Cover Page
Cover Page | 9 Months Ended |
Sep. 30, 2022 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Sep. 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 $.01 per share |
Trading Symbol | AVNT |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 90,943,531 |
Entity Central Index Key | 0001122976 |
Amendment Flag | false |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q3 |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Sales | $ 823.3 | $ 818 | $ 2,606.5 | $ 2,508.5 |
Cost of sales | 627.9 | 602.4 | 1,895.8 | 1,781.2 |
Gross margin | 195.4 | 215.6 | 710.7 | 727.3 |
Selling and administrative expense | 154.8 | 162.8 | 467.8 | 497.7 |
Operating income | 40.6 | 52.8 | 242.9 | 229.6 |
Interest expense, net | (37.3) | (19) | (70.4) | (57.8) |
Other (expense) income, net | (32.3) | 1.6 | (31.3) | 4.3 |
(Loss) income from continuing operations before income taxes | (29) | 35.4 | 141.2 | 176.1 |
Income tax benefit (expense) | 1.2 | (2) | (41.5) | (32.1) |
Net (loss) income from continuing operations | (27.8) | 33.4 | 99.7 | 144 |
Income from discontinued operations, net of income taxes | 17.1 | 19.2 | 58.8 | 57.7 |
Net (loss) income | (10.7) | 52.6 | 158.5 | 201.7 |
Net loss (income) attributable to noncontrolling interests | 0.4 | 0.3 | 0.1 | (0.7) |
Net (loss) income attributable to Avient common shareholders | $ (10.3) | $ 52.9 | $ 158.6 | $ 201 |
(Loss) earnings per share attributable to Avient common shareholders - Basic | ||||
Continuing operations (in USD per share) | $ (0.30) | $ 0.37 | $ 1.09 | $ 1.57 |
Discontinued operations (in USD per share) | 0.19 | 0.21 | 0.65 | 0.63 |
Total (in USD per share) | (0.11) | 0.58 | 1.74 | 2.20 |
(Loss) earnings per share attributable to Avient common shareholders - Diluted | ||||
Continuing operations (in USD per share) | (0.30) | 0.37 | 1.08 | 1.56 |
Discontinued operations (in USD per share) | 0.19 | 0.20 | 0.64 | 0.62 |
Total (in USD per share) | $ (0.11) | $ 0.57 | $ 1.72 | $ 2.18 |
Weighted-average shares used to compute earnings per common share: | ||||
Basic (in shares) | 90.9 | 91.4 | 91.3 | 91.3 |
Dilutive impact of share-based compensation (in shares) | 0 | 0.8 | 0.7 | 0.8 |
Diluted (in shares) | 90.9 | 92.2 | 92 | 92.1 |
Anti-dilutive shares not included in diluted common shares outstanding (in shares) | 1 | 0 | 0.3 | 0 |
Cash dividends declared per share of common stock (in USD per share) | $ 0.2375 | $ 0.2125 | $ 0.7125 | $ 0.6375 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (10.7) | $ 52.6 | $ 158.5 | $ 201.7 |
Other comprehensive (loss) income, net of tax: | ||||
Translation adjustments and related hedging instruments | (61.1) | (29.4) | (120.4) | (70.9) |
Cash flow hedges | 0.2 | 0.7 | 2.3 | 2.2 |
Total other comprehensive loss | (60.9) | (28.7) | (118.1) | (68.7) |
Total comprehensive (loss) income | (71.6) | 23.9 | 40.4 | 133 |
Comprehensive loss (income) attributable to noncontrolling interests | 0.4 | 0.3 | 0.1 | (0.7) |
Comprehensive (loss) income attributable to Avient common shareholders | $ (71.2) | $ 24.2 | $ 40.5 | $ 132.3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 544.4 | $ 601.2 |
Accounts receivable, net | 504.6 | 439.9 |
Inventories, net | 441.5 | 305.8 |
Current assets held for sale | 367.8 | 360.2 |
Other current assets | 130 | 119.9 |
Total current assets | 1,988.3 | 1,827 |
Property, net | 965.4 | 672.3 |
Goodwill | 1,491 | 1,284.8 |
Intangible assets, net | 1,525.7 | 925.2 |
Operating lease assets, net | 56 | 58.2 |
Non-current assets held for sale | 0 | 22 |
Other non-current assets | 280.7 | 207.7 |
Total assets | 6,307.1 | 4,997.2 |
Current liabilities: | ||
Short-term and current portion of long-term debt | 613.9 | 8.6 |
Accounts payable | 448.7 | 429.5 |
Current operating lease obligations | 18.1 | 21.1 |
Current liabilities held for sale | 170.3 | 141.3 |
Accrued expenses and other current liabilities | 304.6 | 340.2 |
Total current liabilities | 1,555.6 | 940.7 |
Non-current liabilities: | ||
Long-term debt | 2,502.9 | 1,850.3 |
Pension and other post-retirement benefits | 91.6 | 99.9 |
Deferred income taxes | 210.4 | 100.6 |
Non-current operating lease obligations | 35.7 | 37.3 |
Non-current liabilities held for sale | 0 | 13.1 |
Other non-current liabilities | 174.8 | 164.8 |
Total non-current liabilities | 3,015.4 | 2,266 |
SHAREHOLDERS' EQUITY | ||
Avient shareholders’ equity | 1,720.4 | 1,774.7 |
Noncontrolling interest | 15.7 | 15.8 |
Total equity | 1,736.1 | 1,790.5 |
Total liabilities and equity | $ 6,307.1 | $ 4,997.2 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Activities | ||
Net income | $ 158.5 | $ 201.7 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 110.3 | 105.8 |
Accelerated depreciation | 4 | 1.9 |
Share-based compensation expense | 9.5 | 8.4 |
Changes in assets and liabilities, net of the effect of acquisitions: | ||
Increase in accounts receivable | (66.5) | (199.7) |
Increase in inventories | (12.5) | (156.2) |
Increase in accounts payable | 43.5 | 95.3 |
Decrease in pension and other post-retirement benefits | (15.8) | (14.2) |
(Decrease) increase in accrued expenses and other assets and liabilities, net | (7.1) | 67 |
Net cash provided by operating activities | 223.9 | 110 |
Investing activities | ||
Capital expenditures | (55.1) | (62.7) |
Business acquisitions, net of cash acquired | (1,426.1) | (47.6) |
Settlement of foreign exchange derivatives | 93.3 | 0 |
Net cash proceeds used by other assets | 0 | (2) |
Net cash used by investing activities | (1,387.9) | (112.3) |
Financing activities | ||
Debt proceeds | 1,300 | 0 |
Purchase of common shares for treasury | (36.4) | (4.2) |
Cash dividends paid | (65.2) | (58.2) |
Repayment of long-term debt | (6.8) | (16.5) |
Payments of withholding tax on share awards | (4.2) | (9.1) |
Debt financing costs | (49.3) | 0 |
Other financing activities | 0 | (3.5) |
Net cash provided (used) by financing activities | 1,138.1 | (91.5) |
Effect of exchange rate changes on cash | (30.9) | (10.5) |
Decrease in cash and cash equivalents | (56.8) | (104.3) |
Cash and cash equivalents at beginning of year | 601.2 | 649.5 |
Cash and cash equivalents at end of period | $ 544.4 | $ 545.2 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ 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 | 122.2 | |||||||
Beginning balance, Treasury shares (in shares) at Dec. 31, 2020 | (30.8) | |||||||
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 (loss) income | 79.7 | 79.3 | 79.3 | 0.4 | ||||
Other comprehensive (loss) income | (50.2) | (50.2) | (50.2) | |||||
Cash dividends declared | (19.5) | (19.5) | (19.5) | |||||
Repurchase of common shares (in shares) | (0.1) | |||||||
Repurchase of common shares | (4.2) | (4.2) | $ (4.2) | |||||
Share-based compensation and exercise of awards (in shares) | 0.1 | |||||||
Share-based compensation and exercise of awards | 4.5 | 4.5 | $ 1.6 | 2.9 | ||||
Ending balance (in shares) at Mar. 31, 2021 | 122.2 | |||||||
Ending balance, Treasury shares (in shares) at Mar. 31, 2021 | (30.8) | |||||||
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 | 122.2 | |||||||
