Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 03, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
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 $0.01 per share | |
Trading Symbol | TSE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 38,739,042 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001519061 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 618.4 | $ 588.7 |
Restricted cash | 450 | |
Accounts receivable, net of allowance for doubtful accounts (March 31, 2021: $4.9; December 31, 2020: $5.8) | 657.8 | 529.2 |
Inventories | 463 | 384.1 |
Other current assets | 15.8 | 15.1 |
Total current assets | 2,205 | 1,517.1 |
Investments in unconsolidated affiliates | 248.1 | 240.1 |
Property, plant and equipment, net of accumulated depreciation (March 31, 2021: $823.5; December 31, 2020: $831.5) | 570.2 | 601.4 |
Other assets | ||
Goodwill | 70.9 | 74.2 |
Other intangible assets, net | 171.5 | 182.8 |
Right of use assets - operating, net | 76.6 | 78.3 |
Deferred income tax assets | 81.2 | 90.2 |
Deferred charges and other assets | 56.6 | 61.1 |
Total other assets | 456.8 | 486.6 |
Total assets | 3,480.1 | 2,845.2 |
Current liabilities | ||
Short-term borrowings and current portion of long-term debt | 13.7 | 12.3 |
Accounts payable | 482.5 | 355.4 |
Current lease liabilities - operating | 16.3 | 15.8 |
Income taxes payable | 15.4 | 10 |
Accrued expenses and other current liabilities | 149.7 | 139.8 |
Total current liabilities | 677.6 | 533.3 |
Noncurrent liabilities | ||
Long-term debt, net of unamortized deferred financing fees | 1,605.1 | 1,158.7 |
Noncurrent lease liabilities - operating | 62.8 | 65.7 |
Deferred income tax liabilities | 62.8 | 60.7 |
Other noncurrent obligations | 395.5 | 436.5 |
Total noncurrent liabilities | 2,126.2 | 1,721.6 |
Shareholders' equity | ||
Ordinary shares, $0.01 nominal value, 50,000.0 shares authorized (March 31, 2021: 48.8 shares issued and 38.7 shares outstanding; December 31, 2020: 48.8 shares issued and 38.4 shares outstanding) | 0.5 | 0.5 |
Additional paid-in-capital | 578.5 | 579.6 |
Treasury shares, at cost (March 31, 2021: 10.1 shares; December 31, 2020: 10.4 shares) | (530) | (542.9) |
Retained earnings | 807.3 | 739.2 |
Accumulated other comprehensive loss | (180) | (186.1) |
Total shareholders' equity | 676.3 | 590.3 |
Total liabilities and shareholders' equity | $ 3,480.1 | $ 2,845.2 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Condensed Consolidated Balance Sheets | ||
Allowance for doubtful accounts | $ 4.9 | $ 5.8 |
Accumulated depreciation | $ 823.5 | $ 831.5 |
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 | 38,700,000 | 38,400,000 |
Treasury stock, shares | 10,100,000 | 10,400,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Condensed Consolidated Statements of Operations | ||
Net sales | $ 1,092.6 | $ 853.5 |
Cost of sales | 890.6 | 783.8 |
Gross profit (loss) | 202 | 69.7 |
Selling, general and administrative expenses | 62.6 | 77.5 |
Equity in earnings of unconsolidated affiliates | 22.9 | 9.8 |
Impairment charges | 38.3 | |
Operating income (loss) | 162.3 | (36.3) |
Interest expense, net | 12 | 10.3 |
Acquisition purchase price hedge loss | 55 | |
Other expense, net | 2.7 | 1.6 |
Income (loss) before income taxes | 92.6 | (48.2) |
Provision for (benefit from) income taxes | 21.1 | (11.9) |
Net income (loss) | $ 71.5 | $ (36.3) |
Weighted average shares- basic | 38.5 | 38.5 |
Net income (loss) per share- basic | $ 1.86 | $ (0.94) |
Weighted average shares- diluted | 39.5 | 38.5 |
Net income (loss) per share- diluted | $ 1.81 | $ (0.94) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||
Net income (loss) | $ 71.5 | $ (36.3) |
Other comprehensive income (loss), net of tax | ||
Cumulative translation adjustments | 0.4 | 10.7 |
Net gain (loss) on cash flow hedges | 4.6 | (3.7) |
Pension and other postretirement benefit plans: | ||
Net gain arising during period (net of tax of $0.0 and $0.1) | 0.6 | |
Amounts reclassified from accumulated other comprehensive income | 1.1 | 0.6 |
Total other comprehensive income (loss), net of tax | 6.1 | 8.2 |
Comprehensive income (loss) | $ 77.6 | $ (28.1) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||
Net gain (loss) during period, tax (benefit) expense | $ 0 | $ 0.1 |
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, 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 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (36.3) | (36.3) | ||||
