Huntsman Announces Fourth Quarter 2022 Earnings; Approximately $1.2 Billion in Buybacks and Dividends in 2022; Huntsman Board Approves 12% Dividend Increase

Fourth Quarter and Recent Highlights

• Fourth quarter 2022 net loss of $91 million compared to net income of $597 million in the prior year period; fourth quarter 2022 diluted loss per share of $0.48 compared to diluted earnings per share of $2.73 in the prior year period.

• Fourth quarter 2022 adjusted net income of $8 million compared to adjusted net income of $195 million in the prior year period; fourth quarter 2022 adjusted diluted earnings per share of $0.04 compared to adjusted diluted earnings per share of $0.89 in the prior year period.

• Fourth quarter 2022 adjusted EBITDA of $87 million compared to adjusted EBITDA of $327 million in the prior year period.

• Fourth quarter 2022 net cash provided by operating activities from continuing operations was $297 million. Free cash flow from continuing operations was $211 million for the fourth quarter 2022 compared to free cash flow from continuing operations of $648 million in the prior year period.

• Repurchased approximately 9.1 million shares for approximately $250 million in the fourth quarter 2022.

• On February 17, 2023, the Board approved a 12% increase to the quarterly dividend.

• Huntsman has secured all regulatory approvals required to complete the sale of its Textile Effects division to Archroma, a portfolio company of SK Capital Partners. The transaction is expected to close on February 28, 2023. Huntsman expects the net after tax cash proceeds to be approximately $540 million before customary post-closing adjustments.

		Three months ended				Twelve months ended
		December 31,				December 31,
In millions, except per share amounts		2022		2021		2022		2021
Revenues		$ 1,650		$ 2,112		$ 8,023		$ 7,670
Net (loss) income attributable to Huntsman Corporation		$ (91)		$ 597		$ 460		$ 1,045
Adjusted net income (1)		$ 8		$ 195		$ 636		$ 726
Diluted (loss) income per share		$ (0.48)		$ 2.73		$ 2.27		$ 4.72
Adjusted diluted income per share(1)		$ 0.04		$ 0.89		$ 3.13		$ 3.28
Adjusted EBITDA(1)		$ 87		$ 327		$ 1,155		$ 1,246
Net cash provided by operating activities from continuing operations		$ 297		$ 733		$ 892		$ 915
Free cash flow from continuing operations(2)		$ 211		$ 648		$ 620		$ 589

See end of press release for footnote explanations and reconciliations of non-GAAP measures.

THE WOODLANDS, Texas, Feb. 21, 2023 /PRNewswire/ -- Huntsman Corporation (NYSE: HUN) today reported fourth quarter 2022 results with revenues of $1,650 million, net loss of $91 million, adjusted net income of $8 million and adjusted EBITDA of $87 million.

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

"In 2022 we delivered almost $1.2 billion of adjusted EBITDA and Free Cash Flow of over $600 million. We increased our dividend and in total returned approximately $1.2 billion to shareholders. We made great progress in our cost reduction programs to offset historically high inflation and energy costs and strengthen our core businesses. We also announced the agreement to sell our Textile Effects business, which we expect to be completed at the end of this month.

"Turning to 2023, we are optimistic that destocking will end in the first part of 2023 and fundamentals in our businesses will begin to modestly improve as we move through the year, but visibility into the second half is still low. We are seeing some green shoots in areas like China, automotive, and aerospace, but construction demand globally is still under pressure. Regardless of how much demand improves through the year, we will remain focused on delivering our previously announced cost reduction programs, returning cash to shareholders, and looking for strategic investments to improve our core business while maintaining a strong balance sheet. We look forward to updating you of our progress as we move through 2023."

Segment Analysis for 4Q22 Compared to 4Q21

Polyurethanes

The decrease in revenues in our Polyurethanes segment for the three months ended December 31, 2022 compared to the same period of 2021 was primarily due to lower sales volumes and the negative impact of weaker major international currencies against the U.S. dollar, partially offset by higher MDI local prices. Sales volumes decreased primarily due to lower demand, particularly in our European and American regions. The decrease in segment adjusted EBITDA was primarily due to lower sales volumes, lower MDI margins, the negative impact of weaker major international currencies against the U.S. dollar and lower equity earnings from our minority-owned joint venture in China, partially offset by lower fixed costs.

Performance Products

The decrease in revenues in our Performance Products segment for the three months ended December 31, 2022 compared to the same period of 2021 was primarily due to lower sales volumes, partially offset by higher average selling prices. Sales volumes decreased due primarily to lower demand for certain products. Average selling prices increased primarily due to commercial excellence programs and in response to an increase in raw material costs. The decrease in segment adjusted EBITDA was primarily due to lower sales volumes.

Advanced Materials

The decrease in revenues in our Advanced Materials segment for the three months ended December 31, 2022 compared to the same period of 2021 was primarily due to lower sales volumes, partially offset by higher average selling prices. Sales volumes decreased primarily due to deselection of lower margin business and lower customer demand in industrial markets, partially offset by higher demand in our Aerospace market. Average selling prices increased largely in response to higher raw material, energy, and logistics costs as well as improved sales mix. The decrease in segment adjusted EBITDA was primarily due to lower sales volumes, partially offset by higher sales prices and improved sales mix.