Beginning balance, Treasury shares (in shares) at Dec. 31, 2020 | (30.8) | |||||||
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 (loss) income | 201.7 | |||||||
Other comprehensive (loss) income | (68.7) | |||||||
Ending balance (in shares) at Sep. 30, 2021 | 122.2 | |||||||
Ending balance, Treasury shares (in shares) at Sep. 30, 2021 | (30.7) | |||||||
Ending balance at Sep. 30, 2021 | 1,785.4 | 1,768.8 | $ 1.2 | $ (901.6) | 1,511.6 | 1,199.9 | (42.3) | 16.6 |
Beginning balance (in shares) at Mar. 31, 2021 | 122.2 | |||||||
Beginning balance, Treasury shares (in shares) at Mar. 31, 2021 | (30.8) | |||||||
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 (loss) income | 69.4 | 68.8 | 68.8 | 0.6 | ||||
Other comprehensive (loss) income | 10.2 | 10.2 | 10.2 | |||||
Noncontrolling interest activity | 2.6 | 2.6 | ||||||
Cash dividends declared | (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 | ||||
Other | 0 | 0 | 0 | 0 | ||||
Ending balance (in shares) at Jun. 30, 2021 | 122.2 | |||||||
Ending balance, Treasury shares (in shares) at Jun. 30, 2021 | (30.8) | |||||||
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 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net (loss) income | 52.6 | 52.9 | 52.9 | (0.3) | ||||
Other comprehensive (loss) income | (28.7) | (28.7) | (28.7) | |||||
Noncontrolling interest activity | (1.3) | (1.3) | ||||||
Cash dividends declared | (19.6) | (19.6) | (19.6) | |||||
Share-based compensation and exercise of awards (in shares) | 0.1 | |||||||
Share-based compensation and exercise of awards | (1.6) | (1.6) | $ 1.6 | (3.2) | ||||
Other | (2.4) | (2.4) | (2.4) | |||||
Ending balance (in shares) at Sep. 30, 2021 | 122.2 | |||||||
Ending balance, Treasury shares (in shares) at Sep. 30, 2021 | (30.7) | |||||||
Ending balance at Sep. 30, 2021 | 1,785.4 | 1,768.8 | $ 1.2 | $ (901.6) | 1,511.6 | 1,199.9 | (42.3) | 16.6 |
Beginning balance (in shares) at Dec. 31, 2021 | 122.2 | |||||||
Beginning balance, Treasury shares (in shares) at Dec. 31, 2021 | (30.6) | |||||||
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 (loss) income | 84.5 | 84.2 | 84.2 | 0.3 | ||||
Other comprehensive (loss) income | (7.9) | (7.9) | (7.9) | |||||
Cash dividends declared | (21.7) | (21.7) | (21.7) | |||||
Repurchase of common shares (in shares) | (0.3) | |||||||
Repurchase of common shares | (15.8) | (15.8) | $ (15.8) | |||||
Share-based compensation and exercise of awards (in shares) | 0.1 | |||||||
Share-based compensation and exercise of awards | (0.3) | (0.3) | $ 1.9 | (2.2) | ||||
Ending balance (in shares) at Mar. 31, 2022 | 122.2 | |||||||
Ending balance, Treasury shares (in shares) at Mar. 31, 2022 | (30.8) | |||||||
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 | 122.2 | |||||||
Beginning balance, Treasury shares (in shares) at Dec. 31, 2021 | (30.6) | |||||||
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 (loss) income | 158.5 | |||||||
Other comprehensive (loss) income | (118.1) | |||||||
Ending balance (in shares) at Sep. 30, 2022 | 122.2 | |||||||
Ending balance, Treasury shares (in shares) at Sep. 30, 2022 | (31.3) | |||||||
Ending balance at Sep. 30, 2022 | 1,736.1 | 1,720.4 | $ 1.2 | $ (935.1) | 1,516.4 | 1,301.6 | (163.7) | 15.7 |
Beginning balance (in shares) at Mar. 31, 2022 | 122.2 | |||||||
Beginning balance, Treasury shares (in shares) at Mar. 31, 2022 | (30.8) | |||||||
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 (loss) income | 84.7 | 84.7 | 84.7 | 0 | ||||
Other comprehensive (loss) income | (49.3) | (49.3) | (49.3) | |||||
Cash dividends declared | (21.7) | (21.7) | (21.7) | |||||
Repurchase of common shares (in shares) | (0.5) | |||||||
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 | 122.2 | |||||||
Ending balance, Treasury shares (in shares) at Jun. 30, 2022 | (31.3) | |||||||
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 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net (loss) income | (10.7) | (10.3) | (10.3) | (0.4) | ||||
Other comprehensive (loss) income | (60.9) | (60.9) | (60.9) | |||||
Cash dividends declared | (21.6) | (21.6) | (21.6) | |||||
Share-based compensation and exercise of awards | 3.5 | 3.5 | $ 0.1 | 3.4 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 122.2 | |||||||
Ending balance, Treasury shares (in shares) at Sep. 30, 2022 | (31.3) | |||||||
Ending balance at Sep. 30, 2022 | $ 1,736.1 | $ 1,720.4 | $ 1.2 | $ (935.1) | $ 1,516.4 | $ 1,301.6 | $ (163.7) | $ 15.7 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared per share of common stock (in USD per share) | $ 0.2375 | $ 0.2125 | $ 0.7125 | $ 0.6375 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 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. 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 nine months ended September 30, 2022 are not necessarily indicative of the results that may be attained in subsequent periods or for the year ending December 31, 2022. Historical information has been retrospectively adjusted to reflect the classification of discontinued operations. Discontinued operations are further discussed in Note 3, Discontinued Operations. Accounting Standards Not Yet Adopted Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (ASU 2020-04) , provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as LIBOR. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rates expected to be discontinued. The amendments in ASU 2020-04 are effective through December 31, 2022. The Company is currently evaluating the impact of adopting this standard and does not expect any material impact to our consolidated financial statements and disclosures. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | Note 2 — BUSINESS COMBINATIONS On September 1, 2022, the Company completed the acquisition of the DSM Protective Materials business, including the Dyneema® brand, the World's Strongest Fiber™. The Dyneema® brand ultra-light specialty fiber is stronger than steel and is used in demanding applications such as ballistic personal protection, marine and sustainable infrastructure, renewable energy, industrial protection and outdoor sports. The acquired business is collectively referred to as Avient Protective Materials and APM, and the acquisition is referred to as the APM Acquisition. The APM Acquisition enhances Avient's material offerings of composites and engineered fibers. Total consideration paid by the Company to complete the APM Acquisition was $1.4 billion, net of cash acquired. Avient (i) incurred $575.0 million of borrowings under a new Senior Secured Term Loan due 2029 and (ii) issued $725.0 million aggregate principal of 7.125% Senior Notes due 2030 to finance a portion of the APM Acquisition. For additional details relating to the financing, refer to Note 8, Financing Arrangements . The APM Acquisition is being accounted for under the acquisition method of accounting in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 805. As of September 30, 2022, the purchase accounting for the APM Acquisition is preliminary and purchase price allocation adjustments will be made throughout the end of the Company's measurement period, which