Other comprehensive income (loss) | 8.2 | 8.2 | ||||
Share-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 | ||||
Balance at beginning of period at Dec. 31, 2020 | $ 0.5 | 579.6 | $ (542.9) | (186.1) | 739.2 | $ 590.3 |
Balance at beginning of period, shares at Dec. 31, 2020 | 38.4 | 10.4 | 38.4 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 71.5 | $ 71.5 | ||||
Other comprehensive income (loss) | 6.1 | 6.1 | ||||
Share-based compensation | (1.1) | $ 12.9 | 11.8 | |||
Share-based compensation, shares | 0.3 | (0.3) | ||||
Dividends on ordinary shares | (3.4) | (3.4) | ||||
Balance at end of period at Mar. 31, 2021 | $ 0.5 | $ 578.5 | $ (530) | $ (180) | $ 807.3 | $ 676.3 |
Balance at end of period, shares at Mar. 31, 2021 | 38.7 | 10.1 | 38.7 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical)) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Condensed Consolidated Statement of Stockholders' Equity | ||
Dividends on ordinary shares | $ 0.08 | $ 0.40 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities | ||
Net income (loss) | $ 71.5 | $ (36.3) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||
Depreciation and amortization | 32.9 | 36.4 |
Amortization of deferred financing fees, issuance discount, and excluded component of hedging instruments | 1.2 | 0.4 |
Deferred income tax | 6.6 | (11.5) |
Share-based compensation expense | 3.5 | 3.2 |
Earnings of unconsolidated affiliates, net of dividends | (7.9) | (9.8) |
Unrealized net (gain) loss on foreign exchange forward contracts | (21.8) | (11.5) |
Acquisition purchase price hedge loss | 55 | |
Gain on sale of businesses and other assets | (0.2) | (0.4) |
Asset impairment charges or write-offs | 38.3 | |
Changes in assets and liabilities | ||
Accounts receivable | (138.8) | (12.7) |
Inventories | (89.5) | 26.8 |
Accounts payable and other current liabilities | 114.9 | (28.9) |
Income taxes payable | 4.9 | (3.3) |
Other assets, net | 4.1 | (6.9) |
Other liabilities, net | 14.6 | 10.4 |
Cash provided by (used in) operating activities | 51 | (5.8) |
Cash flows from investing activities | ||
Capital expenditures | (12.6) | (24.3) |
Net cash received for asset and business acquisitions | 0.2 | |
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 | (12.6) | 39.1 |
Cash flows from financing activities | ||
Deferred financing fees | (1.3) | |
Short-term borrowings, net | (2.8) | (3.5) |
Purchase of treasury shares | (25) | |
Dividends paid | (3.3) | (15.9) |
Proceeds from exercise of option awards | 9 | |
Withholding taxes paid on restricted share units | (0.8) | (0.6) |
Repayments of 2024 Term Loan B | (1.7) | |
Net proceeds from issuance of Senior Notes | 450 | |
Cash provided by (used in) financing activities | 450.8 | (46.7) |
Effect of exchange rates on cash | (9.5) | (2.7) |
Net change in cash, cash equivalents and restricted cash | 479.7 | (16.1) |
Cash, cash equivalents and restricted cash, beginning of period | 588.7 | 457.4 |
Cash, cash equivalents and restricted cash, end of period | 1,068.4 | 441.3 |
Restricted cash | $ (450) | $ (1.2) |
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 | $ 618.4 | $ 440.1 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 and 2020 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 2020 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 22, 2021. 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, 2021. However, actual results could differ from these estimates and assumptions. The December 31, 2020 condensed consolidated balance sheet data presented herein was derived from the Company’s December 31, 2020 audited consolidated financial statements, but does not include all disclosures required by GAAP for annual periods. Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications pertain primarily to the Company’s resegmentation effective October 1, 2020. Refer to Notes 3 and 15 for further information. |
Recent Accounting Guidance
Recent Accounting Guidance | 3 Months Ended |
Mar. 31, 2021 | |
Recent Accounting Guidance | |
Recent Accounting Guidance | NOTE 2—RECENT ACCOUNTING GUIDANCE 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. The Company adopted the guidance effective January 1, 2021, noting that adoption did not have a material impact on its consolidated financial statements. |
Net Sales
