Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 04, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-36473 | |
Entity Registrant Name | Trinseo S.A. | |
Entity Incorporation, State or Country Code | N4 | |
Entity Tax Identification Number | 00-0000000 | |
Entity Address, Address Line One | 1000 Chesterbrook Boulevard | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, Address Line Three | Berwyn | |
Entity Address, City or Town | Berwyn, PA 19312 | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19312 | |
City Area Code | 610 | |
Local Phone Number | 240-3200 | |
Title of 12(b) Security | Ordinary Shares, par value $0.01 per share | |
Trading Symbol | TSE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 38,238,977 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001519061 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 440.1 | $ 456.2 |
Accounts receivable, net of allowance for doubtful accounts (March 31, 2020: $6.7; December 31, 2019: $5.3) | 576 | 570.8 |
Inventories | 405.5 | 438.2 |
Other current assets | 16.6 | 25.9 |
Total current assets | 1,438.2 | 1,491.1 |
Investments in unconsolidated affiliates | 197.9 | 188.1 |
Property, plant and equipment, net of accumulated depreciation (March 31, 2020: $702.9; December 31, 2019: $665.7) | 572.4 | 625.8 |
Other assets | ||
Goodwill | 66.2 | 67.7 |
Other intangible assets, net | 188.1 | 191.5 |
Right of use assets - operating | 77.2 | 71.4 |
Deferred income tax assets | 78.7 | 67.5 |
Deferred charges and other assets | 38.7 | 55.7 |
Total other assets | 448.9 | 453.8 |
Total assets | 2,657.4 | 2,758.8 |
Current liabilities | ||
Short-term borrowings and current portion of long-term debt | 11.5 | 11.1 |
Accounts payable | 301.9 | 343 |
Current lease liabilities - operating | 14.8 | 14.1 |
Income taxes payable | 1.9 | 5 |
Accrued expenses and other current liabilities | 151.4 | 154.4 |
Total current liabilities | 481.5 | 527.6 |
Noncurrent liabilities | ||
Long-term debt, net of unamortized deferred financing fees | 1,162.2 | 1,162.6 |
Noncurrent lease liabilities - operating | 64.1 | 58 |
Deferred income tax liabilities | 45.9 | 41.5 |
Other noncurrent obligations | 300.7 | 300.2 |
Total noncurrent liabilities | 1,572.9 | 1,562.3 |
Commitments and contingencies (Note 15) | ||
Shareholders' equity | ||
Ordinary shares, $0.01 nominal value, 50,000.0 shares authorized (March 31, 2020: 48.8 shares issued and 38.2 shares outstanding; December 31, 2019: 48.8 shares issued and 39.0 shares outstanding) | 0.5 | 0.5 |
Additional paid-in-capital | 575.7 | 574.7 |
Treasury shares, at cost (March 31, 2020: 10.68 shares; December 31, 2019: 9.8 shares) | (548.2) | (524.9) |
Retained earnings | 729.2 | 781 |
Accumulated other comprehensive loss | (154.2) | (162.4) |
Total shareholders' equity | 603 | 668.9 |
Total liabilities and shareholders' equity | $ 2,657.4 | $ 2,758.8 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Condensed Consolidated Balance Sheets | ||
Allowance for doubtful accounts | $ 6.7 | $ 5.3 |
Accumulated depreciation | $ 702.9 | $ 665.7 |
Ordinary shares, nominal value | $ 0.01 | $ 0.01 |
Ordinary shares, shares authorized | 50,000,000,000 | 50,000,000,000 |
Ordinary shares, shares issued | 48,800,000 | 48,800,000 |
Ordinary shares, shares outstanding | 38,200,000 | 39,000,000 |
Treasury stock, shares | 10,600,000 | 9,800,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Consolidated Statements of Operations | ||
Net sales | $ 853.5 | $ 1,013.1 |
Cost of sales | 783.8 | 915.7 |
Gross profit | 69.7 | 97.4 |
Selling, general and administrative expenses | 77.5 | 68.8 |
Equity in earnings of unconsolidated affiliates | 9.8 | 32.2 |
Impairment charges | 38.3 | |
Operating income (loss) | (36.3) | 60.8 |
Interest expense, net | 10.3 | 10.2 |
Other expense (income), net | 1.6 | 4 |
Income (loss) before income taxes | (48.2) | 46.6 |
Provision for (benefit from) income taxes | (11.9) | 10.8 |
Net income (loss) | $ (36.3) | $ 35.8 |
Weighted average shares- basic | 38.5 | 41.3 |
Net income (loss) per share- basic | $ (0.94) | $ 0.87 |
Weighted average shares- diluted | 38.5 | 41.8 |
Net income (loss) per share- diluted | $ (0.94) | $ 0.86 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||
Net income (loss) | $ (36.3) | $ 35.8 |
Other comprehensive income (loss), net of tax | ||
Cumulative translation adjustments | 10.7 | (0.3) |
Net gain (loss) on cash flow hedges | (3.7) | 0.1 |
Pension and other postretirement benefit plans: | ||
Net gain (loss) arising during period (net of tax of: $0.1 and $(0.2)) | 0.6 | (2) |
Amounts reclassified from accumulated other comprehensive income (loss) | 0.6 | 1 |
Total other comprehensive income (loss), net of tax | 8.2 | (1.2) |
Comprehensive income (loss) | $ (28.1) | $ 34.6 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||
Net loss arising during period, tax (benefit) expense | $ 0.1 | $ (0.2) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Millions, $ in Millions | Ordinary Shares | Additional Paid-In Capital | Treasury Shares | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total |
Balance at beginning of period at Dec. 31, 2018 | $ 0.5 | $ 575.4 | $ (418.1) | $ (142.3) | $ 753.2 | $ 768.7 |
Balance at beginning of period, shares at Dec. 31, 2018 | 41.6 | 7.2 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 35.8 | 35.8 | ||||
Other comprehensive income (loss) | (1.2) | (1.2) | ||||
Stock-based compensation | (6.6) | $ 7 | 0.4 | |||
Stock-based compensation, shares | 0.1 | (0.1) | ||||
Purchase of treasury shares | $ (34) | (34) | ||||
Purchase of treasury shares, shares | (0.7) | 0.7 | ||||
Dividends on ordinary shares | (16.6) | (16.6) | ||||
Balance at end of period at Mar. 31, 2019 | $ 0.5 | 568.8 | $ (445.1) | (143.5) | 772.4 | 753.1 |
Balance at end of period, shares at Mar. 31, 2019 | 41 | 7.8 | ||||
Balance at beginning of period at Dec. 31, 2019 | $ 0.5 | 574.7 | $ (524.9) | (162.4) | 781 | $ 668.9 |
Balance at beginning of period, shares at Dec. 31, 2019 | 39 | 9.8 | 39 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (36.3) | $ (36.3) | ||||
Other comprehensive income (loss) | 8.2 | 8.2 | ||||
Stock-based compensation | 1 | $ 1.7 | 2.7 | |||
Purchase of treasury shares | $ (25) | (25) | ||||
Purchase of treasury shares, shares | (0.8) | 0.8 | ||||
Dividends on ordinary shares | (15.5) | (15.5) | ||||
Balance at end of period at Mar. 31, 2020 | $ 0.5 | $ 575.7 | $ (548.2) | $ (154.2) | $ 729.2 | $ 603 |
Balance at end of period, shares at Mar. 31, 2020 | 38.2 | 10.6 | 38.2 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical)) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Consolidated Statement of Stockholders' Equity | ||
Dividends on ordinary shares | $ 0.40 | $ 0.40 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities | ||
Net income (loss) | $ (36.3) | $ 35.8 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 36.4 | 33.9 |
Amortization of deferred financing fees, issuance discount, and excluded component of hedging instruments | 0.4 | (0.1) |
Deferred income tax | (11.5) | (0.1) |
Share-based compensation expense | 3.2 | 4.1 |
Earnings of unconsolidated affiliates, net of dividends | (9.8) | (19.7) |
Unrealized net gain on foreign exchange forward contracts | (11.5) | (6.6) |
Gain on sale of businesses and other assets | (0.4) | (0.2) |
Impairment charges | 38.3 | |
Pension curtailment and settlement (gain) loss | 0.7 | |
Changes in assets and liabilities | ||
Accounts receivable | (12.7) | (4.8) |
Inventories | 26.8 | 57.7 |
Accounts payable and other current liabilities | (28.9) | 49.4 |
Income taxes payable | (3.3) | (2) |
Other assets, net | (6.9) | 2.8 |
Other liabilities, net | 10.4 | 2.3 |
Cash provided by operating activities | (5.8) | 153.2 |
Cash flows from investing activities | ||
Capital expenditures | (24.3) | (25) |
Net cash received for asset and business acquisitions, net of cash acquired | 0.2 | |
Proceeds from capital expenditures subsidy | 0.7 | |
Proceeds from the sale of businesses and other assets | 11.6 | |
Proceeds from the settlement of hedging instruments | 51.6 | |
Cash provided by (used in) investing activities | 39.1 | (24.3) |
Cash flows from financing activities | ||
Short term borrowings, net | (3.5) | (0.1) |
Purchase of treasury shares | (25) | (37.4) |
Dividends paid | (15.9) | (17.4) |
Proceeds from exercise of option awards | 0.1 | |
Withholding taxes paid on restricted share units | (0.6) | (3.8) |
Repayments of Term Loans | (1.7) | (1.8) |
Cash used in financing activities | (46.7) | (60.4) |
Effect of exchange rates on cash | (2.7) | (1.6) |
Net change in cash, cash equivalents and restricted cash | (16.1) | 66.9 |
Cash, cash equivalents and restricted cash, beginning of period | 457.4 | 452.3 |
Cash, cash equivalents and restricted cash, end of period | 441.3 | 519.2 |
Restricted cash | $ (1.2) | $ (2.8) |
Restricted Cash and Cash Equivalents, Current, Asset, Statement of Financial Position [Extensible List] | Other Assets, Current | Other Assets, Current |
Cash and cash equivalents, end of period | $ 440.1 | $ 516.4 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 and 2019 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 2019 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 February 28, 2020. The Company expects the effects of the COVID-19 pandemic to negatively impact its results of operations, cash flows and financial position, which impact could be material, and dependent on numerous factors that are highly uncertain, for which the ultimate impact cannot be predicted at this time, including the duration and scope of the COVID-19 pandemic. The Company’s condensed consolidated financial statements presented herein reflect the latest estimates and assumptions made by management that affect the reported amounts and related disclosures as of and for the period ended March 31, 2020. However, actual results could differ from these estimates and assumptions. The December 31, 2019 condensed consolidated balance sheet data presented herein was derived from the Company’s December 31, 2019 audited consolidated financial statements, but does not include all disclosures required by GAAP for annual periods. |
Recent Accounting Guidance
Recent Accounting Guidance | 3 Months Ended |
Mar. 31, 2020 | |
Recent Accounting Guidance | |
Recent Accounting Guidance | NOTE 2—RECENT ACCOUNTING GUIDANCE In August 2018, the Financial Accounting Standards Board (“FASB”) issued guidance which aligns the requirements for capitalizing implementation costs incurred in a cloud computing hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted this standard prospectively, effective January 1, 2020. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements. In December 2019, the FASB issued guidance that simplifies the accounting for income taxes. The amended guidance includes removal of certain exceptions to the general principles of Accounting Standards Codification 740, Income Taxes, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. This guidance is effective for public business entities for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. The Company is currently assessing the timing and impacts of adopting this guidance on its consolidated financial statements. In March 2020, the FASB issued optional guidance for a limited period of time to ease the potential burden in accounting for the effects of the transition away from London Interbank Offered Rate (“LIBOR”) and other reference rates. The Company adopted this guidance upon issuance, noting that it did not have a material impact on the Company’s condensed consolidated financial statements. |
Net Sales
Net Sales | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Net Sales | NOTE 3—NET SALES Refer to the Annual Report for information on the Company's accounting policies and further background related to its net sales. The following table provides disclosure of net sales to external customers by primary geographical market (based on the location where sales originated), by segment for the three months ended March 31, 2020 and 2019: Latex Synthetic Performance Three Months Ended Binders Rubber Plastics Polystyrene Feedstocks Total March 31, 2020 United States $ 62.2 $ — $ 70.6 $ — $ 2.6 $ 135.4 Europe 101.9 99.8 165.0 109.8 29.1 505.6 Asia-Pacific 52.3 1.9 49.7 73.0 13.1 190.0 Rest of World 2.7 — 19.8 — — 22.5 Total $ 219.1 $ 101.7 $ 305.1 $ 182.8 $ 44.8 $ 853.5 March 31, 2019 United States $ 63.3 $ — $ 81.8 $ — $ 2.7 $ 147.8 Europe 101.4 124.6 213.3 138.2 40.5 618.0 Asia-Pacific 56.5 — 51.6 90.3 23.6 222.0 Rest of World 2.7 — 22.6 — — 25.3 Total $ 223.9 $ 124.6 $ 369.3 $ 228.5 $ 66.8 $ 1,013.1 |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliates | 3 Months Ended |
Mar. 31, 2020 | |
Investments in Unconsolidated Affiliates | |
Investments in Unconsolidated Affiliates | NOTE 4—INVESTMENTS IN UNCONSOLIDATED AFFILIATES The Company’s investments held in unconsolidated affiliates are accounted for by the equity method. The Company is currently supplemented by one joint venture, Americas Styrenics LLC (“Americas Styrenics,” a styrene and polystyrene joint venture with Chevron Phillips Chemical Company LP). The results of Americas Styrenics are included within its own reporting segment. Americas Styrenics is a privately held company; therefore, a quoted market price for its equity interests is not available. The summarized financial information of the Company’s unconsolidated affiliate is shown below. Three Months Ended March 31, 2020 2019 Sales $ 322.2 $ 369.2 Gross profit $ 7.2 $ 54.2 Net income (loss) $ (8.3) $ 42.9 Americas Styrenics As of March 31, 2020 and December 31, 2019, the Company’s investment in Americas Styrenics was $197.9 million and $188.1 million, respectively, which was $3.5 million and $10.3 million less than the Company’s 50% share of the underlying net assets of Americas Styrenics, respectively. 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 the weighted average remaining useful life of the contributed assets of approximately 1.9 years as of March 31, 2020. The Company did not receive dividends from Americas Styrenics during the three months ended March 31, 2020 and received dividends of |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventories | |
Inventories | NOTE 5—INVENTORIES Inventories consisted of the following: March 31, December 31, 2020 2019 Finished goods $ 200.2 $ 210.8 Raw materials and semi-finished goods 168.5 190.1 Supplies 36.8 37.3 Total $ 405.5 $ 438.2 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt | |
Debt | NOTE 6—DEBT Refer to the Annual Report for definitions of capitalized terms not included herein and further background on the Company’s debt structure discussed below. The Company was in compliance with all debt related covenants as of March 31, 2020 and December 31, 2019. As of March 31, 2020 and December 31, 2019, debt consisted of the following: March 31, 2020 December 31, 2019 Interest Rate as of Maturity Date Carrying Amount Unamortized Deferred Financing Fees (1) Total Debt, Less Unamortized Deferred Financing Fees Carrying Amount Unamortized Deferred Financing Fees (1) Total Debt, Less Senior Credit Facility 2024 Term Loan B 2.989% September 2024 $ 682.6 $ (12.9) $ 669.7 $ 684.3 $ (13.7) $ 670.6 2022 Revolving Facility (2) Various September 2022 — — — — — — 2025 Senior Notes 5.375% September 2025 500.0 (7.0) 493.0 500.0 (7.3) 492.7 Accounts Receivable Securitization Facility (3) Various September 2021 — — — — — — Other indebtedness Various Various 11.0 — 11.0 10.4 — 10.4 Total debt $ 1,193.6 $ (19.9) $ 1,173.7 $ 1,194.7 $ (21.0) $ 1,173.7 Less: current portion (4) (11.5) (11.1) Total long-term debt, net of unamortized deferred financing fees $ 1,162.2 $ 1,162.6 (1) This caption does not include deferred financing fees related to the Company’s revolving facilities, which are included within “Deferred charges and other assets” on the condensed consolidated balance sheets. (2) Under the 2022 Revolving Facility, the Company had a capacity of $375.0 million and funds available for borrowing of $360.9 million (net of $14.1 million outstanding letters of credit) as of March 31, 2020. Additionally, the Company is required to pay a quarterly commitment fee in respect of any unused commitments under this facility equal to 0.375% per annum. On April 3, 2020, the Company drew down $100.0 million from the 2022 Revolving Facility. (3) This facility had a borrowing capacity of $150.0 million as of March 31, 2020. As of March 31, 2020, the Company had approximately $135.6 million of accounts receivable available to support this facility, based on the pool of eligible accounts receivable. In regard to outstanding borrowings, fixed interest charges are 1.95% plus variable commercial paper rates, while for available, but undrawn commitments, fixed interest charges are 1.00%. (4) As of March 31, 2020 and December 31, 2019, the current portion of long-term debt primarily related to $7.0 million of the scheduled future principal payments on the 2024 Term Loan B. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill. | |
Goodwill | NOTE 7—GOODWILL The following table shows changes in the carrying amount of goodwill, by segment, from December 31, 2019 to March 31, 2020: Latex Synthetic Performance Americas Binders Rubber Plastics Polystyrene Feedstocks Styrenics Total Balance at December 31, 2019 $ 15.6 $ 11.0 $ 36.7 $ 4.4 $ — $ — $ 67.7 Foreign currency impact (0.3) (0.2) (0.9) (0.1) — — (1.5) Balance at March 31, 2020 $ 15.3 $ 10.8 $ 35.8 $ 4.3 $ — $ — $ 66.2 |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments [Abstract] | |
Derivative Instruments | NOTE 8—DERIVATIVE INSTRUMENTS The Company’s ongoing business operations expose it to various risks, including fluctuating foreign exchange rates and interest rate risk. To manage these risks, the Company periodically enters into derivative financial instruments, such as foreign exchange forward contracts and interest rate swap agreements. 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 its 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 this exposure, the Company also uses foreign exchange forward contracts to economically hedge the impact of the variability in exchange rates on assets and liabilities denominated in certain foreign currencies. These derivative contracts are not designated for hedge accounting treatment. As of March 31, 2020, the Company had open foreign exchange forward contracts with a notional U.S. dollar equivalent absolute value of $455.4 million. The following table displays the notional amounts of the most significant net foreign exchange hedge positions outstanding as of March 31, 2020: March 31, Buy / (Sell) 2020 Euro $ (325.1) Chinese Yuan $ (43.7) Swiss Franc $ 26.3 Indonesian Rupiah $ (16.3) Korean Won $ (13.1) Open foreign exchange forward contracts as of March 31, 2020 had maturities occurring over a period of two months. 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 March 31, 2020 had maturities occurring over a period of nine months, and had a net notional U.S. dollar equivalent of $63.0 million. Interest Rate Swaps On September 6, 2017, the Company issued the 2024 Term Loan B, which currently bears an interest rate of LIBOR plus 2.00%, subject to a 0.00% LIBOR floor. In order to reduce the variability in interest payments associated with the Company’s variable rate debt, during 2017 the Company entered into certain interest rate swap agreements to convert a portion of these variable rate borrowings into a fixed rate obligation. These interest rate swap agreements are designated as cash flow hedges, and as such, the contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in AOCI to the extent effective, and reclassified to interest expense in the period during which the transaction affects earnings or it becomes probable that the forecasted transaction will not occur. As of March 31, 2020, the Company had open interest rate swap agreements with a net notional U.S. dollar equivalent of $200.0 million which had an effective date of September 29, 2017 and mature in September 2022. Under the terms of the swap agreements, the Company is required to pay the counterparties a stream of fixed interest payments at a rate of 1.81%, and in turn, receives variable interest payments based on 1-month LIBOR (0.99% as of March 31, 2020) from the counterparties. Net Investment Hedge On September 1, 2017, the Company entered into certain fixed-for-fixed cross currency swaps (“CCS”), swapping USD principal and interest payments on its 2025 Senior Notes for euro-denominated payments the 2017 CCS were deemed to be highly effective hedges. A cumulative foreign currency translation loss of $38.0 million was recorded within AOCI related to the 2017 CCS through March 31, 2018. Effective April 1, 2018, the Company elected as an accounting policy to re-designate the 2017 CCS as a net investment hedge (and any future similar hedges) under the spot method. As such, changes in the fair value of the 2017 CCS included in the assessment of effectiveness (changes due to spot foreign exchange rates) were recorded as cumulative foreign currency translation within OCI, and will remain in AOCI until either the sale or substantially complete liquidation of the subsidiary. As of March 31, 2020, no gains or losses have been reclassified from AOCI into income related to the sale or substantially complete liquidation of the relevant subsidiaries. As an additional accounting policy election applied to similar hedges under this new standard, the initial value of any component excluded from the assessment of effectiveness is recognized in income using a systematic and rational method over the life of the hedging instrument. Any difference between the change in the fair value of the excluded component and amounts recognized in income under that systematic and rational method is recognized in AOCI. Prior to April 1, 2018, no components were excluded from the assessment of effectiveness for any of the Company’s existing net investment hedges. As of April 1, 2018, the initial excluded component value related to the 2017 CCS was $23.6 million, which the Company elected to amortize as a reduction of “Interest expense, net” in the condensed consolidated statements of operations using the straight-line method over the remaining term of the 2017 CCS. Additionally, the accrual of periodic USD and euro-denominated interest receipts and payments under the terms of the 2017 CCS were recognized within “Interest expense, net” in the condensed consolidated statements of operations. On February 26, 2020, the Company settled its 2017 CCS and replaced it with a new CCS arrangement (the “2020 CCS”) that carried substantially the same terms as the 2017 CCS. Upon settlement of the 2017 CCS, the Company realized net cash proceeds of $51.6 million. The remaining $13.8 million unamortized balance of the initial excluded component related to the 2017 CCS at the time of settlement is no longer being amortized following the settlement and will remain in AOCI until either the sale or substantially complete liquidation of the relevant subsidiaries. Under the 2020 CCS, the Company notionally exchanged $500.0 million at an interest rate of 5.375% for €459.3 million at a weighted average interest rate of 3.672% for approximately 2.7 years, with a final maturity of November 3, 2022. The cash flows under the 2020 CCS are aligned with the Company’s principal and interest obligations on its 5.375% 2025 Senior Notes. Summary of Derivative Instruments The following table presents the effect of the Company’s derivative instruments, including those not designated for hedge accounting treatment, on the condensed consolidated statements of operations for the three months ended March 31, 2020 and 2019: Location and Amount of Gain (Loss) Recognized in Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Cost of Interest expense, net Other expense, net Cost of Interest expense, net Other expense, net Total amount of income and expense line items presented in the statements of operations in which the effects of derivative instruments are recorded $ 783.8 $ 10.3 $ 1.6 $ 915.7 $ 10.2 $ 4.0 The effects of cash flow hedge instruments: Foreign exchange cash flow hedges Amount of gain reclassified from AOCI into income $ 0.2 $ — $ — $ 0.6 $ — $ — Interest rate swaps Amount of gain (loss) reclassified from AOCI into income $ — $ (0.1) $ — $ — $ 0.3 $ — The effects of net investment hedge instruments: Cross currency swaps (CCS) Amount of gain excluded from effectiveness testing (1) $ — $ 3.4 $ — $ — $ 4.0 $ — The effects of derivatives not designated as hedge instruments: Foreign exchange forward contracts Amount of gain recognized in income $ — $ — $ 13.8 $ — $ — $ 2.7 (1) Amount for the three months ended March 31, 2020 includes the effects of the 2017 CCS through its settlement on February 26, 2020 and the effects of the 2020 CCS from when it was entered into on February 26, 2020 through March 31, 2020. The following table presents the effect of cash flow and net investment hedge accounting on AOCI for the three months ended March 31, 2020 and 2019: Gain (Loss) Recognized in AOCI on Balance Sheet Three Months Ended March 31, 2020 2019 Designated as Cash Flow Hedges Foreign exchange cash flow hedges $ 2.1 $ 2.3 Interest rate swaps (5.8) (2.2) Total $ (3.7) $ 0.1 Designated as Net Investment Hedges Cross currency swaps (CCS) (1) $ 22.9 $ 11.5 Total $ 22.9 $ 11.5 (1) Amount for the three months ended March 31, 2020 includes the effect on AOCI from the 2017 CCS through its settlement on February 26, 2020 and the effect on AOCI from the 2020 CCS from when it was entered into on February 26, 2020 through March 31, 2020. The Company recorded gains of $13.8 million and $2.7 million during the three months ended March 31, 2020 and 2019, respectively, from settlements and changes in the fair value of outstanding forward contracts (not designated as hedges). The gains from these forward contracts offset net foreign exchange transaction losses of $14.0 million and $3.1 million during the three months ended March 31, 2020 and 2019, respectively, which resulted from the re-measurement 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 statements of cash flows. The Company expects to reclassify in the next twelve months an approximate $1.3 million net loss from AOCI into earnings related to the Company’s outstanding foreign exchange cash flow hedges and interest rate swaps as of March 31, 2020 based on current foreign exchange rates. The following tables summarize the gross and net unrealized gains and losses, as well as the balance sheet classification, of outstanding derivatives recorded in the condensed consolidated balance sheets: March 31, 2020 Foreign Foreign Exchange Exchange Interest Cross Balance Sheet Forward Cash Flow Rate Currency Classification Contracts Hedges Swaps Swaps Total Asset Derivatives: Accounts receivable, net of allowance $ 7.0 $ 1.6 $ — $ 4.8 $ 13.4 Gross derivative asset position 7.0 1.6 — 4.8 13.4 Less: Counterparty netting (0.1) — — — (0.1) Net derivative asset position $ 6.9 $ 1.6 $ — $ 4.8 $ 13.3 Liability Derivatives: Accounts payable $ (0.1) $ — $ (2.9) $ — $ (3.0) Other noncurrent obligations — — (4.3) (1.4) (5.7) Gross derivative liability position (0.1) — (7.2) (1.4) (8.7) Less: Counterparty netting 0.1 — — — 0.1 Net derivative liability position $ — $ — $ (7.2) $ (1.4) $ (8.6) Total net derivative position $ 6.9 $ 1.6 $ (7.2) $ 3.4 $ 4.7 December 31, 2019 Foreign Foreign Exchange Exchange Interest Cross Balance Sheet Forward Cash Flow Rate Currency Classification Contracts Hedges Swaps Swaps Total Asset Derivatives: Accounts receivable, net of allowance $ 1.1 $ — $ — $ 8.6 $ 9.7 Deferred charges and other assets — — — 19.2 19.2 Gross derivative asset position 1.1 — — 27.8 28.9 Less: Counterparty netting (0.4) — — — (0.4) Net derivative asset position $ 0.7 $ — $ — $ 27.8 $ 28.5 Liability Derivatives: Accounts payable $ (5.7) $ (0.5) $ (0.4) $ — $ (6.6) Other noncurrent obligations — — (1.0) — (1.0) Gross derivative liability position (5.7) (0.5) (1.4) — (7.6) Less: Counterparty netting 0.5 — — — 0.5 Net derivative liability position $ (5.2) $ (0.5) $ (1.4) $ — $ (7.1) Total net derivative position $ (4.5) $ (0.5) $ (1.4) $ 27.8 $ 21.4 Forward contracts, interest rate swaps, and cross currency swaps 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, these derivative instruments are recorded on a net basis by counterparty within the condensed consolidated balance sheets. Refer to Notes 9 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 AOCI. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | NOTE 9—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 March 31, 2020 and December 31, 2019: March 31, 2020 Quoted Prices in Active Markets for Identical Items Significant Other Observable Inputs Significant Unobservable Inputs Assets (Liabilities) at Fair Value (Level 1) (Level 2) (Level 3) Total Foreign exchange forward contracts—Assets $ — $ 6.9 $ — $ 6.9 Foreign exchange cash flow hedges—Assets — 1.6 — 1.6 Interest rate swaps—(Liabilities) — (7.2) — (7.2) Cross currency swaps—Assets — 4.8 — 4.8 Cross currency swaps—(Liabilities) — (1.4) — (1.4) Total fair value $ — $ 4.7 $ — $ 4.7 December 31, 2019 Quoted Prices in Active Markets for Identical Items Significant Other Observable Inputs Significant Unobservable Inputs Assets (Liabilities) at Fair Value (Level 1) (Level 2) (Level 3) Total Foreign exchange forward contracts—Assets $ — $ 0.7 $ — $ 0.7 Foreign exchange forward contracts—(Liabilities) — (5.2) — (5.2) Foreign exchange cash flow hedges—(Liabilities) — (0.5) — (0.5) Interest rate swaps—(Liabilities) — (1.4) — (1.4) Cross currency swaps—Assets — 27.8 — 27.8 Total fair value $ — $ 21.4 $ — $ 21.4 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, such as interest rate yield curves and currency spot and forward rates. Significant inputs to the valuation for these derivative instruments 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. Nonrecurring Fair Value Measurements The Company’s financial assets measured at fair value on a nonrecurring basis as of March 31, 2020 were as follows: March 31, 2020 Quoted Prices in Active Markets for Identical Items Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Assets: Boehlen styrene monomer property, plant and equipment $ — $ — $ 3.4 $ 3.4 Schkopau PBR property, plant and equipment — — 1.5 1.5 Total fair value $ — $ — $ 4.9 $ 4.9 In 2020, the Company continued its strategy to focus efforts and increase investments in certain product offerings serving the following applications, which are less cyclical and offer significantly higher growth and margin potential: coatings, adhesives, sealants, and elastomers applications (“CASE”) within the Latex Binders segment; engineered materials applications within the Performance Plastics segment; and solution styrene butadiene rubber (“SSBR”) within the Synthetic Rubber segment. As a result of continuing this strategy and other management considerations, in March of 2020, the Company initiated a consultation process with the Economic Council and Works Councils of Trinseo Deutschland regarding the disposition of its styrene monomer assets in Boehlen, Germany and its polybutadiene rubber (“PBR,” specifically nickel and neodymium-PBR) assets in Schkopau, Germany. Based on the Company’s evaluation of these asset groups, it determined that the long-lived assets at both locations should be assessed for impairment during the three months ended March 31, 2020. These assessments indicated that the carrying values of the asset groups at each location were not recoverable when compared to the expected undiscounted future cash flows from the operation and potential disposition of these assets. Based upon the Company’s assessment, it concluded that the fair value of the Boehlen styrene monomer and Schkopau PBR asset groups totaled $3.4 million and $1.5 million, respectively, as of March 31, 2020. Therefore, the Company recorded impairment charges on the Boehlen styrene monomer assets and the Schkopau PBR assets of $10.3 million and $28.0 million, respectively, during the three months ended March 31, 2020, which are included within “Impairment charges” on the condensed consolidated statements of operations. The fair value of the depreciable assets at each location was determined through an analysis of the underlying fixed asset records in conjunction with the use of industry experience and available market data. There were no other financial assets and no financial liabilities measured at fair value on a nonrecurring basis as of March 31, 2020 and there were no financial assets or liabilities measured at fair value on a nonrecurring basis as of December 31, 2019. 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 March 31, 2020 and December 31, 2019: As of As of March 31, 2020 December 31, 2019 2025 Senior Notes $ 419.8 $ 503.7 2024 Term Loan B 578.9 686.4 Total fair value $ 998.7 $ 1,190.1 The fair value of the Company’s debt facilities above (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 March 31, 2020 and December 31, 2019. |
Provision for Income Taxes
Provision for Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Provision for Income Taxes | |
Income Taxes | NOTE 10—PROVISION FOR INCOME TAXES Three Months Ended March 31, 2020 2019 Effective income tax rate 24.6 % 23.1 % Benefit from income taxes for the three months ended March 31, 2020 totaled $11.9 million, resulting in an effective tax rate of 24.6%. Provision for income taxes for the three months ended March 31, 2019 totaled $10.8 million, resulting in an effective tax rate of 23.1%. The effective tax rate for 2020 was impacted by the jurisdictional mix of income before income taxes compared to the prior year, partially offset by the tax benefit related to the impairment charges recorded during the period related to the Company’s assets in Boehlen and Schkopau, Germany. Refer to Note 9 for further information. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure | |
Commitments and Contingencies | NOTE 11—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. Pursuant to the terms of the agreement associated with the Company’s formation, the pre-closing environmental liabilities were retained by Dow, and Dow agreed, subject to temporal, monetary, and other limitations to indemnify the Company from and against environmental liabilities incurred or relating to the predecessor periods. No environmental claims have been asserted or threatened against the Company, and the Company is not a potentially responsible party at any Superfund Sites. As of March 31, 2020 and December 31, 2019, the Company had no accrued obligations for environmental remediation or restoration costs. 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 over the next 12 months. 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 one Litigation Matters 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 employees, 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, financial condition or cash flow. Legal costs, including those legal costs expected to be incurred in connection with a loss contingency, are expensed as incurred. European Commission Request for Information On June 6, 2018, Trinseo Europe GmbH, a subsidiary of the Company, received a Request for Information in the form of a letter from the European Commission Directorate General for Competition (the “European Commission”) related to styrene monomer commercial activity in the European Economic Area. The Company subsequently commenced an internal investigation into these commercial activities and discovered instances of inappropriate activity. On October 28, 2019, a supplemental request for information was received from the European Commission. This request was limited to historical employment, entity, and organizational structures, along with certain financial, styrene purchasing, and styrene market information, as well as certain spot styrene purchase contracts. The Company has provided this information and continues to fully cooperate with the European Commission. Notwithstanding the delivery of the Company’s response to the European Commission, this matter remains open with the European Commission. Based on its findings, the European Commission may decide to: (i) require further information; (ii) conduct unannounced raids of the Company’s premises; (iii) adopt decisions imposing fines, interim measures to halt immediately any anti-competitive behavior, orders for the Company to cease anti-competitive activities, and/or certain behavioral or structural commitments from the Company; or (iv) take no further action. As a result of the above factors, the Company is unable to predict the ultimate outcome of this matter or estimate the range of reasonably possible losses that could be incurred. However, any potential losses incurred could be material to the Company’s results of operations, balance sheet, and cash flows for the period in which they are resolved or become probable and reasonably estimable. |
Pension Plans and Other Postret
Pension Plans and Other Postretirement Benefits | 3 Months Ended |
Mar. 31, 2020 | |
Pension Plans and Other Postretirement Benefits | |
Pension Plans and Other Postretirement Benefits | NOTE 12—PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS The components of net periodic benefit costs for all significant plans were as follows: Three Months Ended March 31, 2020 2019 Defined Benefit Pension Plans Service cost $ 4.3 $ 3.2 Interest cost 0.8 1.3 Expected return on plan assets (0.3) (0.5) Amortization of prior service credit (0.3) (0.3) Amortization of net loss 1.2 0.8 Net settlement loss — 0.7 Net periodic benefit cost $ 5.7 $ 5.2 The Company had less than $0.1 million of net periodic benefit costs for its other postretirement plans for the three months ended March 31, 2020. Net periodic benefit costs for the Company’s other postretirement plans were comprised of $0.1 million in interest cost and $(0.1) million in amortization of net gain for the three months ended March 31, 2019. Service cost related to the Company’s defined benefit pension plans and other postretirement plans is included within “Cost of sales” and “Selling, general and administrative expenses” whereas all other components of net periodic benefit cost are included within “Other expense, net” in the condensed consolidated statements of operations. As of March 31, 2020 and December 31, 2019, the Company’s benefit obligations included primarily in “Other noncurrent obligations” in the condensed consolidated balance sheets were $267.7 million and $270.6 million, respectively. The Company made cash contributions and benefit payments to unfunded plans of approximately $1.9 million during the three months ended March 31, 2020. The Company expects to make additional cash contributions, including benefit payments to unfunded plans, of approximately $5.8 million to its defined benefit plans for the remainder of 2020. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | NOTE 13—SHARE-BASED COMPENSATION Refer to the Annual Report for definitions of capitalized terms not included herein and further background on the Company’s share-based compensation programs included in the tables below. The following table summarizes the Company’s share-based compensation expense for the three months ended March 31, 2020 and 2019, as well as unrecognized compensation cost as of March 31, 2020: As of Three Months Ended March 31, 2020 March 31, Unrecognized Weighted 2020 2019 Compensation Cost Average Years RSUs $ 1.7 $ 2.1 $ 13.0 2.3 Options 1.0 1.1 3.7 1.6 PSUs 0.5 0.9 5.2 2.3 Total share-based compensation expense $ 3.2 $ 4.1 The following table summarizes awards granted and the respective weighted average grant date fair value for the three months ended March 31, 2020: Three Months Ended March 31, 2020 Awards Granted Weighted Average Grant Date Fair Value per Award RSUs 264,604 $ 24.30 Options 503,824 6.57 PSUs 102,545 24.54 Option Awards The following are the weighted average assumptions used within the Black-Scholes pricing model for the Company’s option awards granted during the three months ended March 31, 2020: Three Months Ended March 31, 2020 Expected term (in years) 5.50 Expected volatility 39.70 % Risk-free interest rate 1.24 % Dividend yield 3.25 % The expected volatility assumption is predominantly determined based on the historical volatility of the Company’s publicly traded ordinary shares. The expected term of option awards represents the period of time that option awards granted are expected to be outstanding. For the option awards granted during the three months ended March 31, 2020, the simplified method was used to calculate the expected term, given the Company’s limited historical exercise data. The risk-free interest rate for the periods within the expected term of option awards is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is estimated based on historical and expected dividend activity. Performance Share Units (PSUs) The following are the weighted average assumptions used within the Monte Carlo valuation model for PSUs granted during the three months ended March 31, 2020: Three Months Ended March 31, 2020 Expected term (in years) 3.00 Expected volatility 40.50 % Risk-free interest rate 1.16 % Share Price $ 24.30 Determining the fair value of PSUs requires considerable judgment, including estimating the expected volatility of the price of the Company’s ordinary shares, the correlation between the Company’s share price and that of its peer companies, and the expected rate of interest. The expected volatility for each grant is determined based on the historical volatility of the Company’s ordinary shares. The expected term of PSUs represents the length of the performance period. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for a duration equivalent to the performance period. The share price is the closing price of the Company’s ordinary shares on the grant date. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 3 Months Ended |
Mar. 31, 2020 | |
Acquisitions and Divestitures | |
