AdvanSix Inc. (Form: 10-Q, Received: 05/11/2017 16:20:09)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 1-37774

AdvanSix Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware

81-2525089

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer Identification No.)


300 Kimball Drive, Suite 101, Parsippany, New Jersey		07054
(Address of Principal Executive Offices)		(Zip Code)

(973) 526-1800

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o	Non-accelerated filer x	Smaller reporting company o
			Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The Registrant had 30,482,966 shares of common stock, $0.01 par value, outstanding at May 01, 2017.

ADVANSIX INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS

Part I.	FINANCIAL INFORMATION

Item 1.	Financial Statements	3
	Condensed Consolidated and Combined Statements of Operations for the Three Months Ended March 31, 2017 and 2016 (unaudited)	3
	Condensed Consolidated and Combined Statements of Comprehensive Income for the Three Months Ended March 31, 2017 and 2016 (unaudited)	4
	Condensed Consolidated and Combined Balance Sheets as of March 31, 2017 and December 31, 2016 (unaudited)	5
	Condensed Consolidated and Combined Statements of Cash Flows for the Three Months Ended March 31, 2017 and 2016 (unaudited)	6
	Notes to Condensed Consolidated and Combined Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23

Part II.	OTHER INFORMATION

Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 6.	Exhibits	24
	Signature	26

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ADVANSIX INC.

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except share and per share amounts)

	Three Months Ended March 31,
	2017		2016

Sales	$	376,704	$	299,830
Costs, expenses and other:
Costs of goods sold		314,117		245,559
Selling, general and administrative expenses		16,806		11,378
Other non-operating, net		1,540		(658	)
		332,463		256,279

Income before taxes		44,241		43,551
Income taxes		16,948		16,157
Net income	$	27,293	$	27,394

Earnings per common share
Basic	$	0.90	$	0.90
Diluted	$	0.88	$	0.90
Weighted average common shares outstanding
Basic		30,482,966		30,482,966
Diluted		30,894,254		30,482,966

See accompanying notes to condensed consolidated and combined financial statements.

ADVANSIX INC.

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands)

	Three Months Ended March 31,
	2017			2016

Net income	$	27,293		$	27,394

Foreign exchange translation adjustment		(1	)		7
Commodity hedges		—			(65	)
Other comprehensive income (loss), net of tax		(1	)		(58	)
Comprehensive income	$	27,292		$	27,336

See accompanying notes to condensed consolidated and combined financial statements.

ADVANSIX INC.

CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except share and per share amounts)

	March 31,			December 31,
	2017			2016
ASSETS
Current assets:
Cash and cash equivalents	$	12,028		$	14,199
Accounts and other receivables – net		167,965			131,671
Inventories – net		112,037			128,978
Other current assets		5,675			7,690
Total current assets		297,705			282,538

Property, plant, equipment – net		584,714			575,375
Goodwill		15,005			15,005
Other assets		30,602			32,039
Total assets	$	928,026		$	904,957

LIABILITIES
Current liabilities:
Accounts payable	$	208,416		$	222,929
Accrued liabilities		22,573			25,396
Income taxes payable		5,238			86
Deferred income and customer advances		19,707			25,567
Current portion of long-term debt		3,375			—
Total current liabilities		259,309			273,978

Deferred income taxes		125,906			114,200
Long-term debt		261,557			264,838
Postretirement benefit obligations		33,603			33,544
Other liabilities		3,313			3,035
Total liabilities		683,688			689,595

COMMITMENTS AND CONTINGENCIES (Note 8)

EQUITY
Common stock, par value $0.01; 200,000,000 shares authorized and 30,482,966 shares issued and outstanding		305			305
Preferred stock, par value $0.01; 50,000,000 shares authorized and 0 shares issued and outstanding		—			—
Additional paid in capital		244,490			242,806
Retained earnings/(accumulated deficit)		2,579			(24,714	)
Accumulated other comprehensive income (loss)		(3,036	)		(3,035	)
Total equity		244,338			215,362
Total liabilities and equity	$	928,026		$	904,957

See accompanying notes to condensed consolidated and combined financial statements.

ADVANSIX INC.

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

	Three Months Ended March 31,
	2017			2016
Cash flows from operating activities:
Net income	$	27,293		$	27,394
Adjustments to reconcile net income to net cash (used for) provided by operating activities:
Depreciation and amortization		11,296			9,788
Loss on disposal of assets		534			415
Deferred income taxes		11,706			10,548
Stock based compensation		1,684			—
Accretion of deferred financing fees		148			—
Changes in assets and liabilities:
Accounts and other receivables		(36,295	)		(18,033	)
Inventories		16,941			11,988
Accounts payable		(176	)		(17,098	)
Income taxes payable		5,152			—
Accrued liabilities		(2,823	)		(7,088	)
Deferred income and customer advances		(5,860	)		(5,169	)
Other assets and liabilities		1,606			(8,704	)
Net cash provided by operating activities		31,206			4,041

Cash flows from investing activities:
Expenditures for property, plant and equipment		(33,214	)		(24,626	)
Other investing activities		(121	)		(203	)
Net cash used for investing activities		(33,335	)		(24,829	)

Cash flows from financing activities:
Borrowings from revolving credit facility		167,500			—
Payments of revolving credit facility		(167,500	)		—
Principal payments of capital leases		(42	)		—
Net increase in invested equity		—			20,788
Net cash (used for) provided by financing activities		(42	)		20,788

Net decrease in cash and cash equivalents		(2,171	)		—
Cash and cash equivalents at beginning of period		14,199			—
Cash and cash equivalents at the end of period	$	12,028		$	—

Supplemental Disclosure of Cash Flow Information:
Interest paid	$	2,434		$	—
Income taxes paid	$	—		$	—

Non-Cash Financing Activities:
Capital expenditures included in accounts payable	$	14,295		$	11,526

See accompanying notes to condensed consolidated and combined financial statements.

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

(Dollars in thousands, unless otherwise noted)

1. Organization, Operations and Basis of Presentation

Description of Business

AdvanSix Inc. (“AdvanSix” or the “Company”) is an integrated manufacturer of Nylon 6, a polymer resin which is a synthetic material used by our customers to produce engineered plastics, fibers, filaments and films that, in turn, are used in such end-products as automotive and electronic components, carpets, sports apparel, fishing nets and food and industrial packaging. As a result of our backward integration and the configuration of our manufacturing facilities, we also sell a variety of other products, all of which are produced as part of the Nylon 6 resin manufacturing process including caprolactam, ammonium sulfate fertilizers, and other chemical intermediates. Each of these product lines represented the following approximate percentage of our sales:

	Three Months Ended March 31,
	2017		2016
Nylon		29%		28%
Caprolactam		21%		18%
Ammonium Sulfate Fertilizers		18%		25%
Chemical Intermediates		32%		29%

Separation from Honeywell

On October 1, 2016, Honeywell International Inc. (“Honeywell”) completed the previously announced separation of AdvanSix. The separation was completed by Honeywell distributing all of the then outstanding shares of common stock of AdvanSix on October 1, 2016 (the “Distribution Date”) through a dividend in kind of AdvanSix common stock, par value $0.01, to holders of Honeywell common stock as of the close of business on the record date of September 16, 2016 who held their shares through the Distribution Date (the “Spin-Off”).

Each Honeywell stockholder who held their shares through the Distribution Date received one share of AdvanSix common stock for every 25 shares of Honeywell common stock held at the close of business on the record date of September 16, 2016. The separation was completed pursuant to a Separation and Distribution Agreement and other agreements with Honeywell related to the separation, including an Employee Matters Agreement, a Tax Matters Agreement, and Transition Services Agreement as well as Site Sharing and Services Agreements for Chesterfield, Colonial Heights and Pottsville. These agreements govern the relationship between AdvanSix and Honeywell following the separation and provide for the allocation of various assets, liabilities, rights and obligations. These agreements also include arrangements for transition services to be provided by Honeywell to AdvanSix and by AdvanSix to Honeywell.

On October 3, 2016, AdvanSix stock began “regular-way” trading on the New York Stock Exchange under the “ASIX” stock symbol.

Basis of Presentation

Unless the context otherwise requires, references in these Notes to the Condensed Consolidated and Combined Financial Statements to “we,” “us,” “our,” “AdvanSix” and the “Company” refer to AdvanSix Inc. and its consolidated subsidiaries after giving effect to the Spin-Off. All significant intercompany balances and transactions have been eliminated.

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

(Dollars in thousands, unless otherwise noted)

The condensed consolidated and combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation of financial statements have been included. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

In preparing these condensed consolidated and combined financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the condensed consolidated and combined financial statements were issued.

Certain prior period amounts have been reclassified for consistency with the current period presentation.

We report our quarterly financial information using a calendar convention; prior to the Spin-Off, the first, second and third quarters were consistently reported as ending on March 31, June 30 and September 30 in the financial statements of Honeywell; subsequent to the Spin-Off we continued following such convention. It is our practice to establish actual quarterly closing dates using a predetermined fiscal calendar, which requires our businesses to close their books on a Saturday in order to minimize the potentially disruptive effects of quarterly closing on our business processes. Historically, the effects of this practice were generally not significant to reported results for any quarter and only existed within a reporting year. In the event that differences in actual closing dates are material to year-over-year comparisons of quarterly or year-to-date results, we will provide the appropriate disclosures. Our actual closing dates for the three month reporting periods ending March 31, 2017 and 2016 were April 1, 2017 and April 2, 2016, respectively.

Liabilities to creditors to whom we have issued checks that remained outstanding at March 31, 2017 and December 31, 2016 aggregated $17.7 and $12.5 million, respectively, and were included in Cash and cash equivalents and Accounts payable in the Condensed Consolidated and Combined Balance Sheets.

2. Recent Accounting Pronouncements

The Company considers the applicability and impact of all Accounting Standards Updates (“ASU”). ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.

In March 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715), in order to improve the presentation of net periodic pension and postretirement costs. The amendment requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost as defined in paragraphs 715-30-35-4 and 715-60-35-9 are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendments in this ASU also allow only the service cost component to be eligible for capitalization when applicable. The amendments in this update related to income statement activity should be applied retrospectively whereas balance sheet activity should be applied prospectively. For public business entities, the effective date for ASU 2017-07 is annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted within the first interim period. We expect to adopt this guidance effective January 1, 2018 and no impact on the Company is expected upon adoption.

