Twelve months ended

December 31,

In millions, except per share amounts

2017

2018

2017

Revenues

$2,236

$2,203

$9,379

$8,358

Net (loss) income

$ (315)

$ 287

$ 650

$ 741

Adjusted net income(1)

$ 123

$ 186

$ 808

$ 604

Diluted (loss) income per share

$ (1.43)

$ 1.00

$ 1.39

$ 2.61

Adjusted diluted income per share(1)

$ 0.52

$ 0.76

$ 3.34

$ 2.48

Adjusted EBITDA(1)

$ 275

$ 360

$1,469

$1,259

Net cash provided by operating activities from continuing operations

$ 329

$ 304

$ 963

$ 842

Free cash flow(2)

$ 195

$ 190

$ 651

$ 594

See end of press release for footnote explanations

Call-in numbers for the conference call:

U.S. participants

(888) 713 - 4213

International participants

(617) 213 - 4865

Passcode

485 932 39#

Call-in numbers for the replay:

U.S. participants

(888) 286 - 8010

International participants

(617) 801 - 6888

Replay code

11329067

Three months ended

Twelve months ended

December 31,

December 31,

In millions, except per share amounts

2018

2017

2018

2017

Revenues

$2,236

$2,203

$9,379

$8,358

Cost of goods sold

1,695

7,354

6,552

Gross profit

406

508

2,025

1,806

Operating expenses

243

236

990

913

Restructuring, impairment and plant closing (credits) costs

(13)

7

(5)

20

Expenses associated with the merger

-

10

2

28

Operating income

176

255

1,038

845

Interest expense

(29)

(31)

(115)

(165)

Equity in income of investment in unconsolidated affiliates

10

9

55

13

Fair value adjustments to Venator investment

(62)

-

(62)

-

Loss on early extinguishment of debt

-

(18)

(3)

(54)

Other income, net

9

1

29

8

Income before income taxes

216

942

647

Income tax (expense) benefit

(13)

14

(97)

(64)

Income from continuing operations

91

230

845

583

(Loss) income from discontinued operations, net of tax(3)

(406)

57

(195)

158

Net (loss) income

(315)

287

650

741

Net income attributable to noncontrolling interests, net of tax

(25)

(41)

(313)

(105)

Net (loss) income attributable to Huntsman Corporation

$ 337

$ 636

Adjusted EBITDA(1)

$ 275

$ 360

$1,469

$1,259

Adjusted net income(1)

$ 123

$ 186

$ 808

$ 604

Basic (loss) income per share

$ (1.45)

$ 1.03

$ 1.42

$ 2.67

Diluted (loss) income per share

$ (1.43)

$ 1.00

$ 1.39

$ 2.61

Adjusted diluted income per share(1)

$ 0.52

$ 0.76

$ 3.34

$ 2.48

Common share information:

Basic weighted average shares

235

240

238

238

Diluted weighted average shares

237

245

242

244

Diluted shares for adjusted diluted income per share

237

245

242

244

See end of press release for footnote explanations

Table 2 – Results of Operations by Segment

Three months ended

Twelve months ended

December 31,

Better /

December 31,

Better /

In millions

2018

2017

(Worse)

2018

2017

(Worse)

Segment Revenues:

Polyurethanes

$1,204

$1,227

$5,094

$4,399

16%

Performance Products

560

514

9%

2,355

2,109

12%

Advanced Materials

266

258

3%

1,116

1,040

7%

Textile Effects

193

190

2%

824

776

6%

Corporate and eliminations

13

14

n/m

34

n/m

Total

$2,236

$2,203

1%

$9,379

$8,358

12%

Segment Adjusted EBITDA(1):

Polyurethanes

$ 169

$ 294

(43)%

$ 946

$ 850

11%

Performance Products

78

47

66%

367

296

24%

Advanced Materials

48

53

(9)%

225

219

3%

Textile Effects

21

19

11%

101

83

22%

Corporate, LIFO and other

(53)

23%

(170)

(189)

10%

Total

$ 275

$ 360

(24)%

$1,469

$1,259

17%

n/m = not meaningful

See end of press release for footnote explanations

Table 3 -- Factors Impacting Sales Revenue

Three months ended

December 31, 2018 vs. 2017

Average Selling Price(a)