Acquisitions and Divestitures | NOTE 14—ACQUISITIONS AND DIVESTITURES Acquisition of Latex Binders Assets in Germany On October 1, 2019, the Company completed the acquisition from Dow of its latex binder production facilities and related infrastructure in Rheinmünster, Germany. The transaction included full ownership and operational control of latex production facilities, site infrastructure, and service contracts, as well as certain employees transferring from Dow to Trinseo. This acquisition provided Trinseo with manufacturing assets supporting its strategy to grow its Latex Binders business in applications serving the coatings, adhesives, specialty paper, and sealants markets. The transaction was accounted for as a business combination and did not require any upfront cash outlay from Trinseo. The Company assumed net liabilities of $2.0 million as well as employees transferred in connection with the acquisition during the year ended December 31, 2019. In exchange for the net liabilities assumed, Trinseo received net cash of $6.7 million during the year ended December 31, 2019, and an additional $0.2 million during the three months ended March 31, 2020. The Company allocated the purchase price of the acquisition to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. During the first quarter of 2020, there were no changes to the purchase price allocation for the acquisition. However, further adjustments may be necessary as a result of the Company’s ongoing assessment of additional information related to the fair value of assets acquired and liabilities assumed during the measurement period. Refer to the Annual Report for further information. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2020 | |
Segments | |
Segments | NOTE 15—SEGMENTS The Company operates under six segments: Latex Binders, Synthetic Rubber, Performance Plastics, Polystyrene, Feedstocks, and Americas Styrenics. The Latex Binders segment produces styrene-butadiene latex (“SB latex”) and other latex polymers and binders, primarily for coated paper and packaging board, carpet and artificial turf backings, as well as a broad range of performance latex binders products, including SB latex, SA latex, and vinylidene chloride latex for CASE applications. The Synthetic Rubber segment produces synthetic rubber products, including SSBR, used predominantly in high-performance tires, impact modifiers and technical rubber products, such as conveyer belts, hoses, seals and gaskets. The Performance Plastics segment includes a variety of highly engineered compounds and blends, the Company’s acrylonitrile-butadiene-styrene (“ABS”), styrene-acrylonitrile (“SAN”), and polycarbonate (“PC”) businesses, and engineered materials applications, which includes consumer electronics, medical, and thermoplastic elastomers (“TPEs”) applications. The Polystyrene segment includes a variety of general purpose polystyrenes (“GPPS”) and polystyrene that has been modified with polybutadiene rubber to increase its impact resistant properties (“HIPS”). The Feedstocks segment includes the Company’s production and procurement of styrene monomer outside of North America, which is used as a key raw material in many of the Company’s products, including polystyrene, SB latex, ABS resins, and SSBR. Lastly, the Americas Styrenics segment consists solely of the operations of the Company’s 50%-owned joint venture, Americas Styrenics, a producer of both styrene monomer and polystyrene in North America. The following table provides disclosure of the Company’s segment Adjusted EBITDA, which is used to measure segment operating performance and is defined below, for the three months ended March 31, 2020 and 2019. Asset and intersegment sales information by reporting segment is not regularly reviewed or included with the Company’s reporting to the chief operating decision maker. Therefore, this information has not been disclosed below. Refer to Note 3 for the Company’s net sales to external customers by segment for the three months ended March 31, 2020 and 2019. Latex Synthetic Performance Americas Three Months Ended (1) Binders Rubber Plastics Polystyrene Feedstocks Styrenics March 31, 2020 $ 21.5 $ 15.3 $ 36.7 $ 11.8 $ (16.2) $ 9.8 March 31, 2019 $ 17.5 $ 8.8 $ 35.5 $ 16.8 $ 17.2 $ 32.2 (1) The Company’s primary measure of segment operating performance is Adjusted EBITDA, which is defined as income from continuing operations before interest expense, net; provision for income taxes; depreciation and amortization expense; loss on extinguishment of long-term debt; asset impairment charges; gains or losses on the dispositions of businesses and assets; restructuring charges; acquisition related costs and benefits and other items. Segment Adjusted 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 core operating performance by removing the impact of transactions and events that would not be considered a part of core operations. Other companies in the industry may define segment Adjusted EBITDA differently than the Company, and as a result, it may be difficult to use segment Adjusted EBITDA, or similarly named financial measures, that other companies may use to compare the performance of those companies to the Company’s segment performance. The reconciliation of income before income taxes to segment Adjusted EBITDA is as follows: Three Months Ended March 31, 2020 2019 Income (loss) before income taxes $ (48.2) $ 46.6 Interest expense, net 10.3 10.2 Depreciation and amortization 36.4 33.9 Corporate Unallocated (2) 21.9 26.0 Adjusted EBITDA Addbacks (3) 58.5 11.3 Segment Adjusted EBITDA $ 78.9 $ 128.0 (2) Corporate unallocated includes corporate overhead costs and certain other income and expenses. (3) Adjusted EBITDA addbacks for the three months ended March 31, 2020 and 2019 are as follows: Three Months Ended March 31, 2020 2019 Net gain on disposition of businesses and assets $ (0.4) $ (0.2) Restructuring and other charges (Note 16) 1.8 0.4 Acquisition transaction and integration net costs 0.1 — Asset impairment charges or write-offs (Note 9) 38.3 — Other items (a) 18.7 11.1 Total Adjusted EBITDA Addbacks $ 58.5 $ 11.3 (a) Other items for the three months ended March 31, 2020 and 2019 primarily relate to advisory and professional fees incurred in conjunction with the Company’s initiative to transition business services from Dow, including certain administrative services such as accounts payable, logistics, finance, and IT services. Also included within other items for the three months ended March 31, 2020 are fees incurred in conjunction with certain of the Company’s strategic initiatives. |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring | |
Restructuring | NOTE 16—RESTRUCTURING Refer to the Annual Report for further details regarding the Company’s previously announced restructuring activities included in the tables below. Restructuring charges are included within “Selling, general and administrative expenses” in the condensed consolidated statements of operations. The following table provides detail of the Company’s restructuring charges for the three months ended March 31, 2020 and 2019: Three Months Ended Cumulative March 31, Life-to-date 2020 2019 Charges Segment Corporate Restructuring Program Accelerated depreciation $ 1.3 $ — $ 1.7 Employee termination benefits 0.3 — 17.3 Contract terminations 1.2 — 1.6 Corporate Program Subtotal $ 2.8 $ — $ 20.6 N/A (1) Terneuzen Compounding Restructuring Asset impairment/accelerated depreciation $ — $ — $ 3.1 Employee termination benefits — — 0.7 Contract terminations — — 0.3 Decommissioning and other 0.1 0.2 2.1 Terneuzen Subtotal $ 0.1 $ 0.2 $ 6.2 Performance Plastics (2) Livorno Plant Restructuring Asset impairment/accelerated depreciation $ — $ — $ 14.7 Employee termination benefits — — 5.4 Contract terminations — — 0.3 Decommissioning and other 0.2 0.2 4.4 Livorno Subtotal $ 0.2 $ 0.2 $ 24.8 Latex Binders (3) Total Restructuring Charges $ 3.1 $ 0.4 (1) In November 2019, the Company announced a corporate restructuring program associated with the Company’s shift to a global functional structure and business excellence initiatives to drive greater focus on business process optimization and efficiency. The corporate restructuring program is expected to be substantially completed by the end of 2020. In connection with this restructuring plan, during the three months ended March 31, 2020, the Company incurred employee termination benefit charges of $0.3 million, contract termination charges of $1.2 million, and accelerated depreciation charges of $1.3 million. The Company expects to incur incremental employee termination benefit charges of $0.7 million, inclusive of pension charges of approximately $0.4 million, as well as contract termination charges of $1.3 million and accelerated depreciation charges of $1.3 million through the end of 2020, the majority of which are expected to be paid by the end of 2020. As this was identified as a corporate-related activity, the charges related to this restructuring program were not allocated to a specific segment, but rather included within corporate unallocated. (2) In 2017, the Company announced plans to upgrade its production capability for compounded resins with the construction of a new state-of-the art compounding facility to replace its existing compounding facility in Terneuzen, The Netherlands. As of March 31, 2020, the new facility is complete, along with all substantive transition and quality assurance activities. Production at the prior facility ceased and decommissioning activities began in 2019, and are expected to continue through the first half of 2021. The Company estimates it will incur decommissioning and other charges of approximately $0.6 million through 2021, the majority of which are expected to be paid during the remainder of 2020. (3) In 2016, the Company ceased manufacturing activities at its latex binders manufacturing facility in Livorno, Italy and began decommissioning activities. In 2018, the Company entered into an agreement to sell the land where the former facility is located. This land sale closed in January 2020, for a total purchase price of $12.5 million. A prepayment of $1.3 million of this purchase price was received in 2018, and was recorded within “Accrued expenses and other current liabilities” on the condensed consolidated balance sheets as of December 31, 2019. The remaining purchase price was received in January 2020 when the transaction closed. The Company recorded a net gain on sale of $0.6 million during the three months ended March 31, 2020, which was recorded within “Selling, general and administrative expenses” in the condensed consolidated statements of operations. The following table provides a roll forward of the liability balances associated with the Company’s restructuring activities as of March 31, 2020. Employee termination benefit and contract termination charges are primarily recorded within “Accrued expenses and other current liabilities” in the condensed consolidated balance sheets. The liability balances as of March 31, 2020 primarily represents activity related to the corporate restructuring program. No other individual restructuring activity had a material liability balance as of March 31, 2020. Balance at Balance at December 31, 2019 Expenses Deductions (1) March 31, 2020 Employee termination benefits $ 17.2 $ 0.3 $ (3.7) $ 13.8 Contract terminations 0.7 — (0.5) 0.2 Decommissioning and other — 0.3 (0.3) — Total $ 17.9 $ 0.6 $ (4.5) $ 14.0 (1) Primarily includes payments made against the existing accrual, as well as immaterial impacts of foreign currency remeasurement. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2020 | |
Shareholders' Equity. | |
Accumulated Other Comprehensive Income (Loss) | NOTE 17—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The components of AOCI, net of income taxes, consisted of: Cumulative Pension & Other Translation Postretirement Benefit Cash Flow Three Months Ended March 31, 2020 and 2019 Adjustments Plans, Net Hedges, Net Total Balance at December 31, 2019 $ (106.7) $ (56.3) $ 0.6 $ (162.4) Other comprehensive income (loss) 10.7 0.6 (3.6) 7.7 Amounts reclassified from AOCI to net income (1) — 0.6 (0.1) 0.5 Balance as of March 31, 2020 $ (96.0) $ (55.1) $ (3.1) $ (154.2) Balance at December 31, 2018 $ (111.8) $ (39.4) $ 8.9 $ (142.3) Other comprehensive income (loss) (0.3) (2.0) 1.0 (1.3) Amounts reclassified from AOCI to net income (loss) (1) — 1.0 (0.9) 0.1 Balance as of March 31, 2019 $ (112.1) $ (40.4) $ 9.0 $ (143.5) (1) The following is a summary of amounts reclassified from AOCI to net income for the three months ended March 31, 2020 and 2019: Three Months Ended AOCI Components March 31, Statements of Operations 2020 2019 Classification Cash flow hedging items Foreign exchange cash flow hedges $ (0.2) $ (0.6) Cost of sales Interest rate swaps 0.1 (0.3) Interest expense, net Total before tax (0.1) (0.9) Tax effect — — Provision for (benefit from) income taxes Total, net of tax $ (0.1) $ (0.9) Amortization of pension and other postretirement benefit plan items Prior service credit $ (0.3) $ (0.3) (a) Net actuarial loss 1.2 0.9 (a) Net settlement loss — 0.8 (a) Total before tax 0.9 1.4 Tax effect (0.3) (0.4) Provision for (benefit from) income taxes Total, net of tax $ 0.6 $ 1.0 (a) These AOCI components are included in the computation of net periodic benefit costs (see Note 12). ..... |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share | |
Earnings Per Share | NOTE 18—EARNINGS PER SHARE Basic earnings per ordinary share (“basic EPS”) is computed by dividing net income available to ordinary shareholders by the weighted average number of the Company’s ordinary shares outstanding for the applicable period. Diluted earnings per ordinary share (“diluted EPS”) is calculated using net income available to ordinary shareholders divided by diluted weighted average ordinary shares outstanding during each period, which includes unvested RSUs, option awards, and PSUs. Diluted EPS considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential ordinary shares would have an anti-dilutive effect. The following table presents basic EPS and diluted EPS for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, (in millions, except per share data) 2020 2019 Earnings: Net income (loss) $ (36.3) $ 35.8 Shares: Weighted average ordinary shares outstanding 38.5 41.3 Dilutive effect of RSUs, option awards, and PSUs (1) — 0.5 Diluted weighted average ordinary shares outstanding 38.5 41.8 Income (loss) per share: Income (loss) per share—basic $ (0.94) $ 0.87 Income (loss) per share—diluted $ (0.94) $ 0.86 (1) Refer to Note 13 for discussion of RSUs, option awards, and PSUs granted to certain Company directors and employees. As the Company recorded a net loss for the three months ended March 31, 2020, potential shares related to equity-based awards have been excluded from the calculation of diluted EPS, as doing so would be anti-dilutive. For the three months ended March 31, 2019 there were 1.1 million anti-dilutive shares excluded from the computation of diluted EPS. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Basis of Presentation | |