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

(Dollars in thousands, unless otherwise noted)

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment for all entities by requiring impairment charges to be based on the first step in today’s two-step impairment test under ASC 350. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The amendment eliminates the requirement to calculate a goodwill impairment charge by comparing the implied fair value of goodwill with its carrying amount (i.e., Step 2 of today’s goodwill impairment test). The standard will be applied prospectively and is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The Company elected to early adopt ASU 2017-04 beginning in January 2017 and there was no impact on the Company upon adoption.

In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business , which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The new guidance requires an entity to first evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set of transferred assets and activities is not a business. If the threshold is not met, the entity evaluates whether the set meets the requirement that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. For public business entities, the effective date for ASU 2017-01 is annual periods beginning after December 15, 2017, including interim periods within those periods. The Company elected to early adopt ASU 2017-01 beginning in January 2017 and there was no impact on the Company upon adoption.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718) , which simplifies certain aspects of share-based payment transactions including income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The new guidance requires an entity to record all excess tax benefits / deficiencies as income tax expense / benefit in the income statement. The new guidance also allows an entity to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. For public business entities, the effective date for ASU 2016-09 is annual periods beginning after December 15, 2016, including interim periods within those periods. The Company adopted this ASU effective January 1, 2017 and has elected to continue to accrue compensation cost for forfeitures based on the number of awards that are expected to vest. There was no impact on the Company upon adoption.

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

(Dollars in thousands, unless otherwise noted)

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The new standard also requires disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases and will be effective for interim and annual periods beginning after December 15, 2018 (early adoption is permitted). The new standard should be applied under a modified retrospective approach. We are evaluating the impact of the new standard on our Consolidated and Combined Financial Statements and related disclosures.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which replaces the existing accounting standards for revenue recognition with a single comprehensive five-step model eliminating industry-specific accounting rules. The core principle is to recognize revenue upon the transfer of goods or services to customers at an amount that reflects the consideration expected to be received. Since its issuance, the FASB has amended several aspects of the new guidance, including provisions that address revenue recognition associated with the licensing of intellectual property. The provisions of ASU 2014-09 will be effective for public business entities for interim and annual periods beginning after December 15, 2017, with early adoption permitted for annual periods beginning after December 15, 2016. The guidance may be adopted either by restating all years presented in the Company’s financial statements or by recording the impact of adoption as an adjustment to retained earnings at the beginning of the year of adoption. We are continuing to assess the potential impact of this guidance, including the impact on those areas currently subject to industry-specific guidance. As part of our assessment, we are reviewing customer contracts and related transaction support to determine the impact on revenue recognition under the new guidance. Our method of adoption will in part be based on the degree of change identified in our assessment.

3. Related Party Transactions with Honeywell

Prior to consummation of the Spin-Off, the Condensed Consolidated and Combined Financial Statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Honeywell.

During the three months ended March 31, 2016, AdvanSix was allocated $10,740 of general corporate expenses incurred by Honeywell for certain services, such as legal, accounting, information technology, human resources, other infrastructure support and shared facilities, on behalf of AdvanSix. These expenses were reflected within Costs of goods sold and Selling, general and administrative expenses in the Condensed Consolidated and Combined Statements of Operations.

Sales to Honeywell during the three months ended March 31, 2016 were $1,540. Of these sales, $1,525 were sold to Honeywell at zero margin. Costs of goods sold to Honeywell during the three months ended March 31, 2016 were $1,537. Purchases from Honeywell during the three months ended March 31, 2016 were $1,192. The total net effect of the settlement of these intercompany transactions was reflected in the Condensed Consolidated and Combined Statements of Cash Flows as a financing activity identified as Invested equity.

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

(Dollars in thousands, unless otherwise noted)

While we were owned by Honeywell, a centralized approach was used for cash management and financing of operations. Prior to consummation of the Spin-Off, the Company’s cash was transferred to Honeywell daily and Honeywell funded the Company’s operating and investing activities as needed.

Subsequent to the Spin-Off on October 1, 2016, transactions with Honeywell were not considered related party transactions. Accordingly, no related party transactions with Honeywell were recorded for the three months ended March 31, 2017.

4. Earnings Per Share

On October 1, 2016, the date of consummation of the Spin-Off, 30,482,966 shares of the Company’s Common Stock were distributed to Honeywell shareholders of record as of September 16, 2016. This share amount is being utilized for the calculation of basic earnings per share for all periods presented as no Common Stock was outstanding prior to the date of the Spin-Off. In October 2016, the Company issued 908,540 time-based restricted stock units in connection with the Spin-Off with vesting periods ranging from 18 to 42 months. These restricted stock units were not included in the computation of diluted earnings per share for the three months ended March 31, 2016.

The details of the earnings per share calculations for the three months ended March 31, 2017 and 2016 are as follows:

	March 31,
	2017		2016
Basic
Net Income	$	27,293	$	27,394

Weighted average common shares outstanding		30,482,966		30,482,966

EPS – Basic	$	0.90	$	0.90

	March 31,
	2017		2016
Diluted
Net Income	$	27,293	$	27,394

Weighted average common shares outstanding – Basic		30,482,966		30,482,966
Dilutive effect of unvested equity awards		411,288		—
Weighted average common shares outstanding – Diluted		30,894,254		30,482,966

EPS – Diluted	$	0.88	$	0.90

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

(Dollars in thousands, unless otherwise noted)

On March 8, 2017, the Company granted equity awards representing 333,719 shares of our common stock under the 2016 Stock Incentive Plan of AdvanSix Inc. and its Affiliates to Company employees consisting of 175,026 stock options, 89,896 performance stock units and 68,797 restricted stock units. All equity awards have a per share strike price or grant date fair value per share, as applicable, of $26.66 with vesting periods ranging from 12 to 36 months.

Stock compensation expense related to all outstanding equity awards is being ratably recognized over the vesting period of each type of equity award with vesting periods ranging from 12 to 42 months based on grant date fair value. Stock compensation expense aggregated $1,684 for the three months ended March 31, 2017.

5. Accounts and Other Receivables - Net

	March 31, 2017			December 31, 2016
Accounts receivables	$	164,309		$	119,475
Other		4,852			15,407
		169,161			134,882
Less – allowance for doubtful accounts		(1,196	)		(3,211	)
Total accounts and other receivables – net	$	167,965		$	131,671

The increase in accounts receivable at March 31, 2017 versus December 31, 2016 is due to significantly higher sales during the first quarter of 2017 versus the fourth quarter of 2016 which was impacted by our plant turnaround activities.

6. Inventories

	March 31, 2017			December 31, 2016
Raw materials	$	42,078		$	68,900
Work in progress		39,676			47,759
Finished goods		35,212			19,069
Spares and other		23,398			23,129
		140,364			158,857
Reduction to LIFO cost basis		(28,327	)		(29,879	)
Total inventories	$	112,037		$	128,978

The decrease in the total amount of inventories at March 31, 2017 compared to December 31, 2016 is due primarily to lower levels of raw materials due to the timing of cumene purchases and the replenishment of finished goods following the plant turnaround activities in the fourth quarter of 2016.

7. Postretirement Benefit Cost

The components of net periodic benefit cost of the Company’s pension plan are as follows:

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

(Dollars in thousands, unless otherwise noted)

	Three Months Ended March 31,
	2017			2016
Service costs	$	1,908		$	—
Interest costs		333			—
Expected return on plan assets		(76	)		—
Amortization of actuarial net loss		—			—
Amortization of prior service cost (gain)		—			—
Curtailment gain		—			—
Other ⁽¹⁾		—			1,717
Net periodic benefit cost	$	2,165		$	1,717

⁽¹⁾

Prior to the Spin-Off, certain of our employees participated in a defined benefit pension plan (“Shared Plan”) sponsored by Honeywell which included participants of other Honeywell subsidiaries and operations. Pension expense related to participation in the Shared Plan was $1.7 million for the three months ended March 31, 2016.

The Company plans to make contributions during 2017 sufficient to satisfy pension funding requirements of approximately $20 million as well as additional contributions in future years sufficient to satisfy pension funding requirements in those periods. The Company made contributions to the AdvanSix Retirement Earnings Plan of $2.2 million in January 2017 and $1.6 million in April 2017.

8. Commitments and Contingencies

The Company is subject to a number of lawsuits, investigations and disputes (some of which involve substantial amounts claimed) arising out of the conduct of the Company or other third parties in the normal and ordinary course of business, including matters relating to commercial transactions. A liability is recognized for any contingency that is probable of occurrence and reasonably estimable. The Company continually assesses the likelihood of adverse judgments or outcomes in these matters, as well as potential ranges of possible losses (taking into consideration any insurance recoveries), based on an analysis of each matter with the assistance of legal counsel and, if applicable, other experts.

ADVANSIX INC.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

(Dollars in thousands, unless otherwise noted)

Given the uncertainty inherent in such lawsuits, investigations and disputes, the Company does not believe it is possible to develop estimates of reasonably possible loss in excess of current accruals for these matters. Considering the Company’s past experience and existing accruals, the Company does not expect the outcome of these matters, either individually or in the aggregate, to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. Potential liabilities are subject to change due to new developments, changes in settlement strategy or the impact of evidentiary requirements, which could cause the Company to pay damage awards or settlements (or become subject to equitable remedies) that could have a material adverse effect on the Company’s consolidated results of operations, balance sheet and/or operating cash flows in the periods recognized or paid.

We assumed from Honeywell all health, safety and environmental (“HSE”) liabilities and compliance obligations related to the past and future operations of our current business, as well as all HSE liabilities associated with our three current manufacturing locations and the other locations used in our current operations, including any cleanup or other liabilities related to any contamination that may have occurred at such locations in the past. Honeywell retained all HSE liabilities related to former business locations or the operation of our former businesses. Although we have ongoing environmental remedial obligations at certain of our facilities, in the past three years, the associated remediation costs have not been material, and we do not expect our known remediation costs to be material for 2017.

9. Income Taxes

The Company’s provision for income taxes in interim periods is computed by applying an estimated annual effective tax rate against income before income taxes for the period. The provision for income taxes was $16.9 million and $16.2 million for the three months ended March 31, 2017 and 2016, respectively.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the Company’s financial condition and results of operations, which we refer to as our “MD&A,” should be read in conjunction with the Consolidated and Combined Financial Statements and the notes thereto contained elsewhere in this Report, as well as the MD&A section included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 6, 2017 (the “2016 Form 10-K”). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those incorporated by reference in Item 1A of Part II of this Report, as well as those discussed in the section entitled “Note Regarding Forward-Looking Statements” below.

