Exhibit 99.1
PolyOne Corporation and Subsidiaries
Consolidated Statements of Operations, as Adjusted (Unaudited)
(In millions, except per share data)
Consolidated Statements of Operations, as Adjusted (Unaudited)
(In millions, except per share data)
| 1Q09 | 2Q09 | 3Q09 | 4Q09 | 2009Y | ||||||||||||||||
| Sales | $ | 463.4 | $ | 496.5 | $ | 548.3 | $ | 552.5 | $ | 2,060.7 | ||||||||||
| Cost of sales | 412.6 | 415.6 | 442.3 | 468.0 | 1,738.5 | |||||||||||||||
| Gross margin | 50.8 | 80.9 | 106.0 | 84.5 | 322.2 | |||||||||||||||
| Selling and administrative | 70.2 | 77.1 | 56.3 | 68.7 | 272.3 | |||||||||||||||
| Impairment of goodwill | 5.0 | — | — | — | 5.0 | |||||||||||||||
| Income from equity affiliates | 13.3 | 10.1 | 5.2 | 6.6 | 35.2 | |||||||||||||||
| Operating income (loss) | (11.1 | ) | 13.9 | 54.9 | 22.4 | 80.1 | ||||||||||||||
| Interest expense, net | (8.8 | ) | (8.8 | ) | (8.5 | ) | (8.2 | ) | (34.3 | ) | ||||||||||
| Other expense, net | (6.6 | ) | (0.7 | ) | (1.2 | ) | (1.1 | ) | (9.6 | ) | ||||||||||
| Income (loss) before income taxes | (26.5 | ) | 4.4 | 45.2 | 13.1 | 36.2 | ||||||||||||||
| Income tax benefit (expense) | 8.8 | (6.3 | ) | 3.1 | 7.7 | 13.3 | ||||||||||||||
| Net income (loss) | $ | (17.7 | ) | $ | (1.9 | ) | $ | 48.3 | $ | 20.8 | $ | 49.5 | ||||||||
| Basic earnings (loss) per common share | $ | (0.19 | ) | $ | (0.02 | ) | $ | 0.52 | $ | 0.22 | $ | 0.54 | ||||||||
| Diluted earnings (loss) per common share | $ | (0.19 | ) | $ | (0.02 | ) | $ | 0.51 | $ | 0.22 | $ | 0.53 | ||||||||
| Weighted average shares used to compute earnings (loss) per share: | ||||||||||||||||||||
| Basic | 92.2 | 92.4 | 92.4 | 92.5 | 92.4 | |||||||||||||||
| Diluted | 92.2 | 93.5 | 93.9 | 94.4 | 93.4 | |||||||||||||||
| 1Q08 | 2Q08 | 3Q08 | 4Q08 | 2008Y | ||||||||||||||||
| Sales | $ | 713.7 | $ | 748.1 | $ | 735.1 | $ | 541.8 | $ | 2,738.7 | ||||||||||
| Cost of sales | 627.5 | 655.8 | 663.1 | 500.3 | 2,446.7 | |||||||||||||||
| Gross margin | 86.2 | 92.3 | 72.0 | 41.5 | 292.0 | |||||||||||||||
| Selling and administrative | 72.9 | 75.0 | 69.7 | 69.5 | 287.1 | |||||||||||||||
| Impairment of goodwill | — | — | — | 170.0 | 170.0 | |||||||||||||||
| Income from equity affiliates | 8.1 | 10.5 | 5.8 | 6.8 | 31.2 | |||||||||||||||
| Operating income (loss) | 21.4 | 27.8 | 8.1 | (191.2 | ) | (133.9 | ) | |||||||||||||
| Interest expense, net | (8.4 | ) | (9.8 | ) | (9.7 | ) | (9.3 | ) | (37.2 | ) | ||||||||||
| Other expense, net | (2.0 | ) | (0.7 | ) | — | (1.9 | ) | (4.6 | ) | |||||||||||
| Income (loss) before income taxes | 11.0 | 17.3 | (1.6 | ) | (202.4 | ) | (175.7 | ) | ||||||||||||
| Income tax benefit (expense) | (3.7 | ) | (6.1 | ) | 0.3 | (75.0 | ) | (84.5 | ) | |||||||||||
| Net income (loss) | $ | 7.3 | $ | 11.2 | $ | (1.3 | ) | $ | (277.4 | ) | $ | (260.2 | ) | |||||||
| Basic and diluted earnings (loss) per common share: | $ | 0.08 | $ | 0.12 | $ | (0.01 | ) | $ | (3.01 | ) | $ | (2.81 | ) | |||||||
| Weighted average shares used to compute earnings (loss) per share: | ||||||||||||||||||||
| Basic | 92.9 | 93.0 | 92.9 | 92.1 | 92.7 | |||||||||||||||
| Diluted | 93.3 | 93.8 | 92.9 | 92.1 | 92.7 | |||||||||||||||
1
Exhibit 99.1 (continued)
Consolidated Statements of Operations, as Adjusted (Unaudited)
(In millions, except per share data)
(In millions, except per share data)
| 1Q07 | 2Q07 | 3Q07 | 4Q07 | 2007Y | ||||||||||||||||
| Sales | $ | 657.8 | $ | 688.8 | $ | 664.8 | $ | 631.3 | $ | 2,642.7 | ||||||||||
| Cost of sales | 575.6 | 602.1 | 630.6 | 563.5 | 2,371.8 | |||||||||||||||
| Gross margin | 82.2 | 86.7 | 34.2 | 67.8 | 270.9 | |||||||||||||||
