SECOND QUARTER ADJUSTED DILUTED INCOME FROM CONTINUING OPERATIONS
WAS $0.33 PER SHARE AS COMPARED TO $0.34 PER SHARE IN PRIOR YEAR
PERIOD THE WOODLANDS, Texas, July 31 /PRNewswire-FirstCall/ --
Second Quarter 2007 Highlights -- Revenues for the second quarter
of 2007 were $2,517.6 million, as compared to $2,389.0 million for
the second quarter of 2006. -- Second quarter 2007 net loss was
$83.9 million or $0.36 loss per diluted share as compared to net
income of $262.9 million or $1.13 per diluted share for the same
period in 2006. Adjusted net income from continuing operations for
the second quarter of 2007 was $76.1 million or $0.33 per diluted
share as compared to $80.2 million or $0.34 for the same period in
2006. -- Adjusted EBITDA from continuing operations for the second
quarter of 2007 was $241.4 million compared to $285.0 million for
the same period in 2006. Summarized earnings are as follows: Three
months ended Six months ended June 30, June 30, In millions, except
per share amounts 2007 2006 2007 2006 Net (loss) income $(83.9)
$262.9 $(37.3) $331.9 Adjusted net income from continuing
operations $76.1 $80.2 $129.2 $144.5 Diluted (loss) income per
share $(0.36) $1.13 $(0.16) $1.42 Adjusted diluted income per share
from continuing operations $0.33 $0.34 $0.55 $0.62 EBITDA $9.6
$499.3 $251.6 $780.5 Adjusted EBITDA from continuing operations
$241.4 $285.0 $485.3 $544.7 See end of press release for important
explanations -- On July 12, 2007, we entered into a definitive
merger agreement with Hexion Specialty Chemicals, Inc., an
affiliate Apollo Management, L.P., pursuant to which Hexion will
acquire all of our outstanding common stock for $28.00 per share in
cash. The total transaction is valued at $10.6 billion including
the assumption of debt. -- On June 22, 2007, we entered into an
amended and restated agreement with Flint Hills Resources whereby
we expect to close on the sale of our North American polymers
business on or about August 1, 2007. Second quarter 2007 results
include a $240 million impairment charge related to this sale and
the results of this business have been classified as discontinued
operations for all periods. Peter R. Huntsman, President and CEO,
stated: "I am pleased with our results for the 2nd quarter of 2007.
Despite higher feedstock and energy cost and continued softness in
most construction-related end markets in North America, our
earnings profile was very similar to that achieved in the first
quarter. In our Polyurethanes segment, we saw MDI sales volumes
increase by 15% as compared to the first quarter as demand,
particularly in insulation applications, was strong in all global
regions. "We anticipate closing on the sale of our U.S. Polymers
business to Flint Hills Resources in the coming days and look
forward to completing the divestiture of our U.S. Base Chemicals
business later this year following the commissioning and re-start
of our Port Arthur, Texas olefins manufacturing facility. "Finally,
our agreement to merge with Hexion Specialty Chemicals, Inc.
represents excellent value for our shareholders. I believe that the
combination of Huntsman and Hexion will create one of the premier
specialty chemical companies in the world. This organization will
be characterized by its geographic reach, leading technologies and
products and experienced management. We look forward to completing
this transaction and being a part of this new organization."
