Huntsman to Sell U.S. Base Chemicals and Polymers Business to Koch
Industries; Company Initiates Cash Dividend on Common Stock THE
WOODLANDS, Texas, Feb. 15 /PRNewswire-FirstCall/ -- Peter R.
Huntsman, President and CEO, stated, "The announcement of our
agreement with Koch Industries to sell our U.S. Base Chemicals and
Polymers business marks the final milestone in our ongoing efforts
to separate our commodity petrochemicals assets from our portfolio
of differentiated businesses. Following the completion of this
transaction, together with our recent divestiture of our European
commodities business to SABIC and the sale of certain U.S. MTBE and
butadiene assets to Texas Petrochemicals, our differentiated and
inorganic businesses will comprise nearly 100% of our portfolio. In
addition, we will have generated in excess of $1.8 billion from the
sale of these businesses which has allowed us to dramatically
improve our balance sheet as total net debt is expected to be
approximately $2.7 billion, which is more than 50% lower than our
debt level at the end of 2004. With a stronger balance sheet and a
more focused product portfolio, Huntsman is well positioned to
capitalize on opportunities for further expansion and growth. "The
declaration by our Board of Directors of Huntsman's first quarterly
common stock dividend further demonstrates our commitment to
enhance shareholder value and reflects our confidence in the future
growth and stability in earnings of our new portfolio. I believe
this action will be welcomed by our stockholders. "As we enter
2007, we continue to experience many very positive trends across
our businesses and the markets that we serve. Raw material and
energy prices have declined, while at the same time, demand and
selling prices for many of our products continue to improve. We
anticipate that the earnings in each of our three differentiated
segments that will remain following the sale to Koch will be higher
in the first quarter of 2007 as compared to the fourth quarter of
2006 and also higher for the full year 2007 as compared to the full
year 2006. In Pigments, we are guardedly optimistic about our
outlook for the upcoming spring paint season given the softness in
demand that we experienced in the fourth quarter. The higher
earnings in the differentiated segments, together with
substantially lower interest expense, will have a positive impact
on our bottom line in the coming quarters." Huntsman Corporation
Operating Results Three months ended Full year ended In millions,
except December 31, December 31, per share amounts 2006 2005 2006
(3) 2005 (1) Revenues $2,535.9 $2,555.9 $10,623.6 $10,676.9 Cost of
goods sold 2,190.4 2,289.6 9,084.1 9,061.5 Gross profit 345.5 266.3
1,539.5 1,615.4 Operating expenses 261.4 184.9 783.0 786.3
Restructuring, impairment and plant closing costs -- 22.5 20.0
114.1 Operating income 84.1 58.9 736.5 715.0 Interest expense, net
(85.9) (84.8) (350.7) (426.6) Loss on accounts receivable
securitization program (5.3) (1.5) (16.1) (9.0) Equity in income of
unconsolidated affiliates 1.0 1.2 3.6 8.2 Other non-operating
expense (12.7) (42.9) (25.8) (322.6) (Loss) income from continuing
operations before income taxes and minority interest (18.8) (69.1)
347.5 (35.0) Income tax benefit 65.0 43.0 49.0 6.1 Minority
interests in subsidiaries' income (1.8) (0.2) (2.9) (1.7) Income
(loss) from continuing operations 44.4 (26.3) 393.6 (30.6) Income
(loss) from discontinued operations, net of tax (2,3) 37.6 (7.0)
(219.7) 23.7 Extraordinary (loss) gain on the acquisition of a
business, net of tax (4) (1.8) -- 55.9 -- Cumulative effect of
change in accounting principle, net of tax (5) -- (31.7) -- (27.7)
Net income (loss) 80.2 (65.0) 229.8 (34.6) Preferred dividends (6)
-- -- -- (43.1) Net income (loss) available to common stockholders