Local

Exchange

Sales Mix

Sales

Currency

Rate

& Other

Volume(b)

Total

Polyurethanes

(7)%

(2)%

0%

7%

(2)%

Performance Products

3%

(1)%

(8)%

15%

9%

Performance Products, adj

6%

(1)%

(3)%

(2)%

0%

(e)

Advanced Materials

6%

(3)%

0%

0%

3%

Textile Effects

15%

(3)%

(4)%

(6)%

2%

Total Company

(2)%

(2)%

(5)%

10%

1%

Total Company, adj

(1)%

(2)%

(1)%

4%

0%

(e)

Twelve months ended

December 31, 2018 vs. 2017

Average Selling Price(a)

Local

Exchange

Sales Mix

Sales

Currency

Rate

& Other

Volume(b)

Total

Polyurethanes

5%

2%

0%

9%

16%

Polyurethanes, adj

4%

2%

1%

8%

15%

(c)(d)

Performance Products

5%

1%

(3)%

9%

12%

Performance Products, adj

6%

1%

(3)%

1%

5%

(d)(e)(f)

Advanced Materials

4%

2%

0%

1%

7%

Textile Effects

6%

0%

0%

0%

6%

Total Company

4%

1%

(2)%

9%

12%

Total Company, adj

4%

1%

1%

4%

10%

(c)(d)(e)(f)

(a) Excludes sales from tolling arrangements, by-products and raw materials.

(b) Excludes sales from by-products and raw materials.

(c) Pro forma adjusted to exclude the impact 2Q17 Rotterdam planned maintenance and 2Q18 and 3Q18 Rotterdam outages onset by 3rd party constraints.

(d) Pro forma adjusted to exclude the impact from Hurricane Harvey in 3Q17.

(e) Pro forma adjusted to exclude the impact from planned maintenance and unplanned weather related and other outages in 4Q17.

(f) Pro forma adjusted to exclude the impact from planned maintenance in 2Q18.

Table 4 – Reconciliation of U.S. GAAP to Non-GAAP Measures

Income Tax

Diluted (Loss) Income

EBITDA

(Expense) Benefit

Net (Loss) Income

Per Share

Three months ended

Three months ended

Three months ended

Three months ended

December 31,

December 31,

December 31,

December 31,

In millions, except per share amounts

2018

2017

2018

2017

2018

2017

2018

2017

Net (loss) income

$ (315)

$ 287

$ (315)

$ 287

$(1.33)

$1.17

Net income attributable to noncontrolling interests

(25)

(41)

(25)

(41)

(0.11)

(0.17)

Net (loss) income attributable to Huntsman Corporation

(340)

246

(340)

246

1.00

Interest expense from continuing operations

29

31

Interest expense from discontinued operations(3)

6

11

Income tax expense (benefit) from continuing operations

13

(14)

$ (13)

$ 14

Income tax (benefit) expense from discontinued operations(3)

(18)

26

Depreciation and amortization from continuing operations

93

84

Depreciation and amortization from discontinued operations(3)

-

-

Acquisition and integration expenses and purchase accounting adjustments

(1)

2

(1)

(1)

(2)

1

(0.01)

-

EBITDA / Loss (income) from discontinued operations, net of tax(3)

418

(94)

N/A

N/A

406

(57)

1.71

(0.23)

Noncontrolling interest of discontinued operations(1)(3)

10

31

N/A

N/A

10

31

0.04

0.13

U.S. tax reform impact on noncontrolling interest

-

(6)

N/A

N/A

-

(6)

-

(0.02)

U.S. tax reform impact on tax expense

N/A

N/A

(17)

(52)

(17)

(52)

(0.07)

(0.21)

Gain on disposition of businesses/assets

-

(1)

-

-

-

(1)

-

-

Fair value adjustments to Venator Investment (a)

62

-

-

-

62

-

0.26

-

Loss on early extinguishment of debt

-

18

-

(7)

-

11

-

0.04

Expenses associated with merger, net of tax

-

10

-

(9)

-

1

-

-

Certain legal and other settlements and related income

(3)

(12)

-

4

(3)

(8)

(0.01)

(0.03)

Net plant incident costs

1

3

-

(2)

1

1

-

-

Amortization of pension and postretirement actuarial losses

18

18

(2)