Note Regarding Forward-Looking Statements

All statements other than statements of historical fact included in this Report including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Report, words such as “anticipate,” “believe,” “will,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.

Business Overview

We produce and sell our Nylon 6 resin and caprolactam as commodity products and also produce and sell our Nylon 6 resin as a specialized resin product. The production of these products is capital intensive, requiring ongoing investments in improving plant reliability, expanding production capacity and achieving higher quality. Our results of operations are primarily driven by production volume and the spread between the prices of our products and the costs of the underlying raw materials built into the market-based pricing models for most of our sales. The global prices for nylon resin typically track a spread over the price of caprolactam, which in turn tracks as a spread over benzene because the key feedstock materials for caprolactam, phenol or cyclohexane, are ultimately derived from benzene. This price spread has historically experienced cyclicality as a result of global changes in supply and demand. Generally, Nylon 6 resin prices track the cyclicality of caprolactam prices, although prices set above the spread are achievable when nylon resin manufacturers, like AdvanSix, are able to formulate and produce specialized nylon resin products. Our specialized Nylon 6 products are typically valued at a higher level than commodity resin products.

Since 2011, commodity caprolactam and resin prices have experienced a cyclical period of downturn as the global market has experienced large increases in supply without a commensurate increase in demand. Most of this supply increase has come from Chinese manufacturers entering the market, although many of our other competitors have also announced recent increases in production capacity. As a result, our margins for Nylon 6 resin and caprolactam have declined in recent years to historic lows. We believe that, in addition to a potential recovery that has historically followed periods of oversupply and declining prices, certain anticipated trends in the Nylon 6 resin industry may begin to bolster an increase in demand. Nylon 6 end-market growth generally tracks global GDP with certain applications growing at faster rates including engineered plastics and packaging. Additionally, one of our strategies is to continue developing specialty resin and copolymer products that we believe will obtain higher margins.

Our ammonium sulfate is used by customers as a fertilizer containing nitrogen and sulfur, two key crop nutrients. Global prices for ammonium sulfate fertilizer are influenced by several factors including the price of urea, which is the most widely used source of nitrogen-based fertilizer in the world. Urea pricing has been under pressure recently due to the loosening of urea export restrictions by the Chinese government and the growth of both Chinese and broader global production capacity. A secondary global price driver for ammonium sulfate fertilizer is the price of future deliveries of crops, including corn, wheat and coffee, which are impacted by general trends in the agricultural industry.

We produce ammonium sulfate fertilizer continuously throughout the year as part of our manufacturing process, but sales experience quarterly cyclicality based on the timing and length of the growing seasons in North and South America. Due to the ammonium sulfate fertilizer sales cycle, we occasionally build up higher inventory balances because our production is continuous and not tied to seasonal demand for fertilizers. Sales of most of our other products have generally been subject to minimal, or no, seasonality.

We seek to run our production facilities on a nearly continuous basis for maximum efficiency and several of our intermediate products are key feedstock materials for other products in our integrated manufacturing chain. On average, we schedule two planned outages per year to conduct routine and major maintenance at our facilities, which are referred to as plant turnarounds. While we may experience unplanned interruptions from time to time, we seek to mitigate the risk through regularly scheduled maintenance both for major and minor repairs at all of our production facilities. We also utilize maintenance excellence and mechanical integrity programs and maintain an appropriate buffer inventory of intermediate chemicals necessary for our manufacturing process, which are intended to mitigate the extent of any production losses as a result of unplanned downtime. However, unplanned outages may still occur and we may not have enough intermediate chemical inventory at any given time to offset such production losses. Moreover, taking our production facilities offline for regularly scheduled repairs can be an expensive and time-consuming operation with risk that discoverable items and delays during the repair process may cause unplanned downtime as well.

Results of Operations

(Dollars in thousands, unless otherwise noted)

Sales

	Three Months Ended March 31,
	2017			2016
Sales	$	376,704		$	299,830
% change compared with prior year period		25.6	%

The change in sales compared to the prior year period is attributable to the following:

	Three Months Ended March 31, 2017
Volume		3.8	%
Price		21.8	%
		25.6	%

Sales increased for the three months ended March 31, 2017 compared to the prior year period by $76.9 million or approximately 26% due primarily to higher sales prices (approximately 22%) and volume increases (approximately 4%) of caprolactam and resins, intermediate chemicals and ammonium sulfate. Sales prices increased due primarily to (i) higher prices of the raw materials used to manufacture our intermediate chemicals, caprolactam and resins impacting formula-based pass-through pricing, particularly benzene and propylene (inputs to cumene which is a key feedstock material for our products), (approximately 19% favorable impact) and (ii) market-based pricing due primarily to increases in prices of caprolactam and resins as well as chemical intermediates offset partially by a decrease in prices of ammonium sulfate (approximately 3% favorable impact).

Costs of Goods Sold

	Three Months Ended March 31,
	2017			2016
Costs of goods sold	$	314,117		$	245,559
% change compared with prior year period		27.9	%

Gross Margin percentage		16.6	%		18.1	%

Costs of goods sold increased in the three months ended March 31, 2017 compared to the prior year period by $68.6 million or approximately 28% due primarily to (i) higher prices of raw materials, particularly benzene and propylene (inputs to cumene which is a key feedstock material for our products), (approximately 24%) and (ii) a one-time prior year benefit related to the termination of a long-term supply agreement in the three months ended March 31, 2016 (approximately 7% unfavorable) which were partially offset by the net favorable fixed cost absorption impact of higher production volumes on a year-over-year basis (approximately 3%).

Gross margin percentage decreased by approximately 1% in the three months ended March 31, 2017 compared to the prior year period due primarily to the termination of a long-term supply agreement in the first quarter 2016 (approximately 4%) and the net impact of pricing over raw material costs (approximately 1% impact) which were mostly offset by the net favorable fixed cost absorption impact of higher production volumes (approximately 5%).

Selling, General and Administrative Expenses

	Three Months Ended March 31,
	2017			2016
Selling, general and administrative expenses	$	16,806		$	11,378
Percent of sales		4.5	%		3.8	%

Selling, general and administrative expenses increased by $5.4 million in the three months ended March 31, 2017 compared to the prior year period due primarily to higher stand-alone costs incurred since the Spin-Off on October 1, 2016 related to workforce and other infrastructure and shared facilities including costs for transition services provided by Honeywell. In the three months ended March 31, 2016, these costs were allocated to the Company from Honeywell on the basis of sales.

Tax Expense

	Three Months Ended March 31,
	2017			2016
Tax expense	$	16,948		$	16,157
Effective tax rate		38.3	%		37.1	%

The Company’s effective tax rate for the three months ended March 31, 2017 was higher compared to the U.S. federal statutory rate due primarily to state taxes partially offset by the benefit from the domestic manufacturing credit. The effective tax rate increased for the three months ended March 31, 2017 compared to the same period last year due primarily to a higher effective state income tax provision driven by changes in the mix of state tax jurisdictions.

Net Income

	Three Months Ended March 31,
		2017		2016
Net income	$	27,293	$	27,394

As a result of the factors described above, net income was $27.3 million for the three months ended March 31, 2017 as compared to $27.4 million in the corresponding prior year period.

Non-GAAP Measures

(Dollars in thousands, unless otherwise noted)

The following tables set forth the non-GAAP financial measures of EBITDA, EBITDA Margin, and EBITDA and EBITDA Margin excluding the prior year one-time benefit. EBITDA is defined as Net Income before Interest, Income Taxes, Depreciation and Amortization. EBITDA Margin is equal to EBITDA divided by Sales. The Company believes these non-GAAP financial measures provide meaningful supplemental information as they are used by the Company’s management to evaluate the Company’s operating performance, enhance a reader’s understanding of the financial performance of the Company, and facilitate a better comparison among fiscal periods and performance relative to its competitors, as the non-GAAP measures exclude items that are not considered core to the Company’s operations. These non-GAAP results are presented for supplemental informational purposes only and should not be considered a substitute for the financial information presented in accordance with GAAP. Non-GAAP financial measures should be read only in conjunction with the comparable GAAP financial measures. The following is a reconciliation between the non-GAAP financial measures of EBITDA, EBITDA Margin, and EBITDA and EBITDA Margin excluding the prior year one-time benefit to their most directly comparable GAAP financial measure:

	Three Months Ended March 31,
	2017			2016
Net income	$	27,293		$	27,394
Interest expense		1,539			—
Income taxes		16,948			16,157
Depreciation and amortization		11,296			9,788
EBITDA (non-GAAP)		57,076			53,339
Prior year one-time benefit ⁽¹⁾		—			15,500
EBITDA excluding prior year one-time benefit	$	57,076		$	37,839

Sales	$	376,704		$	299,830

EBITDA Margin (non-GAAP)		15.2	%		17.8	%

EBITDA Margin excluding prior year one-time benefit (non-GAAP)		15.2	%		12.6	%

⁽¹⁾

Prior year one-time benefit reflects the $15.5 million one-time benefit in the first quarter of 2016 related to the termination of a long-term supply agreement.

Liquidity and Capital Resources

(Dollars in thousands, unless otherwise noted)

We believe that cash balances and operating cash flows, together with available capacity under our credit agreement, will provide adequate funds to support our current annual operating plan, subject to the risks and uncertainties outlined below and in the risk factors as previously disclosed in our 2016 Form 10-K and incorporated by reference in Item 1A of Part II of this Report. Our principal source of liquidity is our cash flow generated from operating activities, which is expected to provide us with the ability to meet the majority of our short-term funding requirements. Our operating cash flows are affected by capital requirements and production volume as well as the prices of our raw materials and general economic and industry trends. We monitor the third-party depository institutions that hold our cash and cash equivalents. Our emphasis is primarily on safety of principal and secondarily on maximizing yield on those funds. We diversify our cash and cash equivalents among counterparties to minimize exposure to any one of these entities.

On a recurring basis, our primary future cash needs will be centered on operating activities, working capital, capital expenditures, environmental compliance costs, employee benefit obligations, interest payments, debt repayment and strategic acquisitions. We believe that our future cash from operations, together with our access to funds on hand and credit and capital markets, will provide adequate resources to fund our expected operating and financing needs. Our ability to fund our capital needs, however, will depend on our ongoing ability to generate cash from operations and access to credit and capital markets, which are subject to the risk factors previously disclosed in our 2016 Form 10-K, as well as general economic, financial, competitive, regulatory and other factors that are beyond our control.

We expect that our primary cash requirements for the remainder of 2017 will be to fund costs associated ongoing operations including planned plant outages, capital expenditures and defined benefit pension plan contributions.

