Three months ended

March 31,

December 31,

In millions, except per share amounts

2018

2017

2017

Revenues

$2,295

$1,932

$          2,203

Net income

$   350

$     92

$             287

Adjusted net income⁽¹⁾

$   237

$   110

$             186

Diluted income per share

$  1.11

$  0.31

$            1.00

Adjusted diluted income per share⁽¹⁾

$  0.96

$  0.45

$            0.76

Adjusted EBITDA⁽¹⁾

$   405

$   260

$             360

Net cash provided by operating activities

from continuing operations

$   111

$     70

$             304

Free cash flow⁽³⁾

$     56

$     23

$             190

See end of press release for footnote explanations

Call-in numbers for the conference call:

U.S. participants

(888) 713 – 4213

International participants 

(617) 213 - 4865

Passcode 

755 496 16#

Call-in numbers for the replay:

U.S. participants 

(888) 286 - 8010

International participants 

(617) 801 - 6888

Replay code 

29385180

Table 1 – Results of Operations

Three months ended

March 31,

In millions, except per share amounts

2018

2017

Revenues

$2,295

$1,932

Cost of goods sold

1,755

1,542

Gross profit

540

390

Operating expenses

242

219

Restructuring, impairment and plant closing costs

2

9

Operating income

296

162

Interest expense

(27)

(48)

Equity in income of investment in unconsolidated affiliates

13

-

Other income, net

7

4

Income before income taxes

289

118

Income tax expense

(53)

(19)

Income from continuing operations

236

99

Income (loss) from discontinued operations, net of tax⁽⁴⁾

114

(7)

Net income

350

92

Net income attributable to noncontrolling interests, net of tax

(76)

(16)

Net income attributable to Huntsman Corporation

$   274

$     76

Adjusted EBITDA⁽¹⁾

$   405

$   260

Adjusted net income⁽¹⁾

$   237

$   110

Basic income per share

$  1.14

$  0.32

Diluted income per share

$  1.11

$  0.31

Adjusted diluted income per share⁽¹⁾

$  0.96

$  0.45

Common share information:

Basic shares outstanding

241

237

Diluted shares

246

243

Diluted shares for adjusted diluted income per share

246

243

See end of press release for footnote explanations

Table 2 – Results of Operations by Segment

Three months ended

March 31,

Better /

In millions

2018

2017

(Worse)

Segment Revenues:

Polyurethanes

$1,222

$   953

28%

Performance Products

603

533

13%

Advanced Materials

279

259

8%

Textile Effects

200

188

6%

Corporate and eliminations

(9)

(1)

n/m

Total

$2,295

$1,932

19%

Segment Adjusted EBITDA⁽¹⁾:

Polyurethanes

$   261

$   144

81%

Performance Products

102

84

21%

Advanced Materials

59

54

9%

Textile Effects

26

21

24%

Corporate, LIFO and other

(43)

(43)

0%

Total

$   405

$   260

56%

n/m = not meaningful

See end of press release for footnote explanations

Table 3 – Factors Impacting Sales Revenue

Three months ended

March 31, 2018 vs. 2017

Average Selling Price^(a)

Local

Exchange

Sales Mix

Sales

Currency

Rate

& Other

Volume^(b)

Total

Polyurethanes

15%

7%

(3)%

9%

28%

Performance Products

8%

3%

(8)%

10%

13%

Advanced Materials

2%

7%

2%

(3)%

8%

Textile Effects

(3)%

4%

2%

3%

6%

Total Company

8%

6%

(4)%

9%

19%

(a)

Excludes sales from tolling arrangements, by-products and raw materials.

(b)

Excludes sales from by-products and raw materials.

Table 4 – Reconciliation of U.S. GAAP to Non-GAAP Measures

 Income Tax 

 Diluted Income 

 EBITDA 

Expense

 Net Income 

 Per Share 

Three months ended

Three months ended

Three months ended

Three months ended

March 31,

March 31,

March 31,

March 31,

In millions, except per share amounts

2018

2017

2018

2017

2018

2017

2018

2017

Net income

$ 350

$   92

$ 350

$       92

$ 1.42

$  0.38

Net income attributable to noncontrolling interests

(76)

(16)

(76)

(16)

(0.31)

(0.07)

Net income attributable to Huntsman Corporation

274

76

274

76

1.11

0.31

Interest expense  from continuing operations

27

48

Interest expense from discontinued operations⁽⁴⁾

9

-

Income tax expense from continuing operations

53

19

$ (53)

$ (19)

Income tax expense from discontinued operations⁽⁴⁾

20

3

Depreciation and amortization from continuing operations

82

76

Depreciation and amortization from discontinued operations⁽⁴⁾

-

30

Acquisition and integration expenses

1

3

-

(1)

1

2

-

0.01

EBITDA / Income from discontinued operations, net of tax⁽⁴⁾

(143)

(26)

 N/A 

 N/A 

(114)

