hun_Current_Folio_10Q

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 March 31, 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 April 19, 2017, 239,748,757 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 MARCH 31, 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

 

49

ITEM 3. 

 

Quantitative and Qualitative Disclosures About Market Risk

 

63

ITEM 4. 

 

Controls and Procedures

 

64

PART II 

 

OTHER INFORMATION

 

65

ITEM 1. 

 

Legal Proceedings

 

65

ITEM 1A. 

 

Risk Factors

 

65

ITEM 2. 

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

65

ITEM 6. 

 

Exhibits

 

66

 

 

2


 

Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10‑Q FOR THE QUARTERLY PERIOD

ENDED MARCH 31, 2017

 

FORWARD‑LOOKING STATEMENTS

 

With respect to Huntsman Corporation, 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.

 

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)

 

 

 

 

 

 

 

 

 

 

March 31, 

 

December 31, 

 

    

2017

    

2016

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents(a)

 

$

457

 

$

414

Restricted cash(a)

 

 

12

 

 

11

Accounts and notes receivable (net of allowance for doubtful accounts of $28 and $27, respectively), ($460 and $437 pledged as collateral, respectively)(a)

 

 

1,471

 

 

1,402

Accounts receivable from affiliates

 

 

37

 

 

33

Inventories(a)

 

 

1,486

 

 

1,344

Prepaid expenses

 

 

63

 

 

60

Other current assets(a)

 

 

309

 

 

291

Total current assets 

 

 

3,835

 

 

3,555

Property, plant and equipment, net(a)

 

 

4,186

 

 

4,212

Investment in unconsolidated affiliates

 

 

336

 

 

332

Intangible assets, net(a)

 

 

82

 

 

66

Goodwill

 

 

122

 

 

121

Deferred income taxes

 

 

412

 

 

396

Other noncurrent assets(a)

 

 

515

 

 

507

Total assets 

 

$

9,488

 

$

9,189

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable(a)

 

$

1,125

 

$

1,071

Accounts payable to affiliates

 

 

37

 

 

31

Accrued liabilities(a)

 

 

632

 

 

616

Current portion of debt(a)

 

 

61

 

 

60

Total current liabilities 

 

 

1,855

 

 

1,778

Long-term debt(a)

 

 

4,161

 

 

4,135

Notes payable to affiliates

 

 

 —

 

 

 1

Deferred income taxes

 

 

437

 

 

427

Other noncurrent liabilities(a)

 

 

1,386

 

 

1,381

Total liabilities 

 

 

7,839

 

 

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, 252,328,698 and 250,802,175 shares issued and 238,152,916 and 236,370,347 shares outstanding, respectively

 

 

 3

 

 

 3

Additional paid-in capital

 

 

3,504

 

 

3,447

Treasury stock, 12,607,223 shares

 

 

(150)

 

 

(150)

Unearned stock-based compensation

 

 

(29)

 

 

(17)

Accumulated deficit

 

 

(300)

 

 

(325)

Accumulated other comprehensive loss

 

 

(1,576)

 

 

(1,671)

Total Huntsman Corporation stockholders’ equity 

 

 

1,452

 

 

1,287

Noncontrolling interests in subsidiaries

 

 

197

 

 

180

Total equity 

 

 

1,649

 

 

1,467

Total liabilities and equity 

 

$

9,488

 

$

9,189


(a)

At March 31, 2017 and December 31, 2016, respectively, $28 and $25 of cash and cash equivalents, $10 each of restricted cash, $33 and $27 of accounts and notes receivable (net), $42 and $46 of inventories, $6 and $5 of other current assets, $279 and $284 of property, plant and equipment (net), $32 and $31 of intangible assets (net), $37 each of other noncurrent assets, $86 and $90 of accounts payable, $32 and $34 of accrued liabilities, $21 and $14 of current portion of debt, $104 and $114 of long‑term debt, and $77 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

 

 

ended

 

 

March 31, 

 

    

2017

    

2016

Revenues:

 

 

 

 

 

 

Trade sales, services and fees, net

 

$

2,428

 

$

2,321

Related party sales

 

 

41

 

 

34

Total revenues 

 

 

2,469

 

 

2,355

Cost of goods sold 

 

 

2,003

 

 

1,939

Gross profit 

 

 

466

 

 

416

Operating expenses:

 

 

 

 

 

 

Selling, general and administrative

 

 

228

 

 

223

Research and development

 

 

37

 

 

37

Restructuring, impairment and plant closing costs

 

 

36

 

 

13

Business separation expenses

 

 

 9

 

 

