Huntsman CORP (HUN) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from Huntsman CORP's 10-K for fiscal year 2024. Filing date: 2025-02-18. Report date: 2024-12-31. Accession: 0001437749-25-004205.

This page reproduces the company's own Item 7 MD&A text from the linked SEC filing. It is filer text, not grepcent analysis, scoring, or investment advice.

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high.

Company profile: HUN · All MD&A years: index · Previous year: FY 2023 · Next year: FY 2025

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ReSULTS OF OPERATIONS

As discussed in “Note 4. Discontinued Operations—Sale of Textile Effects Business” to our consolidated financial statements, the results from continuing operations primarily exclude the results of our Textile Effects Business for all periods presented. For each of our Company and Huntsman International, the following tables set forth our consolidated results of operations for the years ended December 31, 2024, 2023 and 2022 (in millions, except per share amounts).

Huntsman Corporation

	December 31,			Percent change
	2024			2023			2022		2024 vs 2023		2023 vs 2022
Revenues	$	6,036			$	6,111		$	8,023			(1	)%	(24	)%
Cost of goods sold		5,170				5,205			6,477			(1	)%	(20	)%
Gross profit		866				906			1,546			(4	)%	(41	)%
Operating expenses		793				804			788			(1	)%	2	%
Restructuring, impairment and plant closing costs		39				18			86			117	%	(79	)%
Gain on acquisition of assets, net		(51	)			—			—			NM		—
Prepaid asset write-off		71				—			—			NM		—
Loss on dissolution of subsidiaries(4)		39				—			—			NM		—
Operating (loss) income		(25	)			84			672			NM		(88	)%
Interest expense, net		(79	)			(65	)		(62	)		22	%	5	%
Equity in income of investment in unconsolidated affiliates		44				83			67			(47	)%	24	%
Other income (expense), net		21				(3	)		20			NM		NM
(Loss) income from continuing operations before income taxes		(39	)			99			697			NM		(86	)%
Income tax expense		(61	)			(64	)		(186	)		(5	)%	(66	)%
(Loss) income from continuing operations		(100	)			35			511			NM		(93	)%
(Loss) income from discontinued operations, net of tax		(27	)			118			12			NM		883	%
Net (loss) income		(127	)			153			523			NM		(71	)%
Reconciliation of net (loss) income to adjusted EBITDA(1):
Net income attributable to noncontrolling interests		(62	)			(52	)		(63	)		19	%	(17	)%
Interest expense, net from continuing operations		79				65			62			22	%	5	%
Income tax expense from continuing operations		61				64			186			(5	)%	(66	)%
Income tax (benefit) expense from discontinued operations		(11	)			17			19			NM		(11	)%
Depreciation and amortization of continuing operations		289				278			281			4	%	(1	)%
Depreciation and amortization of discontinued operations		—				—			12			—		(100	)%
Other adjustments:
Business acquisition and integration expenses and purchase accounting inventory adjustments, net		21				4			12
EBITDA from discontinued operations(2)		38				(135	)		(43	)
Fair value adjustments to Venator investment, net and other tax matter adjustments		(12	)			5			12
Certain legal and other settlements and related expenses(3)		13				6			7
Costs associated with the Albemarle Settlement, net		—				—			3
Loss on sale of business/assets		1				—			—
Loss on dissolution of subsidiaries(4)		39				—			—
Income from transition services arrangements		—				—			(2	)
Certain nonrecurring information technology project implementation costs		—				5			5
Amortization of pension and postretirement actuarial losses		39				37			49
Plant incident remediation credits		—				—			(4	)
Restructuring, impairment and plant closing and transition costs(5)		46				25			96
Adjusted EBITDA(1)	$	414			$	472		$	1,155			(12	)%	(59	)%
Net cash provided by operating activities from continuing operations	$	285			$	251		$	892			14	%	(72	)%
Net cash (used in) provided by investing activities from continuing operations		(126	)			309			(260	)		NM		NM
Net cash used in financing activities		(326	)			(620	)		(994	)		(47	)%	(38	)%
Capital expenditures from continuing operations		(184	)			(230	)		(272	)		(20	)%	(15	)%
Amounts attributable to Huntsman Corporation:
(Loss) income from continuing operations	$	(162	)		$	(17	)	$	448
(Loss) income from discontinued operations, net of tax		(27	)			118			12
Net (loss) income	$	(189	)		$	101		$	460

