☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Virginia
|
13-1872319
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
190 Carondelet Plaza,
|
Suite 1530,
|
Clayton,
|
MO
|
63105
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class:
|
Trading symbol:
|
Name of each exchange on which registered:
|
Common Stock, $1.00 par value per share
|
OLN
|
New York Stock Exchange
|
TABLE OF CONTENTS FOR FORM 10-Q
|
Page
|
|
Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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||
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June 30, 2020
|
|
December 31, 2019
|
|
June 30, 2019
|
||||||
Assets
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
237.9
|
|
|
$
|
220.9
|
|
|
$
|
126.9
|
|
Receivables, net
|
700.2
|
|
|
760.4
|
|
|
848.2
|
|
|||
Income taxes receivable
|
17.6
|
|
|
13.9
|
|
|
23.4
|
|
|||
Inventories, net
|
619.1
|
|
|
695.7
|
|
|
698.9
|
|
|||
Other current assets
|
42.0
|
|
|
23.1
|
|
|
28.8
|
|
|||
Total current assets
|
1,616.8
|
|
|
1,714.0
|
|
|
1,726.2
|
|
|||
Property, plant and equipment (less accumulated depreciation of $3,484.9, $3,268.1 and $3,000.0)
|
3,234.9
|
|
|
3,323.8
|
|
|
3,410.5
|
|
|||
Operating lease assets, net
|
371.8
|
|
|
377.8
|
|
|
295.8
|
|
|||
Deferred income taxes
|
38.3
|
|
|
35.3
|
|
|
28.1
|
|
|||
Other assets
|
1,179.7
|
|
|
1,169.1
|
|
|
1,174.5
|
|
|||
Intangible assets, net
|
416.9
|
|
|
448.1
|
|
|
480.6
|
|
|||
Goodwill
|
2,119.7
|
|
|
2,119.7
|
|
|
2,119.6
|
|
|||
Total assets
|
$
|
8,978.1
|
|
|
$
|
9,187.8
|
|
|
$
|
9,235.3
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Current installments of long-term debt
|
$
|
1.8
|
|
|
$
|
2.1
|
|
|
$
|
1.1
|
|
Accounts payable
|
520.8
|
|
|
651.9
|
|
|
669.2
|
|
|||
Income taxes payable
|
7.7
|
|
|
19.8
|
|
|
9.5
|
|
|||
Current operating lease liabilities
|
77.3
|
|
|
79.3
|
|
|
71.4
|
|
|||
Accrued liabilities
|
318.7
|
|
|
329.1
|
|
|
298.9
|
|
|||
Total current liabilities
|
926.3
|
|
|
1,082.2
|
|
|
1,050.1
|
|
|||
Long-term debt
|
4,073.9
|
|
|
3,338.7
|
|
|
3,232.6
|
|
|||
Operating lease liabilities
|
299.2
|
|
|
303.4
|
|
|
229.3
|
|
|||
Accrued pension liability
|
768.0
|
|
|
797.7
|
|
|
653.6
|
|
|||
Deferred income taxes
|
414.5
|
|
|
454.5
|
|
|
506.4
|
|
|||
Other liabilities
|
307.3
|
|
|
793.8
|
|
|
792.5
|
|
|||
Total liabilities
|
6,789.2
|
|
|
6,770.3
|
|
|
6,464.5
|
|
|||
Commitments and contingencies
|
|
|
|
|
|
||||||
Shareholders’ equity:
|
|
|
|
|
|
||||||
Common stock, $1.00 par value per share: authorized, 240.0 shares; issued and outstanding, 157.9, 157.7 and 164.3 shares
|
157.9
|
|
|
157.7
|
|
|
164.3
|
|
|||
Additional paid-in capital
|
2,127.0
|
|
|
2,122.1
|
|
|
2,229.2
|
|
|||
Accumulated other comprehensive loss
|
(773.9
|
)
|
|
(803.4
|
)
|
|
(660.4
|
)
|
|||
Retained earnings
|
677.9
|
|
|
941.1
|
|
|
1,037.7
|
|
|||
Total shareholders’ equity
|
2,188.9
|
|
|
2,417.5
|
|
|
2,770.8
|
|
|||
Total liabilities and shareholders’ equity
|
$
|
8,978.1
|
|
|
$
|
9,187.8
|
|
|
$
|
9,235.3
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Sales
|
$
|
1,241.2
|
|
|
$
|
1,592.9
|
|
|
$
|
2,666.3
|
|
|
$
|
3,146.3
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold
|
1,235.7
|
|
|
1,463.7
|
|
|
2,609.9
|
|
|
2,811.0
|
|
||||
Selling and administration
|
99.7
|
|
|
97.0
|
|
|
196.4
|
|
|
204.0
|
|
||||
Restructuring charges
|
1.7
|
|
|
3.8
|
|
|
3.4
|
|
|
7.8
|
|
||||
Other operating income
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
||||
Operating (loss) income
|
(95.8
|
)
|
|
28.5
|
|
|
(143.3
|
)
|
|
123.7
|
|
||||
Interest expense
|
69.4
|
|
|
57.9
|
|
|
132.5
|
|
|
115.3
|
|
||||
Interest income
|
0.2
|
|
|
0.3
|
|
|
0.3
|
|
|
0.5
|
|
||||
Non-operating pension income
|
4.9
|
|
|
4.2
|
|
|
9.5
|
|
|
8.1
|
|
||||
Other income
|
—
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
||||
Income (loss) before taxes
|
(160.1
|
)
|
|
(24.9
|
)
|
|
(266.0
|
)
|
|
28.2
|
|
||||
Income tax (benefit) provision
|
(40.0
|
)
|
|
(4.9
|
)
|
|
(65.9
|
)
|
|
6.5
|
|
||||
Net (loss) income
|
$
|
(120.1
|
)
|
|
$
|
(20.0
|
)
|
|
$
|
(200.1
|
)
|
|
$
|
21.7
|
|
Net (loss) income per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.76
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(1.27
|
)
|
|
$
|
0.13
|
|
Diluted
|
$
|
(0.76
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(1.27
|
)
|
|
$
|
0.13
|
|
Average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
157.9
|
|
|
164.6
|
|
|
157.8
|
|
|
164.8
|
|
||||
Diluted
|
157.9
|
|
|
164.6
|
|
|
157.8
|
|
|
165.7
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net (loss) income
|
$
|
(120.1
|
)
|
|
$
|
(20.0
|
)
|
|
$
|
(200.1
|
)
|
|
$
|
21.7
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments, net
|
8.2
|
|
|
3.3
|
|
|
(0.8
|
)
|
|
(5.0
|
)
|
||||
Unrealized gains (losses) on derivative contracts, net
|
30.0
|
|
|
(12.1
|
)
|
|
12.1
|
|
|
(15.4
|
)
|
||||
Amortization of prior service costs and actuarial losses, net
|
9.0
|
|
|
5.3
|
|
|
18.2
|
|
|
11.0
|
|
||||
Total other comprehensive income (loss), net of tax
|
47.2
|
|
|
(3.5
|
)
|
|
29.5
|
|
|
(9.4
|
)
|
||||
Comprehensive (loss) income
|
$
|
(72.9
|
)
|
|
$
|
(23.5
|
)
|
|
$
|
(170.6
|
)
|
|
$
|
12.3
|
|
|
Six Months Ended June 30, 2020
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Loss
|
|
Retained Earnings
|
|
Total Shareholders’ Equity
|
|||||||||||||
|
Shares Issued
|
|
Par Value
|
|||||||||||||||||||
Balance at January 1, 2020
|
157.7
|
|
|
$
|
157.7
|
|
|
$
|
2,122.1
|
|
|
$
|
(803.4
|
)
|
|
$
|
941.1
|
|
|
$
|
2,417.5
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(80.0
|
)
|
|
(80.0
|
)
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(17.7
|
)
|
|
—
|
|
|
(17.7
|
)
|
|||||
Dividends paid:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock ($0.20 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31.5
|
)
|
|
(31.5
|
)
|
|||||
Common stock issued for:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stock options exercised
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|||||
Other transactions
|
0.1
|
|
|
0.1
|
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
|
—
|
|
|
(2.6
|
)
|
|||||
Balance at March 31, 2020
|
157.8
|
|
|
157.8
|
|
|
2,122.8
|
|
|
(821.1
|
)
|
|
829.6
|
|
|
2,289.1
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(120.1
|
)
|
|
(120.1
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
47.2
|
|
|
—
|
|
|
47.2
|
|
|||||
Dividends paid:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock ($0.20 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31.6
|
)
|
|
(31.6
|
)
|
|||||
Common stock issued for:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other transactions
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
|
—
|
|
|
3.9
|
|
|||||
Balance at June 30, 2020
|
157.9
|
|
|
$
|
157.9
|
|
|
$
|
2,127.0
|
|
|
$
|
(773.9
|
)
|
|
$
|
677.9
|
|
|
$
|
2,188.9
|
|
|
Six Months Ended June 30, 2019
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Loss
|
|
Retained Earnings
|
|
Total Shareholders’ Equity
|
|||||||||||||
|
Shares Issued
|
|
Par Value
|
|||||||||||||||||||
Balance at January 1, 2019
|
165.3
|
|
|
$
|
165.3
|
|
|
$
|
2,247.4
|
|
|
$
|
(651.0
|
)
|
|
$
|
1,070.5
|
|
|
$
|
2,832.2
|
|
Lease accounting adoption adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
|
11.2
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41.7
|
|
|
41.7
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.9
|
)
|
|
—
|
|
|
(5.9
|
)
|
|||||
Dividends paid:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock ($0.20 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33.0
|
)
|
|
(33.0
|
)
|
|||||
Common stock repurchased and retired
|
(0.6
|
)
|
|
(0.6
|
)
|
|
(12.6
|
)
|
|
—
|
|
|
—
|
|
|
(13.2
|
)
|
|||||
Common stock issued for:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stock options exercised
|
0.1
|
|
|
0.1
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|||||
Other transactions
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|||||
Balance at March 31, 2019
|
164.9
|
|
|
164.9
|
|
|
2,239.2
|
|
|
(656.9
|
)
|
|
1,090.4
|
|
|
2,837.6
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20.0
|
)
|
|
(20.0
|
)
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.5
|
)
|
|
—
|
|
|
(3.5
|
)
|
|||||
Dividends paid:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock ($0.20 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32.7
|
)
|
|
(32.7
|
)
|
|||||
Common stock repurchased and retired
|
(0.6
|
)
|
|
(0.6
|
)
|
|
(12.9
|
)
|
|
—
|
|
|
—
|
|
|
(13.5
|
)
|
|||||
Common stock issued for:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stock options exercised
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||
Other transactions
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|||||
Balance at June 30, 2019
|
164.3
|
|
|
$
|
164.3
|
|
|
$
|
2,229.2
|
|
|
$
|
(660.4
|
)
|
|
$
|
1,037.7
|
|
|
$
|
2,770.8
|
|
|
Six Months Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Operating Activities
|
|
|
|
||||
Net (loss) income
|
$
|
(200.1
|
)
|
|
$
|
21.7
|
|
Adjustments to reconcile net (loss) income to net cash and cash equivalents provided by (used for) operating activities:
|
|
|
|
||||
