☒
|
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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September 30, 2020
|
|
December 31, 2019
|
|
September 30, 2019
|
||||||
Assets
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
282.7
|
|
|
$
|
220.9
|
|
|
$
|
177.4
|
|
Receivables, net
|
714.9
|
|
|
760.4
|
|
|
849.9
|
|
|||
Income taxes receivable
|
22.0
|
|
|
13.9
|
|
|
17.5
|
|
|||
Inventories, net
|
608.4
|
|
|
695.7
|
|
|
700.7
|
|
|||
Other current assets
|
44.5
|
|
|
23.1
|
|
|
24.1
|
|
|||
Total current assets
|
1,672.5
|
|
|
1,714.0
|
|
|
1,769.6
|
|
|||
Property, plant and equipment (less accumulated depreciation of $3,602.4, $3,268.1 and $3,112.4)
|
3,179.8
|
|
|
3,323.8
|
|
|
3,367.0
|
|
|||
Operating lease assets, net
|
376.0
|
|
|
377.8
|
|
|
314.6
|
|
|||
Deferred income taxes
|
36.3
|
|
|
35.3
|
|
|
30.3
|
|
|||
Other assets
|
1,177.0
|
|
|
1,169.1
|
|
|
1,170.1
|
|
|||
Intangible assets, net
|
404.9
|
|
|
448.1
|
|
|
461.9
|
|
|||
Goodwill
|
1,420.1
|
|
|
2,119.7
|
|
|
2,119.1
|
|
|||
Total assets
|
$
|
8,266.6
|
|
|
$
|
9,187.8
|
|
|
$
|
9,232.6
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Current installments of long-term debt
|
$
|
1.2
|
|
|
$
|
2.1
|
|
|
$
|
1.1
|
|
Accounts payable
|
614.7
|
|
|
651.9
|
|
|
647.7
|
|
|||
Income taxes payable
|
14.2
|
|
|
19.8
|
|
|
9.8
|
|
|||
Current operating lease liabilities
|
76.2
|
|
|
79.3
|
|
|
71.2
|
|
|||
Accrued liabilities
|
335.8
|
|
|
329.1
|
|
|
347.4
|
|
|||
Total current liabilities
|
1,042.1
|
|
|
1,082.2
|
|
|
1,077.2
|
|
|||
Long-term debt
|
3,959.5
|
|
|
3,338.7
|
|
|
3,339.0
|
|
|||
Operating lease liabilities
|
305.0
|
|
|
303.4
|
|
|
248.2
|
|
|||
Accrued pension liability
|
766.5
|
|
|
797.7
|
|
|
622.4
|
|
|||
Deferred income taxes
|
410.9
|
|
|
454.5
|
|
|
515.5
|
|
|||
Other liabilities
|
313.5
|
|
|
793.8
|
|
|
765.6
|
|
|||
Total liabilities
|
6,797.5
|
|
|
6,770.3
|
|
|
6,567.9
|
|
|||
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 159.7 shares
|
157.9
|
|
|
157.7
|
|
|
159.7
|
|
|||
Additional paid-in capital
|
2,129.9
|
|
|
2,122.1
|
|
|
2,128.6
|
|
|||
Accumulated other comprehensive loss
|
(728.2
|
)
|
|
(803.4
|
)
|
|
(672.7
|
)
|
|||
Retained earnings (accumulated deficit)
|
(90.5
|
)
|
|
941.1
|
|
|
1,049.1
|
|
|||
Total shareholders’ equity
|
1,469.1
|
|
|
2,417.5
|
|
|
2,664.7
|
|
|||
Total liabilities and shareholders’ equity
|
$
|
8,266.6
|
|
|
$
|
9,187.8
|
|
|
$
|
9,232.6
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Sales
|
$
|
1,437.6
|
|
|
$
|
1,576.6
|
|
|
$
|
4,103.9
|
|
|
$
|
4,722.9
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold
|
1,307.4
|
|
|
1,357.6
|
|
|
3,917.3
|
|
|
4,168.6
|
|
||||
Selling and administration
|
112.7
|
|
|
110.8
|
|
|
309.1
|
|
|
314.8
|
|
||||
Restructuring charges
|
1.3
|
|
|
4.9
|
|
|
4.7
|
|
|
12.7
|
|
||||
Goodwill impairment
|
699.8
|
|
|
—
|
|
|
699.8
|
|
|
—
|
|
||||
Other operating (expense) income
|
(0.2
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
|
0.3
|
|
||||
Operating (loss) income
|
(683.8
|
)
|
|
103.4
|
|
|
(827.1
|
)
|
|
227.1
|
|
||||
Interest expense
|
74.6
|
|
|
63.9
|
|
|
207.1
|
|
|
179.2
|
|
||||
Interest income
|
0.1
|
|
|
0.2
|
|
|
0.4
|
|
|
0.7
|
|
||||
Non-operating pension income
|
4.9
|
|
|
4.1
|
|
|
14.4
|
|
|
12.2
|
|
||||
Other income
|
—
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
||||
Income (loss) before taxes
|
(753.4
|
)
|
|
43.8
|
|
|
(1,019.4
|
)
|
|
72.0
|
|
||||
Income tax (benefit) provision
|
(16.6
|
)
|
|
(0.4
|
)
|
|
(82.5
|
)
|
|
6.1
|
|
||||
Net (loss) income
|
$
|
(736.8
|
)
|
|
$
|
44.2
|
|
|
$
|
(936.9
|
)
|
|
$
|
65.9
|
|
Net (loss) income per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(4.67
|
)
|
|
$
|
0.27
|
|
|
$
|
(5.94
|
)
|
|
$
|
0.40
|
|
Diluted
|
$
|
(4.67
|
)
|
|
$
|
0.27
|
|
|
$
|
(5.94
|
)
|
|
$
|
0.40
|
|
Average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
157.9
|
|
|
161.9
|
|
|
157.8
|
|
|
163.7
|
|
||||
Diluted
|
157.9
|
|
|
162.8
|
|
|
157.8
|
|
|
164.5
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net (loss) income
|
$
|
(736.8
|
)
|
|
$
|
44.2
|
|
|
$
|
(936.9
|
)
|
|
$
|
65.9
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments, net
|
17.0
|
|
|
(15.7
|
)
|
|
16.2
|
|
|
(20.7
|
)
|
||||
Unrealized gains (losses) on derivative contracts, net