Huntsman Corporation Operating Results Three months ended Six
months ended In millions, except June 30, June 30, per share
amounts 2007 2006 2007 2006 Revenues $2,517.6 $2,389.0 $4,804.5
$4,688.0 Cost of goods sold 2,137.9 1,993.6 4,032.8 3,934.7 Gross
profit 379.7 395.4 771.7 753.3 Operating expenses 257.7 102.7 504.4
291.5 Restructuring, impairment and plant closing costs 13.2 8.9
24.4 17.1 Operating income 108.8 283.8 242.9 444.7 Interest
expense, net (70.0) (94.6) (143.8) (181.4) Loss on accounts
receivable securitization program (4.7) (3.6) (9.0) (5.9) Equity in
income of investment in unconsolidated affiliates 5.1 1.4 7.3 2.1
Other non-operating (expense) income (1.3) 0.6 (2.1) 0.1 Income
from continuing operations before income taxes and minority
interest 37.9 187.6 95.3 259.6 Income tax benefit (expense) 8.0
(17.4) (4.4) (32.3) Minority interest in subsidiaries' loss
(income) 11.1 (0.3) 10.7 (0.7) Income from continuing operations
57.0 169.9 101.6 226.6 (Loss) income from discontinued operations,
net of tax(1) (132.0) 42.5 (132.4) 54.8 Extraordinary (loss) gain
on the acquisition of a business, net of tax(2) (8.9) 50.5 (6.5)
50.5 Net (loss) income $(83.9) $262.9 $(37.3) $331.9 Net (loss)
income $(83.9) $262.9 $(37.3) $331.9 Interest expense, net 70.0
94.6 143.8 181.4 Income tax (benefit) expense (8.0) 17.4 4.4 32.3
Depreciation and amortization 97.1 91.9 195.6 182.6 Income taxes,
depreciation and amortization included in discontinued
operations(1) (65.6) 32.5 (54.9) 52.3 EBITDA(3) $9.6 $499.3 $251.6
$780.5 Adjusted EBITDA - continuing operations(3) $241.4 $285.0
$485.3 $544.7 Basic (loss) income per share $(0.38) $1.19 $(0.17)
$1.50 Diluted (loss) income per share $(0.36) $1.13 $(0.16) $1.42
Adjusted diluted income per share from continuing operations(3)
$0.33 $0.34 $0.55 $0.62 Common share information: Basic shares
outstanding 220.9 220.6 220.9 220.6 Diluted shares 233.5 233.2
233.5 233.1 See end of press release for footnote explanations
Huntsman Corporation Segment Results Three months ended Six months
ended June 30, June 30, In millions 2007 2006 2007 2006 Segment
Revenues: Polyurethanes $1,010.2 $925.1 $1,850.2 $1,734.2 Materials
and Effects 621.5 335.3 1,211.1 658.4 Performance Products 548.4
543.4 1,100.3 1,053.3 Pigments 293.2 276.0 563.4 534.8 Polymers(4)
- - - - Base Chemicals 141.3 350.6 273.9 797.9 Eliminations and
other(4) (97.0) (41.4) (194.4) (90.6) Total from continuing
operations 2,517.6 2,389.0 4,804.5 4,688.0 Discontinued
operations(1) 385.6 954.0 746.0 1,843.6 Total $2,903.2 $3,343.0
$5,550.5 $6,531.6 Segment EBITDA (3): Polyurethanes $158.6 $180.5
$276.9 $339.7 Materials and Effects 52.5 34.2 109.6 69.1
Performance Products 33.2 77.5 105.3 128.4 Pigments 21.9 31.8 45.4
65.1 Polymers(4) (219.9) 35.2 (206.5) 75.6 Base Chemicals 21.9
138.1 21.4 152.9 Corporate and other(4) (58.6) 2.0 (100.5) (50.3)
Total $9.6 $499.3 $251.6 $780.5 Segment Adjusted EBITDA(3):
Polyurethanes $159.2 $172.0 $277.9 $329.5 Materials and Effects
61.1 33.9 124.0 71.1 Performance Products 39.8 76.5 112.0 128.4
Pigments 20.9 31.9 43.9 67.7 Polymers(4) - - - - Base Chemicals
(1.6) 13.1 1.3 35.3 Corporate and other(4) (38.0) (42.4) (73.8)
(87.3) Total from continuing operations 241.4 285.0 485.3 544.7
Discontinued operations(1) 20.6 77.1 36.5 109.2 Total $262.0 $362.1
$521.8 $653.9 See end of press release for footnote explanations
Three Months Ended June 30, 2007 as Compared to Three Months Ended
June 30, 2006 Revenues for the three months ended June 30, 2007,
increased to $2,517.6 million, from $2,389.0 million during the
same period in 2006. Revenues increased in our Polyurethanes
segment due to higher average selling prices and higher sales
volumes. Revenues increased in our Materials and Effects segment
primarily due to the acquisition of our textile effects business in
June 2006. Revenues increased in our Performance Products segment
