XNYS:HUN Huntsman Corp Quarterly Report 10-Q Filing - 6/30/2012

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TABLE OF CONTENTS

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)    

ý

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

OR

o

 

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
500 Huntsman Way
Salt Lake City, Utah 84108
(801) 584-5700
  Delaware     42-1648585  
 

333-85141

 

Huntsman International LLC
500 Huntsman Way
Salt Lake City, Utah 84108
(801) 584-5700

 

Delaware

   
87-0630358
 



         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 ý   NO o

Huntsman International LLC

  YES ý   NO o

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

Huntsman Corporation

  YES ý   NO o

Huntsman International LLC

  YES ý   NO o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Huntsman Corporation   Large accelerated filer ý   Accelerated filer o   Non-accelerated filer o   Smaller reporting company o
Huntsman International LLC   Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý   Smaller reporting company o

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

Huntsman Corporation

  YES o   NO ý

Huntsman International LLC

  YES o   NO ý



         On July 23, 2012, 243,458,610 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


HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED JUNE 30, 2012

TABLE OF CONTENTS

 
   
   
  Page  

PART I

 

FINANCIAL INFORMATION

   
3
 

ITEM 1.

 

Financial Statements:

   
3
 

 

Huntsman Corporation and Subsidiaries:

       

     

Condensed Consolidated Balance Sheets (Unaudited)

   
3
 

     

Condensed Consolidated Statements of Operations (Unaudited)

   
4
 

     

Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

   
5
 

     

Condensed Consolidated Statements of Cash Flows (Unaudited)

   
6
 

     

Condensed Consolidated Statements of Equity (Unaudited)

   
8
 

 

Huntsman International LLC and Subsidiaries:

       

     

Condensed Consolidated Balance Sheets (Unaudited)

   
9
 

     

Condensed Consolidated Statements of Operations (Unaudited)

   
10
 

     

Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

   
11
 

     

Condensed Consolidated Statements of Cash Flows (Unaudited)

   
12
 

     

Condensed Consolidated Statements of Equity (Unaudited)

   
14
 

 

Huntsman Corporation and Subsidiaries and Huntsman International LLC and Subsidiaries:

       

     

Notes to Condensed Consolidated Financial Statements (Unaudited)

   
15
 

ITEM 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

   
67
 

ITEM 3.

 

Quantitative and Qualitative Disclosures About Market Risk

   
91
 

ITEM 4.

 

Controls and Procedures

   
93
 

PART II

 

OTHER INFORMATION

   
93
 

ITEM 1.

 

Legal Proceedings

   
93
 

ITEM 1A.

 

Risk Factors

   
93
 

ITEM 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

   
94
 

ITEM 6.

 

Exhibits

   
94
 

2


Table of Contents


PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

        


HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in Millions, Except Share and Per Share Amounts)

 
  June 30,
2012
  December 31,
2011
 

ASSETS

             

Current assets:

             

Cash and cash equivalents(a)

  $ 452   $ 554  

Restricted cash(a)

    9     8  

Accounts and notes receivable (net of allowance for doubtful accounts of $44 and $46, respectively), ($649 and $659 pledged as collateral, respectively)(a)

    1,677     1,529  

Accounts receivable from affiliates

    40     5  

Inventories(a)

    1,645     1,539  

Prepaid expenses

    37     46  

Deferred income taxes

    40     20  

Other current assets(a)

    209     245  
           

Total current assets

    4,109     3,946  

Property, plant and equipment, net(a)

    3,536     3,622  

Investment in unconsolidated affiliates

    223     202  

Intangible assets, net(a)

    78     91  

Goodwill

    106     114  

Deferred income taxes

    189     195  

Notes receivable from affiliates

    2     5  

Other noncurrent assets(a)

    486     482  
           

Total assets

  $ 8,729   $ 8,657  
           

LIABILITIES AND EQUITY

             

Current liabilities:

             

Accounts payable(a)

  $ 976   $ 862  

Accounts payable to affiliates

    33     50  

Accrued liabilities(a)

    669     695  

Deferred income taxes

    27     7  

Current portion of debt(a)

    143     212  
           

Total current liabilities

    1,848     1,826  

Long-term debt(a)

    3,601     3,730  

Notes payable to affiliates

    4     4  

Deferred income taxes

    341     309  

Other noncurrent liabilities(a)

    929     1,012  
           

Total liabilities

    6,723     6,881  

Commitments and contingencies (Notes 13 and 14)

             

Equity

             

Huntsman Corporation stockholders' equity:

             

Common stock $0.01 par value, 1,200,000,000 shares authorized, 243,468,351 and 241,836,001 issued and 237,890,371 and 235,746,087 outstanding in 2012 and 2011, respectively

    2     2  

Additional paid-in capital

    3,257     3,228  

Treasury stock, 4,043,526 shares at 2012 and 2011

    (50 )   (50 )

Unearned stock-based compensation

    (17 )   (12 )

Accumulated deficit

    (715 )   (947 )

Accumulated other comprehensive loss

    (589 )   (559 )
           

Total Huntsman Corporation stockholders' equity

    1,888     1,662  

Noncontrolling interests in subsidiaries

    118     114  
           

Total equity

    2,006     1,776  
           

Total liabilities and equity

  $ 8,729   $ 8,657  
           

(a)
At June 30, 2012 and December 31, 2011, respectively, $34 and $44 of cash and cash equivalents, $9 and $2 of restricted cash, $36 and $29 of accounts and notes receivable (net), $50 and $47 of inventories, $1 each of other current assets, $383 and $403 of property, plant and equipment (net), $20 and $23 of intangible assets (net), $22 and $21 of other noncurrent assets, $54 and $55 of accounts payable, $22 and $21 of accrued liabilities, $23 and $16 of current portion of debt, $248 and $264 of long-term debt, and $74 and $111 of other noncurrent liabilities from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note 5. Variable Interest Entities."

   

See accompanying notes to condensed consolidated financial statements (unaudited).

3


Table of Contents


HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Dollars in Millions, Except Per Share Amounts)

 
  Three months
ended
June 30,
  Six months
ended
June 30,
 
 
  2012   2011   2012   2011  

Revenues:

                         

Trade sales, services and fees, net

  $ 2,862   $ 2,896   $ 5,715   $ 5,522  

Related party sales

    52     38     112     91  
                   

Total revenues

    2,914     2,934     5,827     5,613  

Cost of goods sold

    2,387     2,433     4,750     4,652  
                   

Gross profit

    527     501     1,077     961  

Operating expenses:

                         

Selling, general and administrative

    232     256     453     474  

Research and development

    38     42     77     81  

Other operating expense (income)

    2     (26 )   7     8  

Restructuring, impairment and plant closing costs

    5     9     5     16  
                   

Total expenses

    277     281     542     579  
                   

Operating income

    250     220     535     382  

Interest expense, net

    (57 )   (65 )   (116 )   (124 )

Equity in income of investment in unconsolidated affiliates

    1     2     3     4  

Loss on early extinguishment of debt

            (1 )   (3 )

Other income

    1     1     1     1  
                   

Income from continuing operations before income taxes

    195     158     422     260  

Income tax expense

    (65 )   (34 )   (125 )   (56 )
                   

Income from continuing operations

    130     124     297     204  

Loss from discontinued operations, net of tax

    (2 )   (1 )   (6 )   (15 )
                   

Income before extraordinary gain

    128     123     291     189  

Extraordinary gain on the acquisition of a business, net of tax of nil

        1         2  
                   

Net income

    128     124     291     191  

Net income attributable to noncontrolling interests

    (4 )   (10 )   (4 )   (15 )
                   

Net income attributable to Huntsman Corporation

  $ 124   $ 114   $ 287   $ 176  
                   

Basic income (loss) per share:

                         

Income from continuing operations attributable to Huntsman Corporation common stockholders

  $ 0.53   $ 0.48   $ 1.24   $ 0.79  

Loss from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax

    (0.01 )       (0.03 )   (0.06 )

Extraordinary gain on the acquisition of a business attributable to Huntsman Corporation common stockholders, net of tax

                0.01  
                   

Net income attributable to Huntsman Corporation common stockholders

  $ 0.52   $ 0.48   $ 1.21   $ 0.74  
                   

Weighted average shares

    237.8     239.4     237.2     238.5  
                   

Diluted income (loss) per share:

                         

Income from continuing operations attributable to Huntsman Corporation common stockholders

  $ 0.52   $ 0.47   $ 1.22   $ 0.78  

Loss from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax

            (0.03 )   (0.07 )

Extraordinary gain on the acquisition of a business attributable to Huntsman Corporation common stockholders, net of tax

                0.01  
                   

Net income attributable to Huntsman Corporation common stockholders

  $ 0.52   $ 0.47   $ 1.19   $ 0.72  
                   

Weighted average shares

    240.5     243.7     240.2     243.2  
                   

Amounts attributable to Huntsman Corporation common stockholders:

                         

Income from continuing operations

  $ 126   $ 114   $ 293   $ 189  

Loss from discontinued operations, net of tax

    (2 )   (1 )   (6 )   (15 )

Extraordinary gain on the acquisition of a business, net of tax

        1         2  
                   

Net income

  $ 124   $ 114   $ 287   $ 176  
                   

Dividends per share

  $ 0.10   $ 0.10   $ 0.20   $ 0.20  
                   

   

See accompanying notes to condensed consolidated financial statements (unaudited).

