Cover Page
Cover Page | 6 Months Ended |
Jun. 30, 2022 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2022 |
Document Transition Report | false |
Entity File Number | 1-16091 |
Entity Registrant Name | AVIENT CORPORATION |
Entity Incorporation, State or Country Code | OH |
Entity Tax Identification Number | 34-1730488 |
Entity Address, Address Line One | Avient Center |
Entity Address, Address Line Two | 33587 Walker Road |
Entity Address, Postal Zip Code | 44012 |
Entity Address, City or Town | Avon Lake |
Entity Address, State or Province | OH |
City Area Code | 440 |
Local Phone Number | 930-1000 |
Title of 12(b) Security | Common Shares, par value $.01 per share |
Trading Symbol | AVNT |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 90,936,943 |
Entity Central Index Key | 0001122976 |
Amendment Flag | false |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q2 |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Sales | $ 1,302.4 | $ 1,235.2 | $ 2,596.2 | $ 2,397.5 |
Cost of sales | 998.6 | 946.5 | 1,998.7 | 1,806.4 |
Gross margin | 303.8 | 288.7 | 597.5 | 591.1 |
Selling and administrative expense | 174.3 | 180.6 | 339.4 | 362.6 |
Operating income | 129.5 | 108.1 | 258.1 | 228.5 |
Interest expense, net | (16.2) | (19.5) | (33.1) | (38.8) |
Other income, net | 1.4 | 1.2 | 0.8 | 2.7 |
Income before income taxes | 114.7 | 89.8 | 225.8 | 192.4 |
Income tax expense | (30) | (20.4) | (56.6) | (43.3) |
Net income | 84.7 | 69.4 | 169.2 | 149.1 |
Net income attributable to noncontrolling interests | 0 | (0.6) | (0.3) | (1) |
Net income attributable to Avient common shareholders | $ 84.7 | $ 68.8 | $ 168.9 | $ 148.1 |
Earnings per share attributable to Avient common shareholders - Basic (in USD per share) | $ 0.93 | $ 0.75 | $ 1.85 | $ 1.62 |
Earnings per share attributable to Avient common shareholders - Diluted | $ 0.92 | $ 0.74 | $ 1.83 | $ 1.60 |
Weighted-average shares used to compute earnings per common share: | ||||
Basic (in shares) | 91.4 | 91.3 | 91.4 | 91.3 |
Dilutive impact of share-based compensation (in shares) | 0.7 | 1.1 | 0.8 | 1 |
Diluted (in shares) | 92.1 | 92.4 | 92.2 | 92.3 |
Anti-dilutive shares not included in diluted common shares outstanding (in shares) | 0.2 | 0 | 0.3 | 0 |
Cash dividends declared per share of common stock (in USD per share) | $ 0.2375 | $ 0.2125 | $ 0.4750 | $ 0.4250 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 84.7 | $ 69.4 | $ 169.2 | $ 149.1 |
Other comprehensive (loss) income, net of tax: | ||||
Translation adjustments and related hedging instruments | (50.2) | 9.5 | (59.3) | (41.5) |
Cash flow hedges | 0.9 | 0.7 | 2.1 | 1.5 |
Total other comprehensive (loss) income | (49.3) | 10.2 | (57.2) | (40) |
Total comprehensive income | 35.4 | 79.6 | 112 | 109.1 |
Comprehensive income attributable to noncontrolling interests | 0 | (0.6) | (0.3) | (1) |
Comprehensive income attributable to Avient common shareholders | $ 35.4 | $ 79 | $ 111.7 | $ 108.1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 645.1 | $ 601.2 |
Accounts receivable, net | 752.6 | 642.3 |
Inventories, net | 494 | 461.1 |
Other current assets | 128.4 | 122.4 |
Total current assets | 2,020.1 | 1,827 |
Property, net | 638.9 | 676.1 |
Goodwill | 1,256.8 | 1,286.4 |
Intangible assets, net | 867.2 | 925.2 |
Operating lease assets, net | 62.7 | 74.1 |
Other non-current assets | 197.9 | 208.4 |
Total assets | 5,043.6 | 4,997.2 |
Current liabilities: | ||
Short-term and current portion of long-term debt | 607.7 | 8.6 |
Accounts payable | 634 | 553.9 |
Current operating lease obligations | 21.4 | 24.2 |
Accrued expenses and other current liabilities | 307.5 | 353.9 |
Total current liabilities | 1,570.6 | 940.6 |
Non-current liabilities: | ||
Long-term debt | 1,249.1 | 1,850.3 |
Pension and other post-retirement benefits | 95 | 100 |
Deferred income taxes | 106.6 | 100.6 |
Non-current operating lease obligations | 41.8 | 50.1 |
Other non-current liabilities | 154.7 | 165.1 |
Total non-current liabilities | 1,647.2 | 2,266.1 |
SHAREHOLDERS' EQUITY | ||
Avient shareholders’ equity | 1,809.7 | 1,774.7 |
Noncontrolling interest | 16.1 | 15.8 |
Total equity | 1,825.8 | 1,790.5 |
Total liabilities and equity | $ 5,043.6 | $ 4,997.2 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating Activities | ||
Net income | $ 169.2 | $ 149.1 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 71.1 | 69.5 |
Accelerated depreciation and amortization | 3.2 | 1.4 |
Share-based compensation expense | 6.3 | 5.6 |
Changes in assets and liabilities, net of the effect of acquisitions: | ||
Increase in accounts receivable | (133.2) | (196.1) |
Increase in inventories | (45.9) | (88.1) |
Increase in accounts payable | 98.5 | 108.4 |
Decrease in pension and other post-retirement benefits | (9.9) | (9.2) |
(Decrease) increase in accrued expenses and other assets and liabilities, net | (52.6) | 27.5 |
Net cash provided by operating activities | 106.7 | 68.1 |
Investing activities | ||
Capital expenditures | (34) | (42.1) |
Settlement of cross-currency swaps | 75.1 | 0 |
Net cash proceeds used by other assets | 0 | (2) |
Net cash provided (used) by investing activities | 41.1 | (44.1) |
Financing activities | ||
Purchase of common shares for treasury | (36.4) | (4.2) |
Cash dividends paid | (43.5) | (38.8) |
Repayment of long-term debt | (4.4) | (4.4) |
Payments of withholding tax on share awards | (4.1) | (4.2) |
Net cash used by financing activities | (88.4) | (51.6) |
Effect of exchange rate changes on cash | (15.5) | (5.7) |
Increase (decrease) in cash and cash equivalents | 43.9 | (33.3) |
Cash and cash equivalents at beginning of year | 601.2 | 649.5 |
Cash and cash equivalents at end of period | $ 645.1 | $ 616.2 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Millions | Total | Total Avient shareholders' equity | Common Shares | Common Shares Held in Treasury | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Non-controlling Interests | |
Beginning balance (in shares) at Dec. 31, 2020 | 122,200 | ||||||||
Beginning balance, Treasury shares (in shares) at Dec. 31, 2020 | 30,800 | ||||||||
Beginning balance at Dec. 31, 2020 | $ 1,711.7 | $ 1,697.1 | $ 1.2 | $ (901.2) | $ 1,513.3 | $ 1,057.4 | $ 26.4 | $ 14.6 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 79.7 | 79.3 | 79.3 | 0.4 | |||||
Other comprehensive (loss) income | (50.2) | (50.2) | (50.2) | ||||||
Cash dividends declared | [1] | (19.5) | (19.5) | (19.5) | |||||
Repurchase of common shares (in shares) | (100) | ||||||||
Repurchase of common shares | (4.2) | (4.2) | $ (4.2) | ||||||
Share-based compensation and exercise of awards (in shares) | 100 | ||||||||
Share-based compensation and exercise of awards | 4.5 | 4.5 | $ 1.6 | 2.9 | |||||
Ending balance (in shares) at Mar. 31, 2021 | 122,200 | ||||||||
Ending balance, Treasury shares (in shares) at Mar. 31, 2021 | 30,800 | ||||||||
Ending balance at Mar. 31, 2021 | 1,722 | 1,707 | $ 1.2 | $ (903.8) | 1,516.2 | 1,117.2 | (23.8) | 15 | |
Beginning balance (in shares) at Dec. 31, 2020 | 122,200 | ||||||||
Beginning balance, Treasury shares (in shares) at Dec. 31, 2020 | 30,800 | ||||||||