| Selling and administrative | 64.1 | 68.5 | 65.3 | 56.9 | 254.8 | |||||||||||||||
| Income (loss) from equity affiliates | 6.5 | (1.6 | ) | 11.7 | 11.1 | 27.7 | ||||||||||||||
| Operating income (loss) | 24.6 | 16.6 | (19.4 | ) | 22.0 | 43.8 | ||||||||||||||
| Interest expense, net | (14.4 | ) | (15.1 | ) | (10.3 | ) | (7.1 | ) | (46.9 | ) | ||||||||||
| Premium on early extinguishment of debt | — | (5.3 | ) | (7.5 | ) | — | (12.8 | ) | ||||||||||||
| Other expense, net | (0.9 | ) | (1.8 | ) | (1.8 | ) | (2.1 | ) | (6.6 | ) | ||||||||||
| Income (loss) before income taxes | 9.3 | (5.6 | ) | (39.0 | ) | 12.8 | (22.5 | ) | ||||||||||||
| Income tax benefit (expense) | (2.8 | ) | 2.8 | 43.9 | (3.6 | ) | 40.3 | |||||||||||||
| Net income (loss) | $ | 6.5 | $ | (2.8 | ) | $ | 4.9 | $ | 9.2 | $ | 17.8 | |||||||||
| Basic and diluted earnings (loss) per common share: | $ | 0.07 | $ | (0.03 | ) | $ | 0.05 | $ | 0.10 | $ | 0.19 | |||||||||
| Weighted average shares used to compute earnings (loss) per share: | ||||||||||||||||||||
| Basic | 92.6 | 92.8 | 92.8 | 92.9 | 92.8 | |||||||||||||||
| Diluted | 93.0 | 92.8 | 93.3 | 93.2 | 93.1 | |||||||||||||||
| 1Q06 | 2Q06 | 3Q06 | 4Q06 | 2006Y | ||||||||||||||||
| Sales | $ | 674.6 | $ | 686.4 | $ | 666.2 | $ | 595.2 | $ | 2,622.4 | ||||||||||
| Cost of sales | 598.9 | 601.0 | 600.7 | 535.0 | 2,335.6 | |||||||||||||||
| Gross margin | 75.7 | 85.4 | 65.5 | 60.2 | 286.8 | |||||||||||||||
| Selling and administrative | 54.2 | 54.9 | 56.2 | 56.6 | 221.9 | |||||||||||||||
| Income from equity affiliates | 38.8 | 31.6 | 30.0 | 11.6 | 112.0 | |||||||||||||||
| Operating income | 60.3 | 62.1 | 39.3 | 15.2 | 176.9 | |||||||||||||||
| Interest expense, net | (16.1 | ) | (16.0 | ) | (15.1 | ) | (15.9 | ) | (63.1 | ) | ||||||||||
| Premium on early extinguishment of debt | — | (1.2 | ) | — | (3.2 | ) | (4.4 | ) | ||||||||||||
| Other expense, net | (1.2 | ) | (1.5 | ) | (0.2 | ) | 0.1 | (2.8 | ) | |||||||||||
| Income (loss) before income taxes and discontinued operations | 43.0 | 43.4 | 24.0 | (3.8 | ) | 106.6 | ||||||||||||||
| Income tax benefit (expense) | (1.7 | ) | (2.4 | ) | (1.5 | ) | (2.9 | ) | (8.5 | ) | ||||||||||
| Income (loss) from continuing operations | 41.3 | 41.0 | 22.5 | (6.7 | ) | 98.1 | ||||||||||||||
| Loss from discontinued operations and loss on sale, net of income taxes | (2.1 | ) | — | — | (0.6 | ) | (2.7 | ) | ||||||||||||
| Net income (loss) | $ | 39.2 | $ | 41.0 | $ | 22.5 | $ | (7.3 | ) | $ | 95.4 | |||||||||
| Basic earnings (loss) per common share: | ||||||||||||||||||||
| From continuing operations | $ | 0.45 | $ | 0.44 | $ | 0.24 | $ | (0.07 | ) | $ | 1.06 | |||||||||
| Net income | $ | 0.43 | $ | 0.44 | $ | 0.24 | $ | (0.08 | ) | $ | 1.03 | |||||||||
| Diluted earnings (loss) per common share: | ||||||||||||||||||||
| From continuing operations | $ | 0.45 | $ | 0.44 | $ | 0.24 | $ | (0.07 | ) | $ | 1.06 | |||||||||
| Net income | $ | 0.42 | $ | 0.44 | $ | 0.24 | $ | (0.08 | ) | $ | 1.03 | |||||||||
| Weighted average shares used to compute earnings per share: | ||||||||||||||||||||
| Basic | 92.1 | 92.4 | 92.5 | 92.5 | 92.4 | |||||||||||||||
| Diluted | 92.5 | 93.0 | 93.0 | 93.0 | 92.8 | |||||||||||||||
2
Exhibit 99.1 (continued)
Business Segment and Platform Operations, as Adjusted (Unaudited)
(In millions)
(In millions)
Gross margin, selling and administration, and operating income at the segment level does not include: special items as defined on page 7; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker. These costs are included in Corporate and eliminations.