Gain on disposition of non-consolidated affiliate
|
—
|
|
|
(11.2
|
)
|
||
Stock-based compensation
|
4.1
|
|
|
5.3
|
|
||
Depreciation and amortization
|
283.0
|
|
|
304.3
|
|
||
Deferred income taxes
|
(52.1
|
)
|
|
(16.6
|
)
|
||
Qualified pension plan contributions
|
(1.2
|
)
|
|
(0.7
|
)
|
||
Qualified pension plan income
|
(5.9
|
)
|
|
(4.6
|
)
|
||
Change in:
|
|
|
|
||||
Receivables
|
64.1
|
|
|
(70.8
|
)
|
||
Income taxes receivable/payable
|
(15.8
|
)
|
|
(30.6
|
)
|
||
Inventories
|
75.7
|
|
|
9.6
|
|
||
Other current assets
|
(18.3
|
)
|
|
2.4
|
|
||
Accounts payable and accrued liabilities
|
(74.9
|
)
|
|
(1.9
|
)
|
||
Other assets
|
0.6
|
|
|
(2.3
|
)
|
||
Other noncurrent liabilities
|
(5.6
|
)
|
|
29.4
|
|
||
Other operating activities
|
1.8
|
|
|
2.1
|
|
||
Net operating activities
|
55.4
|
|
|
236.1
|
|
||
Investing Activities
|
|
|
|
||||
Capital expenditures
|
(166.5
|
)
|
|
(191.3
|
)
|
||
Payments under ethylene long-term supply contracts
|
(461.0
|
)
|
|
—
|
|
||
Payments under other long-term supply contracts
|
(75.8
|
)
|
|
—
|
|
||
Proceeds from disposition of non-consolidated affiliate
|
—
|
|
|
20.0
|
|
||
Net investing activities
|
(703.3
|
)
|
|
(171.3
|
)
|
||
Financing Activities
|
|
|
|
||||
Long-term debt:
|
|
|
|
||||
Borrowings
|
1,163.2
|
|
|
25.0
|
|
||
Repayments
|
(425.8
|
)
|
|
(50.6
|
)
|
||
Common stock repurchased and retired
|
—
|
|
|
(26.7
|
)
|
||
Stock options exercised
|
0.5
|
|
|
1.5
|
|
||
Dividends paid
|
(63.1
|
)
|
|
(65.7
|
)
|
||
Debt issuance costs
|
(9.6
|
)
|
|
—
|
|
||
Net financing activities
|
665.2
|
|
|
(116.5
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(0.3
|
)
|
|
(0.2
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
17.0
|
|
|
(51.9
|
)
|
||
Cash and cash equivalents, beginning of year
|
220.9
|
|
|
178.8
|
|
||
Cash and cash equivalents, end of period
|
$
|
237.9
|
|
|
$
|
126.9
|
|
Cash paid for interest and income taxes:
|
|
|
|
||||
Interest, net
|
$
|
122.3
|
|
|
$
|
108.2
|
|
Income taxes, net of refunds
|
$
|
3.1
|
|
|
$
|
44.3
|
|
Non-cash investing activities:
|
|
|
|
||||
Decrease in capital expenditures included in accounts payable and accrued liabilities
|
$
|
38.6
|
|
|
$
|
10.1
|
|
|
Employee severance and related benefit costs
|
|
Lease and other contract termination costs
|
|
Facility exit costs
|
|
Total
|
||||||||
|
($ in millions)
|
||||||||||||||
Balance at January 1, 2019
|
$
|
1.5
|
|
|
$
|
6.0
|
|
|
$
|
0.7
|
|
|
$
|
8.2
|
|
Restructuring charges:
|
|
|
|
|
|
|
|
||||||||
First quarter
|
1.4
|
|
|
0.1
|
|
|
2.5
|
|
|
4.0
|
|
||||
Second quarter
|
0.4
|
|
|
0.2
|
|
|
3.2
|
|
|
3.8
|
|
||||
Amounts utilized
|
(3.3
|
)
|
|
(1.0
|
)
|
|
(5.5
|
)
|
|
(9.8
|
)
|
||||
Balance at June 30, 2019
|
$
|
—
|
|
|
$
|
5.3
|
|
|
$
|
0.9
|
|
|
$
|
6.2
|
|
Balance at January 1, 2020
|
$
|
—
|
|
|
$
|
3.1
|
|
|
$
|
—
|
|
|
$
|
3.1
|
|
Restructuring charges:
|
|
|
|
|
|
|
|
||||||||
First quarter
|
0.1
|
|
|
0.1
|
|
|
1.5
|
|
|
1.7
|
|
||||
Second quarter
|
—
|
|
|
—
|
|
|
1.7
|
|
|
1.7
|
|
||||
Amounts utilized
|
(0.1
|
)
|
|
(0.6
|
)
|
|
(3.2
|
)
|
|
(3.9
|
)
|
||||
Balance at June 30, 2020
|
$
|
—
|
|
|
$
|
2.6
|
|
|
$
|
—
|
|
|
$
|
2.6
|
|
|
Chlor Alkali Products and Vinyls
|
|
Winchester
|
|
Total
|
||||||||||
|
Freeport
|
|
Capacity Reductions
|
|
|
||||||||||
|
($ in millions)
|
||||||||||||||
Write-off of equipment and facility
|
$
|
58.9
|
|
|
$
|
78.1
|
|
|
$
|
2.6
|
|
|
$
|
139.6
|
|
Employee severance and related benefit costs
|
—
|
|
|
6.7
|
|
|
2.7
|
|
|
9.4
|
|
||||
Facility exit costs
|
0.5
|
|
|
50.9
|
|
|
0.2
|
|
|
51.6
|
|
||||
Employee relocation costs
|
—
|
|
|
1.7
|
|
|
—
|
|
|
1.7
|
|
||||
Lease and other contract termination costs
|
—
|
|
|
41.0
|
|
|
0.4
|
|
|
41.4
|
|
||||
Total cumulative restructuring charges
|
$
|
59.4
|
|
|
$
|
178.4
|
|
|
$
|
5.9
|
|
|
$
|
243.7
|
|
|
June 30,
|
||||||
|
2020
|
|
2019
|
||||
|
($ in millions)
|
||||||
Balance at beginning of year
|
$
|
63.1
|
|
|
$
|
132.4
|
|
Gross receivables sold
|
457.5
|
|
|
522.4
|
|
||
Payments received from customers on sold accounts
|
(458.9
|
)
|
|
(556.1
|
)
|
||
Balance at end of period
|
$
|
61.7
|
|
|
$
|
98.7
|
|
|
June 30,
|
||||||
|
2020
|
|
2019
|
||||
|
($ in millions)
|
||||||
Balance at beginning of year
|
$
|
11.9
|
|
|
$
|
12.9
|
|
Provisions charged
|
0.7
|
|
|
0.9
|
|
||
Write-offs, net of recoveries
|
—
|
|
|
(2.1
|
)
|
||
Foreign currency translation adjustment
|
(0.1
|
)
|
|
0.2
|
|
||
Balance at end of period
|
$
|
12.5
|
|
|
$
|
11.9
|
|
|
June 30, 2020
|
|
December 31,
2019 |
|
June 30, 2019
|
||||||
|
($ in millions)
|
||||||||||
Supplies
|
$
|
81.0
|
|
|
$
|
80.5
|
|
|
$
|
74.6
|
|
Raw materials
|
74.3
|
|
|
74.9
|
|
|
73.1
|
|
|||
Work in process
|
114.9
|
|
|
140.3
|
|
|
140.6
|
|
|||
Finished goods
|
392.7
|
|
|
449.5
|
|
|
469.8
|
|
|||
|
662.9
|
|
|
745.2
|
|
|
758.1
|
|
|||
LIFO reserve
|
(43.8
|
)
|
|
(49.5
|
)
|
|
(59.2
|
)
|
|||
Inventories, net
|
$
|
619.1
|
|
|
$
|
695.7
|
|
|
$
|
698.9
|
|
|
June 30, 2020
|
|
December 31, 2019
|
|
June 30, 2019
|
||||||
|
($ in millions)
|
||||||||||
Supply contracts
|
$
|
1,137.9
|
|
|
$
|
1,112.6
|
|
|
$
|
1,131.4
|
|
Other
|
41.8
|
|
|
56.5
|
|
|
43.1
|
|
|||
Other assets
|
$
|
1,179.7
|
|
|
$
|
1,169.1
|
|
|
$
|
1,174.5
|
|
|
Chlor Alkali Products and Vinyls
|
|
Epoxy
|
|
Total
|
||||||
|
($ in millions)
|
||||||||||
Balance at January 1, 2019
|
$
|
1,832.6
|
|
|
$
|
287.0
|
|
|
$
|
2,119.6
|
|
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at June 30, 2019
|
$
|
1,832.6
|
|
|
$
|
287.0
|
|
|
$
|
2,119.6
|
|
Balance at January 1, 2020
|
$
|
1,832.7
|
|
|
$
|
287.0
|
|
|
2,119.7
|
|
|
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at June 30, 2020
|
$
|
1,832.7
|
|
|
$
|
287.0
|
|
|
$
|
2,119.7
|
|
|
|
June 30, 2020
|
|
December 31, 2019
|
|
June 30, 2019
|
||||||||||||||||||||||||||||||
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||||||||
|
|
($ in millions)
|
||||||||||||||||||||||||||||||||||
Customers, customer contracts and relationships
|
|
$
|
673.3
|
|
|
$
|
(285.3
|
)
|
|
$
|
388.0
|
|
|
$
|
673.5
|
|
|
$
|
(260.9
|
)
|
|
$
|
412.6
|
|
|
$
|
674.4
|
|
|
$
|
(236.3
|
)
|
|
$
|
438.1
|
|
Trade name
|
|
7.0
|
|
|
(6.7
|
)
|
|
0.3
|
|
|
7.0
|
|
|
(6.0
|
)
|
|
1.0
|
|
|
7.0
|
|
|
(5.3
|
)
|
|
1.7
|
|
|||||||||
Acquired technology
|
|
85.1
|
|
|
(57.7
|
)
|
|
27.4
|
|
|
85.1
|
|
|
(51.8
|
)
|
|
33.3
|
|
|
85.3
|
|
|
(45.7
|
)
|
|
39.6
|
|
|||||||||
Other
|
|
1.8
|
|
|
(0.6
|
)
|
|
1.2
|
|
|
1.8
|
|
|
(0.6
|
)
|
|
1.2
|
|
|
1.8
|
|
|
(0.6
|
)
|
|
1.2
|
|
|||||||||
Total intangible assets
|
|
$
|
767.2
|
|
|
$
|
(350.3
|
)
|
|
$
|
416.9
|
|
|
$
|
767.4
|
|
|
$
|
(319.3
|
)
|
|
$
|
448.1
|
|
|
$
|
768.5
|
|
|
$
|
(287.9
|
)
|
|
$
|
480.6
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Computation of Net (Loss) Income per Share
|
(In millions, except per share data)
|
||||||||||||||
Net (loss) income
|
$
|
(120.1
|
)
|
|
$
|
(20.0
|
)
|
|
$
|
(200.1
|
)
|
|
$
|
21.7
|
|
Basic shares
|
157.9
|
|
|
164.6
|
|
|
157.8
|
|
|
164.8
|
|
||||
Basic net (loss) income per share
|
$
|
(0.76
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(1.27
|
)
|
|
$
|
0.13
|
|
Diluted shares:
|
|
|
|
|
|
|
|
||||||||
Basic shares
|
157.9
|
|
|
164.6
|
|
|
157.8
|
|
|
164.8
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
||||
Diluted shares
|
157.9
|
|
|
164.6
|
|
|
157.8
|
|
|
165.7
|
|
||||
Diluted net (loss) income per share
|
$
|
(0.76
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(1.27
|
)
|
|
$
|
0.13
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
($ in millions)
|
||||||||||||||
Provisions charged to income
|
$
|
2.8
|
|
|
$
|
22.0
|
|
|
$
|
5.4
|
|
|
$
|
23.8
|
|
Recoveries for costs incurred and expensed
|
—
|
|
|
(4.8
|
)
|
|
—
|
|
|
(4.8
|
)
|
||||
Environmental expense
|
$
|
2.8
|
|
|
$
|
17.2
|
|
|
$
|
5.4
|
|
|
$
|
19.0
|
|
|
Foreign Currency Translation Adjustment (net of taxes)
|
|
Unrealized (Losses) Gains on Derivative Contracts (net of taxes)
|
|
Pension and Other Postretirement Benefits (net of taxes)
|
|
Accumulated Other Comprehensive Loss
|
||||||||
|
($ in millions)
|
||||||||||||||
Balance at January 1, 2019
|
$
|
0.7
|
|
|
$
|
1.8
|
|
|
$
|
(653.5
|
)
|
|
$
|
(651.0
|
)
|
Unrealized (losses) gains:
|
|
|
|
|
|
|
|
||||||||
First quarter
|
(8.3
|
)
|
|
(6.6
|
)
|
|
—
|
|
|
(14.9
|
)
|
||||
Second quarter
|
3.3
|
|
|
(22.2
|
)
|
|
—
|
|
|
(18.9
|
)
|
||||
Reclassification adjustments of losses into income:
|
|
|
|
|
|
|
|
||||||||
First quarter
|
—
|
|
|
2.2
|
|
|
7.4
|
|
|
9.6
|
|
||||
Second quarter
|
—
|
|
|
6.3
|
|
|
7.1
|
|
|
13.4
|
|
||||
Tax benefit (provision):
|
|
|
|
|
|
|
|
||||||||
First quarter
|
—
|
|
|
1.1
|
|
|
(1.7
|
)
|
|
(0.6
|
)
|
||||
Second quarter
|
—
|
|
|
3.8
|
|
|
(1.8
|
)
|
|
2.0
|
|
||||
Net change
|
(5.0
|
)
|
|
(15.4
|
)
|
|
11.0
|
|
|
(9.4
|
)
|
||||
Balance at June 30, 2019
|
$
|
(4.3
|
)
|
|
$
|
(13.6
|
)
|
|
$
|
(642.5
|
)
|
|
$
|
(660.4
|
)
|
Balance at January 1, 2020
|
$
|
(8.4
|
)
|
|
$
|
(13.6
|
)
|
|
$
|
(781.4
|
)
|
|
$
|
(803.4
|
)
|
Unrealized (losses) gains:
|
|
|
|
|
|
|
|
||||||||
First quarter
|
(9.0
|
)
|
|
(35.1
|
)
|
|
—
|
|
|
(44.1
|
)
|
||||
Second quarter
|
8.2
|
|
|
29.9
|
|
|
—
|
|
|
38.1
|
|
||||
Reclassification adjustments of losses into income:
|
|
|
|
|
|
|
|
||||||||
First quarter
|
—
|
|
|
11.6
|
|
|
11.9
|
|
|
23.5
|
|
||||
Second quarter
|
—
|
|
|
9.3
|
|
|
11.6
|
|
|
20.9
|
|
||||
Tax benefit (provision):
|
|
|
|
|
|
|
|
||||||||
First quarter
|
—
|
|
|
5.6
|
|
|
(2.7
|
)
|
|
2.9
|
|
||||
Second quarter
|
—
|
|
|
(9.2
|
)
|
|
(2.6
|
)
|
|
(11.8
|
)
|
||||
Net change
|
(0.8
|
)
|
|
12.1
|
|
|
18.2
|
|
|
29.5
|
|
||||
Balance at June 30, 2020
|
$
|
(9.2
|
)
|
|
$
|
(1.5
|
)
|
|
$
|
(763.2
|
)
|
|
$
|
(773.9
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Sales:
|
($ in millions)
|
||||||||||||||
Chlor Alkali Products and Vinyls
|
$
|
651.2
|
|
|
$
|
909.2
|
|
|
$
|
1,411.1
|
|
|
$
|
1,781.4
|
|
Epoxy
|
397.4
|
|
|
518.8
|
|
|
874.6
|
|
|
1,042.8
|
|
||||
Winchester
|
192.6
|
|
|
164.9
|
|
|
380.6
|
|
|
322.1
|
|
||||
Total sales
|
$
|
1,241.2
|
|
|
$
|
1,592.9
|
|
|
$
|
2,666.3
|
|
|
$
|
3,146.3
|
|
Income (loss) before taxes:
|
|
|
|
|
|
|
|
||||||||
Chlor Alkali Products and Vinyls
|
$
|
(57.0
|
)
|
|
$
|
70.7
|
|
|
$
|
(91.3
|
)
|
|
$
|
191.1
|
|
Epoxy
|
(13.0
|
)
|
|
3.9
|
|
|
(1.3
|
)
|
|
14.4
|
|
||||
Winchester
|
16.0
|
|
|
10.1
|
|
|
26.5
|
|
|
19.2
|
|
||||
Corporate/other:
|
|
|
|
|
|
|
|
||||||||
Environmental expense
|
(2.8
|
)
|
|
(17.2
|
)
|
|
(5.4
|
)
|
|
(19.0
|
)
|
||||
Other corporate and unallocated costs
|
(37.4
|
)
|
|
(35.3
|
)
|
|
(68.5
|
)
|
|
(74.4
|
)
|
||||
Restructuring charges
|
(1.7
|
)
|
|
(3.8
|
)
|
|
(3.4
|
)
|
|
(7.8
|
)
|
||||
Other operating income
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
||||
Interest expense
|
(69.4
|
)
|
|
(57.9
|
)
|
|
(132.5
|
)
|
|
(115.3
|
)
|
||||
Interest income
|
0.2
|
|
|
0.3
|
|
|
0.3
|
|
|
0.5
|
|
||||
Non-operating pension income
|
4.9
|
|
|
4.2
|
|
|
9.5
|
|
|
8.1
|
|
||||
Other income
|
—
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
||||
Income (loss) before taxes
|
$
|
(160.1
|
)
|
|
$
|
(24.9
|
)
|
|
$
|
(266.0
|
)
|
|
$
|
28.2
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Sales by geography:
|
($ in millions)
|
||||||||||||||
Chlor Alkali Products and Vinyls
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
450.3
|
|
|
$
|
601.0
|
|
|
$
|
984.2
|
|
|
$
|
1,205.0
|
|
Europe
|
26.8
|
|
|
39.1
|
|
|
57.0
|
|
|
77.7
|
|
||||
Other foreign
|
174.1
|
|
|
269.1
|
|
|
369.9
|
|
|
498.7
|
|
||||
Total Chlor Alkali Products and Vinyls
|
651.2
|
|
|
909.2
|
|
|
1,411.1
|
|
|
1,781.4
|
|
||||
Epoxy
|
|
|
|
|
|
|
|
||||||||
United States
|
122.5
|
|
|
175.4
|
|
|
281.3
|
|
|
339.5
|
|
||||
Europe
|
140.4
|
|
|
222.6
|
|
|
334.8
|
|
|
458.0
|
|
||||
Other foreign
|
134.5
|
|
|
120.8
|
|
|
258.5
|
|
|
245.3
|
|
||||
Total Epoxy
|
397.4
|
|
|
518.8
|
|
|
874.6
|
|
|
1,042.8
|
|
||||
Winchester
|
|
|
|
|
|
|
|
||||||||
United States
|
178.6
|
|
|
146.8
|
|
|
352.7
|
|
|
288.1
|
|
||||
Europe
|
2.3
|
|
|
2.3
|
|
|
4.8
|
|
|
5.1
|
|
||||
Other foreign
|
11.7
|
|
|
15.8
|
|
|
23.1
|
|
|
28.9
|
|
||||
Total Winchester
|
192.6
|
|
|
164.9
|
|
|
380.6
|
|
|
322.1
|
|
||||
Total
|
|
|
|
|
|
|
|
||||||||
United States
|
751.4
|
|
|
923.2
|
|
|
1,618.2
|
|
|
1,832.6
|
|
||||
Europe
|
169.5
|
|
|
264.0
|
|
|
396.6
|
|
|
540.8
|
|
||||
Other foreign
|
320.3
|
|
|
405.7
|
|
|
651.5
|
|
|
772.9
|
|
||||
Total sales
|
$
|
1,241.2
|
|
|
$
|
1,592.9
|
|
|
$
|
2,666.3
|
|
|
$
|
3,146.3
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Sales by product line:
|
($ in millions)
|
||||||||||||||
Chlor Alkali Products and Vinyls
|
|
|
|
|
|
|
|
||||||||
Caustic soda
|
$
|
320.2
|
|
|
$
|
461.0
|
|
|
$
|
680.4
|
|
|
$
|
923.1
|
|
Chlorine, chlorine-derivatives and other co-products
|
331.0
|
|
|
448.2
|
|
|
730.7
|
|
|
858.3
|
|
||||
Total Chlor Alkali Products and Vinyls
|
651.2
|
|
|
909.2
|
|
|
1,411.1
|
|
|
1,781.4
|
|
||||
Epoxy
|
|
|
|
|
|
|
|
||||||||
Aromatics and allylics
|
167.0
|
|
|
234.8
|
|
|
384.4
|
|
|
478.6
|
|
||||
Epoxy resins
|
230.4
|
|
|
284.0
|
|
|
490.2
|
|
|
564.2
|
|
||||
Total Epoxy
|
397.4
|
|
|
518.8
|
|
|
874.6
|
|
|
1,042.8
|
|
||||
Winchester
|
|
|
|
|
|
|
|
||||||||
Commercial
|
135.6
|
|
|
103.6
|
|
|
262.7
|
|
|
210.0
|
|
||||
Military and law enforcement
|
57.0
|
|
|
61.3
|
|
|
117.9
|
|
|
112.1
|
|
||||
Total Winchester
|
192.6
|
|
|
164.9
|
|
|
380.6
|
|
|
322.1
|
|
||||
Total sales
|
$
|
1,241.2
|
|
|
$
|
1,592.9
|
|
|
$
|
2,666.3
|
|
|
$
|
3,146.3
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
($ in millions)
|
||||||||||||||
Stock-based compensation
|
$
|
4.3
|
|
|
$
|
(1.3
|
)
|
|
$
|
6.3
|
|
|
$
|
4.3
|
|
Mark-to-market adjustments
|
(0.1
|
)
|
|
(0.9
|
)
|
|
(3.1
|
)
|
|
0.4
|
|
||||
Total expense (benefit)
|
$
|
4.2
|
|
|
$
|
(2.2
|
)
|
|
$
|
3.2
|
|
|
$
|
4.7
|
|
Grant date
|
2020
|
|
2019
|
||||
Dividend yield
|
4.60
|
%
|
|
3.05
|
%
|
||
Risk-free interest rate
|
1.44
|
%
|
|
2.51
|
%
|
||
Expected volatility
|
36
|
%
|
|
34
|
%
|
||
Expected life (years)
|
6.0
|
|
|
6.0
|
|
||
Weighted-average grant fair value (per option)
|
$
|
3.64
|
|
|
$
|
6.76
|
|
Weighted-average exercise price
|
$
|
17.33
|
|
|
$
|
26.26
|
|
Shares granted
|
2,665,700
|
|
|
1,575,900
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
Three Months Ended June 30,
|
|
Three Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Components of Net Periodic Benefit (Income) Cost
|
($ in millions)
|
||||||||||||||
Service cost
|
$
|
2.7
|
|
|
$
|
2.7
|
|
|
$
|
0.4
|
|
|
$
|
0.3
|
|
Interest cost
|
18.8
|
|
|
23.7
|
|
|
0.3
|
|
|
0.5
|
|
||||
Expected return on plans’ assets
|
(35.6
|
)
|
|
(35.5
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
11.1
|
|
|
6.6
|
|
|
0.5
|
|
|
0.5
|
|
||||
Net periodic benefit (income) cost
|
$
|
(3.0
|
)
|
|
$
|
(2.5
|
)
|
|
$
|
1.2
|
|
|
$
|
1.3
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
Six Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Components of Net Periodic Benefit (Income) Cost
|
($ in millions)
|
||||||||||||||
Service cost
|
$
|
5.7
|
|
|
$
|
5.8
|
|
|
$
|
0.7
|
|
|
$
|
0.6
|
|
Interest cost
|
37.5
|
|
|
47.3
|
|
|
0.7
|
|
|
0.9
|
|
||||
Expected return on plans’ assets
|
(71.2
|
)
|
|
(70.8
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
22.3
|
|
|
13.4
|
|
|
1.2
|
|
|
1.1
|
|
||||
Net periodic benefit (income) cost
|
$
|
(5.7
|
)
|
|
$
|
(4.3
|
)
|
|
$
|
2.6
|
|
|
$
|
2.6
|
|
|
June 30,
|
||||||
|
2020
|
|
2019
|
||||
|
($ in millions)
|
||||||
Balance at beginning of year
|
$
|
22.8
|
|
|
$
|
33.8
|
|
Decreases for prior year tax positions
|
(1.8
|
)
|
|
—
|
|
||
Increases for current year tax positions
|
1.0
|
|
|
1.2
|
|
||
Balance at end of period
|
$
|
22.0
|
|
|
$
|
35.0
|
|
|
Tax Years
|
U.S. federal income tax
|
2016 - 2019
|
U.S. state income tax
|
2006 - 2019
|
Canadian federal income tax
|
2012 - 2019
|
Brazil
|
2014 - 2019
|
Germany
|
2015 - 2019
|
China
|
2014 - 2019
|
The Netherlands
|
2014 - 2019
|
|
June 30, 2020
|
|
December 31, 2019
|
|
June 30, 2019
|
||||||
|
($ in millions)
|
||||||||||
Natural gas
|
$
|
59.3
|
|
|
$
|
62.9
|
|
|
$
|
67.1
|
|
Ethane
|
48.2
|
|
|
51.5
|
|
|
53.4
|
|
|||
Metals
|
117.6
|
|
|
60.2
|
|
|
65.6
|
|
|||
Total notional
|
$
|
225.1
|
|
|
$
|
174.6
|
|
|
$
|
186.1
|
|
|
June 30, 2020
|
|
December 31, 2019
|
|
June 30, 2019
|
||||||
|
($ in millions)
|
||||||||||
Asset derivatives:
|
|
|
|
|
|
||||||
Other current assets
|
|
|
|
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||||
Interest rate contracts - gains
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.7
|
|
Commodity contracts - gains
|
5.1
|
|
|
1.8
|
|
|
0.5
|
|
|||
Commodity contracts - losses
|
(2.8
|
)
|
|
(0.5
|
)
|
|
(0.3
|
)
|
|||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||||
Foreign exchange contracts - gains
|
5.3
|
|
|
1.1
|
|
|
0.4
|
|
|||
Foreign exchange contracts - losses
|
(2.9
|
)
|
|
(0.5
|
)
|
|
(0.3
|
)
|
|||
Total other current assets
|
4.7
|
|
|
1.9
|
|
|
2.0
|
|
|||
Other assets
|
|
|
|
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||||
Commodity contracts - gains
|
3.0
|
|
|
0.8
|
|
|
0.9
|
|
|||
Commodity contracts - losses
|
(0.7
|
)
|
|
(0.1
|
)
|
|
(0.4
|
)
|
|||
Total other assets
|
2.3
|
|
|
0.7
|
|
|
0.5
|
|
|||
Total asset derivatives(1)
|
$
|
7.0
|
|
|
$
|
2.6
|
|
|
$
|
2.5
|
|
Liability derivatives:
|
|
|
|
|
|
||||||
Accrued liabilities
|
|
|
|
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||||
Commodity contracts - losses
|
$
|
8.8
|
|
|
$
|
18.0
|
|
|
$
|
18.8
|
|
Commodity contracts - gains
|
(2.4
|
)
|
|
(0.2
|
)
|
|
(0.5
|
)
|
|||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||||
Foreign exchange contracts - losses
|
1.3
|
|
|
1.4
|
|
|
0.9
|
|
|||
Foreign exchange contracts - gains
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|||
Total accrued liabilities
|
7.6
|
|
|
19.0
|
|
|
19.0
|
|
|||
Other liabilities
|
|
|
|
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||||
Interest rate contracts - losses
|
—
|
|
|
—
|
|
|
9.0
|
|
|||
Commodity contracts - losses
|
0.2
|
|
|
1.8
|
|
|
1.7
|
|
|||
Commodity contracts - gains
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|||
Total other liabilities
|
0.1
|
|
|
1.8
|
|
|
10.7
|
|
|||
Total liability derivatives(1)
|
$
|
7.7
|
|
|
$
|
20.8
|
|
|
$
|
29.7
|
|
(1)
|
Does not include the impact of cash collateral received from or provided to counterparties.
