Huntsman(HUN) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for both Huntsman Corporation and its principal operating subsidiary, Huntsman International LLC, for the quarterly period ended June 30, 2025 Huntsman Corporation and Subsidiaries Financial Statements For the six months ended June 30, 2025, Huntsman Corporation reported a net loss of $134 million on total revenues of $2.87 billion, a significant shift from a net income of $15 million on total revenues of $3.04 billion in the prior-year period Huntsman Corporation - Key Financials (Six Months Ended June 30) | Financial Metric (In Millions) | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $2,868 | $3,044 | | Gross Profit | $383 | $444 | | Operating (Loss) Income | $(78) | $(4) | | Net (Loss) Income | $(134) | $15 | | Net (Loss) Income Attributable to Huntsman | $(163) | $(15) | | Diluted (Loss) per Share | $(0.94) | $(0.09) | Huntsman Corporation - Balance Sheet Summary (In Millions) | Balance Sheet Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $2,208 | $2,125 | | Total Assets | $7,147 | $7,114 | | Total Current Liabilities | $1,544 | $1,565 | | Total Liabilities | $4,086 | $3,951 | | Total Equity | $3,061 | $3,163 | Huntsman Corporation - Cash Flow Summary (Six Months Ended June 30, In Millions) | Cash Flow Item | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $17 | $(19) | | Net Cash from Investing Activities | $(32) | $(80) | | Net Cash from Financing Activities | $69 | $(102) | | Capital Expenditures | $(73) | $(92) | Huntsman International LLC and Subsidiaries Financial Statements Huntsman International LLC, the primary operating company, reported a net loss of $132 million for the first six months of 2025, compared to a net income of $17 million in the same period of 2024 Huntsman International LLC - Key Financials (Six Months Ended June 30) | Financial Metric (In Millions) | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $2,868 | $3,044 | | Gross Profit | $383 | $444 | | Operating (Loss) Income | $(76) | $(2) | | Net (Loss) Income | $(132) | $17 | | Net (Loss) Income Attributable to Huntsman Int'l | $(161) | $(13) | Huntsman International LLC - Cash Flow Summary (Six Months Ended June 30, In Millions) | Cash Flow Item | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $18 | $(18) | | Net Cash from Investing Activities | $(37) | $(89) | | Net Cash from Financing Activities | $73 | $(94) | Notes to Unaudited Condensed Consolidated Financial Statements The notes provide critical context to the financial statements, detailing accounting policies, business combinations, restructuring activities, debt structure, and segment performance - The company operates in three segments: Polyurethanes, Performance Products, and Advanced Materials[43] - In Q1 2025, the company received a final liquidating distribution of approximately $41 million from the SLIC joint venture separation, with the acquisition resulting in a net gain of approximately $5 million in Q1 2025[49][50] - The Performance Products segment initiated a restructuring program in Q2 2025 to close its European maleic anhydride facility in Moers, Germany, resulting in an $88 million charge, including a $77 million asset impairment[62] - The Polyurethanes segment expanded its restructuring program in Q2 2025 to optimize its European organization, recording a $38 million expense in H1 2025, with an additional $24 million expected through 2027[63][64] - On March 28, 2025, the company redeemed its 4.25% senior notes due April 2025 for approximately $315 million[76] - In Q1 2025, the company received a final legal award of approximately $66 million in its case against Praxair/Linde, recognizing net income of $33 million after legal fees[115] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a challenging quarter, with total revenues and profits decreasing year-over-year due to lower average selling prices and lower sales volumes across all segments, leading to a significant net loss driven by weaker market conditions and substantial restructuring and asset impairment charges Results of Operations In Q2 2025, Huntsman's total revenues decreased by 7% to $1.46 billion, and gross profit dropped 25% to $182 million compared to Q2 2024, resulting in a stark reversal to a loss from continuing operations of $146 million from a $31 million income in the prior-year quarter Huntsman Corporation - Overall Performance (In Millions) | Metric | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $1,458 | $1,574 | (7)% | $2,868 | $3,044 | (6)% | | Gross Profit | $182 | $243 | (25)% | $383 | $444 | (14)% | | Operating (Loss) Income | $(120) | $34 | NM | $(78) | $(4) | NM | | (Loss) Income from Cont. Ops. | $(146) | $31 | NM | $(134) | $15 | NM | | Adjusted EBITDA | $74 | $131 | (44)% | $146 | $212 | (31)% | - The decline in Q2 2025 results was driven by lower average selling prices and lower sales volumes, a $120 million increase in restructuring