Credit Agreement

On September 30, 2016, under the Credit Agreement, we incurred indebtedness in the aggregate principal amount of approximately $270 million in the form of a term loan, the net proceeds of which were distributed to Honeywell substantially concurrent with the consummation of the Spin-Off, and we also entered into a $155 million revolving credit facility to fund our working capital and other cash needs. For information regarding our Credit Agreement, refer to “Note 9-Long-term Debt and Credit Agreement” to the Consolidated and Combined Financial Statements in Item 8 of our 2016 Form 10-K. Going forward, cash provided by operating activities will be needed to fund future interest payments in respect of our outstanding indebtedness.

Under the terms of the Credit Agreement, we are subject to restrictive covenants that limit our ability, among other things, to incur additional indebtedness, pay dividends or make other distributions, and consolidate, merge, sell or otherwise dispose of assets, as well as financial covenants that require us to maintain interest coverage and leverage ratios at levels specified in the Credit Agreement. These covenants may limit how we conduct our business, and in the event of certain defaults, our repayment obligations may be accelerated. We were in compliance with all of our covenants at March 31, 2017. As of March 31, 2017, $153 million of the total credit facility of $425 million is available to be drawn under the Credit Agreement.

During the three month period ended March 31, 2017, we borrowed $167.5 million in the aggregate from our revolving credit facility for our working capital and other cash needs and these borrowings were fully repaid by March 31, 2017.

Cash Flow Summary

	Three Months Ended March 31,
		2017			2016
Cash provided by (used for):
Operating activities	$	31,206		$	4,041
Investing activities		(33,335	)		(24,829	)
Financing activities		(42	)		20,788
Net decrease in cash and cash equivalents	$	(2,171	)	$	—

Cash provided by operating activities increased by $27.2 million for the three months ended March 31, 2017 versus the same period last year due primarily to a $17.1 million decrease in Accounts payable in the first quarter of 2016 due to timing of payments, a $10.3 million increase in Other assets and liabilities due to our contributions to the Hopewell regional wastewater treatment facility and other factors in the first quarter of 2016, and a $5.2 million increase in Income taxes payable as the Company is now responsible for its own tax liabilities. This was offset partially by higher accounts receivable of $18.3 million due to higher sales in the first quarter of 2017.

Cash used for investing activities increased by $8.5 million for the three months ended March 31, 2017 versus the same period last year due primarily to an increase in cash paid for capital expenditures of $8.6 million.

Cash provided by financing activities decreased by $20.8 million for the three months ended March 31, 2017 versus the same period last year due to a reduction in invested equity resulting from the completion of the Spin-Off from Honeywell. Cash provided by operating activities was sufficient to repay all current period borrowings under the revolving credit facility.

Capital Expenditures

(Dollars in thousands, unless otherwise noted)

Our operations are capital intensive, requiring ongoing investments that have consisted, and are expected to continue to consist, primarily of capital expenditures required to maintain and improve equipment reliability, expand production capacity, further improve mix, yield, throughput, and cost position, and comply with environmental and safety regulations.

The following table summarizes ongoing and expansion capital expenditures:

	Three Months Ended March 31, 2017

Capital expenditures in Accounts payable at December 31, 2016	$	28,495
Purchases of property, plant and equipment		19,014
Capital expenditures in Accounts payable at March 31, 2017		(14,295	)
Cash paid for capital expenditures	$	33,214

For the full year 2017, we expect the Company’s total capital expenditures to be approximately $90 million.

Critical Accounting Policies

The preparation of our Condensed Consolidated and Combined Financial Statements in accordance with U.S. GAAP is based on the selection and application of accounting policies that require us to make significant estimates and assumptions about the effects of matters that are inherently uncertain. We consider these accounting policies to be critical to the understanding of our Condensed Consolidated and Combined Financial Statements. For a full description of our critical accounting policies, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the 2016 Form 10-K. While there have been no material changes to our critical accounting policies as to the methodologies or assumptions we apply under them, we continue to monitor such methodologies and assumption.

Off-Balance Sheet Arrangements and Contractual Obligations

As of March 31, 2017, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations other than those detailed in our 2016 Form 10-K. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

Recent Accounting Pronouncements

See “Note 2 Recent Accounting Pronouncements” to the Condensed Consolidated and Combined Financial Statements included in Part I, Item 1 of this Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our exposure to risk based on changes in interest rates relates primarily to our Credit Agreement. We have not used derivative financial instruments in our investment portfolio. The Credit Agreement bears interest at floating rates. For variable rate debt, interest rate changes generally do not affect the fair market value of such debt assuming all other factors remain constant, but do impact future earnings and cash flows. Accordingly, we may be exposed to interest rate risk on borrowings under the Credit Agreement. Based on current borrowing levels, a 25 basis point fluctuation in interest rates for the first quarter of 2017 would result in an increase or decrease to our interest expense of approximately $0.1 million.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains a system of disclosure controls and procedures designed to give reasonable assurance that information required to be disclosed in the Company’s reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to management to allow timely decisions regarding required disclosures.

Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud have been or will be detected.

Our Chief Executive Officer and Chief Financial Officer, with the assistance of other members of our management, conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report. Based upon such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective at a reasonable assurance level as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

Management has not identified any change in the Company’s internal control over financial reporting that occurred during the quarter ended March 31, 2017 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are involved in litigation relating to claims arising out of the ordinary course of our business operations. We are not a party to, and, to our knowledge, there are not threats of any claims or actions against us, the ultimate disposition of which would have a material adverse effect on our consolidated results of operations or liquidity.

ITEM 1A. RISK FACTORS

There have been no material changes to our risk factors as previously disclosed in the Company’s 2016 Form 10-K.

ITEM 6. EXHIBITS

Exhibit		Description
3.1		Amended and Restated Certificate of Incorporation of AdvanSix Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on October 3, 2016).
3.2		Amended and Restated By-laws of AdvanSix Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on October 3, 2016).
10.1		Fifth Amendment to the Amended and Restated Caprolactam and Polymer Supply Agreement dated as of March 1, 2017, by and between AdvanSix Resins & Chemicals LLC and Shaw Industries Group, Inc.* (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 6, 2017).
10.2		Sixth Amendment to the Amended and Restated Caprolactam and Polymer Supply Agreement dated as of March 1, 2017, by and between AdvanSix Resins & Chemicals LLC and Shaw Industries Group, Inc.* (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 6, 2017).
10.3		Form of Restricted Stock Unit Agreement for Officers under the 2016 Stock Incentive Plan of AdvanSix Inc. and its Affiliates †
10.4		Form of Performance Stock Unit Agreement under the 2016 Stock Incentive Plan of AdvanSix Inc. and its Affiliates †
10.5		Form of Stock Option Award Agreement under the 2016 Stock Incentive Plan of AdvanSix Inc. and its Affiliates †
31.1		Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Executive Officer.

31.2		Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Financial Officer
32.1		Section 1350 Certification of the Company’s Principal Executive Officer. The information contained in this Exhibit shall not be deemed filed with the SEC nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
32.2		Section 1350 Certification of the Company’s Principal Financial Officer. The information contained in this Exhibit shall not be deemed filed with the SEC nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.DEF		XBRL Taxonomy Extension Definition Linkbase
101.LAB		XBRL Taxonomy Extension Label Linkbase
101.PRE		XBRL Taxonomy Extension Presentation Linkbase

†	Indicates management contract or compensatory plan.

*	Confidential treatment has been granted for certain information contained in Exhibits 10.1 and 10.2, and the omitted portions have been filed separately with the SEC.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ADVANSIX INC.

Date: May 11, 2017	By:	/s/ Michael Preston
		Michael Preston
		Senior Vice President and Chief Financial Officer

Exhibit 10.3

2016 Stock Incentive Plan
of AdvanSix Inc. and its Affiliates

Form of Restricted Stock Unit Agreement

RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”) as of the [DAY] day of [MONTH YEAR] (the “Award Date”) between AdvanSix Inc. (the “Company”) and [EMPLOYEE NAME].

Grant of Award. The Company has granted you [NUMBER] Restricted Stock Units, subject to the provisions of this Agreement and the 2016 Stock Incentive Plan of AdvanSix Inc. and its Affiliates (the “Plan”). The Company will hold the Restricted Stock Units and Additional Restricted Stock Units (as defined in Section 2) in a bookkeeping account on your behalf until they become payable or are forfeited or cancelled.

Dividend Equivalents. Except as otherwise determined by the Committee, in its sole discretion, you will earn Dividend Equivalents in an amount equal to the value of any cash or stock dividends paid by the Company upon one Share of Common Stock for each unvested Restricted Stock Unit or Additional Restricted Stock Unit (as defined below) credited to your bookkeeping account on a dividend record date. In the case of cash dividends, the Company shall credit to your bookkeeping account, on each dividend payment date, an additional number of Restricted Stock Units (“Additional Restricted Stock Units”) equal to (a) divided by (b), where (a) equals the total number of unvested Restricted Stock Units and Additional Restricted Stock Units, if any, subject to this Agreement on such date multiplied by the dollar amount of the cash dividend paid per Share of Common Stock on such date, and (b) equals the Fair Market Value of a Share on such date. If a dividend is paid to holders of Common Stock in Shares, the Company shall credit to you, on each dividend payment date, Additional Restricted Stock Units equal to the total number of unvested Restricted Stock Units and Additional Restricted Stock Units subject to this Agreement on such date multiplied by the Share dividend paid per Share of Common Stock on such date. Additional Restricted Stock Units are subject to the same restrictions, including but not limited to vesting, transferability and payment restrictions, that apply to the Restricted Stock Units to which they relate.

Payment Amount. Restricted Stock Units and Additional Restricted Stock Units each represent one (1) Share of Common Stock.

Vesting. Except in the event of your Termination of Service due to death or the incurrence of a Disability or as otherwise provided in Section 8 of this Agreement relating to a Change in Control, the Restricted Stock Units and Additional Restricted Stock Units will vest [in full on [●]] (the “Vesting Date”), based on your continued employment with the Company through the Vesting Date.

Form and Timing of Payment. Except as otherwise determined by the Committee in its sole discretion or as provided in Section 8(a), vested Restricted Stock Units and Additional Restricted Stock Units will be redeemed solely for Shares. Payment of vested Restricted Stock Units and Additional Restricted Stock Units will be made as soon as practicable, but no later than 15 days, following the Vesting Date and in no event later than two and one-half (2-1/2) months following the end of the calendar year in which the Vesting Date occurs. As determined by the Company in its sole discretion prior to the Vesting Date, any fractional Shares may be paid in cash or rounded up or down to the nearest whole Share.