|
|
Fair Value Measurements
|
||||||||||||||
Balance at June 30, 2020
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
($ in millions)
|
||||||||||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
4.6
|
|
|
$
|
—
|
|
|
$
|
4.6
|
|
Foreign exchange contracts
|
—
|
|
|
2.4
|
|
|
—
|
|
|
2.4
|
|
||||
Total assets
|
$
|
—
|
|
|
$
|
7.0
|
|
|
$
|
—
|
|
|
$
|
7.0
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
6.5
|
|
|
$
|
—
|
|
|
$
|
6.5
|
|
Foreign exchange contracts
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
7.7
|
|
|
$
|
—
|
|
|
$
|
7.7
|
|
Balance at December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
||||||||||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
Foreign exchange contracts
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||
Total assets
|
$
|
—
|
|
|
$
|
2.6
|
|
|
$
|
—
|
|
|
$
|
2.6
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
19.6
|
|
|
$
|
—
|
|
|
$
|
19.6
|
|
Foreign exchange contracts
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
20.8
|
|
|
$
|
—
|
|
|
$
|
20.8
|
|
Balance at June 30, 2019
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
1.7
|
|
Commodity contracts
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
||||
Foreign exchange contracts
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Total assets
|
$
|
—
|
|
|
$
|
2.5
|
|
|
$
|
—
|
|
|
$
|
2.5
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
9.0
|
|
|
$
|
—
|
|
|
$
|
9.0
|
|
Commodity contracts
|
—
|
|
|
20.0
|
|
|
—
|
|
|
20.0
|
|
||||
Foreign exchange contracts
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
29.7
|
|
|
$
|
—
|
|
|
$
|
29.7
|
|
|
Fair Value Measurements
|
|
Amount recorded
on balance sheets |
||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|||||||||||
|
($ in millions)
|
||||||||||||||||||
Balance at June 30, 2020
|
$
|
—
|
|
|
$
|
3,901.7
|
|
|
$
|
153.0
|
|
|
$
|
4,054.7
|
|
|
$
|
4,075.7
|
|
Balance at December 31, 2019
|
—
|
|
|
3,417.5
|
|
|
153.0
|
|
|
3,570.5
|
|
|
3,340.8
|
|
|||||
Balance at June 30, 2019
|
—
|
|
|
3,262.6
|
|
|
153.0
|
|
|
3,415.6
|
|
|
3,233.7
|
|
CONDENSED CONSOLIDATING BALANCE SHEETS
|
|||||||||||||||||||
June 30, 2020
|
|||||||||||||||||||
(In millions)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Guarantor
|
|
Issuer
|
|
Subsidiary
Non-Guarantor |
|
Eliminations
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
56.9
|
|
|
$
|
—
|
|
|
$
|
181.0
|
|
|
$
|
—
|
|
|
$
|
237.9
|
|
Receivables, net
|
51.1
|
|
|
—
|
|
|
649.1
|
|
|
—
|
|
|
700.2
|
|
|||||
Intercompany receivables
|
—
|
|
|
—
|
|
|
2,587.6
|
|
|
(2,587.6
|
)
|
|
—
|
|
|||||
Income taxes receivable
|
10.9
|
|
|
—
|
|
|
8.3
|
|
|
(1.6
|
)
|
|
17.6
|
|
|||||
Inventories, net
|
131.4
|
|
|
—
|
|
|
487.7
|
|
|
—
|
|
|
619.1
|
|
|||||
Other current assets
|
259.8
|
|
|
—
|
|
|
1.0
|
|
|
(218.8
|
)
|
|
42.0
|
|
|||||
Total current assets
|
510.1
|
|
|
—
|
|
|
3,914.7
|
|
|
(2,808.0
|
)
|
|
1,616.8
|
|
|||||
Property, plant and equipment, net
|
705.5
|
|
|
—
|
|
|
2,529.4
|
|
|
—
|
|
|
3,234.9
|
|
|||||
Operating lease assets, net
|
44.2
|
|
|
—
|
|
|
327.6
|
|
|
—
|
|
|
371.8
|
|
|||||
Investment in subsidiaries
|
6,942.1
|
|
|
4,262.9
|
|
|
—
|
|
|
(11,205.0
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
58.2
|
|
|
—
|
|
|
38.2
|
|
|
(58.1
|
)
|
|
38.3
|
|
|||||
Other assets
|
23.6
|
|
|
—
|
|
|
1,156.1
|
|
|
—
|
|
|
1,179.7
|
|
|||||
Long-term receivables—affiliates
|
73.4
|
|
|
560.2
|
|
|
—
|
|
|
(633.6
|
)
|
|
—
|
|
|||||
Intangible assets, net
|
0.2
|
|
|
—
|
|
|
416.7
|
|
|
—
|
|
|
416.9
|
|
|||||
Goodwill
|
—
|
|
|
966.3
|
|
|
1,153.4
|
|
|
—
|
|
|
2,119.7
|
|
|||||
Total assets
|
$
|
8,357.3
|
|
|
$
|
5,789.4
|
|
|
$
|
9,536.1
|
|
|
$
|
(14,704.7
|
)
|
|
$
|
8,978.1
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current installments of long-term debt
|
$
|
1.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.8
|
|
Accounts payable
|
—
|
|
|
—
|
|
|
526.3
|
|
|
(5.5
|
)
|
|
520.8
|
|
|||||
Intercompany payables
|
2,587.6
|
|
|
—
|
|
|
—
|
|
|
(2,587.6
|
)
|
|
—
|
|
|||||
Income taxes payable
|
—
|
|
|
—
|
|
|
9.3
|
|
|
(1.6
|
)
|
|
7.7
|
|
|||||
Current operating lease liabilities
|
8.4
|
|
|
—
|
|
|
68.9
|
|
|
—
|
|
|
77.3
|
|
|||||
Accrued liabilities
|
188.8
|
|
|
—
|
|
|
345.4
|
|
|
(215.5
|
)
|
|
318.7
|
|
|||||
Total current liabilities
|
2,786.6
|
|
|
—
|
|
|
949.9
|
|
|
(2,810.2
|
)
|
|
926.3
|
|
|||||
Long-term debt
|
2,623.9
|
|
|
1,209.7
|
|
|
240.3
|
|
|
—
|
|
|
4,073.9
|
|
|||||
Operating lease liabilities
|
37.0
|
|
|
—
|
|
|
262.2
|
|
|
—
|
|
|
299.2
|
|
|||||
Accrued pension liability
|
463.2
|
|
|
—
|
|
|
304.8
|
|
|
—
|
|
|
768.0
|
|
|||||
Deferred income taxes
|
—
|
|
|
6.6
|
|
|
466.0
|
|
|
(58.1
|
)
|
|
414.5
|
|
|||||
Long-term payables—affiliates
|
—
|
|
|
—
|
|
|
633.6
|
|
|
(633.6
|
)
|
|
—
|
|
|||||
Other liabilities
|
257.7
|
|
|
5.6
|
|
|
44.0
|
|
|
—
|
|
|
307.3
|
|
|||||
Total liabilities
|
6,168.4
|
|
|
1,221.9
|
|
|
2,900.8
|
|
|
(3,501.9
|
)
|
|
6,789.2
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
157.9
|
|
|
—
|
|
|
14.6
|
|
|
(14.6
|
)
|
|
157.9
|
|
|||||
Additional paid-in capital
|
2,127.0
|
|
|
4,125.7
|
|
|
4,808.2
|
|
|
(8,933.9
|
)
|
|
2,127.0
|
|
|||||
Accumulated other comprehensive loss
|
(773.9
|
)
|
|
—
|
|
|
(7.5
|
)
|
|
7.5
|
|
|
(773.9
|
)
|
|||||
Retained earnings
|
677.9
|
|
|
441.8
|
|
|
1,820.0
|
|
|
(2,261.8
|
)
|
|
677.9
|
|
|||||
Total shareholders’ equity
|
2,188.9
|
|
|
4,567.5
|
|
|
6,635.3
|
|
|
(11,202.8
|
)
|
|
2,188.9
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
8,357.3
|
|
|
$
|
5,789.4
|
|
|
$
|
9,536.1
|
|
|
$
|
(14,704.7
|
)
|
|
$
|
8,978.1
|
|
CONDENSED CONSOLIDATING BALANCE SHEETS
|
|||||||||||||||||||
December 31, 2019
|
|||||||||||||||||||
(In millions)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Guarantor
|
|
Issuer
|
|
Subsidiary
Non-Guarantor |
|
Eliminations
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
11.6
|
|
|
$
|
—
|
|
|
$
|
209.3
|
|
|
$
|
—
|
|
|
$
|
220.9
|
|
Receivables, net
|
78.3
|
|
|
—
|
|
|
686.8
|
|
|
(4.7
|
)
|
|
760.4
|
|
|||||
Intercompany receivables
|
—
|
|
|
—
|
|
|
2,815.5
|
|
|
(2,815.5
|
)
|
|
—
|
|
|||||
Income taxes receivable
|
1.6
|
|
|
—
|
|
|
12.3
|
|
|
—
|
|
|
13.9
|
|
|||||
Inventories, net
|
157.1
|
|
|
—
|
|
|
538.6
|
|
|
—
|
|
|
695.7
|
|
|||||
Other current assets
|
231.4
|
|
|
—
|
|
|
0.2
|
|
|
(208.5
|
)
|
|
23.1
|
|
|||||
Total current assets
|
480.0
|
|
|
—
|
|
|
4,262.7
|
|
|
(3,028.7
|
)
|
|
1,714.0
|
|
|||||
Property, plant and equipment, net
|
699.0
|
|
|
—
|
|
|
2,624.8
|
|
|
—
|
|
|
3,323.8
|
|
|||||
Operating lease assets, net
|
47.4
|
|
|
—
|
|
|
330.4
|
|
|
—
|
|
|
377.8
|
|
|||||
Investment in subsidiaries
|
7,048.2
|
|
|
4,353.5
|
|
|
—
|
|
|
(11,401.7
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
1.7
|
|
|
—
|
|
|
34.7
|
|
|
(1.1
|
)
|
|
35.3
|
|
|||||
Other assets
|
20.9
|
|
|
—
|
|
|
1,148.2
|
|
|
—
|
|
|
1,169.1
|
|
|||||
Long-term receivables—affiliates
|
73.4
|
|
|
605.8
|
|
|
—
|
|
|
(679.2
|
)
|
|
—
|
|
|||||
Intangible assets, net
|
0.3
|
|
|
—
|
|
|
447.8
|
|
|
—
|
|
|
448.1
|
|
|||||
Goodwill
|
—
|
|
|
966.3
|
|
|
1,153.4
|
|
|
—
|
|
|
2,119.7
|
|
|||||
Total assets
|
$
|
8,370.9
|
|
|
$
|
5,925.6
|
|
|
$
|
10,002.0
|
|
|
$
|
(15,110.7
|
)
|
|
$
|
9,187.8
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current installments of long-term debt
|
$
|
2.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
Accounts payable
|
—
|
|
|
—
|
|
|
660.6
|
|
|
(8.7
|
)
|
|
651.9
|
|
|||||
Intercompany payables
|
2,815.5
|
|
|
—
|
|
|
—
|
|
|
(2,815.5
|
)
|
|
—
|
|
|||||
Income taxes payable
|
11.5
|
|
|
—
|
|
|
8.3
|
|
|
—
|
|
|
19.8
|
|
|||||
Current operating lease liabilities
|
8.2
|
|
|
—
|
|
|
71.1
|
|
|
—
|
|
|
79.3
|
|
|||||
Accrued liabilities
|
183.7
|
|
|
—
|
|
|
350.8
|
|
|
(205.4
|
)
|
|
329.1
|
|
|||||
Total current liabilities
|
3,021.0
|
|
|
—
|
|
|
1,090.8
|
|
|
(3,029.6
|
)
|
|
1,082.2
|
|
|||||
Long-term debt
|
2,130.0
|
|
|
1,208.7
|
|
|