|
19.8
|
|
|
(2.5
|
)
|
|
31.9
|
|
|
(17.9
|
)
|
||||
Amortization of prior service costs and actuarial losses, net
|
8.9
|
|
|
5.9
|
|
|
27.1
|
|
|
16.9
|
|
||||
Total other comprehensive income (loss), net of tax
|
45.7
|
|
|
(12.3
|
)
|
|
75.2
|
|
|
(21.7
|
)
|
||||
Comprehensive (loss) income
|
$
|
(691.1
|
)
|
|
$
|
31.9
|
|
|
$
|
(861.7
|
)
|
|
$
|
44.2
|
|
|
Nine Months Ended September 30, 2020
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Loss
|
|
Retained Earnings (Accumulated Deficit)
|
|
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
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|||||
Other transactions
|
0.1
|
|
|
0.1
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|||||
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
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(736.8
|
)
|
|
(736.8
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
45.7
|
|
|
—
|
|
|
45.7
|
|
|||||
Dividends paid:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock ($0.20 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31.6
|
)
|
|
(31.6
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2.9
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|||||
Balance at September 30, 2020
|
157.9
|
|
|
$
|
157.9
|
|
|
$
|
2,129.9
|
|
|
$
|
(728.2
|
)
|
|
$
|
(90.5
|
)
|
|
$
|
1,469.1
|
|
|
Nine Months Ended September 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
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44.2
|
|
|
44.2
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.3
|
)
|
|
—
|
|
|
(12.3
|
)
|
|||||
Dividends paid:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock ($0.20 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32.8
|
)
|
|
(32.8
|
)
|
|||||
Common stock repurchased and retired
|
(4.8
|
)
|
|
(4.8
|
)
|
|
(104.1
|
)
|
|
—
|
|
|
—
|
|
|
(108.9
|
)
|
|||||
Common stock issued for:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other transactions
|
0.2
|
|
|
0.2
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|||||
Balance at September 30, 2019
|
159.7
|
|
|
$
|
159.7
|
|
|
$
|
2,128.6
|
|
|
$
|
(672.7
|
)
|
|
$
|
1,049.1
|
|
|
$
|
2,664.7
|
|
|
Nine Months Ended September 30,
|
||||||
|
2020
|
|
2019
|
||||
Operating Activities
|
|
|
|
||||
Net (loss) income
|
$
|
(936.9
|
)
|
|
$
|
65.9
|
|
Adjustments to reconcile net (loss) income to net cash and cash equivalents provided by (used for) operating activities:
|
|
|
|
||||
Goodwill impairment
|
699.8
|
|
|
—
|
|
||
Gain on disposition of non-consolidated affiliate
|
—
|
|
|
(11.2
|
)
|
||
Stock-based compensation
|
7.1
|
|
|
8.9
|
|
||
Depreciation and amortization
|
425.1
|
|
|
460.3
|
|
||
Deferred income taxes
|
(61.6
|
)
|
|
(11.0
|
)
|
||
Qualified pension plan contributions
|
(1.3
|
)
|
|
(13.2
|
)
|
||
Qualified pension plan income
|
(8.7
|
)
|
|
(6.9
|
)
|
||
Change in:
|
|
|
|
||||
Receivables
|
57.0
|
|
|
(77.4
|
)
|
||
Income taxes receivable/payable
|
(14.0
|
)
|
|
(24.1
|
)
|
||
Inventories
|
90.5
|
|
|
2.5
|
|
||
Other current assets
|
(7.2
|
)
|
|
4.9
|
|
||
Accounts payable and accrued liabilities
|
52.9
|
|
|
14.2
|
|
||
Other assets
|
(4.1
|
)
|
|
(4.8
|
)
|
||
Other noncurrent liabilities
|
0.9
|
|
|
12.9
|
|
||
Other operating activities
|
5.8
|
|
|
(4.4
|
)
|
||
Net operating activities
|
305.3
|
|
|
416.6
|
|
||
Investing Activities
|
|
|
|
||||
Capital expenditures
|
(223.3
|
)
|
|
(271.8
|
)
|
||
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
|
(760.1
|
)
|
|
(251.8
|
)
|
||
Financing Activities
|
|
|
|
||||
Long-term debt:
|
|
|
|
||||
Borrowings
|
1,212.5
|
|
|
825.0
|
|
||
Repayments
|
(591.8
|
)
|
|
(744.1
|
)
|
||
Common stock repurchased and retired
|
—
|
|
|
(135.6
|
)
|
||
Stock options exercised
|
0.5
|
|
|
1.5
|
|
||
Dividends paid
|
(94.7
|
)
|
|
(98.5
|
)
|
||
Debt issuance costs
|
(9.9
|
)
|
|
(14.4
|
)
|
||
Net financing activities
|
516.6
|
|
|
(166.1
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
(0.1
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
61.8
|
|
|
(1.4
|
)
|
||
Cash and cash equivalents, beginning of year
|
220.9
|
|
|
178.8
|
|
||
Cash and cash equivalents, end of period
|
$
|
282.7
|
|
|
$
|
177.4
|
|
Cash paid for interest and income taxes:
|
|
|
|
||||
Interest, net
|
$
|
179.3
|
|
|
$
|