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Huntsman International

	December 31,			Percent change
	2024			2023			2022		2024 vs 2023		2023 vs 2022
Revenues	$	6,036			$	6,111		$	8,023			(1	)%	(24	)%
Cost of goods sold		5,170				5,205			6,477			(1	)%	(20	)%
Gross profit		866				906			1,546			(4	)%	(41	)%
Operating expenses		790				801			784			(1	)%	2	%
Restructuring, impairment and plant closing costs		39				18			86			117	%	(79	)%
Gain on acquisition of assets, net		(51	)			—			—			NM		—
Prepaid asset write-off		71				—			—			NM		—
Loss on dissolution of subsidiaries(4)		39				—			—			NM		—
Operating (loss) income		(22	)			87			676			NM		(87	)%
Interest expense, net		(79	)			(65	)		(62	)		22	%	5	%
Equity in income of investment in unconsolidated affiliates		44				83			67			(47	)%	24	%
Other income (expense), net		21				(3	)		19			NM		NM
(Loss) income from continuing operations before income taxes		(36	)			102			700			NM		(85	)%
Income tax expense		(62	)			(65	)		(188	)		(5	)%	(65	)%
(Loss) income from continuing operations		(98	)			37			512			NM		(93	)%
(Loss) income from discontinued operations, net of tax		(27	)			118			12			NM		883	%
Net (loss) income		(125	)			155			524			NM		(70	)%
Reconciliation of net (loss) income to adjusted EBITDA(1):
Net income attributable to noncontrolling interests		(62	)			(52	)		(63	)		19	%	(17	)%
Interest expense, net from continuing operations		79				65			62			22	%	5	%
Income tax expense from continuing operations		62				65			188			(5	)%	(65	)%
Income tax (benefit) expense from discontinued operations		(11	)			17			19			NM		(11	)%
Depreciation and amortization of continuing operations		289				278			281			4	%	(1	)%
Depreciation and amortization of discontinued operations		—				—			12			—		(100	)%
Other adjustments:
Business acquisition and integration expenses and purchase accounting inventory adjustments, net		21				4			12
EBITDA from discontinued operations(2)		38				(135	)		(43	)
Fair value adjustments to Venator investment, net and other tax matter adjustments		(12	)			5			12
Certain legal and other settlements and related expenses(3)		13				6			7
Costs associated with the Albemarle Settlement, net		—				—			3
Loss on sale of business/assets		1				—			—
Loss on dissolution of subsidiaries(4)		39				—			—
Income from transition services arrangements		—				—			(2	)
Certain nonrecurring information technology project implementation costs		—				5			5
Amortization of pension and postretirement actuarial losses		39				37			49
Plant incident remediation credits		—				—			(4	)
Restructuring, impairment and plant closing and transition costs(5)		46				25			96
Adjusted EBITDA(1)	$	417			$	475		$	1,158			(12	)%	(59	)%
Net cash provided by operating activities from continuing operations	$	285			$	253		$	895			13	%	(72	)%
Net cash used in investing activities from continuing operations		(138	)			(42	)		(1,277	)		229	%	(97	)%
Net cash (used in) provided by financing activities		(314	)			(271	)		22			16	%	NM
Capital expenditures from continuing operations		(184	)			(230	)		(272	)		(20	)%	(15	)%
Amounts attributable to Huntsman International:
(Loss) income from continuing operations	$	(160	)		$	(15	)	$	449
(Loss) income from discontinued operations, net of tax		(27	)			118			12
Net (loss) income	$	(187	)		$	103		$	461

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Huntsman Corporation

	Year ended			Year ended			Year ended
	December 31, 2024			December 31, 2023			December 31, 2022
					Tax									Tax									Tax
	Gross			and other(6)			Net		Gross		and other(6)			Net			Gross		and other(6)		Net
Reconciliation of net (loss) income to adjusted net (loss) income(1):
Net (loss) income								$	(127	)								$	153								$	523
Net income attributable to noncontrolling interests									(62	)									(52	)								(63	)
Business acquisition and integration expenses and purchase accounting inventory adjustments, net	$	21			$	(17	)		4		$	4			$	(1	)		3		$	12		$	(2	)		10
Loss (income) from discontinued operations(2)		38				(11	)		27			(135	)			17			(118	)		(43	)		31			(12	)
Fair value adjustments to Venator investment, net and other tax matter adjustments		(12	)			3			(9	)		5				—			5			12			—			12
Certain legal and other settlements and related expenses(3)		13				(3	)		10			6				(1	)		5			7			(2	)		5
Costs associated with the Albemarle Settlement, net		—				—			—			—				—			—			3			(1	)		2
Loss on sale of business/assets		1				—			1			—				—			—			—			—			—
Loss on dissolution of subsidiaries(4)		39				—			39			—				—			—			—			—			—
Income from transition services arrangements		—				—			—			—				—			—			(2	)		—			(2	)
Certain nonrecurring information technology project implementation costs		—				—			—			5				(1	)		4			5			(1	)		4
Amortization of pension and postretirement actuarial losses		39				(3	)		36			37				(6	)		31			49			(11	)		38
Plant incident remediation credits		—				—			—			—				—			—			(4	)		1			(3	)
Establishment of significant deferred tax asset valuation allowances(7)		—				23			23			—				14			14			—			49			49
Income tax settlement related to U.S. Tax Reform Act		—				5			5			—				—			—			—			—			—
Restructuring, impairment and plant closing and transition costs(5)		46				(6	)		40			25				(3	)		22			96			(23	)		73
Adjusted net (loss) income(1)								$	(13	)								$	67								$	636
Weighted average shares-basic									172.1										177.4									201.0
Weighted average shares-diluted									172.1										177.4									203.0
Basic net (loss) income attributable to Huntsman Corporation per share:
(Loss) income from continuing operations								$	(0.94	)								$	(0.10	)							$	2.23
(Loss) income from discontinued operations									(0.16	)									0.67									0.06
Net (loss) income								$	(1.10	)								$	0.57								$	2.29
Diluted net (loss) income attributable to Huntsman Corporation per share:
(Loss) income from continuing operations								$	(0.94	)								$	(0.10	)							$	2.21
(Loss) income from discontinued operations									(0.16	)									0.67									0.06
Net (loss) income								$	(1.10	)								$	0.57								$	2.27
Other non-GAAP measures:
Diluted adjusted net (loss) income per share(1)								$	(0.08	)								$	0.37								$	3.13
Net cash provided by operating activities from continuing operations								$	285									$	251								$	892
Capital expenditures from continuing operations									(184	)									(230	)								(272	)
Free cash flow from continuing operations(1)								$	101									$	21								$	620
Effective tax rate									(156	)%									65	%								27	%
Impact of non-GAAP adjustments(8)									211	%									(31	)%								(7	)%
Adjusted effective tax rate(1)									55	%									34	%								20	%