Termination of Service. Except as otherwise provided in Sections 7(a) and 8 of this Agreement, any Restricted Stock Units and Additional Restricted Stock Units that have not vested as of your Termination of Service will immediately be forfeited, and your rights with respect to these Restricted Stock Units and Additional Restricted Stock Units will end.

Death or Disability.

Vesting. If your Termination of Service occurs due to death or due to the incurrence of a Disability before the Vesting Date described in Section 4 of this Agreement, all of your unvested Restricted Stock Units and Additional Restricted Stock Units will vest as of your Termination of Service due to death or Disability, as applicable. If you are deceased, the Company will make a payment to your estate only after the Committee has determined that the payee is the duly appointed executor or administrator of your estate, subject to Section 7.14 of the Plan.

Payment. Except as otherwise determined by the Committee, if your Termination of Service occurs due to death or due to the incurrence of a Disability, before the Vesting Date, payment for vested Restricted Stock Units and Additional Restricted Stock Units will be made as soon as practicable, but no later than 15 days, following such Termination of Service and in no event later than two and one-half (2-1/2) months following the end of the calendar year in which such Termination of Service occurs.

Change in Control. In the event of a Change in Control, the following provisions apply:

Cashout of Awards . Unless assumed, substituted or continued in accordance with Section 5.4(a) of the Plan, the Restricted Stock Units and Additional Restricted Stock Units that have not vested or terminated as of the date of the Change in Control shall vest as of immediately prior to the Change in Control. Unless otherwise determined by the Committee, no later than 15 days after the date of the Change in Control, you will receive for the Restricted Stock Units and Additional Restricted Stock Units a

single payment in cash equal to the product of the number of outstanding Restricted Stock Units and Additional Restricted Stock Units as of the date of the Change in Control (including any Restricted Stock Units and Additional Restricted Stock Units that vest pursuant to this Section 8) and an amount equal to the highest price per Share paid by the successor company in connection with such Change in Control, as determined by the Committee.

Rollover of Awards. If assumed, substituted or continued in accordance with Section 5.4(a) of the Plan, Restricted Stock Units and Additional Restricted Stock Units that have not vested or terminated as of the date of the Change in Control will continue to vest in accordance with the schedule described in Section 4 of this Agreement (or as adjusted if more favorable); provided, however, that if you incur an involuntary Termination of Service not for Cause (as defined in Section 2.6 of the Plan) or a voluntary Termination of Service for Good Reason (as defined in Section 5.4(c) of the Plan) on or before the second anniversary of the date of the Change in Control, Restricted Stock Units and Additional Restricted Stock Units that have not vested or terminated as of your Termination of Service will immediately vest in full and be settled no later than 15 days after the Termination of Service.

Withholdings. The Company or your local employer shall have the power and the right to deduct or withhold, or require you to remit to the Company or to your local employer, prior to any issuance or delivery of Shares on Restricted Stock Units or Additional Restricted Stock Units, an amount sufficient to satisfy taxes imposed under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital gain taxes, transfer taxes, and social security contributions, and National Insurance Contributions, that are required by law to be withheld as determined by the Company or your local employer.

10.

Transfer of Award. You may not transfer the Restricted Stock Units, Additional Restricted Stock Units or any interest in such Units except by will or the laws of descent and distribution or except as otherwise permitted by the Committee and as specified in the Plan. Any other attempt to dispose of your interest will be null and void.

11.

Requirements for and Forfeiture of Award.

General. The Award is expressly contingent upon you complying with the terms, conditions and definitions contained in this Section 11 and in any other agreement that governs your noncompetition with the Company and its Affiliates, your nonsolicitation of employees, customers, suppliers, business partners and vendors of the Company and its Affiliates, and/or your conduct with respect to trade secrets and proprietary and confidential information of the Company and its Affiliates.

Remedies.

You expressly agree and acknowledge that the forfeiture provisions of subsection 11.b.2. of this Agreement shall apply if, from the Award Date until the date that is twenty-four (24) months after your Termination of Service for any reason, you (i) enter into an employment, consultation or similar agreement or arrangement (including any arrangement for service as an agent, partner, stockholder, consultant, officer or director) with any entity or person engaged in a business in which the Company or its Affiliates are engaged if the business is competitive (in the sole judgment of the Committee) with the Company or its Affiliates and the Committee has not approved the agreement or arrangement in writing, or (ii) make any statement, publicly or privately (other than to your spouse and legal advisors), which would be disparaging (as defined below) to the Company and its Affiliates or their businesses, products, strategies, prospects, condition, or reputation or that of their directors, employees, officers or members, or (iii) write or contribute to a book, article or other media publication, whether in written or electronic format, that is in any way descriptive of the Company and its Affiliates or your career with the Company and its Affiliates without first submitting a draft thereof, at least thirty (30) days in advance, to the Company’s Senior Vice President, General Counsel and Corporate Secretary or his or her delegate, whose judgment about whether such book, article or other media publication is disparaging shall be determinative; or such a book, article or other media publication is published after a determination that it is disparaging; provided, however, that nothing herein shall preclude you from reporting (in good faith) possible violations of federal law or regulation to any governmental agency or entity, including but not limited to, the Department of Justice, the Securities and Exchange Commission, the Congress, and/or any agency Inspector General, or making any other disclosures that are protected under the whistleblower provisions of federal or state law or regulation, or from otherwise making any statement (in good faith) which is required by any applicable law or regulation or the order of a court or other governmental body.

For purposes of this subsection 11.b.1, the term “disparaging” shall mean any statement or representation (whether oral or written and whether true or untrue) which, directly or by implication, tends to create a negative, adverse, or derogatory impression about the subject of the statement or representation or which is intended to harm the reputation of the subject of the statement or representation.

In addition to the relief described in any other agreement that governs your noncompetition with the Company and its Affiliates, your nonsolicitation of the employees, customers, suppliers, business partners and vendors of the Company and its Affiliates, and/or your conduct with respect to the trade secrets and proprietary and confidential information of the Company and its Affiliates, if the Committee determines, in its sole judgment, that you have violated the terms of any such agreement, or you have engaged in an act that violates subsection 11.b.1. of this Agreement, (i) any Restricted Stock Units and Additional Restricted Stock Units that have not vested under this Agreement shall immediately be cancelled, and you shall forfeit any rights you have with respect to such Units as of the date of the Committee’s determination, and (ii) you shall immediately deliver to the Company Shares (or the cash equivalent) equal in value to the Restricted Stock Units and Additional Restricted Stock Units you received during the period beginning twelve (12) months prior to your Termination of Service and ending on the date of the Committee’s determination.

Notwithstanding anything in the Plan or this Agreement to the contrary, you acknowledge that the Company may be entitled or required by law, Company policy or the requirements of an exchange on which the Shares are listed for trading, to recoup compensation paid to you pursuant to the Plan, and you agree to comply with any Company request or demand for recoupment.

12.

Restrictions on Payment of Shares. Payment of Shares for your Restricted Stock Units and Additional Restricted Stock Units is subject to the conditions that, to the extent required at the time of settlement, (i) the Shares underlying the Restricted Stock Units and Additional Restricted Stock Units will be duly listed, upon official notice of redemption, upon the New York Stock Exchange (or any other securities exchange on which Shares may be listed), and (ii) a Registration Statement under the Securities Act of 1933 with respect to the Shares will be effective. The Company will not be required to deliver any Shares until all applicable federal and state laws and regulations have been complied with and all legal matters in connection with the issuance and delivery of the Shares have been approved by counsel for the Company.

13.

Adjustments. Any adjustments to the Restricted Stock Units and Additional Restricted Stock Units will be governed by Section 5.3 of the Plan.

14.

Shares received for Restricted Stock Units or Additional Restricted Stock Units to the extent that the Company has a right of recovery or reimbursement under applicable securities laws.

15.

Plan Terms Govern. The vesting and redemption of Restricted Stock Units or Additional Restricted Stock Units, the disposition of any Shares received for Restricted Stock Units or Additional Restricted Stock Units, the treatment of gain on the disposition of these Shares, and the treatment of Dividend Equivalents are subject to the provisions of the Plan and any rules that the Committee may prescribe. The Plan document, as may be amended from time to time, is incorporated into this Agreement. Capitalized terms used in this Agreement have the meaning set forth in the Plan, unless otherwise stated in this Agreement. In the event of any conflict between the terms of the Plan and the terms of this Agreement, the Plan will control. By accepting the Award, you acknowledge that the Plan and the Plan prospectus, as in effect on the date of this Agreement, have been made available to you for your review.

16.

Personal Data.

By entering into this Agreement, and as a condition of the grant of the Restricted Stock Units, you expressly consent to the collection, use, and transfer of personal data as described in this Section to the full extent permitted by and in full compliance with applicable law.

You understand that your local employer holds, by means of an automated data file, certain personal information about you, including, but not limited to, name, home address and telephone number, date of birth, social insurance number, salary, nationality, job title, any shares or directorships held in the Company, details of all restricted units or other entitlement to shares awarded, canceled, exercised, vested, unvested, or outstanding in your favor, for the purpose of managing and administering the Plan (“Data”).

You further understand that part or all of your Data may be also held by the Company or its Affiliates, pursuant to a transfer made in the past with your consent, in respect of any previous grant of restricted units or awards, which was made for the same purposes of managing and administering of previous award/incentive plans, or for other purposes.

You further understand that your local employer will transfer Data to the Company or its Affiliates among themselves as necessary for the purposes of implementation, administration, and management of your participation in the Plan, and that the Company or its Affiliates may transfer Data among themselves, and/or each, in turn, further transfer Data to any third parties assisting the Company in the implementation, administration, and management of the Plan (“Data Recipients”).

You understand that the Company or its Affiliates, as well as the Data Recipients, are or may be located in your country of residence or elsewhere, such as the United States. You authorize the Company or its Affiliates, as well as the Data Recipients, to receive, possess, use, retain, and transfer Data in electronic or other form, for the purposes of implementing, administering, and managing your participation in the Plan, including any transfer of such Data, as may be required for the administration of the Plan and/or the subsequent holding of Shares on your behalf, to a broker or third party with whom the Shares may be deposited.

You understand that you may show your opposition to the processing and transfer of your Data, and, may at any time, review the Data, request that any necessary amendments be made to it, or withdraw your consent herein in writing by contacting the Company. You further understand that withdrawing consent may affect your ability to participate in the Plan.

