Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 05, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Trinseo S.A. | |
Entity Central Index Key | 1,519,061 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 48,777,934 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 320,771 | $ 220,786 |
Accounts receivable, net of allowance for doubtful accounts (September 30, 2015 -- $2,339; December 31, 2014 -- $6,268) | 550,006 | 601,066 |
Inventories | 391,247 | 473,861 |
Deferred income tax assets | 10,198 | 11,786 |
Other current assets | 19,749 | 15,164 |
Total current assets | 1,291,971 | 1,322,663 |
Investments in unconsolidated affiliates | 191,194 | 167,658 |
Property, plant and equipment, net of accumulated depreciation (September 30, 2015 -- $358,415; December 31, 2014 -- $324,383) | 522,213 | 556,697 |
Other assets | ||
Goodwill | 31,917 | 34,574 |
Other intangible assets, net | 155,194 | 165,358 |
Deferred income tax assets-noncurrent | 62,269 | 46,812 |
Deferred charges and other assets | 57,381 | 62,354 |
Total other assets | 306,761 | 309,098 |
Total assets | 2,312,139 | 2,356,116 |
Current liabilities | ||
Short-term borrowings and current portion of long-term debt | 5,627 | 7,559 |
Accounts payable | 337,759 | 434,692 |
Income taxes payable | 36,007 | 9,413 |
Deferred income tax liabilities | 834 | 1,413 |
Accrued expenses and other current liabilities | 109,164 | 120,928 |
Total current liabilities | 489,391 | 574,005 |
Noncurrent liabilities | ||
Long-term debt | 1,215,334 | 1,194,648 |
Deferred income tax liabilities-noncurrent | 29,571 | 27,311 |
Other noncurrent obligations | 232,592 | 239,287 |
Total noncurrent liabilities | 1,477,497 | 1,461,246 |
Shareholders' equity | ||
Common stock, $0.01 nominal value, 50,000,000 shares authorized at September 30, 2015 and December 31, 2014, 48,778 and 48,770 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | 488 | 488 |
Additional paid-in-capital | 556,964 | 547,530 |
Accumulated deficit | (61,421) | (151,936) |
Accumulated other comprehensive loss | (150,780) | (75,217) |
Total shareholders' equity | 345,251 | 320,865 |
Total liabilities and shareholders' equity | $ 2,312,139 | $ 2,356,116 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Condensed Consolidated Balance Sheets | ||
Allowance for doubtful accounts | $ 2,339 | $ 6,268 |
Accumulated depreciation | $ 358,415 | $ 324,383 |
Common stock, nominal value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000,000 | 50,000,000,000 |
Common stock, shares issued | 48,778,000 | 48,770,000 |
Common stock, shares outstanding | 48,778,000 | 48,770,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Consolidated Statements of Operations | ||||
Net sales | $ 1,027,952 | $ 1,305,493 | $ 3,074,890 | $ 4,005,560 |
Cost of sales | 916,390 | 1,237,257 | 2,718,112 | 3,746,285 |
Gross profit | 111,562 | 68,236 | 356,778 | 259,275 |
Selling, general and administrative expenses | 51,093 | 48,113 | 153,607 | 172,351 |
Equity in earnings of unconsolidated affiliates | 33,489 | 9,267 | 111,037 | 29,595 |
Operating income | 93,958 | 29,390 | 314,208 | 116,519 |
Interest expense, net | 19,489 | 30,098 | 73,945 | 95,518 |
Loss on extinguishment of long-term debt | 7,390 | 95,150 | 7,390 | |
Other expense (income), net | 1,214 | (1,638) | 7,998 | 29,406 |
Income (loss) before income taxes | 73,255 | (6,460) | 137,115 | (15,795) |
Provision for income taxes | 21,200 | 3,650 | 46,600 | 21,850 |
Net income (loss) | $ 52,055 | $ (10,110) | $ 90,515 | $ (37,645) |
Weighted average shares- basic | 48,778 | 48,770 | 48,773 | 41,693 |
Net income (loss) per share- basic | $ 1.07 | $ (0.21) | $ 1.86 | $ (0.90) |
Weighted average shares- diluted | 48,989 | 48,770 | 48,936 | 41,693 |
Net income (loss) per share- diluted | $ 1.06 | $ (0.21) | $ 1.85 | $ (0.90) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||||
Net income (loss) | $ 52,055 | $ (10,110) | $ 90,515 | $ (37,645) |
Other comprehensive income (loss), net of tax (tax amounts shown in millions below for the three and nine months ended September 30, 2015 and 2014, respectively): | ||||
Cumulative translation adjustments | 1,234 | (84,868) | (77,680) | (95,220) |
Net gain (loss) on foreign exchange cash flow hedges | 97 | (308) | ||
Pension and other postretirement benefit plans (net of tax of 2015 -- $0.3 and $1.0; 2014 -- $0.2 and $0.5) | 797 | 286 | 2,425 | 866 |
Total other comprehensive income (loss), net of tax | 2,128 | (84,582) | (75,563) | (94,354) |
Comprehensive income (loss) | $ 54,183 | $ (94,692) | $ 14,952 | $ (131,999) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||||
Pension and other postretirement benefit plans, tax | $ 0.3 | $ 0.2 | $ 1 | $ 0.5 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2013 | $ 373 | $ 339,055 | $ 88,378 | $ (84,604) | $ 343,202 |
Balance, Shares at Dec. 31, 2013 | 37,270 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock | $ 115 | 197,974 | 198,089 | ||
Issuance of common stock, shares | 11,500 | ||||
Net income (loss) | (37,645) | (37,645) | |||
Other comprehensive income (loss) | (94,354) | (94,354) | |||
Stock-based compensation | 7,779 | 7,779 | |||
Balance at Sep. 30, 2014 | $ 488 | 544,808 | (5,976) | (122,249) | 417,071 |
Balance, Shares at Sep. 30, 2014 | 48,770 | ||||
Balance at Jun. 30, 2014 | 78,606 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (10,110) | ||||
Other comprehensive income (loss) | (84,582) | ||||
Balance at Sep. 30, 2014 | $ 488 | 544,808 | (5,976) | (122,249) | 417,071 |
Balance, Shares at Sep. 30, 2014 | 48,770 | ||||
Balance at Dec. 31, 2014 | $ 488 | 547,530 | (75,217) | (151,936) | 320,865 |
Balance, Shares at Dec. 31, 2014 | 48,770 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 90,515 | 90,515 | |||
Other comprehensive income (loss) | (75,563) | (75,563) | |||
Stock-based compensation | 9,434 | 9,434 | |||
Stock-based compensation, shares | 8 | ||||
Balance at Sep. 30, 2015 | $ 488 | 556,964 | (150,780) | (61,421) | 345,251 |
Balance, Shares at Sep. 30, 2015 | 48,778 | ||||
Balance at Jun. 30, 2015 | (152,908) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 52,055 | ||||
Other comprehensive income (loss) | 2,128 | ||||
Balance at Sep. 30, 2015 | $ 488 | $ 556,964 | $ (150,780) | $ (61,421) | $ 345,251 |
Balance, Shares at Sep. 30, 2015 | 48,778 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities | ||
Net income (loss) | $ 90,515 | $ (37,645) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||
Depreciation and amortization | 67,287 | 78,798 |
Amortization of deferred financing costs and issuance discount | 6,075 | 7,495 |
Deferred income tax | (13,815) | 4,716 |
Stock-based compensation | 9,434 | 7,779 |
Earnings of unconsolidated affiliates, net of dividends | (23,540) | (9,596) |
Unrealized net losses (gains) on foreign exchange forward contracts | (4,435) | 13,324 |
Loss on extinguishment of debt | 95,150 | 7,390 |
Prepayment penalty on long-term debt | (68,603) | (3,975) |
Loss (gain) on sale of businesses and other assets | (116) | |
Changes in assets and liabilities | ||
Accounts receivable | 11,726 | (42,015) |
Inventories | 63,117 | (1,360) |
Accounts payable and other current liabilities | (47,861) | 1,535 |
Income taxes payable | 26,780 | 764 |
Other assets, net | (7,119) | (6,254) |
Other liabilities, net | 994 | (19,179) |
Cash provided by operating activities | 205,705 | 1,661 |
Cash flows from investing activities | ||
Capital expenditures | (79,088) | (69,269) |
Proceeds from capital expenditures subsidy | 2,191 | |
Proceeds from the sale of businesses and other assets | 689 | 6,257 |
Payment for working capital adjustment from sale of business | (700) | |
Distributions from unconsolidated affiliates | 978 | |
Increase in restricted cash | (413) | |
Cash used in investing activities | (76,621) | (62,734) |
Cash flows from financing activities | ||
Proceeds from initial public offering, net of offering costs | 198,087 | |
Deferred financing fees | (28,033) | |
Short term borrowings, net | (17,703) | (43,430) |
Repayments of Term Loans | (1,250) | |
Net proceeds from issuance of Term Loan B | 498,750 | |
Net proceeds from issuance of 2022 Senior Notes | 716,625 | |
Repayments of 2019 Senior Notes | (1,192,500) | (132,500) |
Proceeds from Accounts Receivable Securitization Facility | 25,000 | 283,292 |
Repayments of Accounts Receivable Securitization Facility | (25,000) | (283,859) |
Cash provided by (used in) financing activities | (24,111) | 21,590 |
Effect of exchange rates on cash | (4,988) | (4,893) |
Net change in cash and cash equivalents | 99,985 | (44,376) |
Cash and cash equivalents-beginning of period | 220,786 | 196,503 |
Cash and cash equivalents-end of period | $ 320,771 | $ 152,127 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation | |
Basis of Presentation | NOTE 1—BASIS OF PRESENTATION The unaudited interim condensed consolidated financial statements of Trinseo S.A. and its subsidiaries (the “Company”) as of and for the periods ended September 30, 2015 and 2014 were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect all adjustments, consisting only of normal recurring adjustments, which, in the opinion of management, are considered necessary for the fair statement of the results for the periods presented. Because they cover interim periods, the statements and related notes to the financial statements do not include all disclosures normally provided in annual financial statements and, therefore, these statements should be read in conjunction with the 2014 audited consolidated financial statements included within the Company’s Annual Report on Form 10-K (“Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on March 10, 2015. The December 31, 2014 condensed consolidated balance sheet data presented herein was derived from the Company’s December 31, 2014 audited consolidated financial statements, but does not include all disclosures required by GAAP for annual periods. Reverse Stock Split and Initial Public Offering On May 30, 2014, the Company amended its Articles of Association to effect a 1 -for-436.69219 reverse stock split of its issued and outstanding common stock (“reverse split”) and to increase its authorized shares to 50.0 billion. On June 17, 2014, the Company completed an initial public offering (the “IPO”) of 11,500,000 ordinary shares at a price of $19.00 per share, which included 1,500,000 of shares sold pursuant to the underwriters’ exercise of their over-allotment option. The Company received cash proceeds of $203.2 million from this transaction, net of underwriting discounts. Company Realignment Until January 1, 2015, the chief executive officer, who is the Company’s chief operating decision maker, managed the Company’s operations under two divisions, Emulsion Polymers and Plastics, which included the following four reporting segments: Latex, Synthetic Rubber, Styrenics, and Engineered Polymers. Effective January 1, 2015, the Company was reorganized under two new divisions called Performance Materials and Basic Plastics & Feedstocks. The Performance Materials division now includes the following reporting segments: Synthetic Rubber, Latex, and Performance Plastics. The Basic Plastics & Feedstocks division represents a separate segment for financial reporting purposes. These condensed consolidated financial statements and related notes thereto have been recast to reflect this change in reporting segments. See Note 14 for more information. |
Recent Accounting Guidance
Recent Accounting Guidance | 9 Months Ended |
Sep. 30, 2015 | |
Recent Accounting Guidance | |
Recent Accounting Guidance | NOTE 2 —RECENT ACCOUNTING GUIDANCE In April 2014, the Financial Accounting Standards Board (“ FASB ”) issued amendments to guidance for reporting discontinued operations and disposals of components of an entity. The amended guidance requires that a disposal representing a strategic shift that has (or will have) a major effect on an entity’s financial results or a business activity classified as held for sale should be reported as discontinued operations. The amendments also expand the disclosure requirements for discontinued operations and add new disclosures for individually significant dispositions that do not qualify as discontinued operations. The Company adopted this guidance effective January 1, 2015, and the adoption did not have a significant impact on the Company’s financial position, results of operations, or disclosures. In May 2014, the FASB and the International Accounting Standards Board (“IASB”) jointly issued new guidance which clarifies the principles for recognizing revenue and develops a common revenue standard for GAAP and International Financial Reporting Standards (“IFRS”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those go ods or services. This guidance is effective for public entities for annual and interim periods beginning after December 15, 201 7. The Company is currently assessing the impact of adopting this guidance on its financial position and results of operations. In January 2015, the FASB issued guidance to simplify income statement classification by removing the concept of extraordinary items from GAAP. The Company adopted this guidance effective January 1, 2015, and the adoption did not have an impact on the Company’s financial position or results of operations. In April 2015, the FASB issued guidance that requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying value of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. This new guidance, which is to be applied on a retrospective basis, is effective for public companies for annual and interim periods beginning after December 15, 2015, with early adoption permitted. The Company will adopt this guidance effective January 1, 2016, which we do not expect to have a significant impact on the Company’s financial position or results of operations . In July 2015, the FASB issued guidance which simplifies the subsequent measurement of inventory by replacing the lower of cost or market test with a lower of cost or net realizable value (“NRV”) test. NRV is calculated as the estimated selling price less reasonably predictable costs of completion, disposal and transportation. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016, and prospective adoption is required. The Company is currently assessing the impact of adopting this guidance on its financial position and results of operations. |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliates | 9 Months Ended |
Sep. 30, 2015 | |
Investments in Unconsolidated Affiliates | |
Investments in Unconsolidated Affiliates | NOTE 3 —INVESTMENTS IN UNCONSOLIDATED AFFILIATES The Company is supplemented by two strategic joint ventures , the results of which are included within the Basic Plastics & Feedstocks reporting segment: Americas Styrenics LLC (“Americas Styrenics”, a polystyrene joint venture with Chevron Phillips Chemical Company LP) and Sumika Styron Polycarbonate Limited (“Sumika Styron Polycarbonate”, a polycarbonate joint venture with Sumitomo Chemical Company, Limited). Investments held in the unconsolidated affiliates are accounted for by the equity method. As of September 30, 2015 and December 31, 2014, respectively, the Company’s investment in Americas Styrenics was $154.1 million and $133.5 million , which was $97.2 million and $108.4 million less than the Company’s 50% share of the underlying net assets of Americas Styrenics . This amount represents the difference between the book value of assets contributed to the joint venture at the time of formation (May 1, 2008) and the Company’s 50% share of the total recorded value of the joint venture’s assets and certain adjustments to conform with the Company’s accounting policies. This difference is being amortized over a weighted average remaining useful life of the contributed assets of approximately 5.0 years as of September 30, 2015. The Company received dividends from Americas Styrenics of $42.5 million and $87.5 million during the three and nine months ended September 30, 2015, respectively, compared to dividends of $7.5 million and $20.0 million during the three and nine months ended September 30, 2014 , respectively . As of September 30, 2015 and December 31, 2014, respectively, the Company’s investment in Sumika Styron Polycarbonate was $37.1 million and $34.1 million , which was $20.2 million and $21.3 million greater than the Company’s 50% share of the underlying net assets of Sumika Styron Polycarbonate . This amount represents the fair value of certain identifiable assets which have not been recorded on the historical financial statements of Sumika Styron Polycarbonate . This difference is being amortized over the remaining useful life of the contributed assets of 10.0 years as of September 30, 2015. The Company received no dividends from Sumika Styron Polycarbonate during the three and nine months ended September 30, 2015, respectively, compared to dividends of zero and $1.0 million during the three and nine months ended September 30, 2014, respectively. Both of the unconsolidated affiliates are privately held companies; therefore, quoted market prices for their stock are not available. The summarized financial information of the Company’s unconsolidated affiliates is shown below: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Sales $ $ $ $ Gross profit $ $ $ $ Net income $ $ $ $ |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Inventories | |
