Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | Commission Exact Name of Registrant as Specified in its Charter, I.R.S. Employer | | | | State of | | | --- | --- | --- | --- | --- | --- | | File Number Identification No. | ...

Exhibit 99.1 News Release FOR IMMEDIATE RELEASE Media: Investor Relations: February 21, 2024 Kevin Gundersen Ivan Marcuse The Woodlands, TX (281) 719-4627 (281) 719-4637 NYSE: HUN Huntsman Announces Fourth Quarter 2023 Earnings Fourth Quarter Highlights | | | | Three months ended | | | | Twelve months ended | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | December 31, | | | | December 31, | | | In millions, except per share amounts | 2023 | | | 2022 | 2023 | | | 2022 | | Revenues | $ | 1, ...

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, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | | | State of | | | --- | --- | --- | --- | | Commission | Exact Name of Registrant as Specified in its Charter, | Incorporation | I ...

[Form 10-Q General Information](index=1&type=section&id=Form%2010-Q%20General%20Information) - The document is a Quarterly Report (Form 10-Q) for the period ended June 30, 2023[2](index=2&type=chunk) - Huntsman Corporation is a **Large Accelerated Filer**, while Huntsman International LLC is a **Non-accelerated Filer**[6](index=6&type=chunk) - As of July 20, 2023, Huntsman Corporation had **177,895,240 shares** of common stock outstanding, and Huntsman International LLC's membership interests are wholly-owned by Huntsman Corporation[7](index=7&type=chunk) Registrant Information | Registrant | File Number | State of Incorporation | I.R.S. Employer Identification No. | | :----------------------- | :---------- | :--------------------- | :--------------------------------- | | Huntsman Corporation | 001-32427 | Delaware | 42-1648585 | | Huntsman International LLC | 333-85141 | Delaware | 87-0630358 | [Table of Contents](index=3&type=section&id=Table%20of%20Contents) - The report is structured into two main parts: **PART I – FINANCIAL INFORMATION** and **PART II – OTHER INFORMATION**[11](index=11&type=chunk) - PART I includes Condensed Consolidated Financial Statements (Unaudited) and Management's Discussion and Analysis of Financial Condition and Results of Operations[11](index=11&type=chunk) [FORWARD-LOOKING STATEMENTS](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) - The report contains forward-looking statements regarding financial projections, management's plans, market trends, and future events[12](index=12&type=chunk) - These statements are based on current expectations and assumptions, and actual results could differ materially due to risks outlined in the company's SEC filings[13](index=13&type=chunk)[14](index=14&type=chunk) - The company undertakes no obligation to publicly update or revise forward-looking statements, except as required by law[13](index=13&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)](index=5&type=section&id=ITEM%201.%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section presents the unaudited condensed consolidated financial statements for Huntsman Corporation and Huntsman International LLC [Huntsman Corporation and Subsidiaries: Unaudited Condensed Consolidated Financial Statements](index=5&type=section&id=Huntsman%20Corporation%20and%20Subsidiaries%3A%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) - Net income attributable to Huntsman Corporation **decreased significantly** from **$228 million** in Q2 2022 to **$19 million** in Q2 2023, and from **$451 million** in H1 2022 to **$172 million** in H1 2023[20](index=20&type=chunk) - Cash received from the sale of businesses was **$541 million** for the six months ended June 30, 2023, significantly impacting investing activities[25](index=25&type=chunk) Huntsman Corporation - Condensed Consolidated Balance Sheets (In Millions) | Metric | June 30, 2023 | December 31, 2022 | | :--------------------------------- | :-------------- | :------------------ | | Total Assets | $7,553 | $8,220 | | Total Liabilities | $3,707 | $4,380 | | Total Equity | $3,846 | $3,840 | | Cash and cash equivalents | $502 | $654 | | Current assets held for sale | $— | $472 | Huntsman Corporation - Condensed Consolidated Statements of Operations (In Millions, Except Per Share Amounts) | Metric | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $1,596 | $2,170 | $3,202 | $4,362 | | Gross profit | $254 | $492 | $523 | $1,007 | | Operating income | $50 | $278 | $111 | $561 | | Income from continuing operations | $33 | $229 | $77 | $451 | | Net income attributable to Huntsman Corp. | $19 | $228 | $172 | $451 | | Basic income per share (Net income) | $0.11 | $1.11 | $0.95 | $2.16 | | Diluted income per share (Net income) | $0.11 | $1.10 | $0.94 | $2.14 | Huntsman Corporation - Condensed Consolidated Statements of Comprehensive (Loss) Income (In Millions) | Metric | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :-------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $31 | $242 | $197 | $482 | | Other comprehensive (loss) income, net of tax | $(40) | $(105) | $87 | $(117) | | Comprehensive (loss) income attributable to Huntsman Corp. | $(13) | $130 | $265 | $342 | Huntsman Corporation - Condensed Consolidated Statements of Cash Flows (In Millions) | Metric | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :-------------------------------------------------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(118) | $316 | | Net cash provided by (used in) investing activities | $440 | $(129) | | Net cash used in financing activities | $(464) | $(609) | | Decrease in cash and cash equivalents | $(152) | $(433) | | Cash and cash equivalents at end of period | $502 | $608 | [Huntsman International LLC and Subsidiaries: Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Huntsman%20International%20LLC%20and%20Subsidiaries%3A%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) - Net income attributable to Huntsman International LLC **decreased** from **$229 million** in Q2 2022 to **$19 million** in Q2 2023, and from **$455 million** in H1 2022 to **$174 million** in H1 2023[30](index=30&type=chunk) - Net cash provided by investing activities was **$236 million** for H1 2023, a significant improvement from **$(645) million** used in the prior year, primarily due to cash from the sale of businesses[39](index=39&type=chunk) Huntsman International LLC - Condensed Consolidated Balance Sheets (In Millions) | Metric | June 