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 March 31, 2020 and 2019 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 2019 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 February 28, 2020. The Company expects the effects of the COVID-19 pandemic to negatively impact its results of operations, cash flows and financial position, which impact could be material, and dependent on numerous factors that are highly uncertain, for which the ultimate impact cannot be predicted at this time, including the duration and scope of the COVID-19 pandemic. The Company’s condensed consolidated financial statements presented herein reflect the latest estimates and assumptions made by management that affect the reported amounts and related disclosures as of and for the period ended March 31, 2020. However, actual results could differ from these estimates and assumptions. The December 31, 2019 condensed consolidated balance sheet data presented herein was derived from the Company’s December 31, 2019 audited consolidated financial statements, but does not include all disclosures required by GAAP for annual periods. |
Net Sales (Tables)
Net Sales (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Sales Attributed to Geographical Areas Based on Location of Sales and Long-lived Assets Attributed to Geographical Areas Based on Asset Location | Latex Synthetic Performance Three Months Ended Binders Rubber Plastics Polystyrene Feedstocks Total March 31, 2020 United States $ 62.2 $ — $ 70.6 $ — $ 2.6 $ 135.4 Europe 101.9 99.8 165.0 109.8 29.1 505.6 Asia-Pacific 52.3 1.9 49.7 73.0 13.1 190.0 Rest of World 2.7 — 19.8 — — 22.5 Total $ 219.1 $ 101.7 $ 305.1 $ 182.8 $ 44.8 $ 853.5 March 31, 2019 United States $ 63.3 $ — $ 81.8 $ — $ 2.7 $ 147.8 Europe 101.4 124.6 213.3 138.2 40.5 618.0 Asia-Pacific 56.5 — 51.6 90.3 23.6 222.0 Rest of World 2.7 — 22.6 — — 25.3 Total $ 223.9 $ 124.6 $ 369.3 $ 228.5 $ 66.8 $ 1,013.1 |
Investments in Unconsolidated_2
Investments in Unconsolidated Affiliates (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investments in Unconsolidated Affiliates | |
Summarized Financial Information of Unconsolidated Affiliates | Three Months Ended March 31, 2020 2019 Sales $ 322.2 $ 369.2 Gross profit $ 7.2 $ 54.2 Net income (loss) $ (8.3) $ 42.9 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventories | |
Schedule of Inventories | March 31, December 31, 2020 2019 Finished goods $ 200.2 $ 210.8 Raw materials and semi-finished goods 168.5 190.1 Supplies 36.8 37.3 Total $ 405.5 $ 438.2 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt | |
Schedule of Debt [Table Text Block] | March 31, 2020 December 31, 2019 Interest Rate as of Maturity Date Carrying Amount Unamortized Deferred Financing Fees (1) Total Debt, Less Unamortized Deferred Financing Fees Carrying Amount Unamortized Deferred Financing Fees (1) Total Debt, Less Senior Credit Facility 2024 Term Loan B 2.989% September 2024 $ 682.6 $ (12.9) $ 669.7 $ 684.3 $ (13.7) $ 670.6 2022 Revolving Facility (2) Various September 2022 — — — — — — 2025 Senior Notes 5.375% September 2025 500.0 (7.0) 493.0 500.0 (7.3) 492.7 Accounts Receivable Securitization Facility (3) Various September 2021 — — — — — — Other indebtedness Various Various 11.0 — 11.0 10.4 — 10.4 Total debt $ 1,193.6 $ (19.9) $ 1,173.7 $ 1,194.7 $ (21.0) $ 1,173.7 Less: current portion (4) (11.5) (11.1) Total long-term debt, net of unamortized deferred financing fees $ 1,162.2 $ 1,162.6 (1) This caption does not include deferred financing fees related to the Company’s revolving facilities, which are included within “Deferred charges and other assets” on the condensed consolidated balance sheets. (2) Under the 2022 Revolving Facility, the Company had a capacity of $375.0 million and funds available for borrowing of $360.9 million (net of $14.1 million outstanding letters of credit) as of March 31, 2020. Additionally, the Company is required to pay a quarterly commitment fee in respect of any unused commitments under this facility equal to 0.375% per annum. On April 3, 2020, the Company drew down $100.0 million from the 2022 Revolving Facility. (3) This facility had a borrowing capacity of $150.0 million as of March 31, 2020. As of March 31, 2020, the Company had approximately $135.6 million of accounts receivable available to support this facility, based on the pool of eligible accounts receivable. In regard to outstanding borrowings, fixed interest charges are 1.95% plus variable commercial paper rates, while for available, but undrawn commitments, fixed interest charges are 1.00%. (4) As of March 31, 2020 and December 31, 2019, the current portion of long-term debt primarily related to $7.0 million of the scheduled future principal payments on the 2024 Term Loan B. |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill. | |
Changes in Carrying Amount of Goodwill, by Segment | Latex Synthetic Performance Americas Binders Rubber Plastics Polystyrene Feedstocks Styrenics Total Balance at December 31, 2019 $ 15.6 $ 11.0 $ 36.7 $ 4.4 $ — $ — $ 67.7 Foreign currency impact (0.3) (0.2) (0.9) (0.1) — — (1.5) Balance at March 31, 2020 $ 15.3 $ 10.8 $ 35.8 $ 4.3 $ — $ — $ 66.2 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments [Abstract] | |
Notional Amounts of Most Significant Net Foreign Exchange Hedge Positions Outstanding | March 31, Buy / (Sell) 2020 Euro $ (325.1) Chinese Yuan $ (43.7) Swiss Franc $ 26.3 Indonesian Rupiah $ (16.3) Korean Won $ (13.1) |
Schedule of Effect of Derivative Instruments on Statements of Operations | Location and Amount of Gain (Loss) Recognized in Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Cost of Interest expense, net Other expense, net Cost of Interest expense, net Other expense, net Total amount of income and expense line items presented in the statements of operations in which the effects of derivative instruments are recorded $ 783.8 $ 10.3 $ 1.6 $ 915.7 $ 10.2 $ 4.0 The effects of cash flow hedge instruments: Foreign exchange cash flow hedges Amount of gain reclassified from AOCI into income $ 0.2 $ — $ — $ 0.6 $ — $ — Interest rate swaps Amount of gain (loss) reclassified from AOCI into income $ — $ (0.1) $ — $ — $ 0.3 $ — The effects of net investment hedge instruments: Cross currency swaps (CCS) Amount of gain excluded from effectiveness testing (1) $ — $ 3.4 $ — $ — $ 4.0 $ — The effects of derivatives not designated as hedge instruments: Foreign exchange forward contracts Amount of gain recognized in income $ — $ — $ 13.8 $ — $ — $ 2.7 (1) Amount for the three months ended March 31, 2020 includes the effects of the 2017 CCS through its settlement on February 26, 2020 and the effects of the 2020 CCS from when it was entered into on February 26, 2020 through March 31, 2020. |
Schedule of Effect of Hedges on AOCI | Gain (Loss) Recognized in AOCI on Balance Sheet Three Months Ended March 31, 2020 2019 Designated as Cash Flow Hedges Foreign exchange cash flow hedges $ 2.1 $ 2.3 Interest rate swaps (5.8) (2.2) Total $ (3.7) $ 0.1 Designated as Net Investment Hedges Cross currency swaps (CCS) (1) $ 22.9 $ 11.5 Total $ 22.9 $ 11.5 (1) Amount for the three months ended March 31, 2020 includes the effect on AOCI from the 2017 CCS through its settlement on February 26, 2020 and the effect on AOCI from the 2020 CCS from when it was entered into on February 26, 2020 through March 31, 2020. |
Schedule of Gross and Net Unrealized Gains and Losses and Balance Sheet Classification | March 31, 2020 Foreign Foreign Exchange Exchange Interest Cross Balance Sheet Forward Cash Flow Rate Currency Classification Contracts Hedges Swaps Swaps Total Asset Derivatives: Accounts receivable, net of allowance $ 7.0 $ 1.6 $ — $ 4.8 $ 13.4 Gross derivative asset position 7.0 1.6 — 4.8 13.4 Less: Counterparty netting (0.1) — — — (0.1) Net derivative asset position $ 6.9 $ 1.6 $ — $ 4.8 $ 13.3 Liability Derivatives: Accounts payable $ (0.1) $ — $ (2.9) $ — $ (3.0) Other noncurrent obligations — — (4.3) (1.4) (5.7) Gross derivative liability position (0.1) — (7.2) (1.4) (8.7) Less: Counterparty netting 0.1 — — — 0.1 Net derivative liability position $ — $ — $ (7.2) $ (1.4) $ (8.6) Total net derivative position $ 6.9 $ 1.6 $ (7.2) $ 3.4 $ 4.7 December 31, 2019 Foreign Foreign Exchange Exchange Interest Cross Balance Sheet Forward Cash Flow Rate Currency Classification Contracts Hedges Swaps Swaps Total Asset Derivatives: Accounts receivable, net of allowance $ 1.1 $ — $ — $ 8.6 $ 9.7 Deferred charges and other assets — — — 19.2 19.2 Gross derivative asset position 1.1 — — 27.8 28.9 Less: Counterparty netting (0.4) — — — (0.4) Net derivative asset position $ 0.7 $ — $ — $ 27.8 $ 28.5 Liability Derivatives: Accounts payable $ (5.7) $ (0.5) $ (0.4) $ — $ (6.6) Other noncurrent obligations — — (1.0) — (1.0) Gross derivative liability position (5.7) (0.5) (1.4) — (7.6) Less: Counterparty netting 0.5 — — — 0.5 Net derivative liability position $ (5.2) $ (0.5) $ (1.4) $ — $ (7.1) Total net derivative position $ (4.5) $ (0.5) $ (1.4) $ 27.8 $ 21.4 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements | |
Schedule of Assets and Liabilities at Fair Value on Recurring Basis | March 31, 2020 Quoted Prices in Active Markets for Identical Items Significant Other Observable Inputs Significant Unobservable Inputs Assets (Liabilities) at Fair Value (Level 1) (Level 2) (Level 3) Total Foreign exchange forward contracts—Assets $ — $ 6.9 $ — $ 6.9 Foreign exchange cash flow hedges—Assets — 1.6 — 1.6 Interest rate swaps—(Liabilities) — (7.2) — (7.2) Cross currency swaps—Assets — 4.8 — 4.8 Cross currency swaps—(Liabilities) — (1.4) — (1.4) Total fair value $ — $ 4.7 $ — $ 4.7 December 31, 2019 Quoted Prices in Active Markets for Identical Items Significant Other Observable Inputs Significant Unobservable Inputs Assets (Liabilities) at Fair Value (Level 1) (Level 2) (Level 3) Total Foreign exchange forward contracts—Assets $ — $ 0.7 $ — $ 0.7 Foreign exchange forward contracts—(Liabilities) — (5.2) — (5.2) Foreign exchange cash flow hedges—(Liabilities) — (0.5) — (0.5) Interest rate swaps—(Liabilities) — (1.4) — (1.4) Cross currency swaps—Assets — 27.8 — 27.8 Total fair value $ — $ 21.4 $ — $ 21.4 |
Schedule of Assets and Liabilities at Fair Value on Nonrecurring Basis | March 31, 2020 Quoted Prices in Active Markets for Identical Items Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Assets: Boehlen styrene monomer property, plant and equipment $ — $ — $ 3.4 $ 3.4 Schkopau PBR property, plant and equipment — — 1.5 1.5 Total fair value $ — $ — $ 4.9 $ 4.9 |
Estimated Fair Value of Outstanding Debt Not Carried at Fair Value | As of As of March 31, 2020 December 31, 2019 2025 Senior Notes $ 419.8 $ 503.7 2024 Term Loan B 578.9 686.4 Total fair value $ 998.7 $ 1,190.1 |
Provision for Income Taxes (Tab
Provision for Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Provision for Income Taxes | |
Schedule of Effective Tax Rate | Three Months Ended March 31, 2020 2019 Effective income tax rate 24.6 % 23.1 % |
Pension Plans and Other Postr_2
Pension Plans and Other Postretirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Pension Plans and Other Postretirement Benefits | |
Schedule of Net Periodic Benefit Costs | Three Months Ended March 31, 2020 2019 Defined Benefit Pension Plans Service cost $ 4.3 $ 3.2 Interest cost 0.8 1.3 Expected return on plan assets (0.3) (0.5) Amortization of prior service credit (0.3) (0.3) Amortization of net loss 1.2 0.8 Net settlement loss — 0.7 Net periodic benefit cost $ 5.7 $ 5.2 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Share-Based Compensation Expense and Unrecognized Compensation Cost | As of Three Months Ended March 31, 2020 March 31, Unrecognized Weighted 2020 2019 Compensation Cost Average Years RSUs $ 1.7 $ 2.1 $ 13.0 2.3 Options 1.0 1.1 3.7 1.6 PSUs 0.5 0.9 5.2 2.3 Total share-based compensation expense $ 3.2 $ 4.1 |
Summary of Awards Granted and Weighted Average Grant-Date Fair Value | Three Months Ended March 31, 2020 Awards Granted Weighted Average Grant Date Fair Value per Award RSUs 264,604 $ 24.30 Options 503,824 6.57 PSUs 102,545 24.54 |
Option Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Weighted-average Assumptions | Three Months Ended March 31, 2020 Expected term (in years) 5.50 Expected volatility 39.70 % Risk-free interest rate 1.24 % Dividend yield 3.25 % |
Performance Share Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Weighted-average Assumptions | Three Months Ended March 31, 2020 Expected term (in years) 3.00 Expected volatility 40.50 % Risk-free interest rate 1.16 % Share Price $ 24.30 |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segments | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Latex Synthetic Performance Americas Three Months Ended (1) Binders Rubber Plastics Polystyrene Feedstocks Styrenics March 31, 2020 $ 21.5 $ 15.3 $ 36.7 $ 11.8 $ (16.2) $ 9.8 March 31, 2019 $ 17.5 $ 8.8 $ 35.5 $ 16.8 $ 17.2 $ 32.2 (1) The Company’s primary measure of segment operating performance is Adjusted EBITDA, which is defined as income from continuing operations before interest expense, net; provision for income taxes; depreciation and amortization expense; loss on extinguishment of long-term debt; asset impairment charges; gains or losses on the dispositions of businesses and assets; restructuring charges; acquisition related costs and benefits and other items. Segment Adjusted 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 core operating performance by removing the impact of transactions and events that would not be considered a part of core operations. Other companies in the industry may define segment Adjusted EBITDA differently than the Company, and as a result, it may be difficult to use segment Adjusted EBITDA, or similarly named financial measures, that other companies may use to compare the performance of those companies to the Company’s segment performance. |