Beginning balance at Dec. 31, 2020 | 1,711.7 | 1,697.1 | $ 1.2 | $ (901.2) | 1,513.3 | 1,057.4 | 26.4 | 14.6 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 149.1 | ||||||||
Ending balance (in shares) at Jun. 30, 2021 | 122,200 | ||||||||
Ending balance, Treasury shares (in shares) at Jun. 30, 2021 | 30,800 | ||||||||
Ending balance at Jun. 30, 2021 | 1,786.4 | 1,768.2 | $ 1.2 | $ (903.2) | 1,517.2 | 1,166.6 | (13.6) | 18.2 | |
Beginning balance (in shares) at Mar. 31, 2021 | 122,200 | ||||||||
Beginning balance, Treasury shares (in shares) at Mar. 31, 2021 | 30,800 | ||||||||
Beginning balance at Mar. 31, 2021 | 1,722 | 1,707 | $ 1.2 | $ (903.8) | 1,516.2 | 1,117.2 | (23.8) | 15 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 69.4 | 68.8 | 68.8 | 0.6 | |||||
Other comprehensive (loss) income | 10.2 | 10.2 | 10.2 | ||||||
Cash dividends declared | [1] | (19.4) | (19.4) | (19.4) | |||||
Share-based compensation and exercise of awards (in shares) | 0 | ||||||||
Share-based compensation and exercise of awards | 1.6 | 1.6 | $ 0.6 | 1 | |||||
Ending balance (in shares) at Jun. 30, 2021 | 122,200 | ||||||||
Ending balance, Treasury shares (in shares) at Jun. 30, 2021 | 30,800 | ||||||||
Ending balance at Jun. 30, 2021 | 1,786.4 | 1,768.2 | $ 1.2 | $ (903.2) | 1,517.2 | 1,166.6 | (13.6) | 18.2 | |
Beginning balance (in shares) at Dec. 31, 2021 | 122,200 | ||||||||
Beginning balance, Treasury shares (in shares) at Dec. 31, 2021 | (30,600) | ||||||||
Beginning balance at Dec. 31, 2021 | 1,790.5 | 1,774.7 | $ 1.2 | $ (900.7) | 1,511.8 | 1,208 | (45.6) | 15.8 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 84.5 | 84.2 | 84.2 | 0.3 | |||||
Other comprehensive (loss) income | (7.9) | (7.9) | (7.9) | ||||||
Cash dividends declared | [2] | (21.7) | (21.7) | (21.7) | |||||
Repurchase of common shares (in shares) | (300) | ||||||||
Repurchase of common shares | (15.8) | (15.8) | $ (15.8) | ||||||
Share-based compensation and exercise of awards (in shares) | 100 | ||||||||
Share-based compensation and exercise of awards | (0.3) | (0.3) | $ 1.9 | (2.2) | |||||
Ending balance (in shares) at Mar. 31, 2022 | 122,200 | ||||||||
Ending balance, Treasury shares (in shares) at Mar. 31, 2022 | (30,800) | ||||||||
Ending balance at Mar. 31, 2022 | 1,829.3 | 1,813.2 | $ 1.2 | $ (914.6) | 1,509.6 | 1,270.5 | (53.5) | 16.1 | |
Beginning balance (in shares) at Dec. 31, 2021 | 122,200 | ||||||||
Beginning balance, Treasury shares (in shares) at Dec. 31, 2021 | (30,600) | ||||||||
Beginning balance at Dec. 31, 2021 | 1,790.5 | 1,774.7 | $ 1.2 | $ (900.7) | 1,511.8 | 1,208 | (45.6) | 15.8 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 169.2 | ||||||||
Ending balance (in shares) at Jun. 30, 2022 | 122,200 | ||||||||
Ending balance, Treasury shares (in shares) at Jun. 30, 2022 | (31,300) | ||||||||
Ending balance at Jun. 30, 2022 | 1,825.8 | 1,809.7 | $ 1.2 | $ (935.2) | 1,513 | 1,333.5 | (102.8) | 16.1 | |
Beginning balance (in shares) at Mar. 31, 2022 | 122,200 | ||||||||
Beginning balance, Treasury shares (in shares) at Mar. 31, 2022 | (30,800) | ||||||||
Beginning balance at Mar. 31, 2022 | 1,829.3 | 1,813.2 | $ 1.2 | $ (914.6) | 1,509.6 | 1,270.5 | (53.5) | 16.1 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 84.7 | 84.7 | 84.7 | ||||||
Other comprehensive (loss) income | (49.3) | (49.3) | (49.3) | ||||||
Cash dividends declared | [2] | (21.7) | (21.7) | (21.7) | |||||
Repurchase of common shares (in shares) | (500) | ||||||||
Repurchase of common shares | (20.6) | (20.6) | $ (20.6) | ||||||
Share-based compensation and exercise of awards | 3.4 | 3.4 | $ 0 | 3.4 | |||||
Ending balance (in shares) at Jun. 30, 2022 | 122,200 | ||||||||
Ending balance, Treasury shares (in shares) at Jun. 30, 2022 | (31,300) | ||||||||
Ending balance at Jun. 30, 2022 | $ 1,825.8 | $ 1,809.7 | $ 1.2 | $ (935.2) | $ 1,513 | $ 1,333.5 | $ (102.8) | $ 16.1 | |
[1] (1) Dividends declared per share were $0.2125 and $0.4250 for the three and six months ended June 30, 2021, respectively. (1) Dividends declared per share were $0.2375 and $0.4750 for the three and six months ended June 30, 2022, respectively. |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared per share of common stock (in USD per share) | $ 0.2375 | $ 0.2125 | $ 0.4750 | $ 0.4250 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | Note 1 — BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Form 10-Q instructions and in the opinion of management contain all adjustments, including those that are normal, recurring and necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. These interim financial statements should be read in conjunction with the financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2021 of Avient Corporation, formerly known as PolyOne Corporation. When used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “Avient” and the “Company” mean Avient Corporation and its consolidated subsidiaries. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | Note 2 — BUSINESS COMBINATIONS On April 19, 2022, we entered into a signing protocol (the Signing Protocol) with Koninklijke DSM N.V., a public limited liability company incorporated under the laws of the Netherlands (DSM). Pursuant to the terms of the Signing Protocol, Avient and DSM agreed that, after completion of the consultation process with the relevant Dutch works council, they would will enter into a Sale and Purchase Agreement (the Purchase Agreement) pursuant to which Avient will, among other things, acquire from DSM (a) all of the equity of DSM Protective Materials International B.V., a private limited liability company organized under the laws of the Netherlands, DSM Protective Materials B.V., a private limited liability company organized under the laws of the Netherlands, and DSM Protective Materials LLC, a Delaware limited liability company, and (b) certain other assets related to DSM's protective materials business (including the Dyneema© Brand) (such equity and assets together, the Dyneema Business) (such acquisition of the Dyneema Business, the Dyneema Acquisition). Avient and DSM entered into the Purchase Agreement on June 23, 2022. Pursuant to the terms of the Purchase Agreement, we have agreed to acquire the Dyneema Business for an aggregate purchase price of €1.38 billion, subject to certain customary adjustments for a European “locked box” transaction (the Purchase Price). Certain Purchase Price payments are Euro-denominated and are subject to change based on fluctuations in the euro-U.S. dollar exchange rate. The closing of the Dyneema Acquisition will be subject to the satisfaction or waiver of customary and other conditions. We have received all required regulatory approvals. In conjunction with our intent to acquire the Dyneema Business, we are exploring a potential sale of our Distribution business. On July 1, 2021, the Company completed its acquisition of Magna Colours Ltd. (Magna Colours), a market leader in sustainable, water-based inks technology for the textile screen printing industry, for the purchase price of $47.6 million, net of cash acquired. The results of the Magna Colours business are reported in the Color, Additives and Inks segment. The purchase price allocation resulted in intangible assets of $27.5 million and goodwill of $22.0 million, partially offset by net liabilities assumed. Goodwill is not deductible for tax purposes. The intangible assets that have been acquired are being amortized over a period of 10 to 20 years. Purchase accounting was finalized as of June 30, 2022. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | Note 3 — GOODWILL AND INTANGIBLE ASSETS Goodwill as of June 30, 2022 and December 31, 2021 and changes in the carrying amount of goodwill by segment were as follows: (In millions) Specialty Engineered Materials Color, Additives and Inks Distribution Total Balance at December 31, 2021 $ 236.3 $ 1,048.5 $ 1.6 $ 1,286.4 Currency translation (1.6) (28.0) — (29.6) Balance at June 30, 2022 $ 234.7 $ 1,020.5 $ 1.6 $ 1,256.8 Indefinite and finite-lived intangible assets consisted of the following: As of June 30, 2022 (In millions) Acquisition Cost Accumulated Amortization Currency Translation Net Customer relationships $ 507.2 $ (148.3) $ (6.5) $ 352.4 Patents, technology and other 566.7 (149.0) (15.9) 401.8 Indefinite-lived trade names 113.2 — (0.2) 113.0 Total $ 1,187.1 $ (297.3) $ (22.6) $ 867.2 As of December 31, 2021 (In millions) Acquisition Cost Accumulated Amortization Currency Translation Net Customer relationships $ 507.2 $ (135.4) $ 6.0 $ 377.8 Patents, technology and other 566.7 (134.3) 1.8 434.2 Indefinite-lived trade names 113.2 — — 113.2 Total $ 1,187.1 $ (269.7) $ 7.8 $ 925.2 |
LEASING ARRANGEMENTS
LEASING ARRANGEMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
LEASING ARRANGEMENTS | Note 4 — LEASING ARRANGEMENTS We lease certain manufacturing facilities, warehouse space, machinery and equipment, vehicles and information technology equipment. The majority of our leases are operating leases. Finance leases are immaterial to our condensed consolidated financial statements. Operating lease assets and obligations are reflected within Operating lease assets, net, Current operating lease obligations, and Non-current operating lease obligations, respectively, on the Condensed Consolidated Balance Sheets. Lease expense is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred. The components of lease cost recognized within our Condensed Consolidated Statements of Income were as follows: Three Months Ended Six Months Ended (In millions) 2022 2021 2022 2021 Cost of sales $ 4.8 $ 5.5 $ 9.2 $ 9.3 Selling and administrative expense 2.2 3.4 4.5 7.8 Total operating lease cost $ 7.0 $ 8.9 $ 13.7 $ 17.1 We often have options to renew lease terms for buildings and other assets. The exercise of lease renewal options are generally at our sole discretion. In addition, certain lease arrangements may be terminated prior to their original expiration date at our discretion. We evaluate renewal and termination options at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors. The weighted average remaining lease term for our operating leases as of June 30, 2022 and 2021 was 4.8 years and 4.9 years, respectively. The discount rate implicit within our leases is generally not determinable and, therefore, the Company determines the discount rate based on its incremental borrowing rate. The incremental borrowing rate for our leases is determined based on lease term and currency in which lease payments are made, adjusted for impacts of collateral. The weighted average discount rates used to measure our operating lease liabilities as of June 30, 2022 and 2021 were 3.7%. Maturity Analysis of Operating Lease Liabilities: As of June 30, 2022 (In millions) 2022 $ 12.4 2023 19.9 2024 12.9 2025 8.1 2026 5.0 Thereafter 11.3 Total lease payments 69.4 Less amount of lease payment representing interest (6.2) Total present value of lease payments $ 63.2 |
INVENTORIES, NET
INVENTORIES, NET | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | Note 5 — INVENTORIES, NET Components of Inventories, net are as follows: (In millions) As of June 30, 2022 As of December 31, 2021 Finished products $ 252.7 $ 244.4 Work in process 26.1 21.2 Raw materials and supplies 215.2 195.5 Inventories, net $ 494.0 $ 461.1 |
PROPERTY, NET
PROPERTY, NET | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, NET | Note 6 — PROPERTY, NET Components of Property, net are as follows: (In millions) As of June 30, 2022 As of December 31, 2021 Land and land improvements $ 86.1 $ 91.5 Buildings 344.3 350.6 Machinery and equipment 968.5 972.3 Property, gross 1,398.9 1,414.4 Less accumulated depreciation (760.0) (738.3) Property, net $ 638.9 $ 676.1 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Note 7 — INCOME TAXES During the three and six months ended June 30, 2022, the Company’s effective tax rate of 26.1% and 25.0%, respectively, was above the U.S. federal statutory rate of 21.0% primarily due to state taxes, foreign withholding tax liability accrued associated with the future repatriation of certain current year foreign earnings, and global intangible low-taxed income (GILTI) tax. These unfavorable items were partially offset by the U.S. research and development tax credit. During the three and six months ended June 30, 2021, the Company’s effective tax rate of 22.6% and 22.5%, respectively, was above the U.S. federal statutory rate of 21.0% primarily due to state taxes, foreign withholding tax liability accrued associated with the future repatriation of certain current year foreign earnings and GILTI tax. These unfavorable items were partially offset by changes in net foreign deferred tax assets from a foreign statutory tax rate change, favorable prior year foreign return-to-provision adjustments and U.S. research and development tax credit. |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | Note 8 — FINANCING ARRANGEMENTS Debt consists of the following instruments: As of June 30, 2022 (in millions) Principal Amount Unamortized discount and debt issuance cost Net Debt Weighted average interest rate Senior secured revolving credit facility due 2026 $ — $ — $ — — % Senior secured term loan due 2026 608.2 5.3 602.9 2.21 % 5.25% senior notes due 2023 600.0 0.8 599.2 5.25 % 5.75% senior notes due 2025 650.0 5.9 644.1 5.75 % Other Debt 10.6 — 10.6 Total Debt 1,868.8 12.0 1,856.8 Less short-term and current portion of long-term debt 608.5 0.8 607.7 Total long-term debt, net of current portion $ 1,260.3 $ 11.2 $ 1,249.1 As of December 31, 2021 (in millions) Principal Amount Unamortized discount and debt issuance cost Net Debt Weighted average interest rate Senior secured revolving credit facility due 2026 $ — $ — $ — — % Senior secured term loan due 2026 611.5 6.2 605.3 1.85 % 5.25% senior notes due 2023 600.0 1.4 598.6 5.25 % 5.75% senior notes due 2025 650.0 6.8 643.2 5.75 % Other Debt 11.8 — 11.8 Total Debt 1,873.3 14.4 1,858.9 Less short-term and current portion of long-term debt 8.6 — 8.6 Total long-term debt, net of current portion $ 1,864.7 $ 14.4 $ 1,850.3 As of June 30, 2022, we had no borrowings outstanding under our Revolving Credit Facility, which had remaining availability of $487.1 million. The agreements governing our senior secured revolving credit facility, our senior secured term loan, and the indentures and credit agreements governing other debt contain a number of customary financial and restrictive covenants that, among other things, limit our ability to: consummate asset sales, incur additional debt or liens, consolidate or merge with any entity or transfer or sell all or substantially all of our assets, pay dividends or make certain other restricted payments, make investments, enter into transactions with affiliates, create dividend or other payment restrictions with respect to subsidiaries, make capital investments and alter the business we conduct. As of June 30, 2022, we were in compliance with all covenants. The estimated fair value of Avient’s debt instruments at June 30, 2022 and December 31, 2021 was $1,826.7 million and $1,917.7 million, respectively. The fair value of Avient’s debt instruments was estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities and represent Level 2 measurements within the fair value hierarchy. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | Note 9 — SEGMENT INFORMATION Avient has three reportable segments: (1) Color, Additives and Inks; (2) Specialty Engineered Materials; and (3) Distribution. Operating income is the primary measure that is reported to our chief operating decision maker (CODM) for purposes of allocating resources to the segments and assessing their performance. Operating income at the segment level does not include: corporate general and administrative expenses that are not allocated to segments; intersegment sales and profit eliminations; charges related to specific strategic initiatives such as the consolidation of operations; restructuring activities, including employee separation costs resulting from personnel reduction programs, plant closure and phase-in costs; executive separation agreements; share-based compensation costs; asset impairments; environmental remediation costs, along with related gains from insurance recoveries, and other liabilities for facilities no longer owned or closed in prior years; gains and losses on the divestiture of joint ventures and equity investments; actuarial gains and losses associated with our pension and other post-retirement benefit plans; and certain other items that are not included in the measure of segment profit or loss that is reported to and reviewed by our CODM. These costs are included in Corporate and eliminations. Segment information for the three and six months ended June 30, 2022 and 2021 is as follows: Three Months Ended Three Months Ended (In millions) Sales to Total Sales Operating Sales to Total Sales Operating Color, Additives and Inks $ 646.8 $ 649.1 $ 93.6 $ 622.3 $ 624.4 $ 86.3 Specialty Engineered Materials 223.8 243.9 36.6 219.1 240.6 37.3 Distribution 431.8 443.2 27.1 392.1 404.4 23.7 Corporate and eliminations — (33.8) (27.8) 1.7 (34.2) (39.2) Total $ 1,302.4 $ 1,302.4 $ 129.5 $ 1,235.2 $ 1,235.2 $ 108.1 Six Months Ended Six Months Ended (In millions) Sales to Total Sales Operating Sales to Total Sales Operating Color, Additives and Inks $ 1,294.8 $ 1,298.6 $ 188.1 $ 1,230.2 $ 1,233.7 $ 175.1 Specialty Engineered Materials 447.1 488.6 76.3 414.9 457.1 71.5 Distribution 854.3 876.1 51.3 747.0 767.1 47.7 Corporate and eliminations — (67.1) (57.6) 5.4 (60.4) (65.8) Total $ 2,596.2 $ 2,596.2 $ 258.1 $ 2,397.5 $ 2,397.5 $ 228.5 Total Assets (In millions) As of June 30, 2022 As of December 31, 2021 Color, Additives and Inks $ 2,933.9 $ 2,965.2 Specialty Engineered Materials 783.3 771.0 Distribution 404.3 384.9 Corporate and eliminations 922.1 876.1 Total assets $ 5,043.6 $ 4,997.2 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Note 10 — COMMITMENTS AND CONTINGENCIES We have been notified by federal and state environmental agencies and by private parties that we may be a potentially responsible party (PRP) in connection with the environmental investigation and remediation of certain sites. While government agencies frequently assert that PRPs are jointly and severally liable at these sites, in our experience, the interim and final allocations of liability costs are generally made based on the relative contribution of waste. We may also initiate corrective and preventive environmental projects of our own to ensure safe and lawful activities at our operations. We believe that compliance with current governmental regulations at all levels will not have a material adverse effect on our financial position, results of operations or cash flows. In September 2007, the United States District Court for the Western District of Kentucky (Court) in the case of Westlake Vinyls, Inc. v. Goodrich Corporation, et al ., held that Avient must pay the remediation costs at the former Goodrich Corporation Calvert City facility (now largely owned and operated by Westlake Vinyls, Inc. (Westlake Vinyls)), together with certain defense costs of Goodrich Corporation. The rulings also provided that Avient can seek indemnification for contamination attributable to Westlake Vinyls. Following the rulings, the parties to the litigation agreed to settle all claims regarding past environmental costs incurred at the site. The settlement agreement provides a mechanism to pursue allocation of future remediation costs at the Calvert City site to Westlake Vinyls. We will adjust our accrual, in the future, consistent with any such future allocation of costs. Additionally, we continue to pursue available insurance coverage related to this matter and recognize gains as we receive reimbursement. The environmental obligation at the site arose as a result of an agreement between The B.F. Goodrich Company (n/k/a Goodrich Corporation) and our predecessor, The Geon Company, at the time of the initial public offering in 1993. Under the agreement, The Geon Company agreed to indemnify Goodrich Corporation for certain environmental costs at the site. Neither Avient nor The Geon Company ever operated the facility. Since 2009, Avient, along with respondents Westlake Vinyls, and Goodrich Corporation, has worked with the United States Environmental Protection Agency (USEPA) to address contamination at the site. The USEPA issued its Record of Decision (ROD) in September 2018, selecting a remedy consistent with our accrual assumptions. In April 2019, the respondents signed an Administrative Settlement Agreement and Order on Consent with the USEPA to conduct the remedial design actions at the site. In February 2020, the respondents signed the agreed Consent Decree and remedial action Work Plan, which received Federal Court approval in January 2021. Our current reserve totals $107.7 million for this matter. During the three and six months ended June 30, 2022, Avient recognized $3.0 million and $5.0 million of expense, respectively, related to environmental remediation costs, compared to $12.5 million and $13.0 million recognized during the three and six months ended June 30, 2021, respectively. During the three and six months ended June 30, 2022, Avient received $7.6 million and $8.2 million, respectively, of