30, 2023 | December 31, 2022 | | :--------------------------------- | :-------------- | :------------------ | | Total Assets | $7,553 | $8,226 | | Total Liabilities | $3,697 | $4,374 | | Total Equity | $3,856 | $3,852 | | Cash and cash equivalents | $502 | $654 | | Current assets held for sale | $— | $472 | Huntsman International LLC - Condensed Consolidated Statements of Operations (In Millions) | Metric | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $1,596 | $2,170 | $3,202 | $4,362 | | Gross profit | $254 | $492 | $523 | $1,007 | | Operating income | $50 | $280 | $113 | $566 | | Income from continuing operations | $33 | $230 | $79 | $455 | | Net income attributable to Huntsman Int. LLC | $19 | $229 | $174 | $455 | Huntsman International LLC - Condensed Consolidated Statements of Comprehensive (Loss) Income (In Millions) | Metric | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :-------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $31 | $243 | $199 | $486 | | Other comprehensive (loss) income, net of tax | $(41) | $(106) | $87 | $(118) | | Comprehensive (loss) income attributable to Huntsman Int. LLC | $(14) | $130 | $267 | $345 | Huntsman International LLC - Condensed Consolidated Statements of Cash Flows (In Millions) | Metric | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :-------------------------------------------------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(116) | $319 | | Net cash provided by (used in) investing activities | $236 | $(645) | | Net cash used in financing activities | $(262) | $(94) | | Decrease in cash and cash equivalents | $(152) | $(431) | | Cash and cash equivalents at end of period | $502 | $608 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. GENERAL](index=17&type=section&id=Note%201.%20GENERAL) - Huntsman operates in three segments: **Polyurethanes**, **Performance Products**, and **Advanced Materials**, marketing diversified organic chemical products globally[44](index=44&type=chunk) - Huntsman International LLC is a wholly-owned subsidiary and the principal operating company[44](index=44&type=chunk) - The company announced a planned separation of its Shanghai Lianheng Isocyanate Co Ltd (SLIC) joint venture with BASF, expected to be effective in Q4 2023[49](index=49&type=chunk) [Note 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS](index=19&type=section&id=Note%202.%20RECENTLY%20ISSUED%20ACCOUNTING%20PRONOUNCEMENTS) - No new accounting pronouncements were adopted during H1 2023, and recently issued pronouncements are not expected to have a material impact[51](index=51&type=chunk) [Note 3. DISCONTINUED OPERATIONS](index=19&type=section&id=Note%203.%20DISCONTINUED%20OPERATIONS) - The sale of the Textile Effects Business to Archroma was completed on February 28, 2023, for **$593 million**, resulting in net proceeds of **$530 million** and a pre-tax gain of **$153 million** in Q1 2023[52](index=52&type=chunk) - Cash taxes of approximately **$21 million** were paid through Q2 2023, with an additional **$20 million** expected[52](index=52&type=chunk) Major Line Items Constituting Pretax (Loss) Income of Discontinued Operations (In Millions) | Metric | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :---------------------------------------------- | :----------------------------- | :----------------------------- | | Trade sales, services and fees, net | $88 | $389 | | Cost of goods sold | $69 | $293 | | Gain on sale of our Textile Effects Business | $153 | $— | | Net (loss) income attributable to discontinued operations | $120 | $31 | [Note 4. INVENTORIES](index=20&type=section&id=Note%204.%20INVENTORIES) - Inventories are stated at the lower of cost or market, using average cost, LIFO, and FIFO methods[55](index=55&type=chunk) Inventories (In Millions) | Component | June 30, 2023 | December 31, 2022 | | :----------------------- | :------------ | :---------------- | | Raw materials and supplies | $234 | $241 | | Work in progress | $43 | $40 | | Finished goods | $776 | $758 | | Total | $1,053 | $1,039 | | LIFO reserves | $(41) | $(44) | | Net inventories | $1,012 | $995 | [Note 5. VARIABLE INTEREST ENTITIES](index=21&type=section&id=Note%205.%20VARIABLE%20INTEREST%20ENTITIES) - Huntsman is the primary beneficiary of joint ventures including Rubicon LLC (50%-owned) and Arabian Amines Company (AAC, 50%-owned)[57](index=57&type=chunk)[60](index=60&type=chunk) - Creditors of these variable interest entities have no recourse to Huntsman's general credit[58](index=58&type=chunk) Variable Interest Entities' Assets and Liabilities (In Millions) | Category | June 30, 2023 | December 31, 2022 | | :---------------- | :------------ | :---------------- | | Total Assets | $420 | $403 | | Total Liabilities | $180 | $214 | Variable Interest Entities' Financial Performance (Six Months Ended June 30, In Millions) | Metric | 2023 | 2022 | | :------------------------------------------------ | :--- | :--- | | Income from continuing operations before income taxes | $30 | $13 | | Net cash provided by operating activities | $48 | $35 | [Note 6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS](index=22&type=section&id=Note%206.%20RESTRUCTURING%2C%20IMPAIRMENT%20AND%20PLANT%20CLOSING%20COSTS) - A new restructuring program initiated in Q4 2022 aims for **$40 million** in annualized cost savings by the end of 2023, with expected cash costs of **$70 million** through 2025[62](index=62&type=chunk)[190](index=190&type=chunk) - The Corporate function's restructuring program resulted in a net restructuring credit of approximately **$5 million** for H1 2023 due to adjustments of reserves[63](index=63&type=chunk) Accrued Restructuring Costs (In Millions) | Category | January 1, 2023 | June 30, 2023 | | :------------------- | :-------------- | :------------ | | Workforce reductions | $76 | $39 | | Total | $76 | $39 | Restructuring, Impairment and Plant Closing Costs (Six Months Ended June 30, In Millions) | Type | 2023 | 2022 | | :-------------------------------------------- | :--- | :--- | | Cash charges | $— | $24 | | Noncash charges | $1 | $— | | Total restructuring, impairment and plant closing costs | $1 | $24 | [Note 7. DEBT](index=23&type=section&id=Note%207.