| Business Segments | 1Q09 | 2Q09 | 3Q09 | 4Q09 | 2009Y | |||||||||||||||
Sales: | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | 86.6 | $ | 96.2 | $ | 107.3 | $ | 112.8 | $ | 402.9 | ||||||||||
| Global Color, Additives and Inks | 103.7 | 118.1 | 122.9 | 115.1 | 459.8 | |||||||||||||||
| Specialty Platform | 190.3 | 214.3 | 230.2 | 227.9 | 862.7 | |||||||||||||||
| Performance Products and Solutions | 158.8 | 170.3 | 180.9 | 157.7 | 667.7 | |||||||||||||||
| PolyOne Distribution | 136.9 | 135.1 | 163.1 | 190.0 | 625.1 | |||||||||||||||
| Corporate and eliminations | (22.6 | ) | (23.2 | ) | (25.9 | ) | (23.1 | ) | (94.8 | ) | ||||||||||
| Sales | $ | 463.4 | $ | 496.5 | $ | 548.3 | $ | 552.5 | $ | 2,060.7 | ||||||||||
Gross margin: | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | 14.8 | $ | 21.6 | $ | 25.1 | $ | 25.4 | $ | 86.9 | ||||||||||
| Global Color, Additives and Inks | 20.3 | 26.9 | 30.5 | 27.7 | 105.4 | |||||||||||||||
| Specialty Platform | 35.1 | 48.5 | 55.6 | 53.1 | 192.3 | |||||||||||||||
| Performance Products and Solutions | 12.8 | 23.6 | 25.7 | 19.4 | 81.5 | |||||||||||||||
| PolyOne Distribution | 13.8 | 13.3 | 16.6 | 18.5 | 62.2 | |||||||||||||||
| Corporate and eliminations | (10.9 | ) | (4.5 | ) | 8.1 | (6.5 | ) | (13.8 | ) | |||||||||||
| Gross margin | $ | 50.8 | $ | 80.9 | $ | 106.0 | $ | 84.5 | $ | 322.2 | ||||||||||
Selling and administrative: | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | (15.8 | ) | $ | (15.5 | ) | $ | (16.8 | ) | $ | (17.5 | ) | $ | (65.6 | ) | |||||
| Global Color, Additives and Inks | (19.2 | ) | (20.4 | ) | (21.2 | ) | (20.7 | ) | (81.5 | ) | ||||||||||
| Specialty Platform | (35.0 | ) | (35.9 | ) | (38.0 | ) | (38.2 | ) | (147.1 | ) | ||||||||||
| Performance Products and Solutions | (12.4 | ) | (13.0 | ) | (13.4 | ) | (11.7 | ) | (50.5 | ) | ||||||||||
| PolyOne Distribution | (8.9 | ) | (9.4 | ) | (10.1 | ) | (9.0 | ) | (37.4 | ) | ||||||||||
| SunBelt Joint Venture | (1.1 | ) | (1.0 | ) | (1.0 | ) | (1.1 | ) | (4.2 | ) | ||||||||||
| Corporate and eliminations | (12.8 | ) | (17.8 | ) | 6.2 | (8.7 | ) | (33.1 | ) | |||||||||||
| Selling and administrative | $ | (70.2 | ) | $ | (77.1 | ) | $ | (56.3 | ) | $ | (68.7 | ) | $ | (272.3 | ) | |||||
Operating income (loss): | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | (1.0 | ) | $ | 6.1 | $ | 8.3 | $ | 7.9 | $ | 21.3 | |||||||||
| Global Color, Additives and Inks | 1.6 | 7.0 | 9.8 | 7.7 | 26.1 | |||||||||||||||
| Specialty Platform | 0.6 | 13.1 | 18.1 | 15.6 | 47.4 | |||||||||||||||
| Performance Products and Solutions | 0.4 | 11.2 | 12.2 | 7.7 | 31.5 | |||||||||||||||
| PolyOne Distribution | 4.9 | 3.9 | 6.5 | 9.5 | 24.8 | |||||||||||||||
| SunBelt Joint Venture | 11.7 | 8.0 | 3.8 | 2.0 | 25.5 | |||||||||||||||
| Corporate and eliminations | (28.7 | ) | (22.3 | ) | 14.3 | (12.4 | ) | (49.1 | ) | |||||||||||
| Operating income (loss) | $ | (11.1 | ) | $ | 13.9 | $ | 54.9 | $ | 22.4 | $ | 80.1 | |||||||||
Effect of change in accounting principle on gross margin and operating income (loss): | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | 0.1 | $ | (0.9 | ) | $ | (0.9 | ) | $ | (1.4 | ) | $ | (3.1 | ) | ||||||
| Global Color, Additives and Inks | — | (0.6 | ) | (0.5 | ) | (1.4 | ) | (2.5 | ) | |||||||||||
| Specialty Platform | 0.1 | (1.5 | ) | (1.4 | ) | (2.8 | ) | (5.6 | ) | |||||||||||
| Performance Products and Solutions | (8.3 | ) | (3.5 | ) | 0.2 | (0.4 | ) | (12.0 | ) | |||||||||||
| PolyOne Distribution | — | — | — | — | — | |||||||||||||||
| SunBelt Joint Venture | — | — | — | — | — | |||||||||||||||
| Corporate and eliminations | (0.2 | ) | (0.4 | ) | (0.1 | ) | — | (0.7 | ) | |||||||||||
| Effect of change in accounting principle on gross margin and operating income (loss) | $ | (8.4 | ) | $ | (5.4 | ) | $ | (1.3 | ) | $ | (3.2 | ) | $ | (18.3 | ) | |||||
Specialty Platform consists of our two specialty businesses: Global Specialty Engineered Materials; and Global Color, Additives and Inks. We present Specialty Platform sales, gross margin, selling and administration, and operating income because management believes that this is useful information to investors in highlighting our collective progress in advancing our specialization strategy.