is not to exceed one year from the acquisition date. During the measurement period, we will continue to obtain information to assist in finalizing the fair value of assets acquired and liabilities assumed, which may differ materially from the preliminary estimates. The preliminary purchase price allocation is as follows: (in millions) September 1, 2022 Cash and cash equivalents $ 50.7 Accounts receivable 52.2 Inventories 136.2 Other current assets 2.0 Property 361.9 Intangible assets Indefinite-lived trade names 254.9 Customer relationships 198.7 Patents, technology, and other 275.1 Goodwill 277.1 Other non-current assets 12.3 Accounts payable 32.2 Current operating lease obligations 1.2 Accrued expenses and other current liabilities 11.7 Deferred tax liability 86.1 Non-current operating lease obligations 5.0 Other non-current liabilities 8.1 Total purchase price consideration $ 1,476.8 Definite-lived intangible assets that have been acquired have a preliminary useful life range of 16 to 20 years. Goodwill of $277.1 million resulting from the acquisition was recorded to the Specialty Engineered Materials segment. The goodwill recognized is primarily attributable to intangible assets that do not qualify for separate recognition and the deferred tax impact of applying purchase accounting. We expect a portion of goodwill to be deductible for tax purposes. The amount of sales and loss from continuing operations before income taxes of APM since the acquisition date included in the Condensed Consolidated Statements of Income as of September 30, 2022 were $32.3 million and $7.0 million, respectively. The loss from continuing operations before income taxes includes $10.6 million of expense related to inventory step-up from the preliminary purchase price allocation, which is recorded in Cost of sales. Had the APM Acquisition occurred on January 1, 2021, sales and income from continuing operations before income taxes on a pro forma basis would have been as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Sales $884.0 $912.1 $2,863.1 $2,810.1 (Loss) income from continuing operations before income taxes (9.8) 21.0 146.8 72.4 The unaudited pro forma financial information has been calculated after applying our accounting policies and adjusting the historical results with pro forma adjustments that assume the APM Acquisition occurred on January 1, 2021. These unaudited pro forma results do not represent financial results realized, nor are they intended to be a projection of future results. Pro forma income from continuing operations before income taxes during the nine months ended September 30, 2021 includes expense related to inventory step-up from the preliminary purchase price allocation. The pro forma income from continuing operations before income taxes gives further effect to intangible amortization from the preliminary purchase price allocation and increased interest expense resulting from borrowings under the Senior Secured Term Loan due 2029 and the issuance of the 7.125% Senior Notes due 2030 to fund the APM Acquisition. Costs incurred in connection with the APM Acquisition were $8.1 million and $12.7 million in the three and nine months ended September 30, 2022, respectively. These fees were charged to Selling and Administrative expense on the Condensed Consolidated Statements of Income. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | Note 3 — DISCONTINUED OPERATIONS On August 11, 2022, Avient entered into a definitive asset purchase agreement (the "Purchase Agreement") with an affiliate of H.I.G. Capital, (the "Purchaser"), to sell its Distribution business. Pursuant to the terms of the Purchase Agreement, the Purchaser has agreed to acquire the Company's Distribution business for $950.0 million in cash, subject to a customary working capital adjustment. Avient has classified its Distribution business assets and liabilities as held-for-sale for all periods presented in the accompanying Condensed Consolidated Balance Sheets and has classified its operating results as discontinued operations in the accompanying Condensed Consolidated Statements of Income for all periods presented. Previously, the Distribution business was a separate reportable segment. The following table summarizes the major line items constituting pretax income of discontinued operations associated with the Distribution business segment for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2022 2021 2022 2021 Sales $ 398.6 $ 401.8 $ 1,211.6 $ 1,108.9 Cost of sales 355.4 362.0 1,085.9 989.6 Selling and administrative expense 18.2 13.9 44.9 41.6 Other (expense) income (0.9) (0.2) (1.0) (0.3) Income before income taxes 24.1 25.7 79.8 77.4 Income tax expense (7.0) (6.5) (21.0) (19.7) Income from discontinued operations, net of taxes $ 17.1 19.2 58.8 57.7 The effective tax rate for discontinued operations was 28.9% and 25.3% for the three months ended September 30, 2022 and 2021, respectively, and 26.3% and 25.5% for the nine months ended September 30, 2022 and 2021, respectively. The tax rate is above the US federal rate of 21% primarily due to state and local taxes along with the impacts of global intangible low-taxed income (GILTI) tax. The following table summarizes the major classes of assets and liabilities of the Distribution business that were classified as held for sale in the consolidated balance sheets as of September 30, 2022 and December 31, 2021: (In millions) September 30, 2022 December 31, 2021 Assets held-for-sale: Accounts receivable, net $ 211.9 $ 202.4 Inventories, net 132.4 155.3 Property, net 3.5 3.9 Goodwill 1.6 1.6 Other assets 18.4 19.0 Total assets held-for-sale $ 367.8 $ 382.2 Liabilities held-for-sale: Accounts payable $ 145.3 $ 124.4 Other liabilities 25.0 30.0 Total liabilities held-for-sale $ 170.3 $ 154.4 September 30, 2022 December 31, 2021 Assets held-for-sale: Current $ 367.8 $ 360.2 Non-current $ — $ 22.0 Liabilities held-for-sale: Current $ 170.3 $ 141.3 Non-current $ — $ 13.1 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | Note 4 — GOODWILL AND INTANGIBLE ASSETS Goodwill as of September 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 Total Balance at December 31, 2021 $ 236.3 $ 1,048.5 $ 1,284.8 Acquisition of businesses 277.1 — 277.1 Currency translation (13.1) (57.8) (70.9) Balance at September 30, 2022 $ 500.3 $ 990.7 $ 1,491.0 Indefinite and finite-lived intangible assets consisted of the following: As of September 30, 2022 (In millions) Acquisition Cost Accumulated Amortization Currency Translation Net Customer relationships $ 705.9 $ (156.0) $ (25.4) $ 524.5 Patents, technology and other 841.8 (158.2) (42.1) 641.5 Indefinite-lived trade names 368.0 — (8.3) 359.7 Total $ 1,915.7 $ (314.2) $ (75.8) $ 1,525.7 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 |
INVENTORIES, NET
INVENTORIES, NET | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | Note 5 — INVENTORIES, NET Components of Inventories, net are as follows: (In millions) As of September 30, 2022 As of December 31, 2021 Finished products $ 197.8 $ 90.0 Work in process 25.6 21.2 Raw materials and supplies 218.1 194.6 Inventories, net $ 441.5 $ 305.8 |