—
|
|
|
—
|
|
|
3,338.7
|
|
|||||
Operating lease liabilities
|
40.4
|
|
|
—
|
|
|
263.0
|
|
|
—
|
|
|
303.4
|
|
|||||
Accrued pension liability
|
496.9
|
|
|
—
|
|
|
300.8
|
|
|
—
|
|
|
797.7
|
|
|||||
Deferred income taxes
|
—
|
|
|
6.5
|
|
|
449.2
|
|
|
(1.2
|
)
|
|
454.5
|
|
|||||
Long-term payables—affiliates
|
—
|
|
|
—
|
|
|
679.2
|
|
|
(679.2
|
)
|
|
—
|
|
|||||
Other liabilities
|
265.1
|
|
|
5.6
|
|
|
523.1
|
|
|
—
|
|
|
793.8
|
|
|||||
Total liabilities
|
5,953.4
|
|
|
1,220.8
|
|
|
3,306.1
|
|
|
(3,710.0
|
)
|
|
6,770.3
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Common stock
|
157.7
|
|
|
—
|
|
|
14.6
|
|
|
(14.6
|
)
|
|
157.7
|
|
|||||
Additional paid-in capital
|
2,122.1
|
|
|
4,125.7
|
|
|
4,808.2
|
|
|
(8,933.9
|
)
|
|
2,122.1
|
|
|||||
Accumulated other comprehensive loss
|
(803.4
|
)
|
|
—
|
|
|
(6.5
|
)
|
|
6.5
|
|
|
(803.4
|
)
|
|||||
Retained earnings
|
941.1
|
|
|
579.1
|
|
|
1,879.6
|
|
|
(2,458.7
|
)
|
|
941.1
|
|
|||||
Total shareholders’ equity
|
2,417.5
|
|
|
4,704.8
|
|
|
6,695.9
|
|
|
(11,400.7
|
)
|
|
2,417.5
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
8,370.9
|
|
|
$
|
5,925.6
|
|
|
$
|
10,002.0
|
|
|
$
|
(15,110.7
|
)
|
|
$
|
9,187.8
|
|
CONDENSED CONSOLIDATING BALANCE SHEETS
|
|||||||||||||||||||
June 30, 2019
|
|||||||||||||||||||
(In millions)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Guarantor
|
|
Issuer
|
|
Subsidiary
Non-Guarantor |
|
Eliminations
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
123.2
|
|
|
$
|
—
|
|
|
$
|
126.9
|
|
Receivables, net
|
105.2
|
|
|
—
|
|
|
743.0
|
|
|
—
|
|
|
848.2
|
|
|||||
Intercompany receivables
|
—
|
|
|
—
|
|
|
2,804.3
|
|
|
(2,804.3
|
)
|
|
—
|
|
|||||
Income taxes receivable
|
16.2
|
|
|
—
|
|
|
7.2
|
|
|
—
|
|
|
23.4
|
|
|||||
Inventories, net
|
179.8
|
|
|
—
|
|
|
519.1
|
|
|
—
|
|
|
698.9
|
|
|||||
Other current assets
|
225.9
|
|
|
—
|
|
|
0.8
|
|
|
(197.9
|
)
|
|
28.8
|
|
|||||
Total current assets
|
530.8
|
|
|
—
|
|
|
4,197.6
|
|
|
(3,002.2
|
)
|
|
1,726.2
|
|
|||||
Property, plant and equipment, net
|
687.3
|
|
|
—
|
|
|
2,723.2
|
|
|
—
|
|
|
3,410.5
|
|
|||||
Operating lease assets, net
|
48.5
|
|
|
—
|
|
|
247.3
|
|
|
—
|
|
|
295.8
|
|
|||||
Investment in subsidiaries
|
7,028.6
|
|
|
4,330.9
|
|
|
—
|
|
|
(11,359.5
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
3.9
|
|
|
—
|
|
|
29.0
|
|
|
(4.8
|
)
|
|
28.1
|
|
|||||
Other assets
|
14.3
|
|
|
—
|
|
|
1,160.2
|
|
|
—
|
|
|
1,174.5
|
|
|||||
Long-term receivables—affiliates
|
—
|
|
|
1,141.7
|
|
|
—
|
|
|
(1,141.7
|
)
|
|
—
|
|
|||||
Intangible assets, net
|
0.3
|
|
|
—
|
|
|
480.3
|
|
|
—
|
|
|
480.6
|
|
|||||
Goodwill
|
—
|
|
|
966.3
|
|
|
1,153.3
|
|
|
—
|
|
|
2,119.6
|
|
|||||
Total assets
|
$
|
8,313.7
|
|
|
$
|
6,438.9
|
|
|
$
|
9,990.9
|
|
|
$
|
(15,508.2
|
)
|
|
$
|
9,235.3
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current installments of long-term debt
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
Accounts payable
|
15.9
|
|
|
—
|
|
|
658.6
|
|
|
(5.3
|
)
|
|
669.2
|
|
|||||
Intercompany payables
|
2,804.3
|
|
|
—
|
|
|
—
|
|
|
(2,804.3
|
)
|
|
—
|
|
|||||
Income taxes payable
|
—
|
|
|
—
|
|
|
9.5
|
|
|
—
|
|
|
9.5
|
|
|||||
Current operating lease liabilities
|
8.2
|
|
|
—
|
|
|
63.2
|
|
|
—
|
|
|
71.4
|
|
|||||
Accrued liabilities
|
176.9
|
|
|
—
|
|
|
317.1
|
|
|
(195.1
|
)
|
|
298.9
|
|
|||||
Total current liabilities
|
3,006.4
|
|
|
—
|
|
|
1,048.4
|
|
|
(3,004.7
|
)
|
|
1,050.1
|
|
|||||
Long-term debt
|
1,385.7
|
|
|
1,696.9
|
|
|
150.0
|
|
|
—
|
|
|
3,232.6
|
|
|||||
Operating lease liabilities
|
41.3
|
|
|
—
|
|
|
188.0
|
|
|
—
|
|
|
229.3
|
|
|||||
Accrued pension liability
|
414.6
|
|
|
—
|
|
|
239.0
|
|
|
—
|
|
|
653.6
|
|
|||||
Deferred income taxes
|
—
|
|
|
4.9
|
|
|
506.3
|
|
|
(4.8
|
)
|
|
506.4
|
|
|||||
Long-term payables—affiliates
|
419.6
|
|
|
—
|
|
|
722.1
|
|
|
(1,141.7
|
)
|
|
—
|
|
|||||
Other liabilities
|
275.3
|
|
|
5.5
|
|
|
511.7
|
|
|
—
|
|
|
792.5
|
|
|||||
Total liabilities
|
5,542.9
|
|
|
1,707.3
|
|
|
3,365.5
|
|
|
(4,151.2
|
)
|
|
6,464.5
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Common stock
|
164.3
|
|
|
—
|
|
|
14.6
|
|
|
(14.6
|
)
|
|
164.3
|
|
|||||
Additional paid-in capital
|
2,229.2
|
|
|
4,125.7
|
|
|
4,808.2
|
|
|
(8,933.9
|
)
|
|
2,229.2
|
|
|||||
Accumulated other comprehensive loss
|
(660.4
|
)
|
|
—
|
|
|
(10.0
|
)
|
|
10.0
|
|
|
(660.4
|
)
|
|||||
Retained earnings
|
1,037.7
|
|
|
605.9
|
|
|
1,812.6
|
|
|
(2,418.5
|
)
|
|
1,037.7
|
|
|||||
Total shareholders’ equity
|
2,770.8
|
|
|
4,731.6
|
|
|
6,625.4
|
|
|
(11,357.0
|
)
|
|
2,770.8
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
8,313.7
|
|
|
$
|
6,438.9
|
|
|
$
|
9,990.9
|
|
|
$
|
(15,508.2
|
)
|
|
$
|
9,235.3
|
|
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
|
|||||||||||||||||||
Three Months Ended June 30, 2020
|
|||||||||||||||||||
(In millions)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Guarantor
|
|
Issuer
|
|
Subsidiary
Non-Guarantor |
|
Eliminations
|
|
Total
|
||||||||||
Sales
|
$
|
346.9
|
|
|
$
|
—
|
|
|
$
|
1,023.8
|
|
|
$
|
(129.5
|
)
|
|
$
|
1,241.2
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of goods sold
|
319.5
|
|
|
—
|
|
|
1,045.7
|
|
|
(129.5
|
)
|
|
1,235.7
|
|
|||||
Selling and administration
|
69.0
|
|
|
—
|
|
|
30.7
|
|
|
—
|
|
|
99.7
|
|
|||||
Restructuring charges
|
—
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
1.7
|
|
|||||
Other operating income
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||
Operating loss
|
(41.5
|
)
|
|
—
|
|
|
(54.3
|
)
|
|
—
|
|
|
(95.8
|
)
|
|||||
Equity loss in subsidiaries
|
(65.6
|
)
|
|
(59.5
|
)
|
|
—
|
|
|
125.1
|
|
|
—
|
|
|||||
Interest expense
|
39.3
|
|
|
30.6
|
|
|
0.6
|
|
|
(1.1
|
)
|
|
69.4
|
|
|||||
Interest income
|
1.3
|
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
0.2
|
|
|||||
Non-operating pension income (expense)
|
6.6
|
|
|
—
|
|
|
(1.7
|
)
|
|
—
|
|
|
4.9
|
|
|||||
Loss before taxes
|
(138.5
|
)
|
|
(90.1
|
)
|
|
(56.6
|
)
|
|
125.1
|
|
|
(160.1
|
)
|
|||||
Income tax benefit
|
(18.4
|
)
|
|
(7.2
|
)
|
|
(14.4
|
)
|
|
—
|
|
|
(40.0
|
)
|
|||||
Net loss
|
$
|
(120.1
|
)
|
|
$
|
(82.9
|
)
|
|
$
|
(42.2
|
)
|
|
$
|
125.1
|
|
|
$
|
(120.1
|
)
|
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
|
|||||||||||||||||||
Six Months Ended June 30, 2020
|
|||||||||||||||||||
(In millions)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Guarantor
|
|
Issuer
|
|
Subsidiary
Non-Guarantor |
|
Eliminations
|
|
Total
|
||||||||||
Sales
|
$
|
700.2
|
|
|
$
|
—
|
|
|
$
|
2,225.6
|
|
|
$
|
(259.5
|
)
|
|
$
|
2,666.3
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of goods sold
|
653.1
|
|
|
—
|
|
|
2,216.3
|
|
|
(259.5
|
)
|
|
2,609.9
|
|
|||||
Selling and administration
|
108.9
|
|
|
—
|
|
|
87.5
|
|
|
—
|
|
|
196.4
|
|
|||||
Restructuring charges
|
—
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
3.4
|
|
|||||
Other operating income
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||
Operating loss
|
(61.7
|
)
|
|
—
|
|
|
(81.6
|
)
|
|
—
|
|
|
(143.3
|
)
|
|||||
Equity loss in subsidiaries
|
(114.1
|
)
|
|
(90.6
|
)
|
|
—
|
|
|
204.7
|
|
|
—
|
|
|||||
Interest expense
|
71.7
|
|
|
61.2
|
|
|
3.7
|
|
|
(4.1
|
)
|
|
132.5
|
|
|||||
Interest income
|
3.4
|
|
|
—
|
|
|
1.0
|
|
|
(4.1
|
)
|
|
0.3
|
|
|||||
Non-operating pension income (expense)
|
13.1
|
|
|
—
|
|
|
(3.6
|
)
|
|
—
|
|
|
9.5
|
|
|||||
Loss before taxes
|
(231.0
|
)
|
|
(151.8
|
)
|
|
(87.9
|
)
|
|
204.7
|
|
|
(266.0
|
)
|
|||||
Income tax benefit
|
(30.9
|
)
|
|
(14.5
|
)
|
|
(20.5
|
)
|
|
—
|
|
|
(65.9
|
)
|
|||||
Net loss
|
$
|
(200.1
|
)
|
|
$
|
(137.3
|
)
|
|
$
|
(67.4
|
)
|
|
$
|
204.7
|
|
|
$
|
(200.1
|
)
|
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
|
|||||||||||||||||||
Three Months Ended June 30, 2019
|
|||||||||||||||||||
(In millions)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Guarantor
|
|
Issuer
|
|
Subsidiary
Non-Guarantor |
|
Eliminations
|
|
Total
|
||||||||||
Sales
|
$
|
324.0
|