3
Exhibit 99.1 (continued)
Business Segment and Platform Operations, as Adjusted (Unaudited)
(In millions)
(In millions)
Gross margin, selling and administration, and operating income at the segment level does not include: special items as defined on page 7; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker. These costs are included in Corporate and eliminations.
| Business Segments | 1Q08 | 2Q08 | 3Q08 | 4Q08 | 2008Y | |||||||||||||||
Sales: | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | 140.7 | $ | 141.6 | $ | 134.2 | $ | 97.5 | $ | 514.0 | ||||||||||
| Global Color, Additives and Inks | 147.4 | 158.6 | 145.7 | 102.6 | 554.3 | |||||||||||||||
| Specialty Platform | 288.1 | 300.2 | 279.9 | 200.1 | 1,068.3 | |||||||||||||||
| Performance Products and Solutions | 259.3 | 273.7 | 274.4 | 194.0 | 1,001.4 | |||||||||||||||
| PolyOne Distribution | 201.1 | 208.2 | 214.7 | 172.7 | 796.7 | |||||||||||||||
| Corporate and eliminations | (34.8 | ) | (34.0 | ) | (33.9 | ) | (25.0 | ) | (127.7 | ) | ||||||||||
| Sales | $ | 713.7 | $ | 748.1 | $ | 735.1 | $ | 541.8 | $ | 2,738.7 | ||||||||||
Gross margin: | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | 21.0 | $ | 23.6 | $ | 21.3 | $ | 13.6 | $ | 79.5 | ||||||||||
| Global Color, Additives and Inks | 29.4 | 32.6 | 28.1 | 19.0 | 109.1 | |||||||||||||||
| Specialty Platform | 50.4 | 56.2 | 49.4 | 32.6 | 188.6 | |||||||||||||||
| Performance Products and Solutions | 23.6 | 21.3 | 24.0 | 13.4 | 82.3 | |||||||||||||||
| PolyOne Distribution | 17.2 | 18.1 | 22.2 | 15.6 | 73.1 | |||||||||||||||
| Corporate and eliminations | (5.0 | ) | (3.3 | ) | (23.6 | ) | (20.1 | ) | (52.0 | ) | ||||||||||
| Gross margin | $ | 86.2 | $ | 92.3 | $ | 72.0 | $ | 41.5 | $ | 292.0 | ||||||||||
Selling and administrative: | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | (15.7 | ) | $ | (16.5 | ) | $ | (15.7 | ) | $ | (14.3 | ) | $ | (62.2 | ) | |||||
| Global Color, Additives and Inks | (22.5 | ) | (22.9 | ) | (20.4 | ) | (19.0 | ) | (84.8 | ) | ||||||||||
| Specialty Platform | (38.2 | ) | (39.4 | ) | (36.1 | ) | (33.3 | ) | (147.0 | ) | ||||||||||
| Performance Products and Solutions | (12.7 | ) | (13.9 | ) | (11.3 | ) | (12.4 | ) | (50.3 | ) | ||||||||||
| PolyOne Distribution | (11.7 | ) | (11.1 | ) | (12.8 | ) | (9.4 | ) | (45.0 | ) | ||||||||||
| SunBelt Joint Venture | (1.3 | ) | (0.7 | ) | (0.5 | ) | (1.4 | ) | (3.9 | ) | ||||||||||
| Corporate and eliminations | (9.0 | ) | (9.9 | ) | (9.0 | ) | (13.0 | ) | (40.9 | ) | ||||||||||
| Selling and administrative | $ | (72.9 | ) | $ | (75.0 | ) | $ | (69.7 | ) | $ | (69.5 | ) | $ | (287.1 | ) | |||||
Operating income (loss): | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | 5.3 | $ | 7.1 | $ | 5.6 | $ | (0.7 | ) | $ | 17.3 | |||||||||
| Global Color, Additives and Inks | 7.8 | 10.6 | 8.6 | 0.8 | 27.8 | |||||||||||||||
| Specialty Platform | 13.1 | 17.7 | 14.2 | 0.1 | 45.1 | |||||||||||||||
| Performance Products and Solutions | 10.9 | 7.6 | 12.2 | 1.2 | 31.9 | |||||||||||||||
| PolyOne Distribution | 5.5 | 7.0 | 9.4 | 6.2 | 28.1 | |||||||||||||||
| SunBelt Joint Venture | 5.9 | 8.7 | 9.6 | 4.4 | 28.6 | |||||||||||||||
| Corporate and eliminations | (14.0 | ) | (13.2 | ) | (37.3 | ) | (203.1 | ) | (267.6 | ) | ||||||||||
| Operating income (loss) | $ | 21.4 | $ | 27.8 | $ | 8.1 | $ | (191.2 | ) | $ | (133.9 | ) | ||||||||
Effect of change in accounting principle on gross margin and operating income (loss): | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | (0.3 | ) | $ | 0.4 | $ | — | $ | (0.9 | ) | $ | (0.8 | ) | |||||||
| Global Color, Additives and Inks | (0.1 | ) | 0.2 | (0.1 | ) | (0.9 | ) | (0.9 | ) | |||||||||||