Inventories | NOTE 4—INVENTORIES Inventories consisted of the following: September 30, December 31, 2015 2014 Finished goods $ $ Raw materials and semi-finished goods Supplies Total $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | NOTE 5 —GOODWILL AND INTANGIBLE ASSETS Goodwill The following table shows changes in the carrying amount of goodwill by segment from December 31, 2014 to September 30, 2015: Performance Materials Synthetic Performance Basic Plastics Latex Rubber Plastics & Feedstocks Total Balance at December 31, 2014 $ $ $ $ $ Foreign currency impact Balance at September 30, 2015 $ $ $ $ $ Other Intangible Assets The following table provides information regarding the Company’s other intangible assets as of September 30, 2015 and December 31, 2014, respectively: September 30, 2015 December 31, 2014 Estimated Gross Gross Useful Life Carrying Accumulated Carrying Accumulated (Years) Amount Amortization Net Amount Amortization Net Developed technology $ $ $ $ $ $ Manufacturing Capacity Rights Software Software in development N/A — — Other N/A — — — — Total $ $ $ $ $ $ Amortization expense on other intangible assets totaled $4.8 million and $13.7 million for the three and nine months ended September 30, 2015, respectively, and $5.4 million and $14.6 million for the three and nine months ended September 30, 2014, respectively. The following table details the Company’s estimated amortization expense for the next five years, excluding any amortization expense related to software currently in development: Estimated Amortization Expense for the Next Five Years Remainder of 2015 $ 2016 2017 2018 2019 2020 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt | |
Debt | NOTE 6—DEBT Debt consisted of the following: September 30, December 31, 2015 2014 Senior Credit Facility 2020 Revolving Facility $ — $ — 2021 Term Loan B — 2022 Senior Notes USD Notes — Euro Notes — 2019 Senior Notes — Accounts Receivable Securitization Facility — — Other indebtedness Total debt Less: current portion Total long-term debt $ $ 2018 Senior Secured Credit Facility On June 17, 2010, the Company entered into a credit agreement, which was subsequently amended on February 2, 2011, July 28, 2011, February 13, 2012, August 9, 2012, January 19, 2013, and December 3, 2013 which was to mature in January 2018 (“2018 Senior Secured Credit Facility”). The 2018 Senior Secured Credit Facility included a revolving credit facility (“2018 Revolving Facility”), which, as a result of the amendment in January 2013, included a borrowing capacity of $300.0 million. As of December 31, 2014, the Company had no amounts outstanding under the 2018 Revolving Facility . In May 2015, upon completion of the refinancing transactions discussed below, the Company terminated the 2018 Senior Secured Credit Facility. Immediately p rior to this termination, the Company had no outstanding borrowings under the 2018 Revolving Facility. As a result of this termination, the Company recognized a $0.7 million loss on extinguishment of long- term debt, comprised entirely of the write-off of a portion of the existing unamortized deferred financing fees related to the 2018 Revolving Facility. The remaining unamortized deferred financing fees under the 2018 Revolving Facility totaled $7.2 million, which remained capitalized and is being amortized along with new deferred financing fees over the life of the new revolving credit facility, discussed in further detail below . Senior Credit Facility On May 5, 2015, Trinseo Materials Operating S.C.A. and Trinseo Materials Finance, Inc. (together, the “Issuers” or the “Borrowers”), both wholly-owned subsidiaries of the Company, entered into a senior secured credit agreement (the “Credit Agreement”), which provides senior secured financing of up to $825.0 million (the “Senior Credit Facility”). The Senior Credit Facility provides for senior secured financing consisting of a (i) $325.0 revolving credit facility, with a $25.0 million swingline subfacility and a $35.0 million letter of credit subfacility (the “2020 Revolving Facility”) maturing in May 2020 and (ii) $500.0 million senior secured term loan B facility maturing in November 2021 (the “2021 Term Loan B”). Amounts under the 2020 Revolving Facility are available in U.S. dollars and euros. The 2021 Term Loan B bears an interest rate of LIBOR plus 3.25% , subject to a 1.00% LIBOR floor, and was issued at a 0.25% original issue discount. Further, the 2021 Term Loan B requires scheduled quarterly payments in amounts equal to 0.25% of the original principal amount of the 2021 Term Loan B, with the balance to be paid at maturity. As of September 30, 2015, $5.0 million of these scheduled future payments were classified as current debt on the Company’s condensed consolidated balance sheet. Loans under the 2020 Revolving Facility, at the Borrowers’ option, may be maintained as (a) LIBO rate loans, which bear interest at a rate per annum equal to the LIBO rate plus the applicable margin (as defined in the Credit Agreement), if applicable, or (b) base rate loans which shall bear interest at a rate per annum equal to the base rate plus the applicable margin (as defined in the Credit Agreement). The Borrowers will be required to pay a quarterly commitment fee in respect of any unused commitments under the 2020 Revolving Facility equal to 0.50% per annum. As of September 30, 2015, the Company had no outstanding borrowings, and had $313.0 million (net of $12.0 million outstanding letters of credit) of funds available for borrowing under the 2020 Revolving Facility. The Senior Credit Facility is collateralized by a security interest in substantially all of the assets of Trinseo Materials Operating S.C.A., as lead borrower, Trinseo Materials Finance, Inc., as co-borrower, and the guarantors thereunder including Trinseo Materials S.à r.l., certain U.S. subsidiaries and certain foreign subsidiaries organized in Luxembourg, The Netherlands, Hong Kong, Singapore, Ireland, Germany and Switzerland. The Senior Credit Facility requires the Borrowers and their restricted subsidiaries to comply with customary affirmative and negative covenants, including limitations on their abilities to incur liens; make certain loans and investments; incur additional debt; merge, consolidate liquidate or dissolve; transfer or sell assets; pay dividends and other distributions to shareholders or make certain other restricted payments; enter into transactions with affiliates; restrict any restricted subsidiary from paying dividends or making other distributions or agree to certain negative pledge clauses; materially alter the business they conduct; prepay certain other indebtedness; amend certain material documents; and change our fiscal year. The 2020 Revolving Facility contains a financial covenant that requires compliance with a springing first lien net leverage ratio test. If the outstanding balance under the 2020 Revolving Facility exceeds 30% of the $325.0 million borrowing capacity (excluding undrawn letters of credit up to $10.0 million and cash collateralized letters of credit) at a quarter-end, then the Company’s first lien net leverage ratio may not exceed 2.00 to 1.00. As of September 30, 2015, the Company was in compliance with all debt covenant requirements under the Senior Credit Facility. Fees and expenses incurred in connection with the issuance of the 2021 Term Loan B and the 2020 Revolving Facility were $12.0 million and $0.3 million, respectively, which were capitalized and recorded in “Deferred charges and other assets” in the condensed consolidated balance sheets. For the 2021 Term Loan B, deferred financing fees and the 0.25% debt discount are being amortized over its 6.5 year term using the effective interest method. For the 2020 Revolving Facility, deferred financing fees (along with an additional $7.2 million of unamortized deferred financing fees from the 2018 Revolving Facility) are being amortized over its 5.0 year term using the straight-line method. Amortization of deferred financing fees and debt discounts are recorded in “Interest expense, net” in the condensed consolidated statements of operations. 2019 Senior Notes In January 2013, the Company issued $1,325.0 million 8.750% senior notes due to mature on February 1, 2019 (the “2019 Senior Notes”). In July 2014, using proceeds from the Company’s IPO (see Note 1), the Company redeemed $132.5 million in aggregate principal amount of the 2019 Senior Notes . On May 13, 2015, using the net proceeds from the issuance of the 2021 Term Loan B, together with the net proceeds from the issuance of the 2022 Senior Notes (defined and discussed below) and available cash, the Company redeemed all outstanding borrowings under the 2019 Senior Notes, totaling $1,192.5 million in principal, together with a call premium of $68.6 million (with a redemption price of 103% on the first $132.5 million and 106.097% on the remaining balance) and accrued and unpaid interest thereon of $29.6 million. As a result of this redemption, during the nine months ended September 30, 2015, the Company recorded a loss on extinguishment of long-term debt of $94.5 million, which includes the above $ 68.6 million call premium and a $25.9 million write-off of unamortized deferred financing fees related to the 2019 Senior Notes. 2022 Senior Notes On May 5, 2015, the Issuers executed an indenture (the “Indenture”) pursuant to which they issued $300.0 million aggregate principal amount of 6.750% senior notes due May 1, 2022 (the “USD Notes”) and €375.0 million aggregate principal amount of 6.375% senior notes due May 1, 2022 (the “Euro Notes”, and together with the USD Notes, the “2022 Senior Notes”). Interest on the 2022 Senior Notes is payable semi-annually on May 1 and November 1 of each year, commencing on November 1, 2015. At any time prior to May 1, 2018, the Issuers may redeem the Euro Notes and/or the USD Notes in whole or in part, at their option at a redemption price equal to 100% of the principal amount of such notes plus the relevant applicable premium as of, and accrued and unpaid interest to, but not including, the redemption date. At any time and from time to time after May 1, 2018, the Issuers may redeem the Euro Notes and/or the USD Notes, in whole or in part, at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest, if any, on the notes redeemed to, but not including, the redemption date : Euro Notes USD Notes 12-month period commencing May 1 in Year Percentage Percentage 2018 % % 2019 % % 2020 and thereafter % % In addition, at any time prior to May 1, 2018, the Issuers may redeem up to 40% of the aggregate principal amount of each of the USD Notes and the Euro Notes, either together or separately, at a redemption price equal to 106.750% of the principal amount thereof for the USD Notes and 106.375% of the principal amount thereof for the Euro Notes plus, in each case, accrued and unpaid interest to, but not including, the redemption date, in an amount equal to the aggregate gross proceeds from certain equity offerings. The 2022 Senior Notes are the Issuers’ senior unsecured obligations and rank equally in right of payment with all of the Issuers’ existing and future indebtedness that is not expressly subordinated in right of payment thereto. The 2022 Senior Notes will be senior in right of payment to any future indebtedness that is expressly subordinated in right of payment thereto and effectively junior to (a) the Issuers’ existing and future secured indebtedness, including the Company’s accounts receivable facility and the Issuers’ Senior Credit Facility (discussed above), to the extent of the value of the collateral securing such indebtedness and (b) all existing and future liabilities of the Issuers’ non-guarantor subsidiaries. The Indenture contains customary covenants that, among other things, limit the Issuers’ and certain of their subsidiaries’ ability to incur additional indebtedness and guarantee indebtedness, pay dividends or make other distributions, make investments, or prepay certain indebtedness, each subject to a number of exceptions and qualifications. Certain of these covenants, will be suspended during any period of time that (1) the 2022 Notes have investment grade ratings (as defined in the Indenture) and (2) no default has occurred and is continuing under the Indenture. In the event that the 2022 Senior Notes are downgraded to below an investment grade rating, the Issuers and certain subsidiaries will again be subject to the suspended covenants with respect to future events. As of September 30, 2015, the Company was in compliance with all debt covenant requirements under the Indenture. Fees and expenses incurred in connection with the issuance of the 2022 Senior Notes were $16.0 million, which were capitalized and recorded in “Deferred charges and other assets” in the condensed consolidated balance sheets, and are being amortized into “Interest expense, net” in the condensed consolidated statements of operations over their 7.0 year term using the effective interest method . Accounts Receivable Securitization Facility In May 2013, the Company amended its existing accounts receivable securitization facility (“Accounts Receivable Securitization Facility”) which increased its borrowing capacity from $160.0 million to $200.0 million, extended the maturity date to May 2016 and allows for the expansion of the pool of eligible accounts receivable to include previously excluded U.S. and Netherlands subsidiaries. The Accounts Receivable Securitization Facility is subject to interest charges against the amount of outstanding borrowings as well as the amount of available, but undrawn borrowings. As a result of the amendment to the Accounts Receivable Securitization Facility, in regards to outstanding borrowings, fixed interest charges decreased from 3.25% plus commercial paper rates to 2.60% plus variable commercial paper rates. In regards to available, but undrawn borrowings, fixed interest charges decreased from 1.50% to 1.40% . As of Septemb er 30, 2015 and December 31, 2014, there were no amounts outstanding under the Accounts Receivable Securitization Facility, with approximately $153.0 million and $136.1 million, respectively, of accounts receivable available to support this facility, based on the pool of eligible accounts receivable. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments | |
Derivative Instruments | NOTE 7—DERIVATIVE INSTRUMENTS The Company’s ongoing business operations expose it to various risks, including fluctuating foreign exchange rates. To manage these risks, the Company periodically enters into derivative financial instruments such as foreign exchange forward contracts. The Company does not hold or enter into financial instruments for trading or speculative purposes. All derivatives are recorded on the condensed consolidated balance sheets at fair value. Foreign Exchange Forward Contracts Certain subsidiaries have assets and liabilities denominated in currencies other than their respective functional currencies, which creates foreign exchange risk. The Company’s principal strategy in managing its exposure to changes in foreign currency exchange rates is to naturally hedge the foreign currency-denominated liabilities on our balance sheet against corresponding assets of the same currency such that any changes in liabilities due to fluctuations in exchange rates are offset by changes in their corresponding foreign currency assets. In order to further reduce its exposure, the Company also uses foreign exchange forward contracts to economically hedge the impact of the variability in exchange rates on our assets and liabilities denominated in certain foreign currencies. These derivative contracts are not designated for hedge accounting treatment. As of September 30, 2015, the Company had open foreign exchange forward contracts with a notional U.S. dollar equivalent absolute value of $370.4 million. The following table displays the notional amounts of the most significant net foreign exchange hedge positions outstanding as of September 30, 2015. September 30, Buy / (Sell) 2015 Chinese Yuan $ Euro $ Indonesian Rupiah $ Swiss Franc $ Japanese Yen $ Foreign Exchange Cash Flow Hedges The Company also enters into forward contracts with the objective of managing the currency risk associated with forecasted U.S. dollar-denominated raw materials purchases by one of its subsidiaries whose functional currency is the euro. By entering into these forward contracts, which are designated as cash flow hedges, the Company buys a designated amount of U.S. dollars and sells euros at the prevailing market rate to mitigate the risk associated with the fluctuations in the euro-to-U.S. dollar foreign currency exchange rates. The qualifying hedge contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in accumulated other comprehensive income (AOCI) to the extent effective, and reclassified to cost of sales in the period during which the transaction affects earnings or it becomes probable that the forecasted transaction will not occur. Open foreign exchange cash flow hedges as of September 30, 2015 have maturities occurring over a period of 15 months, and have a net notional U.S. dollar equivalent of $135.0 million. Net Investment Hedge The Company’s outstanding debt includes €375.0 million of Euro Notes (see Note 6 for details) . As of September 30, 2015, the Company has designated a portion ( €150.0 million) of the principal amount of these Euro Notes as a hedge of the foreign currency exposure of the Issuers’ net investment in certain European subsidiaries. As this debt was deemed to be a highly effective hedge, changes in the Euro Notes’ carrying value resulting from fluctuations in the euro exchange rate were recorded as cumulative foreign currency translation loss of $4.1 million within accumulated other comprehensive loss as of September 30, 2015 . Summary of Derivative Instruments Information regarding changes in the fair value of the Company’s derivative instruments, including those not designated for hedge accounting treatment, is as follows: Gain (Loss) Recognized in Gain (Loss) Recognized in AOCI on Balance Sheet Statement of Operations Three Months Ended September 30, Statement of Operations 2015 2014 2015 2014 Classification Designated as Cash Flow Hedges Foreign exchange cash flow hedges $ $ — $ $ — Cost of sales Total $ $ — $ $ — Net Investment Hedges Euro Notes $ $ — $ — $ — Other expenses, net Total $ $ — $ — $ — Not Designated as Cash Flow Hedges Foreign exchange forward contracts $ — $ — $ $ Other expenses, net Total $ — $ — $ $ Gain (Loss) Recognized in Gain (Loss) Recognized in AOCI on Balance Sheet Statement of Operations Nine Months Ended September 30, Statement of Operations 2015 2014 2015 2014 Classification Designated as Cash Flow Hedges Foreign exchange cash flow hedges $ $ — $ $ — Cost of sales Total $ $ — $ $ — Net Investment Hedges Euro Notes $ $ — $ — $ — Other expenses, net Total $ $ — $ — $ — Not Designated as Cash Flow Hedges Foreign exchange forward contracts $ — $ — $ $ Other expenses, net Total $ — $ — $ $ The Company recorded gains of $4.5 million and losses of $9.2 million during the three and nine months ended September 30, 2015 and losses of $19.5 million during the three and nine months ended September 30, 2014 from settlements and changes in the fair value of outstanding forward contracts (not designated as hedges) . The gains and losses from these forward contracts offset net foreign exchange transaction losses of $6.7 million and gains of $0.9 million during the three and nine months ended September 30, 2015, respectively, and gains of $21.8 million and $23.4 million during the three and nine months ended September 30, 2014, respectively, which resulted from the remeasurement of the Company’s foreign currency denominated assets and liabilities. The cash settlements of these foreign exchange forward contracts are included within operating activities in the condensed consolidated statement of cash flows. As of September 30, 2015, the Company has no ineffectiveness related to its foreign exchange cash flow hedges. Further, the Company expects to reclassify in the next twelve months an approximate $1.0 million net loss from other comprehensive income (loss) into earnings related to the Company’s outstanding cash flow hedges as of September 30, 2015 based on current foreign exchange rates. The following table summarizes the net unrealized gains and losses and balance sheet classification of outstanding derivatives recorded in the condensed consolidated balance sheets: September 30, 2015 December 31, 2014 Foreign Exchange Foreign Exchange Foreign Exchange Foreign Exchange Forward Cash Flow Forward Cash Flow Balance Sheet Classification Contracts Hedges Total Contracts Hedges Total Asset Derivatives: Accounts receivable, net of allowance $ $ $ $ $ — $ Deferred charges and other assets — — — — Total asset derivatives $ $ $ $ $ — $ Liability Derivatives: Accounts payable $ $ $ $ $ — $ Other noncurrent obligations — — — — — — Total liability derivatives $ $ $ $ $ — $ Forward contracts are entered into with a limited number of counterparties, each of which allows for net settlement of all contracts through a single payment in a single currency in the event of a default on or termination of any one contract. As such, in accordance with the Company’s accounting policy, we record these foreign exchange forward contracts on a net basis by counterparty within the condensed consolidated balance sheet. Information regarding the gross amounts of the Company’s derivative instruments and the amounts offset in the condensed consolidated balance sheets is as follows: Gross Amounts Gross Amounts Net Amounts Recognized in the Offset in the Presented in the Balance Sheet Balance Sheet Balance Sheet Balance at September 30, 2015 Derivative assets $ $ $ Derivative liabilities Balance at December 31, 2014 Derivative assets $ $ $ Derivative liabilities Refer to Notes 8 and 17 of the condensed consolidated financial statements for further information regarding the fair value of the Company’s derivative instruments and the related changes in accumulated other comprehensive income . |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | NOTE 8 —FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date. Level 1—Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3—Valuation is based upon other unobservable inputs that are significant to the fair value measurement. The following table summarizes the basis used to measure certain assets and liabilities at fair value on a recurring basis in the condensed consolidated balance sheets as of September 30, 2015 and December 31, 2014. September 30, 2015 Quoted Prices in Significant Significant Active Markets for Other Observable Unobservable Identical Items Inputs Inputs Assets (Liabilities) at Fair Value (Level 1) (Level 2) (Level 3) Total Foreign exchange forward contracts—Assets $ — $ $ — $ Foreign exchange forward contracts—(Liabilities) — — Foreign exchange cash flow hedges—Assets — — Foreign exchange cash flow hedges—(Liabilities) — — Total fair value $ — $ $ — $ December 31, 2014 Quoted Prices in Significant Significant Active Markets for Other Observable Unobservable Identical Items Inputs Inputs Assets (Liabilities) at Fair Value (Level 1) (Level 2) (Level 3) Total Foreign exchange forward contracts—Assets $ — $ $ — $ Foreign exchange forward contracts—(Liabilities) — — Total fair value $ — $ $ — $ The Company uses an income approach to value its derivative instruments , utilizing discounted cash flow techniques, considering the terms of the contract and observable market information available as of the reporting date. Significant inputs to the valuation for foreign exchange forward contracts and foreign exchange cash flow hedges are obtained from broker quotations or from listed or over-the-counter market data, and are classified as Level 2 in the fair value hierarchy. Fair Value of Debt Instruments The following table presents the estimated fair value of the Company’s outstanding debt not carried at fair value as of September 30, 2015 and December 31, 2014, respectively: As of As of September 30, 2015 December 31, 2014 2019 Senior Notes $ — $ 2022 Senior Notes USD Notes — Euro Notes — 2021 Term Loan B — Total fair value $ $ The fair value of the Company’s Term Loan B, USD Notes, Euro Notes, and 2019 Senior Notes (each Level 2 securities) is determined using over-the-counter market quotes and benchmark yields received from independent vendors. There were no other significant financial instruments outstanding as of September 30, 2015 and December 31, 2014. |
Provision for Income Taxes
Provision for Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Provision for Income Taxes | |
Provision for Income Taxes | NOTE 9 —PROVISION FOR INCOME TAXES Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Effective income tax rate % % % % Provision for income taxes for the three and nine months ended September 30, 201 5 were $ 21.2 million , resulting in an effective tax rate of 28.9 % , and $ 46.6 million, resulting in an effective tax rate of 34.0 % , respectively. Provision for income taxes for the three and nine months ended September 30, 201 4 were $ 3 . 7 million , resulting in a negative effective tax rate of 56.5 % , and $ 21.9 million, resulting in a negative effective tax rate of 1 38.3 % , respectively. The effective income tax rate is impacted by losses primarily within our holding companies incorporated in Luxembourg, which are not anticipated to provide a tax benefit to the Company in the future . For the three and nine months ended September 30, 2015 , these losses totaled approximately $12.9 million and $73.5 mill ion, respectively. T hese losses included non-deductible interest and stock-based compensation expense. Additionally, during the nine months ended September 30, 2015 , these losses included $18.6 million related to a portion of the fees associated with the call premium paid to retire the Company’s 2019 Senior Notes and $5.6 million related to the write off of the related unamortized deferred financing fees ( both incurred in the second quarter; see Note 6 for further discussion ). These non - deductible expenses unfavorably impacted the effective tax rate during the three and nine months ended September 30, 2015. For the three and nine months ended September 30, 2014, losses primarily within our holding companies incorporated in Luxembourg, which are not anticipated to provide a tax benefit to the Company in the future , were approximately $22.6 million and $119.8 million during these respective periods. These losses included non-deductible interest and stock-based compensation expense. Additionally, during the nine months ended September 30, 2014 , these losses included payments of $32.5 million related to an agreement with Dow to terminate the Latex JV Option Agreement and a portion of the fees related to the termination of the Advisory Agreement with Bain Capital of approximately $18.6 million ( both incurred in the second quarter of 2014; see Note 13 for further discussion). These non - deductible expenses unfavorably impacted the effective tax rate during the three and nine months ended September 30, 2014. Partially offsetting this unfavorable impact to the effective tax rate during the nine months ended September 30, 2014 was a tax benefit during the period, as the Company effectively settled its 2010 and 2011 audits with the IRS and received a refund of $3.2 million in July 2014. As a result, the Company recorded a previously unrecognized tax benefit in the amount of $2.7 million, including penalties and interest, relating to its 2011 tax return filing. No similar benefits were recorded in the nine months ended September 30, 2015. As of September 30, 2015, the Company has a net deferred tax asset of approximately $7.0 million in one of its China subsidiaries. This net deferred tax asset primarily consists of the future benefit from net operating loss carryforwards which, if not utilized, will expire in varying amounts by 2018 and 2020. It is possible that some or all of these loss carryforwards may expire unused if we are not able to generate sufficient taxable income from our operations or through tax planning strategies in this jurisdiction. If the Company concludes in the future that it cannot assert it is more likely than not it will realize this net deferred tax asset, a valuation allowance will be established. If recorded, this will affect the Company’s financial position and results of operations in the period it is recognized. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure | |
Commitments and Contingencies | NOTE 10 —COMMITMENTS AND CONTINGENCIES Environmental Matters Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law, existing technologies and other information. As of September 30, 2015 and December 31, 2014, the Company had no accrued obligations for environmental remediation and restoration costs. Pursuant to the terms of the sales and purchase agreement for the Styron business , the pre-closing environmental conditions were retained by Dow and the Company has been indemnified by Dow from and against all environmental liabilities incurred or relating to the predecessor periods. There are several properties which the Company now owns on which Dow has been conducting investigation, monitoring or remediation to address historical contamination. Those properties include Allyn’s Point, Connecticut ; Dalton, Georgia ; and Livorno, Italy. There are other properties with historical contamination that are owned by Dow that the Company leases for its operations, including its facilities in Midland, Michigan ; Schkopau, Germany ; Terneuzen, The Netherlands ; and Guaruja, Brazil. No environmental claims have been asserted or threatened against the Company, and the Company is not a potentially responsible party at any Superfund Sites. Inherent uncertainties exist in the Company’s potential environmental liabilities primarily due to unknown conditions, whether future claims may fall outside the scope of the indemnity, changing governmental regulations and legal standards regarding liability, and evolving technologies for handling site remediation and restoration. In connection with the Company’s existing indemnification, the possibility is considered remote that environmental remediation costs will have a material adverse impact on the condensed consolidated financial statements. Purchase Commitments In the normal course of business, the Company has certain raw material purchase contracts where it is required to purchase certain minimum volumes at current market prices. These commitments range from 1 to 6 years. In certain raw material purchase contracts, the Company has the right to purchase less than the required minimums and pay a liquidated damages fee, or, in case of a permanent plant shutdown, to terminate the contracts. In such cases, these obligations would be less than the annual commitment as disclosed in the consolidated financial statements included in the 2014 Annual Report . Litigation Matter s From time to time, the Company may be subject to various legal claims and proceedings incidental to the normal conduct of business, relating to such matters as product liability, antitrust/competition, past waste disposal practices and release of chemicals into the environment. While it is impossible at this time to determine with certainty the ultimate outcome of these routine claims, the Company does not believe that the ultimate resolution of these claims will have a material adverse effect on the Company’s results of operations, fi nancial condition or cash flow. Legal costs, including those legal costs expected to be incurred in connection with a loss contingency, are expensed as incurred. |
Pension Plans and Other Postret
Pension Plans and Other Postretirement Benefits | 9 Months Ended |
Sep. 30, 2015 | |
Pension Plans and Other Postretirement Benefits | |