$80.2 $(65.0) $229.8 $(77.7) Net income (loss) $80.2 $(65.0) $229.8
$(34.6) Interest expense, net 85.9 84.8 350.7 426.6 Income tax
benefit (5,8) (65.0) (47.8) (49.0) (9.0) Depreciation and
amortization 112.4 111.6 420.0 439.7 Income taxes, depreciation and
amortization included in discontinued (2) operations 23.6 14.0 79.7
90.7 EBITDA (7) $237.1 $97.6 $1,031.2 $913.4 Adjusted EBITDA from
continuing and discontinued operations (7) $279.7 $205.0 $1,237.1
$1,437.2 Basic income (loss) per share $0.36 $(0.29) $1.04 $(0.35)
Diluted income (loss) per share $0.34 $(0.29) $0.99 $(0.35)
Adjusted diluted income per share from continuing and discontinued
operations (7) $0.50 $0.15 $1.81 $2.04 Common share information
(9): Basic shares outstanding 220.6 220.5 220.6 220.5 Diluted
shares 233.3 220.5 233.1 220.5 Diluted shares for adjusted income
per share from continuing and discontinued operations 233.3 233.0
233.1 233.0 See end of press release for footnote explanations
Huntsman Corporation Segment Results Three months ended Year ended
December 31, December 31, In millions 2006 2005 2006 (3) 2005 (1)
Segment Revenues: Polyurethanes $837.6 $786.4 $3,457.2 $3,396.3
Materials and Effects 555.6 273.8 1,734.6 1,185.3 Performance
Products (10) 483.9 458.0 2,036.8 2,025.4 Pigments 244.7 265.3
1,057.8 1,052.8 Polymers 407.1 452.7 1,756.8 1,702.0 Base Chemicals
(10) 74.6 418.1 963.1 1,775.5 Eliminations (67.6) (98.4) (382.7)
(460.4) Total from continuing operations $2,535.9 $2,555.9
$10,623.6 $10,676.9 Discontinued operations (2) 683.5 595.3 2,524.6
2,309.1 Total $3,219.4 $3,151.2 $13,148.2 $12,986.0 Segment EBITDA
(7): Polyurethanes $107.9 $141.3 $582.5 $676.3 Materials and
Effects 38.9 18.6 153.2 154.1 Performance Products (10) 42.4 (0.1)
207.8 164.9 Pigments 21.4 28.8 112.8 115.3 Polymers 13.8 31.1 112.8
102.7 Base Chemicals (3,10) 74.2 11.7 11.9 256.7 Corporate and
other (61.5) (133.8) (149.8) (556.6) Total (3) $237.1 $97.6
$1,031.2 $913.4 Segment Adjusted EBITDA (7): Polyurethanes $107.6
$150.0 $572.9 $733.6 Materials and Effects 39.3 19.7 157.0 154.6
Performance Products (10) 42.0 3.9 208.5 176.0 Pigments 22.8 32.0
116.6 145.4 Polymers 15.3 31.4 121.1 154.3 Base Chemicals (10) 8.5
7.9 40.6 96.3 Corporate and other (39.1) (47.7) (139.4) (185.0)
Total from continuing operations $196.4 $197.2 $1,077.3 $1,275.2
Discontinued operations (2) 83.3 7.8 159.8 162.0 Total $279.7
$205.0 $1,237.1 $1,437.2 Three Months Ended December 31, 2006 as
Compared to Three Months Ended December 31, 2005 Revenues for the
three months ended December 31, 2006, decreased slightly to
$2,535.9 million, from $2,555.9 million during the same period in
2005. Revenues increased in our Polyurethanes and Performance
Products segments due primarily to higher sales volumes. Revenues
increased in our Materials and Effects segment primarily due to the
acquisition of our textile effects business. Revenues decreased in
our Pigments segment due to lower sales volumes and in our Polymers
segment due primarily to lower average selling prices. Revenues
decreased in our Base Chemicals segment primarily due to the
continuing outage at our Port Arthur, Texas olefins manufacturing
facility and the divestiture of certain of our U.S. butadiene and
MTBE business assets. For the three months ended December 31, 2006,
EBITDA increased to $237.1 million, from $97.6 million in the same
period in 2005. Total Adjusted EBITDA from continuing and
discontinued operations for the three months ended December 31,
2006 was $279.7 million, an increase from $205.0 million for the
same period in 2005. Polyurethanes The increase in revenues in the
Polyurethanes segment for the three months ended December 31, 2006
compared to the same period in 2005 was primarily due to higher
sales volumes, partially offset by lower average selling prices.
