Huntsman CORP: Form 10-Q for the period ended Sep 30, 2023

Results of Operations

As discussed in “Note 3. Discontinued Operations—Sale of Textile Effects Business” to our condensed consolidated financial statements, the results from continuing operations primarily exclude the results of our Textile Effects Business for all periods presented. For each of our Company and Huntsman International, the following tables set forth the condensed consolidated results of operations from continuing operations (dollars in millions, except per share amounts):

Huntsman Corporation

Huntsman International

Huntsman Corporation

36

NM—Not meaningful

(1) Includes the gain on the sale of our Textile Effects Business in the first quarter of 2023.

(2) Includes costs associated with transition activities related primarily to our Corporate program to optimize our global approach to leverage shared services capabilities and managed services in various information technology functions.

​(3) See “—Non-GAAP Financial Measures.”

(4) The income tax impacts, if any, are computed on the pre-tax adjustments using a with and without approach.

(5) In addition to income tax impacts, this adjusting item is also impacted by depreciation and amortization expense and interest expense.

(6) For details regarding the tax impacts of our non-GAAP adjustments, please see the reconciliation of our net income to adjusted net income noted above.

(7) Represents cash received of $332.5 million, net of legal fees and cash taxes paid of approximately $255 million.

Non-GAAP Financial Measures

Our condensed consolidated financial statements are prepared in accordance with GAAP, which we supplement with certain non-GAAP financial information. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures in their entirety and not to rely on any single financial measure. These non-GAAP measures exclude the impact of certain income and expenses that we do not believe are indicative of our core operating results.

Adjusted EBITDA

Our management uses adjusted EBITDA to assess financial performance. Adjusted EBITDA is defined as net income of Huntsman Corporation or Huntsman International, as appropriate, before interest, income tax, depreciation and amortization, net income attributable to noncontrolling interests and certain Corporate and other items, as well as eliminating the following adjustments: (a) business acquisition and integration expenses and purchase accounting inventory adjustments; (b) EBITDA from discontinued operations; (c) fair value adjustments to Venator investment, net; (d) certain legal and other settlements and related expenses; (e) costs associated with the Albemarle Settlement, net; (f) (gain) loss on sale of business/assets; (g) income from transition services arrangements; (h) certain nonrecurring information technology project implementation costs; (i) amortization of pension and postretirement actuarial losses; (j) plant incident remediation costs (credits); and (k) restructuring, impairment and plant closing and transition costs. We believe that net income of Huntsman Corporation or Huntsman International, as appropriate, is the performance measure calculated and presented in accordance with U.S. GAAP that is most directly comparable to adjusted EBITDA.

We believe adjusted EBITDA is useful to investors in assessing the businesses’ ongoing financial performance and 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. However, this measure should not be considered in isolation or viewed as a substitute for net income of Huntsman Corporation or Huntsman International, as appropriate, or other measures of performance determined in accordance with U.S. GAAP. Moreover, adjusted EBITDA as used herein is not necessarily comparable to other similarly titled measures of other companies due to potential inconsistencies in the methods of calculation. Our management believes this measure is useful to compare general operating performance from period to period and to make certain related management decisions. Adjusted EBITDA is also used by securities analysts, lenders and others in their evaluation of different companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be highly dependent on a company’s capital structure, debt levels and credit ratings. Therefore, the impact of interest expense on earnings can vary significantly among companies. In addition, the tax positions of companies can vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the various jurisdictions in which they operate. As a result, effective tax rates and tax expense can vary considerably among companies. Finally, companies employ productive assets of different ages and utilize different methods of acquiring and depreciating such assets. This can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.

Nevertheless, our management recognizes that there are material limitations associated with the use of adjusted EBITDA in the evaluation of our Company as compared to net income of Huntsman Corporation or Huntsman International, as appropriate, which reflects overall financial performance. For example, we have borrowed money in order to finance our operations and interest expense is a necessary element of our costs and ability to generate revenue. Our management compensates for the limitations of using adjusted EBITDA by using this measure to supplement U.S. GAAP results to provide a more complete understanding of the factors and trends affecting the business rather than U.S. GAAP results alone.