| Specialty Platform | (0.4 | ) | 0.6 | (0.1 | ) | (1.8 | ) | (1.7 | ) | |||||||||||
| Performance Products and Solutions | 2.6 | 2.3 | 6.9 | (14.8 | ) | (3.0 | ) | |||||||||||||
| PolyOne Distribution | — | — | — | — | — | |||||||||||||||
| SunBelt Joint Venture | — | — | — | — | — | |||||||||||||||
| Corporate and eliminations | (0.9 | ) | 0.9 | — | 0.1 | 0.1 | ||||||||||||||
| Effect of change in accounting principle on gross margin and operating income (loss) | $ | 1.3 | $ | 3.8 | $ | 6.8 | $ | (16.5 | ) | $ | (4.6 | ) | ||||||||
Specialty Platform consists of our two specialty businesses: Global Specialty Engineered Materials; and Global Color, Additives and Inks. We present Specialty Platform sales, gross margin, selling and administration, and operating income because management believes that this is useful information to investors in highlighting our collective progress in advancing our specialization strategy.
4
Exhibit 99.1 (continued)
Business Segment and Platform Operations, as Adjusted (Unaudited)
(In millions)
(In millions)
Gross margin, selling and administration, and operating income at the segment level does not include: special items as defined on page 7; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker. These costs are included in Corporate and eliminations.
| Business Segments | 1Q07 | 2Q07 | 3Q07 | 4Q07 | 2007Y | |||||||||||||||
Sales: | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | 95.3 | $ | 97.3 | $ | 97.4 | $ | 94.4 | $ | 384.4 | ||||||||||
| Global Color, Additives and Inks | 140.9 | 144.9 | 140.5 | 134.2 | 560.5 | |||||||||||||||
| Specialty Platform | 236.2 | 242.2 | 237.9 | 228.6 | 944.9 | |||||||||||||||
| Performance Products and Solutions | 273.2 | 293.0 | 274.5 | 246.1 | 1,086.8 | |||||||||||||||
| PolyOne Distribution | 184.4 | 190.1 | 185.8 | 184.0 | 744.3 | |||||||||||||||
| Corporate and eliminations | (36.0 | ) | (36.5 | ) | (33.4 | ) | (27.4 | ) | (133.3 | ) | ||||||||||
| Sales | $ | 657.8 | $ | 688.8 | $ | 664.8 | $ | 631.3 | $ | 2,642.7 | ||||||||||
Gross margin: | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | 10.2 | $ | 12.1 | $ | 11.5 | $ | 11.0 | $ | 44.8 | ||||||||||
| Global Color, Additives and Inks | 25.7 | 28.1 | 26.5 | 24.3 | 104.6 | |||||||||||||||
| Specialty Platform | 35.9 | 40.2 | 38.0 | 35.3 | 149.4 | |||||||||||||||
| Performance Products and Solutions | 32.7 | 33.3 | 29.7 | 18.7 | 114.4 | |||||||||||||||
| PolyOne Distribution | 14.7 | 15.8 | 14.8 | 15.4 | 60.7 | |||||||||||||||
| Resin and Intermediates | 0.8 | (0.2 | ) | — | — | 0.6 | ||||||||||||||
| Corporate and eliminations | (1.9 | ) | (2.4 | ) | (48.3 | ) | (1.6 | ) | (54.2 | ) | ||||||||||
| Gross margin | $ | 82.2 | $ | 86.7 | $ | 34.2 | $ | 67.8 | $ | 270.9 | ||||||||||
Selling and administrative: | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | (10.0 | ) | $ | (10.0 | ) | $ | (9.7 | ) | $ | (10.5 | ) | $ | (40.2 | ) | |||||
| Global Color, Additives and Inks | (21.0 | ) | (21.0 | ) | (19.9 | ) | (20.7 | ) | (82.6 | ) | ||||||||||
| Specialty Platform | (31.0 | ) | (31.0 | ) | (29.6 | ) | (31.2 | ) | (122.8 | ) | ||||||||||
| Performance Products and Solutions | (13.2 | ) | (12.5 | ) | (11.3 | ) | (11.5 | ) | (48.5 | ) | ||||||||||
| PolyOne Distribution | (10.1 | ) | (9.3 | ) | (9.5 | ) | (9.7 | ) | (38.6 | ) | ||||||||||
| Resin and Intermediates | (2.2 | ) | (1.0 | ) | (1.4 | ) | (2.0 | ) | (6.6 | ) | ||||||||||
| Corporate and eliminations | (7.6 | ) | (14.7 | ) | (13.5 | ) | (2.5 | ) | (38.3 | ) | ||||||||||
| Selling and administrative | $ | (64.1 | ) | $ | (68.5 | ) | $ | (65.3 | ) | $ | (56.9 | ) | $ | (254.8 | ) | |||||
Operating income (loss): | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | 0.2 | $ | 2.1 | $ | 1.8 | $ | 0.5 | $ | 4.6 | ||||||||||