NM—Not meaningful

(1)	See “—Non-GAAP Financial Measures.”
(2)	Includes the net (loss) gain on the sale of our Textile Effects Business. In addition to income tax impacts, this adjusting item is also impacted by depreciation and amortization expense and interest expense.
(3)	Certain legal and other settlements and related expenses for the year ended December 31, 2024 includes approximately $10 million related to the settlement of a claim in connection with a commercial dispute.
(4)	Loss on dissolution of subsidiaries for the year ended December 31, 2024 relates to the elimination and non-cash recognition of cumulative translation adjustments from accumulated other comprehensive loss due to the liquidation of certain subsidiaries.
(5)	Includes costs associated with transition activities relating primarily to our Corporate program to optimize our global approach to managed services in various information technology functions and our program to realign our cost structure in Europe.
(6)	The income tax impacts, if any, are computed on the pre-tax adjustments using a with and without approach.
(7)	During the years ended December 31, 2024, 2023 and 2022, we established significant deferred tax asset valuation allowances of $23 million, $14 million and $49 million, respectively, in Germany, Luxembourg, the U.K. and the Netherlands. We eliminated the effect of these significant deferred tax asset valuation allowances from our presentation of adjusted net income to allow investors to better compare our ongoing financial performance from period to period.
(8)	For details regarding the tax impacts of our non-GAAP adjustments, please see the reconciliation of our net (loss) income to adjusted net (loss) income noted above.

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Non-GAAP Financial Measures

Our consolidated financial statements are prepared in accordance with U.S. GAAP, which we supplement with certain non-GAAP financial information. These non-GAAP measures should not be considered in isolation or as a substitute for the related U.S. GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and the reconciliation of the non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures in their entirety and not to rely on any single financial measure. These non-GAAP measures exclude the impact of certain income and expenses that we do not believe are indicative of our core operating results.

Adjusted EBITDA

Our management uses adjusted EBITDA to assess financial performance. Adjusted EBITDA is defined as net income of Huntsman Corporation or Huntsman International, as appropriate, before interest, income tax, depreciation and amortization, net income attributable to noncontrolling interests and certain Corporate and other items, as well as eliminating the following adjustments: (a) business acquisition and integration expenses and purchase accounting inventory adjustments, net; (b) EBITDA from discontinued operations; (c) fair value adjustments to Venator investment, net and other tax matter adjustments; (d) certain legal and other settlements and related expenses; (e) costs associated with the Albemarle settlement, net; (f) loss on sale of business/assets; (g) loss on dissolution of subsidiaries; (h) income from transition services arrangements; (i) certain nonrecurring information technology project implementation costs; (j) amortization of pension and postretirement actuarial losses; (k) plant incident remediation credits; and (l) restructuring, impairment and plant closing and transition costs. We believe that net income of Huntsman Corporation or Huntsman International, as appropriate, is the performance measure calculated and presented in accordance with U.S. GAAP that is most directly comparable to adjusted EBITDA.

We believe adjusted EBITDA is useful to investors in assessing the businesses’ ongoing financial performance and provides improved comparability between periods through the exclusion of certain items that management believes are not indicative of the businesses’ operational profitability and that may obscure underlying business results and trends. However, this measure should not be considered in isolation or viewed as a substitute for net income of Huntsman Corporation or Huntsman International, as appropriate, or other measures of performance determined in accordance with U.S. GAAP. Moreover, adjusted EBITDA as used herein is not necessarily comparable to other similarly titled measures of other companies due to potential inconsistencies in the methods of calculation. Our management believes this measure is useful to compare general operating performance from period to period and to make certain related management decisions. Adjusted EBITDA is also used by securities analysts, lenders and others in their evaluation of different companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be highly dependent on a company’s capital structure, debt levels and credit ratings. Therefore, the impact of interest expense on earnings can vary significantly among companies. In addition, the tax positions of companies can vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the various jurisdictions in which they operate. As a result, effective tax rates and tax expense can vary considerably among companies. Finally, companies employ productive assets of different ages and utilize different methods of acquiring and depreciating such assets. This can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.

Nevertheless, our management recognizes that there are material limitations associated with the use of adjusted EBITDA in the evaluation of our Company as compared to net income of Huntsman Corporation or Huntsman International, as appropriate, which reflects overall financial performance. For example, we have borrowed money in order to finance our operations and interest expense is a necessary element of our costs and ability to generate revenue. Our management compensates for the limitations of using adjusted EBITDA by using this measure to supplement U.S. GAAP results to provide a more complete understanding of the factors and trends affecting the business rather than U.S. GAAP results alone.