(5)

16

13

0.07

0.05

Restructuring, impairment and plant closing and transition (credits) costs

(13)

7

3

(1)

(10)

6

(0.04)

0.02

Adjusted(1)

$ 275

$ 360

$ (30)

$ (59)

$ 123

$ 186

$ 0.52

$0.76

Adjusted income tax expense(1)

$ 30

$ 59

Net income attributable to noncontrolling interests, net of tax

25

41

Noncontrolling interest of discontinued operations(1)(3)

(10)

(31)

U.S. tax reform impact on noncontrolling interest

-

6

Adjusted pre-tax income(1)

$ 168

$ 261

Adjusted effective tax rate(4)

18%

23%

Effective tax rate

13%

(6%)

Income Tax

Diluted Income

EBITDA

(Expense) Benefit

Net Income

Per Share

Twelve months ended

Twelve months ended

Twelve months ended

Twelve months ended

December 31,

December 31,

December 31,

December 31,

In millions, except per share amounts

2018

2017

2018

2017

2018

2017

2018

2017

Net income

$ 650

$ 741

$ 650

$ 741

$ 2.69

$3.04

Net income attributable to noncontrolling interests

(313)

(105)

(313)

(105)

(1.30)

(0.43)

Net income attributable to Huntsman Corporation

337

636

337

636

1.39

2.61

Interest expense from continuing operations

115

165

Interest expense from discontinued operations(3)

36

19

Income tax expense from continuing operations

97

64

(97)

(64)

Income tax expense from discontinued operations(3)

34

67

Depreciation and amortization from continuing operations

343

319

Depreciation and amortization from discontinued operations(3)

-

68

Acquisition and integration expenses and purchase accounting adjustments

9

19

(3)

(5)

6

14

0.02

0.06

EBITDA / Loss (income) from discontinued operations, net of tax(3)

125

(312)

N/A

N/A

195

(158)

0.81

(0.65)

Noncontrolling interest of discontinued operations(1)(3)

232

49

N/A

N/A

232

49

0.96

0.20

U.S. tax reform impact on noncontrolling interest

-

(6)

N/A

N/A

-

(6)

-

(0.02)

U.S. tax reform impact on tax expense

N/A

N/A

32

(52)

32

(52)

0.13

(0.21)

Release of significant income tax valuation allowances (b)

N/A

N/A

(119)

-

(119)

-

(0.50)

-

Gain on disposition of businesses/assets

-

(9)

-

-

-

(9)

-

(0.04)

Fair value adjustments to Venator Investment (a)

62

-

-

-

62

-

0.26

-

Loss on early extinguishment of debt

3

54

(1)

(19)

2

35

0.01

0.14

Expenses associated with merger

2

28

-

(10)

2

18

0.01

0.07

Certain legal and other settlements and related expenses (income)

6

(11)

(2)

4

4

(7)

0.02

(0.03)

Net plant incident costs

1

16

-

(6)

1

10

-

0.04

Amortization of pension and postretirement actuarial losses

71

73

(14)

(16)

57

57

0.24

0.23

Restructuring, impairment and plant closing and transition (credits) costs

(4)

20

1

(3)

(3)

17

(0.01)

0.07

Adjusted(1)

$1,469

$1,259

$(203)

$(171)

$ 808

$ 604

$ 3.34

$2.48

Adjusted income tax expense(1)

$ 203

$ 171

Net income attributable to noncontrolling interests, net of tax

313

105

Noncontrolling interest of discontinued operations(1)(3)

(232)

(49)

U.S. tax reform impact on noncontrolling interest

-

6

Adjusted pre-tax income(1)

$1,092

$ 837

Adjusted effective tax rate(4)

19%

20%

Effective tax rate

10%

10%

(a) Represents the changes in market value in Huntsman's remaining interesting in Venator.

(b) During the twelve months ended December 31, 2018, we released $119 million of valuation allowances in Switzerland, the U.K., and Luxembourg. We eliminated the effect of this significant change in tax valuation allowances from our presentation of adjusted net income to allow investors to better compare our ongoing financial performance from period to period. We do not adjust for insignificant changes in tax valuation allowances because we do not believe this provides more meaningful information than is provided under GAAP.