%20DEBT) [DIRECT AND SUBSIDIARY DEBT](index=23&type=section&id=DIRECT%20AND%20SUBSIDIARY%20DEBT) - Substantially all debt is incurred by subsidiaries, primarily Huntsman International, and Huntsman Corporation is not a guarantor[67](index=67&type=chunk) [Debt Issuance Costs](index=23&type=section&id=Debt%20Issuance%20Costs) - Debt issuance costs, recorded as a reduction to debt liability, were **$7 million** as of June 30, 2023, and **$8 million** as of December 31, 2022[69](index=69&type=chunk) [Revolving Credit Facility](index=25&type=section&id=Revolving%20Credit%20Facility) - Huntsman International entered into a new **$1.2 billion** senior unsecured revolving credit facility in May 2022, maturing in May 2027[71](index=71&type=chunk) - Borrowings bear interest rates tied to Term SOFR and are subject to adjustments based on sustainability target thresholds[71](index=71&type=chunk)[73](index=73&type=chunk) - As of June 30, 2023, there was **no principal outstanding** under the 2022 Revolving Credit Facility[72](index=72&type=chunk) [A/R Programs](index=25&type=section&id=A%2FR%20Programs) - As of June 30, 2023, **$296 million** of accounts receivable were pledged as collateral under the A/R Programs[76](index=76&type=chunk) A/R Programs Information (In Millions) | Facility | Maturity | Maximum funding availability | Amount outstanding | | :---------------- | :-------- | :--------------------------- | :----------------- | | U.S. A/R Program | July 2024 | $150 | $— | | EU A/R Program | July 2024 | €100 (approx. $109) | €50 (approx. $55) | [Senior Notes](index=26&type=section&id=Senior%20Notes) Senior Notes (In Millions) | Notes | Maturity | Interest rate | Amount outstanding | | :-------------- | :----------- | :------------ | :----------------- | | 2025 Senior Notes | April 2025 | 4.25% | €300 (approx. $327) | | 2029 Senior Notes | February 2029 | 4.50% | $750 | | 2031 Senior Notes | June 2031 | 2.95% | $400 | [Variable Interest Entity Debt](index=27&type=section&id=Variable%20Interest%20Entity%20Debt) - AAC, a consolidated 50%-owned joint venture, had **$31 million** outstanding under its loan commitments as of June 30, 2023[79](index=79&type=chunk) [COMPLIANCE WITH COVENANTS](index=27&type=section&id=COMPLIANCE%20WITH%20COVENANTS) - The company believes it is in compliance with the covenants of its material debt instruments[80](index=80&type=chunk) [Note 8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES](index=27&type=section&id=Note%208.%20DERIVATIVE%20INSTRUMENTS%20AND%20HEDGING%20ACTIVITIES) - Huntsman uses derivative instruments to manage exposures to market risks such as interest rates, foreign exchange rates, and commodity prices[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) - As of June 30, 2023, the company had approximately **$384 million** in notional amount outstanding in forward foreign currency contracts[82](index=82&type=chunk) - Approximately **€150 million** of euro-denominated debt was designated as a hedge of net investment, resulting in a **$6 million** gain for H1 2023[84](index=84&type=chunk) [Note 9. FAIR VALUE](index=27&type=section&id=Note%209.%20FAIR%20VALUE) - The fair values of cash, accounts receivable, and accounts payable approximate their carrying amounts due to immediate or short-term maturity[85](index=85&type=chunk) - No instruments were measured at fair value using significant unobservable inputs (Level 3) during H1 2023[86](index=86&type=chunk) Fair Values of Financial Instruments (In Millions) | Instrument | June 30, 2023 (Carrying Value) | June 30, 2023 (Estimated Fair Value) | December 31, 2022 (Carrying Value) | December 31, 2022 (Estimated Fair Value) | | :---------------------------------------- | :------------------------------- | :----------------------------------- | :--------------------------------- | :----------------------------------- | | Non-qualified employee benefit plan investments | $15 | $15 | $15 | $15 | | Investment in Venator | $— | $— | $5 | $5 | | Long-term debt (including current portion) | $(1,573) | $(1,437) | $(1,737) | $(1,578) | [Note 10. REVENUE RECOGNITION](index=29&type=section&id=Note%2010.%20REVENUE%20RECOGNITION) Revenues by Segment and Geographic Market (Three Months Ended June 30, 2023, In Millions) | Segment | U.S. and Canada | Europe | Asia Pacific | Rest of world | Total | | :------------------- | :-------------- | :----- | :----------- | :------------ | :---- | | Polyurethanes | $388 | $278 | $260 | $86 | $1,012 | | Performance Products | $140 | $68 | $74 | $25 | $307 | | Advanced Materials | $83 | $110 | $69 | $22 | $284 | | Total | $609 | $451 | $403 | $133 | $1,596 | Revenues by Segment and Product Grouping (Three Months Ended June 30, 2023, In Millions) | Segment | MDI urethanes | Differentiated | Specialty | Other | Eliminations | Total | | :------------------- | :------------ | :------------- | :-------- | :---- | :----------- | :---- | | Polyurethanes | $1,012 | $— | $— | $— | $— | $1,012 | | Performance Products | $— | $307 | $— | $— | $— | $307 | | Advanced Materials | $— | $— | $267 | $17 | $— | $284 | | Eliminations | $— | $— | $— | $— | $(7) | $(7) | | Total | $1,012 | $307 | $267 | $17 | $(7) | $1,596 | Revenues by Segment and Geographic Market (Six Months Ended June 30, 2023, In Millions) | Segment | U.S. and Canada | Europe | Asia Pacific | Rest of world | Total | | :------------------- | :-------------- | :----- | :----------- | :------------ | :---- | | Polyurethanes | $774 | $550 | $518 | $161 | $2,003 | | Performance Products | $297 | $142 | $153 | $49 | $641 | | Advanced Materials | $172 | $226 | $131 | $44 | $573 | | Total | $1,238 | $909 | $801 | $254 | $3,202 | [Note 11. EMPLOYEE BENEFIT PLANS](index=31&type=section&id=Note%2011.%20EMPLOYEE%20BENEFIT%20PLANS) - Contributions to pension and other postretirement benefit plans totaled **$20 million** for H1 2023, with an additional **$19 million** expected for the remainder of 2023[92](index=92&type=chunk)[190](index=190&type=chunk) Huntsman Corporation Net Periodic Benefit Cost (Six Months Ended June 30, In Millions) | Metric | Defined benefit plans | Other postretirement benefit plans | | :--------------------------- | :-------------------- | :--------------------------------- | | Service cost | $13 | $— | | Interest cost | $46 | $2 | | Expected return on assets | $(63) | $— | | Amortization of prior service benefit | $(2) | $(2) | | Amortization of actuarial loss | $16 | $— | | Net periodic benefit cost (credit) | $10 | $— | [Note 12. HUNTSMAN CORPORATION STOCKHOLDERS' EQUITY](index=33&type=section&id=Note%2012.