Huntsman Corporation

Greetings and welcome to the Huntsman Corporation second quarter 2025 earnings call. At this time, all participants are in listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Ivan Marcuse, Vice President of Invest Relations and Corporate Development.

Thank you, Joan. Good morning, everyone. Welcome to Huntsman second quarter 2025 earnings call. Joining us on the call today are Peter Huntsman, Chairman, CEO and President, Phil Lister, Executive Vice President, CFO. Yesterday, July 31st, 2025, we released our earnings for the second quarter 2025 via press release and posted to our website, huntsman.com. We also posted a set of slides and detailed commentary discussing the second quarter of 2025 on our website. Peter Huntsman will provide some opening comments shortly, and we will then move to the Q&A 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, and 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 the projections or expectations. We do not plan on publicly updating or revising any forward-looking statements during the call, during the quarter. We will also refer to non-GAAP financial measures such as adjusted EBITDA, adjusted net income or loss, 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 at huntsman.com. And I'll turn the call over to Peter Huntsman.

Ivan, thank you very much, and thank you all for joining us. Our second quarter results were not unexpected and came in about where we thought they would. We did see a nice rebound back to what we would see as more normalized earnings from advanced materials offsetting the disappointing sluggishness of construction activity and tariff uncertainty, especially in polyurethanes. As we step back and look at the macro condition, it appears that the volatility caused by tariff and trade disputes over the past few months is starting to dissipate at least as of 12 hours ago. I believe that inventories remain very low in most of our downstream supply chain while consumer confidence seems to be muted. We look into the third quarter, we see neither reason to panic nor to be overly optimistic. However, long-term, we do anticipate an improvement in construction and perhaps some gradual change as China seems to be focusing more on their overcapacity. Our focus will continue to be on our balance sheet. To this end, we will continue to be extremely prudent on spending capital beyond our normalized run rate of safety, maintenance, and reliability. We remain focused on our cost structure and making sure that our business expenses are in line with market conditions and our cash generation. Our aggressive inventory and working capital focus allowed us to generate positive cash flow in the second quarter. This cost us about $25 million of EBITDA in the second quarter. This charge was offset by reduced bonus accruals and other smaller one-time benefits. This inventory impact will be less in the third quarter, again, offset by bonus accruals. As markets improve or raw materials drop in value, we wanna make sure that we're in a position to take advantage as soon as possible. We will operate our business to create value over volume to the extent that we can. We continue to review our asset portfolio and engage with shareholders. The last thing we want to be doing is sitting around waiting for things to get better. Over the next few quarters, we will see usual seasonality, but also the possible influences of higher tariffs and duties for MDI coming into North American markets, a possible interest rate cut, the benefits of more of our cost reductions falling to the bottom line, and hopefully the greater focus on prices over volume. In short, we will manage our balance sheet as effectively as possible while also pushing for better P&L outcomes. With that operator, why don't we open the line up for any questions.