See end of press release for footnote explanations

Table 5 – Selected Balance Sheet Items

December 31,

September 30,

December 31,

In millions

2018

2018

2017

Cash

$ 340

$ 446

$ 481

Accounts and notes receivable, net

1,272

1,394

1,283

Inventories

1,134

1,231

1,073

Other current assets

212

230

262

Current assets held for sale

-

2,916

2,880

Property, plant and equipment, net

3,064

3,004

3,098

Other noncurrent assets

1,931

1,675

1,167

Total assets

$ 10,896

$ 10,244

Accounts payable

$ 961

$ 998

$ 964

Other current liabilities

554

540

569

Current portion of debt

96

200

40

Current liabilities held for sale

-

1,564

1,692

Long-term debt

2,224

2,277

2,258

Other noncurrent liabilities

1,369

1,353

1,350

Huntsman Corporation stockholders' equity

2,520

2,958

2,620

Noncontrolling interests in subsidiaries

229

1,006

751

Total liabilities and equity

$ 7,953

$ 10,896

$ 10,244

Table 6 – Outstanding Debt

December 31,

September 30,

December 31,

In millions

2018

2018

2017

Debt:

Revolving credit facility

$ 50

$ 175

$ -

Accounts receivable programs

252

269

180

Senior notes

1,892

1,917

1,927

Variable interest entities

86

94

107

Other debt

40

22

84

Total debt - excluding affiliates

2,320

2,477

2,298

Total cash

340

446

481

Net debt - excluding affiliates(5)

$ 1,980

$ 2,031

$ 1,817

LTM Adjusted EBITDA(1)

$ 1,469

$ 1,554

$ 1,259

LTM Net income

650

1,252

741

Net debt - excluding affiliates / LTM Adjusted EBITDA(1)(5)

1.3x

1.3x

1.4x

Total debt - excluding affiliates / LTM Net income

3.6x

2.0x

3.1x

Table 7 – Summarized Statement of Cash Flows

Three months ended

Twelve months ended

December 31,

December 31,

In millions

2018

2017

2018

2017

Total cash at beginning of period(a)

$ 697

$ 637

$ 719

$ 425

Net cash provided by operating activities - continuing operations

329

304

963

842

Net cash (used in) provided by operating activities - discontinued operations(3)

(56)

172

244

377

Net cash used in investing activities - continuing operations

(131)

(120)

(677)

(265)

Net cash used in investing activities - discontinued operations(3)

(31)

(110)

(296)

(159)

Net cash used in financing activities

(307)

(170)

(424)

(519)

Effect of exchange rate changes on cash

(7)

6

(35)

18

Deconsolidation of cash, cash equivalents and restricted cash from Venator (a)

(154)

-

(154)

-

-

Total cash at end of period(a)

$ 340

$ 719

$ 340

$ 719

Supplemental cash flow information - continuing operations:

Cash paid for interest

$ (44)

$ (47)

$ (117)

$ (169)

Cash paid for income taxes

(24)

(45)

(141)

(9)

Cash paid for capital expenditures

(133)

(123)

(313)

(282)

Depreciation and amortization

93

84

343

319

Changes in primary working capital:

Accounts and notes receivable

116

(35)

(13)

(183)

Inventories

84

14

(86)

(104)

Accounts payable

(54)

59

8

154

Total cash received from (used in) primary working capital

$ 146

$ 38

$ (133)

Three months ended

Twelve months ended

December 31,

December 31,

2018

2017

2018

2017

Free cash flow(2):

Net cash provided by operating activities

$ 329

$ 304

$ 963

$ 842

Capital expenditures

(133)

(123)

(313)

(282)

All other investing activities, excluding acquisition and disposition activities(b)

2

(1)

2

6

Non-recurring merger costs(c)

-

10

2

28

Proceeds from forward sale of Venator shares(d)

(3)

-

(3)

-

Total free cash flow

$ 195

$ 190

$ 651

$ 594

Adjusted EBITDA

$ 275

$ 360

$ 1,469

$1,259

Capital expenditures

(133)

(123)

(313)

(282)

Capital reimbursements

4

2

8

3

Interest

(44)

(47)

(117)

(169)

Income taxes

(24)

(45)

(141)

(9)

Primary working capital change

146

38

(91)

(133)

Restructuring

(4)

(10)

(11)

(36)

Pensions

(30)

(26)

(125)

(111)

Maintenance & other

5

41

(28)

72

Total free cash flow(2)

$ 195

$ 190

$ 651

$ 594

Total free cash flow(2)

$ 195

$ 190

$ 651

$ 594

/ Adjusted EBITDA

275

360

1,469

1,259

Free cash flow conversion

70.9%

52.8%

44.3%

47.2%

(a) Includes restricted cash and cash held in discontinued operations until the Deconsolidation of Venator.

