Huntsman 2026 Q2 Earnings Call

Thank you, Daryl. Good morning, everyone. Welcome to Huntsman's second quarter 2026 earnings call. Joining us on the call today are Peter Huntsman, Chairman, CEO, and President, and Phil Lister, Executive Vice President and CFO. Yesterday, July 30th, 2026, we released our earnings for the second quarter of 2026 via press release and posted it on our website, huntsman.com. We also posted a set of slides and detailed commentary discussing the second quarter 2026 on our website. Peter Huntsman will provide some opening comments shortly. We will then move into the question and answer session for the remainder of the call. During the call, let me remind you that we may make statements about our projections or expectations for the future. All such statements are forward-looking statements. While they reflect our current expectations, they involve risks and uncertainties and are not guarantees of future performance.

You should review our filings with the SEC for more information regarding the factors that could cause actual results to differ materially from these projections or expectations. We do not plan on publicly updating or revising any forward-looking statements during the quarter. We will also refer to non-GAAP financial measures such as adjusted EBITDA, adjusted net income, and free cash flow. You can find reconciliations to the most directly comparable GAAP financial measures in our earnings release, which has been posted to our website, huntsman.com. I'll now turn the call over to Peter Huntsman, our Chairman and CEO.

Ivan, thank you very much. Thank you, everybody, for taking the time to join us this morning. It's been three months since the last time we were able to report on market conditions and what we were doing as a company to enhance shareholder value. Needless to say, it has been a rather busy few months on a number of fronts. I'd like to comment on a few things. I plan to be brief, as your questions and comments are the reason for this call. I stated during our last quarter's call that while I was heartened to see the prices and margins were improving across most of our product lines, I emphasized the need for, quote, "stable and long-term demand trends to continue." While we improved our margins from the first quarter, I remain concerned as to the growth rates and consumer confidence that we are seeing.

Since our last call, North American housing stats have softened, and Chinese consumer confidence continues to languish. Europe continues its ill-fated energy policy, and all that free wind is now costing European consumers and industry near record amounts. As ongoing conflicts in the Middle East seemingly move weekly from a ceasefire to all-out war, moving energy prices, stock markets, and consumer sentiment with each action, we continue to keep a wary eye on inflation and consumer spending, especially on durable goods. It seems much of this turbulence will continue through the third quarter. While this is playing havoc on cost and order patterns, it is also demonstrating the value of reliable supply lines, contractual assurance of supply, and the value of pricing and consistent quality. We will continue to push for greater margins as we believe that this industry still has a lot of room for improvement.

On the 16th of June, we announced a merger of equal with Olin Corporation. Since that time, we've had the opportunity to visit one-on-one with the majority of our largest shareholders. If I had to summarize my feelings towards this transaction, it would be in the answer that I shared when I was asked if I could do anything different than what had been done. My response was that I wish I had met Ken Lane a year earlier and that we were here today earning materially more than we otherwise would be earning. Regardless of market conditions, whether they improve or continue to languish, our company and shareholders will be better off with this proposed merger. If this transaction was a year behind us, we would be today well on our way to achieving an additional $300 million in synergies.

We would be earning more through newfound commercial opportunities that are not even part of our $300 million in synergies. We would have a stronger balance sheet that would be improving quarter by quarter. In short, should today's market conditions continue through next year, we will be better off than we are today. Should markets improve, we will be the benefactors of not only the forthcoming synergies but also higher combined volumes and greater integration. Either way, this positions us to improve regardless of market conditions. I have been impressed with the strong collaboration and interaction between the Huntsman and Olin teams that are advancing our closing at a rapid pace. Our teams will be ready on day 1 of closing to commence with achieving our outlined synergies. Between now and closing, we will continue to focus on creating as much shareholder value as possible.

Following the completion of this transaction, we'll be able to achieve far more. Operator, with that, we'll open the line up for any questions and comments.

Well, I think on 2Q, we had the ability to be able to put prices up. Much of that was to recover the increased raw materials that we were seeing at the time, but we were also able to get ahead, as our results indicate, that we've nearly doubled our EBITDA since second quarter of last year. Look, on a supply basis, we obviously have a large global MDI plant that is on the wrong side of the Strait of Hormuz, I would say, and that is probably representing somewhere around 4% of industry average. From a supply point of view, Frank, I think that it's pretty well-balanced. My disappointment, if I have one, is that we're not seeing greater demand and greater improvement in the macroeconomic situation. I don't want to be overly dire on this.

I'm just saying that, yeah, on the supply side, I think it's pretty well-balanced. On the demand side, I'd like to see a little bit more. Right now, depending on where you are around the world, you're probably seeing anywhere from zero to 2%, very low single digits sort of growth that is taking place. An improved economy, improved housing demand, particularly North America, would be very helpful. Return in consumer confidence in Asia would be very good to see. Frankly, improved consumer sentiment and lower energy inflation in Europe, I think would all be benefactors this time.

Thank you. I'm not sure that the investment community is missing a whole lot as much as this industry is, I'll borrow the, what is it, Missouri?