Adjusted Net Income

Adjusted net income is computed by eliminating the after-tax amounts related to the following from net income attributable to Huntsman Corporation: (a) business acquisition and integration expenses and purchase accounting inventory adjustments; (b) loss (income) from discontinued operations; (c) fair value adjustments to Venator investment, net; (d) certain legal and other settlements and related expenses; (e) costs associated with the Albemarle Settlement, net; (f) (gain) loss on sale of business/assets; (g) income from transition services arrangements; (h) certain nonrecurring information technology project implementation costs; (i) amortization of pension and postretirement actuarial losses; (j) plant incident remediation costs (credits); and (k) restructuring, impairment and plant closing and transition costs. Basic adjusted net income per share excludes dilution and is computed by dividing adjusted net income by the weighted average number of shares outstanding during the period. Adjusted diluted net income per share reflects all potential dilutive common shares outstanding during the period and is computed by dividing adjusted net income by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding as dilutive securities. Adjusted net income and adjusted net income per share amounts are presented solely as supplemental information.

We believe adjusted net income is useful to investors in assessing the businesses’ ongoing financial performance and 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.

Free Cash Flow

We believe free cash flow is an important indicator of our liquidity as it measures the amount of cash we generate. Management internally uses a free cash flow measure: (a) to evaluate our liquidity, (b) evaluate strategic investments, (c) plan stock buyback and dividend levels and (d) evaluate our ability to incur and service debt.

Adjusted Effective Tax Rate

We believe that the effective tax rate of Huntsman Corporation or Huntsman International, as appropriate, is the performance measure calculated and presented in accordance with U.S. GAAP that is most directly comparable to adjusted effective tax rate. We believe our adjusted effective tax rate provides improved comparability between periods through the exclusion of certain items, such as, business acquisition and integration expenses and purchase accounting inventory adjustments, certain legal and other settlements and related expenses, gains on sale of businesses/assets and certain tax only items, including tax law changes not yet enacted, that we believe are not indicative of the businesses’ operational profitability and that may obscure underlying business results and trends.

Our forward-looking adjusted effective tax rate is calculated based on our forecast effective tax rate, and the range of our forward-looking adjusted effective tax rate equals the range of our forecast effective tax rate. We disclose forward-looking adjusted effective tax rate because we cannot adequately forecast certain items and events that may or may not impact us in the near future, such as business acquisition and integration expenses and purchase accounting inventory adjustments, certain legal and other settlements and related expenses, gains on sale of businesses/assets and certain tax only items, including tax law changes not yet enacted. Each of such adjustment has not yet occurred, is out of our control and/or cannot be reasonably predicted. In our view, our forward-looking adjusted effective tax rate represents the forecast effective tax rate on our underlying business operations but does not reflect any adjustments related to the items noted above that may occur and can cause our effective tax rate to differ.

Three Months Ended September 30, 2023 Compared with Three Months Ended September 30, 2022

For the three months ended September 30, 2023, income from continuing operations attributable to Huntsman Corporation was nil, a decrease of $101 million from $101 million in the 2022 period. For the three months ended September 30, 2023, income from continuing operations attributable to Huntsman International was $1 million, a decrease of $99 million from $100 million in the 2022 period. The decreases noted above were the result of the following items:

• Revenues for the three months ended September 30, 2023 decreased by $505 million, or 25%, as compared with the 2022 period. The decrease was primarily due to lower sales volumes and lower average selling prices in all our segments. See “—Segment Analysis” below.
• Gross profit for the three months ended September 30, 2023 decreased by $118 million, or 34%, as compared with the 2022 period. The decrease resulted primarily from lower gross profits in all our segments. See “—Segment Analysis” below.
• Our operating expenses, net and the operating expenses, net of Huntsman International for the three months ended September 30, 2023 decreased marginally by $1 million and $3 million, respectively, or 1% and 2%, respectively, as compared with the 2022 period, primarily related to a decrease in selling, general and administrative expenses, mostly offset by the negative impact of translating foreign currency amounts to the U.S. dollar.
• Restructuring, impairment and plant closing costs were $6 million for the three months ended September 30, 2023 as compared with $12 million in the 2022 period. For further information, see “Note 6. Restructuring, Impairment and Plant Closing Costs” to our condensed consolidated financial statements.
• Equity in income of investment in unconsolidated affiliates for the three months ended September 30, 2023 increased to $30 million from $21 million in the 2022 period primarily related to an increase in income at our PO/MTBE joint venture in China, in which we hold a 49% interest.
• Our income tax expense and the income tax expense of Huntsman International for the three months ended September 30, 2023 decreased to $27 million from $30 million in the 2022 period. The decrease in income tax expense was primarily due to the decrease in income from continuing operations before income taxes. Our income tax expense is significantly affected by the mix of income and losses in the tax jurisdictions in which we operate along with the impact of valuation allowances in certain tax jurisdictions. For further information, see “Note 17. Income Taxes” to our condensed consolidated financial statements.