Reconciliation of IBT to Adjusted EBITDA | Three Months Ended March 31, 2020 2019 Income (loss) before income taxes $ (48.2) $ 46.6 Interest expense, net 10.3 10.2 Depreciation and amortization 36.4 33.9 Corporate Unallocated (2) 21.9 26.0 Adjusted EBITDA Addbacks (3) 58.5 11.3 Segment Adjusted EBITDA $ 78.9 $ 128.0 (2) Corporate unallocated includes corporate overhead costs and certain other income and expenses. (3) Adjusted EBITDA addbacks for the three months ended March 31, 2020 and 2019 are as follows: Three Months Ended March 31, 2020 2019 Net gain on disposition of businesses and assets $ (0.4) $ (0.2) Restructuring and other charges (Note 16) 1.8 0.4 Acquisition transaction and integration net costs 0.1 — Asset impairment charges or write-offs (Note 9) 38.3 — Other items (a) 18.7 11.1 Total Adjusted EBITDA Addbacks $ 58.5 $ 11.3 (a) Other items for the three months ended March 31, 2020 and 2019 primarily relate to advisory and professional fees incurred in conjunction with the Company’s initiative to transition business services from Dow, including certain administrative services such as accounts payable, logistics, finance, and IT services. Also included within other items for the three months ended March 31, 2020 are fees incurred in conjunction with certain of the Company’s strategic initiatives. |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring | |
Detail of Restructuring Charges | Three Months Ended Cumulative March 31, Life-to-date 2020 2019 Charges Segment Corporate Restructuring Program Accelerated depreciation $ 1.3 $ — $ 1.7 Employee termination benefits 0.3 — 17.3 Contract terminations 1.2 — 1.6 Corporate Program Subtotal $ 2.8 $ — $ 20.6 N/A (1) Terneuzen Compounding Restructuring Asset impairment/accelerated depreciation $ — $ — $ 3.1 Employee termination benefits — — 0.7 Contract terminations — — 0.3 Decommissioning and other 0.1 0.2 2.1 Terneuzen Subtotal $ 0.1 $ 0.2 $ 6.2 Performance Plastics (2) Livorno Plant Restructuring Asset impairment/accelerated depreciation $ — $ — $ 14.7 Employee termination benefits — — 5.4 Contract terminations — — 0.3 Decommissioning and other 0.2 0.2 4.4 Livorno Subtotal $ 0.2 $ 0.2 $ 24.8 Latex Binders (3) Total Restructuring Charges $ 3.1 $ 0.4 (1) In November 2019, the Company announced a corporate restructuring program associated with the Company’s shift to a global functional structure and business excellence initiatives to drive greater focus on business process optimization and efficiency. The corporate restructuring program is expected to be substantially completed by the end of 2020. In connection with this restructuring plan, during the three months ended March 31, 2020, the Company incurred employee termination benefit charges of $0.3 million, contract termination charges of $1.2 million, and accelerated depreciation charges of $1.3 million. The Company expects to incur incremental employee termination benefit charges of $0.7 million, inclusive of pension charges of approximately $0.4 million, as well as contract termination charges of $1.3 million and accelerated depreciation charges of $1.3 million through the end of 2020, the majority of which are expected to be paid by the end of 2020. As this was identified as a corporate-related activity, the charges related to this restructuring program were not allocated to a specific segment, but rather included within corporate unallocated. (2) In 2017, the Company announced plans to upgrade its production capability for compounded resins with the construction of a new state-of-the art compounding facility to replace its existing compounding facility in Terneuzen, The Netherlands. As of March 31, 2020, the new facility is complete, along with all substantive transition and quality assurance activities. Production at the prior facility ceased and decommissioning activities began in 2019, and are expected to continue through the first half of 2021. The Company estimates it will incur decommissioning and other charges of approximately $0.6 million through 2021, the majority of which are expected to be paid during the remainder of 2020. (3) In 2016, the Company ceased manufacturing activities at its latex binders manufacturing facility in Livorno, Italy and began decommissioning activities. In 2018, the Company entered into an agreement to sell the land where the former facility is located. This land sale closed in January 2020, for a total purchase price of $12.5 million. A prepayment of $1.3 million of this purchase price was received in 2018, and was recorded within “Accrued expenses and other current liabilities” on the condensed consolidated balance sheets as of December 31, 2019. The remaining purchase price was received in January 2020 when the transaction closed. The Company recorded a net gain on sale of $0.6 million during the three months ended March 31, 2020, which was recorded within “Selling, general and administrative expenses” in the condensed consolidated statements of operations. |
Rollforward of Liability Balances | Balance at Balance at December 31, 2019 Expenses Deductions (1) March 31, 2020 Employee termination benefits $ 17.2 $ 0.3 $ (3.7) $ 13.8 Contract terminations 0.7 — (0.5) 0.2 Decommissioning and other — 0.3 (0.3) — Total $ 17.9 $ 0.6 $ (4.5) $ 14.0 (1) Primarily includes payments made against the existing accrual, as well as immaterial impacts of foreign currency remeasurement. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Shareholders' Equity. | |
Components of AOCI, Net of Income Taxes | Cumulative Pension & Other Translation Postretirement Benefit Cash Flow Three Months Ended March 31, 2020 and 2019 Adjustments Plans, Net Hedges, Net Total Balance at December 31, 2019 $ (106.7) $ (56.3) $ 0.6 $ (162.4) Other comprehensive income (loss) 10.7 0.6 (3.6) 7.7 Amounts reclassified from AOCI to net income (1) — 0.6 (0.1) 0.5 Balance as of March 31, 2020 $ (96.0) $ (55.1) $ (3.1) $ (154.2) Balance at December 31, 2018 $ (111.8) $ (39.4) $ 8.9 $ (142.3) Other comprehensive income (loss) (0.3) (2.0) 1.0 (1.3) Amounts reclassified from AOCI to net income (loss) (1) — 1.0 (0.9) 0.1 Balance as of March 31, 2019 $ (112.1) $ (40.4) $ 9.0 $ (143.5) |
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | Three Months Ended AOCI Components March 31, Statements of Operations 2020 2019 Classification Cash flow hedging items Foreign exchange cash flow hedges $ (0.2) $ (0.6) Cost of sales Interest rate swaps 0.1 (0.3) Interest expense, net Total before tax (0.1) (0.9) Tax effect — — Provision for (benefit from) income taxes Total, net of tax $ (0.1) $ (0.9) Amortization of pension and other postretirement benefit plan items Prior service credit $ (0.3) $ (0.3) (a) Net actuarial loss 1.2 0.9 (a) Net settlement loss — 0.8 (a) Total before tax 0.9 1.4 Tax effect (0.3) (0.4) Provision for (benefit from) income taxes Total, net of tax $ 0.6 $ 1.0 (a) These AOCI components are included in the computation of net periodic benefit costs (see Note 12). |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share | |
Schedule of Earnings per Share Basic and Diluted | Three Months Ended March 31, (in millions, except per share data) 2020 2019 Earnings: Net income (loss) $ (36.3) $ 35.8 Shares: Weighted average ordinary shares outstanding 38.5 41.3 Dilutive effect of RSUs, option awards, and PSUs (1) — 0.5 Diluted weighted average ordinary shares outstanding 38.5 41.8 Income (loss) per share: Income (loss) per share—basic $ (0.94) $ 0.87 Income (loss) per share—diluted $ (0.94) $ 0.86 (1) Refer to Note 13 for discussion of RSUs, option awards, and PSUs granted to certain Company directors and employees. As the Company recorded a net loss for the three months ended March 31, 2020, potential shares related to equity-based awards have been excluded from the calculation of diluted EPS, as doing so would be anti-dilutive. For the three months ended March 31, 2019 there were 1.1 million anti-dilutive shares excluded from the computation of diluted EPS. |
Net Sales (Details)
Net Sales (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 853.5 | $ 1,013.1 |
Latex Binders Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 219.1 | 223.9 |
Synthetic Rubber Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 101.7 | 124.6 |
Performance Plastics Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 305.1 | 369.3 |
Polystyrene [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 182.8 | 228.5 |
Feedstocks [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 44.8 | 66.8 |
United States [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 135.4 | 147.8 |
United States [Member] | Latex Binders Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 62.2 | 63.3 |
United States [Member] | Performance Plastics Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 70.6 | 81.8 |
United States [Member] | Feedstocks [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2.6 | 2.7 |
Europe [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 505.6 | 618 |
Europe [Member] | Latex Binders Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 101.9 | 101.4 |
Europe [Member] | Synthetic Rubber Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 99.8 | 124.6 |
Europe [Member] | Performance Plastics Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 165 | 213.3 |
Europe [Member] | Polystyrene [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 109.8 | 138.2 |
Europe [Member] | Feedstocks [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 29.1 | 40.5 |
Asia-Pacific [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 190 | 222 |
Asia-Pacific [Member] | Latex Binders Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 52.3 | 56.5 |
Asia-Pacific [Member] | Synthetic Rubber Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1.9 | |
Asia-Pacific [Member] | Performance Plastics Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 49.7 | 51.6 |
Asia-Pacific [Member] | Polystyrene [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 73 | 90.3 |
Asia-Pacific [Member] | Feedstocks [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 13.1 | 23.6 |
Rest of World [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 22.5 | 25.3 |
Rest of World [Member] | Latex Binders Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2.7 | 2.7 |
Rest of World [Member] | Performance Plastics Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 19.8 | $ 22.6 |
Investments in Unconsolidated_3
Investments in Unconsolidated Affiliates - Summarized Financial Information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)item | Mar. 31, 2019USD ($) | |
Investments in Unconsolidated Affiliates - Summarized Information | ||
Number of joint ventures | item | 1 | |
Summarized Financial Information, Net Income | ||
Sales | $ 322.2 | $ 369.2 |
Gross profit | 7.2 | 54.2 |
Net income | $ (8.3) | $ 42.9 |
Investments in Unconsolidated_4
Investments in Unconsolidated Affiliates - Detail (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Investments in Unconsolidated Affiliates | |||
Investments in unconsolidated affiliates | $ 197.9 | $ 188.1 | |
Americas Styrenics | |||
Investments in Unconsolidated Affiliates | |||
Investments in unconsolidated affiliates | 197.9 | 188.1 | |
Investment in unconsolidated affiliates-difference between carrying amount and underlying equity | $ 3.5 | $ 10.3 | |
Percentage of ownership underlying net assets | 50.00% | 50.00% | |
Amortized weighted average remaining useful life | 1.9 | ||
Dividends received from operating activities | $ 12.5 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventories | ||
Finished goods | $ 200.2 | $ 210.8 |
Raw materials and semi-finished goods | 168.5 | 190.1 |
Supplies | 36.8 | 37.3 |
Total | $ 405.5 | $ 438.2 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Apr. 03, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Feb. 26, 2020 | Dec. 31, 2019 | Sep. 01, 2017 |
Debt Instruments | ||||||
Carrying amount | $ 1,193.6 | $ 1,194.7 | ||||
Unamortized deferred financing fees | (19.9) | (21) | ||||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | 1,173.7 | 1,173.7 | ||||
Less: current portion | (11.5) | (11.1) | ||||
Total long-term debt, net of unamortized deferred financing fees | 1,162.2 | 1,162.6 | ||||
Interest and Debt Expense [Abstract] | ||||||
Interest expense, net | $ 10.3 | $ 10.2 | ||||
Subsequent Event [Member] | ||||||
Debt Instruments | ||||||
Draw down from credit facility | $ 100 | |||||
2024 Term Loan B | ||||||
Debt Instruments | ||||||
Interest rate at end of period (as a percent) | 2.989% | |||||
Carrying amount | $ 682.6 | 684.3 | ||||
Unamortized deferred financing fees | (12.9) | (13.7) | ||||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | 669.7 | 670.6 | ||||
Less: current portion | $ (7) | (7) | ||||
2024 Term Loan B | LIBOR [Member] | ||||||
Debt Instruments | ||||||
Debt instrument, margin rate | 2.00% | |||||
2022 Revolving Facility | ||||||
Debt Instruments | ||||||
Funds available for borrowings | $ 360.9 | |||||
Letters of credit, amount outstanding | $ 14.1 | |||||
Commitment fee (as a percent) | 0.375% | |||||
Maximum borrowing capacity | $ 375 | |||||
2025 Senior Notes | ||||||
Debt Instruments | ||||||
Interest rate | 5.375% | 5.375% | 5.375% | |||
Carrying amount | $ 500 | 500 | ||||
Unamortized deferred financing fees | (7) | (7.3) | ||||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | 493 | 492.7 | ||||
Accounts Receivable Securitization Facility [Member] | ||||||
Debt Instruments | ||||||
Carrying amount | 0 | 0 | ||||
Unamortized deferred financing fees | 0 | 0 | ||||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | $ 0 | 0 | ||||
Commitment fee (as a percent) | 1.00% | |||||
Maximum borrowing capacity | $ 150 | |||||
Accounts receivable available to support facility | $ 135.6 | |||||
Accounts Receivable Securitization Facility [Member] | Base Rate [Member] | ||||||
Debt Instruments | ||||||
Interest rate | 1.95% | |||||
Other Indebtedness [Member] | ||||||
Debt Instruments | ||||||
Carrying amount | $ 11 | 10.4 | ||||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | $ 11 | $ 10.4 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 67.7 |
Foreign currency impact | (1.5) |
Ending Balance | 66.2 |
Latex Binders Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 15.6 |