costs, and an $18 million decrease in equity income from unconsolidated affiliates[168] - Selling, general and administrative (SG&A) expenses decreased by 9% in Q2 2025 due to the impact of restructuring programs and favorable currency translation[168] Segment Analysis All three segments experienced year-over-year declines in Q2 2025, with Polyurethanes' Adjusted EBITDA falling 61% due to lower MDI average selling prices and lower sales volumes, Performance Products' Adjusted EBITDA dropping 30% impacted by lower sales volumes from softer markets and reduced operating rates, and Advanced Materials' Adjusted EBITDA decreasing 13% on lower average selling prices and lower sales volumes Segment Adjusted EBITDA (In Millions) | Segment | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Polyurethanes | $31 | $80 | (61)% | $73 | $119 | (39)% | | Performance Products | $32 | $46 | (30)% | $62 | $88 | (30)% | | Advanced Materials | $45 | $52 | (13)% | $81 | $95 | (15)% | - Polyurethanes: The decrease was driven by lower MDI average selling prices from unfavorable supply/demand dynamics and lower sales volumes due to weak construction demand and a plant turnaround in Rotterdam[173] - Performance Products: The decline was caused by lower sales volumes from reduced operating rates at the Moers, Germany facility and softer market conditions[174] - Advanced Materials: The decrease was due to lower average selling prices from unfavorable sales mix and reduced demand in coatings and aerospace markets[175] Liquidity and Capital Resources As of June 30, 2025, Huntsman had total liquidity of $1.287 billion, including $399 million in cash and $888 million in available credit, with net cash from operating activities improving to a $21 million inflow for H1 2025 from an $8 million outflow in H1 2024 - Total liquidity as of June 30, 2025, was $1,287 million, comprising $399 million in cash, $836 million available under the 2022 Revolving Credit Facility, and $52 million under A/R Programs[191] Cash Flow Comparison (Six Months Ended June 30, In Millions) | Cash Flow Item | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $21 | $(8) | | Net Cash from Investing Activities | $(32) | $(80) | | Net Cash from Financing Activities | $69 | $(102) | - Working capital increased by $104 million to $664 million from December 31, 2024, primarily due to an increase in accounts receivable and a decrease in accounts payable[190] - The company expects to spend between $180 million and $190 million on capital expenditures in 2025[196] - The company has $547 million remaining under its share repurchase program, but repurchases are limited by the Second Amendment to the 2022 Revolving Credit Facility[196] Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks including changes in interest rates, foreign exchange rates, and commodity prices - Huntsman is exposed to market risks from interest rates, foreign exchange rates, and commodity prices[197] - The company uses derivative instruments to manage exposures and hedges its net investment in some European operations[197] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025 - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[198] - No material changes were made to internal control over financial reporting during the quarter ended June 30, 2025[199] PART II. OTHER INFORMATION Legal Proceedings There have been no material developments in the legal proceedings previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material developments have occurred regarding legal proceedings since the last Annual Report[201] Risk Factors This section refers investors to the detailed discussion of risk factors in the company's Annual Report on Form 10-K for the year ended December 31, 2024, indicating no new material risk factors have emerged - For information on risk factors, the report refers to the Annual Report on Form 10-K for the year ended December 31, 2024[202] Unregistered Sales of Equity Securities and Use of Proceeds During the three months ended June 30, 2025, the company did no shares were repurchased under its publicly announced share repurchase program, though $547 million remained authorized for future repurchases, which are currently limited by a credit facility amendment - No shares were repurchased under the company's share repurchase program during the three months ended June 30, 2025[205] - Approximately $547 million remains available for repurchase under the existing program as of the end of the quarter[204] - Share repurchases are currently limited by the Second Amendment to the 2022 Revolving Credit Facility[205] Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO, and various agreements related to stock incentive plans and credit facilities - Exhibits filed include CEO/CFO certifications under Sarbanes-Oxley Sections 302 and 906[208] - The Second Amendment to the Credit Agreement, dated May 23, 2025, is included as an exhibit[208]