| Global Color, Additives and Inks | 5.4 | 8.0 | 7.4 | 4.5 | 25.3 | |||||||||||||||
| Specialty Platform | 5.6 | 10.1 | 9.2 | 5.0 | 29.9 | |||||||||||||||
| Performance Products and Solutions | 19.6 | 21.0 | 18.4 | 7.4 | 66.4 | |||||||||||||||
| PolyOne Distribution | 4.6 | 6.5 | 5.3 | 5.7 | 22.1 | |||||||||||||||
| Resin and Intermediates | 4.3 | 12.0 | 11.2 | 7.3 | 34.8 | |||||||||||||||
| Corporate and eliminations | (9.5 | ) | (33.0 | ) | (63.5 | ) | (3.4 | ) | (109.4 | ) | ||||||||||
| Operating income (loss) | $ | 24.6 | $ | 16.6 | $ | (19.4 | ) | $ | 22.0 | $ | 43.8 | |||||||||
Effect of change in accounting principle on gross margin and operating income (loss): | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | (0.1 | ) | $ | 0.2 | $ | (0.3 | ) | $ | 0.2 | $ | — | ||||||||
| Global Color, Additives and Inks | 0.7 | (0.2 | ) | (0.2 | ) | (0.3 | ) | — | ||||||||||||
| Specialty Platform | 0.6 | — | (0.5 | ) | (0.1 | ) | — | |||||||||||||
| Performance Products and Solutions | (2.4 | ) | 2.4 | 5.8 | 3.1 | 8.9 | ||||||||||||||
| PolyOne Distribution | — | — | — | — | — | |||||||||||||||
| Resin and Intermediates | — | — | — | — | — | |||||||||||||||
| Corporate and eliminations | (0.1 | ) | 1.8 | (1.1 | ) | 0.4 | 1.0 | |||||||||||||
| Effect of change in accounting principle on gross margin and operating income (loss) | $ | (1.9 | ) | $ | 4.2 | $ | 4.2 | $ | 3.4 | $ | 9.9 | |||||||||
Specialty Platform consists of our two specialty businesses: Global Specialty Engineered Materials; and Global Color, Additives and Inks. We present Specialty Platform sales, gross margin, selling and administration, and operating income because management believes that this is useful information to investors in highlighting our collective progress in advancing our specialization strategy.
5
Exhibit 99.1 (continued)
Business Segment and Platform Operations, as Adjusted (Unaudited)
(In millions)
(In millions)
Gross margin, selling and administration, and operating income at the segment level does not include: special items as defined on page 7; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker. These costs are included in Corporate and eliminations.
| Business Segments | 1Q06 | 2Q06 | 3Q06 | 4Q06 | 2006Y | |||||||||||||||
Sales: | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | 81.3 | $ | 89.8 | $ | 89.0 | $ | 85.2 | $ | 345.3 | ||||||||||
| Global Color, Additives and Inks | 134.7 | 137.1 | 134.9 | 125.1 | 531.8 | |||||||||||||||
| Specialty Platform | 216.0 | 226.9 | 223.9 | 210.3 | 877.1 | |||||||||||||||
| Performance Products and Solutions | 303.9 | 311.7 | 301.2 | 249.4 | 1,166.2 | |||||||||||||||
| PolyOne Distribution | 194.1 | 189.7 | 182.1 | 166.9 | 732.8 | |||||||||||||||
| Corporate and eliminations | (39.4 | ) | (41.9 | ) | (41.0 | ) | (31.4 | ) | (153.7 | ) | ||||||||||
| Sales | $ | 674.6 | $ | 686.4 | $ | 666.2 | $ | 595.2 | $ | 2,622.4 | ||||||||||
Gross margin: | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | 9.7 | $ | 12.7 | $ | 11.1 | $ | 8.3 | $ | 41.8 | ||||||||||
| Global Color, Additives and Inks | 23.5 | 20.5 | 21.1 | 19.2 | 84.3 | |||||||||||||||
| Specialty Platform | 33.2 | 33.2 | 32.2 | 27.5 | 126.1 | |||||||||||||||
| Performance Products and Solutions | 28.4 | 36.9 | 26.9 | 21.6 | 113.8 | |||||||||||||||
| PolyOne Distribution | 15.9 | 15.0 | 14.3 | 12.4 | 57.6 | |||||||||||||||
| Resin and Intermediates | — | (0.4 | ) | 0.3 | 0.1 | — | ||||||||||||||
| Corporate and eliminations | (1.8 | ) | 0.7 | (8.2 | ) | (1.4 | ) | (10.7 | ) | |||||||||||
| Gross margin | $ | 75.7 | $ | 85.4 | $ | 65.5 | $ | 60.2 | $ | 286.8 | ||||||||||
