Huntsman (HUN) Q4 2013 earnings summary

Executive summary

• FY2013 revenue was $11.079B, down from $11.187B; net income attributable to Huntsman Corporation was $128M vs. $363M in 2012.

• Adjusted EBITDA was $1.213B vs. $1.439B; adjusted net income was $390M and adjusted EPS was $1.63 vs. $577M and $2.43.

• Q4 revenue was $2.705B, net income attributable was $41M, and diluted EPS was $0.17.

Financial highlights

• Gross profit declined 14% to $1.753B; operating income fell 40% to $510M.

• EBITDA was $889M vs. $1.187B; restructuring, impairment and plant-closing costs were $151M vs. $92M.

• Net interest expense fell to $190M from $226M; early debt-extinguishment losses were $51M vs. $80M.

• Operating cash flow was $708M vs. $774M; capital expenditures were $471M vs. $412M.

Outlook and guidance

• 2014 capital expenditures, net of reimbursements, expected at ~$500M, excluding acquisition-related amounts; spending expected to be funded from operating cash flow.

• 2014 adjusted effective tax rate expected at ~35%, excluding the planned acquisition; long-term effective tax rate expected at ~30%.

• Cost-reduction programs target ~$240M in savings through early 2015; ~$180M achieved through year-end 2013.

• Polyurethanes: strong MDI demand in the U.S. and Asia, modest in Europe; improving price leverage, with higher benzene costs.

• Acquisition expected to close in H1 2014; outlook also cited strong aerospace demand, improving amines volumes and margins, and Pigments volume and pricing improvement.