 -

Other operating (income) expense, net

 

 

(6)

 

 

 5

Total expenses

 

 

304

 

 

278

Operating income   

 

 

162

 

 

138

Interest expense

 

 

(48)

 

 

(50)

Equity in income of investment in unconsolidated affiliates

 

 

 —

 

 

 1

Other income

 

 

 2

 

 

 1

Income from continuing operations before income taxes 

 

 

116

 

 

90

Income tax expense

 

 

(23)

 

 

(27)

Income from continuing operations 

 

 

93

 

 

63

Loss from discontinued operations

 

 

(1)

 

 

(1)

Net income

 

 

92

 

 

62

Net income attributable to noncontrolling interests

 

 

(16)

 

 

(6)

Net income attributable to Huntsman Corporation 

 

$

76

 

$

56

 

 

 

 

 

 

 

 

Basic income (loss) per share:

 

 

 

 

 

 

Income from continuing operations attributable to Huntsman Corporation common stockholders

    

$

0.32

    

$

0.24

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

 

 

 

 

 —

Net income attributable to Huntsman Corporation common stockholders

 

$

0.32

 

$

0.24

Weighted average shares

 

 

237.4

 

 

236.1

Diluted income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to Huntsman Corporation common stockholders

 

$

0.31

 

$

0.24

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

 

 

 

 

 —

Net income attributable to Huntsman Corporation common stockholders

 

$

0.31

 

$

0.24

Weighted average shares

 

 

242.5

 

 

237.9

Amounts attributable to Huntsman Corporation common stockholders:

 

 

 

 

 

 

Income from continuing operations

 

$

77

 

$

57

Loss from discontinued operations, net of tax

 

 

(1)

 

 

(1)

Net income

 

$

76

 

$

56

Dividends per share 

 

$

0.125

 

$

0.125

 

See accompanying notes to condensed consolidated financial statements.

 

 

5


 

Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Millions)

 

 

 

 

 

 

 

 

 

 

Three months

 

 

ended

 

 

March 31, 

 

    

2017

    

2016

Net income

 

$

92

 

$

62

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

Foreign currency translations adjustments

 

 

77

 

 

27

Pension and other postretirement benefits adjustments

 

 

18

 

 

13

Other, net

 

 

 2

 

 

(11)

Other comprehensive income, net of tax

 

 

97

 

 

29

Comprehensive income

 

 

189

 

 

91

Comprehensive income attributable to noncontrolling interests

 

 

(18)

 

 

(8)

Comprehensive income attributable to Huntsman Corporation 

 

$

171

 

$

83

 

See accompanying notes to condensed consolidated financial statements.

 

 

6


 

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

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

76

 

 

 —

 

 

16

 

 

92

Other comprehensive income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

95

 

 

 2

 

 

97

Issuance of nonvested stock awards

 

 —

 

 

 —

 

 

17

 

 

 —

 

 

(17)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Vesting of stock awards

 

1,158,884

 

 

 —

 

 

 8

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 8

Recognition of stock-based compensation

 

 —

 

 

 —

 

 

 2

 

 

 —

 

 

 5

 

 

 —

 

 

 —

 

 

 —

 

 

 7

Repurchase and cancellation of stock awards

 

(343,712)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(8)

 

 

 —

 

 

 —

 

 

(8)

Contribution from noncontrolling interests

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 2

 

 

 2

Dividends paid to noncontrolling interests

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(3)

 

 

(3)

Stock options exercised

 

967,397

 

 

 —

 

 

30

 

 

 —

 

 

 —

 

 

(13)

 

 

 —

 

 

 —

 

 

17

Dividends declared on common stock

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(30)

 

 

 —

 

 

 —

 

 

(30)

Balance, March 31, 2017

 

238,152,916

 

$

 3

 

$

3,504

 

$

(150)

 

$

(29)

 

$

(300)

 

$

(1,576)

 

$

197

 

$

1,649

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2016

 

237,080,026

 

$

 3

 

$

3,407

 

$

(135)

 

$

(17)

 

$

(528)

 

$

(1,288)

 

$

187

 

$

1,629

Net income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

56

 

 

 —

 

 

 6

 

 

62

Other comprehensive income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

27

 

 

 2

 

 

29

Issuance of nonvested stock awards

 

 —

 

 

 —

 

 

16

 

 

 —

 

 

(16)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Vesting of stock awards

 

880,269

 

 

 —

 

 

 2

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 2

Recognition of stock-based compensation

 

 —

 

 

 —

 

 

 2

 

 

 —

 

 

 5

 

 

 —

 

 

 —

 