135.2
|
|
Income taxes, net of refunds
|
$
|
(2.5
|
)
|
|
$
|
47.6
|
|
Non-cash investing activities:
|
|
|
|
||||
Decrease (increase) in capital expenditures included in accounts payable and accrued liabilities
|
$
|
46.2
|
|
|
$
|
(4.6
|
)
|
|
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
|
|
||||
Third quarter
|
0.3
|
|
|
0.1
|
|
|
4.5
|
|
|
4.9
|
|
||||
Amounts utilized
|
(3.4
|
)
|
|
(1.5
|
)
|
|
(10.8
|
)
|
|
(15.7
|
)
|
||||
Balance at September 30, 2019
|
$
|
0.2
|
|
|
$
|
4.9
|
|
|
$
|
0.1
|
|
|
$
|
5.2
|
|
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
|
|
||||
Third quarter
|
—
|
|
|
0.3
|
|
|
1.0
|
|
|
1.3
|
|
||||
Amounts utilized
|
(0.1
|
)
|
|
(1.0
|
)
|
|
(4.2
|
)
|
|
(5.3
|
)
|
||||
Balance at September 30, 2020
|
$
|
—
|
|
|
$
|
2.5
|
|
|
$
|
—
|
|
|
$
|
2.5
|
|
|
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
|
0.8
|
|
|
51.6
|
|
|
0.2
|
|
|
52.6
|
|
||||
Employee relocation costs
|
—
|
|
|
1.7
|
|
|
—
|
|
|
1.7
|
|
||||
Lease and other contract termination costs
|
—
|
|
|
41.3
|
|
|
0.4
|
|
|
41.7
|
|
||||
Total cumulative restructuring charges
|
$
|
59.7
|
|
|
$
|
179.4
|
|
|
$
|
5.9
|
|
|
$
|
245.0
|
|
|
September 30,
|
||||||
|
2020
|
|
2019
|
||||
|
($ in millions)
|
||||||
Balance at beginning of year
|
$
|
63.1
|
|
|
$
|
132.4
|
|
Gross receivables sold
|
614.9
|
|
|
778.9
|
|
||
Payments received from customers on sold accounts
|
(584.9
|
)
|
|
(803.9
|
)
|
||
Balance at end of period
|
$
|
93.1
|
|
|
$
|
107.4
|
|
|
September 30,
|
||||||
|
2020
|
|
2019
|
||||
|
($ in millions)
|
||||||
Balance at beginning of year
|
$
|
11.9
|
|
|
$
|
12.9
|
|
Provisions charged
|
0.7
|
|
|
1.1
|
|
||
Write-offs, net of recoveries
|
(0.5
|
)
|
|
(2.1
|
)
|
||
Balance at end of period
|
$
|
12.1
|
|
|
$
|
11.9
|
|
|
September 30, 2020
|
|
December 31,
2019 |
|
September 30, 2019
|
||||||
|
($ in millions)
|
||||||||||
Supplies
|
$
|
107.6
|
|
|
$
|
105.6
|
|
|
$
|
99.4
|
|
Raw materials
|
86.4
|
|
|
69.2
|
|
|
60.9
|
|
|||
Work in process
|
96.3
|
|
|
120.9
|
|
|
123.1
|
|
|||
Finished goods
|
363.8
|
|
|
449.5
|
|
|
474.9
|
|
|||
|
654.1
|
|
|
745.2
|
|
|
758.3
|
|
|||
LIFO reserve
|
(45.7
|
)
|
|
(49.5
|
)
|
|
(57.6
|
)
|
|||
Inventories, net
|
$
|
608.4
|
|
|
$
|
695.7
|
|
|
$
|
700.7
|
|
|
September 30, 2020
|
|
December 31, 2019
|
|
September 30, 2019
|
||||||
|
($ in millions)
|
||||||||||
Supply contracts
|
$
|
1,129.7
|
|
|
$
|
1,112.6
|
|
|
$
|
1,122.0
|
|
Other
|
47.3
|
|
|
56.5
|
|
|
48.1
|
|
|||
Other assets
|
$
|
1,177.0
|
|
|
$
|
1,169.1
|
|
|
$
|
1,170.1
|
|
|
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
|
(0.4
|
)
|
|
(0.1
|
)
|
|
(0.5
|
)
|
|||
Balance at September 30, 2019
|
$
|
1,832.2
|
|
|
$
|
286.9
|
|
|
$
|
2,119.1
|
|
Balance at January 1, 2020
|
$
|
1,832.7
|
|
|
$
|
287.0
|
|
|
$
|
2,119.7
|
|
Goodwill impairment
|
(557.6
|
)
|
|
(142.2
|
)
|
|
(699.8
|
)
|
|||
Foreign currency translation adjustment
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||
Balance at September 30, 2020
|
$
|
1,275.3
|
|
|
$
|
144.8
|
|
|
$
|
1,420.1
|
|
|
|
September 30, 2020
|
|
December 31, 2019
|
|
September 30, 2019
|
||||||||||||||||||||||||||||||
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||||||||
|
|
($ in millions)
|
||||||||||||||||||||||||||||||||||
Customers, customer contracts and relationships
|
|
$
|
676.5
|
|
|
$
|
(299.2
|
)
|
|
$
|
377.3
|
|
|
$
|
673.5
|
|
|
$
|
(260.9
|
)
|
|
$
|
412.6
|
|
|
$
|
671.1
|
|
|
$
|
(248.0
|
)
|
|
$
|
423.1
|
|
Trade name
|
|
7.1
|
|
|
(7.1
|
)
|
|
—
|
|
|
7.0
|
|
|
(6.0
|
)
|
|
1.0
|
|
|
7.0
|
|
|
(5.6
|
)
|
|
1.4
|
|
|||||||||
Acquired technology
|
|
87.7
|
|
|
(61.3
|
)
|
|
26.4
|
|
|
85.1
|
|
|
(51.8
|
)
|
|
33.3
|
|
|
84.7
|
|
|
(48.5
|
)
|
|
36.2
|
|
|||||||||
Other
|
|
1.8
|
|
|
(0.6
|
)
|
|
1.2
|
|
|
1.8
|
|
|
(0.6
|
)
|
|
1.2
|
|
|
1.8
|
|
|
(0.6
|
)
|
|
1.2
|
|
|||||||||
Total intangible assets
|
|
$
|
773.1
|
|
|
$
|
(368.2
|
)
|
|
$
|
404.9
|
|
|
$
|
767.4
|
|
|
$
|
(319.3
|
)
|
|
$
|
448.1
|
|
|
$
|
764.6
|
|
|
$
|
(302.7
|
)
|
|
$
|
461.9
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Computation of Net (Loss) Income per Share
|
(In millions, except per share data)
|
||||||||||||||
Net (loss) income
|
$
|
(736.8
|
)
|
|
$
|
44.2
|
|
|
$
|
(936.9
|
)
|
|
$
|
65.9
|
|
Basic shares
|
157.9