insurance recoveries for previously incurred environmental costs. During the six months ended June 30, 2021, Avient received $4.5 million of insurance recoveries. These expenses and insurance recoveries are included within Cost of sales within our Condensed Consolidated Statements of Income. Our Condensed Consolidated Balance Sheets include accruals totaling $119.9 million and $124.5 million as of June 30, 2022 and December 31, 2021, respectively, based on our estimates of probable future environmental expenditures relating to previously contaminated sites. These undiscounted amounts are included in Accrued expenses and other current liabilities and Other non-current liabilities on the accompanying Condensed Consolidated Balance Sheets. The accruals represent our best estimate of probable future costs that we can reasonably estimate, based upon currently available information and technology and our view of the most likely remedy. Depending upon the results of future testing, completion and results of remedial investigation and feasibility studies, the ultimate remediation alternatives undertaken, changes in regulations, technology development, new information, newly discovered conditions and other factors, it is reasonably possible that we could incur additional costs in excess of the amount accrued at June 30, 2022. However, such additional costs, if any, cannot be currently estimated. Avient is subject to a broad range of claims, administrative and legal proceedings such as lawsuits that relate to contractual allegations, tax audits, product claims, personal injuries, and employment related matters. Although it is not possible to predict with certainty the outcome or cost of these matters, the Company believes our current reserves are appropriate and these matters will not have a material adverse effect on the condensed consolidated financial statements. |
DERIVATIVES AND HEDGING
DERIVATIVES AND HEDGING | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING | Note 11 — DERIVATIVES AND HEDGING We are exposed to market risks, such as changes in foreign currency exchange rates and interest rates. To manage the volatility related to these exposures we may enter into various derivative transactions. We formally assess, designate and document, as a hedge of an underlying exposure, the qualifying derivative instrument that will be accounted for as an accounting hedge at inception. Additionally, we assess both at inception and at least quarterly thereafter, whether the financial instruments used in the hedging transaction are effective at offsetting changes in either the fair values or cash flows of the underlying exposures. In accordance with ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12), that ongoing assessment will be done qualitatively for highly effective relationships. Net Investment Hedge As a means of mitigating the future impact of currency fluctuations on our euro investments in foreign entities, we enter into cross currency swaps in which we generally pay fixed-rate interest in euros and receive fixed-rate interest in U.S. dollars. In April and May 2022, we settled €1.0 billion of our existing cross currency swaps and concurrently entered into €1.1 billion of new cross currency swaps, to align with our planned financing of the Dyneema Acquisition, receiving cash proceeds of $75.1 million. We currently have 11 cross currency swaps with a combined notional amount of €1.4 billion with maturities in 2023 and 2028. These effectively convert a portion of our U.S. dollar denominated fixed-rate debt to euro denominated fixed-rate debt. Included in Interest expense, net within the Condensed Consolidated Statements of Income are gains of $7.0 million and $12.6 million for the three and six months ended June 30, 2022, compared to gains of $3.5 million and $7.0 million for the three and six months ended June 30, 2021, respectively. We designated the cross currency swaps as net investment hedges of our net investment in our European operations under ASU 2017-12 and applied the spot method to these hedges. The changes in fair value of the derivative instruments that are designated and qualify as hedges of net investments in foreign operations are recognized within A ccumulated Other Comprehensive Income (AOCI) to offset the changes in the values of the net investment being hedged. For the three and six months ended June 30, 2022, gains of $45.2 million and $52.0 million were recognized within translation adjustments in AOCI, net of tax, respectively, compared to a loss of $5.2 million and a gain of $17.7 million for the three and six months ended June 30, 2021, respectively. Derivatives Designated as Cash Flow Hedging Instruments In August 2018, we entered into two interest rate swaps with a combined notional amount of $150.0 million to manage the variability of cash flows in the interest rate payments associated with our existing LIBOR-based interest payments, effectively converting $150.0 million of our floating rate debt to a fixed rate. We began to receive floating rate interest payments based upon one-month U.S. dollar LIBOR and in return are obligated to pay interest at a fixed rate of 2.732% until November 2022. We have designated these interest rate swap contracts as cash flow hedges pursuant to ASC Topic 815, Derivatives and Hedging . The net interest payments accrued are reflected in net income as adjustments of interest expense and the remaining change in the fair value of the derivatives is recorded as a component of AOCI. The amount of expense recognized within Interest expense, net in our Condensed Consolidated Statements of Income was $0.6 million and $1.6 million for the three and six months ended June 30, 2022, compared to $1.0 million and $2.0 million for the three and six months ended June 30, 2021. For the three and six months ended June 30, 2022, gains of $0.9 million and $2.1 million, net of tax, were recognized in AOCI, compared to gains of $0.7 million $1.5 million for the three and six months ended June 30, 2021. Derivatives Not Designated for Hedge Accounting On April 20, 2022, we executed additional cross currency swaps, pursuant to which we will pay fixed-rate interest in euros and receive fixed-rate interest in U.S. dollars with a combined notional amount of €900 million, which mature in April 2028, as a means of mitigating the impact of currency fluctuations on our future euro investments in foreign entities related to the Dyneema Acquisition. Additionally, we entered into foreign currency forward contracts with an aggregate notional amount of €350 million, which are scheduled to mature within one year, to mitigate the impact of currency fluctuations on the euro-denominated Purchase Price for the Dyneema Acquisition. Changes in the fair value of the cross-currency swaps and foreign exchange forward contracts are recorded in earnings directly. The amount of income recognized within Other income, net in our Condensed Consolidated Statements of Income was $0.9 million for the three and six months ended June 30, 2022. All of our derivative assets and liabilities measured at fair