Foreign currency impact | (0.3) |
Ending Balance | 15.3 |
Synthetic Rubber Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 11 |
Foreign currency impact | (0.2) |
Ending Balance | 10.8 |
Performance Plastics Segment [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 36.7 |
Foreign currency impact | (0.9) |
Ending Balance | 35.8 |
Polystyrene [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 4.4 |
Foreign currency impact | (0.1) |
Ending Balance | $ 4.3 |
Derivative Instruments (Details
Derivative Instruments (Details) € in Millions | Feb. 26, 2020USD ($) | Sep. 01, 2017EUR (€) | Mar. 31, 2020USD ($)item | Feb. 26, 2020EUR (€) | Feb. 26, 2020USD ($) | Dec. 31, 2019USD ($) | Apr. 01, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 01, 2017USD ($) |
Derivative Instruments | |||||||||
Total debt | $ 1,173,700,000 | $ 1,173,700,000 | |||||||
Cumulative foreign currency translation loss | $ 0 | ||||||||
Foreign Exchange Forward Contracts | |||||||||
Derivative Instruments | |||||||||
Derivative term | 2 months | ||||||||
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments - Economic | |||||||||
Derivative Instruments | |||||||||
Derivative contracts, notional amount | $ 455,400,000 | ||||||||
Foreign Exchange Forward Contracts | Designated as Hedging Instrument | |||||||||
Derivative Instruments | |||||||||
Derivative contracts, notional amount | $ 63,000,000 | ||||||||
Derivative term | 9 months | ||||||||
Number of subsidiaries participating | item | 1 | ||||||||
Cross Currency Swap | Net Investment Hedges | |||||||||
Derivative Instruments | |||||||||
Derivative contracts, notional amount | € | € 420 | ||||||||
Derivative term | 2 years 8 months 12 days | 5 years | |||||||
Cross currency swap weighted average interest rate (as a percent) | 3.672% | 3.45% | |||||||
Amount hedged | € 459.3 | $ 500,000,000 | $ 500,000,000 | ||||||
Cumulative translation adjustment, net of tax | $ 38,000,000 | ||||||||
Initial excluded component value | $ 13,800,000 | $ 23,600,000 | |||||||
Cash proceeds | $ 51,600,000 | ||||||||
Interest Rate Swap | |||||||||
Derivative Instruments | |||||||||
Derivative contracts, notional amount | $ 200,000,000 | ||||||||
Fixed interest rate per agreement (as a percent) | 1.81% | ||||||||
LIBOR rate at end of period (as a percent) | 0.99% | ||||||||
2025 Senior Notes | |||||||||
Derivative Instruments | |||||||||
Total debt | $ 493,000,000 | 492,700,000 | |||||||
Interest rate | 5.375% | 5.375% | 5.375% | 5.375% | 5.375% | ||||
2024 Term Loan B | |||||||||
Derivative Instruments | |||||||||
Total debt | $ 669,700,000 | $ 670,600,000 | |||||||
2024 Term Loan B | LIBOR [Member] | |||||||||
Derivative Instruments | |||||||||
Debt instrument, margin rate | 2.00% | ||||||||
Variable rate floor (as a percent) | 0.00% | ||||||||
Euro [Member] | Foreign Exchange Forward Contracts | Sell | Not Designated as Hedging Instruments - Economic | |||||||||
Derivative Instruments | |||||||||
Derivative contracts, notional amount | $ 325,100,000 | ||||||||
Chinese Yuan [Member] | Foreign Exchange Forward Contracts | Sell | Not Designated as Hedging Instruments - Economic | |||||||||
Derivative Instruments | |||||||||
Derivative contracts, notional amount | 43,700,000 | ||||||||
Swiss Franc [Member] | Foreign Exchange Forward Contracts | Buy | Not Designated as Hedging Instruments - Economic | |||||||||
Derivative Instruments | |||||||||
Derivative contracts, notional amount | 26,300,000 | ||||||||
Indonesian Rupiah [Member] | Foreign Exchange Forward Contracts | Sell | Not Designated as Hedging Instruments - Economic | |||||||||
Derivative Instruments | |||||||||
Derivative contracts, notional amount | 16,300,000 | ||||||||
Korea (South), Won | Foreign Exchange Forward Contracts | Sell | Not Designated as Hedging Instruments - Economic | |||||||||
Derivative Instruments | |||||||||
Derivative contracts, notional amount | $ 13,100,000 |
Derivative Instruments - Income
Derivative Instruments - Income Statements (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Cost of sales | $ 783.8 | $ 915.7 |
Interest expense, net | 10.3 | 10.2 |
Other expense (income), net | 1.6 | 4 |
Cost of Sales | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Cost of sales | 783.8 | |
Interest Expense, Net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Interest expense, net | 10.3 | 10.2 |
Other Expense (Income), Net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Other expense (income), net | 1.6 | 4 |
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments - Economic | Other Expense (Income), Net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of gain recognized in income, not designated | 13.8 | 2.7 |
Foreign Exchange Forward Contracts | Designated as Hedging Instrument | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of gain (loss) reclassified from AOCI into income, foreign exchange cash flow hedges | 0.6 | |
Foreign Exchange Forward Contracts | Designated as Hedging Instrument | Cost of Sales | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of gain (loss) reclassified from AOCI into income, foreign exchange cash flow hedges | 0.2 | |
Cross Currency Swap | Interest Expense, Net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of gain excluded from effectiveness testing | 3.4 | 4 |
Interest Rate Swap | Interest Expense, Net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of gain (loss) reclassified from AOCI into income, interest rate cash flow hedges | $ (0.1) | $ 0.3 |
Derivative Instruments - Effect
Derivative Instruments - Effect on AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments | ||
Gain (Loss) Recognized in AOCI, Cash flow hedges | $ (3.7) | $ 0.1 |
Gain (Loss) Recognized in AOCI, Net investment hedges | 22.9 | 11.5 |
Foreign Exchange Forward Contracts | ||
Derivative Instruments | ||
Gain (Loss) Recognized in AOCI, Cash flow hedges | 2.1 | 2.3 |
Cross Currency Swap | ||
Derivative Instruments | ||
Gain (Loss) Recognized in AOCI, Net investment hedges | 22.9 | 11.5 |
Interest Rate Swap | ||
Derivative Instruments | ||
Gain (Loss) Recognized in AOCI, Cash flow hedges | $ (5.8) | $ (2.2) |
Derivative Instruments - Gains
Derivative Instruments - Gains and Losses text (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Foreign exchange transaction gains (losses) | $ 14,000,000 | $ (3,100,000) |
Information regarding changes in fair value of derivatives | ||
Current foreign currency translation gain | 0 | |
Maximum | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Reclassification expected during next 12 months | 1,300,000 | |
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments - Economic | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Gain (loss) from settlements and changes in fair value | $ 13,800,000 | $ 2,700,000 |
Derivative Instruments - Financ
Derivative Instruments - Financial Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | $ 13.4 | $ 28.9 |
Counterparty netting, derivative assets | (0.1) | (0.4) |
Net derivative asset position | 13.3 | 28.5 |
Gross derivative liability position | (8.7) | (7.6) |
Counterparty netting, derivative liabilities | 0.1 | 0.5 |
Net derivative liability position | (8.6) | (7.1) |
Total net derivative position | 4.7 | 21.4 |
Accounts Receivable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 13.4 | 9.7 |
Deferred Charges and Other Assets | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 19.2 | |
Accounts Payable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | (3) | (6.6) |
Other Noncurrent Obligations | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | (5.7) | (1) |
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments - Economic | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 7 | 1.1 |
Counterparty netting, derivative assets | (0.1) | (0.4) |
Net derivative asset position | 6.9 | 0.7 |
Gross derivative liability position | (0.1) | (5.7) |
Counterparty netting, derivative liabilities | 0.1 | 0.5 |
Net derivative liability position | (5.2) | |
Total net derivative position | 6.9 | (4.5) |
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments - Economic | Accounts Receivable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 7 | 1.1 |
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments - Economic | Accounts Payable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | (0.1) | (5.7) |
Foreign Exchange Forward Contracts | Designated as Hedging Instrument | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 1.6 | |
Net derivative asset position | 1.6 | |
Gross derivative liability position | (0.5) | |
Net derivative liability position | (0.5) | |
Total net derivative position | 1.6 | (0.5) |
Foreign Exchange Forward Contracts | Designated as Hedging Instrument | Accounts Receivable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 1.6 | |
Foreign Exchange Forward Contracts | Designated as Hedging Instrument | Accounts Payable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | (0.5) | |
Interest Rate Swap | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | (7.2) | (1.4) |
Net derivative liability position | (7.2) | (1.4) |
Total net derivative position | (7.2) | (1.4) |
Interest Rate Swap | Accounts Payable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | (2.9) | (0.4) |
Interest Rate Swap | Other Noncurrent Obligations | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | (4.3) | (1) |
Cross Currency Swap | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 4.8 | 27.8 |
Net derivative asset position | 4.8 | 27.8 |
Gross derivative liability position | (1.4) | |
Net derivative liability position | (1.4) | |
Total net derivative position | 3.4 | 27.8 |
Cross Currency Swap | Accounts Receivable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 4.8 | 8.6 |
Cross Currency Swap | Deferred Charges and Other Assets | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | $ 19.2 | |
Cross Currency Swap | Other Noncurrent Obligations | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | $ (1.4) |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities at Fair Value, Recurring (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value Measurements | ||
Total net derivative position | $ 4.7 | $ 21.4 |
Property, plant and equipment, net | 572.4 | 625.8 |
Boehlen Location [Member] | ||
Fair Value Measurements | ||
Property, plant and equipment, net | 3.4 | |
Impairment loss on assets | 10.3 | |
Schkopau PBR Location [Member] | ||
Fair Value Measurements | ||
Property, plant and equipment, net | 1.5 | |
Impairment loss on assets | 28 | |
Interest Rate Swap | ||
Fair Value Measurements | ||
Total net derivative position | (7.2) | (1.4) |
Cross Currency Swap | ||
Fair Value Measurements | ||
Total net derivative position | 3.4 | 27.8 |
Designated as Hedging Instrument | Foreign Exchange Forward Contracts | ||
Fair Value Measurements | ||
Total net derivative position | 1.6 | (0.5) |
Not Designated as Hedging Instruments - Economic | Foreign Exchange Forward Contracts | ||
Fair Value Measurements | ||
Total net derivative position | 6.9 | (4.5) |
Recurring | ||
Fair Value Measurements | ||
Total net derivative position | 4.7 | 21.4 |
Recurring | Interest Rate Swap | ||
Fair Value Measurements | ||
Liabilities at fair value | (7.2) | (1.4) |
Recurring | Cross Currency Swap | ||
Fair Value Measurements | ||
Assets at fair value | 4.8 | 27.8 |
Liabilities at fair value | (1.4) | |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value Measurements | ||
Total net derivative position | 4.7 | 21.4 |
Recurring | Significant Other Observable Inputs (Level 2) | Interest Rate Swap | ||
Fair Value Measurements | ||
Liabilities at fair value | (7.2) | (1.4) |
Recurring | Significant Other Observable Inputs (Level 2) | Cross Currency Swap | ||
Fair Value Measurements | ||
Assets at fair value | 4.8 | 27.8 |
Liabilities at fair value | (1.4) | |
Recurring | Designated as Hedging Instrument | Foreign Exchange Forward Contracts | ||
Fair Value Measurements | ||
Assets at fair value | 1.6 | |
Liabilities at fair value | (0.5) | |
Recurring | Designated as Hedging Instrument | Significant Other Observable Inputs (Level 2) | Foreign Exchange Forward Contracts | ||
Fair Value Measurements | ||
Assets at fair value | 1.6 | |
Liabilities at fair value | (0.5) | |
Recurring | Not Designated as Hedging Instruments - Economic | Foreign Exchange Forward Contracts | ||
Fair Value Measurements | ||
Assets at fair value | 6.9 | 0.7 |
Liabilities at fair value | (5.2) | |
Recurring | Not Designated as Hedging Instruments - Economic | Significant Other Observable Inputs (Level 2) | Foreign Exchange Forward Contracts | ||
Fair Value Measurements | ||
Assets at fair value | 6.9 | 0.7 |
Liabilities at fair value | $ (5.2) | |
Nonrecurring | ||
Fair Value Measurements | ||
Assets at fair value, nonrecurring | 4.9 | |
Nonrecurring | Property Plant And Equipment At Fair Value [Member] | Boehlen Location [Member] | ||
Fair Value Measurements | ||
Assets at fair value, nonrecurring | 3.4 | |
Nonrecurring | Property Plant And Equipment At Fair Value [Member] | Schkopau PBR Location [Member] | ||
Fair Value Measurements | ||
Assets at fair value, nonrecurring | 1.5 | |
Nonrecurring | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Measurements | ||
Assets at fair value, nonrecurring | 4.9 | |
Nonrecurring | Fair Value, Inputs, Level 3 [Member] | Property Plant And Equipment At Fair Value [Member] | Boehlen Location [Member] | ||
Fair Value Measurements | ||
Assets at fair value, nonrecurring | 3.4 | |
Nonrecurring | Fair Value, Inputs, Level 3 [Member] | Property Plant And Equipment At Fair Value [Member] | Schkopau PBR Location [Member] | ||
Fair Value Measurements | ||
Assets at fair value, nonrecurring | $ 1.5 |
Fair Value Measurements - Items
Fair Value Measurements - Items not at Fair Value (Details) - Significant Other Observable Inputs (Level 2) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value of Debt Instruments | ||
Total fair value of long term debt | $ 998.7 | $ 1,190.1 |
2025 Senior Notes | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | 419.8 | 503.7 |
2024 Term Loan B | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | $ 578.9 | $ 686.4 |
Provision for Income Taxes (Det