|
|
|
161.9
|
|
|
157.8
|
|
|
163.7
|
|
||||
Basic net (loss) income per share
|
$
|
(4.67
|
)
|
|
$
|
0.27
|
|
|
$
|
(5.94
|
)
|
|
$
|
0.40
|
|
Diluted shares:
|
|
|
|
|
|
|
|
||||||||
Basic shares
|
157.9
|
|
|
161.9
|
|
|
157.8
|
|
|
163.7
|
|
||||
Stock-based compensation
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.8
|
|
||||
Diluted shares
|
157.9
|
|
|
162.8
|
|
|
157.8
|
|
|
164.5
|
|
||||
Diluted net (loss) income per share
|
$
|
(4.67
|
)
|
|
$
|
0.27
|
|
|
$
|
(5.94
|
)
|
|
$
|
0.40
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
($ in millions)
|
||||||||||||||
Provisions charged (credited) to income
|
$
|
12.5
|
|
|
$
|
(0.8
|
)
|
|
$
|
17.9
|
|
|
$
|
23.0
|
|
Recoveries for costs incurred and expensed
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.8
|
)
|
||||
Environmental expense (income)
|
$
|
12.5
|
|
|
$
|
(0.8
|
)
|
|
$
|
17.9
|
|
|
$
|
18.2
|
|
|
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
|
)
|
||||
Third quarter
|
(15.7
|
)
|
|
(12.3
|
)
|
|
—
|
|
|
(28.0
|
)
|
||||
Reclassification adjustments of losses into income:
|
|
|
|
|
|
|
|
||||||||
First quarter
|
—
|
|
|
2.2
|
|
|
7.4
|
|
|
9.6
|
|
||||
Second quarter
|
—
|
|
|
6.3
|
|
|
7.1
|
|
|
13.4
|
|
||||
Third quarter
|
—
|
|
|
9.0
|
|
|
7.3
|
|
|
16.3
|
|
||||
Tax benefit (provision):
|
|
|
|
|
|
|
|
||||||||
First quarter
|
—
|
|
|
1.1
|
|
|
(1.7
|
)
|
|
(0.6
|
)
|
||||
Second quarter
|
—
|
|
|
3.8
|
|
|
(1.8
|
)
|
|
2.0
|
|
||||
Third quarter
|
—
|
|
|
0.8
|
|
|
(1.4
|
)
|
|
(0.6
|
)
|
||||
Net change
|
(20.7
|
)
|
|
(17.9
|
)
|
|
16.9
|
|
|
(21.7
|
)
|
||||
Balance at September 30, 2019
|
$
|
(20.0
|
)
|
|
$
|
(16.1
|
)
|
|
$
|
(636.6
|
)
|
|
$
|
(672.7
|
)
|
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
|
|
||||
Third quarter
|
17.0
|
|
|
26.0
|
|
|
—
|
|
|
43.0
|
|
||||
Reclassification adjustments of losses into income:
|
|
|
|
|
|
|
|
||||||||
First quarter
|
—
|
|
|
11.6
|
|
|
11.9
|
|
|
23.5
|
|
||||
Second quarter
|
—
|
|
|
9.3
|
|
|
11.6
|
|
|
20.9
|
|
||||
Third quarter
|
—
|
|
|
0.1
|
|
|
11.5
|
|
|
11.6
|
|
||||
Tax benefit (provision):
|
|
|
|
|
|
|
|
||||||||
First quarter
|
—
|
|
|
5.6
|
|
|
(2.7
|
)
|
|
2.9
|
|
||||
Second quarter
|
—
|
|
|
(9.2
|
)
|
|
(2.6
|
)
|
|
(11.8
|
)
|
||||
Third quarter
|
—
|
|
|
(6.3
|
)
|
|
(2.6
|
)
|
|
(8.9
|
)
|
||||
Net change
|
16.2
|
|
|
31.9
|
|
|
27.1
|
|
|
75.2
|
|
||||
Balance at September 30, 2020
|
$
|
7.8
|
|
|
$
|
18.3
|
|
|
$
|
(754.3
|
)
|
|
$
|
(728.2
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Sales:
|
($ in millions)
|
||||||||||||||
Chlor Alkali Products and Vinyls
|
$
|
755.1
|
|
|
$
|
876.3
|
|
|
$
|
2,166.2
|
|
|
$
|
2,657.7
|
|
Epoxy
|
476.1
|
|
|
511.6
|
|
|
1,350.7
|
|
|
1,554.4
|
|
||||
Winchester
|
206.4
|
|
|
188.7
|
|
|
587.0
|
|
|
510.8
|
|
||||
Total sales
|
$
|
1,437.6
|
|
|
$
|
1,576.6
|
|
|
$
|
4,103.9
|
|
|
$
|
4,722.9
|
|
Income (loss) before taxes:
|
|
|
|
|
|
|
|
||||||||
Chlor Alkali Products and Vinyls
|
$
|
37.8
|
|
|
$
|
112.7
|
|
|
$
|
(53.5
|
)
|
|
$
|
303.8
|
|
Epoxy
|
14.9
|
|
|
24.2
|
|
|
13.6
|
|
|
38.6
|
|
||||
Winchester
|
21.0
|
|
|
13.9
|
|
|
47.5
|
|
|
33.1
|
|
||||
Corporate/other:
|
|
|
|
|
|
|
|
||||||||
Environmental (expense) income
|
(12.5
|
)
|
|
0.8
|
|
|
(17.9
|
)
|
|
(18.2
|
)
|
||||
Other corporate and unallocated costs
|
(43.7
|
)
|
|
(43.4
|
)
|
|
(112.2
|
)
|
|
(117.8
|
)
|
||||
Restructuring charges
|
(1.3
|
)
|
|
(4.9
|
)
|
|
(4.7
|
)
|
|
(12.7
|
)
|
||||
Goodwill impairment
|
(699.8
|
)
|
|
—
|
|
|
(699.8
|
)
|
|
—
|
|
||||
Other operating (expense) income
|
(0.2
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
|
0.3
|
|
||||
Interest expense
|
(74.6
|
)
|
|
(63.9
|
)
|
|
(207.1
|
)
|
|
(179.2
|
)
|
||||
Interest income
|
0.1
|
|
|
0.2
|
|
|
0.4
|
|
|
0.7
|
|
||||
Non-operating pension income
|
4.9
|
|
|
4.1
|
|
|
14.4
|
|
|
12.2
|
|
||||
Other income
|
—
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
||||
Income (loss) before taxes
|
$
|
(753.4
|
)
|
|
$
|
43.8
|
|
|
$
|
(1,019.4
|
)
|
|
$
|
72.0
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Sales by geography:
|
($ in millions)
|
||||||||||||||
Chlor Alkali Products and Vinyls
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
596.8
|
|
|
$
|
613.7
|
|
|
$
|
1,581.0
|
|
|
$
|
1,818.7
|
|
Europe
|
22.5