PROPERTY, NET
PROPERTY, NET | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, NET | Note 6 — PROPERTY, NET Components of Property, net are as follows: (In millions) As of September 30, 2022 As of December 31, 2021 Land and land improvements $ 80.9 $ 91.5 Buildings 382.2 348.1 Machinery and equipment 1,272.8 965.4 Property, gross 1,735.9 1,405.0 Less accumulated depreciation (770.5) (732.7) Property, net $ 965.4 $ 672.3 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Note 7 — INCOME TAXES During the three months ended September 30, 2022, the effective tax rate benefit from continuing operations of 4.1% was below the U.S. federal statutory rate of 21.0%. The tax rate benefit relates to a pretax loss as well as state income tax benefits, prior year favorable U.S. return-to-provision adjustments and the U.S. research and development tax credit. These favorable items were partially offset by foreign withholding tax liabilities accrued associated with the future repatriation of certain foreign earnings, global intangible low-taxed income (GILTI) tax, certain non-deductible expenses and an increase in valuation allowances. During the nine months ended September 30, 2022, the Company’s effective tax rate from continuing operations of 29.4% was above the U.S. federal statutory rate of 21.0% primarily due to foreign withholding tax liabilities accrued associated with the future repatriation of certain foreign earnings, GILTI tax, certain non-deductible expenses and an increase in valuation allowances. These unfavorable items were partially offset by prior year favorable U.S. return-to-provision adjustments and the U.S. research and development tax credit. During the three and nine months ended September 30, 2021, the Company's effective tax rates from continuing operations of 5.7% and 18.2%, respectively, were below the U.S. federal statutory rate of 21.0% primarily due to higher U.S. foreign-derived intangible income (FDII) tax benefits, favorable prior year U.S. return-to-provision adjustments and U.S. research and development tax credit. These favorable items were partially offset by foreign withholding tax liabilities accrued associated with the repatriation of certain foreign earnings and GILTI tax. |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | Note 8 — FINANCING ARRANGEMENTS Debt consists of the following instruments: As of September 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 606.6 4.9 601.7 2.95 % Senior secured term loan due 2029 575.0 28.2 546.8 5.51 % 5.25% senior notes due 2023 600.0 0.5 599.5 5.25 % 5.75% senior notes due 2025 650.0 5.4 644.6 5.75 % 7.125% senior notes due 2030 725.0 10.6 714.4 7.125 % Other Debt 9.8 — 9.8 Total Debt 3,166.4 49.6 3,116.8 Less short-term and current portion of long-term debt 614.4 0.5 613.9 Total long-term debt, net of current portion $ 2,552.0 $ 49.1 $ 2,502.9 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 On August 10, 2022, the Company entered into an indenture with U.S. Bank Trust Company, National Association, as trustee, relating to the issuance by the Company of $725 million aggregate principal amount of 7.125% Senior Notes due 2030 (the 2030 Notes). The 2030 Notes were sold on August 10, 2022 in a private offering. The 2030 Notes bear interest at a rate of 7.125% per annum. Interest on the 2030 Notes is payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2023. The 2030 Notes will mature on August 1, 2030. The 2030 Notes are senior unsecured obligations of the Company. On August 29, 2022, the Company entered into the Amendment Agreement No. 7 (the Term Loan Amendment) relating to the Credit Agreement, dated as of November 12, 2015, by and among Avient, Citibank, N.A., as administrative agent, and the lenders party thereto, with Citibank, N.A., as administrative agent, and the other agents and lenders named therein. Pursuant to the Term Loan Amendment, Avient, among other things, incurred a new tranche of Senior Secured Term Loan due 2029 (the 2029 Term Loan) in an aggregate principal amount equal to $575 million. The 2029 Term Loan was fully drawn on August 29, 2022. The interest rates per annum applicable to both the 2029 Term Loan and the existing term loan under the Credit Agreement will be either (i) Adjusted Term SOFR (as defined in the Term Loan Amendment) plus 3.25% or (ii) a Base Rate (as defined in the Term Loan Amendment) plus 2.25%. The other terms and conditions that apply to the 2029 Term Loan are substantially the same as the terms and conditions that applied to the existing term loan under the Credit Agreement immediately prior to the Term Loan Amendment. The Company used the net proceeds from the issuance of the 2030 Notes and the borrowings under the 2029 Term Loan to finance a portion of the consideration for the APM Acquisition. As of September 30, 2022, we had no borrowings outstanding under our senior secured revolving credit, which had remaining availability of $485.1 million. The agreements governing our senior secured revolving credit facility, our senior secured term loans, 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 September 30, 2022, we were in compliance with all covenants. The estimated fair value of Avient’s debt instruments at September 30, 2022 and December 31, 2021 was $3,032.1 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 | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | Note 9 — SEGMENT INFORMATION Avient has two reportable segments: (1) Color, Additives and Inks and (2) Specialty Engineered Materials. Previously, Avient had three reportable segments; however, as a result of the agreement to divest our Distribution business, we have removed Distribution as a separate reportable segment and its results are presented as a discontinued operation. Historical information has been retrospectively adjusted to reflect these changes. Refer to Note 3, Discontinued Operations for additional information. 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 nine months ended September 30, 2022 and 2021 is as follows: Three Months Ended Three Months Ended (In millions) Sales Operating Sales Operating Color, Additives and Inks $ 565.6 $ 68.6 $ 586.6 $ 66.8 Specialty Engineered Materials 258.2 31.4 231.7 30.0 Corporate and eliminations (0.5) (59.4) (0.3) (44.0) Total $ 823.3 $ 40.6 $ 818.0 $ 52.8 Nine Months Ended Nine Months Ended (In millions) Sales Operating Sales Operating Color, Additives and Inks $ 1,864.2 $ 256.7 $ 1,820.3 $ 241.9 Specialty Engineered Materials 743.6 104.9 685.3 98.4 Corporate and eliminations (1.3) (118.7) 2.9 (110.7) Total $ 2,606.5 $ 242.9 $ 2,508.5 $ 229.6 Total Assets (In millions) As of September 30, 2022 As of December 31, 2021 Color, Additives and Inks $ 2,718.5 $ 2,965.2 Specialty Engineered Materials 2,317.3 771.0 Corporate and eliminations 903.5 878.8 Assets held for sale $ 367.8 $ 382.2 Total assets $ 6,307.1 $ 4,997.2 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 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 support 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 $120.9 million for this matter. During the three and nine months ended September 30, 2022, Avient recognized $18.8 million and $23.8 million of expense, respectively, related to environmental remediation costs, compared to $9.4 million and $22.4 million recognized during the three and nine months ended September 30, 2021, respectively. During the three and nine months ended September 30, 2022, Avient received $0.1 million and $8.3 million, respectively, of insurance recoveries for previously incurred environmental costs. During the nine months ended September 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 $131.6 million and $124.5 million as of September 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 September 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 | 9 Months Ended |
