Huntsman 10-K Report Reveals $302M Working Capital Decrease

Huntsman Corporation recently released its 10-K report, providing an overview of its operations and financial performance. The company operates through three segments: Polyurethanes, Performance Products, and Advanced Materials, offering a wide range of chemical products used in various applications such as adhesives, automotive, electronics, and construction. In terms of financial metrics, Huntsman's working capital decreased by $302 million, with significant changes in cash and cash equivalents, accounts and notes receivable, inventories, and other current assets. The company's short-term liquidity is supported by $1,738 million in combined cash and unused borrowing capacity, with expected expenditures on capital, pension plans, share repurchase, and recent business dispositions impacting its liquidity. Additionally, Huntsman's long-term liquidity is underpinned by amendments to its A/R Programs and a recent dividend increase.

Huntsman's cash and cash equivalents decreased by $114 million, and accounts and notes receivable, net decreased by $81 million primarily due to lower revenues in the fourth quarter of 2023 compared to the fourth quarter of 2022. Moreover, inventories decreased by $128 million primarily due to lower inventory costs and volumes, while other current assets decreased by $36 million primarily due to amortization of deferred charges related to insurance premiums and a decrease in current income taxes receivable. Furthermore, accounts payable decreased by $242 million primarily due to lower inventory purchases, and accrued liabilities decreased by $34 million primarily due to a decrease in accrued compensation costs and accrued restructuring costs.

In terms of short-term liquidity, Huntsman had $1,738 million of combined cash and unused borrowing capacity as of December 31, 2023, with various factors expected to impact its liquidity, including capital expenditures, pension and postretirement benefit plan contributions, share repurchase program, recent business dispositions, and cost realignment and synergy plans. Additionally, the company's long-term liquidity is supported by amendments to its A/R Programs and a recent dividend increase.

Huntsman's critical accounting estimates include income taxes and employee benefit programs. The company evaluates deferred tax assets to determine their realization likelihood and records valuation allowances to offset deferred tax assets unlikely to be realized. Additionally, Huntsman sponsors several defined benefit plans and postretirement benefit plans, with amounts recorded based on actuarial valuations involving assumptions regarding long-term rates of return on plan assets, discount rates, compensation increases, mortality rates, and health care cost trends. These critical estimates are subject to uncertainty and are assessed using historical data and projections of future conditions. The market has reacted to these announcements by moving the company's shares 6.6% to a price of $26.25. For more information, read the company's full 10-K submission here.

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