due primarily to higher average selling prices. Revenues increased
in our Pigments segment due to higher sales volumes. Revenues
decreased in our Base Chemicals segment primarily due to the
continuing outage at our Port Arthur, Texas olefins manufacturing
facility since April 29, 2006 and the divestiture of certain of our
U.S. butadiene and MTBE assets on June 27, 2006. For the three
months ended June 30, 2007, EBITDA was $9.6 million, a decrease
from $499.3 million in the same period in 2006. Total Adjusted
EBITDA from continuing operations for the three months ended June
30, 2007 was $241.4 million, a decrease from $285.0 million for the
same period in 2006. Polyurethanes The increase in revenues in the
Polyurethanes segment for the three months ended June 30, 2007
compared to the same period in 2006 was due to higher average
selling prices and higher sales volumes. MDI sales volumes
increased 4% primarily as the result of strong growth in Asia and
Europe partially offset by reduced demand in the Americas. MDI
average selling prices increased 7% primarily in response to
increased raw material costs. MTBE average selling prices increased
due to improved demand. The decrease in EBITDA in the Polyurethanes
segment was primarily the result of lower MDI margins due to higher
raw material costs and expenses related to the ongoing outage at
the China joint venture facility. The temporary shutdown of the
China joint venture facility, which was undergoing repairs to
replace a damaged heat exchanger, resulted in incremental expenses
of approximately $11 million during the second quarter of 2007.
Materials and Effects The increase in revenues in the Materials and
Effects segment for the three months ended June 30, 2007 compared
to the same period in 2006 was primarily due to the acquisition of
the textile effects business on June 30, 2006. The textile effects
business contributed $260.7 million in revenue for the three months
ended June 30, 2007, while the advanced materials business
contributed $360.8 million revenues for the same period, an
increase of $25.5 million or 8% as compared to 2006. The increase
in advanced materials revenues was primarily the result of a 13%
increase in average selling prices partially offset by a 5%
decrease in sales volumes. The increase in EBITDA in the Materials
and Effects segment was primarily due to the acquisition of the
textile effects business on June 30, 2006. The textile effects
business contributed $13.1 million of EBITDA for the three months
ended June 30, 2007 which included $7.9 million of restructuring
costs, while the advanced materials business contributed $39.4
million for the same period, an increase of $4.1 million or 12%.
The increase in EBITDA in the advanced materials business was
primarily due to higher margins resulting from higher average
selling prices, favorable product mix and the strength of major
European currencies versus the U.S. dollar. During the three months
ended June 30, 2007, the Materials and Effects segment recorded
restructuring and plant closing costs of $8.6 million as compared
to a credit of $0.3 million for the comparable period in 2006.
Performance Products The increase in revenues in the Performance
Products segment for the three months ended June 30, 2007 compared
to the same period in 2006 was the result of a 3% increase in
average selling prices, partially offset by a 2% decrease in sales
volumes. Average selling prices increased primarily due to the
strength of major European and Australian currencies versus the
U.S. dollar. The decrease in sales volumes was primarily
attributable to lower sales of olefins, ethylene oxide, ethylene
glycol and ethanolamines due to an outage at our Port Neches, Texas
facility. The decrease in EBITDA in the Performance Products
segment was primarily due to lower sales margins in our U.S.