Selling and administrative: | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | (9.5 | ) | $ | (9.7 | ) | $ | (10.0 | ) | $ | (10.0 | ) | $ | (39.2 | ) | |||||
| Global Color, Additives and Inks | (18.8 | ) | (19.0 | ) | (19.9 | ) | (20.5 | ) | (78.2 | ) | ||||||||||
| Specialty Platform | (28.3 | ) | (28.7 | ) | (29.9 | ) | (30.5 | ) | (117.4 | ) | ||||||||||
| Performance Products and Solutions | (11.7 | ) | (12.9 | ) | (12.4 | ) | (13.7 | ) | (50.7 | ) | ||||||||||
| PolyOne Distribution | (9.7 | ) | (9.9 | ) | (10.0 | ) | (8.8 | ) | (38.4 | ) | ||||||||||
| Resin and Intermediates | (1.1 | ) | (0.7 | ) | (1.2 | ) | (1.1 | ) | (4.1 | ) | ||||||||||
| Corporate and eliminations | (3.4 | ) | (2.7 | ) | (2.7 | ) | (2.5 | ) | (11.3 | ) | ||||||||||
| Selling and administrative | $ | (54.2 | ) | $ | (54.9 | ) | $ | (56.2 | ) | $ | (56.6 | ) | $ | (221.9 | ) | |||||
Operating income (loss): | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | 0.7 | $ | 3.5 | $ | 1.6 | $ | (1.7 | ) | $ | 4.1 | |||||||||
| Global Color, Additives and Inks | 5.6 | 2.5 | 1.9 | (0.4 | ) | 9.6 | ||||||||||||||
| Specialty Platform | 6.3 | 6.0 | 3.5 | (2.1 | ) | 13.7 | ||||||||||||||
| Performance Products and Solutions | 16.7 | 24.0 | 14.5 | 7.9 | 63.1 | |||||||||||||||
| PolyOne Distribution | 6.2 | 5.1 | 4.3 | 3.6 | 19.2 | |||||||||||||||
| Resin and Intermediates | 36.3 | 29.0 | 27.9 | 9.7 | 102.9 | |||||||||||||||
| Corporate and eliminations | (5.2 | ) | (2.0 | ) | (10.9 | ) | (3.9 | ) | (22.0 | ) | ||||||||||
| Operating income (loss) | $ | 60.3 | $ | 62.1 | $ | 39.3 | $ | 15.2 | $ | 176.9 | ||||||||||
Effect of change in accounting principle on gross margin and operating income (loss): | ||||||||||||||||||||
| Global Specialty Engineered Materials | $ | (0.3 | ) | $ | 0.1 | $ | 0.2 | $ | (0.3 | ) | $ | (0.3 | ) | |||||||
| Global Color, Additives and Inks | 1.1 | (1.0 | ) | 0.2 | (0.4 | ) | (0.1 | ) | ||||||||||||
| Specialty Platform | 0.8 | (0.9 | ) | 0.4 | (0.7 | ) | (0.4 | ) | ||||||||||||
| Performance Products and Solutions | (4.8 | ) | (0.9 | ) | 0.5 | (5.1 | ) | (10.3 | ) | |||||||||||
| PolyOne Distribution | — | — | — | — | — | |||||||||||||||
| Resin and Intermediates | — | — | — | — | — | |||||||||||||||
| Corporate and eliminations | (3.7 | ) | 0.3 | 2.0 | (1.6 | ) | (3.0 | ) | ||||||||||||
| Effect of change in accounting principle on gross margin and operating income (loss) | $ | (7.7 | ) | $ | (1.5 | ) | $ | 2.9 | $ | (7.4 | ) | $ | (13.7 | ) | ||||||
Specialty Platform consists of our two specialty businesses: Global Specialty Engineered Materials; and Global Color, Additives and Inks. We present Specialty Platform sales, gross margin, selling and administration, and operating income because management believes that this is useful information to investors in highlighting our collective progress in advancing our specialization strategy.
6
Exhibit 99.1 (continued)
Reconciliation of Non-GAAP Financial Measures, as Adjusted (Unaudited)
(In millions, except per share data)
(In millions, except per share data)
Senior management uses gross margin before special items and operating income before special items to assess performance and allocate resources because senior management believes that these measures are useful in understanding current profitability levels and that current levels may serve as a base for future performance. In addition, operating income before the effect of special items is a component of various PolyOne annual and long-term employee incentive plans and is used in debt covenant computations. Below is a reconciliation of non-GAAP financial measures to the most directly comparable measures calculated and presented in accordance with GAAP.