7

(0.46)

0.03

Noncontrolling  interest of discontinued operations⁽¹⁾⁽⁴⁾

55

3

 N/A 

 N/A 

55

3

0.22

0.01

Certain legal and other settlements and related expenses

7

-

(1)

-

6

-

0.02

-

Amortization of pension and postretirement actuarial losses

17

19

(4)

(4)

13

15

0.05

0.06

Restructuring, impairment and plant closing and transition costs 

3

9

(1)

(2)

2

7

0.01

0.03

Adjusted⁽¹⁾

$ 405

$ 260

$ (59)

$ (26)

$ 237

$      110

$ 0.96

$  0.45

Adjusted income tax expense⁽¹⁾

$   59

$       26

Net income attributable to noncontrolling interests, net of tax

76

16

Noncontrolling interest of discontinued operations⁽¹⁾⁽⁴⁾

(55)

(3)

Adjusted pre-tax income⁽¹⁾

$ 317

$      149

Adjusted effective tax rate

19%

17%

 Income Tax 

 Diluted Income 

 EBITDA 

Expense

 Net Income 

 Per Share 

Three months ended

Three months ended

Three months ended

Three months ended

December 31,

December 31,

December 31,

December 31,

In millions, except per share amounts

2017

2017

2017

2017

Net income

$ 287

$ 287

$ 1.17

Net income attributable to noncontrolling interests

(41)

(41)

(0.17)

Net income attributable to Huntsman Corporation

246

246

1.00

Interest expense  from continuing operations

31

Interest expense from discontinued operations⁽⁴⁾

11

Income tax expense from continuing operations

(14)

$  14

Income tax expense from discontinued operations⁽⁴⁾

26

Depreciation and amortization from continuing operations

84

Acquisition and integration expenses

2

(1)

1

-

EBITDA / Income from discontinued operations, net of tax⁽⁴⁾

(94)

 N/A 

(57)

(0.23)

Noncontrolling interest of discontinued operations⁽¹⁾⁽⁴⁾

31

 N/A 

31

0.13

U.S. tax reform impact on noncontrolling interest

(6)

 N/A 

(6)

(0.02)

U.S. tax reform impact on tax expense

 N/A 

(52)

(52)

(0.21)

Gain on disposition of businesses/assets

(1)

-

(1)

-

Loss on early extinguishment of debt

18

(7)

11

0.04

Expenses associated with merger

10

(9)

1

-

Certain legal and other settlements and related credits

(12)

4

(8)

(0.03)

Net plant incident costs

3

(2)

1

-

Amortization of pension and postretirement actuarial losses

18

(5)

13

0.05

Restructuring, impairment and plant closing and transition costs

7

(1)

6

0.02

Adjusted⁽¹⁾

$ 360

$ (59)

$ 186

$ 0.76

Adjusted income tax expense⁽¹⁾

$   59

Net income attributable to noncontrolling interests, net of tax

41

Noncontrolling interest of discontinued operations⁽¹⁾⁽⁴⁾

(31)

U.S. tax reform impact on noncontrolling interest

6

Adjusted pre-tax income⁽¹⁾

$ 261

Adjusted effective tax rate

23%

See end of press release for footnote explanations

Table 5 – Selected Balance Sheet Items

March 31,

December 31,

In millions

2018

2017

Cash

$      453

$            481

Accounts and notes receivable, net

1,407

1,283

Inventories

1,203

1,073

Other current assets

262

262

Current assets held for sale

3,060

2,880

Property, plant and equipment, net

3,117

3,098

Other assets

1,201

1,167

Total assets

$  10,703

$       10,244

Accounts payable

$      993

$            964

Other current liabilities

533

569

Current portion of debt

36

40

Current liabilities held for sale

1,721

1,692

Long-term debt

2,298

2,258

Other liabilities

1,353

1,350

Total equity

3,769

3,371

Total liabilities and equity

$  10,703

$       10,244

Table 6 – Outstanding Debt

March 31,

December 31,

In millions

2018

2017

Debt:

Senior credit facilities

$         -

$              -

Accounts receivable programs

184

180

Senior notes

1,964

1,927

Variable interest entities

105

107

Other debt

81

84

Total debt - excluding affiliates

2,334

2,298

Total cash

453

481

Net debt- excluding affiliates

$    1,881

$         1,817

Table 7 – Summarized Statement of Cash Flows

Three months ended

March 31,

In millions

2018

2017

Total cash at beginning of period^(a)

$      719

$425

Net cash provided by operating activities - continuing operations

111

70

Net cash provided by operating activities - discontinued operations⁽⁴⁾

52

23

Net cash used in investing activities - continuing operations

(69)

(47)

Net cash (used in) provided by investing activities - discontinued operations⁽⁴⁾

(67)

24

Net cash used in financing activities

(86)

(31)

Effect of exchange rate changes on cash

16

5

-

Total cash at end of period^(a)