intermediates and olefins businesses due to the above mentioned
outage at our Port Neches, Texas facility. Fixed manufacturing and
selling, general and administrative costs were also higher in the
2007 period as compared to the prior year. In addition, during the
three months ended June 30, 2007 we recorded a charge of $6.3
million relating to the settlement of a legal dispute, whereas
during the three months ended June 30, 2006 we recorded a one-time
gain on sale of real estate of $1.5 million. Pigments The increase
in revenues in the Pigments segment for the three months ended June
30, 2007 compared to the same period in 2006 was primarily due to a
9% increase in sales volumes partially offset by a 1% decrease in
average selling prices. Sales volumes increased primarily due to
stronger global demand. Average selling prices decreased in the
European and North American region due to competitive markets
partially offset by the strength of major European currencies
versus the U.S. dollar. The decrease in EBITDA in the Pigments
segment was primarily due to the lower local currency average
selling prices discussed above. The positive effect which the
strength of the major European currencies versus the U.S. dollar
had on revenues noted above was offset by the negative impact of
the strength of the major European currencies on costs. Polymers On
February 15, 2007 we entered into an agreement with Flint Hills
Resources, LLC to sell the majority of the assets that comprise our
Polymers segment. On June 22, 2007 we entered into an amended
agreement with Flint Hills Resources whereby we expect to close on
the sale of our North American polymers business on or about August
1, 2007. Results from our North American polymers business have
been classified as discontinued operations. Results from our
Australian polymers business are now included in the Corporate and
Other segment. The decrease in EBITDA in the Polymers segment was
primarily the result of an increase in restructuring, impairment
and plant closing costs of $240.1 million. In addition, lower
margins driven primarily by lower average selling prices added to
the decrease in EBITDA. During the three months ended June 30, 2007
the Polymers segment recorded restructuring, impairment and plant
closing costs of $240.1 million as compared to charges of nil for
the same period in 2006. Base Chemicals The decrease in revenues in
the Base Chemicals segment for the three months ended June 30, 2007
compared to the same period in 2006 was primarily the result of the
continuing outage at our Port Arthur, Texas olefins manufacturing
facility and the divestiture of certain of our U.S. butadiene and
MTBE assets in the 2006 period. The decrease in EBITDA in the Base
Chemicals segment was primarily the result of the continuing outage
at our Port Arthur, Texas olefins manufacturing facility and the
divestiture of certain of our U.S. butadiene and MTBE assets.
During the three months ended June 30, 2007, EBITDA was negatively
impacted by an estimated $31 million related to the outage at the
Port Arthur, Texas olefins facility as compared to an estimated $64
million, which includes a $10 million impairment charge, in the
2006 period. On February 15, 2007 we entered into an agreement with
Flint Hills Resources, LLC to sell the assets that comprise this
Base Chemicals segment. Corporate and Other Corporate and other
items include the results of our Australia polymers business,
unallocated corporate overhead, loss on the sale of accounts
receivable, unallocated foreign exchange gains and losses, losses
on the early extinguishment of debt, other non-operating income and
expense, minority interest, unallocated restructuring costs, and
the extraordinary gain on the acquisition of a business. In the
second quarter of 2007, the total of these items was a negative
$58.6 million as compared to a positive $2.0 million in the 2006
period. The decrease in EBITDA was primarily the result of a $8.9
million extraordinary loss related to the Textile Effects
acquisition in the second quarter of 2007 whereas in the second
quarter of 2006 we recorded an extraordinary gain of $50.5 million
related to this acquisition. Income Taxes In the second quarter
2007, we recorded $8.0 million of income tax benefit as compared to
$17.4 million of income tax expense in the comparable period of
2006. During the quarter, we released the entire valuation
allowance on the U.S. net deferred tax assets. As a result, we
recorded an incremental non-cash tax benefit of approximately $19.8
million to continuing operations and recorded a tax benefit on
discontinued operations of $76.3 million. Our effective tax rate
benefit on an adjusted basis was 9% for the second quarter 2007 as
compared to an effective tax expense rate of 15% in the prior year
comparable period. We expect our full year 2007 adjusted effective
tax expense rate to be approximately 15%. Liquidity, Capital
Resources and Outstanding Debt As of June 30, 2007 we had
approximately $581 million in cash and unused borrowing capacity.