MDI sales volumes increased slightly and were partially offset by
limitations on product availability resulting from unplanned
manufacturing outages at our Rozenburg facility due to raw material
supply limitations. PO and PO derivative volumes increased 19% and
MTBE volume increased 16% primarily due to the impact of the U.S.
Gulf Coast storms on the fourth quarter of 2005 results. MDI
average selling prices were relatively unchanged as compared to
2005. MTBE selling prices decreased due to reduced U.S. demand as a
result of changes in U.S. legislation. The decrease in EBITDA in
the Polyurethanes segment was primarily the result of lower margins
due to higher raw material costs, commissioning and other costs
related to the startup of our new MDI facility in China and lower
MTBE margins due to lower average selling prices and record high
raw materials costs. During the three months ended December 31,
2006, the Polyurethanes segment recorded restructuring and plant
closing credits of $0.5 million as compared to charges of $8.4
million for the same period in 2005. Materials and Effects The
increase in revenues in the Materials and Effects segment for the
three months ended December 31, 2006 compared to the same period in
2005 was primarily due to the acquisition of the textile effects
business on June 30, 2006. The textile effects business contributed
$234.1 million in revenue for the three months ended December 31,
2006, while the advanced materials business contributed $321.5
million revenues for the same period, an increase of $47.7 million
or 17%. The increase in advanced materials revenues was primarily
the result of a 10% increase in sales volumes and a 6% increase in
average selling prices. The increase in EBITDA in the Materials and
Effects segment was due to increases in the advanced materials
business of $14.0 million while the textile effects business, which
was acquired in June, 2006, contributed $6.3 million in EBITDA for
the three months ended December 31, 2006. The increase in EBITDA in
the advanced materials business was primarily due to higher margins
partially offset by higher SG&A and other business support
costs. During the three months ended December 31, 2006, the
Materials and Effects segment recorded restructuring and plant
closing costs of $0.4 million compared to $1.1 million for the
comparable period in 2005. The 2006 restructuring and plant closing
costs are directly attributable to the two year restructuring plan
of our textile effects business that has now commenced. Performance
Products The increase in revenues in the Performance Products
segment for the three months ended December 31, 2006 compared to
the same period in 2005 was primarily the result of a 4% increase
in sales volumes and a 1% increase in average selling prices. Sales
volumes increased primarily due to increased production and
improved demand over the same period in 2005 which was impacted by
the U.S. Gulf Coast storms. Average selling prices increased
primarily due to strong market conditions for our performance
specialties products. The increase in EBITDA in the Performance
Products segment was primarily due to the impact of the U.S. Gulf
Coast storms on 2005 results and lower raw materials costs. The
fourth quarter of 2005 EBITDA was negatively impacted by an
estimated $44.3 million related to the U.S. Gulf Coast storms.
Included in Performance Products EBITDA in the 2006 period is $7.3
million related to the partial settlement of insurance claims
related to the 2005 U.S. Gulf Coast Storms. During the three months
ended December 31, 2006 the Performance Products segment recorded
restructuring and plant closing credits of $0.4 million compared to
charges of $4.0 million for the comparable period in 2005. Pigments
The decrease in revenues in the Pigments segment for the three
months ended December 31, 2006 compared to the same period in 2005
was primarily due to a 14% decrease in sales volumes partially
offset by a 5% increase in average selling prices. Sales volumes
decreased primarily due to weaker customer demand in the North
America region. Average selling prices increased in Europe and the
Asia Pacific regions due to stronger market demand and the strength
of major European currencies versus the U.S. dollar, partially
offset by lower average selling prices in North America. The
decrease in EBITDA in the Pigments segment was primarily the result
of reduced sales volume and higher raw material and manufacturing
costs. During the three months ended December 31, 2006, the
Pigments segment recorded restructuring and plant closing costs of
$1.4 million as compared to charges of $3.2 million for the
comparable period in 2005. Polymers The decrease in revenues in the
Polymers segment for the three months ended December 31, 2006
compared to the same period in 2005 was primarily the result of a
6% decrease in average selling prices primarily for polyethylene.