%20HUNTSMAN%20CORPORATION%20STOCKHOLDERS'%20EQUITY) [SHARE REPURCHASE PROGRAM](index=33&type=section&id=SHARE%20REPURCHASE%20PROGRAM) - The Board of Directors increased the share repurchase program authorization from **$1 billion** to **$2 billion** on March 25, 2022[93](index=93&type=chunk) - During H1 2023, **7,262,089 shares** were repurchased for approximately **$199 million**[93](index=93&type=chunk) - An additional **441,881 shares** were repurchased for approximately **$12 million** from July 1, 2023, through July 20, 2023[93](index=93&type=chunk) [DIVIDENDS ON COMMON STOCK](index=33&type=section&id=DIVIDENDS%20ON%20COMMON%20STOCK) - Dividends of **$0.2375 per share** were declared for both Q2 2023 (**$42 million**) and Q1 2023 (**$44 million**)[94](index=94&type=chunk) [Note 13. ACCUMULATED OTHER COMPREHENSIVE LOSS](index=33&type=section&id=Note%2013.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) - Net current-period other comprehensive income for Huntsman Corporation was **$93 million** for H1 2023[95](index=95&type=chunk) - Reclassifications for H1 2023 included **$67 million** of pension settlement losses and **$1 million** of pension curtailment gains related to the sale of the Textile Effects Business[101](index=101&type=chunk)[109](index=109&type=chunk) Huntsman Corporation Accumulated Other Comprehensive Loss (In Millions) | Component | January 1, 2023 | June 30, 2023 | | :---------------------------------------- | :-------------- | :------------ | | Foreign currency translation adjustments | $(648) | $(641) | | Pension and other postretirement benefits adjustments | $(652) | $(572) | | Total Huntsman Corporation stockholders' equity | $(1,268) | $(1,175) | [Note 14. COMMITMENTS AND CONTINGENCIES](index=39&type=section&id=Note%2014.%20COMMITMENTS%20AND%20CONTINGENCIES) [LEGAL MATTERS](index=39&type=section&id=LEGAL%20MATTERS) - A New Orleans jury awarded Huntsman approximately **$94 million** in a lawsuit against Praxair/Linde on April 29, 2022, with expected damages exceeding **$125 million** after interest[110](index=110&type=chunk) - The award is subject to a pending appeal, and if affirmed, net proceeds of approximately **$50 million to $60 million** are expected[110](index=110&type=chunk) - The company does not believe other ongoing legal proceedings will have a material effect on its financial condition, results of operations, or liquidity[111](index=111&type=chunk) [Note 15. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS](index=39&type=section&id=Note%2015.%20ENVIRONMENTAL%2C%20HEALTH%20AND%20SAFETY%20MATTERS) [EHS CAPITAL EXPENDITURES](index=39&type=section&id=EHS%20CAPITAL%20EXPENDITURES) - Capital expenditures for EHS matters from continuing operations totaled **$11 million** for H1 2023, down from **$14 million** in the prior year[112](index=112&type=chunk) [ENVIRONMENTAL RESERVES](index=39&type=section&id=ENVIRONMENTAL%20RESERVES) - Accrued environmental liabilities were **$4 million** as of June 30, 2023, with **$1 million** classified as current and **$3 million** as noncurrent[113](index=113&type=chunk) [ENVIRONMENTAL MATTERS](index=39&type=section&id=ENVIRONMENTAL%20MATTERS) - The company is subject to CERCLA and RCRA laws, with ongoing remediation requirements at some manufacturing sites[114](index=114&type=chunk)[115](index=115&type=chunk) - Potential claims at approximately six former facilities or third-party sites are not expected to have a material impact on financial statements[114](index=114&type=chunk) [North Maybe Canyon Mine Remediation](index=40&type=section&id=North%20Maybe%20Canyon%20Mine%20Remediation) - Huntsman is a CERCLA potentially responsible party for contamination at the North Maybe Canyon Mine site and cannot reasonably estimate potential liabilities[116](index=116&type=chunk) [Note 16. STOCK-BASED COMPENSATION PLANS](index=41&type=section&id=Note%2016.%20STOCK-BASED%20COMPENSATION%20PLANS) [STOCK OPTIONS](index=41&type=section&id=STOCK%20OPTIONS) - Approximately **5 million shares** remained available for grant under stock-based compensation plans as of June 30, 2023[117](index=117&type=chunk) - No stock options were granted during H1 2023 or H1 2022[120](index=120&type=chunk) - Total unrecognized compensation cost related to nonvested stock option arrangements was approximately **$1 million** as of June 30, 2023, expected to be recognized over approximately **0.7 years**[121](index=121&type=chunk) [NONVESTED SHARES](index=42&type=section&id=NONVESTED%20SHARES) - Nonvested shares include restricted stock and performance share unit awards (equity awards), and phantom stock (liability award)[123](index=123&type=chunk) - Total unrecognized compensation cost related to nonvested share arrangements was approximately **$45 million** as of June 30, 2023, expected to be recognized over approximately **2.1 years**[127](index=127&type=chunk) Nonvested Shares Activity (Six Months Ended June 30, 2023, In Thousands) | Category | Equity awards (Shares) | Liability awards (Shares) | | :--------------------------- | :--------------------- | :------------------------ | | Nonvested at January 1, 2023 | 1,802 | 257 | | Granted | 945 | 114 | | Vested | (718) | (165) | | Forfeited | (83) | (13) | | Nonvested at June 30, 2023 | 1,946 | 193 | [Note 17. INCOME TAXES](index=44&type=section&id=Note%2017.%20INCOME%20TAXES) - Income tax expense is significantly affected by the mix of income and losses in various tax jurisdictions and the presence of valuation allowances[129](index=129&type=chunk)[130](index=130&type=chunk)[170](index=170&type=chunk) Income Tax Expense from Continuing Operations (Six Months Ended June 30, In Millions) | Registrant | 2023 | 2022 | | :--------------------- | :--- | :--- | | Huntsman Corporation | $39 | $125 | | Huntsman International | $39 | $126 | [Note 18. EARNINGS PER SHARE](index=44&type=section&id=Note%2018.%20EARNINGS%20PER%20SHARE) - Approximately **1.7 million** weighted average equivalent shares were anti-dilutive and excluded from the diluted income per share computation for H1 2023[132](index=132&type=chunk) Basic and Diluted Income Per Share (Six Months Ended June 30, In Millions, Except Per Share Amounts) | Metric | 2023 | 2022 | | :----------------------------------------- | :---- | :---- | | Net income attributable to Huntsman Corp. | $172 | $451 | | Weighted average shares outstanding (Basic) | 180.9 | 209.0 | | Basic net income per share | $0.95 | $2.16 | | Weighted average shares (Diluted) | 182.3 | 211.2 | | Diluted net income per share | $0.94 | $2.14 | [Note 19. OPERATING SEGMENT INFORMATION](index=45&type=section&id=Note%2019.