$      676

$469

Supplemental cash flow information - continuing operations:

Cash paid for interest

$       (12)

$ (36)

Cash paid for income taxes

(26)

(8)

Cash paid for capital expenditures

(55)

(51)

Depreciation and amortization

82

76

Changes in primary working capital:

Accounts and notes receivable

(104)

(55)

Inventories

(105)

(109)

Accounts payable

36

83

Total cash used in  primary working capital

$     (173)

$ (81)

Three months ended

March 31,

2018

2017

Free cash flow⁽³⁾:

Net cash provided by operating activities

$      111

$  70

Capital expenditures

(55)

(51)

All other investing activities, excluding acquisition and disposition activities^(b)

-

4

Total free cash flow 

$        56

$  23

Adjusted EBITDA

$      405

$260

Capital expenditures

(55)

(51)

Capital reimbursements

1

1

Interest

(12)

(36)

Income taxes

(26)

(8)

Primary working capital change

(173)

(81)

Restructuring

-

(9)

Pensions

(31)

(15)

Maintenance & other

(53)

(38)

Total free cash flow⁽³⁾ 

$        56

$  23

(a)

Includes restricted cash and cash held in discontinued operations.

(b)

Represents "Acquisition of business, net of cash acquired", "Cash received from purchase price adjustment for business acquired", and "Proceeds from sale of business/assets".

Footnotes

(1)

We use adjusted EBITDA to measure the operating performance of our business and for planning and evaluating the performance of our business segments.  We provide adjusted net income because we feel it provides meaningful insight for the investment community into the performance of our business.  We believe that net income (loss) is the performance measure calculated and presented in accordance with generally accepted accounting principles in the U.S. ("GAAP") that is most directly comparable to adjusted EBITDA and adjusted net income.  Additional information with respect to our use of each of these financial measures follows:

Adjusted EBITDA, adjusted net income (loss) and adjusted diluted income (loss) per share, as used herein, are not necessarily comparable to other similarly titled measures of other companies.

Adjusted EBITDA is computed by eliminating the following from net income (loss):  (a) net income attributable to noncontrolling interests, net of tax; (b) interest; (c) income taxes; (d) depreciation and amortization; (e) acquisition and integration expenses; (f) income (loss) from discontinued operations, net of tax; (g) noncontrolling interest of discontinued operations (h) loss (gain) on disposition of businesses/assets; (i) loss on early extinguishment of debt; (j) expenses associated with merger; (k) certain legal and other settlements and related expenses (credits) (l) net plant incident costs (credits); (m) amortization of pension and postretirement actuarial losses (gains); and (n) restructuring, impairment and plant closing costs (credits).  The reconciliation of adjusted EBITDA to net income (loss) is set forth in Table 4 above.

Adjusted net income (loss) and adjusted diluted income (loss) per share are computed by eliminating the after tax impact of the following items from net income (loss: (a) net income attributable to noncontrolling interest; (b) acquisition and integration expenses, purchase accounting adjustments; (c) impact of certain foreign tax credit elections; (d) income (loss) from discontinued operations, net of tax; (e) discount amortization on settlement financing associated with the terminated merger; (f) loss (gain) on disposition of businesses/assets; (g) loss on early extinguishment of debt; (h) expenses associated with the merger; (i) certain legal and other settlements and related expenses (credits); (j) net plant incident costs (credits); (k) noncontrolling interest of discontinued operations; (l) amortization of pension and postretirement actuarial losses (gains); and  (m) restructuring, impairment and plant closing costs (credits).  The income tax impacts, if any, of each adjusting item represent a ratable allocation of the total difference between the unadjusted tax expense and the total adjusted tax expense, computed without consideration of any adjusting items using a with and without approach.  We do not adjust for changes in tax valuation allowances because we do not believe it provides more meaningful information than is provided under GAAP.  The reconciliation of adjusted net income (loss) to net income (loss) is set forth in Table 4 above.

(2)

Pro forma adjusted to exclude the sale of our European differentiated surfactants business to Innospec on December 30, 2016 as if it had occurred at the beginning of the relevant period.

(3)

Management internally uses a free cash flow measure: (a) to evaluate the Company's liquidity, (b) to evaluate strategic investments, (c) to plan stock buyback and dividend levels and (d) to evaluate the Company's ability to incur and service debt. Free cash flow is not a defined term under U.S. GAAP, and it should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The Company defines free cash flow as cash flow provided by operating activities less cash flow used in investing activities, excluding acquisition/disposition activities and non-recurring separation costs. Free cash flow is typically derived directly from the Company's condensed consolidated statement of cash flows; however, it may be adjusted for items that affect comparability between periods.

(4)

During the third quarter of 2017 we separated our Pigments and Additives division through an Initial Public Offering of Venator Materials PLC;  Additionally, during the first quarter 2010 we closed our Australian styrenics operations.  Results from these associated businesses are treated as discontinued operations.