hun20230331_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 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

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 April 25, 2023, 181,183,489 shares of common stock of Huntsman Corporation were outstanding and 2,728 units of membership interest of Huntsman International LLC were outstanding. There is no trading market for Huntsman International LLC’s units of membership interest. All of Huntsman International LLC’s units of membership interest are held by Huntsman Corporation.

This Quarterly Report on Form 10-Q presents information for two registrants: Huntsman Corporation and Huntsman International LLC. Huntsman International LLC is a wholly-owned subsidiary of Huntsman Corporation and is the principal operating company of Huntsman Corporation. The information reflected in this Quarterly Report on Form 10-Q is equally applicable to both Huntsman Corporation and Huntsman International LLC, except where otherwise indicated. Huntsman International LLC meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and, to the extent applicable, is therefore filing this form with a reduced disclosure format.

Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD

ENDED March 31, 2023

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION	4
ITEM 1.	Condensed Consolidated Financial Statements (Unaudited)	4
	Huntsman Corporation and Subsidiaries:
	Unaudited Condensed Consolidated Balance Sheets	4
	Unaudited Condensed Consolidated Statements of Operations	5
	Unaudited Condensed Consolidated Statements of Comprehensive Income	6
	Unaudited Condensed Consolidated Statements of Equity	7
	Unaudited Condensed Consolidated Statements of Cash Flows	8
	Huntsman International LLC and Subsidiaries:
	Unaudited Condensed Consolidated Balance Sheets	9
	Unaudited Condensed Consolidated Statements of Operations	10
	Unaudited Condensed Consolidated Statements of Comprehensive Income	11
	Unaudited Condensed Consolidated Statements of Equity	12
	Unaudited Condensed Consolidated Statements of Cash Flows	13
	Huntsman Corporation and Subsidiaries and Huntsman International LLC and Subsidiaries:
	Notes to Unaudited Condensed Consolidated Financial Statements	14
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	44
ITEM 4.	Controls and Procedures	44
PART II	OTHER INFORMATION	45
ITEM 1.	Legal Proceedings	45
ITEM 1A.	Risk Factors	45
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
ITEM 6.	Exhibits	46

Table of Contents

FORWARD-LOOKING STATEMENTS

Certain information set forth in this report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical factual information are forward-looking statements, including without limitation statements regarding: projections of revenue, expenses, profit, profit margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions, divestitures, 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, 2022.

Table of Contents

	*March 31,*			*December 31,*
	*2023*			*2022*
ASSETS
Current assets:
Cash and cash equivalents(a)	$	615		$	654
Accounts and notes receivable (net of allowance for doubtful accounts of $13 and $14, respectively), ($306 and $272 pledged as collateral, respectively)(a)		878			813
Accounts receivable from affiliates		9			21
Inventories(a)		1,048			995
Other current assets		150			190
Current assets held for sale		—			472
Total current assets		2,700			3,145
Property, plant and equipment, net(a)		2,366			2,377
Investment in unconsolidated affiliates		441			425
Intangible assets, net		415			425
Goodwill		642			641
Deferred income taxes		136			147
Operating lease right-of-use assets		367			374
Other noncurrent assets(a)		696			686
Total assets	$	7,763		$	8,220

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable(a)	$	791		$	907
Accounts payable to affiliates		66			54
Accrued liabilities(a)		381			429
Current portion of debt(a)		11			66
Current operating lease liabilities(a)		48			51
Current liabilities held for sale		—			194
Total current liabilities		1,297			1,701
Long-term debt(a)		1,509			1,671
Deferred income taxes		238			250
Noncurrent operating lease liabilities(a)		334			336
Other noncurrent liabilities(a)		395			422
Total liabilities		3,773			4,380
Commitments and contingencies (Notes 14 and 15)
Equity
Huntsman Corporation stockholders’ equity:
Common stock $0.01 par value, 1,200,000,000 shares authorized, 261,880,013 and 261,148,217 shares issued and 180,894,240 and 183,634,464 shares outstanding, respectively		3			3
Additional paid-in capital		4,195			4,156
Treasury stock, 80,985,773 and 77,513,753 shares, respectively		(2,038	)		(1,937	)
Unearned stock-based compensation		(58	)		(35	)
Retained earnings		2,804			2,705
Accumulated other comprehensive loss		(1,143	)		(1,268	)
Total Huntsman Corporation stockholders’ equity		3,763			3,624
Noncontrolling interests in subsidiaries		227			216
Total equity		3,990			3,840
Total liabilities and equity	$	7,763		$	8,220