Senior management uses net income before special items to assess performance and allocate resources because senior management believes that these measures are useful in understanding current profitability levels and that current levels may serve as a base for future performance. Below is a reconciliation of non-GAAP financial measures to the most directly comparable measures calculated and presented in accordance with GAAP.
| 1Q09 | 2Q09 | 3Q09 | 4Q09 | 2009Y | ||||||||||||||||
Reconciliation to Consolidated Statements of Operations | ||||||||||||||||||||
| Sales | $ | 463.4 | $ | 496.5 | $ | 548.3 | $ | 552.5 | $ | 2,060.7 | ||||||||||
| Gross margin before special items | 62.1 | 85.2 | 98.0 | 89.1 | 334.4 | |||||||||||||||
| Special items in gross margin | (11.3 | ) | (4.3 | ) | 8.0 | (4.6 | ) | (12.2 | ) | |||||||||||
| Gross margin | $ | 50.8 | $ | 80.9 | $ | 106.0 | $ | 84.5 | $ | 322.2 | ||||||||||
| Gross margin before special items as a percent of sales | 13.4 | % | 17.2 | % | 17.9 | % | 16.1 | % | 16.2 | % | ||||||||||
| Operating income before special items | 5.5 | 18.5 | 27.4 | 24.3 | 75.7 | |||||||||||||||
| Special items in operating income | (16.6 | ) | (4.6 | ) | 27.5 | (1.9 | ) | 4.4 | ||||||||||||
| Operating income (loss) | $ | (11.1 | ) | $ | 13.9 | $ | 54.9 | $ | 22.4 | $ | 80.1 | |||||||||
| Net income (loss) | $ | (17.7 | ) | $ | (1.9 | ) | $ | 48.3 | $ | 20.8 | $ | 49.5 | ||||||||
| Special items (1), after tax | 10.5 | 3.1 | (17.7 | ) | 0.8 | (3.3 | ) | |||||||||||||
| Tax adjustments (2) | (1.6 | ) | 7.3 | (18.0 | ) | (10.8 | ) | (23.1 | ) | |||||||||||
| $ | (8.8 | ) | $ | 8.5 | $ | 12.6 | $ | 10.8 | $ | 23.1 | ||||||||||
| Earnings (loss) per share excluding special items and tax adjustments: | ||||||||||||||||||||
| Basic | $ | (0.10 | ) | $ | 0.09 | $ | 0.14 | $ | 0.12 | $ | 0.25 | |||||||||
| Diluted | $ | (0.10 | ) | $ | 0.09 | $ | 0.13 | $ | 0.11 | $ | 0.25 | |||||||||
| 1Q08 | 2Q08 | 3Q08 | 4Q08 | 2008Y | ||||||||||||||||
Reconciliation to Consolidated Statements of Operations | ||||||||||||||||||||
| Sales | $ | 713.7 | $ | 748.1 | $ | 735.1 | $ | 541.8 | $ | 2,738.7 | ||||||||||
| Gross margin before special items | 87.8 | 95.0 | 93.9 | 60.2 | 336.9 | |||||||||||||||
| Special items in gross margin | (1.6 | ) | (2.7 | ) | (21.9 | ) | (18.7 | ) | (44.9 | ) | ||||||||||
| Gross margin | $ | 86.2 | $ | 92.3 | $ | 72.0 | $ | 41.5 | $ | 292.0 | ||||||||||
| Gross margin before special items as a percent of sales | 12.3 | % | 12.7 | % | 12.8 | % | 11.1 | % | 12.3 | % | ||||||||||
| Operating income before special items | 23.0 | 31.6 | 34.8 | 6.7 | 96.1 | |||||||||||||||
| Special items in operating income | (1.6 | ) | (3.8 | ) | (26.7 | ) | (197.9 | ) | (230.0 | ) | ||||||||||
| Operating income (loss) | $ | 21.4 | $ | 27.8 | $ | 8.1 | $ | (191.2 | ) | $ | (133.9 | ) | ||||||||
| Net income (loss) | $ | 7.3 | $ | 11.2 | $ | (1.3 | ) | $ | (277.4 | ) | $ | (260.2 | ) | |||||||
| Special items (1), after tax | 1.0 | 2.5 | 17.7 | 185.0 | 206.2 | |||||||||||||||
| Tax adjustments (2) | — | — | — | 88.9 | 88.9 | |||||||||||||||
| $ | 8.3 | $ | 13.7 | $ | 16.4 | $ | (3.5 | ) | $ | 34.9 | ||||||||||
| Basic and diluted earnings per share excluding special items and tax adjustments | $ | 0.09 | $ | 0.15 | $ | 0.18 | $ | (0.04 | ) | $ | 0.38 | |||||||||
| (1) | Special items is a non-GAAP financial measure. Special items include charges related to specific strategic initiatives or financial restructurings such as: consolidation of operations; employee separation costs resulting from personnel reduction programs, plant phaseout costs, executive separation agreements; asset impairments; environmental remediation costs, fines or penalties for facilities no longer owned or closed in prior years; gains and losses on the divestiture of operating businesses, joint ventures and equity investments; gains and losses on facility or property sales or disposals; results of litigation, fines or penalties, where such litigation (or action relating to the fines or penalties) arose prior to the commencement of the performance period; and the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results or the effect of adverse determinations by regulatory agencies relating to accounting principles or treatment. | |
| (2) | Net tax (benefit) loss from one-time foreign and domestic income tax items and deferred income tax valuation allowance adjustments on deferred tax assets |
7