value are classified as Level 2 within the fair value hierarchy. We determine the fair value of our derivatives based on valuation methods, which project future cash flows and discount the future amounts present value using market based observable inputs, including interest rate curves and foreign currency rates. The fair value of derivative financial instruments recognized in the Condensed Consolidated Balance Sheets is as follows: (In millions) Balance Sheet Location As of June 30, 2022 As of December 31, 2021 Assets Cross Currency Swaps (Net Investment Hedge) Other current assets $ 22.6 $ — Cross Currency Swaps (Net Investment Hedge) Other non-current assets 10.9 31.7 Mark-to-Market Cross Currency Swaps Other non-current assets 13.0 — Liabilities Interest Rate Swaps (Cash Flow Hedge) Other current liabilities $ 0.2 $ 3.1 Mark-to-Market Foreign Exchange Forwards Other current liabilities 12.1 — |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Note 12 — SUBSEQUENT EVENTS During July 2022, we settled €2.3 billion of our existing 2023 and 2025 cross-currency swaps and concurrently entered into €2.4 billion of new cross currency swaps, receiving cash proceeds of $65.6 million. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Form 10-Q instructions and in the opinion of management contain all adjustments, including those that are normal, recurring and necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. These interim financial statements should be read in conjunction with the financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2021 of Avient Corporation, formerly known as PolyOne Corporation. When used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “Avient” and the “Company” mean Avient Corporation and its consolidated subsidiaries.Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be attained in subsequent periods or for the year ending December 31, 2022. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Changes in Carrying Amount of Goodwill by Operating Segment | Goodwill as of June 30, 2022 and December 31, 2021 and changes in the carrying amount of goodwill by segment were as follows: (In millions) Specialty Engineered Materials Color, Additives and Inks Distribution Total Balance at December 31, 2021 $ 236.3 $ 1,048.5 $ 1.6 $ 1,286.4 Currency translation (1.6) (28.0) — (29.6) Balance at June 30, 2022 $ 234.7 $ 1,020.5 $ 1.6 $ 1,256.8 |
Schedule of Finite-Lived Intangible Assets | Indefinite and finite-lived intangible assets consisted of the following: As of June 30, 2022 (In millions) Acquisition Cost Accumulated Amortization Currency Translation Net Customer relationships $ 507.2 $ (148.3) $ (6.5) $ 352.4 Patents, technology and other 566.7 (149.0) (15.9) 401.8 Indefinite-lived trade names 113.2 — (0.2) 113.0 Total $ 1,187.1 $ (297.3) $ (22.6) $ 867.2 As of December 31, 2021 (In millions) Acquisition Cost Accumulated Amortization Currency Translation Net Customer relationships $ 507.2 $ (135.4) $ 6.0 $ 377.8 Patents, technology and other 566.7 (134.3) 1.8 434.2 Indefinite-lived trade names 113.2 — — 113.2 Total $ 1,187.1 $ (269.7) $ 7.8 $ 925.2 |
Schedule of Indefinite-Lived Intangible Assets | Indefinite and finite-lived intangible assets consisted of the following: As of June 30, 2022 (In millions) Acquisition Cost Accumulated Amortization Currency Translation Net Customer relationships $ 507.2 $ (148.3) $ (6.5) $ 352.4 Patents, technology and other 566.7 (149.0) (15.9) 401.8 Indefinite-lived trade names 113.2 — (0.2) 113.0 Total $ 1,187.1 $ (297.3) $ (22.6) $ 867.2 As of December 31, 2021 (In millions) Acquisition Cost Accumulated Amortization Currency Translation Net Customer relationships $ 507.2 $ (135.4) $ 6.0 $ 377.8 Patents, technology and other 566.7 (134.3) 1.8 434.2 Indefinite-lived trade names 113.2 — — 113.2 Total $ 1,187.1 $ (269.7) $ 7.8 $ 925.2 |
LEASING ARRANGEMENTS (Tables)
LEASING ARRANGEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Components of Lease Cost | The components of lease cost recognized within our Condensed Consolidated Statements of Income were as follows: Three Months Ended Six Months Ended (In millions) 2022 2021 2022 2021 Cost of sales $ 4.8 $ 5.5 $ 9.2 $ 9.3 Selling and administrative expense 2.2 3.4 4.5 7.8 Total operating lease cost $ 7.0 $ 8.9 $ 13.7 $ 17.1 |
Schedule of Maturity of Operating Lease Liabilities | Maturity Analysis of Operating Lease Liabilities: As of June 30, 2022 (In millions) 2022 $ 12.4 2023 19.9 2024 12.9 2025 8.1 2026 5.0 Thereafter 11.3 Total lease payments 69.4 Less amount of lease payment representing interest (6.2) Total present value of lease payments $ 63.2 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Components of Inventories, Net | (In millions) As of June 30, 2022 As of December 31, 2021 Finished products $ 252.7 $ 244.4 Work in process 26.1 21.2 Raw materials and supplies 215.2 195.5 Inventories, net $ 494.0 $ 461.1 |
Property, Net (Tables)
Property, Net (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Components of Property, Net | Components of Property, net are as follows: (In millions) As of June 30, 2022 As of December 31, 2021 Land and land improvements $ 86.1 $ 91.5 Buildings 344.3 350.6 Machinery and equipment 968.5 972.3 Property, gross 1,398.9 1,414.4 Less accumulated depreciation (760.0) (738.3) Property, net $ 638.9 $ 676.1 |
FINANCING ARRANGEMENTS (Tables)
FINANCING ARRANGEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Components of Debt | Debt consists of the following instruments: As of June 30, 2022 (in millions) Principal Amount Unamortized discount and debt issuance cost Net Debt Weighted average interest rate Senior secured revolving credit facility due 2026 $ — $ — $ — — % Senior secured term loan due 2026 608.2 5.3 602.9 2.21 % 5.25% senior notes due 2023 600.0 0.8 599.2 5.25 % 5.75% senior notes due 2025 650.0 5.9 644.1 5.75 % Other Debt 10.6 — 10.6 Total Debt 1,868.8 12.0 1,856.8 Less short-term and current portion of long-term debt 608.5 0.8 607.7 Total long-term debt, net of current portion $ 1,260.3 $ 11.2 $ 1,249.1 As of December 31, 2021 (in millions) Principal Amount Unamortized discount and debt issuance cost Net Debt Weighted average interest rate Senior secured revolving credit facility due 2026 $ — $ — $ — — % Senior secured term loan due 2026 611.5 6.2 605.3 1.85 % 5.25% senior notes due 2023 600.0 1.4 598.6 5.25 % 5.75% senior notes due 2025 650.0 6.8 643.2 5.75 % Other Debt 11.8 — 11.8 Total Debt 1,873.3 14.4 1,858.9 Less short-term and current portion of long-term debt 8.6 — 8.6 Total long-term debt, net of current portion $ 1,864.7 $ 14.4 $ 1,850.3 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Segment information for the three and six months ended June 30, 2022 and 2021 is as follows: Three Months Ended Three Months Ended (In millions) Sales to Total Sales Operating Sales to Total Sales Operating Color, Additives and Inks $ 646.8 $ 649.1 $ 93.6 $ 622.3 $ 624.4 $ 86.3 Specialty Engineered Materials 223.8 243.9 36.6 219.1 240.6 37.3 Distribution 431.8 443.2 27.1 392.1 404.4 23.7 Corporate and eliminations — (33.8) (27.8) 1.7 (34.2) (39.2) Total $ 1,302.4 $ 1,302.4 $ 129.5 $ 1,235.2 $ 1,235.2 $ 108.1 Six Months Ended Six Months Ended (In millions) Sales to Total Sales Operating Sales to Total Sales Operating Color, Additives and Inks $ 1,294.8 $ 1,298.6 $ 188.1 $ 1,230.2 $ 1,233.7 $ 175.1 Specialty Engineered Materials 447.1 488.6 76.3 414.9 457.1 71.5 Distribution 854.3 876.1 51.3 747.0 767.1 47.7 Corporate and eliminations — (67.1) (57.6) 5.4 (60.4) (65.8) Total $ 2,596.2 $ 2,596.2 $ 258.1 $ 2,397.5 $ 2,397.5 $ 228.5 Total Assets (In millions) As of June 30, 2022 As of December 31, 2021 Color, Additives and Inks $ 2,933.9 $ 2,965.2 Specialty Engineered Materials 783.3 771.0 Distribution 404.3 384.9 Corporate and eliminations 922.1 876.1 Total assets $ 5,043.6 $ 4,997.2 |