Pension Plans and Other Postretirement Benefits | NOTE 11—PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS The components of net periodic benefit costs for all significant plans were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Defined Benefit Pension Plans Service cost $ $ $ $ Interest cost Expected return on plan assets Amortization of prior service credit Amortization of net loss Net periodic benefit cost $ $ $ $ Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Other Postretirement Plans Service cost $ $ $ $ Interest cost Amortization of prior service cost Amortization of net gain — — Net periodic benefit cost $ $ $ $ As of September 30, 2015 and December 31, 2014, the Company’s benefit obligations included primarily in “Other noncurrent obligations” in the condensed consolidated balance sheets were $189.0 million and $196.6 million, respectively. The net periodic benefit costs are recognized in the condensed consolidated statement of operations as “Cost of sales” and “Selling, general and administrative expenses.” The Company made cash contributions of approximately $1.9 million and $9.5 million during the three and nine months ended September 30, 2015, respectively. The Company expects to make additional cash contributions, including benefit payments to unfunded plans, of approximately $8.3 million to its defined benefit plans for the remainder of 2015. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation | |
Stock-Based Compensation | NOTE 12 —STOCK-BASED COMPENSATION Restricted Stock Awards issued by the Parent On June 17, 2010, Bain Capital Everest Manager Holding SCA (“the Parent” ), an affiliate of Bain Capital , authorized the issuance of up to 750,000 shares in time-based and performance-based restricted stock to certain key members of management. Any related compensation associated with these awards is allocated to the Company from the Parent. With the adoption of the Company’s 2014 Omnibus Incentive Plan (see discussion below), no further restricted stock awards will be issued by the Parent on behalf of the Company . Time-based Restricted Stock Awards For the nine month period ended September 30, 2015, there were no grants of time-based restricted stock awards. Total compensation expense for time-based restricted stock awards was $0.6 million and $1.1 million for the three months ended September 30, 2015 and 2014, respectively, and $2.7 million and $5.8 million for the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015, there was $2.4 million of total unrecognized compensation cost related to time-based restricted stock awards , which is expected to be recognized over a weighted-average period of 1.8 years. Modified Time -based Restricted Stock Awards For the nine month period ended September 30, 2015, there were no grants of modified time-based restricted stock awards. Total compensation expense recognized for modified time-based restricted stock awards was $0.9 million and $1.3 million for the three months ended September 30, 2015 and 2014, respectively, and $2.7 m illion and $1.3 million for the nine months ended September 30, 2015 and 2014 , respectively. As of September 30, 2015, there was $6.4 million of total unrecognized compensation cost related to the modified time-based restricted stock awards, which is expected to be recognized over a weighted-average period of 1.8 years. Management Retention Awards During the year ended December 31, 2012, the Parent agreed to retention awards with certain officers. These awards generally vest over one to four years, and are payable upon vesting subject to the participant’s continued employment with the Company on the vesting date. Compensation expense related to these retention awards is equivalent to the value of the award, and is being recognized ratably over the applicable service period. Total compensation expense for these retention awards was $0.1 million and $0.2 million for the three months ended September 30, 2015 and 2014, respectively, and $0.3 million and $0.7 million for the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015, there was $0.1 million in unrecognized compensation cost related to these retention awards. This cost is expected to be recognized over a period of 0.3 years. 2014 Omnibus Incentive Plan In connecti on with the IPO, the Company’s Board of D irectors approved the Trinseo S.A. 2014 Omnibus Incentive Plan (“2014 Omnibus Plan”), adopted on May 28, 2014, under which the maximum number of shares of common stock that may be delivered upon satisfaction of awards granted under such plan is 4.5 million shares. During the nine months ended September 30, 2015, the Board of Directors of the Company approved equity award grants for cer tain directors, executives, and employees, comprised of restricted share units (or RSUs) and options to purchase shares. The RSUs granted to executives and employees vest in full on the third anniversary of the date of grant, generally subject to the employee remaining continuously employed by the Company on the vesting date. RSUs granted to directors of the Company vest in full on the first anniversary of the date of grant. Upon a termination of employment due to the employee’s death or retirement or a termination of employment by the Company without cause in connection with a restructuring or redundancy or due to the employee’s disability prior to the vesting date, the RSUs will vest in full or in part, depending on the type of termination. In the event employment is terminated for cause, all unvested RSUs will be forfeited. Dividends and dividend equivalents will not accumulate on unvested RSUs. Compensation costs for the RSUs are measured at the grant date based on the fair value of the award and are recognized ratably as expense over the applicable vesting term. The option awards, which contain an exercise term of nine years from the date of grant, vest in three equal annual installments beginning on the first anniversary of the date of grant, generally subject to the employee remaining continuously employed on the applicable vesting date. Upon a termination of employment due to the employee’s death or retirement or a termination of employment by the Company without cause in connection with a restructuring or redundancy or due to the employee’s disability prior to a vesting date, the options will vest in full or will continue to vest on the original vesting schedule, depending on the type of termination. In the event employment is terminated for cause, all vested and unvested options will be forfeited. Compensation cost for the option awards is measured at the grant date based on the fair value of the award and is recognized as expense over the appropriate service period utilizing graded vesting. The fair value of RSUs is equal to the fair market value of the Company’s common shares based on the closing price on the date of grant. During the three months ended September 30, 2015, the Company granted no RSUs. During the nine months ended September 30, 2015, the Company granted 436,323 RSUs at a weighted- average grant date fair value of $18.67 per unit. Total compensation expense recognized for the RSUs was $0.7 million and $1.4 million for the three and nine months ended September 30, 2015, respectively. As of September 30, 2015, there was $6.4 million of total unrecognized compensation cost related to the RSUs, which is expected to be recognized over a weighted-average period of 2.3 years . The fair value for option awards is computed using the Black-Scholes pricing model, whose significant inputs and assumptions are determined as of the date of grant. Determining the fair value of the option awards requires considerable judgment, including estimating the expected term of stock options and the expected volatility of the Company’s stock price. During the three months ended September 30, 2015, the Company granted no option awards. During the nine months ended September 30, 2015, the Company granted 607,382 option awards to purchase common shares at a weighted-average grant date fair value of $7.82 per option award. Since the Company’s equity interests were privately held prior to the IPO in June 2014, there is limited publicly traded stock history, and as a result the expected volatility used in the Black-Scholes pricing model is based on the historical volatility of similar companies’ stock that are publicly traded as well as the Company’s debt-to-equity ratio. Until such time that the Company has enough publicly traded stock history to determine expected volatility based solely on its stock, estimated volatility of options granted will be based on a combination of our historical volatility and similar companies’ stock that are publicly traded. The expected term of options represents the period of time that options granted are expected to be outstanding. For the grants presented herein, the simplified method was used to calculate the expected term of options, given the Company’s limited historical exercise data. The risk-free interest rate for the periods within the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is assumed to be zero based on historical and expected dividend activity. The following are the weighted-average assumptions used within the Black-Scholes pricing model for grants during the nine months ended September 30, 2015: Nine Months Ended September 30, 2015 Expected term (in years) Expected volatility % Risk-free interest rate % Dividend yield % Total compensation expense for the option awards was $0.9 million and $2.3 million for the three and nine months ended September 30, 2015, respectively. As of September 30, 2015, there was $2.4 million of total unrecognized compensation cost related to the option awards, which is expected to be recognized over a weighted-average period of 2.4 years . |
Related Party and Dow Transacti
Related Party and Dow Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party and Dow Transactions | |
Related Party and Dow Transactions | NOTE 13 —RELATED PARTY TRANSACTIONS AND DOW TRANSACTIONS In connection with the Acquisition, the Company entered into a ten year initial term advisory agreement with Bain Capital (the “Advisory Agreement”) wherein Bain Capital provides management and consulting services and financial and other advisory services to the Company. The Advisory Agreement terminated upon consummation of the Company’s IPO in June 2014 and pursuant to the terms of the Advisory Agreement, the Company paid $23.3 million of termination fees representing acceleration of the advisory fees for the remainder of the original term. The termination fee was paid in June 2014 using the proceeds from the IPO, and was recorded as an expense within “Selling, general and administrative expenses” in the condensed consolidated statement of operations for the nine months ended September 30, 2014 . Bain Capital will continue to provide an immaterial level of ad hoc advisory services for the Company going forward. In conjunction with the above, we incurred Bain Capital fees (including out-of-pocket expenses) of zero and $0.1 million for the three months ended September 30, 2015 and 2014, respectively, and $0.1 million and $2.2 million for the nine months ended September 30, 2015 and 2014 , respectively (excluding the termination fees noted above). Bain Capital also provide d advice pursuant to a 10 -year transaction services agreement with fees payable equaling 1% of the transaction value of each financing, acquisition or similar transaction. In connection with the IPO, Bain Capital received $2.2 million of transaction fees, which were recorded within “Additional paid-in-capital” on the condensed consolidated balance sheet as of September 30, 2015 and December 31, 2014. This transaction services agreement also terminated upon consummation of the Company’s IPO in June 2014. In connection with the Acquisition in 2010, certain of the Company’s affiliates entered into a latex joint venture option agreement (the “Latex JV Option Agreement”) with Dow, pursuant to which Dow was granted an irrevocable option to purchase 50% of the issued and outstanding interests in a joint venture to be formed by Dow and the Company’s affiliates with respect to the SB Latex business in Asia, Latin America, the Middle East, Africa, Eastern Europe, Russia and India. On May 30, 2014, the Company’s affiliates entered into an agreement with Dow to terminate the Latex JV Option Agreement, Dow’s rights to the option, and all other obligations thereunder, in exchange for a termination payment of $32.5 million. This termination payment was made on May 30, 2014, and the termination of the Latex JV Option Agreement became effective as of such date. This termination payment was recorded as an expense within “Other expense, net” in the condensed consolidated statements of operations for the nine months ended September 30, 2014. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2015 | |
Segments | |
Segments | NOTE 14 —SEGMENTS Until January 1, 2015, the chief executive officer, who is the Company’s chief operating decision maker, managed the Company’s operations under two divisions, Emulsion Polymers and Plastics, which included the following four reporting segments: Latex, Synthetic Rubber, Styrenics, and Engineered Polymers. Effective January 1, 2015, the Company was reorganized under two new divisions called Performance Materials and Basic Plastics & Feedstocks. The Performance Materials division now includes the following reporting segments: Synthetic Rubber, Latex, and Performance Plastics. The Basic Plastics & Feedstocks division represents a separate segment for financial reporting purposes. This new organizational structure better reflects the nature of the Company by grouping together segments with similar strategies, business drivers and operating characteristics. The information below for the three and nine months ended September 30, 2014 has been recast to reflect this change in reporting segments. The Latex segment produces SB latex primarily for coated paper and packaging board, carpet and artificial turf backings, as well as a number of performance latex applications. The Synthetic Rubber segment produces synthetic rubber products used predominantly in tires, with additional applications in polymer modification and technical rubber goods, including conveyer and fan belts, hoses, seals and gaskets. The Performance Plastics segment produces highly engineered compounds and blends for automotive end markets, as well as consumer electronics, medical, and lighting, collectively consumer essential markets, or CEM. The Basic Plastics & Feedstocks segment includes styrenic polymers, polycarbonate, or PC, and styrene monomer, and also includes the results of the Company’s two 50% -owned joint ventures, Americas Styrenics and Sumika Styron Polycarbonate . Performance Materials Synthetic Performance Basic Plastics Corporate Three Months Ended Latex Rubber Plastics & Feedstocks Unallocated Total September 30, 2015 Sales to external customers $ $ $ $ $ — $ Equity in earnings (losses) of unconsolidated affiliates — — — — EBITDA (1) Investment in unconsolidated affiliates — — — — Depreciation and amortization September 30, 2014 Sales to external customers $ $ $ $ $ — $ Equity in earnings (losses) of unconsolidated affiliates — — — — EBITDA (1) Investment in unconsolidated affiliates — — — — Depreciation and amortization Performance Materials Synthetic Performance Basic Plastics Corporate Nine Months Ended Latex Rubber Plastics & Feedstocks Unallocated Total September 30, 2015 Sales to external customers $ $ $ $ $ — $ Equity in earnings (losses) of unconsolidated affiliates — — — — EBITDA (1) Investment in unconsolidated affiliates — — — — Depreciation and amortization September 30, 2014 Sales to external customers $ $ $ $ $ — $ Equity in earnings (losses) of unconsolidated affiliates — — — — EBITDA (1) Investment in unconsolidated affiliates — — — — Depreciation and amortization (1) Reconciliation of EBITDA to net income (loss) is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Total segment EBITDA $ $ $ $ Corporate unallocated Less: Interest expense, net Less: Provision for income taxes Less: Depreciation and amortization Net income (loss) $ $ $ $ Corporate unallocated includes corporate overhead costs and certain other income and expenses , as well as loss on extinguishment of long-term debt . The primary measure of segment operating performance is EBITDA, which is defined as net income (loss) before interest, income taxes, depreciation and amortization. EBITDA is a key metric that is used by management to evaluate business performance in comparison to budgets, forecasts, and prior year financial results, providing a measure that management believes reflects the Company’s core operating performance. EBITDA is useful for analytical purposes; however, it should not be considered an alternative to the Company’s reported GAAP results, as there are limitations in using such financial measures. Other companies in the industry may define EBITDA differently than the Company, and as a result, it may be difficult to use EBITDA, or similarly-named financial measures, that other companies may use to compare the performance of those companies to the Company’s performance. Asset and capital expenditure information is not accounted for at the segment level and consequently is not reviewed or included with the Company’s internal management reporting. Therefore, the Company has not disclosed asset and capital expenditure information for each reportable segment. |