Sales volumes decreased 2% as compared to the 2005 period. The
decrease in EBITDA in the Polymers segment was primarily the result
of lower margins in polyethylene and expandable polystyrene. During
the three months ended December 31, 2006 the Polymers segment
recorded restructuring, impairment and plant closing credits of
$0.6 million compared to charges of $0.3 million for the comparable
period in 2005. Base Chemicals The decrease in revenues in the Base
Chemicals segment for the three months ended December 31, 2006
compared to the same period in 2005 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. The increase in EBITDA in the Base Chemicals segment
was primarily the result of improved market conditions in Europe.
During the three months ended December 31, 2006, EBITDA was
negatively impacted by an estimated $35 million related to the
outage at the Port Arthur, Texas olefins facility whereas during
the 2005 comparable period we experienced lost production which
negatively impacted EBITDA by approximately $65.3 million related
to the U.S. Gulf Coast storms. Included in Base Chemicals 2006
EBITDA is $6.7 million related to the partial settlement of
insurance claims related to the 2005 U.S. Gulf Coast Storms. During
the three months ended December 31, 2006, the Base Chemicals
segment recorded restructuring, impairment and plant closing
credits of $0.3 million compared to charges of $4.3 million for the
comparable period in 2005. Corporate and Other Corporate and other
items include 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
and reorganization costs, extraordinary gain on the acquisition of
a business, and the cumulative effect of change in accounting
principle. In the fourth quarter of 2006, the total of these items
improved by $72.3 million compared to the 2005 period. The
improvement primarily resulted from a decrease in expenses of $33.5
million related to the loss on early extinguishment of debt, and a
decrease of $36.5 million in cumulative effect of changes in
accounting principle. Income Taxes In the fourth quarter 2006, we
recorded $65.0 million of income tax benefit as compared to $43.0
million of income tax benefit in the comparable period of 2005.
Included in the income tax benefit for the fourth quarter 2006 was
approximately $44.2 million related to the favorable resolution of
disputes with taxing authorities in the U.S. and the U.K. In
addition, in the fourth quarter of 2006 we benefited from a
reduction in The Netherlands corporate tax rate which resulted in
approximately $7.9 million reduction in our deferred tax
liabilities and a corresponding increase in our tax benefit. In the
2006 period, we also benefited from an increase in the release of
valuation allowances, including releases resulting from changes in
the geographic location of our income earned during the period,
which also resulted in increased tax benefit. We expect our 2007
effective tax rate to be approximately 25% - 30%. We expect to
utilize available net operating losses and other tax attributes to
result in a cash income tax rate of approximately 10% - 15%.
Liquidity, Capital Resources and Outstanding Debt During the fourth
quarter we used proceeds from the sale of our European commodity
chemicals business to SABIC to repay $400 million of our term loan
B and to defease $250 million of our 9.875% senior notes due 2009.
On November 13, 2006, we completed an offering of euro 400 million
6.875% senior subordinated notes due 2013 and $200 million 7.875%
senior subordinated notes due 2014, the proceeds of which were used
to redeem all but euro 114 million of our 10.125% senior
subordinated noted due 2009. Subject to acceptable market
conditions, we anticipate refinancing these remaining subordinated
notes in the near future. We estimate that the November 2006 notes
offering will result in an approximate $18 million reduction in
annual interest expense. We expect to complete the sale of our U.S.