DERIVATIVES AND HEDGING (Tables
DERIVATIVES AND HEDGING (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair value of derivative financial instruments recognized in the Condensed Consolidated Balance Sheets is as follows: (In millions) Balance Sheet Location As of June 30, 2022 As of December 31, 2021 Assets Cross Currency Swaps (Net Investment Hedge) Other current assets $ 22.6 $ — Cross Currency Swaps (Net Investment Hedge) Other non-current assets 10.9 31.7 Mark-to-Market Cross Currency Swaps Other non-current assets 13.0 — Liabilities Interest Rate Swaps (Cash Flow Hedge) Other current liabilities $ 0.2 $ 3.1 Mark-to-Market Foreign Exchange Forwards Other current liabilities 12.1 — |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) € in Millions, $ in Millions | Jun. 23, 2022 EUR (€) | Jul. 01, 2021 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,256.8 | $ 1,286.4 | ||
Dyneema Business | ||||
Business Acquisition [Line Items] | ||||
Acquisition purchase price | € | € 1,380 | |||
Magna Colours | ||||
Business Acquisition [Line Items] | ||||
Purchase price, net | $ 47.6 | |||
Intangible assets | 27.5 | |||
Goodwill | $ 22 | |||
Magna Colours | Minimum | ||||
Business Acquisition [Line Items] | ||||
Intangible asset, weighted average lives (years) | 10 years | |||
Magna Colours | Maximum | ||||
Business Acquisition [Line Items] | ||||
Intangible asset, weighted average lives (years) | 20 years |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Goodwill and Changes in Carrying Amount of Goodwill by Operating Segment (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | $ 1,286.4 |
Currency translation | (29.6) |
Goodwill, Ending Balance | 1,256.8 |
Specialty Engineered Materials | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 236.3 |
Currency translation | (1.6) |
Goodwill, Ending Balance | 234.7 |
Color, Additives and Inks | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 1,048.5 |
Currency translation | (28) |
Goodwill, Ending Balance | 1,020.5 |
Distribution | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 1.6 |
Currency translation | 0 |
Goodwill, Ending Balance | $ 1.6 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Schedule of Indefinite and Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (297.3) | $ (269.7) |
Currency Translation | (22.6) | 7.8 |
Indefinite-lived Intangible Assets [Line Items] | ||
Acquisition Cost | 1,187.1 | 1,187.1 |
Net | 867.2 | 925.2 |
Trade Names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived trade names | 113.2 | 113.2 |
Indefinite- Lived Intangible Assets, Currency Translation | (0.2) | |
Indefinite-lived trade names, net | 113 | 113.2 |
Customer relationships | ||
Intangible Assets [Line Items] | ||
Acquisition Cost | 507.2 | 507.2 |
Accumulated Amortization | (148.3) | (135.4) |
Currency Translation | (6.5) | 6 |
Finite-Lived Intangible Assets, Net, Total | 352.4 | 377.8 |
Patents, technology and other | ||
Intangible Assets [Line Items] | ||
Acquisition Cost | 566.7 | 566.7 |
Accumulated Amortization | (149) | (134.3) |
Currency Translation | (15.9) | 1.8 |
Finite-Lived Intangible Assets, Net, Total | $ 401.8 | $ 434.2 |
LEASING ARRANGEMENTS - Lease Co
LEASING ARRANGEMENTS - Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Lessee, Lease, Description [Line Items] | ||||
Total operating lease cost | $ 7 | $ 8.9 | $ 13.7 | $ 17.1 |
Cost of sales | ||||
Lessee, Lease, Description [Line Items] | ||||
Total operating lease cost | 4.8 | 5.5 | 9.2 | 9.3 |
Selling and administrative expense | ||||
Lessee, Lease, Description [Line Items] | ||||
Total operating lease cost | $ 2.2 | $ 3.4 | $ 4.5 | $ 7.8 |
LEASING ARRANGEMENTS - Narrativ
LEASING ARRANGEMENTS - Narrative (Details) | Jun. 30, 2022 | Jun. 30, 2021 |
Leases [Abstract] | ||
Weighted average remaining lease term | 4 years 9 months 18 days | 4 years 10 months 24 days |
Weighted average discount rate | 3.70% | 3.70% |
LEASING ARRANGEMENTS - Schedule
LEASING ARRANGEMENTS - Schedule of Maturity of Lease Liabilities (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2022 | $ 12.4 |
2023 | 19.9 |
2024 | 12.9 |
2025 | 8.1 |
2026 | 5 |
Thereafter | 11.3 |
Total lease payments | 69.4 |
Less amount of lease payment representing interest | (6.2) |
Total present value of lease payments | $ 63.2 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 252.7 | $ 244.4 |
Work in process | 26.1 | 21.2 |
Raw materials and supplies | 215.2 | 195.5 |
Inventories, net | $ 494 | $ 461.1 |
PROPERTY, NET (Details)
PROPERTY, NET (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, gross | $ 1,398.9 | $ 1,414.4 |
Less accumulated depreciation | (760) | (738.3) |
Property, net | 638.9 | 676.1 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, gross | 86.1 | 91.5 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, gross | 344.3 | 350.6 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, gross | $ 968.5 | $ 972.3 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 26.10% | 22.60% | 25% | 22.50% |
FINANCING ARRANGEMENTS - Compon
FINANCING ARRANGEMENTS - Components of Long-Term Debt (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Principal Amount | $ 1,868.8 | $ 1,873.3 |
Unamortized discount and debt issuance cost | 12 | 14.4 |
Long-term Debt, Total | 1,856.8 | 1,858.9 |
Less short-term and current portion of long-term debt, Principal Amount | 608.5 | 8.6 |
Less short-term and current portion of long-term debt, Unamortized discount and debt issuance cost | 0.8 | 0 |
Less short-term and current portion of long-term debt | 607.7 | 8.6 |
Total long-term debt, gross, net of current | 1,260.3 | 1,864.7 |
Debt excluding current, unamortized discount and debt issuance costs | 11.2 | 14.4 |
Total long-term debt, net of current portion | 1,249.1 | 1,850.3 |
Senior secured revolving credit facility due 2026 | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Principal Amount | 0 | 0 |
Unamortized discount and debt issuance cost | 0 | 0 |
Long-term Debt, Total | $ 0 | $ 0 |
Weighted average interest rate | 0% | 0% |
Senior secured term loan due 2026 | Secured Debt | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 608.2 | $ 611.5 |
Unamortized discount and debt issuance cost | 5.3 | 6.2 |
Long-term Debt, Total | $ 602.9 | $ 605.3 |
Weighted average interest rate | 2.21% | 1.85% |
5.25% Senior Notes Due 2023 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 5.25% | 5.25% |