Corporate, LIFO and other

For the three months ended December 31, 2022, adjusted EBITDA from Corporate and other was a loss of $52 million as compared to a loss of $50 million for the same period of 2021.

Liquidity and Capital Resources

During the three months ended December 31, 2022, our free cash flow from continuing operations was $211 million as compared to $648 million in the same period of 2021. As of December 31, 2022, we had approximately $1.8 billion of combined cash and unused borrowing capacity.

During the three months ended December 31, 2022, we spent $86 million on capital expenditures for continuing operations as compared to $85 million in the same period of 2021. For the year ended December 31, 2022, we spent $272 million on capital expenditures. For 2023, we expect to spend between $240 million to $250 million on capital expenditures.

Income Taxes

In 2022, our adjusted effective tax rate was 20%. We expect our 2023 adjusted effective tax rate to be approximately 24% to 26%. We expect our long-term adjusted effective tax rate to be approximately 22% to 24%.

Earnings Conference Call Information

We will hold a conference call to discuss our fourth quarter 2022 financial results on Tuesday, February 21, 2023 at 10:00 a.m. ET.

Webcast link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=t1RioKDV

Participant dial-in numbers:
Domestic callers: (877) 402-8037
International callers: (201) 378-4913

The conference call will be accompanied by presentation slides that will be accessible via the webcast link and Huntsman's investor relations website, www.huntsman.com/investors. Upon conclusion of the call, the webcast replay will be accessible via Huntsman's website.

Upcoming Conferences
During the first quarter 2023, a member of management is expected to present at:
Alembic Global Advisors Deer Valley Chemical Conference on March 2, 2023
Goldman Sachs Chemical Intensity Day on March 20, 2023

A webcast of the presentation, if applicable, along with accompanying materials will be available at www.huntsman.com/investors.

Table 1 – Results of Operations
		Three months ended				Twelve months ended
		December 31,				December 31,
In millions, except per share amounts		2022		2021		2022		2021
Revenues		$ 1,650		$ 2,112		$ 8,023		$ 7,670
Cost of goods sold		1,460		1,689		6,477		6,086
Gross profit		190		423		1,546		1,584
Operating expenses, net		167		216		788		813
Restructuring, impairment and plant closing costs		50		6		86		40
Operating (loss) income		(27)		201		672		731
Interest expense, net		(16)		(15)		(62)		(67)
Equity in income of investment in unconsolidated affiliates		12		25		67		143
Fair value adjustments to Venator investment, net		(3)		-		(12)		(28)
Loss on early extinguishment of debt		-		-		-		(27)
(Costs) income associated with the Albemarle Settlement, net		(3)		465		(3)		465
Other income, net		12		8		35		29
(Loss) income from continuing operations before income taxes		(25)		684		697		1,246
Income tax expense		(31)		(90)		(186)		(191)
(Loss) income from continuing operations		(56)		594		511		1,055
(Loss) income from discontinued operations, net of tax(3)		(18)		13		12		49
Net (loss) income		(74)		607		523		1,104
Net income attributable to noncontrolling interests, net of tax		(17)		(10)		(63)		(59)
Net (loss) income attributable to Huntsman Corporation		$ (91)		$ 597		$ 460		$ 1,045
Adjusted EBITDA(1)		$ 87		$ 327		$ 1,155		$ 1,246
Adjusted net income (1)		$ 8		$ 195		$ 636		$ 726
Basic (loss) income per share		$ (0.48)		$ 2.76		$ 2.29		$ 4.77
Diluted (loss) income per share		$ (0.48)		$ 2.73		$ 2.27		$ 4.72
Adjusted diluted income per share(1)		$ 0.04		$ 0.89		$ 3.13		$ 3.28
Common share information:
Basic weighted average shares		189		216		201		219
Diluted weighted average shares		189		219		203		221
Diluted shares for adjusted diluted income per share		190		219		203		221

Table 2 – Results of Operations by Segment
		Three months ended						Twelve months ended
		December 31,				Better /		December 31,				Better /
In millions		2022		2021		(Worse)		2022		2021		(Worse)
Segment Revenues:
Polyurethanes		$ 1,071		$ 1,393		(23 %)		$ 5,067		$ 5,019		1 %
Performance Products		307		410		(25 %)		1,713		1,485		15 %
Advanced Materials		278		317		(12 %)		1,277		1,198		7 %
Total Reportable Segments' Revenue		1,656		2,120		(22 %)		8,057		7,702		5 %
Intersegment Eliminations		(6)		(8)		n/m		(34)		(32)		n/m
Total Revenues		$ 1,650		$ 2,112		(22 %)		$ 8,023		$ 7,670		5 %
Segment Adjusted EBITDA(1):
Polyurethanes		$ 37		$ 218		(83 %)		$ 628		$ 879		(29 %)
Performance Products		61		105		(42 %)		469		359		31 %
Advanced Materials		41		54		...