 

 —

 

 

 7

Repurchase and cancellation of stock awards

 

(244,324)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(2)

 

 

 —

 

 

 —

 

 

(2)

Dividends paid to noncontrolling interests

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(9)

 

 

(9)

Treasury stock repurchased

 

(1,444,769)

 

 

 —

 

 

15

 

 

(15)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Excess tax shortfall related to stock-based compensation

 

 —

 

 

 —

 

 

(3)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(3)

Dividends declared on common stock

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(30)

 

 

 —

 

 

 —

 

 

(30)

Balance, March 31, 2016

 

236,271,202

 

$

 3

 

$

3,439

 

$

(150)

 

$

(28)

 

$

(504)

 

$

(1,261)

 

$

186

 

$

1,685

 

See accompanying notes to condensed consolidated financial statements.

 

 

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions)

 

 

 

 

 

 

 

 

 

 

Three months

 

 

ended

 

 

March 31, 

 

    

2017

    

2016

Operating Activities:

 

 

 

 

 

 

Net income

 

$

92

 

$

62

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

 

 

 

 

 

 

Equity in income of investment in unconsolidated affiliates

 

 

 —

 

 

(1)

Depreciation and amortization

 

 

106

 

 

100

Loss on disposal of businesses/assets, net

 

 

26

 

 

 —

Noncash interest expense

 

 

 3

 

 

 4

Noncash restructuring and impairment charges

 

 

 3

 

 

 5

Deferred income taxes

 

 

 4

 

 

 6

Noncash gain on foreign currency transactions

 

 

(5)

 

 

 —

Stock-based compensation

 

 

10

 

 

 8

Portion of insurance proceeds representing cash provided by investing activities

 

 

(54)

 

 

 —

Other, net

 

 

(1)

 

 

 2

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts and notes receivable

 

 

(57)

 

 

(105)

Inventories

 

 

(110)

 

 

22

Prepaid expenses

 

 

(2)

 

 

 2

Other current assets

 

 

(15)

 

 

33

Other noncurrent assets

 

 

(5)

 

 

(20)

Accounts payable

 

 

77

 

 

(31)

Accrued liabilities

 

 

19

 

 

 —

Other noncurrent liabilities

 

 

 2

 

 

 1

Net cash provided by operating activities 

 

 

93

 

 

88

Investing Activities:

 

 

 

 

 

 

Capital expenditures

 

 

(74)

 

 

(99)

Insurance proceeds for recovery of property damage

 

 

54

 

 

 —

Cash received from unconsolidated affiliates

 

 

12

 

 

10

Investment in unconsolidated affiliates

 

 

(15)

 

 

(12)

Change in restricted cash

 

 

(1)

 

 

 2

Other, net

 

 

 —

 

 

(2)

Net cash used in investing activities 

 

 

(24)

 

 

(101)

 

(Continued)

8


 

Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In Millions)

 

 

 

 

 

 

 

 

 

 

Three months

 

 

ended

 

 

March 31, 

 

    

2017

    

2016

Financing Activities:

 

 

 

 

 

 

Net borrowings under revolving loan facilities

 

$

 —

 

$

45

Repayments of short-term debt

 

 

(6)

 

 

(12)

Borrowings on short-term debt

 

 

 2

 

 

 4

Repayments of long-term debt

 

 

(7)

 

 

(27)

Proceeds from issuance of long-term debt

 

 

 8

 

 

 —

Repayments of notes payable

 

 

(5)

 

 

(9)

Borrowings on notes payable

 

 

 —

 

 

 2

Dividends paid to noncontrolling interests

 

 

(3)

 

 

(9)

Contribution from noncontrolling interests

 

 

 2

 

 

 —

Dividends paid to common stockholders

 

 

(30)

 

 

(30)

Repurchase and cancellation of stock awards

 

 

(8)

 

 

(2)

Proceeds from issuance of common stock

 

 

17

 

 

 —

Other, net

 

 

(1)

 

 

 —

Net cash used in financing activities 

 

 

(31)

 

 

(38)

Effect of exchange rate changes on cash

 

 

 5

 

 

 2

Increase (decrease) in cash and cash equivalents

 

 

43

 

 

(49)

Cash and cash equivalents at beginning of period

 

 

414

 

 

257

Cash and cash equivalents at end of period

 

$

457

 

$

208

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

36

 

$

35

Cash paid for income taxes

 

 

 8

 

 

 5

 

As of March 31, 2017 and 2016, the amount of capital expenditures in accounts payable was $55 million and $62 million, respectively.