4


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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

(Dollars in Millions)

 
  Three months
ended
June 30,
  Six months
ended
June 30,
 
 
  2012   2011   2012   2011  

Net income

  $ 128   $ 124   $ 291   $ 191  

Other comprehensive (loss) income, net of tax:

                         

Foreign currency translations adjustments

    (142 )   56     (69 )   147  

Pension and other postretirement benefits adjustments

    22     4     41     8  

Other, net

    (3 )       (2 )   1  
                   

Other comprehensive (loss) income

    (123 )   60     (30 )   156  
                   

Comprehensive income

    5     184     261     347  

Comprehensive income attributable to noncontrolling interests

    (2 )   (10 )   (4 )   (16 )
                   

Comprehensive income attributable to Huntsman Corporation

  $ 3   $ 174   $ 257   $ 331  
                   

   

See accompanying notes to condensed consolidated financial statements (unaudited).

5


Table of Contents


HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in Millions)

 
  Six months
ended
June 30,
 
 
  2012   2011  

Operating Activities:

             

Net income

  $ 291   $ 191  

Adjustments to reconcile net income to net cash provided by operating activities:

             

Gain on the consolidation of a variable interest entity

        (12 )

Equity in income of investment in unconsolidated affiliates

    (3 )   (4 )

Depreciation and amortization

    216     214  

Loss (gain) on disposal of businesses/assets, net

    1     (2 )

Loss on early extinguishment of debt

    1     3  

Noncash interest expense

    14     19  

Deferred income taxes

    31     (18 )

Noncash loss on foreign currency transactions

    4      

Stock-based compensation

    15     16  

Other, net

    7     2  

Changes in operating assets and liabilities:

             

Accounts and notes receivable

    (183 )   (325 )

Inventories

    (139 )   (270 )

Prepaid expenses

    9     10  

Other current assets

    32     (121 )

Other noncurrent assets

    (7 )   37  

Accounts payable

    100     200  

Accrued liabilities

    4     119  

Other noncurrent liabilities

    (45 )   (58 )
           

Net cash provided by operating activities

    348     1  
           

Investing Activities:

             

Capital expenditures

    (163 )   (124 )

Proceeds from settlements treated as reimbursement of capital expenditures

        3  

Cash assumed in connection with the initial consolidation of a variable interest entity

        28  

Cash paid for acquisition of a business

    (2 )   (23 )

Proceeds from sale of business/assets

        3  

Investment in unconsolidated affiliates

    (60 )   (10 )

Cash received from unconsolidated affiliates

    40     13  

Increase in restricted cash

    (2 )    

Other, net

    2     (1 )
           

Net cash used in investing activities

    (185 )   (111 )
           

   

(Continued)

6


Table of Contents


HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)

(Dollars in Millions)

 
  Six months
ended
June 30,
 
 
  2012   2011  

Financing Activities:

             

Net (repayments) borrowings under revolving loan facilities

  $ (15 ) $ 4  

Net borrowings on overdraft facilities

    4     11  

Repayments of short-term debt

    (21 )   (100 )

Borrowings on short-term debt

        76  

Repayments of long-term debt

    (152 )   (170 )

Proceeds from issuance of long-term debt

    1     71  

Repayments of notes payable

    (24 )   (15 )

Borrowings on notes payable

    1     1  

Debt issuance costs paid

    (4 )   (7 )

Call premiums related to early extinguishment of debt

    (2 )   (3 )

Dividends paid to common stockholders

    (48 )   (48 )

Repurchase and cancellation of stock awards

    (7 )   (8 )

Proceeds from issuance of common stock

    1     3  

Excess tax benefit related to stock-based compensation

    4     10  

Other, net

    (2 )   (3 )
           

Net cash used in financing activities

    (264 )   (178 )
           

Effect of exchange rate changes on cash

    (1 )   5  
           

Decrease in cash and cash equivalents

    (102 )   (283 )

Cash and cash equivalents at beginning of period

    554     966  
           

Cash and cash equivalents at end of period

  $ 452   $ 683  
           

Supplemental cash flow information:

             

Cash paid for interest

  $ 106   $ 108  

Cash paid for income taxes

    70     35  

        During the six months ended June 30, 2012 and 2011, the amount of capital expenditures in accounts payable decreased by $8 million each.