Segment Analysis

(Dollars in millions)

NM—Not meaningful

(1) For further information, including reconciliation of total reportable segments’ adjusted EBITDA to income from continuing operations before income taxes of Huntsman Corporation or Huntsman International, as appropriate, see “Note 19. Operating Segment Information” to our condensed consolidated financial statements.

(1) Excludes revenues from tolling arrangements, byproducts and raw materials.

(2) Excludes sales volumes of byproducts and raw materials.

Polyurethanes

The decrease in revenues in our Polyurethanes segment for the three months ended September 30, 2023 compared to the same period of 2022 was primarily due to lower MDI average selling prices and lower sales volumes combined with an adverse sales mix. MDI average selling prices decreased due to less favorable supply and demand dynamics. Sales volumes decreased primarily due to lower demand, primarily in the Americas. Sales mix was adverse with proportionally lower sales of higher priced products. The decrease in segment adjusted EBITDA was primarily due to lower MDI margins and lower sales volumes, partially offset by higher equity earnings from our minority-owned joint venture in China.

​Performance Products

The decrease in revenues in our Performance Products segment for the three months ended September 30, 2023 compared to the same period of 2022 was primarily due to lower sales volumes and reduced average selling prices. Sales volumes decreased in all regions primarily due to slowing construction activity and reduced demand in agrochemicals, coatings and adhesives, fuel and lubes and other industrial markets. The decrease in segment adjusted EBITDA was primarily due to decreased sales volumes and lower average selling prices.

Advanced Materials

The decrease in revenues in our Advanced Materials segment for the three months ended September 30, 2023 compared to the same period of 2022 was primarily due to lower sales volumes, while average selling prices remained relatively flat. Sales volumes decreased primarily due to reduced customer demand in our infrastructure and industrial markets and the deselection of lower margin business. The decrease in segment adjusted EBITDA was primarily due to lower sales volumes.

Corporate and other

Corporate and other includes unallocated corporate overhead, unallocated foreign currency exchange gains and losses, LIFO inventory valuation reserve adjustments, loss on early extinguishment of debt, unallocated restructuring, impairment and plant closing costs, nonoperating income and expense and gains and losses on the disposition of corporate assets. For the three months ended September 30, 2023, adjusted EBITDA from Corporate and other for Huntsman Corporation was a loss of $41 million as compared to a loss of $35 million for the same period of 2022. For the three months ended September 30, 2023, adjusted EBITDA from Corporate and other for Huntsman International was a loss of $40 million as compared to a loss of $36 million for the same period of 2022. The decrease in adjusted EBITDA from Corporate and other resulted primarily from an increase in unallocated foreign currency exchange losses, partially offset by an increase in LIFO valuation gains.

Nine Months Ended September 30, 2023 Compared with Nine Months Ended September 30, 2022

For the nine months ended September 30, 2023, income from continuing operations attributable to Huntsman Corporation was $52 million, a decrease of $469 million from $521 million in the 2022 period. For the nine months ended September 30, 2023, income from continuing operations attributable to Huntsman International was $55 million, a decrease of $469 million from $524 million in the 2022 period. The decreases noted above were the result of the following items:

• Revenues for the nine months ended September 30, 2023 decreased by $1,665 million, or 26%, as compared with the 2022 period. The decrease was primarily due to lower sales volumes in all our segments and lower average selling prices in all our segments, except for our Advanced Materials segment. See “—Segment Analysis” below.
• Gross profit for the nine months ended September 30, 2023 decreased by $602 million, or 44%, as compared with the 2022 period. The decrease resulted primarily from lower gross profits in all our segments. See “—Segment Analysis” below.
• Our operating expenses, net and the operating expenses, net of Huntsman International for the nine months ended September 30, 2023 decreased by $12 million and $11 million, respectively, or 2% for both, as compared with the 2022 period, primarily related to a decrease in selling, general and administrative expenses, partially offset by the negative impact of translating foreign currency amounts to the U.S. dollar.
• Restructuring, impairment and plant closing costs were $7 million for the nine months ended September 30, 2023 as compared with $36 million in the 2022 period. For further information, see “Note 6. Restructuring, Impairment and Plant Closing Costs” to our condensed consolidated financial statements.
• Equity in income of investment in unconsolidated affiliates for the nine months ended September 30, 2023 increased to $70 million from $55 million in the 2022 period primarily related to an increase in income at our PO/MTBE joint venture with China, in which we hold a 49% interest.
• Other income (expense), net for the nine months ended September 30, 2023 was $2 million of expense as compared with $14 million of income in the 2022 period, primarily related to an increase in certain periodic pension costs, partially offset by a decrease in certain legal related expenses.
• Our income tax expense for the nine months ended September 30, 2023 decreased to $66 million from $155 million in the 2022 period. The income tax expense of Huntsman International for the nine months ended September 30, 2023 decreased to $66 million from $156 million in the 2022 period. The decrease in income tax expense was primarily due to the decrease in income from continuing operations before income taxes. Our income tax expense is significantly affected by the mix of income and losses in the tax jurisdictions in which we operate along with the impact of valuation allowances in certain tax jurisdictions. For further information, see “Note 17. Income Taxes” to our condensed consolidated financial statements.

Segment Analysis

(Dollars in millions)

NM—Not meaningful

(1) For further information, including reconciliation of total reportable segments’ adjusted EBITDA to income from continuing operations before income taxes of Huntsman Corporation or Huntsman International, as appropriate, see “Note 19. Operating Segment Information” to our condensed consolidated financial statements.

(1) Excludes revenues from tolling arrangements, byproducts and raw materials.

(2) Excludes sales volumes of byproducts and raw materials.

Polyurethanes

The decrease in revenues in our Polyurethanes segment for the nine months ended September 30, 2023 compared to the same period of 2022 was primarily due to lower sales volumes combined with an adverse sales mix, lower MDI average selling prices and the negative impact of foreign currency exchange rate movements against the U.S. dollar. Sales volumes decreased primarily due to lower demand, primarily in Europe and the Americas. Sales mix was adverse with proportionally lower sales of higher priced products. MDI average selling prices decreased primarily due to less favorable supply and demand dynamics. The decrease in segment adjusted EBITDA was primarily due to lower sales volumes, lower MDI margins, the negative impact of foreign currency exchange rate movements against the U.S. dollar and a gain from an insurance settlement received in the second quarter of 2022, partially offset by higher equity earnings from our minority-owned joint venture in China.

​Performance Products

The decrease in revenues in our Performance Products segment for the nine months ended September 30, 2023 compared to the same period of 2022 was primarily due to lower sales volumes and reduced average selling prices. Sales volumes decreased in all regions primarily due to slowing construction activity and reduced demand in coatings and adhesives, fuel and lubes and other industrial markets. The decrease in segment adjusted EBITDA was primarily due to decreased sales volumes and lower average selling prices.

Advanced Materials

The decrease in revenues in our Advanced Materials segment for the nine months ended September 30, 2023 compared to the same period of 2022 was primarily due to lower sales volumes, while average selling prices remained relatively flat. Sales volumes decreased primarily due to reduced customer demand in our infrastructure and industrial markets and the deselection of lower margin business. The decrease in segment adjusted EBITDA was primarily due to lower sales volumes.

Corporate and other

Corporate and other includes unallocated corporate overhead, unallocated foreign currency exchange gains and losses, LIFO inventory valuation reserve adjustments, loss on early extinguishment of debt, unallocated restructuring, impairment and plant closing costs, nonoperating income and expense and gains and losses on the disposition of corporate assets. For the nine months ended September 30, 2023, adjusted EBITDA from Corporate and other for Huntsman Corporation was a loss of $128 million as compared to a loss of $123 million for the same period of 2022. For the nine months ended September 30, 2023, adjusted EBITDA from Corporate and other for Huntsman International was a loss of $125 million as compared to a loss of $119 million for the same period of 2022. The decrease in adjusted EBITDA from Corporate and other for Huntsman International resulted primarily from an increase in unallocated foreign currency exchange losses, partially offset by an increase in LIFO valuation gains and a decrease in corporate overhead costs.

Liquidity and Capital Resources

The following is a discussion of our liquidity and capital resources and generally does not include separate information with respect to Huntsman International in accordance with General Instructions H(1)(a) and (b) of Form 10-Q.