(b) Represents "Acquisition of business, net of cash acquired", "Cash received from purchase price adjustment for business acquired", and "Proceeds from sale of business/assets".

(c) Represents payments associated with one-time costs of the terminated merger of equals with Clariant.

(d) Represents payments received from forward sale contract of Venator shares in December 2018.

(1)

We use adjusted EBITDA to measure the operating performance of our business and for planning and evaluating the performance of our business segments. We provide adjusted net income because we feel it provides meaningful insight for the investment community into the performance of our business. We believe that net income (loss) 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 adjusted EBITDA and adjusted net income (loss). Additional information with respect to our use of each of these financial measures follows:

Adjusted EBITDA, adjusted net income (loss) and adjusted diluted income (loss) per share, as used herein, are not necessarily comparable to other similarly titled measures of other companies.

Adjusted EBITDA is computed by eliminating the following from net income (loss): (a) net income attributable to noncontrolling interests, net of tax; (b) interest; (c) income taxes; (d) depreciation and amortization (e) amortization of pension and postretirement actuarial losses (gains); (f) restructuring, impairment and plant closing costs (credits); and further adjusted for certain other items set forth in reconciliation of adjusted EBITDA to net income (loss) in Table 4 above.

Adjusted net income (loss) and adjusted diluted income (loss) per share are computed by eliminating the after tax impact of the following items from net income (loss): (a) net income attributable to noncontrolling interest; (b) amortization of pension and postretirement actuarial losses (gains); (c) restructuring, impairment and plant closing costs (credits); and further adjusted for certain other items set forth in reconciliation of adjusted EBITDA to net income (loss) in Table 4 above. The income tax impacts, if any, of each adjusting item represent a ratable allocation of the total difference between the unadjusted tax expense and the total adjusted tax expense, computed without consideration of any adjusting items using a with and without approach.

We do not provide reconciliations for adjusted EBITDA, adjusted net income (loss) or adjusted diluted income (loss) per share on a forward-looking basis because we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, (a) business acquisition and integration expenses and purchase accounting adjustments, (b) merger costs, and (c) certain legal and other settlements and related costs. Each of such adjustments has not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.

(2)

Management internally uses a free cash flow measure: (a) to evaluate the Company's liquidity, (b) to evaluate strategic investments, (c) to plan stock buyback and dividend levels and (d) to evaluate the Company's ability to incur and service debt. Free cash flow is not a defined term under U.S. GAAP, and it should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The Company defines free cash flow as cash flow provided by operating activities less cash flow used in investing activities, excluding acquisition/disposition activities and non-recurring separation costs. Free cash flow is typically derived directly from the Company's condensed consolidated statement of cash flows; however, it may be adjusted for items that affect comparability between periods.

(3)

During the third quarter of 2017 we separated our Pigments and Additives division through an Initial Public Offering of Venator Materials PLC. Additionally, during the first quarter 2010 we closed our Australian styrenics operations. Results from these associated businesses are treated as discontinued operations.

(4)

We believe adjusted effective tax rate 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. In our view, effective tax rate is the performance measure calculated and presented in accordance with U.S. GAAP that is most directly comparable to adjusted effective tax rate.

The reconciliation of historical adjusted effective tax rate and effective tax rate is set forth in Table 4 above. We do not provide reconciliations for adjusted effective tax rate on a forward-looking basis because we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, (a) business acquisition and integration expenses, (b) merger costs, and (c) certain legal and other settlements and related costs. Each of such adjustments has not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.

(5)

Net debt is a measure we use to monitor how much debt we have after taking into account our total cash. We use it as an indicator of our overall financial position, and calculate it by taking our total debt, including the current portion, and subtracting total cash.