Net Sales | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 and 2020. Prior period balances in this table have been recast in conjunction with the resegmentation that occurred during the fourth quarter of 2020. Refer to Note 15 for further information. Latex Synthetic Engineered Base Three Months Ended Binders Rubber Materials Plastics Polystyrene Feedstocks Total March 31, 2021 United States $ 67.8 $ — $ 10.3 $ 62.5 $ — $ 3.4 $ 144.0 Europe 117.5 111.5 21.0 197.9 149.3 52.5 649.7 Asia-Pacific 63.8 12.7 34.2 48.8 117.6 — 277.1 Rest of World 1.8 — 0.3 19.7 — — 21.8 Total $ 250.9 $ 124.2 $ 65.8 $ 328.9 $ 266.9 $ 55.9 $ 1,092.6 March 31, 2020 United States $ 62.2 $ — $ 9.9 $ 60.7 $ — $ 2.6 $ 135.4 Europe 101.9 99.8 14.9 150.1 109.8 29.1 505.6 Asia-Pacific 52.3 1.9 22.9 26.8 73.0 13.1 190.0 Rest of World 2.7 — — 19.8 — — 22.5 Total $ 219.1 $ 101.7 $ 47.7 $ 257.4 $ 182.8 $ 44.8 $ 853.5 placeholder |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliates | 3 Months Ended |
Mar. 31, 2021 | |
Investments in Unconsolidated Affiliates | |
Investments in Unconsolidated Affiliates | NOTE 4—INVESTMENTS IN UNCONSOLIDATED AFFILIATES 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), which is accounted for using the equity method. 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, 2021 2020 Sales $ 423.0 $ 322.2 Gross profit $ 65.4 $ 7.2 Net income (loss) $ 51.1 $ (8.3) As of March 31, 2021 and December 31, 2020, the Company’s investment in Americas Styrenics was $248.1 million and $240.1 million, respectively, which was $13.7 million and $16.3 million greater 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 3.0 years as of March 31, 2021. The Company received dividends of $15.0 million from Americas Styrenics during the three months ended March 31, 2021, while no dividends were received during the three months ended March 31, 2020. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2021 | |
Inventories | |
Inventories | NOTE 5—INVENTORIES Inventories consisted of the following: March 31, December 31, 2021 2020 Finished goods $ 193.5 $ 174.0 Raw materials and semi-finished goods 229.5 169.1 Supplies 40.0 41.0 Total $ 463.0 $ 384.1 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 and December 31, 2020. As of March 31, 2021 and December 31, 2020, debt consisted of the following: March 31, 2021 December 31, 2020 Interest Rate as of Maturity Date Carrying Amount Unamortized Deferred Financing Fees Total Debt, Less Unamortized Deferred Financing Fees Carrying Amount Unamortized Deferred Financing Fees (1) Total Debt, Less Senior Credit Facility 2024 Term Loan B 2.109% September 2024 $ 677.3 $ (10.2) $ 667.1 $ 677.3 $ (10.8) $ 666.5 2022 Revolving Facility (2) Various September 2022 — — — — — — 2029 Senior Notes 5.125% April 2029 450.0 (2.2) 447.8 — — — 2025 Senior Notes 5.375% September 2025 500.0 (5.9) 494.1 500.0 (6.2) 493.8 Accounts Receivable Securitization Facility (3) Various September 2021 — — — — — — Other indebtedness Various Various 9.8 — 9.8 10.7 — 10.7 Total debt $ 1,637.1 $ (18.3) $ 1,618.8 $ 1,188.0 $ (17.0) $ 1,171.0 Less: current portion (4) (13.7) (12.3) Total long-term debt, net of unamortized deferred financing fees $ 1,605.1 $ 1,158.7 (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) As of March 31, 2021, under the 2022 Revolving Facility, the Company had a capacity of $375.0 million and funds available for borrowing of $360.0 million (net of $15.0 million outstanding letters of credit). 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. (3) As of March 31, 2021, this facility had a borrowing capacity of $150.0 million, and the Company had approximately $150.0 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, 2021 and December 31, 2020, the current portion of long-term debt was primarily related to $8.7 million and $7.0 million, respectively, of the scheduled future principal payments on the 2024 Term Loan B. 2029 Senior Notes On March 24, 2021, Trinseo Materials Operating S.C.A. and Trinseo Materials Finance, Inc. (together, the “Issuers”), each an indirect, wholly-owned subsidiary of the Company, executed an indenture pursuant to which they issued $450.0 million aggregate principal amount of 5.125% senior notes due 2029 (the “2029 Senior Notes”) in a 144A private transaction exempt from the registration requirements of the Securities Act of 1933, as amended. Interest on the 2029 Senior Notes is payable semi-annually on February 15 and August 15 of each year, commencing on August 15, 2021. The 2029 Senior Notes mature on April 1, 2029. The net proceeds from the 2029 