Cash Flows for the Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022

Net cash provided by operating activities from continuing operations for the nine months ended September 30, 2023 and 2022 was $85 million and $595 million, respectively. The decrease in net cash provided by operating activities from continuing operations during the nine months ended September 30, 2023 as compared with the same period of 2022 was primarily attributable to decreased operating income as described in “—Results of Operations” above for the nine months ended September 30, 2023 as compared with the same period of 2022, partially offset by a net cash inflow of $49 million related to changes in operating assets and liabilities.

Net cash provided by (used in) investing activities from continuing operations for the nine months ended September 30, 2023 and 2022 was $395 million and $(176) million, respectively. During the nine months ended September 30, 2023 and 2022, we paid $147 million and $186 million for capital expenditures, respectively. During the nine months ended September 30, 2023, we received $544 million for the sale of businesses, net, primarily related to net proceeds of $530 million from the sale of our Textile Effects Business. See “Note 3. Discontinued Operations—Sale of Textile Effects Business” to our condensed consolidated financial statements.

Net cash used in financing activities for the nine months ended September 30, 2023 and 2022 was $581 million and $905 million, respectively. During the nine months ended September 30, 2023, we repaid $115 million against the outstanding balances under our 2022 Revolving Credit Facility and our A/R Programs. During the nine months ended September 30, 2023 and 2022, we paid $296 million and $755 million for repurchases of our common stock, respectively.

​Free cash flow from continuing operations for the nine months ended September 30, 2023 and 2022 was a use of cash of $62 million and proceeds of cash of $409 million, respectively. The decrease in free cash flow from continuing operations was primarily attributable to a decrease in cash provided by operating activities from continuing operations, partially offset by a decrease in cash used for capital expenditures during the nine months ended September 30, 2023 as compared with the same period of 2022.

Changes in Financial Condition

The following information summarizes our working capital position (dollars in millions):

(1) Total assets and liabilities held for sale as of December 31, 2022 are classified as current because we completed the sale of our Textile Effects Business on February 28, 2023. For more information see “Note 3. Discontinued Operations—Sale of Textile Effects Business” to our condensed consolidated financial statements.

​Our working capital decreased by $321 million as a result of the net impact of the following significant changes:

• The decrease in cash and cash equivalents of $158 million resulted from the matters identified on our condensed consolidated statements of cash flows. See also “—Cash Flows for the Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022.”
• Inventories decreased by $54 million primarily due to lower inventory costs and volumes.
• Other current assets decreased by $60 million primarily due to amortization of deferred charges related to insurance premiums.
• Accounts payable decreased by $235 million primarily due to a decrease in non-trade payables related to insurance premiums, a reduction of capital accruals and lower inventory purchases.
• Accrued liabilities decreased by $43 million primarily due to a decrease in accrued compensation costs and accrued restructuring costs.
• Current portion of debt increased by $47 million primarily due to the reclassification of amounts related to our A/R Programs to current debt, partially offset by the repayment in full of the outstanding balance under our 2022 Revolving Credit Facility.

Short-Term Liquidity

We depend upon our cash, our 2022 Revolving Credit Facility, A/R Programs and other debt instruments to provide liquidity for our operations and working capital needs. As of September 30, 2023, we had $1,784 million of combined cash and unused borrowing capacity, consisting of $496 million in cash, $1,188 million in availability under our 2022 Revolving Credit Facility and $100 million in availability under our A/R Programs. Our liquidity can be significantly impacted by various factors. The following matters are expected to have a significant impact on our liquidity:

• During 2023, we expect to spend approximately $230 million on capital expenditures. Additionally, during 2024, we expect to spend between approximately $200 million and $220 million on capital expenditures. Our future expenditures include certain environmental, health and safety upgrades; expansions of our existing manufacturing and other facilities; certain cost reduction projects, including those described below; and certain information technology expenditures. We expect to fund capital expenditures with cash provided by operations.
• During the remainder of 2023, we expect to make additional contributions to our pension and other postretirement benefit plans of approximately $9 million.
• During the fourth quarter of 2023, we expect to repurchase approximately $50 million of shares of our common stock.
• On February 28, 2023, we completed the sale of our Textile Effects Business to Archroma and received net proceeds of $530 million, determined as the preliminary purchase price of $593 million less $5 million for certain costs paid by Archroma on our behalf, $30 million of estimated net working capital adjustments and $28 million of cash that will be reimbursed to us as part of the final post-closing adjustments anticipated in 2023. Through the third quarter of 2023, we have paid cash taxes of approximately $24 million, and we expect to pay additional cash taxes of approximately $17 million.