Our liquidity decreased during the quarter by approximately $93
million from $674 million as of March 31, 2007 primarily due to
increased capital expenditures and increased net working capital
partially offset by insurance proceeds. In conjunction with the
sale of our Polymers business to Flint Hills Resources, LLC, which
we anticipate closing on or about August 1, 2007, we anticipate
receiving approximately $350 million in proceeds, subject to
certain post closing adjustments. Substantially all of such
proceeds will be used to repay a portion of outstanding borrowings
under our revolving credit facility and reduce borrowings under our
accounts receivable securitization facility. We expect to complete
the sale of our North American Base Chemicals businesses by the end
of the year following the successful re-start of our Port Arthur,
Texas olefins facility. In 2007, we expect to record a pre-tax net
asset impairment charge related to the sales of this business of
approximately $150 to $175 million. We intend to use net proceeds
from this sale to repay debt and further reduce borrowings under
our off balance sheet accounts receivable securitization facility.
Also upon the successful start up of our olefins facility we expect
to receive an additional $70 million in proceeds from Texas
Petrochemicals, L.P. relating to the sale of our U.S. butadiene and
MTBE business that was completed in June of 2006. With respect to
the Port Arthur, Texas fire damage, during the quarter ended June
30, 2007 we executed a sworn statement in proof of loss with the
insurance companies to receive additional insurance recovery
advances of $55 million in addition to the $250 million in advances
previously received. As of June 30, 2007 we received $18 million of
the $55 million, the remaining $37 million was received in July
2007. We anticipate receiving additional insurance proceeds
associated with this claim during 2007. For the three months ended
June 30, 2007, total capital expenditures were approximately $186
million compared to $107 million for the same period in 2006. The
increase in capital spending is primarily attributable to the
spending associated with the rebuild of the Port Arthur, Texas
olefins facility which totaled approximately $63 million in the
second quarter of 2007. Excluding estimated 2007 capital
expenditures to repair our Port Arthur, Texas olefins facility of
approximately $218 million, we expect to spend approximately $550
million in capital expenditures in 2007. Below is our outstanding
debt: June 30, December 31, In millions 2007 2006 Debt: (6) Senior
Secured Credit Facilities $1,858.0 $1,711.2 Secured Notes 294.1
294.0 Unsecured Notes 198.0 198.0 Subordinated Notes 1,246.9
1,228.3 Other Debt 186.4 213.8 Total Debt 3,783.4 3,645.3 Total
Cash 167.5 263.2 Net Debt $3,615.9 $3,382.1 Huntsman Corporation
Reconciliation of Adjustments Net Income (Loss) Available Diluted