Divestitures
Divestitures | 9 Months Ended |
Sep. 30, 2015 | |
Divestitures | |
Divestitures | NOTE 15—DIVESTITURES EPS Divestiture In June 2013, the Company’s Board of Directors approved the sale of its expandable polystyrene (“EPS”) business within the Company’s Basic Plastics & Feedstocks segment, under a sale and purchase agreement which was signed in July 2013. The sale closed on September 30, 2013, subject to a $0.7 million working capital adjustment, which was paid by the Company during the first quarter of 2014 and is reflected within investing activities in the condensed consolidated statement of cash flows for the nine months ended September 30, 2014. Further, under the terms of the sale and purchase agreement, should the divested EPS business record EBITDA (as defined therein) greater than zero for fiscal year 2014, the Company would receive an incremental payment of €0.5 million. The EBITDA threshold was met for fiscal year 2014 and the Company received the €0.5 million payment (approximately $0.6 million based upon the applicable foreign exchange rate in the period the payment was received) during the first quarter of 2015, which is reflected within cash flows used in investing activities in the condensed consolidated statement of cash flows for the nine months ended September 30, 2015. Livorno Land Sale In April 2014, the Company completed the sale of a portion of land at its manufacturing site in Livorno, Italy for a purchase price of €4.95 million (approximately $6.8 million based upon the applicable foreign exchange rate in the period the payment was received). As a result, the Company recognized a gain on sale of $0.1 million within “Other expense (income) , net” in the condensed consolidated statement of operations for the nine months ended September 30, 2014. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring | |
Restructuring | NOTE 16—RESTRUCTURING Allyn’s Point Plant Shutdown In September 201 5 , the Company approved the plan to close its Allyn’s Point latex manufacturing facility in Gales Ferry, Connecticut. This restructuring plan was a strategic business decision to improve the resul ts of the overall Latex segment due to continuing declines in the coated paper industry in North America. Production at the facility is expected to cease at the end of 2015, followed by decommissioning and demolition in 201 6 . For the three and nine months ended September 30, 2015, the Company recorded restructuring charges of $0.8 million relating to the accelerated depreciation of the related assets at the Allyn’s Point facility and $0.1 million of employee termination benefit charges, which are included within “Selling, general and administrative expenses” in the condensed consolidated statements of operations and were allocated entirely to the Latex segment. The employee termination benefit charges remained accrued in “Accrued expenses and other current liabilities” in the condensed consolidated balance sheet as of September 30, 2015 . The Company expects to incur approximately $6.0 million of incremental accelerated depreciation charges during the fourth quarter of 2015 and $1.0 million of incremental employee termination benefits charges during the fourth quarter of 2015 and first half of 2016 related to this restructuring. The majority of the employee termination benefit charges are expected to be paid by December 31, 2016. Lastly, the Company expects to incur decommissioning and demolition costs associated with this plant shutdown in 2016, the cost of which will be expensed as incurred, within the Latex segment. However, these costs cannot be reasonably estimated at this time. Restructuring in Polycarbonate During the second quarter of 2014, the Company announced a restructuring within its Basic Plastics & Feedstocks segment to exit the commodity market for polycarbonate in North America and to terminate existing arrangements with Dow regarding manufacturing services for the Company at Dow’s Freeport, Texas facility (the “Freeport facility”). The Company also entered into a new long-term supply contract with a third party to supply polycarbonate in North America. These revised arrangements became operational in the fourth quarter of 2014. In addition, the Company executed revised supply contracts for certain raw materials that were processed at its polycarbonate manufacturing facility in Stade, Germany, which took effect January 1, 2015. These revised agreements are expected to facilitate improvements in future results of operations for the Basic Plastics & Feedstocks segment. Production at the Freeport facility ceased as of September 30, 2014, and decommissioning and demolition began thereafter, with completion in the first quarter of 2015. The Company recorded certain restructuring charges during the year ended December 31, 2014 primarily relating to the reimbursement of decommissioning and demolition costs incurred by Dow. For the three and nine months ended September 30, 2014, the Company recorded restructuring charges of $2.0 million and $3.5 million relating to the accelerated depreciation of the related assets at Dow’s Freeport, Texas facility and other charges. Of the additional charges incurred during the remainder of 2014, $4.2 million remained accrued within “Accounts payable” in the condensed consolidated balance sheet as of December 31, 2014. For the nine months ended September 30, 2015, the Company recorded the remainder of the expected restructuring charges of $0.5 million related to the reimbursement of decommissioning and demolition costs incurred by Dow, noting no charges were recorded during the three months ended September 30, 2015. These charges were included in “Selling, general and administrative expenses” in the condensed consolidated statements of operations, and were allocated entirely to the Basic Plastics & Feedstocks segment. There were no remaining amounts accrued in the condensed consolidated balance sheet as of September 30, 2015. Altona Plant Shutdown In July 2013, the Company’s Board of Directors approved the plan to close the Company’s latex manufacturing facility in Altona, Australia. This restructuring plan was a strategic business decision to improve the results of the overall Latex segment. The facility manufactured SB latex used in the carpet and paper markets. Production at the facility ceased in the third quarter of 2013, followed by decommissioning, with demolition throughout most of 2014. For the year ended December 31, 2014, the Company recorded additional net restructuring charges of approximately $2.8 million, related primarily to incremental employee termination benefit charges, contract termination charges, and decommissioning costs (of which $0.7 million and $2.8 million were recorded during the three and nine months ended September 30, 2014, respectively). These charges were included in “Selling, general and administrative expenses” in the condensed consolidated statements of operations, and were allocated entirely to the Latex segment. There were no additional restructuring charges record ed related to the Altona plant shutdown during the three and nine months ended September 30, 2015. Of the remaining balances a s of September 30, 2015 and December 31, 2014, $1.0 million and $1.2 million, respectively, are recorded in “Accrued expenses and other current liabilities” and $0.1 million and $0.9 million, respectively, were recorded in “Other noncurrent liabilities” in the condensed consolidated balance sheet. The following table provides a rollforward of the liability balances associated with the Altona plant shutdown for the nine months ended September 30, 2015: Balance at Balance at December 31, 2014 Expenses Deductions (1) September 30, 2015 Contract termination charges $ $ $ $ Total $ $ $ $ (1) Includes primarily payments made against existing accruals, as well as immaterial impacts of foreign currency remeasurement. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | NOTE 17 —ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The components of accumulated other comprehensive income (AOCI) , net of income taxes, consisted of: Currency Pension & Other Foreign Exchange Translation Postretirement Benefit Cash Flow Three Months Ended September 30, 2015 and 2014 Adjustments Plans, Net Hedges, Net Total Balance at June 30, 2015 $ $ $ $ Other comprehensive income (loss) — Amounts reclassified from AOCI to net income (1) — Balance at September 30, 2015 $ $ $ $ Balance at June 30, 2014 $ $ $ — $ Other comprehensive income (loss) — — Amounts reclassified from AOCI to net income (1) — — Balance at September 30, 2014 $ $ $ — $ Currency Pension & Other Foreign Exchange Translation Postretirement Benefit Cash Flow Nine Months Ended September 30, 2015 and 2014 Adjustments Plans, Net Hedges, Net Total Balance at December 31, 2014 $ $ $ — $ Other comprehensive income (loss) — Amounts reclassified from AOCI to net income (1) — Balance at September 30, 2015 $ $ $ $ Balance at December 31, 2013 $ $ $ — $ Other comprehensive income (loss) — — Amounts reclassified from AOCI to net income (1) — — Balance at September 30, 2014 $ $ $ — $ ____________ (1) The following is a summary of amounts reclassified from AOCI to net income for the three and nine months ended September 30, 2015 and 2014, respectively: Amount Reclassified from AOCI Amount Reclassified from AOCI AOCI Components Three Months Ended September 30, Nine Months Ended September 30, Statement of Operations 2015 2014 2015 2014 Classification Cash flow hedging items Foreign exchange cash flow hedges $ $ — $ $ — Cost of sales Total before tax — — Tax effect — — — — Provision for income taxes Total, net of tax $ $ — $ $ — Amortization of pension and other postretirement benefit plan items Prior service credit $ $ $ $ (a) Net actuarial loss (a) Total before tax Tax effect Provision for income taxes Total, net of tax $ $ $ $ ____________ (a) These AOCI components are included in the computation of net periodic benefit costs (see Note 11). |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings (Loss) Per Share | |
Earnings (Loss) Per Share | NOTE 18 —EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share (“basic EPS”) is computed by dividing net income (loss) available to common shareholders by the weighted average number of the Company’s common shares outstanding for the applicable period. Diluted earnings (loss) per share (“diluted EPS”) is calculated using net income (loss) available to common shareholders divided by diluted weighted-average shares of common shares outstanding during each period, which includes unvested RSUs and stock option awards . Diluted EPS considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. The following table presents basic EPS and diluted EPS for the three and nine months ended September 30, 2015 and 2014, respectively. Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share data) 2015 2014 2015 2014 Earnings (losses): Net income (loss) $ $ $ $ Shares: Weighted-average common shares outstanding Dilutive effect of RSUs and option awards* — — Diluted weighted-average shares outstanding Income (loss) per share: Income (loss) per share—basic $ $ $ $ Income (loss) per share—diluted $ $ $ $ * Refer to Note 12 for discussion of RSUs and option awards granted to certain Company directors and employees. As net loss was reported for the three and nine months ended September 30, 2014, potentially dilutive awards were not included within the calculation of diluted EPS for those periods, as they would have an anti-dilutive effect. |
Recent Accounting Guidance (Pol
Recent Accounting Guidance (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation | |
Recent Accounting Guidance | In April 2014, the Financial Accounting Standards Board (“ FASB ”) issued amendments to guidance for reporting discontinued operations and disposals of components of an entity. The amended guidance requires that a disposal representing a strategic shift that has (or will have) a major effect on an entity’s financial results or a business activity classified as held for sale should be reported as discontinued operations. The amendments also expand the disclosure requirements for discontinued operations and add new disclosures for individually significant dispositions that do not qualify as discontinued operations. The Company adopted this guidance effective January 1, 2015, and the adoption did not have a significant impact on the Company’s financial position, results of operations, or disclosures. In May 2014, the FASB and the International Accounting Standards Board (“IASB”) jointly issued new guidance which clarifies the principles for recognizing revenue and develops a common revenue standard for GAAP and International Financial Reporting Standards (“IFRS”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those go ods or services. This guidance is effective for public entities for annual and interim periods beginning after December 15, 201 7. The Company is currently assessing the impact of adopting this guidance on its financial position and results of operations. In January 2015, the FASB issued guidance to simplify income statement classification by removing the concept of extraordinary items from GAAP. The Company adopted this guidance effective January 1, 2015, and the adoption did not have an impact on the Company’s financial position or results of operations. In April 2015, the FASB issued guidance that requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying value of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. This new guidance, which is to be applied on a retrospective basis, is effective for public companies for annual and interim periods beginning after December 15, 2015, with early adoption permitted. The Company will adopt this guidance effective January 1, 2016, which we do not expect to have a significant impact on the Company’s financial position or results of operations . In July 2015, the FASB issued guidance which simplifies the subsequent measurement of inventory by replacing the lower of cost or market test with a lower of cost or net realizable value (“NRV”) test. NRV is calculated as the estimated selling price less reasonably predictable costs of completion, disposal and transportation. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016, and prospective adoption is required. The Company is currently assessing the impact of adopting this guidance on its financial position and results of operations. |
Investments in Unconsolidated28
Investments in Unconsolidated Affiliates (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investments in Unconsolidated Affiliates | |
Summarized Financial Information of Unconsolidated Affiliates | Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Sales $ $ $ $ Gross profit $ $ $ $ Net income $ $ $ $ |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventories | |
Schedule of Inventories | September 30, December 31, 2015 2014 Finished goods $ $ Raw materials and semi-finished goods Supplies Total $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets | |
Changes in Carrying Amount of Goodwill, by Segment | Performance Materials Synthetic Performance Basic Plastics Latex Rubber Plastics & Feedstocks Total Balance at December 31, 2014 $ $ $ $ $ Foreign currency impact Balance at September 30, 2015 $ $ $ $ $ |
Schedule of Other Intangible Assets | September 30, 2015 December 31, 2014 Estimated Gross Gross Useful Life Carrying Accumulated Carrying Accumulated (Years) Amount Amortization Net Amount Amortization Net Developed technology $ $ $ $ $ $ Manufacturing Capacity Rights Software Software in development N/A — — Other N/A — — — — Total $ $ $ $ $ $ |