Sep. 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 impact of currency fluctuations on our euro investments in foreign entities, we have executed cross currency swaps, in which we pay fixed-rate interest in euros and receive fixed-rate interest in U.S. dollars related to our future obligations to exchange euros for U.S. dollars. We currently hold cross currency swaps with a combined notional amount of €1,467.2 million, maturing in May 2025 and €900.0 million maturing in August 2027. We received cash proceeds of $62.8 million and $132.1 million related to the settlement of prior cross-currency swap positions during the three and nine months ended September 30, 2022, respectively. These cross currency swaps 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 $8.0 million and $20.6 million for the three and nine months ended September 30, 2022, respectively, compared to gains of $3.8 million and $10.8 million for the three and nine months ended September 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 nine months ended September 30, 2022, gains of $98.2 million and $150.2 million were recognized within translation adjustments in AOCI, net of tax, respectively, compared to a loss of $7.1 million and a gain of $24.8 million, net of tax, for the three and nine months ended September 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 each month for these highly effective hedges 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 $0.1 million and $1.7 million for the three and nine months ended September 30, 2022, respectively, compared to $1.0 million and $3.0 million for the three and nine months ended September 30, 2021, respectively. For the three and nine months ended September 30, 2022, gains of $0.2 million and $2.3 million, net of tax, respectively, were recognized in AOCI, compared to gains of $0.7 million and $2.2 million for the three and nine months ended September 30, 2021, respectively. Derivatives Not Designated for Hedge Accounting On April 20, 2022, we executed forward starting 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 €900.0 million, as a means of mitigating the impact of currency fluctuations on our future euro investments in foreign entities related to the APM Acquisition. Additionally, we entered into foreign currency forward contracts with an aggregate notional amount of €350 million, to mitigate the impact of currency fluctuations on the euro-denominated purchase price for the APM Acquisition. In conjunction with the closing of the APM Acquisition, we completed the initial exchange of U.S. dollars for euros as part of the cross-currency swaps and designated these instruments as a net investment hedge against the acquired euro net assets of APM. Changes in the fair value of the cross-currency swaps prior to designation as a net investment hedge and foreign exchange forward contracts were recorded in earnings directly. Beginning September 1, 2022, changes in the fair value of these instruments are recognized in AOCI and offset the changes in our euro net assets. The amount of expense recognized within Other income, net in our Condensed Consolidated Statements of Income was $38.2 million and $37.3 million for the three and nine months ended September 30, 2022, which resulted in a $38.8 million cash payment during the three months ended September 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 September 30, 2022 As of December 31, 2021 Assets Interest Rate Swaps (Cash Flow Hedge) Other current assets $ 0.1 $ — Cross Currency Swaps (Net Investment Hedge) Other non-current assets 103.3 31.7 Liabilities Interest Rate Swaps (Cash Flow Hedge) Other current liabilities $ — $ 3.1 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Note 12 — SUBSEQUENT EVENTS Divestiture of Distribution Business As previously announced, on August 11, 2022, the Company entered into the Purchase Agreement with the Purchaser, an affiliate of H.I.G. Capital. Pursuant to the terms of the Purchase Agreement, the Purchaser agreed to acquire the Company’s Distribution business for $950.0 million in cash, subject to a customary working capital adjustment. On November 1, 2022, the Company completed the sale of its Distribution business to the Purchaser pursuant to the terms of the Purchase Agreement. Debt Repayment The after-tax proceeds from the sale of the Distribution business are being used to redeem the entire outstanding $600.0 million aggregate principal amount of its 5.25% Senior Notes due March 15, 2023. The notes are being redeemed at a redemption price equal to 101.0% of the principal amount of the notes plus accrued and unpaid interest to the redemption date. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 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. 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 nine months ended September 30, 2022 are not necessarily indicative of the results that may be attained in subsequent periods or for the year ending December 31, 2022. |
Accounting Standards Not Yet Adopted | Accounting Standards Not Yet Adopted Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (ASU 2020-04) , provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as LIBOR. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rates expected to be discontinued. The amendments in ASU 2020-04 are effective through December 31, 2022. The Company is currently evaluating the impact of adopting this standard and does not expect any material impact to our consolidated financial statements and disclosures. |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Summarized Preliminary Purchase Price Allocation | The preliminary purchase price allocation is as follows: (in millions) September 1, 2022 Cash and cash equivalents $ 50.7 Accounts receivable 52.2 Inventories 136.2 Other current assets 2.0 Property 361.9 Intangible assets Indefinite-lived trade names 254.9 Customer relationships 198.7 Patents, technology, and other 275.1 Goodwill 277.1 Other non-current assets 12.3 Accounts payable 32.2 Current operating lease obligations 1.2 Accrued expenses and other current liabilities 11.7 Deferred tax liability 86.1 Non-current operating lease obligations 5.0 Other non-current liabilities 8.1 Total purchase price consideration $ 1,476.8 |