Adjusted Net Income

Adjusted net income is computed by eliminating the after tax amounts related to the following from net income attributable to Huntsman Corporation: (a) business acquisition and integration expenses and purchase accounting inventory adjustments, net; (b) (loss) income from discontinued operations; (c) fair value adjustments to Venator investment, net and other tax matter adjustments; (d) certain legal and other settlements and related expenses; (e) costs associated with the Albemarle settlement, net; (f) loss on sale of business/assets; (g) loss on dissolution of subsidiaries; (h) income from transition services arrangements; (i) certain nonrecurring information technology project implementation costs; (j) amortization of pension and postretirement actuarial losses; (k) plant incident remediation credits; (l) establishment of significant deferred tax asset valuation allowances; (m) income tax settlement related to U.S. Tax Reform Act; and (n) restructuring, impairment and plant closing and transition costs. Basic adjusted net income per share excludes dilution and is computed by dividing adjusted net income by the weighted average number of shares outstanding during the period. Adjusted diluted net income per share reflects all potential dilutive common shares outstanding during the period and is computed by dividing adjusted net income by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding as dilutive securities. Adjusted net income and adjusted net income per share amounts are presented solely as supplemental information.

We believe adjusted net income is useful to investors in assessing the businesses’ ongoing financial performance and provides improved comparability between periods through the exclusion of certain items that management believes are not indicative of the businesses’ operational profitability and that may obscure underlying business results and trends.

Free Cash Flow

We believe free cash flow from continuing operations is an important indicator of our liquidity as it measures the amount of cash we generate. Management internally uses a free cash flow measure: (a) to evaluate our liquidity, (b) evaluate strategic investments, (c) plan dividend and stock buyback levels and (d) evaluate our ability to incur and service debt.

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Adjusted Effective Tax Rate

We believe that the effective tax rate of Huntsman Corporation or Huntsman International, as appropriate, is the performance measure calculated and presented in accordance with U.S. GAAP that is most directly comparable to adjusted effective tax rate. We believe our adjusted effective tax rate provides improved comparability between periods through the exclusion of certain items, such as, business acquisition and integration expenses and purchase accounting inventory adjustments, certain legal and other settlements and related expenses, gains on sale of businesses/assets and certain tax only items, such as certain changes in valuation allowances that we believe are not indicative of the businesses’ operational profitability and that may obscure underlying business results and trends.

Our forward-looking adjusted effective tax rate is calculated based on our forecast effective tax rate, and the range of our forward-looking adjusted effective tax rate equals the range of our forecast effective tax rate. We disclose forward-looking adjusted effective tax rate because we cannot adequately forecast certain items and events that may or may not impact us in the near future, such as business acquisition and integration expenses and purchase accounting inventory adjustments, certain legal and other settlements and related expenses, gain on sale of businesses/assets and certain tax only items, including tax law changes not yet enacted. Each of such adjustment has not yet occurred, is out of our control and/or cannot be reasonably predicted. In our view, our forward-looking adjusted effective tax rate represents the forecast effective tax rate on our underlying business operations but does not reflect any adjustments related to the items noted above that may occur and can cause our effective tax rate to differ.

Year Ended December 31, 2024 Compared with Year Ended December 31, 2023

For the year ended December 31, 2024, loss from continuing operations attributable to Huntsman Corporation was $162 million as compared with $17 million in the 2023 period. For the year ended December 31, 2024, loss from continuing operations attributable to Huntsman International was $160 million as compared with $15 million in the 2023 period. The decreases noted above were the result of the following items:

Column 1	Column 2	Column 3
	●	Revenues for the year ended December 31, 2024 decreased by $75 million, or 1%, as compared with the 2023 period. The decrease was primarily due to lower average selling prices in all our segments, partially offset by higher sales volumes in all our segments. See “—Segment Analysis” below.

Column 1	Column 2	Column 3
	●	Gross profit for the year ended December 31, 2024 decreased by $40 million, or 4%, as compared with the 2023 period. The decrease resulted primarily from lower gross profits in our Performance Products segment. See “—Segment Analysis” below.

Column 1	Column 2	Column 3
	●	Restructuring, impairment and plant closing costs for the year ended December 31, 2024 increased by $21 million, or 117%, as compared with the 2023 period. For more information on restructuring activities, see “Note 12. Restructuring, Impairment and Plant Closing Costs” to our consolidated financial statements.

Column 1	Column 2	Column 3
	●	Gain on acquisition of assets, net was approximately $51 million for the year ended December 31, 2024 representing a net bargain purchase gain related to the separation and acquisition of assets of SLIC. For further information, see “Note 3. Business Combinations and Acquisitions—Separation and Acquisition of Assets of SLIC Joint Venture” to our consolidated financial statements.

Column 1	Column 2	Column 3
	●	Prepaid asset write-off was approximately $71 million for the year ended December 31, 2024. Concurrent with the acquisition of assets of SLIC, we wrote off certain prepaid assets related to operating agreements with SLIC and other joint venture partners. For further information, see “Note 3. Business Combinations and Acquisitions—Separation and Acquisition of Assets of SLIC Joint Venture” to our consolidated financial statements.