Estimated Amortization Expense for Next Five Years | Estimated Amortization Expense for the Next Five Years Remainder of 2015 $ 2016 2017 2018 2019 2020 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt | |
Schedule of Debt | September 30, December 31, 2015 2014 Senior Credit Facility 2020 Revolving Facility $ — $ — 2021 Term Loan B — 2022 Senior Notes USD Notes — Euro Notes — 2019 Senior Notes — Accounts Receivable Securitization Facility — — Other indebtedness Total debt Less: current portion Total long-term debt $ $ |
Redemption Price as Percentage of Principal Amount to Applicable Date of Redemption | Euro Notes USD Notes 12-month period commencing May 1 in Year Percentage Percentage 2018 % % 2019 % % 2020 and thereafter % % |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments | |
Notional Amounts of Most Significant Net Foreign Exchange Hedge Positions Outstanding | September 30, Buy / (Sell) 2015 Chinese Yuan $ Euro $ Indonesian Rupiah $ Swiss Franc $ Japanese Yen $ |
Schedule of Changes in Fair Value of Company's Derivatives Instruments | Gain (Loss) Recognized in Gain (Loss) Recognized in AOCI on Balance Sheet Statement of Operations Three Months Ended September 30, Statement of Operations 2015 2014 2015 2014 Classification Designated as Cash Flow Hedges Foreign exchange cash flow hedges $ $ — $ $ — Cost of sales Total $ $ — $ $ — Net Investment Hedges Euro Notes $ $ — $ — $ — Other expenses, net Total $ $ — $ — $ — Not Designated as Cash Flow Hedges Foreign exchange forward contracts $ — $ — $ $ Other expenses, net Total $ — $ — $ $ Gain (Loss) Recognized in Gain (Loss) Recognized in AOCI on Balance Sheet Statement of Operations Nine Months Ended September 30, Statement of Operations 2015 2014 2015 2014 Classification Designated as Cash Flow Hedges Foreign exchange cash flow hedges $ $ — $ $ — Cost of sales Total $ $ — $ $ — Net Investment Hedges Euro Notes $ $ — $ — $ — Other expenses, net Total $ $ — $ — $ — Not Designated as Cash Flow Hedges Foreign exchange forward contracts $ — $ — $ $ Other expenses, net Total $ — $ — $ $ |
Net Unrealized Gains and Losses Recorded in Consolidated Balance Sheets | September 30, 2015 December 31, 2014 Foreign Exchange Foreign Exchange Foreign Exchange Foreign Exchange Forward Cash Flow Forward Cash Flow Balance Sheet Classification Contracts Hedges Total Contracts Hedges Total Asset Derivatives: Accounts receivable, net of allowance $ $ $ $ $ — $ Deferred charges and other assets — — — — Total asset derivatives $ $ $ $ $ — $ Liability Derivatives: Accounts payable $ $ $ $ $ — $ Other noncurrent obligations — — — — — — Total liability derivatives $ $ $ $ $ — $ |
Gross Amounts of Derivative Instruments and Amounts Offset | Gross Amounts Gross Amounts Net Amounts Recognized in the Offset in the Presented in the Balance Sheet Balance Sheet Balance Sheet Balance at September 30, 2015 Derivative assets $ $ $ Derivative liabilities Balance at December 31, 2014 Derivative assets $ $ $ Derivative liabilities |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Measurements | |
Schedule of Assets and Liabilities at Fair Value on Recurring Basis | September 30, 2015 Quoted Prices in Significant Significant Active Markets for Other Observable Unobservable Identical Items Inputs Inputs Assets (Liabilities) at Fair Value (Level 1) (Level 2) (Level 3) Total Foreign exchange forward contracts—Assets $ — $ $ — $ Foreign exchange forward contracts—(Liabilities) — — Foreign exchange cash flow hedges—Assets — — Foreign exchange cash flow hedges—(Liabilities) — — Total fair value $ — $ $ — $ December 31, 2014 Quoted Prices in Significant Significant Active Markets for Other Observable Unobservable Identical Items Inputs Inputs Assets (Liabilities) at Fair Value (Level 1) (Level 2) (Level 3) Total Foreign exchange forward contracts—Assets $ — $ $ — $ Foreign exchange forward contracts—(Liabilities) — — Total fair value $ — $ $ — $ |
Estimated Fair Value of Outstanding Debt Not Carried at Fair Value | As of As of September 30, 2015 December 31, 2014 2019 Senior Notes $ — $ 2022 Senior Notes USD Notes — Euro Notes — 2021 Term Loan B — Total fair value $ $ |
Provision for Income Taxes (Tab
Provision for Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Provision for Income Taxes | |
Schedule of Effective Tax Rate | Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Effective income tax rate % % % % |
Pension Plans and Other Postr35
Pension Plans and Other Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Defined Benefit Pension Plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule of Net Periodic Benefit Costs | Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Defined Benefit Pension Plans Service cost $ $ $ $ Interest cost Expected return on plan assets Amortization of prior service credit Amortization of net loss Net periodic benefit cost $ $ $ $ |
Other Postretirement Plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule of Net Periodic Benefit Costs | Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Other Postretirement Plans Service cost $ $ $ $ Interest cost Amortization of prior service cost Amortization of net gain — — Net periodic benefit cost $ $ $ $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation | |
Summary of Weighted Average Assumptions Used for Grants | Nine Months Ended September 30, 2015 Expected term (in years) Expected volatility % Risk-free interest rate % Dividend yield % |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segments | |
Reconciliation of Segment Reporting to Consolidated | Performance Materials Synthetic Performance Basic Plastics Corporate Three Months Ended Latex Rubber Plastics & Feedstocks Unallocated Total September 30, 2015 Sales to external customers $ $ $ $ $ — $ Equity in earnings (losses) of unconsolidated affiliates — — — — EBITDA (1) Investment in unconsolidated affiliates — — — — Depreciation and amortization September 30, 2014 Sales to external customers $ $ $ $ $ — $ Equity in earnings (losses) of unconsolidated affiliates — — — — EBITDA (1) Investment in unconsolidated affiliates — — — — Depreciation and amortization Performance Materials Synthetic Performance Basic Plastics Corporate Nine Months Ended Latex Rubber Plastics & Feedstocks Unallocated Total September 30, 2015 Sales to external customers $ $ $ $ $ — $ Equity in earnings (losses) of unconsolidated affiliates — — — — EBITDA (1) Investment in unconsolidated affiliates — — — — Depreciation and amortization September 30, 2014 Sales to external customers $ $ $ $ $ — $ Equity in earnings (losses) of unconsolidated affiliates — — — — EBITDA (1) Investment in unconsolidated affiliates — — — — Depreciation and amortization (1) Reconciliation of EBITDA to net income (loss) is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Total segment EBITDA $ $ $ $ Corporate unallocated Less: Interest expense, net Less: Provision for income taxes Less: Depreciation and amortization Net income (loss) $ $ $ $ |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Altona Plant Shutdown | |
Rollforward of Liability Balances | Balance at Balance at December 31, 2014 Expenses Deductions (1) September 30, 2015 Contract termination charges $ $ $ $ Total $ $ $ $ (1) Includes primarily payments made against existing accruals, as well as immaterial impacts of foreign currency remeasurement. |
Accumulated Other Comprehensi39
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) | |
Components of AOCI, Net of Income Taxes | Currency Pension & Other Foreign Exchange Translation Postretirement Benefit Cash Flow Three Months Ended September 30, 2015 and 2014 Adjustments Plans, Net Hedges, Net Total Balance at June 30, 2015 $ $ $ $ Other comprehensive income (loss) — Amounts reclassified from AOCI to net income (1) — Balance at September 30, 2015 $ $ $ $ Balance at June 30, 2014 $ $ $ — $ Other comprehensive income (loss) — — Amounts reclassified from AOCI to net income (1) — — Balance at September 30, 2014 $ $ $ — $ Currency Pension & Other Foreign Exchange Translation Postretirement Benefit Cash Flow Nine Months Ended September 30, 2015 and 2014 Adjustments Plans, Net Hedges, Net Total Balance at December 31, 2014 $ $ $ — $ Other comprehensive income (loss) — Amounts reclassified from AOCI to net income (1) — Balance at September 30, 2015 $ $ $ $ Balance at December 31, 2013 $ $ $ — $ Other comprehensive income (loss) — — Amounts reclassified from AOCI to net income (1) — — Balance at September 30, 2014 $ $ $ — $ ____________ (1) The following is a summary of amounts reclassified from AOCI to net income for the three and nine months ended September 30, 2015 and 2014, respectively: |
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | Amount Reclassified from AOCI Amount Reclassified from AOCI AOCI Components Three Months Ended September 30, Nine Months Ended September 30, Statement of Operations 2015 2014 2015 2014 Classification Cash flow hedging items Foreign exchange cash flow hedges $ $ — $ $ — Cost of sales Total before tax — — Tax effect — — — — Provision for income taxes Total, net of tax $ $ — $ $ — Amortization of pension and other postretirement benefit plan items Prior service credit $ $ $ $ (a) Net actuarial loss (a) Total before tax Tax effect Provision for income taxes Total, net of tax $ $ $ $ ____________ (a) These AOCI components are included in the computation of net periodic benefit costs (see Note 11). |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings (Loss) Per Share | |
Schedule of Earnings (Loss) per Share Basic and Diluted | Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share data) 2015 2014 2015 2014 Earnings (losses): Net income (loss) $ $ $ $ Shares: Weighted-average common shares outstanding Dilutive effect of RSUs and option awards* — — Diluted weighted-average shares outstanding Income (loss) per share: Income (loss) per share—basic $ $ $ $ Income (loss) per share—diluted $ $ $ $ * Refer to Note 12 for discussion of RSUs and option awards granted to certain Company directors and employees. As net loss was reported for the three and nine months ended September 30, 2014, potentially dilutive awards were not included within the calculation of diluted EPS for those periods, as they would have an anti-dilutive effect. |
Basis of Presentation (Details)
Basis of Presentation (Details) $ / shares in Units, $ in Millions | Jun. 17, 2014USD ($)$ / sharesshares | May. 30, 2014shares | Sep. 30, 2015divisionshares | Dec. 31, 2014segmentdivisionshares |
Basis of Presentation | ||||
Reverse stock split ratio | 0.00229 | |||
Authorized common stock after reverse split | 50,000,000,000 | 50,000,000,000 | 50,000,000,000 | |
Number of divisions | division | 2 | 2 | ||
Number of reportable segments | segment | 4 | |||
IPO [Member] | ||||
Basis of Presentation | ||||
Ordinary shares issued | 11,500,000 | |||
Price per share | $ / shares | $ 19 | |||
Cash proceeds, net of underwriting discounts | $ | $ 203.2 | |||
Over-Allotment Option [Member] | ||||
Basis of Presentation | ||||
Ordinary shares issued | 1,500,000 |
Investments in Unconsolidated42
Investments in Unconsolidated Affiliates (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Investments in Unconsolidated Affiliates | |||||
Number of strategic joint ventures | item | 2 | 2 | |||
Investments in unconsolidated affiliates | $ 191,194 | $ 164,504 | $ 191,194 | $ 164,504 | $ 167,658 |
Dividends received from investing activities | 978 | ||||
AmSty [Member] | |||||
Investments in Unconsolidated Affiliates | |||||
Investments in unconsolidated affiliates | 154,100 | 154,100 | 133,500 | ||
Investment in unconsolidated affiliates-difference between carrying amount and underlying equity | $ 97,200 | $ 97,200 | 108,400 | ||
Percentage of ownership underlying net assets | 50.00% | 50.00% | |||
Amortized weighted average remaining useful life | P5Y | ||||
Dividends received from operating activities | $ 42,500 | 7,500 | $ 87,500 | 20,000 | |
Sumika Styron [Member] | |||||
Investments in Unconsolidated Affiliates | |||||
Investments in unconsolidated affiliates | 37,100 | 37,100 | 34,100 | ||
Investment in unconsolidated affiliates-difference between carrying amount and underlying equity | $ 20,200 | $ 20,200 | $ 21,300 | ||
Percentage of ownership underlying net assets | 50.00% | 50.00% | |||
Amortized weighted average remaining useful life | P10Y | ||||
Dividends received from investing activities | $ 0 | $ 0 | $ 0 | $ 1,000 |
Investments in Unconsolidated43
Investments in Unconsolidated Affiliates - Summarized Financial Information of Unconsolidated Affiliates (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Summarized Financial Information, Net Income | ||||
Sales | $ 447,712 | $ 577,519 | $ 1,388,085 | $ 1,682,571 |
Gross profit | 79,972 | 29,743 | 249,334 | 65,222 |
Net income | $ 61,018 | $ 13,667 | $ 201,498 | $ 24,161 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Inventories | ||
Finished goods | $ 186,568 | $ 235,949 |
Raw materials and semi-finished goods | 172,866 | 205,061 |
Supplies | 31,813 | 32,851 |
Total | $ 391,247 | $ 473,861 |
Goodwill and Intangible Asset45
Goodwill and Intangible Assets - Goodwill, by Segment (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 34,574 |
Foreign currency impact | (2,657) |
Ending Balance | 31,917 |
Latex Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 13,815 |
Foreign currency impact | (1,062) |
Ending Balance | 12,753 |
Synthetic Rubber Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 9,461 |
Foreign currency impact | (727) |
Ending Balance | 8,734 |
Performance Plastics Segment [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 3,243 |
Foreign currency impact | (249) |
Ending Balance | 2,994 |
Basic Plastics & Feedstocks Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 8,055 |
Foreign currency impact | (619) |
Ending Balance | $ 7,436 |
Goodwill and Intangible Asset46
Goodwill and Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Other Intangible Assets | ||
Gross Carrying Amount | $ 230,480 | $ 231,390 |
Accumulated Amortization | (75,286) | (66,032) |
Net | $ 155,194 | 165,358 |
Developed Technology [Member] | ||
Other Intangible Assets | ||
Estimated Useful Life (Years) | 15 years | |
Gross Carrying Amount | $ 177,481 | 188,854 |
Accumulated Amortization | (61,497) | (56,782) |
Net | $ 115,984 | 132,072 |
Manufacturing Capacity Rights [Member] | ||
Other Intangible Assets | ||
Estimated Useful Life (Years) | 6 years | |
Gross Carrying Amount | $ 21,320 | 23,095 |
Accumulated Amortization | (5,186) | (2,809) |
Net | $ 16,134 | 20,286 |
Software [Member] | ||
Other Intangible Assets | ||
Estimated Useful Life (Years) | 5 years | |
Gross Carrying Amount | $ 17,703 | 13,177 |
Accumulated Amortization | (8,603) | (6,441) |
Net | 9,100 | 6,736 |
Software in Development [Member] | ||
Other Intangible Assets | ||
Gross Carrying Amount | 13,976 | 6,000 |
Net | $ 13,976 | 6,000 |
Other [Member] | ||
Other Intangible Assets | ||
Gross Carrying Amount | 264 | |
Net | $ 264 |
Goodwill and Intangible Asset47
Goodwill and Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Goodwill and Intangible Assets | ||||
Amortization expense related to finite-lived intangible assets | $ 4,800 | $ 5,400 | $ 13,700 | $ 14,600 |
Estimated Amortization Expense, Remainder of 2015 | 4,871 | 4,871 | ||
Estimated Amortization Expense, 2016 | 18,931 | 18,931 | ||
Estimated Amortization Expense, 2017 | 18,096 | 18,096 | ||
Estimated Amortization Expense, 2018 | 17,405 | 17,405 | ||
Estimated Amortization Expense, 2019 | 17,158 | 17,158 | ||
Estimated Amortization Expense, 2020 | $ 13,465 | $ 13,465 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instruments | ||
Total debt | $ 1,220,961 | $ 1,202,207 |
Less: current portion | (5,627) | (7,559) |
Total long-term debt | 1,215,334 | 1,194,648 |
Senior Credit Facility [Member] | Term Loans [Member] | ||
Debt Instruments | ||
Total debt | 497,571 | |
USD Notes | ||
Debt Instruments | ||
Total debt | 300,000 | |
Euro Notes | ||
Debt Instruments | ||
Total debt | 420,788 | |
2019 Senior Notes | ||
Debt Instruments | ||
Total debt | 1,192,500 | |
Accounts Receivable Securitization Facility [Member] | ||
Debt Instruments | ||
Total debt | 0 | 0 |
Other Indebtedness [Member] | ||
Debt Instruments | ||
Total debt | $ 2,602 | $ 9,707 |
Debt - Senior Secured Credit Fa
Debt - Senior Secured Credit Facility (Details) - USD ($) $ in Thousands | May. 05, 2015 | May. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | Jan. 31, 2013 |
Debt Instruments | |||||