Schedule of Pro Forma Information Sales and Income from Continuing Operations | Had the APM Acquisition occurred on January 1, 2021, sales and income from continuing operations before income taxes on a pro forma basis would have been as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Sales $884.0 $912.1 $2,863.1 $2,810.1 (Loss) income from continuing operations before income taxes (9.8) 21.0 146.8 72.4 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The following table summarizes the major line items constituting pretax income of discontinued operations associated with the Distribution business segment for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2022 2021 2022 2021 Sales $ 398.6 $ 401.8 $ 1,211.6 $ 1,108.9 Cost of sales 355.4 362.0 1,085.9 989.6 Selling and administrative expense 18.2 13.9 44.9 41.6 Other (expense) income (0.9) (0.2) (1.0) (0.3) Income before income taxes 24.1 25.7 79.8 77.4 Income tax expense (7.0) (6.5) (21.0) (19.7) Income from discontinued operations, net of taxes $ 17.1 19.2 58.8 57.7 The following table summarizes the major classes of assets and liabilities of the Distribution business that were classified as held for sale in the consolidated balance sheets as of September 30, 2022 and December 31, 2021: (In millions) September 30, 2022 December 31, 2021 Assets held-for-sale: Accounts receivable, net $ 211.9 $ 202.4 Inventories, net 132.4 155.3 Property, net 3.5 3.9 Goodwill 1.6 1.6 Other assets 18.4 19.0 Total assets held-for-sale $ 367.8 $ 382.2 Liabilities held-for-sale: Accounts payable $ 145.3 $ 124.4 Other liabilities 25.0 30.0 Total liabilities held-for-sale $ 170.3 $ 154.4 September 30, 2022 December 31, 2021 Assets held-for-sale: Current $ 367.8 $ 360.2 Non-current $ — $ 22.0 Liabilities held-for-sale: Current $ 170.3 $ 141.3 Non-current $ — $ 13.1 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Changes in Carrying Amount of Goodwill by Operating Segment | Goodwill as of September 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 Total Balance at December 31, 2021 $ 236.3 $ 1,048.5 $ 1,284.8 Acquisition of businesses 277.1 — 277.1 Currency translation (13.1) (57.8) (70.9) Balance at September 30, 2022 $ 500.3 $ 990.7 $ 1,491.0 |
Schedule of Finite-Lived Intangible Assets | Indefinite and finite-lived intangible assets consisted of the following: As of September 30, 2022 (In millions) Acquisition Cost Accumulated Amortization Currency Translation Net Customer relationships $ 705.9 $ (156.0) $ (25.4) $ 524.5 Patents, technology and other 841.8 (158.2) (42.1) 641.5 Indefinite-lived trade names 368.0 — (8.3) 359.7 Total $ 1,915.7 $ (314.2) $ (75.8) $ 1,525.7 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 September 30, 2022 (In millions) Acquisition Cost Accumulated Amortization Currency Translation Net Customer relationships $ 705.9 $ (156.0) $ (25.4) $ 524.5 Patents, technology and other 841.8 (158.2) (42.1) 641.5 Indefinite-lived trade names 368.0 — (8.3) 359.7 Total $ 1,915.7 $ (314.2) $ (75.8) $ 1,525.7 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 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventories, Net | (In millions) As of September 30, 2022 As of December 31, 2021 Finished products $ 197.8 $ 90.0 Work in process 25.6 21.2 Raw materials and supplies 218.1 194.6 Inventories, net $ 441.5 $ 305.8 |
Property, Net (Tables)
Property, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Components of Property, Net | Components of Property, net are as follows: (In millions) As of September 30, 2022 As of December 31, 2021 Land and land improvements $ 80.9 $ 91.5 Buildings 382.2 348.1 Machinery and equipment 1,272.8 965.4 Property, gross 1,735.9 1,405.0 Less accumulated depreciation (770.5) (732.7) Property, net $ 965.4 $ 672.3 |
FINANCING ARRANGEMENTS (Tables)
FINANCING ARRANGEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Debt | Debt consists of the following instruments: As of September 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 606.6 4.9 601.7 2.95 % Senior secured term loan due 2029 575.0 28.2 546.8 5.51 % 5.25% senior notes due 2023 600.0 0.5 599.5 5.25 % 5.75% senior notes due 2025 650.0 5.4 644.6 5.75 % 7.125% senior notes due 2030 725.0 10.6 714.4 7.125 % Other Debt 9.8 — 9.8 Total Debt 3,166.4 49.6 3,116.8 Less short-term and current portion of long-term debt 614.4 0.5 613.9 Total long-term debt, net of current portion $ 2,552.0 $ 49.1 $ 2,502.9 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) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Segment information for the three and nine months ended September 30, 2022 and 2021 is as follows: Three Months Ended Three Months Ended (In millions) Sales Operating Sales Operating Color, Additives and Inks $ 565.6 $ 68.6 $ 586.6 $ 66.8 Specialty Engineered Materials 258.2 31.4 231.7 30.0 Corporate and eliminations (0.5) (59.4) (0.3) (44.0) Total $ 823.3 $ 40.6 $ 818.0 $ 52.8 Nine Months Ended Nine Months Ended (In millions) Sales Operating Sales Operating Color, Additives and Inks $ 1,864.2 $ 256.7 $ 1,820.3 $ 241.9 Specialty Engineered Materials 743.6 104.9 685.3 98.4 Corporate and eliminations (1.3) (118.7) 2.9 (110.7) Total $ 2,606.5 $ 242.9 $ 2,508.5 $ 229.6 Total Assets (In millions) As of September 30, 2022 As of December 31, 2021 Color, Additives and Inks $ 2,718.5 $ 2,965.2 Specialty Engineered Materials 2,317.3 771.0 Corporate and eliminations 903.5 878.8 Assets held for sale $ 367.8 $ 382.2 Total assets $ 6,307.1 $ 4,997.2 |
DERIVATIVES AND HEDGING (Tables
DERIVATIVES AND HEDGING (Tables) | 9 Months Ended |
Sep. 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 September 30, 2022 As of December 31, 2021 Assets Interest Rate Swaps (Cash Flow Hedge) Other current assets $ 0.1 $ — Cross Currency Swaps (Net Investment Hedge) Other non-current assets 103.3 31.7 Liabilities Interest Rate Swaps (Cash Flow Hedge) Other current liabilities $ — $ 3.1 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Sep. 01, 2022 | Jul. 01, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Aug. 10, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||||
Purchase price, net | $ 1,426.1 | $ 47.6 | ||||||
Debt proceeds | 1,300 | $ 0 | ||||||
Goodwill | $ 1,491 | $ 1,491 | 1,491 | $ 1,284.8 | ||||
Specialty Engineered Materials | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 500.3 | $ 500.3 | $ 500.3 | $ 236.3 | ||||
Senior secured term loan due 2029 | Secured Debt | ||||||||
Business Acquisition [Line Items] | ||||||||
Debt proceeds | $ 575 | |||||||
7.125% senior notes due 2030 | Senior Notes | ||||||||
Business Acquisition [Line Items] | ||||||||
Debt proceeds | $ 725 | |||||||
Interest rate, stated percentage | 7.125% | 7.125% | 7.125% | 7.125% | 7.125% | |||
APM Acquisition | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price, net | $ 1,400 | |||||||
Goodwill | $ 277.1 | $ 277.1 | $ 277.1 | |||||
Revenue since acquisition date | 32.3 | |||||||
Income from continuing operations since acquisition date | $ 7 | |||||||
Pro forma income from continuing operations before income taxes | 10.6 | |||||||
Acquisition costs | $ 8.1 | $ 12.7 | ||||||
APM Acquisition | Specialty Engineered Materials | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 277.1 | |||||||