Base Chemicals and Polymers business in the third quarter of 2007
following the re-start of our Port Arthur, Texas olefins facility
and conditioned upon receipt of necessary regulatory approvals and
other customary closing conditions. We intend to use net proceeds
from the sale to further reduce our debt. During the three months
ended December 31, 2006, we received $150 million of cash proceeds
representing a partial interim payment on our insurance claim
related to fire damage at our Port Arthur, Texas olefins facility.
In the fourth quarter 2006, we recorded approximately $56 million
of this payment as a reimbursement against an accrual for certain
accrued fixed costs and repair expenses. The remaining
approximately $94 million was recorded as a deferred gain in other
current liabilities. We expect to receive additional insurance
proceeds associated with this claim during 2007 following the
restart of our Port Arthur, Texas olefins facility, as well as an
additional $70 million in proceeds relating to the sale of our U.S.
butadiene and MTBE business that was completed in June 2006. As of
December 31, 2006, we and our subsidiaries had approximately $888
million in combined cash and unused borrowing capacity. For the
year ended December 31, 2006, total capital expenditures were
approximately $550 million compared to $339 million for the same
period in 2005. The increase in capital spending is primarily
attributable to capital expenditures on the Wilton, U.K. LDPE
facility of approximately $176 million compared to approximately
$37 million for the same period in 2005. The Wilton, U.K. LDPE
facility has been sold to SABIC. In addition, during 2006, we
incurred capital expenditures for the expansion of various
businesses including expansions of our MDI capacity the majority of
which was for our Caojing, China facility and the construction of a
polyetheramines facility in Jurong Island, Singapore. Excluding
capital expenditures that will be required to repair our Port
Arthur, Texas olefins facility, we expect to spend approximately
$550 million on capital projects in 2007, including approximately
$40 million in our U.S. Base Chemicals and Polymers business in the
first half of 2007. Below is our outstanding debt: December 31, In
millions 2006 2005 Debt (11): Senior Secured Credit Facilities
$1,711.2 $2,099.3 Secured Notes 294.0 293.6 Unsecured Notes 198.0
752.7 Subordinated Notes 1,228.3 1,145.2 Other Debt 213.8 167.1
Total Debt 3,645.3 4,457.9 Total Cash 263.2 142.8 Net Debt $3,382.1
$4,315.1 Huntsman Corporation Reconciliation of Adjustments Net
Income (Loss) Diluted Income Available To (Loss) EBITDA Common
Stockholders Per Share Three months Three months Three months ended
ended ended In millions, except December 31, December 31, December
31, per share amounts 2006 2005 2006 2005 2006 2005 GAAP $237.1
$97.6 $80.2 $(65.0) $0.34 $(0.29) Adjustments: Loss on accounts
receivable securitization program 5.3 1.5 -- -- Loss on early
extinguishment of debt 12.6 46.1 12.4 46.1 0.05 0.20 Other
restructuring, impairment and plant closing costs -- 22.5 -- 20.2
-- 0.09 Loss (gain) on dispositions of assets (8) 0.8 -- 0.8 --
0.00 -- (Income) loss from discontinued operations, net of tax (2)
(61.2) (7.0) (37.6) 7.0 (0.16) 0.03 Extraordinary gain on the
acquisition of a business, net of tax (4) 1.8 -- 1.8 -- 0.01 --
Cumulative effect of change in accounting principle (5) -- 36.5 --
31.7 -- 0.14 Adjusted continuing operations $196.4 $197.2 $57.6
$40.0 $0.25 $0.18 Discontinued operations $61.2 $7.0 $37.6 $(7.0)
$0.16 $(0.03) Restructuring, impairment and plant closing costs --
0.6 -- 0.6 -- 0.00 Loss on sale 21.6 (0.1) 21.6 (0.1) 0.09 (0.00)
Loss on accounts receivable securitization 0.5 0.3 0.5 0.3 0.00