17.

Discretionary Nature and Acceptance of Award . By accepting this Award, you agree to be bound by the terms of this Agreement and acknowledge that:

The Company (and not your local employer) is granting your Restricted Stock Units and Additional Restricted Stock Units. Furthermore, this Agreement is not derived from any preexisting labor relationship between you and the Company, but rather from a mercantile relationship.

The Company may administer the Plan from outside your country of residence and United States law will govern all Restricted Stock Units and Additional Restricted Stock Units granted under the Plan.

Benefits and rights provided under the Plan are wholly discretionary and, although provided by the Company, do not constitute regular or periodic payments.

The benefits and rights provided under the Plan are not to be considered part of your salary or compensation under your employment with your local employer for purposes of calculating any severance, resignation, redundancy or other end of service payments, vacation, bonuses, long-term service awards, indemnification, pension or retirement benefits, or any other payments, benefits or rights of any kind. You waive any and all rights to compensation or damages as a result of the Termination of Service with your local employer for any reason whatsoever insofar as those rights result, or may result, from the loss or diminution in value of such rights under the Plan or your ceasing to have any rights under, or ceasing to be entitled to any rights under, the Plan as a result of such termination.

The grant of Restricted Stock Units and Additional Restricted Stock Units hereunder, and any future grant of Restricted Stock Units or Additional

Restricted Stock Units under the Plan, is entirely voluntary, and at the complete discretion of the Company. Neither the grant of the Restricted Stock Units, the Additional Restricted Stock Units nor any future grant by the Company will be deemed to create any obligation to make any future grants, whether or not such a reservation is explicitly stated at the time of such a grant. The Company has the right, at any time and/or on an annual basis, to amend, suspend or terminate the Plan; provided, however, that no such amendment, suspension, or termination will adversely affect your rights hereunder.

The Plan will not be deemed to constitute, and will not be construed by you to constitute, part of the terms and conditions of employment. Neither the Company nor your local employer will incur any liability of any kind to you as a result of any change or amendment, or any cancellation, of the Plan at any time.

Participation in the Plan will not be deemed to constitute, and will not be deemed by you to constitute, an employment or labor relationship of any kind with the Company.

18.

Limitations. Nothing in this Agreement or the Plan gives you any right to continue in the employ of the Company or any of its Affiliates or to interfere in any way with the right of the Company or any Affiliate to terminate your employment at any time. Payment of your Restricted Stock Units and Additional Restricted Stock Units is not secured by a trust, insurance contract or other funding medium, and you do not have any interest in any fund or specific asset of the Company by reason of this Award or the account established on your behalf. You have no rights as a stockholder of the Company pursuant to the Restricted Stock Units or Additional Restricted Stock Units until Shares are actually delivered to you.

19.

Incorporation of Other Agreements. This Agreement and the Plan constitute the entire understanding between you and the Company regarding the Restricted Stock Units. This Agreement supersedes any prior agreements, commitments or negotiations concerning the Restricted Stock Units and the Additional Restricted Stock Units.

20.

Severability. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of the other provisions of the Agreement, which will remain in full force and effect. Moreover, if any provision is found to be excessively broad in duration, scope or covered activity, the provision will be construed so as to be enforceable to the maximum extent compatible with applicable law.

21.

Governing Law. The Plan, this Agreement, and all determinations made and actions taken under the Plan or this Agreement shall be governed by the internal

substantive laws, and not the choice of law rules, of the State of Delaware and construed accordingly, to the extent not superseded by applicable federal law.

22.

Agreement Changes. The Company reserves the right to change the terms of this Agreement and the Plan without your consent to the extent necessary or desirable to comply with the requirements of Code section 409A, the Treasury regulations and other guidance thereunder.

23.

Successors and Assigns of the Company. The terms and conditions of this Agreement shall be binding upon and shall inure to the benefit of the Company and its successors and assigns.

24.

Acknowledgements. By accepting this Agreement, you agree to the following: (i) you have carefully read, fully understand and agree to all of the terms and conditions described in this Agreement, the Plan, the Plan’s prospectus and all accompanying documentation; and (ii) you understand and agree that this Agreement and the Plan constitute the entire understanding between you and the Company regarding the Restricted Stock Units, and that any prior agreements, commitments or negotiations concerning the Restricted Stock Units are replaced and superseded.

25.

Award Acceptance. To retain this Award, you must accept it by signing the Agreement below and, by signing this Agreement, you will be deemed to consent to the application of the terms and conditions set forth in this Agreement and the Plan. If you do not wish to accept this Award, you must contact AdvanSix Inc., 300 Kimball Drive, Suite 101, Parsippany, New Jersey 07054 in writing within thirty (30) days of the Award Date, or otherwise this Award shall for all purposes be deemed accepted.

	I Accept:


	Signature	Date

Exhibit 10.4

2016 Stock Incentive Plan
of AdvanSix Inc. and its Affiliates

Form of Performance Stock Unit Agreement

PERFORMANCE STOCK UNIT AGREEMENT (this “Agreement”) as of the [DAY] day of [MONTH YEAR] (the “Award Date”) between AdvanSix Inc. (the “Company”) and [EMPLOYEE NAME].

Grant of Award. The Company has granted you [NUMBER] Performance Stock Units (“Performance Stock Units”), representing your Target Award, subject to the provisions of this Agreement and the 2016 Stock Incentive Plan of AdvanSix Inc. and its Affiliates (the “Plan”). The Company will hold the Performance Stock Units and Additional Performance Stock Units (as defined in Section 2) in a bookkeeping account on your behalf until they become payable or are forfeited or cancelled.

Dividend Equivalents. Except as otherwise determined by the Committee, in its sole discretion, you will earn Dividend Equivalents in an amount equal to the value of any cash or stock dividends paid by the Company upon one Share of Common Stock for each unvested Performance Stock Unit or Additional Performance Stock Unit (as defined below) credited to your bookkeeping account on a dividend record date. At the Vesting Date specified in Section 4, such Dividend Equivalents shall be adjusted upward or downward based on your actual number of Performance Stock Units earned and vested in accordance with the terms of this Agreement. In the case of cash dividends, the Company shall credit to your bookkeeping account, on each dividend payment date, an additional number of Performance Stock Units (“Additional Performance Stock Units”) equal to (a) divided by (b), where (a) equals the total number of unvested Performance Stock Units and Additional Performance Stock Units, if any, subject to this Agreement on such date, multiplied by the dollar amount of the cash dividend paid per Share of Common Stock on such date, and (b) equals the Fair Market Value of a Share on such date. If a dividend is paid to holders of Common Stock in Shares, the Company shall credit to you, on each dividend payment date, Additional Performance Stock Units equal to the total number of unvested Performance Stock Units and Additional Performance Stock Units subject to this Agreement on such date multiplied by the Share dividend paid per Share of Common Stock on such date. Additional Performance Stock Units are subject to the same restrictions, including but not limited to vesting, transferability and payment restrictions, that apply to the Performance Stock Units to which they relate.

3.	Payment Amount. Performance Stock Units and Additional Performance Stock Units each represent one (1) Share of Common Stock.

Vesting. Vesting of the Performance Stock Units and any Additional Performance Stock Units is contingent upon achievement of the performance measures set forth in Schedule A , which is incorporated into and made a part of this Agreement, and your continuous employment with the Company through the Vesting Date. Except as otherwise provided in this Agreement or the Plan, any Performance Stock Units and Additional Performance Stock Units earned based on achievement of the specific performance measures shall vest following the end of the Performance Cycle upon the Committee’s certification of the level of attainment of the applicable performance measures (“Vesting Date”).

Form and Timing of Payment. Except as otherwise determined by the Committee in its sole discretion or as provided in Section 8(a), vested Performance Stock Units and Additional Performance Stock Units will be redeemed solely for Shares. Payment of any vested Performance Stock Units and any Additional Performance Stock Units will be made as soon as practicable, but no later than 15 days, following the Vesting Date and in no event later than two and one-half (2-1/2) months following the end of the calendar year in which the Vesting Date occurs. As determined by the Company in its sole discretion prior to the Vesting Date, any fractional Shares may be paid in cash or rounded up or down to the nearest whole Share.

Termination of Service. Except as otherwise provided in Sections 7(a) and 8 of this Agreement, any Performance Stock Units and Additional Performance Stock Units that have not vested as of your Termination of Service will immediately be forfeited, and your rights with respect to these Performance Stock Units and Additional Performance Stock Units will end.

Death or Disability. If your Termination of Service occurs due to death or due to the incurrence of a Disability before the Vesting Date described in Section 4 of this Agreement, you will be entitled to a prorated portion of the Award (or the Award without proration if your death or your incurrence of a Disability occurs after the last day of the Performance Cycle but before the Award is paid) based upon the portion of the Performance Cycle during which you provided services to the Company, which shall be paid at such time as the Award is otherwise payable, but only to the extent performance measures for the applicable Performance Cycle are achieved. If you are deceased, the Company will make a payment to your estate only after the Committee has determined that the payee is the duly appointed executor or administrator of your estate, subject to Section 7.14 of the Plan.

8.	Change in Control. In the event of a Change in Control, the following provisions apply:

Cashout of Awards . Unless assumed, substituted or continued in accordance with Section 5.4(a) of the Plan, the Performance Stock Units and Additional Performance Stock Units shall vest, as of immediately

prior to the Change in Control, as follows: all vesting criteria shall be deemed achieved at the greater of (i) target levels of achievement or (ii) actual levels of performance achievement determined by the Committee in its sole discretion as of the date of the Change in Control. Unless otherwise determined in good faith by the Committee, no later than 30 days after the date of the Change in Control, you will receive a single payment in cash equal to the product of (x) the number of Performance Stock Units and Additional Performance Stock Units outstanding as of the date of the Change in Control that vested pursuant to this Section 8(a) and (y) an amount equal to the highest price per Share paid by the successor company in connection with such Change in Control, as determined by the Committee.

Rollover of Awards. If assumed, substituted or continued in accordance with Section 5.4(a) of the Plan, Performance Stock Units and Additional Performance Stock Units that have not vested or terminated as of the date of the Change in Control will continue to vest in accordance with Section 4 of this Agreement (or as adjusted if more favorable); provided, however, if you incur an involuntary Termination of Service not for Cause (as defined in Section 2.6 of the Plan) or a voluntary Termination of Service for Good Reason (as defined in Section 5.4(c) of the Plan) on or before the second anniversary of the date of the Change in Control, Performance Stock Units and Additional Performance Stock Units that have not vested or terminated as of your Termination of Service will (i) immediately vest, as follows: all vesting criteria shall be deemed achieved at the greater of (x) target levels of achievement or (y) actual levels of performance achievement determined in good faith by the Committee in its sole discretion as of the date of the Termination of Service and (ii) be settled no later than 30 days after the Termination of Service.