	*Three months*
	*ended*
	*March 31,*
	*2023*			*2022*
Revenues:
Trade sales, services and fees, net	$	1,573		$	2,132
Related party sales		33			60
Total revenues		1,606			2,192
Cost of goods sold		1,337			1,677
Gross profit		269			515
Operating expenses:
Selling, general and administrative		188			190
Research and development		30			34
Restructuring, impairment and plant closing credits		(7	)		—
Other operating (income) expense, net		(3	)		8
Total operating expenses		208			232
Operating income		61			283
Interest expense, net		(18	)		(14	)
Equity in income of investment in unconsolidated affiliates		12			15
Fair value adjustments to Venator investment, net		(1	)		(2	)
Other income, net		1			—
Income from continuing operations before income taxes		55			282
Income tax expense		(11	)		(60	)
Income from continuing operations		44			222
Income from discontinued operations, net of tax		122			18
Net income		166			240
Net income attributable to noncontrolling interests		(13	)		(17	)
Net income attributable to Huntsman Corporation	$	153		$	223

Basic income per share:
Income from continuing operations attributable to Huntsman Corporation common stockholders	$	0.17		$	0.96
Income from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax		0.67			0.09
Net income attributable to Huntsman Corporation common stockholders	$	0.84		$	1.05
Weighted average shares		182.7			212.7

Diluted income per share:
Income from continuing operations attributable to Huntsman Corporation common stockholders	$	0.17		$	0.95
Income from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax		0.66			0.09
Net income attributable to Huntsman Corporation common stockholders	$	0.83		$	1.04
Weighted average shares		184.4			215.4

Amounts attributable to Huntsman Corporation:
Income from continuing operations	$	31		$	205
Income from discontinued operations, net of tax		122			18
Net income	$	153		$	223

	*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, 2023		183,634,464		$	3	$	4,156	$	(1,937	)	$	(35	)	$	2,705		$	(1,268	)	$	216		$	3,840
Net income		—			—		—		—			—			153			—			13			166
Other comprehensive income		—			—		—		—			—			—			125			2			127
Issuance of nonvested stock awards		—			—		32		—			(32	)		—			—			—			—
Vesting of stock awards		1,016,782			—		5		—			—			—			—			—			5
Recognition of stock-based compensation		—			—		1		—			9			—			—			—			10
Repurchase and cancellation of stock awards		(301,231	)		—		—		—			—			(9	)		—			—			(9	)
Stock options exercised		16,245			—		1		—			—			(1	)		—			—			—
Treasury stock repurchased		(3,472,020	)		—		—		(101	)		—			—			—			—			(101	)
Distributions to noncontrolling interests		—			—		—		—			—			—			—			(4	)		(4	)
Dividends declared on common stock ($0.2375 per share)		—			—		—		—			—			(44	)		—			—			(44	)
Balance, March 31, 2023		180,894,240		$	3	$	4,195	$	(2,038	)	$	(58	)	$	2,804		$	(1,143	)	$	227		$	3,990

	*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, 2022		214,170,287		$	3	$	4,102	$	(934	)	$	(25	)	$	2,435		$	(1,203	)	$	181		$	4,559
Net income		—			—		—		—			—			223			—			17			240
Other comprehensive loss		—			—		—		—			—			—			(11	)		(1	)		(12	)
Issuance of nonvested stock awards		—			—		32		—			(32	)		—			—			—			—
Vesting of stock awards		1,327,568			—		7		—			—			—			—			—			7
Recognition of stock-based compensation		—			—		1		—			8			—			—			—			9
Repurchase and cancellation of stock awards		(361,250	)		—		—		—			—			(13	)		—			—			(13	)
Stock options exercised		387,899			—		10		—			—			(5	)		—			—			5
Treasury stock repurchased		(5,549,348	)		—		—		(210	)		—			—			—			—			(210	)
Dividends declared on common stock ($0.2125 per share)		—			—		—		—			—			(45	)		—			—			(45	)
Balance, March 31, 2022		209,975,156		$	3	$	4,152	$	(1,144	)	$	(49	)	$	2,595		$	(1,214	)	$	197		$	4,540

	*Three months*
	*ended*
	*March 31,*
	*2023*			*2022*
Operating Activities:
Net income	$	166		$	240
Less: Income from discontinued operations, net of tax		(122	)		(18	)
Income from continuing operations		44			222
Adjustments to reconcile income from continuing operations to net cash (used in) provided by operating activities from continuing operations:
Equity in income of investment in unconsolidated affiliates		(12	)		(15	)
Unrealized net losses on fair value adjustments to Venator investment, net		1			2
Depreciation and amortization		69			67
Noncash lease expense		17			15
Deferred income taxes		(20	)		12
Noncash stock-based compensation		9			10
Other, net		(1	)		1
Changes in operating assets and liabilities:
Accounts and notes receivable		(23	)		(119	)
Inventories		(50	)		(158	)
Other current assets		23			13
Other noncurrent assets		(17	)		(1	)
Accounts payable		(75	)		77
Accrued liabilities		(70	)		(31	)
Other noncurrent liabilities		(17	)		(28	)
Net cash (used in) provided by operating activities from continuing operations		(122	)		67
Net cash (used in) provided by operating activities from discontinued operations		(32	)		18
Net cash (used in) provided by operating activities		(154	)		85