Income To Common (Loss) EBITDA Stockholders Per Share In millions,
Three months Three months Three months except per share ended June
30, ended June 30, ended June 30, amounts 2007 2006 2007 2006 2007
2006 GAAP $9.6 $499.3 $(83.9) $262.9 $(0.36) $1.13 Adjustments:
Loss on accounts receivable securitization program 4.7 3.6 - - - -
Legal and contract settlements 6.3 (8.8) 4.4 (8.8) 0.02 (0.04) Loss
on early extinguishment of debt 0.4 - 0.2 - 0.00 - Loss due to the
Port Arthur outage (write off of assets) - 9.4 - 9.2 - 0.04 Other
restructuring, impairment and plant closing costs (credits) 13.2
(0.6) 14.0 (0.5) 0.06 (0.00) Loss (gain) on dispositions of
assets(5) 0.7 (92.4) 0.5 (89.6) 0.00 (0.38) Loss (income) from
discontinued operations, net of tax(1) 197.6 (75.0) 132.0 (42.5)
0.57 (0.18) Extraordinary loss (gain) on the acquisition of a
business, net of tax(2) 8.9 (50.5) 8.9 (50.5) 0.04 (0.22) Adjusted
continuing operations $241.4 $285.0 $76.1 $80.2 $0.33 $0.34
Discontinued operations $(197.6) $75.0 $(132.0) $42.5 $(0.57) $0.18
Restructuring, impairment and plant closing costs 240.1 0.4 160.1
0.4 0.69 0.00 (Gain) loss on disposition of assets (23.2) - (23.1)
- (0.10) - Loss on accounts receivable securitization 1.3 1.7 - - -
- Adjusted discontinued operations(1) $20.6 $77.1 $5.0 $42.9 $0.02
$0.18 Net Income (Loss) Available Diluted Income To Common (Loss)
EBITDA Stockholders Per Share In millions, Six months Six months
Six months except per ended June 30, ended June 30, ended June 30,
share amounts 2007 2006 2007 2006 2007 2006 GAAP $251.6 $780.5
$(37.3) $331.9 $(0.16) $1.42 Adjustments: Loss on accounts
receivable securitization program 9.0 5.9 - - - - Legal and
contract settlements 6.3 (8.8) 4.4 (8.8) 0.02 (0.04) Loss on early
extinguishment of debt 1.8 - 1.1 - 0.00 - Loss due to the Port
Arthur outage (write off of assets) -- 9.4 - 9.2 - 0.04 Other
restructuring, impairment and plant closing costs 24.4 7.7 24.6 7.1
0.11 0.03 Gain on dispositions of assets(5) (1.6) (92.4) (2.5)
(89.6) (0.01) (0.38) Loss (income) from discontinued operations,
net of tax(1) 187.3 (107.1) 132.4 (54.8) 0.57 (0.24) Extraordinary
loss (gain) on the acquisition of a business, net of tax(2) 6.5
(50.5) 6.5 (50.5) 0.03 (0.22) Adjusted continuing operations $485.3
$544.7 $129.2 $144.5 $0.55 $0.62 Discontinued operations $(187.3)
$107.1 $(132.4) $54.8 $(0.57) $0.24 Restructuring, impairment and
plant closing costs 241.1 (0.1) 161.1 (0.1) 0.69 (0.00) (Gain) loss
on disposition of assets (19.7) - (20.7) - (0.09) - Loss on
accounts receivable securitization 2.4 2.2 - - - - Adjusted
discontinued operations(1) $36.5 $109.2 $8.0 $54.7 $0.03 $0.23 See
end of press release for footnote explanations Conference Call
Information We will hold a telephone conference to discuss our
second quarter results on Tuesday July 31, 2007 at 8:30 a.m. ET.