0.00 Adjusted discontinued operations (2) $83.3 $7.8 $59.7 $(6.2)
$0.25 $(0.03) Total - adjusted continuing and discontinued
operations $279.7 $205.0 $117.3 $33.8 $0.50 $0.15 Net Income (Loss)
Diluted Income Available To (Loss) EBITDA Common Stockholders Per
Share Year ended Year ended Year ended In millions, except December
31, December 31, December 31, per share amounts 2006(3) 2005
2006(3) 2005 2006(3) 2005 GAAP (3) $1,031.2 $913.4 $229.8 $(77.7)
$0.99 $(0.35) Adjustments: Preferred stock dividends 43.1 -- 0.18
Loss on accounts receivable securitization program 16.1 9.0 -- --
Legal and contract settlements (8.8) -- (8.8) -- (0.04) -- Loss on
early extinguishment of debt 27.1 322.5 26.6 322.5 0.11 1.38 Loss
due to the Port Arthur outage (write off of assets) 9.4 -- 9.2 --
0.04 -- Other restructuring, impairment and plant closing costs
10.6 114.1 9.4 111.3 0.04 0.48 Gain on dispositions of assets (8)
(92.4) -- (88.5) -- (0.38) -- Loss (income) from discontinued
operations, net of tax (2,3) 140.0 (114.4) 219.7 (23.7) 0.94 (0.10)
Extraordinary gain on the acquisition of a business, net of tax (4)
(55.9) -- (55.9) -- (0.24) -- Cumulative effect of change in
accounting principle (5) -- 30.6 -- 27.7 -- 0.12 Adjusted
continuing operations $1,077.3 $1,275.2 $341.5 $403.2 $1.46 $1.73
Discontinued operations (3) $(140.0) $114.4 $(219.7) $23.7 $(0.94)
$0.10 Restructuring, impairment and plant closing (credits) costs
(4.5) 9.5 (3.1) 9.5 (0.01) 0.04 Loss on sale (3) 301.8 36.4 301.8
36.4 1.29 0.16 Loss on accounts receivable securitization 2.5 1.7
2.5 1.7 0.01 0.01 Adjusted discontinued operations (2) $159.8
$162.0 $81.5 $71.3 $0.35 $0.31 Total - adjusted continuing and
discontinued operations $1,237.1 $1,437.2 $423.0 $474.5 $1.81 $2.04
Conference Call Information We will hold a telephone conference to
discuss our fourth quarter and full year 2006 results on Thursday,
February 15, 2007 at 11:00 a.m. ET. Call-in number for U.S.
participants: (866) 510 - 0705 Call-in number for international
participants: (617) 597 - 5363 Participant access code: 92166659
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 February 15, 2007 and ending
February 22, 2007. Call-in numbers for the replay: Within the U.S.:
(888) 286 - 8010 International: (617) 801 - 6888 Access code for
replay: 12798242 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. (1) Includes the
data of our predecessor Huntsman Holdings, LLC which became our
wholly-owned subsidiary on February 16, 2005 in connection with our
initial public offering. (2) 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. (3) 2006 full year results reflect a restatement
of our third quarter 2006 for an additional $99 million in non-cash
asset impairment charges related to the sale of our European
commodity chemicals business recorded in discontinued operations.
We did not accurately estimate the effect that the re-purchase of
our receivables from our accounts receivable securitization program
would have on the final book value of our business sold in the
fourth quarter 2006. This had the effect of reducing full year 2006
net income by $99 million or $0.42 per diluted share. Adjusted
EBITDA is not affected. We expect to file an amended third quarter
2006 Form 10Q as soon as possible. (4) 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 recorded for the three months and
year ended December 31, 2006 was $1.8 and $55.9 million
respectively of which taxes were not applicable because the gain
was recorded in purchase accounting. (5) We adopted FIN 47,
"Accounting for Conditional Asset Retirement Obligations" on
December 31, 2005. We recorded a charge for the cumulative effect
of changes in accounting principle, net of tax, of $31.7 million.