Investing Activities:
Capital expenditures		(46	)		(64	)
Cash received from sale of businesses, net		541			—
Other, net		(2	)		4
Net cash provided by (used in) investing activities from continuing operations		493			(60	)
Net cash used in investing activities from discontinued operations		(4	)		(5	)
Net cash provided by (used in) investing activities		489			(65	)

Financing Activities:
Net (repayments) borrowings on revolving loan facilities		(220	)		8
Repayments of long-term debt		(4	)		(3	)
Dividends paid to common stockholders		(44	)		(46	)
Distributions paid to noncontrolling interests		(4	)		—
Repurchase and cancellation of awards		(9	)		(13	)
Repurchase of common stock		(97	)		(203	)
Proceeds from issuance of common stock		—			5
Other, net		(1	)		—
Net cash used in financing activities		(379	)		(252	)
Effect of exchange rate changes on cash		5			(2	)
Decrease in cash and cash equivalents		(39	)		(234	)
Cash and cash equivalents at beginning of period		654			1,041
Cash and cash equivalents at end of period	$	615		$	807

Supplemental cash flow information:
Cash paid for interest	$	10		$	9
Cash paid for income taxes		29			32

As of March 31, 2023 and 2022, the amount of capital expenditures in accounts payable was $21 million and $41 million, respectively.

	*March 31,*			*December 31,*
	*2023*			*2022*
ASSETS
Current assets:
Cash and cash equivalents(a)	$	615		$	654
Accounts and notes receivable (net of allowance for doubtful accounts of $13 and $14, respectively), ($306 and $272 pledged as collateral, respectively)(a)		878			813
Accounts receivable from affiliates		9			21
Inventories(a)		1,048			995
Other current assets		150			196
Current assets held for sale		—			472
Total current assets		2,700			3,151
Property, plant and equipment, net(a)		2,366			2,377
Investment in unconsolidated affiliates		441			425
Intangible assets, net		415			425
Goodwill		642			641
Deferred income taxes		136			147
Operating lease right-of-use assets		367			374
Other noncurrent assets(a)		696			686
Total assets	$	7,763		$	8,226

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable(a)	$	787		$	907
Accounts payable to affiliates		66			54
Accrued liabilities(a)		374			427
Current portion of debt(a)		11			66
Current operating lease liabilities(a)		48			51
Current liabilities held for sale		—			194
Total current liabilities		1,286			1,699
Long-term debt(a)		1,509			1,671
Deferred income taxes		242			254
Noncurrent operating lease liabilities(a)		334			336
Other noncurrent liabilities(a)		390			414
Total liabilities		3,761			4,374
Commitments and contingencies (Notes 14 and 15)
Equity
Huntsman International LLC members’ equity:
Members’ equity, 2,728 units issued and outstanding		3,769			3,759
Retained earnings		1,133			1,130
Accumulated other comprehensive loss		(1,127	)		(1,253	)
Total Huntsman International LLC members’ equity		3,775			3,636
Noncontrolling interests in subsidiaries		227			216
Total equity		4,002			3,852
Total liabilities and equity	$	7,763		$	8,226

	*Three months*
	*ended*
	*March 31,*
	*2023*			*2022*
Revenues:
Trade sales, services and fees, net	$	1,573		$	2,132
Related party sales		33			60
Total revenues		1,606			2,192
Cost of goods sold		1,337			1,677
Gross profit		269			515
Operating expenses:
Selling, general and administrative		186			187
Research and development		30			34
Restructuring, impairment and plant closing credits		(7	)		—
Other operating (income) expense, net		(3	)		8
Total operating expenses		206			229
Operating income		63			286
Interest expense, net		(18	)		(14	)
Equity in income of investment in unconsolidated affiliates		12			15
Fair value adjustments to Venator investment, net		(1	)		(2	)
Other income, net		1			—
Income from continuing operations before income taxes		57			285
Income tax expense		(11	)		(60	)
Income from continuing operations		46			225
Income from discontinued operations, net of tax		122			18
Net income		168			243
Net income attributable to noncontrolling interests		(13	)		(17	)
Net income attributable to Huntsman International LLC	$	155		$	226

	*Huntsman International LLC Members*
	*Members'*							*Accumulated other*			*Noncontrolling*
	*equity*							*comprehensive*			*interests in*			*Total*
	*Units*		*Amount*		*Retained earnings*			*loss*			*subsidiaries*			*equity*
Balance, January 1, 2023		2,728	$	3,759	$	1,130		$	(1,253	)	$	216		$	3,852
Net income		—		—		155			—			13			168
Dividends paid to parent		—		—		(43	)		—			—			(43	)
Other comprehensive income		—		—		—			126			2			128
Contribution from parent		—		10		—			—			—			10
Distribution to parent		—		—		(109	)		—			—			(109	)
Distributions to noncontrolling interests		—		—		—			—			(4	)		(4	)
Balance, March 31, 2023		2,728		3,769		1,133			(1,127	)		227			4,002