Senior Notes offering were used as a portion of the funding needed for the Company’s acquisition (the “Acquisition”) of the Arkema S.A. (“Arkema”) polymethyl methacrylates (“PMMA”) and activated methyl methacrylates (“MMA”) businesses (together, referred to herein as the “PMMA business”) Senior Notes offering were released upon satisfaction of certain escrow release conditions, including closing of the Acquisition, which was completed on May 3, 2021. At any time prior to April 1, 2024, the Issuers may redeem the 2029 Senior Notes in whole or in part, at their option, at a redemption price equal to 100% of the principal amount of such notes plus the relevant applicable premium as of, and accrued and unpaid interest to, but not including, the redemption date. At any time and from time to time after April 1, 2024, the Issuers may redeem the 2029 Senior Notes, in whole or in part, at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest, if any, on the notes redeemed to, but not including, the redemption date: 12-month period commencing April 1 in Year Percentage 2024 102.563 % 2025 101.281 % 2026 and thereafter 100.000 % At any time prior to April 1, 2024, the Issuers may redeem up to 40% of the aggregate principal amount of the 2029 Senior Notes at a redemption price equal to 105.125%, plus accrued and unpaid interest to, but not including, the redemption date, with the aggregate gross proceeds from certain equity offerings. The 2029 Senior Notes are the Issuers’ senior unsecured obligations and rank equally in right of payment with all of the Issuers’ existing and future indebtedness that is not expressly subordinated in right of payment thereto. The 2029 Senior Notes will be senior in right of payment to any future indebtedness that is expressly subordinated in right of payment thereto and effectively junior to (a) the Issuers’ existing and future secured indebtedness, including the Company’s accounts receivable facility and the Issuers’ Credit Facility, to the extent of the value of the collateral securing such indebtedness and (b) all existing and future liabilities of the Issuers’ non-guarantor subsidiaries. The Indenture contains customary covenants, including restrictions on the Issuers’ and certain of its subsidiaries’ ability to incur additional indebtedness and guarantee indebtedness; pay dividends on, redeem or repurchase capital stock; make investments; prepay certain indebtedness; create liens; enter into transactions with the Issuers’ affiliates; designate the Issuers’ subsidiaries as Unrestricted Subsidiaries (as defined in the Indenture); and consolidate, merge, or transfer all or substantially all of the Issuers’ assets. The covenants are subject to a number of exceptions and qualifications. Certain of these covenants, excluding without limitation those relating to transactions with the Issuers’ affiliates and consolidation, merger, or transfer of all or substantially all of the Issuers’ assets, will be suspended during any period of time that (1) the 2029 Senior Notes have Investment Grade Status (as defined in the Indenture) and (2) no default has occurred and is continuing under the Indenture. In the event that the 2029 Senior Notes are downgraded to below an Investment Grade Status, the Issuers and certain subsidiaries will again be subject to the suspended covenants with respect to future events. As of March 31, 2021, fees and expenses incurred in connection with the issuance of the 2029 Senior Notes were $2.2 million, which were capitalized and recorded within “Long-term debt, net of unamortized deferred financing fees” on the condensed consolidated balance sheet, and are being amortized into “Interest expense, net” in the condensed consolidated statements of operations over their eight year term using the effective interest method. In addition to proceeds from the 2029 Senior Notes, the remainder of the purchase price of the Acquisition was funded with $750.0 million in incremental term loan borrowings (“2028 Term Loan B”) entered into on May 3, 2021 under the Company’s existing senior secured credit facility, and available cash. The 2028 Term Loan B bears an interest rate of the London Interbank Offered Rate (“LIBOR”) plus 2.50%, subject to a 0.00% LIBOR floor, and matures in May 2028. Concurrent with the closing of the Acquisition on May 3, 2021, the Company also extended the term of its 2022 Revolving Facility through May 2026. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill. | |