The tax benefit associated with this charge for the 2005 period was
$4.8 million. In 2005, we accelerated the date for actuarial
measurement of our pension and postretirement benefit obligations
from December 31 to November 30. We believe the one-month
acceleration improves internal control procedures by allowing more
time for review. The effect of this change resulted in a cumulative
effect of change in accounting principle credit, net of tax, of
$4.0 million for the year ended December 31, 2005. The income tax
expense associated with this change for the 2005 period was $1.9
million. (6) For the year ended December 31, 2005, preferred
dividends represent all of the dividends that were declared and
will become payable from the issuance of our 5% mandatory
convertible preferred stock until the mandatory conversion date.
(7) 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 from EBITDA loss due to the
Port Arthur outage, gains and losses from discontinued operations,
restructuring, impairment and reorganization (credits) costs,
losses on the sale of accounts receivable to our securitization
program, legal and contract settlements, losses from early
extinguishment of debt, extraordinary gain on the acquisition of a
business, cumulative effect of changes in accounting principle, 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, impairment of assets, losses on the sale of accounts
receivable to our securitization program, and restructuring. The
following table provides a reconciliation of adjusted EBITDA from
discontinued operations to income (loss) from discontinued
operations: Three months ended December 31, Year ended December 31,
2006 2005 2006 (3) 2005 Income (loss) from discontinued operations
(3) $37.6 $(7.0) $(219.7) $ 23.7 Income tax expense (benefit) 23.6
(2.3) 34.0 29.6 Depreciation and amortization -- 16.3 45.7 61.1
EBITDA from discontinued operations (3) $61.2 $7.0 $(140.0) $114.4
Restructuring, impairment and plant closing (credits) costs -- 0.6
(4.5) 9.5 Loss (gain) on sale (3) 21.6 (0.1) 301.8 36.4 Loss on
accounts receivable securitization 0.5 0.3 2.5 1.7 Adjusted EBITDA
from discontinued operations $83.3 $7.8 $159.8 $162.0 Adjusted net
income from continuing operations is computed by eliminating the
after tax impact of losses from discontinued operations, preferred
dividends, loss due to the Port Arthur outage, legal and contract
settlements, restructuring, impairment and plant closing (credits)
costs, losses on the early extinguishment of debt, extraordinary
gain on the acquisition of a business, cumulative effect of changes
in accounting principle, 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 from
adjusted EBITDA from discontinued operations the applicable income
taxes and depreciation and amortization. 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. (8) On June 27, 2006 we
sold the assets comprising certain of our U.S. butadiene and MTBE
business. During the fourth quarter 2006 we recognized a net of tax
loss of $0.8 million, while the net gain on disposition of assets
for the year ended December 31, 2006 was $88.5 million, the income
tax impact of which was $3.9 million. We expect to recognize an
additional pre tax gain of $70 million which is contingent upon the
restart of our Port Arthur, Texas olefins manufacturing facility;
provided that the restart occurs within 30 months of closing the
asset sale. (9) For the year ended December 31, 2005 shares
outstanding reflect the company's reorganization transaction and
initial public offering in February 2005 as if it occurred at the
beginning of the period. (10) In the fourth quarter of 2006, our
Port Neches olefins facility was transferred from our Base
Chemicals segment to our Performance Products segment. All segment
information for prior periods has been restated to reflect this
transfer and is presented in the table below. Three months ended
December 31, Year ended December 31, 2006 2005 2006 2005 Revenues
$59.9 $49.6 $233.8 $174.8 EBITDA $2.6 $0.6 $13.0 $7.6 Adjusted
EBITDA $2.6 $1.2 $14.9 $8.7 (11) Excludes $443 million and $302
million of off-balance sheet financing obtained under our accounts
receivable securitization program as of December 31, 2006, and
December 31, 2005, respectively. DATASOURCE: Huntsman Corporation
CONTACT: Media, Russ Stolle, +1-281-719-6624, or Investor
Relations, John Heskett, +1-801-584-5768, both of Huntsman
Corporation Web site: http://www.huntsman.com/
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