Column 1	Column 2	Column 3
	●	Loss on dissolution of subsidiaries was approximately $39 million for the year ended December 31, 2024 related to the elimination and non-cash recognition of cumulative translation adjustments from accumulated other comprehensive loss due to the liquidation of certain subsidiaries in the fourth quarter of 2024.

Column 1	Column 2	Column 3
	●	Interest expense, net for the year ended December 31, 2024 increased by $14 million, or 22%, as compared with the 2023 period. The increase resulted primarily from higher borrowings under our 2022 $1.2 billion senior unsecured revolving credit facility (“2022 Revolving Credit Facility”).

Column 1	Column 2	Column 3
	●	Equity in income of investment in unconsolidated affiliates for the year ended December 31, 2024 decreased to $44 million from $83 million in the 2023 period, primarily related to a decrease in income at our PO/MTBE joint venture with China, in which we hold a 49% interest.

Column 1	Column 2	Column 3
	●	Other income (expense), net for the year ended December 31, 2024 was income of $21 million as compared with expense of $3 million in the 2023 period, primarily due to a decrease in losses related to the fair value adjustments to our investment in Venator, as well as income recognized during the year ended December 31, 2024 for the resolution of certain matters related to the 2017 separation of our titanium dioxide and performance additives business.

Column 1	Column 2	Column 3
	●	Our income tax expense for the year ended December 31, 2024 was $61 million as compared with $64 million in the 2023 period. The income tax expense of Huntsman International for the year ended December 31, 2024 was $62 million as compared with $65 million in the 2023 period. Our income tax expense is significantly affected by the mix of income and losses in the tax jurisdictions in which we operate along with the impact of valuation allowances in certain tax jurisdictions. In particular, we recognize tax expense in jurisdictions with pre-tax income, but do not recognize a tax benefit of pre-tax losses in jurisdictions with valuation allowances. In addition, in 2024 we recognized discrete tax expenses for settlement of U.S. tax reform items of approximately $5 million and discrete establishments of valuation allowances of approximately $29 million, which were greater than the valuation allowance net establishments of approximately $16 million in 2023. For more information concerning income taxes, see “Note 19. Income Taxes” to our consolidated financial statements.

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Segment Analysis

								Percent
								favorable
	Year ended December 31,			(unfavorable)
(Dollars in millions)	2024			2023			change
Revenues
Polyurethanes	$	3,900			$	3,865		1	%
Performance Products		1,109				1,178		(6	)%
Advanced Materials		1,055				1,092		(3	)%
Total reportable segments’ revenues		6,064				6,135		(1	)%
Intersegment eliminations		(28	)			(24	)	NM
Total	$	6,036			$	6,111		(1	)%
Huntsman Corporation
Adjusted EBITDA(1)
Polyurethanes	$	245			$	248		(1	)%
Performance Products		153				201		(24	)%
Advanced Materials		179				186		(4	)%
Total reportable segments’ adjusted EBITDA		577				635		(9	)%
Corporate and other		(163	)			(163	)	—
Total	$	414			$	472		(12	)%
Huntsman International
Adjusted EBITDA(1)
Polyurethanes	$	245			$	248		(1	)%
Performance Products		153				201		(24	)%
Advanced Materials		179				186		(4	)%
Total reportable segments’ adjusted EBITDA		577				635		(9	)%
Corporate and other		(160	)			(160	)	—
Total	$	417			$	475		(12	)%

NM—Not meaningful
(1)	For more information, including reconciliation of total reportable segments’ adjusted EBITDA to (loss) income from continuing operations before income taxes of Huntsman Corporation or Huntsman International, as appropriate, see “Note 26. Operating Segment Information” to our consolidated financial statements.

	Year ended December 31, 2024 vs 2023
	Average selling prices(1)
	Local			Foreign currency		Sales
	currency and mix			translation impact		volumes(2)
Period-over-period (decrease) increase
Polyurethanes		(7	)%		—		8	%
Performance Products		(7	)%		—		1	%
Advanced Materials		(8	)%		—		5	%

Column 1	Column 2
(1)	Excludes revenues from tolling arrangements, byproducts and raw materials.

Column 1	Column 2
(2)	Excludes sales volumes of byproducts and raw materials.

Polyurethanes

The increase in revenues in our Polyurethanes segment for 2024 compared to 2023 was primarily due to higher sales volumes, partially offset by lower MDI average selling prices. Sales volumes increased primarily due to improved demand and share gains in certain markets, including insulation and composite wood panels. MDI average selling prices decreased primarily due to competitive pressures. The minimal decrease in segment adjusted EBITDA was primarily due to lower MDI average selling prices and lower equity earnings from our minority-owned joint venture in China, partially offset by lower raw materials costs, lower fixed costs and higher sales volumes.

Performance Products

The decrease in revenues in our Performance Products segment for 2024 compared to 2023 was primarily due to lower average selling prices, partially offset by higher sales volumes. Average selling prices decreased primarily due to competitive pressure. Sales volumes increased primarily due to improved demand and volume improvement initiatives across certain markets, including fuel and lubricant additives and coatings and adhesives. The decrease in segment adjusted EBITDA was primarily due to lower average selling prices, partially offset by higher sales volumes and lower raw materials costs.