Call-in number for U.S. participants: (800) 329 - 9097 Call-in
number for international participants: (617) 614 - 4929 Participant
access code: 25642004 The conference call will be available via
webcast and can be accessed from the investor relations portion of
the company's website at http://www.huntsman.com/. The conference
call will be available for replay beginning July 31, 2007 and
ending August 6, 2007. Call-in numbers for the replay: Within the
U.S.: (888) 286 - 8010 International: (617) 801 - 6888 Access code
for replay: 47508950 Statements in this release that are not
historical are forward-looking statements. These statements are
based on management's current beliefs and expectations. The
forward-looking statements in this release are subject to
uncertainty and changes in circumstances and involve risks and
uncertainties that may affect the company's operations, markets,
products, services, prices and other factors as discussed in the
Huntsman companies' filings with the Securities and Exchange
Commission. Significant risks and uncertainties may relate to, but
are not limited to, financial, economic, competitive,
environmental, political, legal, regulatory and technological
factors. Accordingly, there can be no assurance the company's
expectations will be realized. The company assumes no obligation to
provide revisions to any forward-looking statements should
circumstances change, except as otherwise required by securities
and other applicable laws. In connection with the proposed Merger,
the Company will file a proxy statement with the Securities and
Exchange Commission (the "SEC"). INVESTORS AND SECURITY HOLDERS ARE
ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND
THE PARTIES TO THE HEXION AGREEMENT. Investors and security holders
may obtain a free copy of the proxy statement (when available) and
other relevant documents filed with the SEC from the SEC's website
at http://www.sec.gov/. The Company's security holders and other
interested parties will also be able to obtain, without charge, a
copy of the proxy statement and other relevant documents (when
available) by directing a request by mail or telephone to Huntsman
Corporation Investor Relations, 500 Huntsman Way, Salt Lake City,
Utah 84108, telephone: (801) 584-5700 or on the Company's website
at http://www.huntsman.com/. The Company and its directors,
executive officers and other members of its management and
employees may be deemed to be participants in the solicitation of
proxies from the Company's shareholders with respect to the Hexion
Agreement. Information about the Company's directors and executive
officers and their ownership of the Company's common stock is set
forth herein and in the proxy statement for the Company's 2007
Annual Meeting of Shareholders, which was filed with the SEC on
March 30, 2007. Shareholders and investors may obtain additional
information regarding the interests of the Company and its
directors and executive officers in the Hexion Agreement, which may
be different than those of the Company's shareholders generally, by
reading the proxy statement and other relevant documents regarding
the Hexion Agreement, which will be filed with the SEC. (1) On
December 29, 2006, we completed the sale of our European
petrochemicals business to SABIC. On July 6, 2005 we completed the
sale of our toluene di-isocyanate (TDI) business to BASF. On
February 15, 2007, we entered into a definitive agreement pursuant
to which Flint Hills Resources would acquire our North American
base chemicals and polymers business. On June 22, 2007, we entered
into an amended agreement with Flint Hills Resources providing for
the closing to occur on August 1, 2007. Sale of our North American
Base Chemicals business is expected to close by year end after a
restart of our Port Arthur, Texas olefins facility. (2) On June 30,
2006, we acquired the global textile effects business of Ciba
Specialty Chemicals Inc. for approximately $172.1 million. Because
the fair value of acquired current assets less liabilities assumed
exceeded the acquisition price and planned restructuring costs the
excess was recorded as an extraordinary gain on the acquisition of
a business. The extraordinary gain (loss) recorded during the three
and six months ended June 30, 2007 and 2006 respectively were
$(8.9) million, $(6.5) million, $50.5 million and $50.5 million of
which taxes were not applicable. (3) We use EBITDA, adjusted EBITDA
from continuing operations, adjusted EBITDA from discontinued
operations, adjusted net income from continuing operations and
adjusted net income from discontinued operations. We believe that
net income (loss) available to common stockholders 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 EBITDA, adjusted EBITDA from
continuing operations and adjusted net income from continuing
operations. We believe that income (loss) from discontinued
operations is the performance measure calculated and presented in
accordance with GAAP that is most directly comparable to adjusted
EBITDA from discontinued operations and adjusted net income from
discontinued operations. Additional information with respect to our
use of each of these financial measures follows. EBITDA is defined
as net income before interest, income taxes, and depreciation and
amortization. EBITDA as used herein is not necessarily comparable
to other similarly titled measures of other companies. The
reconciliation of EBITDA to net income (loss) available to common
stockholders is set forth in the operating results table above.