%20OPERATING%20SEGMENT%20INFORMATION) - Huntsman's three reportable operating segments are **Polyurethanes**, **Performance Products**, and **Advanced Materials**, with adjusted EBITDA used to measure performance[133](index=133&type=chunk)[134](index=134&type=chunk)[137](index=137&type=chunk) Revenues by Segment (Six Months Ended June 30, In Millions) | Segment | 2023 | 2022 | Change (%) | | :------------------- | :----- | :----- | :--------- | | Polyurethanes | $2,003 | $2,739 | (27)% | | Performance Products | $641 | $972 | (34)% | | Advanced Materials | $573 | $671 | (15)% | | Total | $3,217 | $4,382 | (27)% | Segment Adjusted EBITDA (Six Months Ended June 30, In Millions) | Segment | 2023 | 2022 | Change (%) | | :------------------- | :--- | :--- | :--------- | | Polyurethanes | $154 | $453 | (66)% | | Performance Products | $126 | $298 | (58)% | | Advanced Materials | $99 | $134 | (26)% | | Total | $379 | $885 | (57)% | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=48&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial condition and results of operations for the three and six months ended June 30, 2023 [RESULTS OF OPERATIONS](index=48&type=section&id=RESULTS%20OF%20OPERATIONS) [Three Months Ended June 30, 2023 Compared with Three Months Ended June 30, 2022](index=57&type=section&id=Three%20Months%20Ended%20June%2030%2C%202023%20Compared%20with%20Three%20Months%20Ended%20June%2030%2C%202022) [Segment Analysis](index=57&type=section&id=Segment%20Analysis%20(Three%20Months)) [Polyurethanes](index=59&type=section&id=Polyurethanes%20(Three%20Months)) - Revenues **decreased by 25%** due to lower sales volumes (**down 10%**), lower MDI average selling prices (**down 10%**), and negative foreign currency impact[158](index=158&type=chunk)[162](index=162&type=chunk)[164](index=164&type=chunk) - Segment adjusted EBITDA **decreased by 62%** primarily due to lower sales volumes, lower MDI margins, and negative foreign currency exchange rate movements[158](index=158&type=chunk)[164](index=164&type=chunk) [Performance Products](index=59&type=section&id=Performance%20Products%20(Three%20Months)) - Revenues **decreased by 38%** due to lower sales volumes (**down 31%**) and reduced average selling prices (**down 8%**)[158](index=158&type=chunk)[162](index=162&type=chunk)[165](index=165&type=chunk) - Sales volumes decreased primarily due to slowing construction activity and reduced demand in industrial markets[165](index=165&type=chunk) - Segment adjusted EBITDA **decreased by 64%** primarily due to decreased sales volumes and lower average selling prices[158](index=158&type=chunk)[165](index=165&type=chunk) [Advanced Materials](index=59&type=section&id=Advanced%20Materials%20(Three%20Months)) - Revenues **decreased by 15%** primarily due to lower sales volumes (**down 19%**), partially offset by higher average selling prices (**up 1%**)[158](index=158&type=chunk)[162](index=162&type=chunk)[166](index=166&type=chunk) - Segment adjusted EBITDA **decreased by 24%** primarily due to lower sales volumes[158](index=158&type=chunk)[166](index=166&type=chunk) [Corporate and other](index=59&type=section&id=Corporate%20and%20other%20(Three%20Months)) - Adjusted EBITDA from Corporate and other for Huntsman Corporation remained a **loss of $38 million**[167](index=167&type=chunk) - For Huntsman International, adjusted EBITDA from Corporate and other was a **loss of $38 million**, compared to a loss of $36 million in the prior year[167](index=167&type=chunk) [Six Months Ended June 30, 2023 Compared with Six Months Ended June 30, 2022](index=60&type=section&id=Six%20Months%20Ended%20June%2030%2C%202023%20Compared%20with%20Six%20Months%20Ended%20June%2030%2C%202022) [Segment Analysis](index=60&type=section&id=Segment%20Analysis%20(Six%20Months)) [Polyurethanes](index=62&type=section&id=Polyurethanes%20(Six%20Months)) - Revenues **decreased by 27%** due to lower sales volumes (**down 16%**), lower MDI average selling prices (**down 6%**), and negative foreign currency impact[169](index=169&type=chunk)[173](index=173&type=chunk)[175](index=175&type=chunk) - Sales volumes decreased primarily due to lower demand in Europe and the Americas[175](index=175&type=chunk) - Segment adjusted EBITDA **decreased by 66%** primarily due to lower sales volumes, lower MDI margins, and negative foreign currency exchange rate movements[169](index=169&type=chunk)[175](index=175&type=chunk) [Performance Products](index=62&type=section&id=Performance%20Products%20(Six%20Months)) - Revenues **decreased by 34%** due to lower sales volumes (**down 31%**) and reduced average selling prices (**down 4%**)[169](index=169&type=chunk)[173](index=173&type=chunk)[176](index=176&type=chunk) - Sales volumes decreased primarily due to slowing construction activity and reduced demand in industrial markets[176](index=176&type=chunk) - Segment adjusted EBITDA **decreased by 58%** primarily due to decreased sales volumes and lower average selling prices[169](index=169&type=chunk)[176](index=176&type=chunk) [Advanced Materials](index=62&type=section&id=Advanced%20Materials%20(Six%20Months)) - Revenues **decreased by 15%** primarily due to lower sales volumes (**down 20%**), partially offset by higher average selling prices (**up 3%**)[169](index=169&type=chunk)[173](index=173&type=chunk)[177](index=177&type=chunk) - Average selling prices increased largely in response to higher raw material, energy, and logistics costs as well as improved sales mix[177](index=177&type=chunk) - Segment adjusted EBITDA **decreased by 26%** primarily due to lower sales volumes[169](index=169&type=chunk)[177](index=177&type=chunk) [Corporate and other](index=62&type=section&id=Corporate%20and%20other%20(Six%20Months)) - Adjusted EBITDA from Corporate and other for Huntsman Corporation was a **loss of $87 million**, relatively flat compared to the prior year[178](index=178&type=chunk) - For Huntsman International, adjusted EBITDA from Corporate and other was a **loss of $85 million**, compared to a loss of $83 million in the prior year[178](index=178&type=chunk) [Non-GAAP Financial Measures](index=55&type=section&id=Non-GAAP%20Financial%20Measures) [Adjusted EBITDA](index=55&type=section&id=Adjusted%20EBITDA) - Adjusted EBITDA is defined as net income before interest, income tax, depreciation and amortization, and other specified adjustments[148](index=148&type=chunk) - It is used to assess ongoing financial performance and