|
|
|
27.2
|
|
|
79.5
|
|
|
104.9
|
|
||||
Other foreign
|
135.8
|
|
|
235.4
|
|
|
505.7
|
|
|
734.1
|
|
||||
Total Chlor Alkali Products and Vinyls
|
755.1
|
|
|
876.3
|
|
|
2,166.2
|
|
|
2,657.7
|
|
||||
Epoxy
|
|
|
|
|
|
|
|
||||||||
United States
|
161.9
|
|
|
177.7
|
|
|
443.2
|
|
|
517.2
|
|
||||
Europe
|
166.9
|
|
|
199.6
|
|
|
501.7
|
|
|
657.6
|
|
||||
Other foreign
|
147.3
|
|
|
134.3
|
|
|
405.8
|
|
|
379.6
|
|
||||
Total Epoxy
|
476.1
|
|
|
511.6
|
|
|
1,350.7
|
|
|
1,554.4
|
|
||||
Winchester
|
|
|
|
|
|
|
|
||||||||
United States
|
182.1
|
|
|
174.5
|
|
|
534.8
|
|
|
462.6
|
|
||||
Europe
|
1.8
|
|
|
2.8
|
|
|
6.6
|
|
|
7.9
|
|
||||
Other foreign
|
22.5
|
|
|
11.4
|
|
|
45.6
|
|
|
40.3
|
|
||||
Total Winchester
|
206.4
|
|
|
188.7
|
|
|
587.0
|
|
|
510.8
|
|
||||
Total
|
|
|
|
|
|
|
|
||||||||
United States
|
940.8
|
|
|
965.9
|
|
|
2,559.0
|
|
|
2,798.5
|
|
||||
Europe
|
191.2
|
|
|
229.6
|
|
|
587.8
|
|
|
770.4
|
|
||||
Other foreign
|
305.6
|
|
|
381.1
|
|
|
957.1
|
|
|
1,154.0
|
|
||||
Total sales
|
$
|
1,437.6
|
|
|
$
|
1,576.6
|
|
|
$
|
4,103.9
|
|
|
$
|
4,722.9
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Sales by product line:
|
($ in millions)
|
||||||||||||||
Chlor Alkali Products and Vinyls
|
|
|
|
|
|
|
|
||||||||
Caustic soda
|
$
|
373.0
|
|
|
$
|
421.7
|
|
|
$
|
1,053.4
|
|
|
$
|
1,344.8
|
|
Chlorine, chlorine-derivatives and other co-products
|
382.1
|
|
|
454.6
|
|
|
1,112.8
|
|
|
1,312.9
|
|
||||
Total Chlor Alkali Products and Vinyls
|
755.1
|
|
|
876.3
|
|
|
2,166.2
|
|
|
2,657.7
|
|
||||
Epoxy
|
|
|
|
|
|
|
|
||||||||
Aromatics and allylics
|
198.3
|
|
|
237.9
|
|
|
582.7
|
|
|
716.5
|
|
||||
Epoxy resins
|
277.8
|
|
|
273.7
|
|
|
768.0
|
|
|
837.9
|
|
||||
Total Epoxy
|
476.1
|
|
|
511.6
|
|
|
1,350.7
|
|
|
1,554.4
|
|
||||
Winchester
|
|
|
|
|
|
|
|
||||||||
Commercial
|
152.4
|
|
|
131.0
|
|
|
415.1
|
|
|
341.0
|
|
||||
Military and law enforcement
|
54.0
|
|
|
57.7
|
|
|
171.9
|
|
|
169.8
|
|
||||
Total Winchester
|
206.4
|
|
|
188.7
|
|
|
587.0
|
|
|
510.8
|
|
||||
Total sales
|
$
|
1,437.6
|
|
|
$
|
1,576.6
|
|
|
$
|
4,103.9
|
|
|
$
|
4,722.9
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
($ in millions)
|
||||||||||||||
Stock-based compensation
|
$
|
3.4
|
|
|
$
|
4.2
|
|
|
$
|
9.7
|
|
|
$
|
8.5
|
|
Mark-to-market adjustments
|
0.6
|
|
|
(1.4
|
)
|
|
(2.5
|
)
|
|
(1.0
|
)
|
||||
Total expense
|
$
|
4.0
|
|
|
$
|
2.8
|
|
|
$
|
7.2
|
|
|
$
|
7.5
|
|
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 September 30,
|
|
Three Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Components of Net Periodic Benefit (Income) Cost
|
($ in millions)
|
||||||||||||||
Service cost
|
$
|
2.8
|
|
|
$
|
2.7
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
Interest cost
|
18.8
|
|
|
23.7
|
|
|
0.3
|
|
|
0.4
|
|
||||
Expected return on plans’ assets
|
(35.5
|
)
|
|
(35.5
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
11.2
|
|
|
6.8
|
|
|
0.3
|
|
|
0.5
|
|
||||
Net periodic benefit (income) cost
|
$
|
(2.7
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
0.8
|
|
|
$
|
1.1
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
Nine Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Components of Net Periodic Benefit (Income) Cost
|
($ in millions)
|
||||||||||||||
Service cost
|
$
|
8.5
|
|
|
$
|
8.5
|
|
|
$
|
0.9
|
|
|
$
|
0.8
|
|
Interest cost
|
56.3
|
|
|
71.0
|
|
|
1.0
|
|
|
1.3
|
|
||||
Expected return on plans’ assets
|
(106.7
|
)
|
|
(106.3
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
33.5
|
|
|
20.2
|
|
|
1.5
|
|
|
1.6
|
|
||||
Net periodic benefit (income) cost
|
$
|
(8.4
|
)
|
|
$
|
(6.6
|
)
|
|
$
|
3.4
|
|
|
$
|
3.7
|
|
|
September 30,
|
||||||
|
2020
|
|
2019
|
||||
|
($ in millions)
|
||||||
Balance at beginning of year
|
$
|
22.8
|
|
|
$
|
33.8
|
|
Increases for prior year tax positions
|
2.1
|
|
|
1.6
|
|
||
Decreases for prior year tax positions
|
(3.5
|
)
|
|
(14.3
|
)
|
||
Increases for current year tax positions
|
1.3
|
|
|
1.4
|
|
||
Settlements with taxing authorities
|
—
|
|
|
(0.2
|
)
|
||
Balance at end of period
|
$
|
22.7
|
|
|
$
|
22.3
|
|
|
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
|
|
September 30, 2020
|
|
December 31, 2019
|
|
September 30, 2019
|
||||||
|
($ in millions)
|
||||||||||
Natural gas
|
$
|
46.8