Provision for Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Provision for Income Taxes | ||
Effective tax rate | 24.60% | 23.10% |
Provision for income taxes | $ (11.9) | $ 10.8 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure | ||
Accrued obligations for environmental remediation and restoration costs | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Purchase Commitments (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Maximum | |
Loss Contingencies [Line Items] | |
Purchase commitment period | 3 years |
Minimum | |
Loss Contingencies [Line Items] | |
Purchase commitment period | 1 year |
Pension Plans and Other Postr_3
Pension Plans and Other Postretirement Benefits - Net Periodic Benefit Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net periodic benefit cost | ||
Net settlement loss | $ 0.7 | |
Defined Benefit Pension Plans | ||
Net periodic benefit cost | ||
Service cost | $ 4.3 | 3.2 |
Interest cost | 0.8 | 1.3 |
Expected return on plan assets | (0.3) | (0.5) |
Amortization of prior service cost (credit) | (0.3) | (0.3) |
Amortization of net (gain) loss | 1.2 | 0.8 |
Net settlement loss | 0.7 | |
Net periodic benefit cost | $ 5.7 | $ 5.2 |
Interest cost, Statements of Operations location | us-gaap:OtherNonoperatingIncomeExpense | us-gaap:OtherNonoperatingIncomeExpense |
Expected return, Statements of Operations location | us-gaap:OtherNonoperatingIncomeExpense | us-gaap:OtherNonoperatingIncomeExpense |
Amortization of prior service credit, Statements of Operations location | us-gaap:OtherNonoperatingIncomeExpense | us-gaap:OtherNonoperatingIncomeExpense |
Amortization of gain (loss), Statements of Operations location | us-gaap:OtherNonoperatingIncomeExpense | us-gaap:OtherNonoperatingIncomeExpense |
Net settlement and curtailment loss, Statements of Operations location | us-gaap:OtherNonoperatingIncomeExpense | us-gaap:OtherNonoperatingIncomeExpense |
Amounts recognized in other comprehensive income (loss) | ||
Net periodic benefit cost | $ 5.7 | $ 5.2 |
Other Postretirement Plans | ||
Net periodic benefit cost | ||
Interest cost | 0.1 | |
Amortization of net (gain) loss | $ (0.1) | |
Other Postretirement Plans | Maximum | ||
Net periodic benefit cost | ||
Net periodic benefit cost | 0.1 | |
Amounts recognized in other comprehensive income (loss) | ||
Net periodic benefit cost | $ 0.1 |
Pension Plans and Other Postr_4
Pension Plans and Other Postretirement Benefits - Net Amounts Recognized (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Net amounts recognized in the balance sheets at December 31 | ||
Noncurrent liabilities | $ (267.7) | $ (270.6) |
Cash contributions and benefit payments to unfunded plans | 1.9 | |
Expected contributions, remainder of current year | $ 5.8 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Expense (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 3.2 | $ 4.1 |
Restricted Share Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | 1.7 | 2.1 |
Unrecognized compensation cost | $ 13 | |
Weighted-average period of recognition | 2 years 3 months 18 days | |
Option Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 1 | 1.1 |
Unrecognized compensation cost, options | $ 3.7 | |
Weighted-average period of recognition | 1 year 7 months 6 days | |
Performance Share Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 0.5 | $ 0.9 |
Unrecognized compensation cost | $ 5.2 | |
Weighted-average period of recognition | 2 years 3 months 18 days |
Share-Based Compensation - RSUs
Share-Based Compensation - RSUs (Details) - Restricted Share Units | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Other-than-Options, Shares Activity | |
Granted, Shares | shares | 264,604 |
Other-than-Options, FV Activity | |
Granted, Weighted-Average Grant Date Fair Value per Share | $ / shares | $ 24.30 |
Share-Based Compensation - Opti
Share-Based Compensation - Options and PSUs (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Options, Additional Disclosures | ||
Proceeds from exercise of option awards | $ 0.1 | |
Option Awards | ||
Options Outstanding Roll Forward | ||
Granted, Options | 503,824 | |
Options, Additional Disclosures | ||
Unrecognized compensation cost, options | $ 3.7 | |
Fair Value Assumptions | ||
Expected term (in years) | 5 years 6 months | |
Expected volatility | 39.70% | |
Risk-free interest rate | 1.24% | |
Dividend yield | 3.25% | |
Options granted, Weighted average grant date fair value | $ 6.57 | |
Performance Share Units | ||
Fair Value Assumptions | ||
Expected term (in years) | 3 years | |
Expected volatility | 40.50% | |
Risk-free interest rate | 1.16% | |
Share Price | $ 24.30 | |
Other-than-Options, Shares Activity | ||
Granted, Shares | 102,545 | |
Other-than-Options, FV Activity | ||
Granted, Weighted-Average Grant Date Fair Value per Share | $ 24.54 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Acquisition (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Oct. 01, 2019 | |
Acquisitions and Divestitures | |||
Purchase price, net of cash acquired | $ (0.2) | ||
Goodwill | 66.2 | $ 67.7 | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Net identifiable assets acquired | $ (2) | ||
Net cash received | $ 0.2 | $ 6.7 |
Segments - Reconciliation of Se
Segments - Reconciliation of Segment Reporting to Consolidated (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | segment | 6 | ||
Sales to external customers | $ 853.5 | $ 1,013.1 | |
Equity in earnings of unconsolidated affiliates | 9.8 | 32.2 | |
Adjusted EBITDA | 78.9 | 128 | |
Investment in unconsolidated affiliates | 197.9 | $ 188.1 | |
Depreciation and amortization | 36.4 | 33.9 | |
Capital expenditures | $ 24.3 | 25 | |
Americas Styrenics | |||
Segment Reporting Information [Line Items] | |||
Percentage of ownership underlying net assets | 50.00% | 50.00% | |
Investment in unconsolidated affiliates | $ 197.9 | $ 188.1 | |
Latex Binders Segment | |||
Segment Reporting Information [Line Items] | |||
Sales to external customers | 219.1 | 223.9 | |
Latex Binders Segment | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | 21.5 | 17.5 | |
Synthetic Rubber Segment | |||
Segment Reporting Information [Line Items] | |||
Sales to external customers | 101.7 | 124.6 | |
Synthetic Rubber Segment | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | 15.3 | 8.8 | |
Performance Plastics Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales to external customers | 305.1 | 369.3 | |
Performance Plastics Segment [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | 36.7 | 35.5 | |
Polystyrene [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales to external customers | 182.8 | 228.5 | |
Polystyrene [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | 11.8 | 16.8 | |
Feedstocks [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales to external customers | 44.8 | 66.8 | |
Feedstocks [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | (16.2) | 17.2 | |
Americas Styrenics [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | $ 9.8 | $ 32.2 |
Segments - Recon. of Net Income
Segments - Recon. of Net Income to Segment Adjusted EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Income (loss) before income taxes | $ (48.2) | $ 46.6 |
Interest expense, net | (10.3) | (10.2) |
Depreciation and amortization | 36.4 | 33.9 |
Corporate Unallocated | 21.9 | 26 |
Adjusted EBITDA addbacks | 58.5 | 11.3 |
Adjusted EBITDA | 78.9 | 128 |
Net (gain) loss on disposition of businesses and assets | (0.4) | (0.2) |
Restructuring and other charges | 1.8 | 0.4 |
Acquisition transactions and integration net costs (benefit) | 0.1 | |
Asset impairment charges or write-offs | 38.3 | |
Other items | 18.7 | 11.1 |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Income (loss) before income taxes | (48.2) | 46.6 |
Corporate Unallocated [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest expense, net | $ (10.3) | $ (10.2) |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 24 Months Ended | |
Jan. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | $ 3.1 | $ 0.4 | ||
Proceeds received on sale of property | $ 1.3 | $ 12.5 | ||
Gain on sale of land | 0.6 | |||
Restructuring Reserve [Roll Forward] | ||||
Accrued charges/Balance at beginning of period | 17.9 | 17.9 | ||
Expenses | 0.6 | |||
Payments/Deductions | (4.5) | |||
Accrued charges/Balance at end of period | 14 | 17.9 | ||
Corporate Restructuring Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 2.8 | |||
Cumulative life-to-date charges | 20.6 | |||
Terneuzen Plant Modernization | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 0.1 | 0.2 | ||
Cumulative life-to-date charges | 6.2 | |||
Expected restructuring charges | 0.6 | |||
Livorno Plant Restructuring | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 0.2 | 0.2 | ||
Cumulative life-to-date charges | 24.8 | |||
Asset Impairment And Accelerated Depreciation [Member] | Terneuzen Plant Modernization | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative life-to-date charges | 3.1 | |||
Asset Impairment And Accelerated Depreciation [Member] | Livorno Plant Restructuring | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative life-to-date charges | 14.7 | |||
Accelerated Depreciation | Corporate Restructuring Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 1.3 | |||
Cumulative life-to-date charges | 1.7 | |||
Expected restructuring charges | 1.3 | |||
Restructuring Reserve [Roll Forward] | ||||
Expenses | 1.3 | |||
Employee Termination Benefit Charges | ||||
Restructuring Reserve [Roll Forward] | ||||
Accrued charges/Balance at beginning of period | 17.2 | 17.2 | ||
Expenses | 0.3 | |||
Payments/Deductions | (3.7) | |||
Accrued charges/Balance at end of period | 13.8 | 17.2 | ||
Employee Termination Benefit Charges | Corporate Restructuring Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 0.3 | |||
Cumulative life-to-date charges | 17.3 | |||
Expected restructuring charges | 0.7 | |||
Restructuring Reserve [Roll Forward] | ||||
Expenses | 0.3 | |||
Employee Termination Benefit Charges | Terneuzen Plant Modernization | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative life-to-date charges | 0.7 | |||
Employee Termination Benefit Charges | Livorno Plant Restructuring | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative life-to-date charges | 5.4 | |||
Pension Benefits [Member] | Corporate Restructuring Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expected restructuring charges | 0.4 | |||
Contract Termination | ||||
Restructuring Reserve [Roll Forward] | ||||
Accrued charges/Balance at beginning of period | $ 0.7 | 0.7 | ||
Payments/Deductions | (0.5) | |||
Accrued charges/Balance at end of period | 0.2 | $ 0.7 | ||
Contract Termination | Corporate Restructuring Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 1.2 | |||
Cumulative life-to-date charges | 1.6 | |||
Expected restructuring charges | 1.3 | |||
Restructuring Reserve [Roll Forward] | ||||
Expenses | 1.2 | |||
Contract Termination | Terneuzen Plant Modernization | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative life-to-date charges | 0.3 | |||
Contract Termination | Livorno Plant Restructuring | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative life-to-date charges | 0.3 | |||
Decommissioning and Other Charges | ||||
Restructuring Reserve [Roll Forward] | ||||
Expenses | 0.3 | |||
Payments/Deductions | (0.3) | |||
Decommissioning and Other Charges | Terneuzen Plant Modernization | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 0.1 | 0.2 | ||
Cumulative life-to-date charges | 2.1 | |||
Decommissioning and Other Charges | Livorno Plant Restructuring | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 0.2 | $ 0.2 | ||
Cumulative life-to-date charges | $ 4.4 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Components (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 668.9 | $ 768.7 |
Balance at end of period | 603 | 753.1 |
Cumulative Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (106.7) | (111.8) |
Other comprehensive income (loss) | 10.7 | (0.3) |
Balance at end of period | (96) | (112.1) |
Pension and Other Postretirement Benefit Plans, Net | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (56.3) | (39.4) |
Other comprehensive income (loss) | 0.6 | (2) |
Amounts reclassified from AOCI to net income | 0.6 | 1 |
Balance at end of period | (55.1) | (40.4) |
Accumulated Gain Loss Net Cash Flow Hedge Parent | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | 0.6 | 8.9 |
Other comprehensive income (loss) | (3.6) | 1 |
Amounts reclassified from AOCI to net income | (0.1) | (0.9) |
Balance at end of period | (3.1) | 9 |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (162.4) | (142.3) |
Other comprehensive income (loss) | 7.7 | (1.3) |
Amounts reclassified from AOCI to net income | 0.5 | 0.1 |
Balance at end of period | $ (154.2) | $ (143.5) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Reclassification (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Cost of sales | $ 783.8 | $ 915.7 |
Interest expense, net | 10.3 | 10.2 |
Net settlement loss | 0.7 | |
Income before income taxes | 48.2 | (46.6) |
Provision for (benefit from) income taxes | (11.9) | 10.8 |
Net income | 36.3 | (35.8) |
Pension and Other Postretirement Benefit Plans, Net | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net settlement loss | 0.8 | |
Income before income taxes | 0.9 | 1.4 |
Provision for (benefit from) income taxes | (0.3) | (0.4) |
Net income | 0.6 | 1 |
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 | (0.3) | (0.3) |
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 | 1.2 | 0.9 |
Accumulated Gain Loss Net Cash Flow Hedge Parent | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Cost of sales | (0.2) | (0.6) |
Interest expense, net | 0.1 | (0.3) |
Income before income taxes | (0.1) | (0.9) |
Net income | $ (0.1) | $ (0.9) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings: | ||
Net income (loss) | $ (36.3) | $ 35.8 |
Shares: | ||
Weighted average ordinary shares outstanding | 38.5 | 41.3 |
Dilutive effect of RSUs and option awards | 0.5 | |
Diluted weighted average ordinary shares outstanding | 38.5 | 41.8 |
Income (loss) per share: | ||
Income per share- basic | $ (0.94) | $ 0.87 |
Income per share- diluted | $ (0.94) | $ 0.86 |
Anti-dilutive shares excluded | 1.1 |