provides improved comparability by excluding items not indicative of operational profitability[149](index=149&type=chunk)[150](index=150&type=chunk) [Adjusted Net Income](index=56&type=section&id=Adjusted%20Net%20Income) - Adjusted net income is computed by eliminating after-tax amounts of specific non-recurring or non-operational items from net income[152](index=152&type=chunk) - It is presented as supplemental information to provide improved comparability of ongoing financial performance[153](index=153&type=chunk) [Free Cash Flow](index=56&type=section&id=Free%20Cash%20Flow) - Free cash flow is an important indicator of liquidity, used by management to evaluate strategic investments, shareholder returns, and debt servicing ability[154](index=154&type=chunk) [Adjusted Effective Tax Rate](index=56&type=section&id=Adjusted%20Effective%20Tax%20Rate) - The adjusted effective tax rate provides improved comparability by excluding the impact of certain non-operational or non-recurring items[155](index=155&type=chunk) - The forward-looking adjusted effective tax rate is based on the forecast effective tax rate, as certain future adjustments cannot be reasonably predicted[156](index=156&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=63&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) [Cash Flows for the Six Months Ended June 30, 2023 Compared with the Six Months Ended June 30, 2022](index=63&type=section&id=Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202023%20Compared%20with%20the%20Six%20Months%20Ended%20June%2030%2C%202022) - Net cash used in operating activities from continuing operations was **$(82) million** for H1 2023, a significant decrease from **$310 million** provided in H1 2022, primarily due to decreased operating income[180](index=180&type=chunk) - Net cash provided by investing activities from continuing operations was **$444 million** for H1 2023, compared to **$(120) million** used in H1 2022, largely driven by **$541 million** from the sale of businesses[181](index=181&type=chunk) - Free cash flow from continuing operations was a use of cash of **$(179) million** for H1 2023, compared to proceeds of **$181 million** in H1 2022[183](index=183&type=chunk) [Changes in Financial Condition](index=64&type=section&id=Changes%20in%20Financial%20Condition) - The decrease in working capital was primarily due to a **$152 million** decrease in cash and cash equivalents and a **$216 million** decrease in accounts payable[187](index=187&type=chunk) - The sale of the Textile Effects Business resulted in a **$472 million** decrease in current assets held for sale and a **$194 million** decrease in current liabilities held for sale[185](index=185&type=chunk) Working Capital Position (In Millions) | Metric | June 30, 2023 | December 31, 2022 | Increase (decrease) | Percent change | | :------------------------ | :------------ | :---------------- | :------------------ | :------------- | | Total current assets | $2,520 | $3,145 | $(625) | (20)% | | Total current liabilities | $1,176 | $1,701 | $(525) | (31)% | | Working capital | $1,344 | $1,444 | $(100) | (7)% | [SHORT-TERM LIQUIDITY](index=65&type=section&id=SHORT-TERM%20LIQUIDITY) - As of June 30, 2023, Huntsman had **$1,866 million** in combined cash and unused borrowing capacity[188](index=188&type=chunk) - Expected capital expenditures for 2023 are **$230 million to $250 million**, with an additional **$19 million** in pension contributions for the remainder of 2023[190](index=190&type=chunk) - The company expects to repurchase approximately **$200 million** of common stock during the second half of 2023[190](index=190&type=chunk) - Net proceeds of **$530 million** were received from the sale of the Textile Effects Business, with an additional **$20 million** in cash taxes expected to be paid[190](index=190&type=chunk) - The company expects to achieve significant annualized cost savings from various restructuring programs by the end of 2023[190](index=190&type=chunk) [LONG-TERM LIQUIDITY](index=65&type=section&id=LONG-TERM%20LIQUIDITY) - As of June 30, 2023, the current portion of debt was **$11 million**, which the company intends to renew, repay, or extend[190](index=190&type=chunk) - Approximately **$417 million** of cash and cash equivalents are held by foreign subsidiaries, intended for local operations[192](index=192&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=67&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This item states that Huntsman is exposed to market risks and uses derivative instruments and hedging activities to manage these exposures - Huntsman is exposed to market risks, including changes in interest rates, foreign exchange rates, and commodity prices[194](index=194&type=chunk) - The company uses derivative instruments and hedging activities to manage these exposures, including hedging its net investment in certain European operations[194](index=194&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=67&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal controls - Management concluded that disclosure controls and procedures were **effective** as of June 30, 2023[195](index=195&type=chunk) - No changes to internal control over financial reporting occurred during the quarter that materially affected or are reasonably likely to materially affect internal control[196](index=196&type=chunk) [PART II. OTHER INFORMATION](index=68&type=section&id=PART%20II%20OTHER%20INFORMATION) [ITEM 1. LEGAL PROCEEDINGS](index=68&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This item states there have been no material developments regarding legal proceedings previously referenced in the Annual Report on Form 10-K - There have been no material developments with respect to the legal proceedings referenced in the Annual Report on Form 10-K for the year ended December 31, 2022[198](index=198&type=chunk) [ITEM 1A. RISK FACTORS](index=68&type=section&id=ITEM%201A.