|
|
|
$
|
62.9
|
|
|
$
|
56.6
|
|
Ethane
|
38.2
|
|
|
51.5
|
|
|
48.3
|
|
|||
Metals
|
118.5
|
|
|
60.2
|
|
|
62.7
|
|
|||
Total notional
|
$
|
203.5
|
|
|
$
|
174.6
|
|
|
$
|
167.6
|
|
|
September 30, 2020
|
|
December 31, 2019
|
|
September 30, 2019
|
||||||
|
($ in millions)
|
||||||||||
Asset derivatives:
|
|
|
|
|
|
||||||
Other current assets
|
|
|
|
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||||
Commodity contracts - gains
|
$
|
20.6
|
|
|
$
|
1.8
|
|
|
$
|
—
|
|
Commodity contracts - losses
|
(2.9
|
)
|
|
(0.5
|
)
|
|
—
|
|
|||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||||
Foreign exchange contracts - gains
|
2.4
|
|
|
1.1
|
|
|
1.0
|
|
|||
Foreign exchange contracts - losses
|
(1.0
|
)
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|||
Total other current assets
|
19.1
|
|
|
1.9
|
|
|
0.8
|
|
|||
Other assets
|
|
|
|
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||||
Commodity contracts - gains
|
6.7
|
|
|
0.8
|
|
|
0.1
|
|
|||
Commodity contracts - losses
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|||
Total other assets
|
6.6
|
|
|
0.7
|
|
|
0.1
|
|
|||
Total asset derivatives(1)
|
$
|
25.7
|
|
|
$
|
2.6
|
|
|
$
|
0.9
|
|
Liability derivatives:
|
|
|
|
|
|
||||||
Accrued liabilities
|
|
|
|
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||||
Commodity contracts - losses
|
$
|
0.1
|
|
|
$
|
18.0
|
|
|
$
|
19.1
|
|
Commodity contracts - gains
|
—
|
|
|
(0.2
|
)
|
|
(0.8
|
)
|
|||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||||
Foreign exchange contracts - losses
|
1.4
|
|
|
1.4
|
|
|
1.2
|
|
|||
Foreign exchange contracts - gains
|
(0.8
|
)
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|||
Total accrued liabilities
|
0.7
|
|
|
19.0
|
|
|
19.2
|
|
|||
Other liabilities
|
|
|
|
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||||
Commodity contracts - losses
|
—
|
|
|
1.8
|
|
|
3.0
|
|
|||
Commodity contracts - gains
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|||
Total other liabilities
|
—
|
|
|
1.8
|
|
|
2.7
|
|
|||
Total liability derivatives(1)
|
$
|
0.7
|
|
|
$
|
20.8
|
|
|
$
|
21.9
|
|
(1)
|
Does not include the impact of cash collateral received from or provided to counterparties.
|
|
Fair Value Measurements
|
||||||||||||||
Balance at September 30, 2020
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
($ in millions)
|
||||||||||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
24.3
|
|
|
$
|
—
|
|
|
$
|
24.3
|
|
Foreign exchange contracts
|
—
|
|
|
1.4
|
|
|
—
|
|
|
1.4
|
|
||||
Total assets
|
$
|
—
|
|
|
$
|
25.7
|
|
|
$
|
—
|
|
|
$
|
25.7
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Foreign exchange contracts
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
0.7
|
|
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 September 30, 2019
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Foreign exchange contracts
|
—
|
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
||||
Total assets
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
0.9
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
21.0
|
|
|
$
|
—
|
|
|
$
|
21.0
|
|
Foreign exchange contracts
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
21.9
|
|
|
$
|
—
|
|
|
$
|
21.9
|
|
|
Fair Value Measurements
|
|
Amount recorded
on balance sheets |
||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|||||||||||
|
($ in millions)
|
||||||||||||||||||
Balance at September 30, 2020
|
$
|
—
|
|
|
$
|
3,925.7
|
|
|
$
|
153.0
|
|
|
$
|
4,078.7
|
|
|
$
|
3,960.7
|
|
Balance at December 31, 2019
|
—
|
|
|
3,417.5
|
|
|
153.0
|
|
|
3,570.5
|
|
|
3,340.8
|
|
|||||
Balance at September 30, 2019
|
—
|
|
|
3,399.6
|
|
|
153.0
|
|
|
3,552.6
|
|
|
3,340.1
|
|
•
|
Our cash and cash equivalents as of September 30, 2020 were $282.7 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 Facility) with aggregate commitments in an amount equal to $800.0 million, of which we have $799.6 million available to us at September 30, 2020, and a senior secured delayed-draw term loan facility (Delayed Draw Term Loan Facility) with aggregate commitments of $500.0 million, which can be used for general corporate purposes. In October 2020, we drew the $500.0 million and used the proceeds to call a portion of the 9.75% senior notes due 2023 (2023 Notes).
