hun20210930_10q.htm

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, 2021

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

Securities registered pursuant to Section 12(b) of the Act:

Registrant	Title of each class	Trading Symbol	Name of each exchange on which registered
Huntsman Corporation	Common Stock, par value $0.01 per share	HUN	New York Stock Exchange
Huntsman International LLC	NONE	NONE	NONE

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 every Interactive Data File required to be submitted 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 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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Huntsman Corporation	Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐	Emerging growth company ☐
Huntsman International LLC	Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	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 13(a) of the Exchange Act.

Huntsman Corporation		☐
Huntsman International LLC		☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Huntsman Corporation	Yes ☐	No ☒
Huntsman International LLC	Yes ☐	No ☒

On October 20, 2021, 218,030,754 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

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; projected impact of COVID-19 on our operations and future financial results; 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 any projections derived from 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 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, 2020.

	*September 30,*			*December 31,*
	*2021*			*2020*
ASSETS
Current assets:
Cash and cash equivalents(a)	$	505		$	1,593
Accounts and notes receivable (net of allowance for doubtful accounts of $25 and $26, respectively), ($336 and $198 pledged as collateral, respectively)(a)		1,216			902
Accounts receivable from affiliates		23			8
Inventories(a)		1,174			848
Other current assets		196			217
Total current assets		3,114			3,568
Property, plant and equipment, net(a)		2,540			2,505
Investment in unconsolidated affiliates		466			373
Intangible assets, net		404			453
Goodwill		741			533
Deferred income taxes		281			288
Operating lease right-of-use assets		418			445
Other noncurrent assets(a)		605			548
Total assets	$	8,569		$	8,713

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable(a)	$	955		$	842
Accounts payable to affiliates		30			34
Accrued liabilities(a)		569			458
Current portion of debt(a)		16			593
Current operating lease liabilities(a)		54			52
Total current liabilities		1,624			1,979
Long-term debt(a)		1,567			1,528
Deferred income taxes		201			212
Noncurrent operating lease liabilities(a)		383			411
Other noncurrent liabilities(a)		840			910
Total liabilities		4,615			5,040
Commitments and contingencies (Notes 15 and 16)
Equity
Huntsman Corporation stockholders’ equity:
Common stock $0.01 par value, 1,200,000,000 shares authorized, 259,468,984 and 258,520,411 shares issued and 217,028,320 and 220,046,262 shares outstanding, respectively		3			3
Additional paid-in capital		4,096			4,048
Treasury stock, 42,448,875 and 38,477,091 shares, respectively		(833	)		(731	)
Unearned stock-based compensation		(30	)		(19	)
Retained earnings		1,881			1,564
Accumulated other comprehensive loss		(1,338	)		(1,346	)
Total Huntsman Corporation stockholders’ equity		3,779			3,519
Noncontrolling interests in subsidiaries		175			154
Total equity		3,954			3,673
Total liabilities and equity	$	8,569		$	8,713

	*Three months*						*Nine months*
	*ended*						*ended*
	*September 30,*						*September 30,*
	*2021*			*2020*			*2021*			*2020*
Revenues:
Trade sales, services and fees, net	$	2,230		$	1,487		$	6,006		$	4,262
Related party sales		55			23			140			88
Total revenues		2,285			1,510			6,146			4,350
Cost of goods sold		1,802			1,231			4,840			3,612
Gross profit		483			279			1,306			738
Operating expenses:
Selling, general and administrative		204			178			620			563
Research and development		38			33			113			101
Restructuring, impairment and plant closing (credits) costs		(1	)		12			34			34
Gain on sale of India-based DIY business		—			—			(28	)		—
Other operating income, net		(3	)		(3	)		(13	)		(4	)
Total operating expenses		238			220			726			694
Operating income		245			59			580			44
Interest expense, net		(15	)		(24	)		(52	)		(63	)
Equity in income of investment in unconsolidated affiliates		34			21			118			25
Fair value adjustments to Venator investment		(3	)		6			(28	)		(100	)
Loss on early extinguishment of debt		—			—			(27	)		—
Other income, net		7			10			23			27
Income (loss) from continuing operations before income taxes		268			72			614			(67	)
Income tax expense		(38	)		(15	)		(114	)		(9	)
Income (loss) from continuing operations		230			57			500			(76	)
(Loss) income from discontinued operations, net of tax		(5	)		—			(3	)		782
Net income		225			57			497			706
Net income attributable to noncontrolling interests		(16	)		(9	)		(49	)		(15	)
Net income attributable to Huntsman Corporation	$	209		$	48		$	448		$	691

Basic income (loss) per share:
Income (loss) from continuing operations attributable to Huntsman Corporation common stockholders	$	0.97		$	0.22		$	2.04		$	(0.41	)
(Loss) income from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax		(0.02	)		—			(0.01	)		3.54
Net income attributable to Huntsman Corporation common stockholders	$	0.95		$	0.22		$	2.03		$	3.13
Weighted average shares		219.4			219.8			220.2			220.8