Advanced Materials

The decrease in revenues in our Advanced Materials segment for 2024 compared to 2023 was primarily due to lower average selling prices, partially offset by higher sales volumes. Average selling prices decreased primarily due to unfavorable sales mix. Sales volumes increased in our infrastructure, general industry and aerospace markets driven by market recovery. The decrease in segment adjusted EBITDA was primarily due to lower average selling prices.

Corporate and other

Corporate and other includes unallocated corporate overhead, unallocated foreign currency exchange gains and losses, last-in first-out (“LIFO”) inventory valuation reserve adjustments, loss on early extinguishment of debt, unallocated restructuring, impairment and plant closing costs, nonoperating income and expense and gains and losses on the disposition of corporate assets. Adjusted EBITDA from Corporate and other for Huntsman Corporation remained the same, a loss of $163 million, for 2024 as compared to 2023. Adjusted EBITDA from Corporate and other for Huntsman International remained the same, a loss of $160 million, for 2024 as compared to 2023. The impact on adjusted EBITDA from Corporate and other resulted primarily from decreases in corporate overhead costs and unallocated foreign currency exchange losses, offset by an increase in LIFO valuation losses.

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Year Ended December 31, 2023 Compared with Year Ended December 31, 2022

For a comparison of both our results of operations and segment analysis for the fiscal years ended December 31, 2023 and 2022, see “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 22, 2024.

Liquidity and Capital Resources

The following is a discussion of our liquidity and capital resources and generally does not include separate information with respect to Huntsman International in accordance with General Instruction I of Form 10-K.

Cash Flows For Year Ended December 31, 2024 Compared with Year Ended December 31, 2023

Net cash provided by operating activities from continuing operations for 2024 and 2023 was $285 million and $251 million, respectively. The increase in net cash provided by operating activities from continuing operations during 2024 compared with 2023 was primarily attributable to an increase of $42 million in dividends received from unconsolidated subsidiaries and a net cash inflow of $29 million related to changes in operating assets and liabilities for 2024 as compared with 2023, partially offset by a decrease of $37 million in operating (loss) income from continuing operations adjusted for noncash activities as noted in our consolidated statements of cash flows.

Net cash (used in) provided by investing activities from continuing operations for 2024 and 2023 was $(126) million and $309 million, respectively. During 2024 and 2023, we paid $184 million and $230 million, respectively, for capital expenditures. During 2024, we received approximately $30 million as an interim liquidating distribution from SLIC, we received $16 million for the sale of businesses, net, primarily related to the resolution of net working capital of $12 million from the sale of our Textile Effects Business, and we received $11 million related to the sale of assets. During 2023, we received $544 million for the sale of businesses, net, primarily related to net proceeds of $530 million from the sale of our Textile Effects Business. See “Note 4. Discontinued Operations—Sale of Textile Effects Business” to our consolidated financial statements.

Net cash used in financing activities for 2024 and 2023 was $326 million and $620 million, respectively. During 2024, we received proceeds of approximately $350 million related to the issuance of our 5.70% senior notes due 2034 (“2034 Senior Notes”). See “Note 8. Debt—Direct and Subsidiary Debt—Senior Notes” to our consolidated financial statements. During 2024, HPS paid approximately $218 million against the note payable with SLIC for the acquisition of assets. “See “Note 3. Business Combinations and Acquisitions—Separation and Acquisition of Assets of SLIC Joint Venture” to our consolidated financial statements. During 2024 and 2023, we repaid $169 million and $51 million, respectively, against the outstanding balances under our 2022 Revolving Credit Facility and our U.S. accounts receivable securitization program (“U.S. A/R Program”) and European accounts receivable securitization program (“EU A/R Program” and collectively with the U.S. A/R Program, “A/R Programs”). During 2023, we paid $349 million for repurchases of our common stock.

Free cash flow from continuing operations for 2024 and 2023 were proceeds of cash of $101 million and $21 million, respectively. The increase in free cash flow from continuing operations was attributable to an increase in cash provided by operating activities from continuing operations and a decrease in cash used for capital expenditures during 2024 as compared with 2023.

Cash Flows For Year Ended December 31, 2023 Compared with Year Ended December 31, 2022

For a comparison of our cash flows for the fiscal years ended December 31, 2023 and 2022, see “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 22, 2024.

Changes in Financial Condition

The following information summarizes our working capital (dollars in millions):

	December 31,		December 31,			(Decrease)		Percent
	2024		2023			increase		change
Cash and cash equivalents	$	340		$	540		$	(200	)	(37	)%
Accounts and notes receivable, net		725			753			(28	)	(4	)%
Inventories		917			867			50		6	%
Prepaid expenses		114			92			22		24	%
Other current assets		29			62			(33	)	(53	)%
Total current assets		2,125			2,314			(189	)	(8	)%
Accounts payable		770			719			51		7	%
Accrued liabilities		416			395			21		5	%
Current portion of debt		325			12			313		NM
Current operating lease liabilities		54			46			8		17	%
Total current liabilities		1,565			1,172			393		34	%
Working capital	$	560		$	1,142		$	(582	)	(51	)%

Our working capital decreased by $582 million as a result of the net impact of the following significant changes:

Column 1	Column 2	Column 3
	●	The decrease in cash and cash equivalents of $200 million resulted from the matters identified on our consolidated statements of cash flows. See also “—Cash Flows Year Ended December 31, 2024 Compared with Year Ended December 31, 2023.”