%20RISK%20FACTORS) This item refers readers to the 'Risk Factors' section in the company's Annual Report on Form 10-K for information regarding potential risks - For information regarding risk factors, refer to 'Part I Item 1A Risk Factors' in the Annual Report on Form 10-K for the year ended December 31, 2022[199](index=199&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=68&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This item provides information on shares repurchased under the company's share repurchase program during the three months ended June 30, 2023 - During Q2 2023, **3,790,069 shares** of common stock were repurchased for approximately **$98 million** under the **$2 billion** share repurchase program[202](index=202&type=chunk) - Approximately **$698 million** remained authorized under the share repurchase program as of June 30, 2023[201](index=201&type=chunk) Share Repurchase Activity (Three Months Ended June 30, 2023) | Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | | :---------------- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------------------- | | April 1 - April 30 | 704,748 | $26.76 | 704,748 | | May 1 - May 31 | 2,100,381 | $25.46 | 2,100,381 | | June 1 - June 30 | 986,545 | $25.68 | 984,940 | | Total | 3,791,674 | $25.76 | 3,790,069 | [ITEM 6. EXHIBITS](index=69&type=section&id=ITEM%206.%20EXHIBITS) This item lists all exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents, certifications, and XBRL-related documents - Exhibits include Amended and Restated Certificate of Incorporation, Bylaws, CEO/CFO Certifications (Sarbanes-Oxley Act), and various Inline XBRL documents[206](index=206&type=chunk) [SIGNATURES](index=71&type=section&id=SIGNATURES) - The report was signed on August 1, 2023, by the Executive Vice President and Chief Financial Officer, and the Vice President and Controller[208](index=208&type=chunk)

Huntsman Corporation (NYSE:HUN) Q1 2023 Results Conference Call May 5, 2023 10:00 AM ET Company Participants Ivan Marcuse - Vice President of Investor Relations Peter Huntsman - Chairman, President, and Chief Executive Officer Phil Lister - Executive Vice President and Chief Financial Officer Conference Call Participants Mike Harrison - Seaport Research Partners Abigail Jacobsen - Wells Fargo David Begleiter - Deutsche Bank Frank Mitsch - Fermium Research Aleksey Yefremov - KeyBanc Capital Markets Arun Visw ...

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, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | | | State of | | | --- | --- | --- | --- | | Commission | Exact Name of Registrant as Specified in its Charter, | Incorporation | I.R.S ...

Business Operations and Strategy - Huntsman Corporation operates three major polyurethane manufacturing facilities in the U.S., Europe, and China, along with 28 strategically located downstream facilities[31]. - The company produces over 2,500 distinct MDI-based polyurethane products, which are increasingly replacing traditional materials across various applications[32]. - Huntsman Corporation's strategy focuses on growing its differentiated product offerings, including specialty MDI and polyols, which require enhanced formulating capabilities[42]. - The company has made several "bolt-on" acquisitions in recent years to expand its downstream footprint and align with strategic goals[46]. - Huntsman Building Solutions, formed through acquisitions, offers significant growth potential as energy efficiency standards increase globally[34]. - The joint venture with Sinopec to build a world-scale PO/MTBE plant in Nanjing, China, reflects Huntsman's commitment to supporting long-term demand growth in the region[33]. - Huntsman Corporation markets its polyurethane chemicals to over 6,500 customers in more than 90 countries, emphasizing customer support and technical service[44]. - The company’s polyurethane chemicals are primarily used in insulation, automotive, furniture, and construction markets, highlighting diverse end-use applications[44]. Production Capacity and Raw Materials - The total annual production capacity of MDI across various facilities is 2,921 million pounds, with Geismar, Louisiana having a capacity of 1,060 million pounds and Rotterdam, The Netherlands at 1,036 million pounds[48]. - The company holds approximately 78% of the nitrobenzene and aniline production capacity in the Rubicon joint venture, which enhances scale and reduces costs[50]. - The company is involved in two joint ventures in China for MDI production, with a 35% ownership in SLIC and a 70% ownership in HPS, contributing to its production capabilities[51]. - The Performance Products segment has a total production capacity of 884 million pounds for amines, with 550 million pounds in North America and 227 million pounds in EAME[72]. - The primary raw materials for MDI production include benzene and PO, with benzene historically being the largest component of raw material costs[54]. - The company has a competitive cost base due to its facilities being located within integrated petrochemical complexes, which enhances scale and lowers costs[74]. Market Position and Competition - The company is the largest global producer of polyetheramines and the second largest producer of maleic anhydride, which is used in various applications including construction and automotive[58][59]. - The company sells approximately 250 products to over 950 customers globally, leveraging extensive market knowledge and established customer relationships[68]. - The company’s maleic anhydride technology is considered superior in feedstock and energy efficiency, supporting growing demand for BDO[66]. - The company competes primarily on product performance and innovation in the amines market, with key competitors including BASF and Dow[78]. - The Advanced Materials segment is a leading global manufacturer of advanced polymer products, focusing on customer-specific needs across various industries[80]. - The segment serves over 1,900 customers in markets including aerospace, automotive, oil and gas, and electrical power transmission[81]. Environmental, Health, and Safety (EHS) - The company incurred capital expenditures for Environmental, Health and Safety (EHS) matters totaling $44 million in 2022, $36 million in 2021, and $18 million in 2020, with an estimated $32 million for 2023[114]. - The company is subject to extensive regulations regarding greenhouse gas emissions, with the EU targeting a reduction of at least 40% below 1990 levels by 2030 and a binding renewable energy target of at least 32%[118]. - The U.S. rejoined the Paris Agreement in February 2021, aiming to reduce global methane emissions by at least 30% below 2020 levels by 2030[119]. - The company is managing and reporting greenhouse gas emissions as required by law, but potential future regulations may increase operational costs[121]. - The company has developed policies and management systems to enhance compliance with EHS legal requirements and minimize waste