Goodwill | NOTE 7—GOODWILL The following table shows changes in the carrying amount of goodwill, by segment, from December 31, 2020 to March 31, 2021: Latex Synthetic Engineered Base Americas Binders Rubber Materials Plastics Polystyrene Feedstocks Styrenics Total Balance at December 31, 2020 $ 17.1 $ 12.1 $ 16.0 $ 24.2 $ 4.8 $ — $ — $ 74.2 Foreign currency impact (0.8) (0.5) (0.7) (1.1) (0.2) — — (3.3) Balance at March 31, 2021 $ 16.3 $ 11.6 $ 15.3 $ 23.1 $ 4.6 $ — $ — $ 70.9 |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2021 | |
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. The Company entered into a specific such foreign exchange forward contract in December 2020 in order to economically hedge the euro-denominated purchase price of the Arkema PMMA business, which was acquired on May 3, 2021, as discussed in Note 14. These derivative contracts are not designated for hedge accounting treatment. As of March 31, 2021, the Company had open foreign exchange forward contracts with a notional U.S. dollar equivalent absolute value of $819.0 million. The following table displays the notional amounts of the most significant net foreign exchange hedge positions outstanding as of March 31, 2021: March 31, Buy / (Sell) 2021 Euro (1) $ 665.2 Chinese Yuan $ (53.9) Swiss Franc $ 27.9 New Taiwan Dollar $ 20.4 Indonesian Rupiah $ (12.6) (1) Amount includes $1.2 billion of notional for the forward currency hedge arrangement on the euro-denominated purchase price of the Arkema PMMA business, offset by $0.5 billion of notional for foreign currency hedges to sell euros. Open foreign exchange forward contracts as of March 31, 2021 had maturities occurring over a period of three 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, 2021 had maturities occurring over a period of nine months, and had a net notional U.S. dollar equivalent of $72.0 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, 2021, 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 (0.11% as of March 31, 2021) from the counterparties. Net Investment Hedge The Company accounts for its cross currency swaps (“CCS”) under the spot method, meaning that changes in the fair value of the hedge included in the assessment of effectiveness (changes due to spot foreign exchange rates) are recorded within AOCI, where they remain until either the sale or substantially complete liquidation of the subsidiary subject to the hedge. Additionally, 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 and 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. The Company amortizes any initial excluded component value of a CCS 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 related CCS. Additionally, interest receipts and payments are accrued under the terms of the Company’s CCS and are recognized within “Interest expense, net” in the condensed consolidated statements of operations. The Company entered into a CCS arrangement (the “2017 CCS”) on September 1, 2017, swapping U.S. dollar principal and interest payments of $500.0 million at an interest rate of 5.375% on its 2025 Senior Notes for euro-denominated payments of €420.0 million at a weighted average interest rate of 3.45% for approximately five years. The 2017 CCS was initially designated under the forward method and then redesignated under the spot method effective April 1, 2018. At the time of redesignation, the 2017 CCS had a cumulative foreign currency translation loss in AOCI of $38.0 million. The excluded component value related to the 2017 CCS at April 1, 2018 was $23.6 million, which was being amortized over its remaining term. 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 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, 2021 and 2020: Location and Amount of Gain (Loss) Recognized in Three Months Ended Three Months Ended March 31, 2021 March 31, 2020 Cost of Interest expense, net Acquisition purchase price hedge loss Other expense, net Cost of Interest expense, net Acquisition purchase price hedge loss 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 $ (890.6) $ (12.0) $ (55.0) $ (2.7) $ (783.8) $ (10.3) $ — $ (1.6) Effects of cash flow hedge instruments: Foreign exchange cash flow hedges Amount of gain (loss) reclassified from AOCI into income $ (0.3) $ — $ — $ — $ 0.2 $ — $ — $ — Interest rate swaps Amount of loss reclassified from AOCI into income $ — $ (0.8) $ — $ — $ — $ (0.1) $ — $ — Effects of net investment