   

See accompanying notes to condensed consolidated financial statements (unaudited).

7


Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

(Dollars in Millions)

 
  Huntsman Corporation Stockholders    
   
 
 
  Shares    
   
   
   
   
   
   
   
 
 
   
   
   
   
   
  Accumulated
other
comprehensive
(loss) income
   
   
 
 
  Common
stock
  Common
stock
  Additional
paid-in
capital
  Treasury
stock
  Unearned
stock-based
compensation
  Accumulated
deficit
  Noncontrolling
interests in
subsidiaries
  Total
equity
 

Balance, January 1, 2012

    235,746,087   $ 2   $ 3,228   $ (50 ) $ (12 ) $ (947 ) $ (559 ) $ 114   $ 1,776  

Net income

                        287         4     291  

Other comprehensive loss

                            (30 )       (30 )

Issuance of nonvested stock awards

            12         (12 )                

Vesting of stock awards

    2,141,910         10                         10  

Recognition of stock-based compensation

            4         7                 11  

Repurchase and cancellation of stock awards

    (533,266 )                   (7 )           (7 )

Stock options exercised

    535,640         1                         1  

Excess tax benefit related to stock-based compensation

            4                         4  

Dividends paid on common stock

                        (48 )           (48 )

Acquisition of a business

            (2 )                       (2 )
                                       

Balance, June 30, 2012

    237,890,371   $ 2   $ 3,257   $ (50 ) $ (17 ) $ (715 ) $ (589 ) $ 118   $ 2,006  
                                       

Balance, January 1, 2011

   
236,799,455
 
$

2
 
$

3,186
 
$

 
$

(11

)

$

(1,090

)

$

(297

)

$

60
 
$

1,850
 

Net income

                        176         15     191  

Other comprehensive income

                            155     1     156  

Consolidation of a variable interest entity

                                61     61  

Issuance of nonvested stock awards

            11         (11 )                

Vesting of stock awards

    2,211,143         13                         13  

Recognition of stock-based compensation

            2         6                 8  

Repurchase and cancellation of stock awards

    (503,913 )                   (8 )           (8 )

Stock options exercised

    1,225,436         3                         3  

Excess tax benefit related to stock-based compensation

            10                         10  

Dividends paid on common stock

                        (48 )           (48 )
                                       

Balance, June 30, 2011

    239,732,121   $ 2   $ 3,225   $   $ (16 ) $ (970 ) $ (142 ) $ 137   $ 2,236  
                                       

See accompanying notes to condensed consolidated financial statements (unaudited).

8


Table of Contents


HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in Millions)

 
  June 30,
2012
  December 31,
2011
 

ASSETS

             

Current assets:

             

Cash and cash equivalents(a)

  $ 201   $ 231  

Restricted cash(a)

    9     8  

Accounts and notes receivable (net of allowance for doubtful accounts of $44 and $46, respectively), ($649 and $659 pledged as collateral, respectively)(a)

    1,677     1,529  

Accounts receivable from affiliates

    205     148  

Inventories(a)

    1,645     1,539  

Prepaid expenses

    35     46  

Deferred income taxes

    40     40  

Other current assets(a)

    209     220  
           

Total current assets

    4,021     3,761  

Property, plant and equipment, net(a)

    3,436     3,510  

Investment in unconsolidated affiliates

    223     202  

Intangible assets, net(a)

    80     93  

Goodwill

    106     114  

Deferred income taxes

    189     163  

Notes receivable from affiliates

    2     5  

Other noncurrent assets(a)

    486     482  
           

Total assets

  $ 8,543   $ 8,330  
           

LIABILITIES AND EQUITY

             

Current liabilities:

             

Accounts payable(a)

  $ 976   $ 862  

Accounts payable to affiliates

    40     64  

Accrued liabilities(a)

    641     694  

Deferred income taxes

    29     29  

Note payable to affiliate

    100     100  

Current portion of debt(a)

    143     212  
           

Total current liabilities

    1,929     1,961  

Long-term debt(a)

    3,601     3,730  

Notes payable to affiliates

    523     439  

Deferred income taxes

    235     106  

Other noncurrent liabilities(a)