production[114]. - The company may incur liabilities for environmental remediation at current or former facilities, which could impact financial statements if indemnities are not honored[117]. - The company’s operations are increasingly subject to regulations aimed at reducing greenhouse gas emissions, which may lead to increased capital and operating costs[120]. - The company’s capital expenditures for EHS matters have shown a significant increase from $18 million in 2020 to $44 million in 2022, indicating a growing focus on compliance and sustainability[114]. Workforce and Training - As of December 31, 2022, the company employed approximately 7,000 associates globally, with a focus on health and safety standards[107][108]. - The ASTM 2920 Level 1 injury rate for 2022 was 0.21, indicating a commitment to workplace safety[108]. - The company maintains a strong ethical framework, with annual training on Business Conduct Guidelines for all employees[109]. - The company’s commitment to training and talent development includes providing technical and leadership training to associates, customers, and suppliers[111]. Financial and Market Risks - The company is exposed to market risks, including changes in interest rates, foreign exchange rates, and commodity prices, and utilizes derivative instruments to manage these exposures[272].

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |---------------------------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4Q22 Earnings | | | | | | | | | | | | Summary February 21, 2023 | | | | | | | | | | | | | | | | | | | | | | | This presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securit ...

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |--------------------------------------|-------|-------|-------|-------|-------|-------|-------|-------|-------| | Investor Presentation | | | | | | | | | | | Huntsman Corporation (NYSE – HUN) | | | | | | | | | | | Fourth Quarter 2022 | | | | | | | | | | | | | | | | | | | | 1 | General Disclosure Forward-Looking Statements This presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and S ...

Financial Data and Key Metrics Changes - Adjusted EBITDA for the third quarter was $271 million, a decline of $78 million or 22% compared to the third quarter of 2021, and a sequential decline of $139 million or 34% [22] - Sales volumes declined by 15% during the quarter, with Europe down 23%, the Americas down 14%, and Asia down 7% [23] - Earnings per share for the quarter came in at $0.71 compared to $1.02 in the prior year [30] Business Line Data and Key Metrics Changes - Polyurethanes division reported adjusted EBITDA of $138 million, with sales volumes declining 16% [7] - Performance Products reported adjusted EBITDA of $110 million, a 7% increase year-over-year, with a strong adjusted EBITDA margin of 25% [15] - Advanced Materials reported adjusted EBITDA of $58 million, a 21% increase over the previous year's third quarter, despite a 16% decline in volumes [18] Market Data and Key Metrics Changes - Demand in Europe decreased significantly by 23%, while demand in China was impacted by lower economic growth due to COVID policies [15][10] - The joint venture in China contributed approximately $18 million in equity earnings for the quarter, down from $32 million a year ago [11] - Natural gas prices in Europe remain at historically high levels, significantly impacting profitability [9] Company Strategy and Development Direction - The company is implementing a European restructuring plan to reduce costs by at least $40 million by exiting certain legacy commercial and R&D facilities [36][29] - The focus is on aligning production with customer demand and managing costs effectively, particularly in the polyurethanes business [13][46] - The company is committed to returning cash to shareholders through dividends and share buybacks while exploring bolt-on acquisitions [41][66] Management's Comments on Operating Environment and Future Outlook - Management highlighted the challenges posed by high inflation, energy volatility, and geopolitical tensions affecting the European market [35] - The company expects continued destocking in the U.S. and a muted economy in China, with significant headwinds anticipated in Europe [14][42] - Management remains cautiously optimistic about improvements in 2023, contingent on stabilizing inflation and economic recovery in China [70] Other Important Information - The company achieved an annualized run rate of $160 million in cost savings by the end of Q3, with expectations to exceed $170 million by the end of 2022 [27] - Free cash flow from continuing operations for Q3 was $228 million, with total free cash flow over the last 12 months approximately $1.1 billion [30] - The company expects to receive approximately $540 million in after-tax cash proceeds from the sale of its Textile Effects business [32] Q&A Session Summary Question: Sequential move from Q3 to Q4 regarding energy costs, destocking, and volume declines - Management indicated that about 50% to 60% of the decline in demand is related to inventory adjustments, with expectations for inventory depletion by early 2023 [50][51] Question: Asset footprint in polyurethanes and potential rationalization - The company is exploring options in Southeast Asia for rationalization, focusing on higher-margin materials [54] Question: Performance Products margins amidst weaker volumes - Management confirmed that margin discipline has been strong, with pricing strategies in place to offset raw material costs [57] Question: Loading on the new splitter and potential delays due to the economy - The automotive sector remains strong, and management anticipates shifts in production from Europe to North America [60] Question: Fourth quarter free cash flow expectations - Management expects to generate over $100 million in free cash flow in Q4, supported by net working capital inflow [65] Question: 2023 EBITDA outlook - Management anticipates a year similar to 2022 but with potential improvements as cost reduction initiatives take effect [68] Question: MDI competitive environment and pricing dynamics - The company is focused on matching production to customer demand and maintaining pricing discipline despite market volatility [72][74] Question: European restructuring characterization - Management indicated that the restructuring is primarily a cost realignment, with further adjustments possible as customer decisions evolve [95]