Diluted income (loss) per share:
Income (loss) from continuing operations attributable to Huntsman Corporation common stockholders	$	0.96		$	0.22		$	2.03		$	(0.41	)
(Loss) income from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax		(0.02	)		—			(0.01	)		3.54
Net income attributable to Huntsman Corporation common stockholders	$	0.94		$	0.22		$	2.02		$	3.13
Weighted average shares		221.3			221.3			222.2			220.8

Amounts attributable to Huntsman Corporation common stockholders:
Income (loss) from continuing operations	$	214		$	48		$	451		$	(91	)
(Loss) income from discontinued operations, net of tax		(5	)		—			(3	)		782
Net income	$	209		$	48		$	448		$	691

	*Huntsman Corporation Stockholders' Equity*
																	*Accumulated*
	*Shares*					*Additional*					*Unearned*						*other*			*Noncontrolling*
	*common*			*Common*		*paid-in*		*Treasury*			*stock-based*			*Retained*			*comprehensive*			*interests in*			*Total*
	*stock*			*stock*		*capital*		*stock*			*compensation*			*earnings*			*loss*			*subsidiaries*			*equity*
Balance, January 1, 2021		220,046,262		$	3	$	4,048	$	(731	)	$	(19	)	$	1,564		$	(1,346	)	$	154		$	3,673
Net income		—			—		—		—			—			83			—			17			100
Other comprehensive loss		—			—		—		—			—			—			(13	)		—			(13	)
Issuance of nonvested stock awards		—			—		25		—			(25	)		—			—			—			—
Vesting of stock awards		664,818			—		5		—			—			—			—			—			5
Recognition of stock-based compensation		—			—		2		—			6			—			—			—			8
Repurchase and cancellation of stock awards		(202,961	)		—		—		—			—			(6	)		—			—			(6	)
Stock options exercised		204,005			—		5		—			—			(2	)		—			—			3
Dividends declared on common stock ($0.1625 per share)		—			—		—		—			—			(36	)		—			—			(36	)
Balance, March 31, 2021		220,712,124		$	3	$	4,085	$	(731	)	$	(38	)	$	1,603		$	(1,359	)	$	171		$	3,734
Net income		—			—		—		—			—			156			—			16			172
Other comprehensive income		—			—		—		—			—			—			41			1			42
Vesting of stock awards		3,732			—		—		—			—			—			—			—			—
Recognition of stock-based compensation		—			—		2		—			4			—			—			—			6
Repurchase and cancellation of stock awards		(19,912	)		—		—		—			—			(1	)		—			—			(1	)
Stock options exercised		263,962			—		6		—			—			(3	)		—			—			3
Dividends declared to noncontrolling interests		—			—		—		—			—			—			—			(30	)		(30	)
Dividends declared on common stock ($0.1875 per share)		—			—		—		—			—			(41	)		—			—			(41	)
Balance, June 30, 2021		220,959,906		$	3	$	4,093	$	(731	)	$	(34	)	$	1,714		$	(1,318	)	$	158		$	3,885
Net income		—			—		—		—			—			209			—			16			225
Other comprehensive (loss) income		—			—		—		—			—			—			(20	)		1			(19	)
Issuance of nonvested stock awards		—			—		1		—			(1	)		—			—			—			—
Vesting of stock awards		7,695			—		—		—			—			—			—			—			—
Recognition of stock-based compensation		—			—		1		—			5			—			—			—			6
Repurchase and cancellation of stock awards		(1,869	)		—		—		—			—			—			—			—			—
Stock options exercised		34,372			—		1		—			—			—			—			—			1
Treasury stock repurchased		(3,971,784	)		—		—		(102	)		—			—			—			—			(102	)
Dividends declared on common stock ($0.1875 per share)		—			—		—		—			—			(42	)		—			—			(42	)
Balance, September 30, 2021		217,028,320		$	3	$	4,096	$	(833	)	$	(30	)	$	1,881		$	(1,338	)	$	175		$	3,954

		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	9
	Huntsman International LLC and Subsidiaries:
	Condensed Consolidated Balance Sheets	11
	Condensed Consolidated Statements of Operations	12
	Condensed Consolidated Statements of Comprehensive Income	13
	Condensed Consolidated Statements of Equity	14
	Condensed Consolidated Statements of Cash Flows	15
	Huntsman Corporation and Subsidiaries and Huntsman International LLC and Subsidiaries:
	Notes to Condensed Consolidated Financial Statements	17
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	56
ITEM 4.	Controls and Procedures	56
PART II	OTHER INFORMATION	57
ITEM 1.	Legal Proceedings	57
ITEM 1A.	Risk Factors	57
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
ITEM 6.	Exhibits	58