|
•
|
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 2020, we amended our Receivables Financing Agreement to expand the borrowing capacity to $250.0 million and had borrowed $125.0 million as of September 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, which includes an approximately $75 million investment in working capital to support Lake City operations.
|
•
|
We are forecasting capital spending to be in the $275 million range in 2020, which is approximately $110 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 $20 million of additional liquidity during 2020.
|
•
|
We believe that we have access to both the high-yield debt and equity markets at this time.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
($ in millions, except per share data)
|
||||||||||||||
Sales
|
$
|
1,437.6
|
|
|
$
|
1,576.6
|
|
|
$
|
4,103.9
|
|
|
$
|
4,722.9
|
|
Cost of goods sold
|
1,307.4
|
|
|
1,357.6
|
|
|
3,917.3
|
|
|
4,168.6
|
|
||||
Gross margin
|
130.2
|
|
|
219.0
|
|
|
186.6
|
|
|
554.3
|
|
||||
Selling and administration
|
112.7
|
|
|
110.8
|
|
|
309.1
|
|
|
314.8
|
|
||||
Restructuring charges
|
1.3
|
|
|
4.9
|
|
|
4.7
|
|
|
12.7
|
|
||||
Goodwill impairment
|
699.8
|
|
|
—
|
|
|
699.8
|
|
|
—
|
|
||||
Other operating (expense) income
|
(0.2
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
|
0.3
|
|
||||
Operating (loss) income
|
(683.8
|
)
|
|
103.4
|
|
|
(827.1
|
)
|
|
227.1
|
|
||||
Interest expense
|
74.6
|
|
|
63.9
|
|
|
207.1
|
|
|
179.2
|
|
||||
Interest income
|
0.1
|
|
|
0.2
|
|
|
0.4
|
|
|
0.7
|
|
||||
Non-operating pension income
|
4.9
|
|
|
4.1
|
|
|
14.4
|
|
|
12.2
|
|
||||
Other income
|
—
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
||||
Income (loss) before taxes
|
(753.4
|
)
|
|
43.8
|
|
|
(1,019.4
|
)
|
|
72.0
|
|
||||
Income tax (benefit) provision
|
(16.6
|
)
|
|
(0.4
|
)
|
|
(82.5
|
)
|
|
6.1
|
|
||||
Net (loss) income
|
$
|
(736.8
|
)
|
|
$
|
44.2
|
|
|
$
|
(936.9
|
)
|
|
$
|
65.9
|
|
Net (loss) income per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(4.67
|
)
|
|
$
|
0.27
|
|
|
$
|
(5.94
|
)
|
|
$
|
0.40
|
|
Diluted
|
$
|
(4.67
|
)
|
|
$
|
0.27
|
|
|
$
|
(5.94
|
)
|
|
$
|
0.40
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Sales:
|
($ in millions)
|
||||||||||||||
Chlor Alkali Products and Vinyls
|
$
|
755.1
|
|
|
$
|
876.3
|
|
|
$
|
2,166.2
|
|
|
$
|
2,657.7
|
|
Epoxy
|
476.1
|
|
|
511.6
|
|
|
1,350.7
|
|
|
1,554.4
|
|
||||
Winchester
|
206.4
|
|
|
188.7
|
|
|
587.0
|
|
|
510.8
|
|
||||
Total sales
|
$
|
1,437.6
|
|
|
$
|
1,576.6
|
|
|
$
|
4,103.9
|
|
|
$
|
4,722.9
|
|
Income (loss) before taxes:
|
|
|
|
|
|
|
|
||||||||
Chlor Alkali Products and Vinyls
|
$
|
37.8
|
|
|
$
|
112.7
|
|
|
$
|
(53.5
|
)
|
|
$
|
303.8
|
|
Epoxy
|
14.9
|
|
|
24.2
|
|
|
13.6
|
|
|
38.6
|
|
||||
Winchester
|
21.0
|
|
|
13.9
|
|
|
47.5
|
|
|
33.1
|
|
||||
Corporate/other:
|
|
|
|
|
|
|
|
||||||||
Environmental (expense) income(1)
|
(12.5
|
)
|
|
0.8
|
|
|
(17.9
|
)
|
|
(18.2
|
)
|
||||
Other corporate and unallocated costs(2)
|
(43.7
|
)
|
|
(43.4
|
)
|
|
(112.2
|
)
|
|
(117.8
|
)
|
||||
Restructuring charges
|
(1.3
|
)
|
|
(4.9
|
)
|
|
(4.7
|
)
|
|
(12.7
|
)
|
||||
Goodwill impairment
|
(699.8
|
)
|
|
—
|
|
|
(699.8
|
)
|
|
—
|
|
||||
Other operating (expense) income
|
(0.2
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
|
0.3
|
|
||||
Interest expense(3)
|
(74.6
|
)
|
|
(63.9
|
)
|
|
(207.1
|
)
|
|
(179.2
|
)
|
||||
Interest income
|
0.1
|
|
|
0.2
|
|
|
0.4
|
|
|
0.7
|
|
||||
Non-operating pension income
|
4.9
|
|
|
4.1
|
|
|
14.4
|
|
|
12.2
|
|
||||
Other income(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
||||
Income (loss) before taxes
|
$
|
(753.4
|
)
|
|
$
|
43.8
|
|
|
$
|
(1,019.4
|
)
|
|
$
|
72.0
|
|
(1)
|
Environmental (expense) income for the nine months ended September 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 September 30, 2020 and 2019 of $25.5 million and $24.5 million, respectively, and for the nine months ended September 30, 2020 and 2019 of $60.6 million and $60.1 million, respectively.