Repayment of term loans | $ 1,250 | ||||
Senior Credit Facility [Member] | |||||
Debt Instruments | |||||
Maximum borrowing capacity | $ 825,000 | ||||
Credit Facility, amount outstanding | 0 | ||||
Revolving Facility [Member] | 2018 Senior Secured Credit Facility | |||||
Debt Instruments | |||||
Maximum borrowing capacity | $ 300,000 | ||||
Credit Facility, amount outstanding | $ 0 | ||||
Write off of Deferred Debt Issuance Cost | $ 700 | ||||
Unamortized deferred financing fees | $ 7,200 | ||||
Revolving Facility [Member] | Senior Credit Facility [Member] | |||||
Debt Instruments | |||||
Maximum borrowing capacity | $ 325,000 | ||||
Commitment fee (as a percent) | 0.50% | ||||
Funds available for borrowings | 313,000 | ||||
Percentage of Revolving Facility borrowing capacity covenant trigger | 30.00% | ||||
Debt Discount and Deferred Financing Fees Amortization Period | 5 years | ||||
Revolving Facility [Member] | Senior Credit Facility [Member] | Maximum | |||||
Debt Instruments | |||||
Net leverage ratio | 2 | ||||
Revolving Facility [Member] | Deferred Charges and Other Assets | Senior Credit Facility [Member] | |||||
Debt Instruments | |||||
Debt issuance costs | $ 300 | ||||
Swingline Subfacility [Member] | Senior Credit Facility [Member] | |||||
Debt Instruments | |||||
Maximum borrowing capacity | 25,000 | ||||
Letter of Credit [Member] | Senior Credit Facility [Member] | |||||
Debt Instruments | |||||
Maximum borrowing capacity | 35,000 | ||||
Letters of credit, amount outstanding | 12,000 | ||||
Undrawn letters of credit | 10,000 | ||||
Term Loans [Member] | Senior Credit Facility [Member] | |||||
Debt Instruments | |||||
Maximum borrowing capacity | $ 500,000 | ||||
Debt Instrument Discount Rate (as a percent) | 0.25% | ||||
Debt Instrument Periodic Payment as Percent of Original Principal Amount | 0.25% | ||||
Current portion | $ 5,000 | ||||
Debt Discount and Deferred Financing Fees Amortization Period | 6 years 6 months | ||||
Term Loans [Member] | Deferred Charges and Other Assets | Senior Credit Facility [Member] | |||||
Debt Instruments | |||||
Debt issuance costs | $ 12,000 | ||||
Term Loans [Member] | LIBOR [Member] | |||||
Debt Instruments | |||||
Debt instrument, fixed interest charges | 3.25% | ||||
Interest rate floor (as a percent) | 1.00% |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) | May. 13, 2015USD ($) | May. 05, 2015USD ($) | Jul. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | May. 05, 2015EUR (€) | May. 05, 2015USD ($) | Jan. 31, 2013USD ($) |
Debt Instruments | |||||||||
Redemption of Senior Notes | $ 1,192,500,000 | $ 132,500,000 | |||||||
Call premium | 68,603,000 | 3,975,000 | |||||||
Loss on extinguishment of debt | $ 7,390,000 | 95,150,000 | $ 7,390,000 | ||||||
2019 Senior Notes | |||||||||
Debt Instruments | |||||||||
Debt instrument issued | $ 1,325,000,000 | ||||||||
Debt instrument, stated interest rate | 8.75% | ||||||||
Redemption of Senior Notes | $ 1,192,500,000 | $ 132,500,000 | |||||||
Call premium | $ 68,600,000 | ||||||||
Debt instrument, redemption price percentage | 103.00% | ||||||||
Debt Instrument Redemption Price Percentage for Balance Above Threshold | 106.097% | ||||||||
Accrued and unpaid interest | $ 29,600,000 | ||||||||
Loss on extinguishment of debt | 94,500,000 | ||||||||
Write off of Deferred Debt Issuance Cost | $ 25,900,000 | ||||||||
2022 Senior Notes | |||||||||
Debt Instruments | |||||||||
Debt Discount and Deferred Financing Fees Amortization Period | 7 years | ||||||||
2022 Senior Notes | Deferred Charges and Other Assets | |||||||||
Debt Instruments | |||||||||
Debt issuance costs | $ 16,000,000 | ||||||||
2022 Senior Notes | Any Time Prior to May 1, 2018 [Member] | |||||||||
Debt Instruments | |||||||||
Debt instrument, redemption price percentage | 100.00% | ||||||||
Debt Instrument Redemption Price Percentage Of Principal Amount Redeemable Under Certain Conditions | 40.00% | ||||||||
Euro Notes | |||||||||
Debt Instruments | |||||||||
Debt instrument issued | € | € 375,000,000 | ||||||||
Debt instrument, stated interest rate | 6.375% | 6.375% | |||||||
Euro Notes | Any Time Prior to May 1, 2018 [Member] | |||||||||
Debt Instruments | |||||||||
Debt Instrument Redemption Price Percentage Under Certain Conditions (as a percent) | 106.375% | ||||||||
Euro Notes | 12-Month Period Commencing May 1, 2018 [Member] | |||||||||
Debt Instruments | |||||||||
Debt instrument, redemption price percentage | 103.188% | ||||||||
Euro Notes | 12-Month Period Commencing May 1 2019 [Member] | |||||||||
Debt Instruments | |||||||||
Debt instrument, redemption price percentage | 101.594% | ||||||||
Euro Notes | 12-Month Period Commencing May 1 2020 and thereafter [Member] | |||||||||
Debt Instruments | |||||||||
Debt instrument, redemption price percentage | 100.00% | ||||||||
USD Notes | |||||||||
Debt Instruments | |||||||||
Debt instrument issued | $ 300,000,000 | ||||||||
Debt instrument, stated interest rate | 6.75% | 6.75% | |||||||
USD Notes | Any Time Prior to May 1, 2018 [Member] | |||||||||
Debt Instruments | |||||||||
Debt Instrument Redemption Price Percentage Under Certain Conditions (as a percent) | 106.75% | ||||||||
USD Notes | 12-Month Period Commencing May 1, 2018 [Member] | |||||||||
Debt Instruments | |||||||||
Debt instrument, redemption price percentage | 103.375% | ||||||||
USD Notes | 12-Month Period Commencing May 1 2019 [Member] | |||||||||
Debt Instruments | |||||||||
Debt instrument, redemption price percentage | 101.688% | ||||||||
USD Notes | 12-Month Period Commencing May 1 2020 and thereafter [Member] | |||||||||
Debt Instruments | |||||||||
Debt instrument, redemption price percentage | 100.00% |
Debt - Accounts Receivable Secu
Debt - Accounts Receivable Securitization Facility (Details) - Accounts Receivable Securitization Facility [Member] - USD ($) $ in Millions | Apr. 30, 2013 | May. 31, 2013 | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instruments | ||||
Maximum borrowing capacity | $ 160 | $ 200 | ||
Debt instrument, fixed interest charges | 3.25% | 2.60% | ||
Fixed interest charges on available, but undrawn borrowings | 1.50% | 1.40% | ||
Amounts outstanding | $ 0 | $ 0 | ||
Accounts receivable available to support facility | $ 153 | $ 136.1 |
Derivative Instruments (Details
Derivative Instruments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015EUR (€) | Sep. 30, 2015USD ($) | |
Information regarding changes in fair value of derivatives | ||||||
Gain (loss) from settlements | $ 4,435 | $ (13,324) | ||||
Foreign exchange transaction gains (losses) | $ (6,700) | $ 21,800 | $ 900 | 23,400 | ||
Foreign Exchange Cash Flow Hedges | ||||||
Derivative Instruments | ||||||
Original maturity (in years) | 15 months | |||||
Information regarding changes in fair value of derivatives | ||||||
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months | $ (1,000) | |||||
Net Investment Hedge | ||||||
Derivative Instruments | ||||||
Cumulative foreign currency translation loss | $ 4,100 | |||||
Information regarding changes in fair value of derivatives | ||||||
Gain (Loss) Recognized in AOCI on Balance Sheet | (1,635) | (4,073) | ||||
Not Designated as Hedging Instruments [Member] | ||||||
Information regarding changes in fair value of derivatives | ||||||
Gain (Loss) Recognized in Statement of Operations | 4,452 | (19,524) | (9,246) | (19,524) | ||
Not Designated as Hedging Instruments [Member] | Foreign Exchange Cash Flow Hedges | ||||||
Derivative Instruments | ||||||
Derivative contracts, notional amount | (135,000) | |||||
Designated as Hedging Instrument [Member] | ||||||
Information regarding changes in fair value of derivatives | ||||||
Gain (Loss) Recognized in AOCI on Balance Sheet | 97 | (308) | ||||
Gain (Loss) Recognized in Statement of Operations | (17) | 59 | ||||
Foreign Exchange Forward Contracts | ||||||
Information regarding changes in fair value of derivatives | ||||||
Gain (loss) from settlements | 4,500 | 19,500 | (9,200) | 19,500 | ||
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments [Member] | ||||||
Derivative Instruments | ||||||
Derivative contracts, notional amount | (370,400) | |||||
Cost of Sales | Designated as Hedging Instrument [Member] | Foreign Exchange Cash Flow Hedges | ||||||
Information regarding changes in fair value of derivatives | ||||||
Gain (Loss) Recognized in AOCI on Balance Sheet | 97 | (308) | ||||
Gain (Loss) Recognized in Statement of Operations | (17) | 59 | ||||
Other Expense, Net | Net Investment Hedge | ||||||
Information regarding changes in fair value of derivatives | ||||||
Gain (Loss) Recognized in AOCI on Balance Sheet | (1,635) | (4,073) | ||||
Other Expense, Net | Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments [Member] | ||||||
Information regarding changes in fair value of derivatives | ||||||
Gain (Loss) Recognized in Statement of Operations | $ 4,452 | $ (19,524) | $ (9,246) | $ (19,524) | ||
Euro Notes | Net Investment Hedge | ||||||
Derivative Instruments | ||||||
Total debt | € | € 150,000,000 | |||||
Chinese Yuan [Member] | Sell | Not Designated as Hedging Instruments [Member] | Foreign Exchange Cash Flow Hedges | ||||||
Derivative Instruments | ||||||
Derivative contracts, notional amount | (158,543) | |||||
Euro [Member] | Foreign Exchange Forward Contracts | Buy | Not Designated as Hedging Instruments [Member] | ||||||
Derivative Instruments | ||||||
Derivative contracts, notional amount | 94,637 | |||||
Euro [Member] | Euro Notes | Net Investment Hedge | ||||||
Derivative Instruments | ||||||
Total debt | € | € 375,000,000 | |||||
Indonesian Rupiah [Member] | Foreign Exchange Forward Contracts | Sell | Not Designated as Hedging Instruments [Member] | ||||||
Derivative Instruments | ||||||
Derivative contracts, notional amount | (52,218) | |||||
Swiss Franc [Member] | Foreign Exchange Forward Contracts | Buy | Not Designated as Hedging Instruments [Member] | ||||||
Derivative Instruments | ||||||
Derivative contracts, notional amount | 40,835 | |||||
Japanese Yen [Member] | Foreign Exchange Forward Contracts | Sell | Not Designated as Hedging Instruments [Member] | ||||||
Derivative Instruments | ||||||
Derivative contracts, notional amount | $ (8,919) |
Derivative Instruments - Financ
Derivative Instruments - Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Derivatives, Financial Assets and Liabilities | ||
Net Amounts of Assets Presented in the Consolidated Balance Sheet | $ 1,879 | $ 298 |
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | 2,549 | 4,850 |
Accounts Receivable | ||
Derivatives, Financial Assets and Liabilities | ||
Net Amounts of Assets Presented in the Consolidated Balance Sheet | 1,443 | 298 |
Deferred Charges and Other Assets | ||
Derivatives, Financial Assets and Liabilities | ||
Net Amounts of Assets Presented in the Consolidated Balance Sheet | 436 | |
Accounts Payable | ||
Derivatives, Financial Assets and Liabilities | ||
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | 2,549 | 4,850 |
Designated as Hedging Instrument [Member] | Foreign Exchange Cash Flow Hedges | ||
Derivatives, Financial Assets and Liabilities | ||
Net Amounts of Assets Presented in the Consolidated Balance Sheet | 1,143 | |
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | 1,694 | |
Designated as Hedging Instrument [Member] | Foreign Exchange Cash Flow Hedges | Accounts Receivable | ||
Derivatives, Financial Assets and Liabilities | ||
Net Amounts of Assets Presented in the Consolidated Balance Sheet | 707 | |
Designated as Hedging Instrument [Member] | Foreign Exchange Cash Flow Hedges | Deferred Charges and Other Assets | ||
Derivatives, Financial Assets and Liabilities | ||
Net Amounts of Assets Presented in the Consolidated Balance Sheet | 436 | |
Designated as Hedging Instrument [Member] | Foreign Exchange Cash Flow Hedges | Accounts Payable | ||
Derivatives, Financial Assets and Liabilities | ||
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | 1,694 | |
Foreign Exchange Forward Contracts | ||
Derivatives, Financial Assets and Liabilities | ||
Gross Amounts of Recognized Assets | 2,656 | 2,037 |
Gross Amounts of Offset in the Consolidated Balance Sheet | (777) | (1,739) |
Net Amounts of Assets Presented in the Consolidated Balance Sheet | 1,879 | 298 |
Gross Amounts of Recognized Liabilities | 3,326 | 6,589 |
Gross Amounts of Offset in the Consolidated Balance Sheet | (777) | (1,739) |
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | 2,549 | 4,850 |
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments [Member] | ||
Derivatives, Financial Assets and Liabilities | ||
Net Amounts of Assets Presented in the Consolidated Balance Sheet | 736 | 298 |
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | 855 | 4,850 |
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments [Member] | Accounts Receivable | ||
Derivatives, Financial Assets and Liabilities | ||
Net Amounts of Assets Presented in the Consolidated Balance Sheet | 736 | 298 |
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments [Member] | Accounts Payable | ||
Derivatives, Financial Assets and Liabilities | ||
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | $ 855 | $ 4,850 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities at Fair Value, Recurring (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value Measurements | ||
Assets at Fair Value | $ 1,879 | $ 298 |
Liabilities at Fair Value | (2,549) | (4,850) |
Recurring | ||
Fair Value Measurements | ||
Total fair value | (670) | (4,552) |
Recurring | Foreign Exchange Forward Contracts | ||
Fair Value Measurements | ||
Assets at Fair Value | 736 | 298 |
Liabilities at Fair Value | (855) | (4,850) |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value Measurements | ||
Total fair value | (670) | (4,552) |
Recurring | Significant Other Observable Inputs (Level 2) | Foreign Exchange Forward Contracts | ||
Fair Value Measurements | ||
Assets at Fair Value | 736 | 298 |
Liabilities at Fair Value | (855) | $ (4,850) |
Recurring | Foreign Exchange Cash Flow Hedges | ||
Fair Value Measurements | ||
Assets at Fair Value | 1,143 | |
Liabilities at Fair Value | (1,694) | |
Recurring | Foreign Exchange Cash Flow Hedges | Significant Other Observable Inputs (Level 2) | ||
Fair Value Measurements | ||
Assets at Fair Value | 1,143 | |
Liabilities at Fair Value | $ (1,694) |
Fair Value Measurements - Items
Fair Value Measurements - Items not at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value of Debt Instruments | ||
Total fair value of long term debt | $ 1,191,388 | $ 1,212,045 |
2019 Senior Notes | Significant Other Observable Inputs (Level 2) | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | $ 1,212,045 | |
Euro Notes | Significant Other Observable Inputs (Level 2) | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | 405,008 | |
USD Notes | Significant Other Observable Inputs (Level 2) | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | 289,500 | |
Term Loans [Member] | Senior Credit Facility [Member] | Significant Other Observable Inputs (Level 2) | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | $ 496,880 |
Provision for Income Taxes (Det
Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Jul. 31, 2014 | |
Provision for Income Taxes | |||||
Effective tax rate | 28.90% | (56.50%) | 34.00% | (138.30%) | |
Provision for income taxes | $ 21,200 | $ 3,650 | $ 46,600 | $ 21,850 | |
Tax benefit previously unrecognized | 0 | 2,700 | |||
Net deferred tax asset | 7,000 | 7,000 | |||
Internal Revenue Service (IRS) [Member] | |||||
Provision for Income Taxes | |||||
Income Tax Liability (Refund) received from settlement of prior year audit from tax authorities | $ (3,200) | ||||
Luxembourg | |||||
Provision for Income Taxes | |||||
Income (loss) from continuing operations in holding companies | $ (12,900) | $ (22,600) | (73,500) | (119,800) | |
Call premium fees, portion with no tax benefit | 18,600 | ||||
Write-off of deferred financing fees, portion with no tax benefit | $ 5,600 | ||||
Loss on termination of agreement | 32,500 | ||||
Non-deductible expense portion of Advisory Agreement Termination Fee | $ 18,600 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases, Environmental Matters (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure | ||
Accrued obligations for environmental remediation and restoration costs | $ 0 | $ 0 |
Environmental remediation costs | $ 0 | $ 0 |
Commitments and Contingencies58
Commitments and Contingencies - Purchase Commitments (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Maximum | |