    926     1,003  
           

Total liabilities

    7,214     7,239  

Commitments and contingencies (Notes 13 and 14)

             

Equity

             

Huntsman International LLC members' equity:

             

Members' equity, 2,728 units issued and outstanding

    3,097     3,081  

Accumulated deficit

    (1,248 )   (1,493 )

Accumulated other comprehensive loss

    (638 )   (611 )
           

Total Huntsman International LLC members' equity

    1,211     977  

Noncontrolling interests in subsidiaries

    118     114  
           

Total equity

    1,329     1,091  
           

Total liabilities and equity

  $ 8,543   $ 8,330  
           

(a)
At June 30, 2012 and December 31, 2011, respectively, $34 and $44 of cash and cash equivalents, $9 and $2 of restricted cash, $36 and $29 of accounts and notes receivable (net), $50 and $47 of inventories, $1 each of other current assets, $383 and $403 of property, plant and equipment (net), $20 and $23 of intangible assets (net), $22 and $21 of other noncurrent assets, $54 and $55 of accounts payable, $22 and $21 of accrued liabilities, $23 and $16 of current portion of debt, $248 and $264 of long-term debt, and $74 and $111 of other noncurrent liabilities from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note 5. Variable Interest Entities."

   

See accompanying notes to condensed consolidated financial statements (unaudited).

9


Table of Contents


HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Dollars in Millions)

 
  Three months
ended
June 30,
  Six months
ended
June 30,
 
 
  2012   2011   2012   2011  

Revenues:

                         

Trade sales, services and fees, net

  $ 2,862   $ 2,896   $ 5,715   $ 5,522  

Related party sales

    52     38     112     91  
                   

Total revenues

    2,914     2,934     5,827     5,613  

Cost of goods sold

    2,382     2,429     4,741     4,643  
                   

Gross profit

    532     505     1,086     970  

Operating expenses:

                         

Selling, general and administrative

    230     255     449     472  

Research and development

    38     42     77     81  

Other operating expense (income)

    2     (26 )   7     8  

Restructuring, impairment and plant closing costs

    5     9     5     16  
                   

Total expenses

    275     280     538     577  
                   

Operating income

    257     225     548     393  

Interest expense, net

    (61 )   (67 )   (122 )   (131 )

Equity in income of investment in unconsolidated affiliates

    1     2     3     4  

Loss on early extinguishment of debt

            (1 )   (3 )

Other income

    1     1     1     1  
                   

Income from continuing operations before income taxes

    198     161     429     264  

Income tax expense

    (65 )   (34 )   (126 )   (56 )
                   

Income from continuing operations

    133     127     303     208  

Loss from discontinued operations, net of tax

    (2 )   (1 )   (6 )   (15 )
                   

Income before extraordinary gain

    131     126     297     193  

Extraordinary gain on the acquisition of a business, net of tax of nil

        1         2  
                   

Net income

    131     127     297     195  

Net income attributable to noncontrolling interests

    (4 )   (10 )   (4 )   (15 )
                   

Net income attributable to Huntsman International LLC

  $ 127   $ 117   $ 293   $ 180  
                   

   

See accompanying notes to condensed consolidated financial statements (unaudited).

10


Table of Contents


HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

(Dollars in Millions)

 
  Three months
ended
June 30,
  Six months
ended
June 30,
 
 
  2012   2011   2012   2011  

Net income

  $ 131   $ 127   $ 297   $ 195  

Other comprehensive (loss) income, net of tax:

                         

Foreign currency translations adjustments

    (142 )   55     (69 )   148  

Pension and other postretirement benefits adjustments

    22     6     43     11  

Other, net

    (2 )       (1 )    
                   

Other comprehensive (loss) income

    (122 )   61     (27 )   159  
                   

Comprehensive income

    9     188     270     354  

Comprehensive income attributable to noncontrolling interests

    (2 )   (10 )   (4 )   (16 )
                   

Comprehensive income attributable to Huntsman International LLC

  $ 7   $ 178   $ 266   $ 338  
                   

   

See accompanying notes to condensed consolidated financial statements (unaudited).