|
|
$
|
—
|
|
|
$
|
1,397.3
|
|
|
$
|
(128.4
|
)
|
|
$
|
1,592.9
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of goods sold
|
309.8
|
|
|
—
|
|
|
1,282.3
|
|
|
(128.4
|
)
|
|
1,463.7
|
|
|||||
Selling and administration
|
47.8
|
|
|
—
|
|
|
49.2
|
|
|
—
|
|
|
97.0
|
|
|||||
Restructuring charges
|
—
|
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|||||
Other operating (expense) income
|
(2.3
|
)
|
|
—
|
|
|
2.4
|
|
|
—
|
|
|
0.1
|
|
|||||
Operating (loss) income
|
(35.9
|
)
|
|
—
|
|
|
64.4
|
|
|
—
|
|
|
28.5
|
|
|||||
Equity income (loss) in subsidiaries
|
10.9
|
|
|
(8.6
|
)
|
|
—
|
|
|
(2.3
|
)
|
|
—
|
|
|||||
Interest expense
|
18.3
|
|
|
35.7
|
|
|
6.5
|
|
|
(2.6
|
)
|
|
57.9
|
|
|||||
Interest income
|
2.0
|
|
|
—
|
|
|
0.9
|
|
|
(2.6
|
)
|
|
0.3
|
|
|||||
Non-operating pension income (expense)
|
5.7
|
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
4.2
|
|
|||||
Income (loss) before taxes
|
(35.6
|
)
|
|
(44.3
|
)
|
|
57.3
|
|
|
(2.3
|
)
|
|
(24.9
|
)
|
|||||
Income tax (benefit) provision
|
(15.6
|
)
|
|
(8.7
|
)
|
|
19.4
|
|
|
—
|
|
|
(4.9
|
)
|
|||||
Net (loss) income
|
$
|
(20.0
|
)
|
|
$
|
(35.6
|
)
|
|
$
|
37.9
|
|
|
$
|
(2.3
|
)
|
|
$
|
(20.0
|
)
|
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
|
|||||||||||||||||||
Six Months Ended June 30, 2019
|
|||||||||||||||||||
(In millions)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Guarantor
|
|
Issuer
|
|
Subsidiary
Non-Guarantor |
|
Eliminations
|
|
Total
|
||||||||||
Sales
|
$
|
656.8
|
|
|
$
|
—
|
|
|
$
|
2,725.0
|
|
|
$
|
(235.5
|
)
|
|
$
|
3,146.3
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of goods sold
|
613.9
|
|
|
—
|
|
|
2,432.6
|
|
|
(235.5
|
)
|
|
2,811.0
|
|
|||||
Selling and administration
|
99.6
|
|
|
—
|
|
|
104.4
|
|
|
—
|
|
|
204.0
|
|
|||||
Restructuring charges
|
1.4
|
|
|
—
|
|
|
6.4
|
|
|
—
|
|
|
7.8
|
|
|||||
Other operating (expense) income
|
(4.4
|
)
|
|
—
|
|
|
4.6
|
|
|
—
|
|
|
0.2
|
|
|||||
Operating (loss) income
|
(62.5
|
)
|
|
—
|
|
|
186.2
|
|
|
—
|
|
|
123.7
|
|
|||||
Equity income in subsidiaries
|
73.5
|
|
|
44.0
|
|
|
—
|
|
|
(117.5
|
)
|
|
—
|
|
|||||
Interest expense
|
35.7
|
|
|
71.8
|
|
|
11.7
|
|
|
(3.9
|
)
|
|
115.3
|
|
|||||
Interest income
|
2.6
|
|
|
—
|
|
|
1.8
|
|
|
(3.9
|
)
|
|
0.5
|
|
|||||
Non-operating pension income (expense)
|
11.1
|
|
|
—
|
|
|
(3.0
|
)
|
|
—
|
|
|
8.1
|
|
|||||
Other income
|
11.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
|||||
Income (loss) before taxes
|
0.2
|
|
|
(27.8
|
)
|
|
173.3
|
|
|
(117.5
|
)
|
|
28.2
|
|
|||||
Income tax (benefit) provision
|
(21.5
|
)
|
|
(17.4
|
)
|
|
45.4
|
|
|
—
|
|
|
6.5
|
|
|||||
Net income (loss)
|
$
|
21.7
|
|
|
$
|
(10.4
|
)
|
|
$
|
127.9
|
|
|
$
|
(117.5
|
)
|
|
$
|
21.7
|
|
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||||||
Three Months Ended June 30, 2020
|
|||||||||||||||||||
(In millions)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Guarantor
|
|
Issuer
|
|
Subsidiary
Non-Guarantor |
|
Eliminations
|
|
Total
|
||||||||||
Net loss
|
$
|
(120.1
|
)
|
|
$
|
(82.9
|
)
|
|
$
|
(42.2
|
)
|
|
$
|
125.1
|
|
|
$
|
(120.1
|
)
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments, net
|
—
|
|
|
—
|
|
|
8.2
|
|
|
—
|
|
|
8.2
|
|
|||||
Unrealized gains on derivative contracts, net
|
30.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30.0
|
|
|||||
Amortization of prior service costs and actuarial losses, net
|
7.6
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
9.0
|
|
|||||
Total other comprehensive income, net of tax
|
37.6
|
|
|
—
|
|
|
9.6
|
|
|
—
|
|
|
47.2
|
|
|||||
Comprehensive loss
|
$
|
(82.5
|
)
|
|
$
|
(82.9
|
)
|
|
$
|
(32.6
|
)
|
|
$
|
125.1
|
|
|
$
|
(72.9
|
)
|
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||||||
Six Months Ended June 30, 2020
|
|||||||||||||||||||
(In millions)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Guarantor
|
|
Issuer
|
|
Subsidiary
Non-Guarantor |
|
Eliminations
|
|
Total
|
||||||||||
Net loss
|
$
|
(200.1
|
)
|
|
$
|
(137.3
|
)
|
|
$
|
(67.4
|
)
|
|
$
|
204.7
|
|
|
$
|
(200.1
|
)
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments, net
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
|||||
Unrealized gains on derivative contracts, net
|
12.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.1
|
|
|||||
Amortization of prior service costs and actuarial losses, net
|
15.5
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
|
18.2
|
|
|||||
Total other comprehensive income, net of tax
|
27.6
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
29.5
|
|
|||||
Comprehensive loss
|
$
|
(172.5
|
)
|
|
$
|
(137.3
|
)
|
|
$
|
(65.5
|
)
|
|
$
|
204.7
|
|
|
$
|
(170.6
|
)
|
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||||||
Three Months Ended June 30, 2019
|
|||||||||||||||||||
(In millions)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Guarantor
|
|
Issuer
|
|
Subsidiary
Non-Guarantor |
|
Eliminations
|
|
Total
|
||||||||||
Net (loss) income
|
$
|
(20.0
|
)
|
|
$
|
(35.6
|
)
|
|
$
|
37.9
|
|
|
$
|
(2.3
|
)
|
|
$
|
(20.0
|
)
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments, net
|
—
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
3.3
|
|
|||||
Unrealized losses on derivative contracts, net
|
(12.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.1
|
)
|
|||||
Amortization of prior service costs and actuarial losses, net
|
4.8
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
5.3
|
|
|||||
Total other comprehensive (loss) income, net of tax
|
(7.3
|
)
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
(3.5
|
)
|
|||||
Comprehensive (loss) income
|
$
|
(27.3
|
)
|
|
$
|
(35.6
|
)
|
|
$
|
41.7
|
|
|
$
|
(2.3
|
)
|
|
$
|
(23.5
|
)
|
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||||||
Six Months Ended June 30, 2019
|
|||||||||||||||||||
(In millions)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Guarantor
|
|
Issuer
|
|
Subsidiary
Non-Guarantor |
|
Eliminations
|
|
Total
|
||||||||||
Net income (loss)
|
$
|
21.7
|
|
|
$
|
(10.4
|
)
|
|
$
|
127.9
|
|
|
$
|
(117.5
|
)
|
|
$
|
21.7
|
|
Other comprehensive loss, net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments, net
|
—
|
|
|
—
|
|
|
(5.0
|
)
|
|
—
|
|
|
(5.0
|
)
|
|||||
Unrealized losses on derivative contracts, net
|
(15.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.4
|
)
|
|||||
Amortization of prior service costs and actuarial losses, net
|
9.9
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
11.0
|
|
|||||
Total other comprehensive loss, net of tax
|
(5.5
|
)
|
|
—
|
|
|
(3.9
|
)
|
|
—
|
|
|
(9.4
|
)
|
|||||
Comprehensive income (loss)
|
$
|
16.2
|
|
|
$
|
(10.4
|
)
|
|
$
|
124.0
|
|
|
$
|
(117.5
|
)
|
|
$
|
12.3
|
|
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
|
|||||||||||||||||||
Six Months Ended June 30, 2020
|
|||||||||||||||||||
(In millions)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Guarantor
|
|
Issuer
|
|
Subsidiary
Non-Guarantor |
|
Eliminations
|
|
Total
|
||||||||||
Net operating activities
|
$
|
219.1
|
|
|
$
|
—
|
|
|
$
|
(163.7
|
)
|
|
$
|
—
|
|
|
$
|
55.4
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(61.5
|
)
|
|
—
|
|
|
(105.0
|
)
|
|
—
|
|
|
(166.5
|
)
|
|||||
Payments under ethylene long-term supply contracts
|
—
|
|
|
—
|
|
|
(461.0
|
)
|
|
—
|
|
|
(461.0
|
)
|
|||||
Payments under other long-term supply contracts
|
—
|
|
|
—
|
|
|
(75.8
|
)
|
|
—
|
|
|
(75.8
|
)
|
|||||
Net investing activities
|
(61.5
|
)
|
|
—
|
|
|
(641.8
|
)
|
|
—
|
|
|
(703.3
|
)
|
|||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings
|
672.5
|
|
|
—
|
|
|
490.7
|
|
|
—
|
|
|
1,163.2
|
|
|||||
Repayments
|
(175.8
|
)
|
|
—
|
|
|
(250.0
|
)
|
|
—
|
|
|
(425.8
|
)
|
|||||
Stock options exercised
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|||||
Dividends paid
|
(63.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63.1
|
)
|
|||||
Debt issuance costs
|
(9.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.6
|
)
|
|||||
Intercompany financing activities
|
(536.8