Column 1	Column 2	Column 3
	●	Inventories increased by $50 million primarily due to higher sales volumes.

Column 1	Column 2	Column 3
	●	Prepaid expenses increased by $22 million primarily due to higher prepaid information technology costs.

Column 1	Column 2	Column 3
	●	Other current assets decreased by $33 million primarily due to lower bank accepted drafts and lower current income tax receivable.

Column 1	Column 2	Column 3
	●	Accounts payable increased by $51 million primarily due to higher inventory purchases and improved terms.

Column 1	Column 2	Column 3
	●	Accrued liabilities increased by $21 million primarily due to increases in accrued income taxes, accrued interest, accrued rebates and accrued environmental liabilities, partially offset by a decrease in accrued payroll and taxes other than income.

Column 1	Column 2	Column 3
	●	Current portion of debt increased by $313 million primarily due to the outstanding balance on our 4.25% senior notes due April 2025 (“2025 Senior Notes”) that are now classified as current debt.

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Liquidity

Short-Term Liquidity

We depend upon our cash, our 2022 Revolving Credit Facility, our A/R Programs and other debt instruments to provide liquidity for our operations and working capital needs. As of December 31, 2024, we had $1,719 million of combined cash and unused borrowing capacity, consisting of $340 million in cash, $1,197 million in availability under our 2022 Revolving Credit Facility and $182 million in availability under our A/R Programs. Our liquidity can be significantly impacted by various factors. The following matters are expected to have a significant impact on our liquidity:

	●	During 2025, we expect to spend between approximately $180 million to $190 million on capital expenditures. Our future expenditures include certain environmental, health and safety upgrades; expansions and upgrades of our existing manufacturing and other facilities; construction of new facilities; certain cost reduction projects, including those described below; and certain information technology expenditures. We expect to fund capital expenditures with cash provided by operations.
	●	During 2025, we expect to make contributions to our pension and postretirement benefit plans of approximately $35 million.
	●	Our €300 million 2025 Senior Notes are scheduled to mature on April 1, 2025. Accordingly, an approximate €306 million (approximately $320 million as of December 31, 2024) payment for the principal and the unpaid, accrued interest will be made from our available liquidity.
	●	On January 31, 2024, we completed the planned separation and acquisition of assets of SLIC, our manufacturing joint venture with BASF and three Chinese chemical companies. The final purchase price of the acquired assets has been determined based on an asset valuation, which was completed in the second quarter of 2024. The acquisition of the assets was funded in part with HPS issuing a U.S. dollar equivalent note payable at closing of approximately $218 million, which was repaid in full in the second quarter of 2024 using available funds at HPS. During the third quarter of 2024, we received approximately $64 million of cash from SLIC, of which $34 million was a dividend and $30 million was an interim liquidating distribution. Upon the full liquidation of the joint venture, all remaining cash of SLIC, primarily resulting from the proceeds received by SLIC, will be distributed back to the joint venture partners. We currently anticipate that approximately RMB 300 million (approximately $40 million as of December 31, 2024) will be distributed as a liquidating distribution and return of investment upon full liquidation, which we anticipate will be completed in 2025.
	●	On February 28, 2023, we completed the sale of our Textile Effects Business to Archroma, and during the first quarter of 2024, we finalized the purchase price valued at $597 million, which includes adjustments to the purchase price for working capital, plus the assumption of underfunded pension liabilities. During the year ended December 31, 2024, we paid cash taxes of approximately $11 million, and we expect to pay additional cash taxes of approximately $2 million and expect to pay cash for contingencies and post-closing indemnifications in future periods related to the sale of our Textile Effects Business. See “Note 4. Discontinued Operations—Sale of Textile Effects Business” to our consolidated financial statements.
	●	During 2020 and 2021, management implemented cost realignment and synergy plans and, in November 2022, committed to further plans to realign our cost structure with additional restructuring in Europe, including exiting and consolidating certain facilities, workforce relocation to lower cost locations and further personnel rationalization. In connection with these plans, we have achieved combined annualized cost savings and synergy benefits in excess of $280 million. Associated with these plans, we expect total cash costs of approximately $300 million (including approximately $60 million of capital expenditures) through 2026, of which we have spent approximately $275 million through the end of 2024 (including approximately $44 million of capital expenditures). Of the remaining cash costs, the majority will be payments related to our restructuring in Europe, primarily for personnel who have exited as of the end of 2023 as well as capital expenditures related to our research and development footprint, which is included in our overall future capital expenditures projections.
	●	As of December 31, 2024, we have approximately $547 million remaining under the authorization of our existing share repurchase program. Repurchases may be commenced or suspended from time to time without prior notice.