11


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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in Millions)

 
  Six months
ended
June 30,
 
 
  2012   2011  

Operating Activities:

             

Net income

  $ 297   $ 195  

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

             

Gain on the consolidation of a variable interest entity

        (12 )

Equity in income of investment in unconsolidated affiliates

    (3 )   (4 )

Depreciation and amortization

    204     203  

Loss (gain) on disposal of businesses/assets, net

    1     (2 )

Loss on early extinguishment of debt

    1     3  

Noncash interest expense

    20     25  

Deferred income taxes

    96     (19 )

Noncash loss on foreign currency transactions

    4      

Noncash compensation

    14     15  

Other, net

    6     2  

Changes in operating assets and liabilities:

             

Accounts and notes receivable

    (183 )   (325 )

Inventories

    (139 )   (270 )

Prepaid expenses

    10     12  

Other current assets

    7     (121 )

Other noncurrent assets

    (7 )   37  

Accounts payable

    94     194  

Accrued liabilities

    (22 )   119  

Other noncurrent liabilities

    (43 )   (55 )
           

Net cash provided by (used in) operating activities

    357     (3 )
           

Investing Activities:

             

Capital expenditures

    (163 )   (124 )

Proceeds from settlements treated as reimbursement of capital expenditures

        3  

Cash assumed in connection with the initial consolidation of a variable interest entity

        28  

Cash paid for acquisition of a business

    (2 )   (23 )

Proceeds from sale of business/assets

        3  

(Increase) decrease in receivable from affiliate

    (29 )   8  

Investment in unconsolidated affiliates

    (60 )   (10 )

Cash received from unconsolidated affiliates

    40     13  

Increase in restricted cash

    (2 )    

Other, net

    2     (1 )
           

Net cash used in investing activities

    (214 )   (103 )
           

   

(Continued)

12


Table of Contents


HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)

(Dollars in Millions)

 
  Six months
ended
June 30,
 
 
  2012   2011  

Financing Activities:

             

Net (repayments) borrowings under revolving loan facilities

  $ (15 ) $ 4  

Net borrowings on overdraft facilities

    4     11  

Repayments of short-term debt

    (21 )   (100 )

Borrowings on short-term debt

        76  

Repayments of long-term debt

    (152 )   (170 )

Proceeds from issuance of long-term debt

    1     71  

Proceeds from notes payable to affiliate

    84      

Repayments of notes payable

    (24 )   (15 )

Borrowings on notes payable

    1     1  

Debt issuance costs paid

    (4 )   (7 )

Call premiums related to early extinguishment of debt

    (2 )   (3 )

Dividends paid to parent

    (48 )   (32 )

Excess tax benefit related to stock-based compensation

    4     10  
           

Net cash used in financing activities

    (172 )   (154 )
           

Effect of exchange rate changes on cash

    (1 )   5  
           

Decrease in cash and cash equivalents

    (30 )   (255 )

Cash and cash equivalents at beginning of period

    231     561  
           

Cash and cash equivalents at end of period

  $ 201   $ 306  
           

Supplemental cash flow information:

             

Cash paid for interest

  $ 106   $ 108  

Cash paid for income taxes

    58     35  

        During the six months ended June 30, 2012 and 2011, the amount of capital expenditures in accounts payable decreased by $8 million each. During the six months ended June 30, 2012 and 2011, Huntsman Corporation contributed $14 million and $15 million related to stock-based compensation, respectively.

   

See accompanying notes to condensed consolidated financial statements (unaudited).

13


Table of Contents


HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

(Dollars in Millions)

 
  Huntsman International LLC Members    
   
 
 
  Members' equity    
   
   
   
 
 
  Accumulated
deficit
  Accumulated other
comprehensive
(loss) income
  Noncontrolling
interests in
subsidiaries
  Total equity  
 
  Units   Amount  

Balance, January 1, 2012

    2,728   $ 3,081   $ (1,493 ) $ (611 ) $ 114   $ 1,091  

Net income

            293         4     297  

Other comprehensive loss

                (27 )       (27 )

Contribution from parent

        14                 14  

Dividends paid to parent

            (48 )           (48 )

Acquisition of a business

        (2 )               (2 )

Excess tax benefit related to stock-based compensation

        4                 4  
                           

Balance, June 30, 2012

    2,728   $ 3,097   $ (1,248 ) $ (638 ) $ 118   $ 1,329  
                           

Balance, January 1, 2011

   
2,728
 
$

3,049
 
$

(1,667

)

$

(354

)

$

60
 
$

1,088
 

Net income

            180         15     195  

Other comprehensive income

                158     1     159  

Consolidation of a variable interest entity

                    61     61  

Contribution from parent

        15                 15  

Dividends paid to parent

            (32 )           (32 )

Excess tax benefit related to stock-based compensation

        10                 10  
                           

Balance, June 30, 2011

    2,728   $ 3,074<

XNYS:HUN Huntsman Corp Quarterly Report 10-Q Filling

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