Withholdings. The Company or your local employer shall have the power and the right to deduct or withhold, or require you to remit to the Company or to your local employer, prior to any issuance or delivery of Shares on Performance Stock Units or Additional Performance Stock Units, an amount sufficient to satisfy taxes imposed under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital gain taxes, transfer taxes, and social security contributions, and National Insurance Contributions, that are required by law to be withheld as determined by the Company or your local employer.

10.

Transfer of Award. You may not transfer the Performance Stock Units, Additional Performance Stock Units or any interest in such Units except by will or the laws of descent and distribution or except as otherwise permitted by the Committee and as specified in the Plan. Any other attempt to dispose of your interest will be null and void.

11.

Requirements for and Forfeiture of Award.

Remedies.

making any statement (in good faith) which is required by any applicable law or regulation or the order of a court or other governmental body.

In addition to the relief described in any other agreement that governs your noncompetition with the Company and its Affiliates, your nonsolicitation of the employees, customers, suppliers, business partners and vendors of the Company and its Affiliates, and/or your conduct with respect to the trade secrets and proprietary and confidential information of the Company and its Affiliates, if the Committee determines, in its sole judgment, that you have violated the terms of any such agreement, or you have engaged in an act that violates subsection 11.b.1. of this Agreement, (i) any Performance Stock Units and Additional Performance Stock Units that have not vested under this Agreement shall immediately be cancelled, and you shall forfeit any rights you have with respect to such Units as of the date of the Committee’s determination, and (ii) you shall immediately deliver to the Company Shares (or the cash equivalent) equal in value to any Performance Stock Units and Additional Performance Stock Units you received during the period beginning twelve (12) months prior to your Termination of Service and ending on the date of the Committee’s determination.

12.

Restrictions on Payment of Shares. Payment of Shares for your Performance Stock Units and Additional Performance Stock Units is subject to the conditions that, to the extent required at the time of settlement, (i) the Shares underlying the Performance Stock Units and Additional Performance Stock Units will be duly listed upon the New York Stock Exchange (or any other securities exchange on which Shares may be listed), and (ii) a Registration Statement under the Securities Act of 1933 with respect to the Shares will be effective. The Company will not

be required to deliver any Shares until all applicable federal and state laws and regulations have been complied with and all legal matters in connection with the issuance and delivery of the Shares have been approved by counsel for the Company.

13.

Adjustments. Any adjustments to the Performance Stock Units and Additional Performance Stock Units will be governed by Section 5.3 of the Plan.

14.

15.

Plan Terms Govern. The vesting of Performance Stock Units or Additional Performance Stock Units, the disposition of any Shares received for Performance Stock Units or Additional Performance Stock Units, the treatment of gain on the disposition of these Shares, and the treatment of Dividend Equivalents are subject to the provisions of the Plan and any rules that the Committee may prescribe. The Plan document, as may be amended from time to time, is incorporated into this Agreement. Capitalized terms used in this Agreement have the meaning set forth in the Plan, unless otherwise stated in this Agreement. In the event of any conflict between the terms of the Plan and the terms of this Agreement, the Plan will control. By accepting the Award, you acknowledge that the Plan and the Plan prospectus, as in effect on the date of this Agreement, have been made available to you for your review.

16.

Personal Data.

By entering into this Agreement, and as a condition of the grant of the Performance Stock Units, you expressly consent to the collection, use, and transfer of personal data as described in this Section to the full extent permitted by and in full compliance with applicable law.

17.

Discretionary Nature and Acceptance of Award . By accepting this Award, you agree to be bound by the terms of this Agreement and acknowledge that:

The Company (and not your local employer) is granting your Performance Stock Units and Additional Performance Stock Units. Furthermore, this Agreement is not derived from any preexisting labor relationship between you and the Company, but rather from a mercantile relationship.

The Company may administer the Plan from outside your country of residence and United States law will govern all Performance Stock Units and Additional Performance Stock Units granted under the Plan.

Benefits and rights provided under the Plan are wholly discretionary and, although provided by the Company, do not constitute regular or periodic payments.

The grant of Performance Stock Units and Additional Performance Stock Units hereunder, and any future grant of Performance Stock Units or Additional Performance Stock Units under the Plan, is entirely voluntary, and at the complete discretion of the Company. Neither the grant of the Performance Stock Units, the Additional Performance Stock Units nor any future grant by the Company will be deemed to create any obligation to make any future grants, whether or not such a reservation is explicitly stated at the time of such a grant. The Company has the right, at any time and/or on an annual basis, to amend, suspend or terminate the Plan; provided, however, that no such amendment, suspension, or termination will adversely affect your rights hereunder.

Participation in the Plan will not be deemed to constitute, and will not be deemed by you to constitute, an employment or labor relationship of any kind with the Company.

18.

Limitations. Nothing in this Agreement or the Plan gives you any right to continue in the employ of the Company or any of its Affiliates or to interfere in any way with the right of the Company or any Affiliate to terminate your employment at any time. Payment of your Performance Stock Units and Additional Performance Stock Units is not secured by a trust, insurance contract or other funding medium, and you do not have any interest in any fund or specific asset of the Company by reason of this Award or the account established on your behalf. You have no rights as a stockholder of the Company pursuant to the Performance Stock Units or Additional Performance Stock Units until Shares are actually delivered to you.

19.

Incorporation of Other Agreements. This Agreement and the Plan constitute the entire understanding between you and the Company regarding the Performance Stock Units. This Agreement supersedes any prior agreements, commitments or negotiations concerning the Performance Stock Units and the Additional Performance Stock Units.

20.

21.

Governing Law. The Plan, this Agreement, and all determinations made and actions taken under the Plan or this Agreement shall be governed by the internal substantive laws, and not the choice of law rules, of the State of Delaware and construed accordingly, to the extent not superseded by applicable federal law.

22.

23.

Successors and Assigns of the Company. The terms and conditions of this Agreement shall be binding upon and shall inure to the benefit of the Company and its successors and assigns.

24.

Acknowledgements. By accepting this Agreement, you agree to the following: (i) you have carefully read, fully understand and agree to all of the terms and conditions described in this Agreement, the Plan, the Plan’s prospectus and all accompanying documentation; and (ii) you understand and agree that this Agreement and the Plan constitute the entire understanding between you and the Company regarding the Performance Stock Units, and that any prior agreements, commitments or negotiations concerning the Performance Stock Units are replaced and superseded.

25.

	I Accept:

	Signature	Date

Schedule A

Performance Share Units (PSUs)

[Performance Cycle and Vesting Terms]

Exhibit 10.5

2016 Stock Incentive Plan
of AdvanSix Inc. and its Affiliates

Form of Stock Option Award Agreement

STOCK OPTION AWARD AGREEMENT (this “Agreement”), as of [DATE] (the “Grant Date”), between AdvanSix Inc. (the “Company”) and [EMPLOYEE NAME].

Grant of Option. The Company has granted you an Option to purchase [NUMBER] Shares of Common Stock, subject to the provisions of this Agreement and the 2016 Stock Incentive Plan of AdvanSix Inc. and its Affiliates (the “Plan”). This Option is a nonqualified Option.

Exercise Price. The purchase price of the Shares covered by the Option will be $[DOLLAR AMOUNT] per Share (“Exercise Price” or “Grant Price”).

Vesting. Except in the event of your death or Disability or as otherwise provided in Section 8 of this Agreement relating to a Change in Control, the Option will become exercisable as provided on the Vesting Schedule attached as Schedule A , which is incorporated into and made a part of this Agreement.

Term of Option. The Option must be exercised prior to the close of the New York Stock Exchange (“NYSE”) on the day before the tenth anniversary of the Grant Date (the “Expiration Date”), subject to earlier termination or cancellation as provided below. If the NYSE is not open for business on the Expiration Date, the Option will expire at the close of the NYSE on the business day immediately preceding the Expiration Date.

Payment of Exercise Price. Payment of the Exercise Price may be made in cash, certified check, bank draft, wire transfer, postal or express money order; or any of the following methods elected by you, subject to Committee’s discretion:

Delivering a properly executed exercise notice to the Company or its agent, together with irrevocable instructions to a broker to deliver promptly to the Company the amount of sale proceeds with respect to the portion of the Shares to be acquired having a Fair Market Value on the date of exercise equal to the sum of the applicable portion of the Exercise Price being so paid; or

Tendering (actually or by attestation) to the Company previously acquired Shares that have been held by the Participant for at least six months and that have a Fair Market Value on the day prior to the date of exercise equal to the applicable portion of the Exercise Price (and if applicable, tax withholding under Section 9 below) being so paid, provided the Committee, in consideration of applicable accounting standards, may waive any holding period on Shares tendered pursuant to this Section 5(b); or

Instructing the Company to withhold Shares that would otherwise be issued having a Fair Market Value on the date of exercise equal to the applicable portion of the Exercise Price (and if applicable, tax withholding under Section 9 below) being so paid; or

Any combination of the methods described in this Section 5.

Notwithstanding the foregoing, you may not tender any form of payment that the Committee determines, in its sole and absolute discretion, could violate any law or regulation

Exercise of Option. Subject to the terms and conditions of this Agreement, the Option may be exercised by delivering a properly executed exercise notice to the Company. If the Option is exercised after your death, the Company will deliver Shares only after the Company has determined that the person exercising the Option is the duly appointed executor or administrator of your estate or the person to whom the Option has been transferred by your will or by the applicable laws of descent and distribution.

Termination, Retirement, Disability or Death. The Option will vest and remain exercisable as follows:

Event	Vesting	Exercise Period
Death	Immediate vesting as of death.	Expires earlier of (i) original expiration date, or (ii) 3 years after death.

Disability	Immediate vesting as of incurrence of Disability.	Expires earlier of (i) original expiration date, or (ii) 3 years after Disability.

Retirement (Termination of Employment because of retirement from active employment on or after age 55 and 10 Years of Service)	Unvested Awards forfeited as of Retirement.	Expires earlier of (i) original expiration date, or (ii) 3 years after Retirement.

Voluntary Termination of Service	Unvested Awards forfeited as of Termination of Service.	Expires earlier of (i) original expiration date, or (ii) 30 days after Termination of Service.