|
)
|
|
—
|
|
|
536.8
|
|
|
—
|
|
|
—
|
|
|||||
Net financing activities
|
(112.3
|
)
|
|
—
|
|
|
777.5
|
|
|
—
|
|
|
665.2
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
45.3
|
|
|
—
|
|
|
(28.3
|
)
|
|
—
|
|
|
17.0
|
|
|||||
Cash and cash equivalents, beginning of year
|
11.6
|
|
|
—
|
|
|
209.3
|
|
|
—
|
|
|
220.9
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
56.9
|
|
|
$
|
—
|
|
|
$
|
181.0
|
|
|
$
|
—
|
|
|
$
|
237.9
|
|
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
|
|||||||||||||||||||
Six Months Ended June 30, 2019
|
|||||||||||||||||||
(In millions)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent Guarantor
|
|
Issuer
|
|
Subsidiary
Non-Guarantor |
|
Eliminations
|
|
Total
|
||||||||||
Net operating activities
|
$
|
120.1
|
|
|
$
|
—
|
|
|
$
|
116.0
|
|
|
$
|
—
|
|
|
$
|
236.1
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(86.9
|
)
|
|
—
|
|
|
(104.4
|
)
|
|
—
|
|
|
(191.3
|
)
|
|||||
Proceeds from disposition of non-consolidated affiliate
|
20.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.0
|
|
|||||
Net investing activities
|
(66.9
|
)
|
|
—
|
|
|
(104.4
|
)
|
|
—
|
|
|
(171.3
|
)
|
|||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings
|
—
|
|
|
—
|
|
|
25.0
|
|
|
—
|
|
|
25.0
|
|
|||||
Repayments
|
(0.6
|
)
|
|
(50.0
|
)
|
|
—
|
|
|
—
|
|
|
(50.6
|
)
|
|||||
Common stock repurchased and retired
|
(26.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26.7
|
)
|
|||||
Stock options exercised
|
1.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|||||
Dividends paid
|
(65.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65.7
|
)
|
|||||
Intercompany financing activities
|
(50.0
|
)
|
|
50.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net financing activities
|
(141.5
|
)
|
|
—
|
|
|
25.0
|
|
|
—
|
|
|
(116.5
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(88.3
|
)
|
|
—
|
|
|
36.4
|
|
|
—
|
|
|
(51.9
|
)
|
|||||
Cash and cash equivalents, beginning of year
|
92.0
|
|
|
—
|
|
|
86.8
|
|
|
—
|
|
|
178.8
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
123.2
|
|
|
$
|
—
|
|
|
$
|
126.9
|
|
•
|
Our cash and cash equivalents as of June 30, 2020 were $237.9 million. We have no required bond repayments until August 2022.
|
•
|
In May 2020, we entered into a $1,300.0 million senior secured credit facility (Senior Secured Credit Facility) that amended our existing $2,000.0 million senior credit facility, which provides additional flexibility under our restrictive compliance covenants. The facility includes a senior secured revolving credit facility (Senior Revolving Credit
|
•
|
In May 2020, we issued $500.0 million 9.50% senior notes due 2025 (2025 Notes). Proceeds from the 2025 Notes provided additional liquidity and were used for general corporate purposes.
|
•
|
During the first half of 2020, we amended our Receivables Financing Agreement to expand the borrowing capacity to $250.0 million and had borrowed $240.7 million as of June 30, 2020. We also have the ability to increase our accounts receivable factoring arrangements, which ultimately can accelerate the timing of cash receipts and enhance our cash position. The Receivables Financing Agreement and accounts receivable factoring arrangements do not impact our Senior Secured Credit Facility debt ratio covenants.
|
•
|
We are executing a strategy to improve our working capital and manage our balance sheet to maximize our financial flexibility. During 2020, Olin expects to reduce working capital by approximately $150 million.
|
•
|
We are forecasting capital spending to be $250 million to $275 million in 2020, which is approximately $125 million lower than prior year levels.
|
•
|
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) became law. The CARES Act provides for deferred payment of the employer portion of Social Security taxes through the end of 2020, with 50% of the deferred amount due December 31, 2021 and the remaining 50% due December 31, 2022. This is expected to provide us with approximately $20 million of additional liquidity during 2020.
|
•
|
We believe that we have access to both the high-yield debt and equity markets at this time.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
($ in millions, except per share data)
|
||||||||||||||
Sales
|
$
|
1,241.2
|
|
|
$
|
1,592.9
|
|
|
$
|
2,666.3
|
|
|
$
|
3,146.3
|
|
Cost of goods sold
|
1,235.7
|
|
|
1,463.7
|
|
|
2,609.9
|
|
|
2,811.0
|
|
||||
Gross margin
|
5.5
|
|
|
129.2
|
|
|
56.4
|
|
|
335.3
|
|
||||
Selling and administration
|
99.7
|
|
|
97.0
|
|
|
196.4
|
|
|
204.0
|
|
||||
Restructuring charges
|
1.7
|
|
|
3.8
|
|
|
3.4
|
|
|
7.8
|
|
||||
Other operating income
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
||||
Operating (loss) income
|
(95.8
|
)
|
|
28.5
|
|
|
(143.3
|
)
|
|
123.7
|
|
||||
Interest expense
|
69.4
|
|
|
57.9
|
|
|
132.5
|
|
|
115.3
|
|
||||
Interest income
|
0.2
|
|
|
0.3
|
|
|
0.3
|
|
|
0.5
|
|
||||
Non-operating pension income
|
4.9
|
|
|
4.2
|
|
|
9.5
|
|
|
8.1
|
|
||||
Other income
|
—
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
||||
Income (loss) before taxes
|
(160.1
|
)
|
|
(24.9
|
)
|
|
(266.0
|
)
|
|
28.2
|
|
||||
Income tax (benefit) provision
|
(40.0
|
)
|
|
(4.9
|
)
|
|
(65.9
|
)
|
|
6.5
|
|
||||
Net (loss) income
|
$
|
(120.1
|
)
|
|
$
|
(20.0
|
)
|
|
$
|
(200.1
|
)
|
|
$
|
21.7
|
|
Net (loss) income per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.76
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(1.27
|
)
|
|
$
|
0.13
|
|
Diluted
|
$
|
(0.76
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(1.27
|
)
|
|
$
|
0.13
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Sales:
|
($ in millions)
|
||||||||||||||
Chlor Alkali Products and Vinyls
|
$
|
651.2
|
|
|
$
|
909.2
|
|
|
$
|
1,411.1
|
|
|
$
|
1,781.4
|
|
Epoxy
|
397.4
|
|
|
518.8
|
|
|
874.6
|
|
|
1,042.8
|
|
||||
Winchester
|
192.6
|
|
|
164.9
|
|
|
380.6
|
|
|
322.1
|
|
||||
Total sales
|
$
|
1,241.2
|
|
|
$
|
1,592.9
|
|
|
$
|
2,666.3
|
|
|
$
|
3,146.3
|
|
Income (loss) before taxes:
|
|
|
|
|
|
|
|
||||||||
Chlor Alkali Products and Vinyls
|
$
|
(57.0
|
)
|
|
$
|
70.7
|
|
|
$
|
(91.3
|
)
|
|
$
|
191.1
|
|
Epoxy
|
(13.0
|
)
|
|
3.9
|
|
|
(1.3
|
)
|
|
14.4
|
|
||||
Winchester
|
16.0
|
|
|
10.1
|
|
|
26.5
|
|
|
19.2
|
|
||||
Corporate/other:
|
|
|
|
|
|
|
|
||||||||
Environmental expense(1)
|
(2.8
|
)
|
|
(17.2
|
)
|
|
(5.4
|
)
|
|
(19.0
|
)
|
||||
Other corporate and unallocated costs(2)
|
(37.4
|
)
|
|
(35.3
|
)
|
|
(68.5
|
)
|
|
(74.4
|
)
|
||||
Restructuring charges
|
(1.7
|
)
|
|
(3.8
|
)
|
|
(3.4
|
)
|
|
(7.8
|
)
|
||||
Other operating income
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
||||
Interest expense(3)
|
(69.4
|
)
|
|
(57.9
|
)
|
|
(132.5
|
)
|
|
(115.3
|
)
|
||||
Interest income
|
0.2
|
|
|
0.3
|
|
|
0.3
|
|
|
0.5
|
|
||||
Non-operating pension income
|
4.9
|
|
|
4.2
|
|
|
9.5
|
|
|
8.1
|
|
||||
Other income(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
||||
Income (loss) before taxes
|
$
|
(160.1
|
)
|
|
$
|
(24.9
|
)
|
|
$
|
(266.0
|
)
|
|
$
|
28.2
|
|
(1)
|
Environmental expense for both the three and six months ended June 30, 2019 included $4.8 million of an environmental insurance-related settlement gain.
|
(2)
|
In 2017, we began a multi-year implementation of new enterprise resource planning, manufacturing and engineering systems, and related infrastructure (collectively, the Information Technology Project). Other corporate and unallocated costs included costs associated with the implementation of the Information Technology Project for the three months ended June 30, 2020 and 2019 of $20.4 million and $21.5 million, respectively, and for the six months ended June 30, 2020 and 2019 of $35.1 million and $35.6 million, respectively.
|
(3)
|
Interest expense included $4.2 million for the three months ended June 30, 2019, and $4.0 million and $8.2 million for the six months ended June 30, 2020 and 2019, respectively, related to the 2020 ethylene payment discount.