Adjusted EBITDA from continuing operations is computed by
eliminating the following from EBITDA: gains and losses from
discontinued operations; restructuring, impairment and plant
closing (credits) costs; losses on the sale of accounts receivable
to our securitization program; losses from early extinguishment of
debt; extraordinary gain on the acquisition of a business; and gain
on dispositions of assets. The reconciliation of adjusted EBITDA
from continuing operations to EBITDA is set forth in the
reconciliation of adjustments table above. Adjusted EBITDA from
discontinued operations is computed by eliminating from income
(loss) from discontinued operations: income taxes; depreciation and
amortization; restructuring, impairment and plant closing (credits)
costs; losses on the sale of accounts receivable to our
securitization program; and loss on the sale of assets. The
following table provides a reconciliation of adjusted EBITDA from
discontinued operations to income (loss) from discontinued
operations: Three months ended Six months ended June 30, June 30,
2007 2006 2007 2006 (Loss) income from discontinued operations, net
of tax $(132.0) $42.5 $(132.4) $54.8 Income tax (benefit) expense
(76.3) 6.9 (76.3) 0.4 Depreciation and amortization 10.7 25.6 21.4
51.9 EBITDA from discontinued operations (197.6) 75.0 $(187.3)
$107.1 Restructuring, impairment and plant closing costs 240.1 0.4
241.1 (0.1) (Gain) loss on disposition of assets (23.2) - (19.7) -
Loss on accounts receivable securitization 1.3 1.7 2.4 2.2 Adjusted
EBITDA from discontinued operations $20.6 $77.1 $36.5 $109.2
Adjusted net income from continuing operations is computed by
eliminating the after tax impact of the following from net income
(loss) available to common stockholders: loss (income) from
discontinued operations; restructuring, impairment and plant
closing (credits) costs; losses on the early extinguishment of
debt; extraordinary gain on the acquisition of a business; and gain
on dispositions of assets. The reconciliation of adjusted net
income from continuing operations to net income (loss) available to
common stockholders is set forth in the reconciliation of
adjustments table above. Adjusted net income from discontinued
operations is computed by eliminating the after tax impact of the
following from income (loss) from discontinued operations:
restructuring, impairment and plant closing (credits) costs; and
loss on the sale of assets. The reconciliation of adjusted net
income from discontinued operations to net income (loss) available
to common stockholders is set forth in the reconciliation of
adjustments table above. (4) In the second quarter 2007, our
Australia polymers business was transferred from our Polymers
segment to our Corporate and Other segment. All segment information
for prior periods has been restated to reflect this transfer and is
presented in the table below. Three months ended Six months ended
June 30, June 30, 2007 2006 2007 2006 Revenues $34.6 $50.1 $72.2
$94.9 EBITDA $(11.5) $(3.8) $(14.1) $(9.0) Adjusted EBITDA $(6.2)
$(3.0) $(7.1) $(4.1) (5) On January 4, 2007 we sold the assets
comprising our Australia polyester resin business. For the six
months ended June 30, 2007 we recognized a net of tax gain of $4.1
million, the income tax impact of which was nil. On February 15,
2007 we announced that definitive documents had been signed with
Flint Hills Resources, LLC to sell our North American Base
Chemicals and Polymers assets. During the second quarter 2007 we
recognized net of tax adjusting charge related to the disposition
of these assets of $0.5 million, the income tax impact of which was
$0.2 million. During the six months ended June 30, 2007 we
recognized net of tax gain related to the disposition of these
assets of $2.5 million, the income tax impact of which was $0.9
million. On June 27, 2006 we sold the assets comprising certain of
our U.S. butadiene and MTBE business. During the second quarter
2006 we recognized a net of tax gain of $89.6 million, the income
tax impact of which was $2.8 million for the sale of our U.S.
butadiene and MTBE business as well as our Guelph, Ontario
facility. (6) Excludes $500 million and $443 million of off-balance
sheet financing obtained under our accounts receivable
securitization program as of June 30, 2007, and December 31, 2006,
respectively. DATASOURCE: Huntsman Corporation CONTACT: Media, Russ
Stolle, +1-281-719-6624, or investors, John Heskett
+1-801-584-5768, both of Huntsman Corporation Web site:
http://www.huntsman.com/
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