APM Acquisition | Minimum | ||||||||
Business Acquisition [Line Items] | ||||||||
Intangible asset, weighted average lives (years) | 16 years | |||||||
APM Acquisition | Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Intangible asset, weighted average lives (years) | 20 years | |||||||
Magna Colours | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price, net | $ 47.6 | |||||||
Goodwill | 22 | |||||||
Intangible assets | $ 27.5 | |||||||
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 |
BUSINESS COMBINATIONS - Purchas
BUSINESS COMBINATIONS - Purchase Price Allocation (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | ||
Goodwill | $ 1,491 | $ 1,284.8 |
APM Acquisition | ||
Business Acquisition [Line Items] | ||
Cash and cash equivalents | 50.7 | |
Accounts receivable | 52.2 | |
Inventories | 136.2 | |
Other current assets | 2 | |
Property | 361.9 | |
Goodwill | 277.1 | |
Other non-current assets | 12.3 | |
Accounts payable | 32.2 | |
Current operating lease obligations | 1.2 | |
Accrued expenses and other current liabilities | 11.7 | |
Deferred tax liability | 86.1 | |
Non-current operating lease obligations | 5 | |
Other non-current liabilities | 8.1 | |
Total purchase price consideration | 1,476.8 | |
APM Acquisition | Customer relationships | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets | 198.7 | |
APM Acquisition | Patents, technology, and other | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets | 275.1 | |
APM Acquisition | Indefinite-lived trade names | ||
Business Acquisition [Line Items] | ||
Indefinite-lived trade names | $ 254.9 |
BUSINESS COMBINATIONS - Pro For
BUSINESS COMBINATIONS - Pro Forma Sales and Net Income/Loss (Details) - APM Acquisition - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||||
Sales | $ 884 | $ 912.1 | $ 2,863.1 | $ 2,810.1 |
(Loss) income from continuing operations before income taxes | $ (9.8) | $ 21 | $ 146.8 | $ 72.4 |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Aug. 11, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Effective tax rate of discontinued operation | 28.90% | 25.30% | 26.30% | 25.50% | |
Hilo Group Buyer, LLC | Discontinued Operations, Disposed of by Sale | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Cash consideration | $ 950 |
DISCONTINUED OPERATIONS - Sched
DISCONTINUED OPERATIONS - Schedule of Discontinued Operations (Details) - Hilo Group Buyer, LLC - Discontinued Operations, Held-for-sale - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Sales | $ 398.6 | $ 401.8 | $ 1,211.6 | $ 1,108.9 |
Cost of sales | 355.4 | 362 | 1,085.9 | 989.6 |
Selling and administrative expense | 18.2 | 13.9 | 44.9 | 41.6 |
Other (expense) income | (0.9) | (0.2) | (1) | (0.3) |
Income before income taxes | 24.1 | 25.7 | 79.8 | 77.4 |
Income tax expense | (7) | (6.5) | (21) | (19.7) |
Income from discontinued operations, net of taxes | $ 17.1 | $ 19.2 | $ 58.8 | $ 57.7 |
DISCONTINUED OPERATIONS - Asset
DISCONTINUED OPERATIONS - Assets and Liabilities of Distribution Held for Sale (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Liabilities held-for-sale: | ||
Current assets held for sale | $ 367.8 | $ 360.2 |
Non-current assets held for sale | 0 | 22 |
Current liabilities held for sale | 170.3 | 141.3 |
Non-current liabilities held for sale | 0 | 13.1 |
Hilo Group Buyer, LLC | Discontinued Operations, Held-for-sale | ||
Assets held-for-sale: | ||
Accounts receivable, net | 211.9 | 202.4 |
Inventories, net | 132.4 | 155.3 |
Property, net | 3.5 | 3.9 |
Goodwill | 1.6 | 1.6 |
Other assets | 18.4 | 19 |
Total assets held-for-sale | 367.8 | 382.2 |
Liabilities held-for-sale: | ||
Accounts payable | 145.3 | 124.4 |
Other liabilities | 25 | 30 |
Total liabilities held-for-sale | 170.3 | 154.4 |
Current assets held for sale | 367.8 | 360.2 |
Non-current assets held for sale | 0 | 22 |
Current liabilities held for sale | 170.3 | 141.3 |
Non-current liabilities held for sale | $ 0 | $ 13.1 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill and Changes in Carrying Amount of Goodwill by Operating Segment (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | $ 1,284.8 |
Acquisition of businesses | 277.1 |
Currency translation | (70.9) |
Goodwill, Ending Balance | 1,491 |
Specialty Engineered Materials | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 236.3 |
Acquisition of businesses | 277.1 |
Currency translation | (13.1) |
Goodwill, Ending Balance | 500.3 |
Color, Additives and Inks | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 1,048.5 |
Acquisition of businesses | 0 |
Currency translation | (57.8) |
Goodwill, Ending Balance | $ 990.7 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Schedule of Indefinite and Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (314.2) | $ (269.7) |
Currency Translation | (75.8) | 7.8 |
Indefinite-lived Intangible Assets [Line Items] | ||
Acquisition Cost | 1,915.7 | 1,187.1 |
Net | 1,525.7 | 925.2 |
Indefinite-lived trade names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Acquisition Cost | 368 | 113.2 |
Currency Translation | (8.3) | 0 |
Indefinite-Lived Intangible Assets, Net, Total | 359.7 | 113.2 |
Customer relationships | ||
Intangible Assets [Line Items] | ||
Acquisition Cost | 705.9 | 507.2 |
Accumulated Amortization | (156) | (135.4) |
Currency Translation | (25.4) | 6 |
Finite-Lived Intangible Assets, Net, Total | 524.5 | 377.8 |
Patents, technology and other | ||
Intangible Assets [Line Items] | ||
Acquisition Cost | 841.8 | 566.7 |
Accumulated Amortization | (158.2) | (134.3) |
Currency Translation | (42.1) | 1.8 |
Finite-Lived Intangible Assets, Net, Total | $ 641.5 | $ 434.2 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 197.8 | $ 90 |
Work in process | 25.6 | 21.2 |
Raw materials and supplies | 218.1 | 194.6 |
Inventories, net | $ 441.5 | $ 305.8 |
PROPERTY, NET (Details)
PROPERTY, NET (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, gross | $ 1,735.9 | $ 1,405 |
Less accumulated depreciation | (770.5) | (732.7) |
Property, net | 965.4 | 672.3 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, gross | 80.9 | 91.5 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, gross | 382.2 | 348.1 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, gross | $ 1,272.8 | $ 965.4 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate, continuing operations | 4.10% | 29.40% |
Effective income tax rate | 5.70% | 18.20% |
FINANCING ARRANGEMENTS - Compon
FINANCING ARRANGEMENTS - Components of Long-Term Debt (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2021 | Sep. 01, 2022 | Aug. 10, 2022 | |
Debt Instrument [Line Items] | ||||
Principal Amount | $ 3,166,400,000 | $ 1,873,300,000 | ||
Unamortized discount and debt issuance cost | 49,600,000 | 14,400,000 | ||
Long-term Debt, Total | 3,116,800,000 | 1,858,900,000 | ||
Less short-term and current portion of long-term debt, Principal Amount | 614,400,000 | 8,600,000 | ||
Less short-term and current portion of long-term debt, Unamortized discount and debt issuance cost | 500,000 | 0 | ||
Less short-term and current portion of long-term debt | 613,900,000 | 8,600,000 | ||