|
(4)
|
Other income for the six months ended June 30, 2019 included a gain of $11.2 million on the sale of our equity interest in a non-consolidated affiliate.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
($ in millions)
|
||||||||||||||
Provisions charged to income
|
$
|
2.8
|
|
|
$
|
22.0
|
|
|
$
|
5.4
|
|
|
$
|
23.8
|
|
Recoveries for costs incurred and expensed
|
—
|
|
|
(4.8
|
)
|
|
—
|
|
|
(4.8
|
)
|
||||
Environmental expense
|
$
|
2.8
|
|
|
$
|
17.2
|
|
|
$
|
5.4
|
|
|
$
|
19.0
|
|
|
June 30,
|
||||||
|
2020
|
|
2019
|
||||
|
($ in millions)
|
||||||
Balance at beginning of year
|
$
|
139.0
|
|
|
$
|
125.6
|
|
Charges to income
|
5.4
|
|
|
23.8
|
|
||
Remedial and investigatory spending
|
(5.6
|
)
|
|
(5.2
|
)
|
||
Foreign currency translation adjustments
|
(0.2
|
)
|
|
0.2
|
|
||
Balance at end of period
|
$
|
138.6
|
|
|
$
|
144.4
|
|
|
Six Months Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Provided By (Used For)
|
($ in millions)
|
||||||
Net operating activities
|
$
|
55.4
|
|
|
$
|
236.1
|
|
Capital expenditures
|
(166.5
|
)
|
|
(191.3
|
)
|
||
Payments under long-term supply contracts
|
(536.8
|
)
|
|
—
|
|
||
Proceeds from disposition of non-consolidated affiliate
|
—
|
|
|
20.0
|
|
||
Net investing activities
|
(703.3
|
)
|
|
(171.3
|
)
|
||
Long-term debt borrowings (repayments), net
|
737.4
|
|
|
(25.6
|
)
|
||
Common stock repurchased and retired
|
—
|
|
|
(26.7
|
)
|
||
Debt issuance costs
|
(9.6
|
)
|
|
—
|
|
||
Net financing activities
|
665.2
|
|
|
(116.5
|
)
|
•
|
sensitivity to economic, business and market conditions in the United States and overseas, including economic instability or a downturn in the sectors served by us, such as vinyls, urethanes, and pulp and paper;
|
•
|
the cyclical nature of our operating results, particularly declines in average selling prices in the chlor alkali industry and the supply/demand balance for our products, including the impact of excess industry capacity or an imbalance in demand for our chlor alkali products;
|
•
|
our reliance on a limited number of suppliers for specified feedstock and services and our reliance on third-party transportation;
|
•
|
higher-than-expected raw material, energy, transportation and/or logistics costs;
|
•
|
failure to control costs or to achieve targeted cost reductions;
|
•
|
new regulations or public policy changes regarding the transportation of hazardous chemicals and the security of chemical manufacturing facilities;
|
•
|
the occurrence of unexpected manufacturing interruptions and outages, including those occurring as a result of labor disruptions and production hazards;
|
•
|
weak industry conditions affecting our ability to comply with the financial maintenance covenants in our senior secured credit facility;
|
•
|
the negative impact from the COVID-19 pandemic and the global response to the pandemic;
|
•
|
the failure or an interruption of our information technology systems;
|
•
|
complications resulting from our multiple enterprise resource planning systems and the conversion to a new system;
|
•
|
a loss of a substantial customer for either chlorine or caustic soda could cause an imbalance in customer demand for these products;
|
•
|
our substantial amount of indebtedness and significant debt service obligations;
|
•
|
unexpected litigation outcomes;
|
•
|
changes in, or failure to comply with, legislation or government regulations or policies;
|
•
|
costs and other expenditures in excess of those projected for environmental investigation and remediation or other legal proceedings;
|
•
|
failure to attract, retain and motivate key employees;
|
•
|
the effects of any declines in global equity markets on asset values and any declines in interest rates used to value the liabilities in our pension plan;
|
•
|
adverse changes in international markets, including economic, political or regulatory changes;
|
•
|
our long range plan assumptions not being realized causing a non-cash impairment charge of long-lived assets;
|
•
|
adverse conditions in the credit and capital markets, limiting or preventing our ability to borrow or raise capital; and
|
•
|
various risks associated with our transition and subsequent operation of the Lake City U.S. Army Ammunition Plant.
|
(a)
|
Not Applicable.
|
(b)
|
Not Applicable.
|
Period
|
|
Total Number of Shares (or Units) Purchased(1)
|
|
Average Price Paid per Share (or Unit)
|
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Dollar Value of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
|
|
|||
April 1-30, 2020
|
|
—
|
|
|
$—
|
|
—
|
|
|
|
|
|
May 1-31, 2020
|
|
—
|
|
|
—
|
|
—
|
|
|
|
|
|
June 1-30, 2020
|
|
—
|
|
|
—
|
|
—
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
304,075,829
|
|
(1)
|
(1)
|
On April 26, 2018, our board of directors authorized a share repurchase program for the purchase of shares of common stock at an aggregate price of up to $500.0 million. This program will terminate upon the purchase of $500.0 million of our common stock. Through June 30, 2020, 10,072,741 shares had been repurchased at a total value of $195,924,171 and $304,075,829 of common stock remained available for purchase under the program.
|
|
OLIN CORPORATION
|
|
|
(Registrant)
|
|
|
|
|
|
By:
|
/s/ Todd A. Slater
|
|
Vice President and Chief Financial Officer
(Authorized Officer)
|
a.
|
One-half (1/2) of the total target Performance Share Award shall be designated in TSR Performance Shares, and the remaining one-half in Net Income Performance Shares.
|
b.
|
The number of target TSR Performance Shares for each Participant shall be adjusted based upon a comparison of Olin’s TSR during the Performance Cycle with the TSR of the Performance Share Comparison Group over the same period, in accordance with the following chart:
|
c.
|
The number of target Net Income Performance Shares awarded to each Participant for each Net Income Goal shall be adjusted based upon a comparison of Olin’s actual Net Income with that Net Income Goal, in accordance with the following chart:
|
If Olin’s Net Income for the relevant portion of the Performance Cycle is:
|
The number of Net Income Performance Shares paid as a percentage of the target Net Income Performance Shares allocated to that Net Income Goal will be:
|
At least 140% of the relevant Net Income Goal
|
200% of the target number of Net Income Performance Shares allocated to that Net Income Goal
|
More than 100% but less than 140% of the relevant Net Income Goal
|
100% of the target number of Net Income Performance Shares allocated to that Net Income Goal plus a proportionate number of target Net Income Performance Shares determined using linear interpolation
|
100% of the Net Income Goal
|
100% of the target number of Net Income Performance Shares allocated to that Net Income Goal
|
More than 60% but less than 100% of the relevant Net Income Goal
|
50% of the target number of Net Income Performance Shares allocated to that Net Income Goal plus a proportionate number of target Net Income Performance Shares determined using linear interpolation
|
60% of the relevant Net Income Goal
|
50% of the target number of Net Income Performance Shares allocated to that Net Income Goal
|
Less than 60% of the relevant Net Income Goal
|
0
|
d.
|
The Company shall use linear interpolation to determine the number of additional Net Income Performance Shares for performance between 60% and 100% and for 100% and 140% of each Net Income Goal.
|
e.
|
As soon as practicable in the calendar year following the end of the Performance Cycle, the Company shall calculate the number of Performance Shares that vested (the “Final Share Number”) for all Participants whose Performance Share Awards have vested during or at the end of such Performance Cycle.
|
a.
|
Except as otherwise provided by the Committee, the LTIP, this Program or the Performance Share Award certificate, an interest in a Performance Share Award shall vest only if the Participant is an employee of the Company or a subsidiary on the last day of the relevant Performance Cycle.
|
b.
|
If a Participant’s employment with the Company or a subsidiary terminates for cause or without the Company’s consent (other than as the result of the Participant’s death, disability or retirement) before a Performance Share Award has vested, his or her Performance Share Award shall terminate and all rights under such Award shall be forfeited.
|
c.
|
If a Participant’s employment with the Company or a subsidiary terminates as the result of his or her disability, (as that term is defined in Section 409A of the Code or any successor provision), or retirement under any of the Company’s retirement plans before a Performance Share Award has vested, the Participant shall be entitled to a pro rata Performance Share Award, payable solely in cash at the time that the Performance Share Award would otherwise be payable under Section 5 of this Program. The cash payment shall be equal to the Final Share Number calculated in accordance with Sections 3 and 5 of this Program, multiplied by the Fair Market Value on the last day of the relevant Performance Cycle, multiplied by a fraction with a numerator equal to the number of months during the Performance Cycle the Participant was employed by the Company or a subsidiary (rounded up to the nearest whole month) and a denominator of 36.
|
d.
|
If a Participant’s employment with the Company or a subsidiary terminates as the result of his or her death before a Performance Share Award has vested, the Participant shall be entitled to a pro rata Performance Share Award, payable solely in cash within ninety (90) days of the Participant’s death. The cash payment shall be equal to the Participant’s target number of Performance Shares, as the case may be, multiplied by the Fair Market Value on the date of the Participant’s death (or the next trading day, if the Common Stock was not traded on such date), multiplied by a fraction with a numerator equal to the number of months during the Performance Cycle the Participant was employed by the Company or a subsidiary (rounded up to the nearest whole month) and a denominator of 36.
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e.
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If a Participant’s employment with the Company or a subsidiary terminates for any other reason, the Company shall determine the portion, if any, of the Performance Share Award that shall not be forfeited, and the form of payment (cash or shares or a combination) that the Participant shall receive. That determination shall be made by the Committee in the case of any officer, and by the Chairman of the Board, President, Chief Executive Officer, or any Vice President, in the case of any non-officer employee. Notwithstanding this Section 4, payment shall be made pursuant to Section 5 of this Program.
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a.
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As soon as is administratively practicable after the determination of the Final Share Number, but not later than the last day of the calendar year following the Performance Cycle, the Company will (i) issue to each Participant a number of shares of Common Stock equal to one-half of the Final Share Number, rounded down to the nearest whole share if such number is not a whole number, and (ii) pay the Participant in cash an amount equal to the Fair Market Value of one-half of the Final Share Number of shares of Common Stock on the last day of the Performance Cycle, rounded up to the nearest whole share if such number is not a whole number.
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b.
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No dividends or dividend equivalents shall be paid on any Performance Shares.
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c.
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In calculating the number of Performance Shares, all percentages and percentile numbers will be rounded to the nearest one-hundredth of a percent.
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a.
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By acceptance of the Performance Share Award, each Participant agrees that such Award is special compensation, and that any amount paid will not affect:
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i.
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the amount of any pension under any pension or retirement plan in which he or she participates as an employee of Olin,
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ii.
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the amount of coverage under any group life insurance plan in which he or she participates as an employee of Olin, or
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iii.
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the benefits under any other benefit plan of any kind heretofore or hereafter in effect, under which the availability or amount of benefits is related to compensation.
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b.
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The Company will withhold from the distribution of any cash pursuant to Performance Share Awards the amount necessary to satisfy the Participant’s federal, state and local withholding tax requirements. It is the Company’s intention that all income tax liability on Performance Share Awards be deferred in accordance with the applicable requirements of Code Section 409A, until the Participant actually receives such shares or payment thereof.
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c.
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To the extent any provision of the Program (or any Performance Share Award) or action by the Board or Committee would subject any Participant to liability for interest or additional taxes under Code Section 409A, it will be deemed null and void, to the extent permitted by law and deemed advisable by the Committee. It is intended that the Program (and any Performance Share Award) will comply with Code Section 409A, and the Program (and any Performance Share Award) shall be interpreted and construed on a basis consistent with such intent. The Program (and any Performance Share Award) may be amended in any respect deemed necessary (including retroactively) by the Committee in order to preserve compliance with Code Section 409A. The preceding shall not be construed as a guarantee of any particular tax effect for Program benefits or Performance Share Awards. Except as specifically provided in the LTIP, a Participant (or beneficiary) is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on the Participant (or beneficiary) in connection with any distributions to such Participant (or beneficiary) under the Program (including any taxes and penalties under Code Section 409A), and neither Olin nor any Affiliate shall have any obligation to indemnify or otherwise hold a Participant (or beneficiary) harmless from any or all of such taxes or penalties.
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Date:
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August 6, 2020
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/s/ John E. Fischer
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John E. Fischer
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Chairman, President and Chief Executive Officer
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Date:
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August 6, 2020
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/s/ Todd A. Slater
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Todd A. Slater
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Vice President and Chief Financial Officer
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/s/ John E. Fischer
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John E. Fischer
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Chairman, President and Chief Executive Officer
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Dated:
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August 6, 2020
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/s/ Todd A. Slater
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Todd A. Slater
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Vice President and Chief Financial Officer
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Dated:
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August 6, 2020
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