Long-Term Liquidity

	●	On September 26, 2024, Huntsman International completed a $350 million offering of its 2034 Senior Notes. Huntsman International used the net proceeds from the offering for general corporate purposes, including repayment of debt. The 2034 Senior Notes bear interest at 5.70% per year, payable semi-annually on April 15 and October 15 of each year, and will mature on October 15, 2034. For more information, see “Note 8. Debt—Direct and Subsidiary Debt—Senior Notes” to our consolidated financial statements.
	●	On January 22, 2024, we entered into an amendment to our U.S. A/R Program that extended the scheduled maturity date of our U.S. A/R Program from July 2024 to January 2027. In addition, on January 31, 2024, we entered into an amendment to our EU A/R Program, effective as of February 15, 2024, that extended the scheduled maturity date of our EU A/R Program from July 2024 to July 2027. Aside from the extended maturity dates, these amendments to our A/R Programs secured substantially similar terms as those in the prior agreements.
`	●	On February 6, 2025, the Louisiana Supreme Court affirmed the jury verdict and district court judgment in our favor in our long-running court battle against Praxair/Linde, one of the industrial gas suppliers to our Geismar, Louisiana MDI manufacturing site, and entered a damages award consistent with Huntsman’s expert witness testimony at trial. The case was filed after Praxair refused to maintain properly its own Geismar facility and then repeatedly failed to supply our requirements for industrial gases needed to manufacture MDI under long-term supply contracts that expired in 2013. We are evaluating our options with respect to this latest ruling which would result in a final award of approximately $42.5 million or, after adding mandatory pre-judgment and post-judgment interest approximately $65 million. Taking into account taxes and legal fees, we would expect to receive net proceeds of approximately $25 million to $30 million. We have not yet recognized the award in our consolidated statements of operations, and the timing of the resolution of this matter is uncertain.

As of December 31,
2024, we had
$325 million classified as current portion of debt, including $313 million outstanding under our 2025 Senior Notes, debt at our variable interest entities of
$9 million and certain other short-term facilities and scheduled amortization payments totaling $3 million. We intend to renew, repay or extend these short-term facilities in the next twelve months.

As of December 31, 2024, we had approximately $280 million of cash and cash equivalents, including restricted cash, held by our foreign subsidiaries, including our variable interest entities. With the exception of certain amounts that we expect to repatriate in the foreseeable future, we intend to use cash held in our foreign subsidiaries to fund our local operations. Nevertheless, we could repatriate additional cash as dividends and the repatriation of cash as a dividend would generally not be subject to U.S. taxation. However, such repatriation may potentially be subject to limited foreign withholding taxes.

For more information regarding our debt, see “Note 14. Debt” to our consolidated financial statements.

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Critical Accounting Estimates

This discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of financial statements requires us to make judgments, estimates and assumptions that involve a significant level of estimation and uncertainty and are reasonably likely to have a material impact on our financial condition and/or results of operations. Summarized below are our critical accounting estimates.

Income Taxes

Deferred income taxes reflect the net effects of temporary differences between assets and liabilities for financial and tax reporting purposes. We evaluate deferred tax assets to determine whether it is more likely than not that they will be realized; valuation allowances are recorded to offset deferred tax assets unlikely to be realized. Valuation allowances are reviewed each period on a tax jurisdiction basis and analyzed to determine whether there is sufficient positive or negative evidence to support a change in judgment about the realizability of the related deferred tax assets. These conclusions require significant judgment. In evaluating the objective evidence that historical results provide, we consider cumulative income or losses during the applicable three-year period. Cumulative losses incurred over the three-year period limits our ability to consider other evidence, such as our projections for the future. Changes in expected future taxable income and tax planning strategies in applicable jurisdictions affect our assessment of the realization of deferred tax assets. Our judgments regarding valuation allowances are also influenced by factors outside of business results, including the costs and risks associated with any tax planning strategy associated with utilizing a deferred tax asset. As of December 31, 2024, we had total valuation allowances of $255 million, which represents an increase of $34 million from the prior year, and we have recognized a net deferred tax liability of $135 million. See “Note 19. Income Taxes” to our consolidated financial statements for more information regarding our deferred tax assets and valuation allowances.

Employee Benefit Programs

We sponsor several contributory and non-contributory defined benefit plans, covering employees primarily in the U.S., the U.K., the Netherlands, Belgium and Switzerland, but also covering employees in a number of other countries. We fund the material plans through trust arrangements (or local equivalents) where the assets are held separately from us. We also sponsor unfunded postretirement plans which provide medical and, in some cases, life insurance benefits covering certain employees in the U.S. Amounts recorded in our consolidated financial statements are recorded based upon actuarial valuations performed by various independent actuaries. Inherent in these valuations are numerous assumptions regarding expected long-term rates of return on plan assets, discount rates, compensation increases, mortality rates and health care cost trends. Each of these critical estimates are subject to uncertainty and are assessed by us using historical data, as well as projections of future conditions. These assumptions and changes during the period are described in “Note 18. Employee Benefit Plans” to our consolidated financial statements.

We retain third party actuaries to assist us with judgments necessary to make assumptions on which our employee pension and postretirement benefit plan obligations and expenses are based. The effects of a 1% change in three key assumptions are summarized as follows (dollars in millions):

	Statement of			Balance sheet
Assumptions	operations(1)			impact(2)
Discount rate
—1% increase	$	(13	)		$	(226	)
—1% decrease		18				263
Expected long-term rates of return on plan assets
—1% increase		(23	)			—
—1% decrease		23				—
Rate of compensation increase
—1% increase		3				28
—1% decrease		(3	)			(17	)

Column 1	Column 2
(1)	Estimated (decrease) increase on 2024 net periodic benefit cost

Column 1	Column 2
(2)	Estimated (decrease) increase on December 31, 2024 pension and postretirement liabilities and accumulated other comprehensive loss

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