 

See accompanying notes to condensed consolidated financial statements.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Millions)

 

 

 

 

 

 

 

 

 

 

March 31, 

 

December 31, 

 

    

2017

    

2016

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents(a)

 

$

454

 

$

413

Restricted cash(a)

 

 

12

 

 

11

Accounts and notes receivable (net of allowance for doubtful accounts of $28 and $27, respectively), ($460 and $437 pledged as collateral, respectively)(a)

 

 

1,471

 

 

1,402

Accounts receivable from affiliates

 

 

362

 

 

347

Inventories(a)

 

 

1,486

 

 

1,344

Prepaid expenses

 

 

62

 

 

60

Other current assets(a)

 

 

304

 

 

286

Total current assets 

 

 

4,151

 

 

3,863

Property, plant and equipment, net(a)

 

 

4,167

 

 

4,190

Investment in unconsolidated affiliates

 

 

336

 

 

332

Intangible assets, net(a)

 

 

82

 

 

66

Goodwill

 

 

122

 

 

121

Deferred income taxes

 

 

412

 

 

396

Other noncurrent assets(a)

 

 

514

 

 

507

Total assets 

 

$

9,784

 

$

9,475

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable(a)

 

$

1,125

 

$

1,070

Accounts payable to affiliates

 

 

75

 

 

66

Accrued liabilities(a)

 

 

629

 

 

613

Notes payable to affiliates

 

 

100

 

 

100

Current portion of debt(a)

 

 

61

 

 

60

Total current liabilities 

 

 

1,990

 

 

1,909

Long-term debt(a)

 

 

4,161

 

 

4,135

Notes payable to affiliates

 

 

711

 

 

697

Deferred income taxes

 

 

433

 

 

423

Other noncurrent liabilities(a)

 

 

1,385

 

 

1,375

Total liabilities 

 

 

8,680

 

 

8,539

Commitments and contingencies (Notes 13 and 14)

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Huntsman International LLC members’ equity:

 

 

 

 

 

 

Members’ equity, 2,728 units issued and outstanding

 

 

3,235

 

 

3,226

Accumulated deficit

 

 

(734)

 

 

(779)

Accumulated other comprehensive loss

 

 

(1,594)

 

 

(1,691)

Total Huntsman International LLC members’ equity 

 

 

907

 

 

756

Noncontrolling interests in subsidiaries

 

 

197

 

 

180

Total equity 

 

 

1,104

 

 

936

Total liabilities and equity 

 

$

9,784

 

$

9,475


(a)

At March 31, 2017 and December 31, 2016, respectively, $28 and $25 of cash and cash equivalents, $10 each of restricted cash, $33 and $27 of accounts and notes receivable (net), $42 and $46 of inventories, $6 and $5 of other current assets, $279 and $284 of property, plant and equipment (net), $32 and $31 of intangible assets (net), $37 each of other noncurrent assets, $86 and $90 of accounts payable, $32 and $34 of accrued liabilities, $21 and $14 of current portion of debt, $104 and $114 of long‑term debt, and $77 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 INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Millions)

 

 

 

 

 

 

 

 

 

 

Three months

 

 

ended

 

 

March 31, 

 

    

2017

    

2016

Revenues:

 

 

 

 

 

 

Trade sales, services and fees, net

 

$

2,428

 

$

2,321

Related party sales

 

 

41

 

 

34

Total revenues 

 

 

2,469

 

 

2,355

Cost of goods sold 

 

 

2,002

 

 

1,938

Gross profit 

 

 

467

 

 

417

Operating expenses:

 

 

 

 

 

 

Selling, general and administrative

 

 

226

 

 

221

Research and development

 

 

37

 

 

37

Restructuring, impairment and plant closing costs

 

 

36

 

 

13

Business separation expenses

 

 

 9

 

 

 —

Other operating (income) expense, net

 

 

(5)

 

 

 5

Total expenses

 

 

303

 

 

276

Operating income

 

 

164

 

 

141

Interest expense

 

 

(51)

 

 

(53)

Equity in income of investment in unconsolidated affiliates

 

 

 —

 

 

 1

Other income

 

 

 2

 

 

 1

Income from continuing operations before income taxes 

 

 

115

 

 

90

Income tax expense

 

 

(23)

 

 

(27)

Income from continuing operations 

 

 

92

 

 

63

Loss from discontinued operations, net of tax

 

 

(1)

 

 

(1)

Net income

 

 

91

 

 

62

Net income attributable to noncontrolling interests

 

 

(16)

 

 

(6)

Net income attributable to Huntsman International LLC 

 

$

75

 

$