|
(3)
|
Interest expense included $4.4 million for the three months ended September 30, 2019, and $4.0 million and $12.6 million for the nine months ended September 30, 2020 and 2019, respectively, related to the 2020 ethylene payment discount.
|
(4)
|
Other income for the nine months ended September 30, 2019 included a gain of $11.2 million on the sale of our equity interest in a non-consolidated affiliate.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
($ in millions)
|
||||||||||||||
Provisions charged (credited) to income
|
$
|
12.5
|
|
|
$
|
(0.8
|
)
|
|
$
|
17.9
|
|
|
$
|
23.0
|
|
Recoveries for costs incurred and expensed
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.8
|
)
|
||||
Environmental expense (income)
|
$
|
12.5
|
|
|
$
|
(0.8
|
)
|
|
$
|
17.9
|
|
|
$
|
18.2
|
|
|
September 30,
|
||||||
|
2020
|
|
2019
|
||||
|
($ in millions)
|
||||||
Balance at beginning of year
|
$
|
139.0
|
|
|
$
|
125.6
|
|
Charges to income
|
17.9
|
|
|
23.0
|
|
||
Remedial and investigatory spending
|
(10.1
|
)
|
|
(8.7
|
)
|
||
Foreign currency translation adjustments
|
(0.1
|
)
|
|
0.2
|
|
||
Balance at end of period
|
$
|
146.7
|
|
|
$
|
140.1
|
|
|
Nine Months Ended September 30,
|
||||||
|
2020
|
|
2019
|
||||
Provided By (Used For)
|
($ in millions)
|
||||||
Net operating activities
|
$
|
305.3
|
|
|
$
|
416.6
|
|
Capital expenditures
|
(223.3
|
)
|
|
(271.8
|
)
|
||
Payments under long-term supply contracts
|
(536.8
|
)
|
|
—
|
|
||
Proceeds from disposition of non-consolidated affiliate
|
—
|
|
|
20.0
|
|
||
Net investing activities
|
(760.1
|
)
|
|
(251.8
|
)
|
||
Long-term debt borrowings, net
|
620.7
|
|
|
80.9
|
|
||
Common stock repurchased and retired
|
—
|
|
|
(135.6
|
)
|
||
Debt issuance costs
|
(9.9
|
)
|
|
(14.4
|
)
|
||
Net financing activities
|
516.6
|
|
|
(166.1
|
)
|
|
Nine Months Ended September 30, 2020
|
||
Summarized Statement of Operations
|
($ in millions)
|
||
Sales
|
$
|
3,039.6
|
|
Gross margin
|
93.1
|
|
|
Operating loss
|
(734.9
|
)
|
|
Loss before income taxes
|
(919.7
|
)
|
|
Net loss
|
(833.5
|
)
|
|
September 30, 2020
|
|
December 31, 2019
|
||||
Summarized Balance Sheets
|
($ in millions)
|
||||||
Assets
|
|
|
|
||||
Other current assets
|
$
|
903.7
|
|
|
$
|
884.5
|
|
Non-current assets due from non-guarantor subsidiaries
|
288.8
|
|
|
420.4
|
|
||
Other non-current assets
|
5,505.7
|
|
|
6,259.1
|
|
||
Liabilities
|
|
|
|
||||
Current liabilities due to non-guarantor subsidiaries
|
$
|
761.6
|
|
|
$
|
738.0
|
|
Other current liabilities
|
782.4
|
|
|
718.7
|
|
||
Other non-current liabilities
|
5,078.4
|
|
|
5,118.4
|
|
•
|
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
|
|
|||
July 1-31, 2020
|
|
—
|
|
|
$—
|
|
—
|
|
|
|
|
|
August 1-31, 2020
|
|
—
|
|
|
—
|
|
—
|
|
|
|
|
|
September 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 September 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)
|
Name of Guarantor
|
|
Jurisdiction of Incorporation
|
Sunbelt Chlor Alkali Partnership
|
|
Delaware
|
Olin Chlorine 7, LLC
|
|
Delaware
|
Blue Cube Operations, LLC
|
|
Delaware
|
Pioneer Americas LLC
|
|
Delaware
|
Olin Winchester, LLC
|
|
Delaware
|
Winchester Ammunition, Inc.
|
|
Delaware
|
Blue Cube Spinco, LLC
|
|
Delaware
|
Name of Guarantor
|
|
Jurisdiction of Incorporation
|
Olin Corporation
|
|
Virginia
|
Sunbelt Chlor Alkali Partnership
|
|
Delaware
|
Olin Chlorine 7, LLC
|
|
Delaware
|
Blue Cube Operations, LLC
|
|
Delaware
|
Pioneer Americas LLC
|
|
Delaware
|
Olin Winchester, LLC
|
|
Delaware
|
Winchester Ammunition, Inc.
|
|
Delaware
|
Date:
|
November 5, 2020
|
/s/ Scott Sutton
|
|
|
Scott Sutton
|
|
|
President and Chief Executive Officer
|
Date:
|
November 5, 2020
|
/s/ Todd A. Slater
|
|
|
Todd A. Slater
|
|
|
Vice President and Chief Financial Officer
|
|
|
/s/ Scott Sutton
|
|
Scott Sutton
|
|
President and Chief Executive Officer
|
|
Dated:
|
November 5, 2020
|
|
|
/s/ Todd A. Slater
|
|
Todd A. Slater
|
|
Vice President and Chief Financial Officer
|
|
Dated:
|
November 5, 2020
|