hedge instruments: Cross currency swaps Amount of gain excluded from effectiveness testing (1) $ — $ 1.9 $ — $ — $ — $ 3.4 $ — $ — Effects of derivatives not designated as hedge instruments: Foreign exchange forward contracts Amount of gain (loss) recognized in income (2) $ — $ — $ (55.0) $ 19.7 $ — $ — $ — $ 13.8 (1) Amount for the three months ended March 31, 2020 represents both the 2017 CCS through its settlement on February 26, 2020 and the 2020 CCS from when it was entered into on February 26, 2020 through March 31, 2021. (2) The $55.0 million loss incurred from the change in fair value of the forward currency hedge arrangement on the euro-denominated purchase price of the Arkema PMMA business during the three months ended March 31, 2021 is presented separately in the condensed consolidated statements of operations from the gains recorded on the Company’s other foreign exchange forward contracts. The following table presents the effect of cash flow and net investment hedge accounting on AOCI for the three months ended March 31, 2021 and 2020: ` Gain (Loss) Recognized in AOCI on Balance Sheet Three Months Ended March 31, 2021 2020 Designated as Cash Flow Hedges Foreign exchange cash flow hedges $ 3.7 $ 2.1 Interest rate swaps 0.9 (5.8) Total $ 4.6 $ (3.7) Designated as Net Investment Hedges Cross currency swaps (CCS) (1) $ 26.2 $ 22.9 Total $ 26.2 $ 22.9 (1) Amount for the three months ended March 31, 2020 represents both the 2017 CCS through its settlement on February 26, 2020 and the 2020 CCS from when it was entered into on February 26, 2020 through March 31, 2020. The Company recorded gains of $19.7 million and $13.8 million during the three months ended March 31, 2021 and 2020, respectively, from settlements and changes in the fair value of outstanding forward contracts (not designated as hedges), not including the loss of $55.0 million recorded from the change in fair value of the forward currency hedge arrangement on the euro-denominated purchase price of the Arkema PMMA business during the three months ended March 31, 2021. The gains from the Company’s forward contracts offset net foreign exchange transaction losses of $19.9 million and $14.0 million during the three months ended March 31, 2021 and 2020, 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 $1.7 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, 2021 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, 2021 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 $ 16.1 $ 1.6 $ — $ 4.1 $ 21.8 Deferred charges and other assets — — — — — Gross derivative asset position 16.1 1.6 — 4.1 21.8 Less: Counterparty netting (7.3) — — — (7.3) Net derivative asset position $ 8.8 $ 1.6 $ — $ 4.1 $ 14.5 Liability Derivatives: Accounts payable (1) $ (49.5) $ — $ (3.3) $ — $ (52.8) Other noncurrent obligations — — (1.6) (39.4) (41.0) Gross derivative liability position (49.5) — (4.9) (39.4) (93.8) Less: Counterparty netting 7.3 — — — 7.3 Net derivative liability position $ (42.2) $ — $ (4.9) $ (39.4) $ (86.5) Total net derivative position $ (33.4) $ 1.6 $ (4.9) $ (35.3) $ (72.0) December 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 (1) $ 8.2 $ — $ — $ 5.0 $ 13.2 Deferred charges and other assets — — — — — Gross derivative asset position 8.2 — — 5.0 13.2 Less: Counterparty netting (6.5) — — — (6.5) Net derivative asset position $ 1.7 $ — $ — $ 5.0 $ 6.7 Liability Derivatives: Accounts payable $ (8.3) $ (2.1) $ (3.4) $ — $ (13.8) Other noncurrent obligations — — (2.5) (66.5) (69.0) Gross derivative liability position (8.3) (2.1) (5.9) (66.5) (82.8) Less: Counterparty netting 6.5 — — — 6.5 Net derivative liability position $ (1.8) $ (2.1) $ (5.9) $ (66.5) $ (76.3) Total net derivative position $ (0.1) $ (2.1) $ (5.9) $ (61.5) $ (69.6) (1) Balances as of March 31, 2021 and December 31, 2020 include a $47.7 million payable and a $7.3 million receivable, respectively, representing the fair value of the forward currency hedge arrangement on the euro-denominated purchase price of the Arkema PMMA business. 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, 2021 | |