Long-Term Liquidity

• During 2020, management implemented cost realignment and synergy plans. In connection with these plans, we remain committed to achieving annualized cost savings and synergy benefits of approximately $140 million during 2023, as previously communicated. During 2021, management implemented additional cost realignment plans, and in connection with these plans, we expect to achieve further annualized cost savings of approximately $100 million by the end of 2023. Associated with these plans, we expect cash costs of approximately $215 million, including approximately $30 million of capital expenditures, through 2024, of which we have spent approximately $190 million to date.
• In early November 2022, we announced our commitment and specific plans to further realign our cost structure beyond the current in-progress cost optimization plans noted above with additional restructuring in Europe. This program will include exiting and consolidating certain facilities, workforce relocation to lower cost locations and further personnel rationalization. In connection with this program, we currently expect to achieve annualized cost savings of approximately $40 million by the end of 2023. Associated with this program, we expect cash costs of approximately $70 million, including approximately $23 million of capital expenditures, through 2025, of which we have spent approximately $19 million to date.
• On April 29, 2022, a New Orleans jury awarded us approximately $94 million in our long-running court battle against Praxair/Linde, one of the industrial gas suppliers to our Geismar, Louisiana MDI manufacturing site. The case was filed after Praxair refused to properly maintain its own Geismar facility and then repeatedly failed to supply our requirements for industrial gas needed to manufacture MDI under long-term supply contracts that expired in 2013. After adding mandatory pre-judgment and post-judgment interest to the award, we expect damages to exceed $125 million before deducting for taxes and legal fees. The award is subject to a pending appeal, and if affirmed, we expect to receive net proceeds of approximately $50 million to $60 million. We have not yet recognized the award in our condensed consolidated statements of operations.
• On May 20, 2022, Huntsman International entered into the 2022 Revolving Credit Facility. Borrowings will bear interest at the rates specified in the credit agreement governing the 2022 Credit Facility, which will vary based on the type of loan and Huntsman International’s debt ratings. Under the credit agreement, the interest rate margin and the commitment fee rates are also subject to adjustments based on the Company’s performance on specified sustainability target thresholds with respect to annual percentage reduction in operational greenhouse gas emissions intensity and annual percentage reduction in water consumption intensity. Unless previously terminated in accordance with its terms, the credit agreement will mature in May 2027. Huntsman International may increase the 2022 Revolving Credit Facility commitments up to an additional $500 million, subject to the satisfaction of certain conditions. See “Note 7. Debt—Direct and Subsidiary Debt—Revolving Credit Facility” to our condensed consolidated financial statements.

As of September 30, 2023, we had $113 million classified as current portion of debt, including $101 million outstanding under our A/R Programs, debt at our variable interest entities of $9 million and certain other short-term facilities and scheduled amortization payments totaling $3 million. We intend to renew, repay or extend the majority of these short-term facilities in the next twelve months.

As of September 30, 2023, we had approximately $480 million of cash and cash equivalents held by our foreign subsidiaries, including our variable interest entities. With the exception of certain amounts that we expect to repatriate in the foreseeable future, we intend to use cash held in our foreign subsidiaries to fund our local operations. Nevertheless, we could repatriate additional cash as dividends, and the repatriation of cash as a dividend would generally not be subject to U.S. taxation. However, such repatriation may potentially be subject to limited foreign withholding taxes. ​

For more information regarding our debt, see “Note 7. Debt” to our condensed consolidated financial statements.

We are exposed to market risks, such as changes in interest rates, foreign exchange rates and commodity prices. From time to time, we enter into transactions, including transactions involving derivative instruments, to manage certain of these exposures. We also hedge our net investment in certain European operations. See “Note 8. Derivative Instruments and Hedging Activities” to our condensed consolidated financial statements.

Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2023. Based on this evaluation, our chief executive officer and chief financial officer have concluded that, as of September 30, 2023, our disclosure controls and procedures were effective, in that they ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and (2) accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

No changes to our internal control over financial reporting occurred during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). However, we can only give reasonable assurance that our internal controls over financial reporting will prevent or detect material misstatements on a timely basis.

For information regarding risk factors, see “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022.