Purchase commitment period | 6 years |
Minimum | |
Purchase commitment period | 1 year |
Pension Plans and Other Postr59
Pension Plans and Other Postretirement Benefits - Net Periodic Benefit Costs for Pension and Other Postretirement Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Defined Benefit Pension Plans | ||||
Net periodic benefit cost | ||||
Service cost | $ 4,127 | $ 3,454 | $ 12,503 | $ 10,498 |
Interest cost | 1,302 | 1,902 | 3,949 | 5,778 |
Expected return on plan assets | (404) | (611) | (1,224) | (1,856) |
Amortization of prior service cost (credit) | (405) | (252) | (1,230) | (765) |
Amortization of net (gain) loss | 1,325 | 520 | 4,014 | 1,585 |
Defined Benefit Pension Plans | Cost of Sales and Selling, General and Administrative Expenses | ||||
Net periodic benefit cost | ||||
Net periodic benefit cost (income) | 5,945 | 5,013 | 18,012 | 15,240 |
Amounts recognized in other comprehensive income (loss) | ||||
Net periodic benefit cost (income) | 5,945 | 5,013 | 18,012 | 15,240 |
Other Postretirement Plans | ||||
Net periodic benefit cost | ||||
Service cost | 84 | 74 | 258 | 224 |
Interest cost | 128 | 78 | 401 | 234 |
Amortization of prior service cost (credit) | 26 | 26 | 78 | 78 |
Amortization of net (gain) loss | (37) | (111) | ||
Other Postretirement Plans | Cost of Sales and Selling, General and Administrative Expenses | ||||
Net periodic benefit cost | ||||
Net periodic benefit cost (income) | 238 | 141 | 737 | 425 |
Amounts recognized in other comprehensive income (loss) | ||||
Net periodic benefit cost (income) | $ 238 | $ 141 | $ 737 | $ 425 |
Pension Plans and Other Postr60
Pension Plans and Other Postretirement Benefits - Net Amounts Recognized in Balance Sheet (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |
Net amounts recognized in the balance sheets at December 31 | |||
Employer contributions | $ 1.9 | $ 9.5 | |
Additional cash contributions, including benefit payments to unfunded plans | 8.3 | ||
Other Noncurrent Obligations | |||
Net amounts recognized in the balance sheets at December 31 | |||
Benefit obligations | $ 189 | $ 189 | $ 196.6 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards (Details) - Restricted Stock [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Jun. 17, 2010 | |
Time-Based | |||||
Stock-based Compensation | |||||
Compensation expense | $ 0.6 | $ 1.1 | $ 2.7 | $ 5.8 | |
Unrecognized compensation cost | 2.4 | $ 2.4 | |||
Weighted-average period of recognition | 1 year 9 months 18 days | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Granted, Shares | 0 | ||||
Modified Time-Based | |||||
Stock-based Compensation | |||||
Compensation expense | 0.9 | 1.3 | $ 2.7 | 1.3 | |
Unrecognized compensation cost | 6.4 | $ 6.4 | |||
Weighted-average period of recognition | 1 year 9 months 18 days | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Granted, Shares | 0 | ||||
Management Retention | |||||
Stock-based Compensation | |||||
Compensation expense | 0.1 | $ 0.2 | $ 0.3 | $ 0.7 | |
Unrecognized compensation cost | $ 0.1 | $ 0.1 | |||
Weighted-average period of recognition | 3 months 18 days | ||||
Maximum | Management Retention | |||||
Stock-based Compensation | |||||
Stock awards, vesting period | 4 years | ||||
Minimum | Management Retention | |||||
Stock-based Compensation | |||||
Stock awards, vesting period | 1 year | ||||
Parent [Member] | |||||
Stock-based Compensation | |||||
Number of shares authorized | 750,000 | ||||
Restricted stock, further awards to be issued (in shares) | 0 |
Stock-Based Compensation - 2014
Stock-Based Compensation - 2014 Omnibus Incentive Plan, etc. (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015USD ($)shares | Sep. 30, 2015USD ($)item$ / sharesshares | May. 28, 2014shares | |
Weighted-average assumptions used within Black-Scholes Pricing Model | |||
Expected term (in years) | 5 years 6 months | ||
Expected volatility | 45.00% | ||
Risk-free interest rate | 1.65% | ||
Dividend yield | 0.00% | ||
2014 Omnibus Incentive Plan [Member] | |||
Stock-based Compensation | |||
Common Stock, Capital Shares Reserved for Future Issuance | shares | 4,500,000 | ||
Option Awards granted in period | shares | 0 | ||
Restricted Stock Units [Member] | 2014 Omnibus Incentive Plan [Member] | |||
Stock-based Compensation | |||
Weighted-average period of recognition | 2 years 3 months 18 days | ||
Restricted Stock Units granted during period | shares | 436,323 | ||
Weighted-Average Grant Date Fair Value, RSUs | $ / shares | $ 18.67 | ||
Compensation expense | $ 700 | $ 1,400 | |
Unrecognized compensation cost | 6,400 | $ 6,400 | |
Option Award [Member] | |||
Stock-based Compensation | |||
Weighted-average period of recognition | 2 years 4 months 24 days | ||
Compensation expense | 900 | $ 2,300 | |
Unrecognized compensation cost, options | $ 2,400 | $ 2,400 | |
Option Award [Member] | 2014 Omnibus Incentive Plan [Member] | |||
Stock-based Compensation | |||
Exercise term (in years) | 9 years | ||
Number of vesting installments | item | 3 | ||
Weighted-Average Grant Date Fair Value, options | $ / shares | $ 7.82 | ||
Option Awards granted in period | shares | 607,382 |
Related Party and Dow Transac63
Related Party and Dow Transactions (Details) - USD ($) $ in Thousands | May. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2010 | Dec. 31, 2014 |
Related Party and Dow Transactions | |||||||
Additional paid-in-capital | $ 556,964 | $ 556,964 | $ 547,530 | ||||
Dow [Member] | Latex JV Option Agreement [Member] | |||||||
Related Party and Dow Transactions | |||||||
Ownership option granted (as a percent) | 50.00% | ||||||
Dow [Member] | Other Expense, Net | Latex JV Option Agreement [Member] | |||||||
Related Party and Dow Transactions | |||||||
Loss on termination of agreement | $ 32,500 | ||||||
Bain Capital [Member] | Advisory Agreement [Member] | |||||||
Related Party and Dow Transactions | |||||||
Related party agreement term (in years) | 10 years | ||||||
Expenses from transactions | 0 | $ 100 | $ 100 | $ 2,200 | |||
Bain Capital [Member] | Transaction Services Agreement [Member] | |||||||
Related Party and Dow Transactions | |||||||
Transaction services agreement, period | 10 years | ||||||
Additional paid-in-capital | $ 2,200 | $ 2,200 | $ 2,200 | ||||
Percentage of advisory fees | 1.00% | ||||||
Bain Capital [Member] | Selling, General and Administrative Expenses | Advisory Agreement [Member] | |||||||
Related Party and Dow Transactions | |||||||
Loss on termination of agreement | $ 23,300 |
Segments - Reconciliation of Se
Segments - Reconciliation of Segment Reporting to Consolidated (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)divisionitem | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($)segmentdivision | |
Segment Reporting Information [Line Items] | |||||
Number of divisions | division | 2 | 2 | |||
Number of reportable segments | segment | 4 | ||||
Number Of Joint Ventures | item | 2 | 2 | |||
Sales to external customers | $ 1,027,952 | $ 1,305,493 | $ 3,074,890 | $ 4,005,560 | |
Equity in earnings (losses) of unconsolidated affiliates | 33,489 | 9,267 | 111,037 | 29,595 | |
Investment in unconsolidated affiliates | 191,194 | 164,504 | 191,194 | 164,504 | $ 167,658 |
Depreciation and amortization | $ 23,006 | 27,857 | $ 67,287 | 78,798 | |
AmSty [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 50.00% | 50.00% | |||
Investment in unconsolidated affiliates | $ 154,100 | $ 154,100 | 133,500 | ||
Sumika Styron [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 50.00% | 50.00% | |||
Investment in unconsolidated affiliates | $ 37,100 | $ 37,100 | $ 34,100 | ||
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
EBITDA | 136,457 | 75,445 | 444,978 | 278,090 | |
Corporate Unallocated [Member] | |||||
Segment Reporting Information [Line Items] | |||||
EBITDA | 20,707 | 23,950 | 166,631 | 119,569 | |
Depreciation and amortization | 742 | 1,613 | 2,258 | 3,581 | |
Latex Segment | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Sales to external customers | 254,938 | 328,394 | 740,706 | 975,382 | |
EBITDA | 24,295 | 25,389 | 60,658 | 75,717 | |
Depreciation and amortization | 7,033 | 6,456 | 19,599 | 20,095 | |
Synthetic Rubber Segment | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Sales to external customers | 125,956 | 155,452 | 370,730 | 497,091 | |
EBITDA | 27,397 | 26,590 | 72,035 | 106,722 | |
Depreciation and amortization | 7,619 | 8,653 | 22,787 | 24,298 | |
Performance Plastics Segment [Member] | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Sales to external customers | 179,861 | 207,612 | 562,109 | 619,463 | |
EBITDA | 14,540 | 19,173 | 60,893 | 53,348 | |
Depreciation and amortization | 1,387 | 1,441 | 4,173 | 4,101 | |
Basic Plastics & Feedstocks Segment | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Sales to external customers | 467,197 | 614,035 | 1,401,345 | 1,913,624 | |
Equity in earnings (losses) of unconsolidated affiliates | 33,489 | 9,267 | 111,037 | 29,595 | |
EBITDA | 70,225 | 4,293 | 251,392 | 42,303 | |
Investment in unconsolidated affiliates | 191,194 | 164,504 | 191,194 | 164,504 | |
Depreciation and amortization | $ 6,225 | $ 9,694 | $ 18,470 | $ 26,723 |
Segments - Recon. of EBITDA to
Segments - Recon. of EBITDA to Net Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Less: Interest expense, net | $ 19,489 | $ 30,098 | $ 73,945 | $ 95,518 |
Less Provision for income taxes | 21,200 | 3,650 | 46,600 | 21,850 |
Less Depreciation and amortization | 23,006 | 27,857 | 67,287 | 78,798 |
Net income (loss) | 52,055 | (10,110) | 90,515 | (37,645) |
Operating Segments [Member] | ||||
EBITDA | 136,457 | 75,445 | 444,978 | 278,090 |
Corporate Unallocated [Member] | ||||
EBITDA | 20,707 | 23,950 | 166,631 | 119,569 |
Less Depreciation and amortization | $ 742 | $ 1,613 | $ 2,258 | $ 3,581 |
Divestitures (Details)
Divestitures (Details) € in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2014EUR (€) | Apr. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Sep. 30, 2015EUR (€) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
Disclosures by disposal group | ||||||
Business disposition, working capital adjustment paid | $ 700 | |||||
Loss on sale | (116) | |||||
Livorno, Italy [Member] | ||||||
Disclosures by disposal group | ||||||
Sale of portion of land | € 4,950 | $ 6,800 | ||||
Livorno, Italy [Member] | Other Expense [Member] | ||||||
Disclosures by disposal group | ||||||
Gain on sale of property held-for-sale | $ 100 | |||||
Expandable Polystyrene Business [Member] | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | ||||||
Disclosures by disposal group | ||||||
Business disposition, working capital adjustment paid | $ 700 | |||||
Incremental payment | € 500 | $ 600 |
Restructing (Details)
Restructing (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Altona Plant Shutdown | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 42 | ||||
Accrued charges | $ 1,081 | 1,081 | $ 2,128 | ||
Accelerated Depreciation On Related Assets [Member] | Allyn's Point Plant Shutdown [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 800 | 800 | |||
Expected restructuring charges | 6,000 | 6,000 | |||
Employee Termination Benefits [Member] | Allyn's Point Plant Shutdown [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 100 | 100 | |||
Expected restructuring charges | 1,000 | 1,000 | |||
Contract Termination [Member] | Altona Plant Shutdown | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 42 | ||||
Accrued charges | 1,081 | 1,081 | 2,128 | ||
Other Current Liabilities [Member] | Altona Plant Shutdown | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Accrued charges | 1,000 | 1,000 | 1,200 | ||
Other Noncurrent Obligations | Altona Plant Shutdown | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Accrued charges | 100 | 100 | 900 | ||
Selling, General and Administrative Expenses | Latex Segment | Altona Plant Shutdown | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 700 | $ 2,800 | 2,800 | ||
Dow [Member] | Restructuring in Polycarbonate [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Accrued charges | 0 | 0 | |||
Dow [Member] | Accounts Payable | Restructuring in Polycarbonate [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Accrued charges | $ 4,200 | ||||
Dow [Member] | Selling, General and Administrative Expenses | Basic Plastics & Feedstocks Segment | Decommisioning and demolition | Restructuring in Polycarbonate [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 0 | $ 2,000 | $ 500 | $ 3,500 |
Restructuring - Rollforward of
Restructuring - Rollforward of Liability Balances (Details) - Altona Plant Shutdown $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance at beginning of period | $ 2,128 |
Expenses | (42) |
Deductions | (1,005) |
Balance at end of period | 1,081 |
Contract Termination [Member] | |
Restructuring Reserve [Roll Forward] | |
Balance at beginning of period | 2,128 |
Expenses | (42) |
Deductions | (1,005) |
Balance at end of period | $ 1,081 |
Accumulated Other Comprehensi69
Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss), Net of Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance | $ 320,865 | $ 343,202 | ||
Balance | $ 345,251 | $ 417,071 | 345,251 | 417,071 |
Currency Translation Adjustment | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance | (96,669) | 105,794 | (17,755) | 116,146 |
Other comprehensive income (loss) before reclassifications | 1,234 | (84,868) | (77,680) | (95,220) |
Balance | (95,435) | 20,926 | (95,435) | 20,926 |
Pension & Other Postretirement Benefit Plans, Net | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance | (55,834) | (27,188) | (57,462) | (27,768) |
Amounts reclassified from AOCI to net income | 797 | 286 | 2,425 | 866 |
Balance | (55,037) | (26,902) | (55,037) | (26,902) |
Foreign Exchange Cash Flow Hedges, Net | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance | (405) | |||
Other comprehensive income (loss) before reclassifications | 114 | (367) | ||
Amounts reclassified from AOCI to net income | (17) | 59 | ||
Balance | (308) | (308) | ||
Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance | (152,908) | 78,606 | (75,217) | 88,378 |
Other comprehensive income (loss) before reclassifications | 1,348 | (84,868) | (78,047) | (95,220) |
Amounts reclassified from AOCI to net income | 780 | 286 | 2,484 | 866 |
Balance | $ (150,780) | $ (5,976) | $ (150,780) | $ (5,976) |
Accumulated Other Comprehensi70
Accumulated Other Comprehensive Income (Loss) - Reclassification (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income (loss) before income taxes | $ 73,255 | $ (6,460) | $ 137,115 | $ (15,795) |
Tax effect | (21,200) | (3,650) | (46,600) | (21,850) |
Currency Translation Adjustment | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of Sales | (17) | 59 | ||
Pension & Other Postretirement Benefit Plans, Net | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income (loss) before income taxes | 1,150 | 436 | 3,474 | 1,323 |
Tax effect | (353) | (150) | (1,049) | (457) |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest, Total | 797 | 286 | 2,425 | 866 |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Prior service credit | (380) | (227) | (1,153) | (689) |
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net actuarial loss | 1,530 | $ 663 | 4,627 | $ 2,012 |
Foreign Exchange Cash Flow Hedges, Net | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income (loss) before income taxes | (17) | 59 | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest, Total | $ (17) | $ 59 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) $ / shares in Units, shares in Thousands, $ in Thousands | May. 30, 2014 | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014USD ($)$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014USD ($)$ / sharesshares |
Reverse stock split ratio | 0.00229 | ||||
Earnings (losses): | |||||
Net income (loss) | $ | $ 52,055 | $ (10,110) | $ 90,515 | $ (37,645) | |
Shares: | |||||
Weighted average shares- basic | 48,778 | 48,770 | 48,773 | 41,693 | |
Dilutive effect of restricted stock units | 211 | 163 | |||
Diluted weighted average shares outstanding | 48,989 | 48,770 | 48,936 | 41,693 | |
Income (loss) per share: | |||||
Income (loss) per share- basic | $ / shares | $ 1.07 | $ (0.21) | $ 1.86 | $ (0.90) | |
Income (loss) per share- diluted | $ / shares | $ 1.06 | $ (0.21) | $ 1.85 | $ (0.90) | |
Parent [Member] | |||||
Earnings (losses): | |||||
Net income (loss) | $ | $ 52,055 | $ (10,110) | $ 90,515 | $ (37,645) |