Total long-term debt, gross, net of current | 2,552,000,000 | 1,864,700,000 | ||
Debt excluding current, unamortized discount and debt issuance costs | 49,100,000 | 14,400,000 | ||
Total long-term debt, net of current portion | 2,502,900,000 | 1,850,300,000 | ||
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 | $ 606,600,000 | $ 611,500,000 | ||
Unamortized discount and debt issuance cost | 4,900,000 | 6,200,000 | ||
Long-term Debt, Total | $ 601,700,000 | $ 605,300,000 | ||
Weighted average interest rate | 2.95% | 1.85% | ||
Senior secured term loan due 2029 | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Unamortized discount and debt issuance cost | $ 28,200,000 | |||
Long-term Debt, Total | $ 546,800,000 | |||
Weighted average interest rate | 5.51% | |||
5.25% Senior Notes Due 2023 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 5.25% | 5.25% | ||
Principal Amount | $ 600,000,000 | $ 600,000,000 | ||
Unamortized discount and debt issuance cost | 500,000 | 1,400,000 | ||
Long-term Debt, Total | $ 599,500,000 | $ 598,600,000 | ||
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 | $ 650,000,000 | $ 650,000,000 | ||
Unamortized discount and debt issuance cost | 5,400,000 | 6,800,000 | ||
Long-term Debt, Total | $ 644,600,000 | $ 643,200,000 | ||
Weighted average interest rate | 5.75% | 5.75% | ||
7.125% senior notes due 2030 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 7.125% | 7.125% | 7.125% | |
Unamortized discount and debt issuance cost | $ 10,600,000 | |||
Long-term Debt, Total | $ 714,400,000 | |||
Weighted average interest rate | 7.125% | |||
Other Debt | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 9,800,000 | $ 11,800,000 | ||
Unamortized discount and debt issuance cost | 0 | 0 | ||
Long-term Debt, Total | $ 9,800,000 | $ 11,800,000 |
FINANCING ARRANGEMENTS - Narrat
FINANCING ARRANGEMENTS - Narrative (Details) - USD ($) | Sep. 30, 2022 | Sep. 01, 2022 | Aug. 29, 2022 | Aug. 10, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||||
Borrowings outstanding | $ 3,166,400,000 | $ 1,873,300,000 | |||
Fair value of debt instruments | 3,032,100,000 | 1,917,700,000 | |||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Remaining borrowing capacity under Revolving Credit Facility | $ 485,100,000 | ||||
7.125% senior notes due 2030 | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal | $ 725,000,000 | ||||
Interest rate, stated percentage | 7.125% | 7.125% | 7.125% | ||
Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal | $ 575,000,000 | ||||
Credit Agreement | SOFR | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 3.25% | ||||
Credit Agreement | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 2.25% | ||||
Senior secured revolving credit facility due 2026 | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Borrowings outstanding | $ 0 | $ 0 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) - segment | 9 Months Ended | |
Aug. 10, 2022 | Sep. 30, 2022 | |
Segment Reporting [Abstract] | ||
Number of reportable segments | 3 | 2 |
SEGMENT INFORMATION - Schedule
SEGMENT INFORMATION - Schedule of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||
Sales | $ 823.3 | $ 818 | $ 2,606.5 | $ 2,508.5 | |
Operating Income | 40.6 | 52.8 | 242.9 | 229.6 | |
Total assets | 6,307.1 | 6,307.1 | $ 4,997.2 | ||
Discontinued Operations | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 367.8 | 367.8 | 382.2 | ||
Corporate and eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Sales | (0.5) | (0.3) | (1.3) | 2.9 | |
Operating Income | (59.4) | (44) | (118.7) | (110.7) | |
Total assets | 903.5 | 903.5 | 878.8 | ||
Color, Additives and Inks | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 565.6 | 586.6 | 1,864.2 | 1,820.3 | |
Operating Income | 68.6 | 66.8 | 256.7 | 241.9 | |
Total assets | 2,718.5 | 2,718.5 | 2,965.2 | ||
Specialty Engineered Materials | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 258.2 | 231.7 | 743.6 | 685.3 | |
Operating Income | 31.4 | $ 30 | 104.9 | $ 98.4 | |
Total assets | $ 2,317.3 | $ 2,317.3 | $ 771 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | |||||
Accrued probable future environmental expenditures | $ 131.6 | $ 131.6 | $ 124.5 | ||
Expense related to environmental activities | 18.8 | $ 9.4 | 23.8 | $ 22.4 | |
Insurance recoveries | 0.1 | 8.3 | $ 4.5 | ||
Calvert City | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Accrued probable future environmental expenditures | $ 120.9 | $ 120.9 |
DERIVATIVES AND HEDGING - Narra
DERIVATIVES AND HEDGING - Narrative (Details) € in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 EUR (€) | Apr. 20, 2022 EUR (€) | Aug. 31, 2018 USD ($) swap | |
Derivative [Line Items] | |||||||
Gain recognized in AOCI, net | $ 0.2 | $ 0.7 | $ 2.3 | $ 2.2 | |||
Cash payment | 38.8 | ||||||
Cross Currency Swaps | |||||||
Derivative [Line Items] | |||||||
Notional amount | € | € 900 | ||||||
Foreign Currency Forward | |||||||
Derivative [Line Items] | |||||||
Notional amount | € | € 350 | ||||||
Income recognized within other income, net | 38.2 | 37.3 | |||||
Net Investment Hedging | Cross Currency Swaps | |||||||
Derivative [Line Items] | |||||||
Cash proceeds received from settlement | 62.8 | 132.1 | |||||
Gains on net investment hedge, net of tax | 98.2 | 7.1 | 150.2 | 24.8 | |||
Net Investment Hedging | Cross Currency Swaps | Interest expense, net | |||||||
Derivative [Line Items] | |||||||
Conversion benefit | 8 | 3.8 | 20.6 | 10.8 | |||
Net Investment Hedging | Cross Currency Swaps | May 2025 | |||||||
Derivative [Line Items] | |||||||
Notional amount | € | € 1,467.2 | ||||||
Net Investment Hedging | Cross Currency Swaps | August 2027 | |||||||
Derivative [Line Items] | |||||||
Notional amount | € | € 900 | ||||||
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 | 0.2 | 0.7 | 2.3 | 2.2 | |||
Cash Flow Hedging | Interest Rate Swap | Interest expense, net | |||||||
Derivative [Line Items] | |||||||
Expense recognized | $ 0.1 | $ 1 | $ 1.7 | $ 3 |
DERIVATIVES AND HEDGING - Fair
DERIVATIVES AND HEDGING - Fair Value of Derivatives (Details) - Designated as Hedging Instrument - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Cash Flow Hedging | Interest Rate Swap | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 0.1 | $ 0 |
Cash Flow Hedging | Interest Rate Swap | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 0 | 3.1 |
Net Investment Hedging | Cross Currency Swaps | Other non-current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 103.3 | $ 31.7 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event $ in Millions | Nov. 01, 2022 USD ($) |
Secured Debt | |
Subsequent Event [Line Items] | |
Aggregate principal | $ 150 |
5.25% Senior Notes due March 15, 2023 | Senior Notes | |
Subsequent Event [Line Items] | |
Aggregate principal | $ 600 |
Interest rate, stated percentage | 5.25% |
Principal amount redemption price percentage | 101% |
Distribution Business Segment | Discontinued Operations, Disposed of by Sale | |
Subsequent Event [Line Items] | |
Proceeds from Divestiture of Interest in Consolidated Subsidiaries | $ 950 |