Principal Amount | $ 600 | $ 600 |
Unamortized discount and debt issuance cost | 0.8 | 1.4 |
Long-term Debt, Total | $ 599.2 | $ 598.6 |
Weighted average interest rate | 5.25% | 5.25% |
5.75% Senior Notes Due 2025 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 5.75% | 5.75% |
Principal Amount | $ 650 | $ 650 |
Unamortized discount and debt issuance cost | 5.9 | 6.8 |
Long-term Debt, Total | $ 644.1 | $ 643.2 |
Weighted average interest rate | 5.75% | 5.75% |
Other Debt | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 10.6 | $ 11.8 |
Unamortized discount and debt issuance cost | 0 | 0 |
Long-term Debt, Total | $ 10.6 | $ 11.8 |
FINANCING ARRANGEMENTS - Narrat
FINANCING ARRANGEMENTS - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Apr. 19, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||
Borrowings outstanding | $ 1,868.8 | $ 1,873.3 | |
Fair value of debt instruments | 1,826.7 | 1,917.7 | |
Senior Secured Term Loan Facility | Morgan Stanley Senior Funding, Inc. and J.P. Morgan | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 640 | ||
Bridge Loan | Morgan Stanley Senior Funding, Inc. and J.P. Morgan | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 900 | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Remaining borrowing capacity under Revolving Credit Facility | 487.1 | ||
Revolving Credit Facility | Senior secured revolving credit facility due 2026 | |||
Debt Instrument [Line Items] | |||
Borrowings outstanding | $ 0 | $ 0 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 6 Months Ended |
Jun. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
SEGMENT INFORMATION - Schedule
SEGMENT INFORMATION - Schedule of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||
Sales | $ 1,302.4 | $ 1,235.2 | $ 2,596.2 | $ 2,397.5 | |
Operating Income | 129.5 | 108.1 | 258.1 | 228.5 | |
Total assets | 5,043.6 | 5,043.6 | $ 4,997.2 | ||
Corporate and eliminations before intersegment eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 0 | 1.7 | 0 | 5.4 | |
Corporate and eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Sales | (33.8) | (34.2) | (67.1) | (60.4) | |
Operating Income | (27.8) | (39.2) | (57.6) | (65.8) | |
Total assets | 922.1 | 922.1 | 876.1 | ||
Color, Additives and Inks | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 646.8 | 622.3 | 1,294.8 | 1,230.2 | |
Color, Additives and Inks | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 649.1 | 624.4 | 1,298.6 | 1,233.7 | |
Operating Income | 93.6 | 86.3 | 188.1 | 175.1 | |
Total assets | 2,933.9 | 2,933.9 | 2,965.2 | ||
Specialty Engineered Materials | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 223.8 | 219.1 | 447.1 | 414.9 | |
Specialty Engineered Materials | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 243.9 | 240.6 | 488.6 | 457.1 | |
Operating Income | 36.6 | 37.3 | 76.3 | 71.5 | |
Total assets | 783.3 | 783.3 | 771 | ||
Distribution | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 431.8 | 392.1 | 854.3 | 747 | |
Distribution | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 443.2 | 404.4 | 876.1 | 767.1 | |
Operating Income | 27.1 | $ 23.7 | 51.3 | $ 47.7 | |
Total assets | $ 404.3 | $ 404.3 | $ 384.9 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | |||||
Accrued probable future environmental expenditures | $ 119.9 | $ 119.9 | $ 124.5 | ||
Expense related to environmental activities | 3 | $ 12.5 | 5 | $ 13 | |
Insurance recoveries | 7.6 | 8.2 | $ 4.5 | ||
Calvert City | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Accrued probable future environmental expenditures | $ 107.7 | $ 107.7 |
DERIVATIVES AND HEDGING - Narra
DERIVATIVES AND HEDGING - Narrative (Details) € in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||||||
Apr. 20, 2022 EUR (€) | Jun. 30, 2022 USD ($) position | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) position | Jun. 30, 2021 USD ($) | May 31, 2022 EUR (€) | Apr. 30, 2022 EUR (€) | Dec. 31, 2018 EUR (€) | Aug. 31, 2018 USD ($) swap | |
Derivative [Line Items] | |||||||||
Settlement of cross-currency swaps | $ 75.1 | $ 0 | |||||||
Gain recognized in AOCI, net | $ 0.9 | $ 0.7 | $ 2.1 | 1.5 | |||||
Cross Currency Swaps | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | € | € 900 | ||||||||
Number of interest rate swaps | position | 11 | 11 | |||||||
Foreign Currency Forward | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | € | € 350 | ||||||||
Derivative maturity | 1 year | ||||||||
Income on derivative not designated as a hedging instrument recognized in other (expense) income | $ (0.9) | $ (0.9) | |||||||
Net Investment Hedging | Cross Currency Swaps | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | € | € 1,100 | € 1,000 | € 1,400 | ||||||
Gains on net investment hedge, net of tax | 45.2 | (5.2) | 52 | 17.7 | |||||
Net Investment Hedging | Cross Currency Swaps | Interest expense, net | |||||||||
Derivative [Line Items] | |||||||||
Conversion benefit | 7 | 3.5 | 12.6 | 7 | |||||
Cash Flow Hedging | Interest Rate Swap | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | $ 150 | ||||||||
Number of interest rate swaps | swap | 2 | ||||||||
Floating rate debt | $ 150 | ||||||||
Floating rate | 2.732% | ||||||||
Gain recognized in AOCI, net | (0.9) | 0.7 | (2.1) | 1.5 | |||||
Cash Flow Hedging | Interest Rate Swap | Interest expense, net | |||||||||
Derivative [Line Items] | |||||||||
Expense recognized | $ 0.6 | $ 1 | $ 1.6 | $ 2 |
DERIVATIVES AND HEDGING - Fair
DERIVATIVES AND HEDGING - Fair Value of Derivatives (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Foreign Currency Forward | Not Designated as Hedging Instrument | Other non-current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 13 | $ 0 |
Foreign Currency Forward | Not Designated as Hedging Instrument | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 12.1 | 0 |
Net Investment Hedging | Cross Currency Swaps | Designated as Hedging Instrument | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 22.6 | 0 |
Net Investment Hedging | Cross Currency Swaps | Designated as Hedging Instrument | Other non-current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 10.9 | 31.7 |
Cash Flow Hedging | Interest Rate Swap | Designated as Hedging Instrument | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | $ 0.2 | $ 3.1 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) € in Millions, $ in Millions | 1 Months Ended | 6 Months Ended | ||||
Jul. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jul. 26, 2022 USD ($) | Jul. 26, 2022 EUR (€) | Apr. 20, 2022 EUR (€) | |
Subsequent Event [Line Items] | ||||||
Settlement of cross-currency swaps | $ 75.1 | $ 0 | ||||
Cross Currency Swaps | ||||||
Subsequent Event [Line Items] | ||||||
Notional amount | € | € 900 | |||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Settlement of cross-currency swaps | $ 65.6 | |||||
Subsequent Event | Cross Currency Swaps 2023 and 2025 | ||||||
Subsequent Event [Line Items] | ||||||
Notional amount | € | € 2,300 | |||||
Subsequent Event | Cross Currency Swaps | ||||||
Subsequent Event [Line Items] | ||||||
Notional amount | $ 2,400 |