Involuntary Termination of Service not for Cause	Unvested Awards forfeited as of Termination of Service.	Expires earlier of (i) original expiration date, or (ii) 1 year after Termination of Service.

Involuntary Termination of Service for Cause	Unvested Awards forfeited as of Termination of Service.	Vested Awards immediately cancelled.

Except as expressly provided herein, all rights hereunder shall cease to accrue as of the date of your Termination of Service with the Company and its Affiliates. You will forfeit the unvested portion of any award and all rights to continue vesting in awards shall cease as of the date of Termination of Service. Further, you will not be entitled to receive additional awards hereunder after Termination of Service.

Change in Control. In the event of a Change in Control, the following provisions apply:

Cashout of Awards. Unless assumed, substituted or continued in accordance with Section 5.4(a) of the Plan, any portion of the Option that has not vested or terminated as of the date of the Change in Control shall vest and become exercisable in full as of immediately prior to the Change in Control.

Rollover of Awards. If assumed, substituted or continued in accordance with Section 5.4(a) of the Plan, the Option shall remain outstanding and be continued in accordance with its applicable terms, and vesting shall not be accelerated; provided, however, if you incur an involuntary Termination of Service not for Cause (as defined in Section 2.6 of the Plan) or a voluntary Termination of Service for Good Reason (as defined in Section 5.4(c) of the Plan) on or before the second anniversary of the date of a Change in Control, any portion of the Option that has not vested or terminated as of your Termination of Service shall vest as of your Termination of Service and become exercisable in full as of the date of such Termination of Service. For purposes of the Exercise Period, such a termination shall be considered an Involuntary Termination not for Cause or, if applicable, a Retirement, under Section 7 of this Agreement.

Withholdings. The Company or your local employer shall have the power and the right to deduct or withhold, or require you to remit to the Company or your local employer, an amount sufficient to satisfy taxes imposed under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital gain taxes, transfer taxes, and social security contributions, and National Insurance Contributions, that are required by law to be withheld with respect to the grant of the Option, any exercise of the your rights under this Agreement, the sale of Shares acquired from the exercise of the Option, and/or payment of dividends on Shares acquired pursuant to the Option. You may elect to satisfy any such tax withholding obligations using any of the Exercise Price payment methods described in Section 5 above, in the Committee’s discretion.

10.

Transfer of Option. You may not transfer the Option or any interest in the Option except by will or the laws of descent and distribution or except as permitted by the Committee and as specified in the Plan. Any other attempt to dispose of your interest will be null and void.

11.

Requirements for and Forfeiture of Award.

Remedies.

You expressly agree and acknowledge that the forfeiture provisions of subsection 11.b.2. of this Agreement shall apply if, from the Grant Date until the date that is twenty-four (24) months after your Termination of Service for any reason, you (i) enter into an employment, consultation or similar agreement or arrangement (including any arrangement for service as an agent, partner, stockholder, consultant, officer or director) with any entity or person engaged in a business in which the Company or its Affiliates are engaged if the business is competitive (in the sole judgment of the Committee) with the Company or its Affiliates and the Committee has not approved the agreement or arrangement in writing, or (ii) make any statement, publicly or privately (other than to your spouse and legal advisors), which would be disparaging (as defined below) to the Company or its Affiliates or their businesses, products, strategies, prospects, condition, or reputation or that of their directors, employees, officers or members, or (iii) write or contribute to a book, article or other media publication, whether in written or electronic format, that is in any way descriptive of the Company or its Affiliates or your career with the Company or its Affiliates without first submitting a draft thereof, at least thirty (30) days in advance, to the Company’s Senior Vice President, General Counsel and Corporate Secretary or his or her delegate, whose judgment about whether such book, article or other media publication is disparaging shall be determinative; or such a book, article or other media publication is published after a determination that it is disparaging; provided, however, that nothing herein shall preclude you from reporting (in good faith) possible violations of federal law or regulation to any governmental agency or entity, including but not limited to, the Department of Justice, the Securities and Exchange Commission, the Congress, and/or any agency Inspector General, or making any other disclosures that are protected under the whistleblower provisions of federal or state law or regulation, or from otherwise making any statement (in good faith) which is required by any applicable law or regulation or the order of a court or other governmental body.

In addition to the relief described in any other agreement that governs your noncompetition with the Company and its Affiliates, your nonsolicitation of the employees, customers, suppliers, business partners and vendors of the Company or its Affiliates, and/or your conduct with respect to the trade secrets and proprietary and confidential information of the Company and its Affiliates, if the Committee determines, in its sole judgment, that you have violated the terms of any such agreement, or you have engaged in an act that violates subsection 11.b.1. of this Agreement, (i) any portion of the Option you have not exercised (whether vested or unvested) shall immediately be cancelled, and you shall forfeit any rights you have with respect to the Option as of the date of the Committee’s determination, and (ii) you shall immediately deliver to the Company Shares equal in value to the amount of any profit you realized upon an exercise of the Option during the period beginning twelve (12) months prior to your Termination of Service and ending on the date of the Committee’s determination.

12.

Adjustments. Any adjustments to the Option will be governed by Section 5.3 of the Plan.

13.

Restrictions on Exercise. Exercise of the Option is subject to the conditions that, to the extent required at the time of exercise, (i) the Shares covered by the Option will be duly listed upon the New York Stock Exchange (or any other securities exchange on which the Shares may be listed), and (ii) a Registration Statement under the Securities Act of 1933 with respect to the Shares will be effective. The Company will not be required to deliver any Common Stock until all applicable federal and state laws and regulations have been complied with and all legal matters in connection with the issuance and delivery of the Shares have been approved by counsel for the Company.

14.

Disposition of Securities. By accepting the Award, you acknowledge that you have read and understand the Company’s policy, and are aware of and understand your obligations under applicable securities laws in respect of trading in the Company’s securities, and you agree not to use the Company’s “cashless exercise” program (or any successor program) at any time when you possess material nonpublic information with respect to the Company or when using the program would otherwise result in a violation of securities law. The Company will have the right to recover, or receive reimbursement for, any compensation or profit you realize on the exercise of the Option or by the disposition of Shares received upon exercise of the Option to the extent that the Company has a right of recovery or reimbursement under applicable securities laws.

15.

Plan Terms Govern. The exercise of the Option, the disposition of any Shares received upon exercise of the Option, and the treatment of any gain on the disposition of these Shares are subject to the provisions of the Plan and any rules that the Committee may prescribe. The

Plan document, as may be amended from time to time, is incorporated into this Agreement. Capitalized terms used in this Agreement have the meaning set forth in the Plan, unless otherwise stated in this Agreement. In the event of any conflict between the terms of the Plan and the terms of this Agreement, the Plan will control. By accepting the Award, you acknowledge that the Plan and the Plan prospectus, as in effect on the date of this Agreement, have been made available to you for your review.

16.

Personal Data.

By entering into this Agreement, and as a condition of the grant of the Option, you expressly consent to the collection, use, and transfer of personal data as described in this Section to the full extent permitted by and in full compliance with applicable law.

You understand that your local employer holds, by means of an automated data file, certain personal information about you, including, but not limited to, name, home address and telephone number, date of birth, social insurance number, salary, nationality, job title, any shares or directorships held in the Company, details of all options or other entitlement to shares awarded, canceled, exercised, vested, unvested, or outstanding in your favor, for the purpose of managing and administering the Plan (“Data”).

You further understand that part or all of your Data may be also held by the Company or its Affiliates, pursuant to a transfer made in the past with your consent, in respect of any previous grant of options or awards, which was made for the same purposes of managing and administering of previous award/incentive plans, or for other purposes.

17.

Discretionary Nature and Acceptance of Award. By accepting this Award, you agree to be bound by the terms of this Agreement and acknowledge that:

The Company (and not your local employer) is granting your Option. Furthermore, this Agreement is not derived from any preexisting labor relationship between you and the Company, but rather from a mercantile relationship.

The Company may administer the Plan from outside your country of residence and United States law will govern all options granted under the Plan.

Benefits and rights provided under the Plan are wholly discretionary and, although provided by the Company, do not constitute regular or periodic payments.

The grant of the Option hereunder, and any future grant of an option under the Plan, is entirely voluntary, and at the complete discretion of the Company. Neither the grant of the Option nor any future grant by the Company will be deemed to create any obligation to make any future grants, whether or not such a reservation is explicitly stated at the time of such a grant. The Company has the right, at any time and/or on an annual basis, to amend, suspend or terminate the Plan; provided, however, that no such amendment, suspension, or termination will adversely affect your rights hereunder.

Participation in the Plan will not be deemed to constitute, and will not be deemed by you to constitute, an employment or labor relationship of any kind with the Company.

18.

rights as a stockholder of the Company pursuant to the Option until Shares are actually delivered to you.

19.

Incorporation of Other Agreements. This Agreement and the Plan constitute the entire understanding between you and the Company regarding the Option. This Agreement supersedes any prior agreements, commitments or negotiations concerning the Option.

20.

21.

22.

Successors and Assigns of the Company. The terms and conditions of this Agreement shall be binding upon and shall inure to the benefit of the Company and its successors and assigns.

23.

Acknowledgements. By accepting this Agreement, you agree to the following: (i) you have carefully read, fully understand and agree to all of the terms and conditions described in this Agreement, the Plan, the Plan’s prospectus and all accompanying documentation; and (ii) you understand and agree that this Agreement and the Plan constitute the entire understanding between you and the Company regarding the Option, and that any prior agreements, commitments or negotiations concerning the Option are replaced and superseded.

24.

I Accept:


Signature	Date

VESTING SCHEDULE

[VESTING PROVISIONS CONSISTENT WITH THE PLAN]

Exhibit 31.1

CERTIFICATIONS

I, Erin N. Kane, certify that:

I have reviewed this Quarterly Report on Form 10-Q of AdvanSix Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 11, 2017

	/s/ Erin N. Kane
	Erin N. Kane
	President and Chief Executive Officer

Exhibit 31.2

CERTIFICATIONS

I, Michael Preston, certify that:

I have reviewed this Quarterly Report on Form 10-Q of AdvanSix Inc.;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 11, 2017

	/s/ Michael Preston
	Michael Preston
	Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AdvanSix Inc. (“the Company”) on Form 10-Q for the quarter ended March 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 11, 2017

	/s/ Erin N. Kane
	Erin N. Kane
	President and Chief Executive Officer

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 11, 2017

	/s/ Michael Preston
	Michael Preston
	Chief Financial Officer