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, 2021 and December 31, 2020: March 31, 2021 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 $ — $ 8.8 $ — $ 8.8 Foreign exchange forward contracts—(Liabilities) — (42.2) — (42.2) Foreign exchange cash flow hedges—Assets — 1.6 — 1.6 Interest rate swaps—(Liabilities) — (4.9) — (4.9) Cross currency swaps—Assets — 4.1 — 4.1 Cross currency swaps—(Liabilities) — (39.4) — (39.4) Total fair value $ — $ (72.0) $ — $ (72.0) December 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 $ — $ 1.7 $ — $ 1.7 Foreign exchange forward contracts—(Liabilities) — (1.8) — (1.8) Foreign exchange cash flow hedges—(Liabilities) — (2.1) — (2.1) Interest rate swaps—(Liabilities) — (5.9) — (5.9) Cross currency swaps—Assets — 5.0 — 5.0 Cross currency swaps—(Liabilities) — (66.5) — (66.5) Total fair value $ — $ (69.6) $ — $ (69.6) 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 There were no financial assets or liabilities measured at fair value on a nonrecurring basis during the three months ended March 31, 2021. The Company measured certain financial assets at fair value on a nonrecurring basis during the year ended December 31, 2020, which were still held as of March 31, 2021. These financial assets represent the Company’s styrene monomer assets in Boehlen, Germany, which it continues to operate, and its polybutadiene rubber (“PBR,” specifically nickel and neodymium PBR) assets in Schkopau, Germany, which were mothballed in 2020. These assets were measured at fair value using underlying fixed asset records in conjunction with the use of industry experience and available market data, which are classified as Level 3 significant unobservable inputs in the fair value hierarchy. As a result of the fair value measurements performed, 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 first quarter of 2020. Refer to the Company’s Annual Report for further information. As of March 31, 2021 and December 30, 2020, the value of the Boehlen styrene monomer assets was $3.5 million and $3.7 million, respectively, and the value of the Schkopau PBR assets was $1.5 million and $1.6 million, respectively, which are included in the Company’s condensed consolidated balance sheets herein. There were no other financial assets or liabilities measured at fair value on a nonrecurring basis as of December 31, 2020. 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, 2021 and December 31, 2020: As of As of March 31, 2021 December 31, 2020 2029 Senior Notes $ 463.0 $ — 2025 Senior Notes 514.1 513.5 2024 Term Loan B 673.1 674.0 Total fair value $ 1,650.2 $ 1,187.5 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, 2021 and December 31, 2020. |
Provision for Income Taxes
Provision for Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Provision for Income Taxes | |
Income Taxes | NOTE 10—PROVISION FOR INCOME TAXES Three Months Ended March 31, 2021 2020 Effective income tax rate 22.8 % 24.6 % Provision for income taxes for the three months ended March 31, 2021 totaled $21.1 million, resulting in an effective tax rate of 22.8%. 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%. The effective tax rate for 2020 was impacted 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, 2021 | |
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, 2021 and December 31, 2020, 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. The proceedings with the European Commission continue and its outcome remains open. 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 a decision imposing fines, and/or request certain behavioral or structural commitments from the Company; or (iv) in view of defense arguments by the Company close the proceedings. 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, 2021 | |
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, 2021 2020 Defined Benefit Pension Plans Service cost $ 5.4 $ 4.3 Interest cost 0.5 0.8 Expected return on plan assets (0.1) (0.3) Amortization of prior service credit (0.2) (0.3) Amortization of net loss 1.8 1.2 Net periodic benefit cost $ 7.4 $ 5.7 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, 2021 and 2020. 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, 2021 and December 31, 2020, the Company’s benefit obligations included primarily in “Other noncurrent obligations” in the condensed consolidated balance sheets were $326.0 million and $337.5 million, respectively. The Company made cash contributions and benefit payments to unfunded plans of approximately $1.6 million during the three months ended March 31, 2021. The Company expects to make additional cash contributions, including benefit payments to unfunded plans, of approximately $4.7 million to its defined benefit plans for the remainder of 2021. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 and 2020, as well as unrecognized compensation cost as of March 31, 2021: As of Three Months Ended March 31, 2021 March 31, Unrecognized Weighted 2021 2020 Compensation Cost Average Years RSUs $ 1.8 $ 1.7 $ 12.9 2.2 Options 1.2 1.0 3.9 1.5 PSUs 0.5 0.5 5.0 2.3 Total share-based compensation expense $ 3.5 $ 3.2 The following table summarizes awards granted and the respective weighted average grant date fair value for the three months ended March 31, 2021: Three Months Ended March 31, 2021 Awards Granted Weighted Average Grant Date Fair Value per Award RSUs 109,748 $ 61.11 Options 161,769 23.04 PSUs 49,463 61.06 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, 2021: Three Months Ended March 31, 2021 Expected term (in years) 5.50 Expected volatility 48.76 % Risk-free interest rate 0.64 % Dividend yield 1.75 % The expected volatility assumption is 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, 2021, 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, 2021: Three Months Ended March 31, 2021 Expected term (in years) 3.00 Expected volatility 58.00 % Risk-free interest rate 0.20 % Share price $ 61.06 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, 2021 | |
Acquisitions and Divestitures | |
Acquisitions and Divestitures | NOTE 14—ACQUISITIONS AND DIVESTITURES Acquisition of the Arkema PMMA Business On March 19, 2021, pursuant to the terms of the Put Option Agreement the Company entered into with Arkema PMMA is a transparent and rigid plastic with a wide range of end uses, and is an attractive adjacent chemistry which complements Trinseo’s existing offerings across several end markets including automotive, building & construction, medical and consumer electronics The Acquisition closed on May 3, 2021 and was funded using the net proceeds from the Company’s new financing arrangements, including $450.0 million from its 2029 Senior Notes issued on March 24, 2021 and $750.0 million of incremental term loan borrowings under the 2028 Term Loan B entered into in conjunction with closing of the transaction, as well as available cash. Refer to Note 6 for further information on the financing arrangements used to fund the Acquisition. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2021 | |
Segments | |
Segments | NOTE 15—SEGMENTS As discussed in the Annual Report, the Company realigned its reporting segments effective October 1, 2020, as a result of which the Company’s former Performance Plastics segment was reorganized into two standalone reporting segments: Engineered Materials and Base Plastics. There were no changes to the Company’s remaining five segments. Refer to the Annual Report for further information on the resegmentation. The information in the tables below has been retroactively adjusted to reflect the changes in reporting segments . 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 number of performance latex binders applications, such as adhesive, building and construction and the technical textile paper market. The Synthetic Rubber segment produces synthetic rubber products used predominantly in high-performance tires, impact modifiers and technical rubber products, such as conveyer belts, hoses, seals and gaskets. The Engineered Materials segment includes the Company’s compounds and blends products sold into higher growth and value applications, such as consumer electronics and medical, as well as the Company’s thermoplastic elastomers (“TPEs”) products which are sold into a variety of applications including footwear and automotive. The Base Plastics segment contains the results of the acrylonitrile-butadiene-styrene (“ABS”), styrene-acrylonitrile (“SAN”), and polycarbonate (“PC”) businesses, as well as compounds and blends for automotive and other 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 solution styrene-butadiene rubber (“SSBR”). Lastly, the Americas Styrenics segment consists solely of the operations of the Company’s 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, 2021 and 2020. 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, 2021 and 2020. Latex Synthetic Engineered Base Americas Three Months Ended (1) Binders Rubber Materials Plastics Polystyrene Feedstocks Styrenics March 31, 2021 $ 17.7 $ 14.2 $ 8.1 $ 66.1 $ 47.7 $ 46.6 $ 22.9 March 31, 2020 $ 21.5 $ 15.3 $ 8.2 $ 28.5 $ 11.8 $ (16.2) $ 9.8 (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, 2021 2020 Income (loss) before income taxes $ 92.6 $ (48.2) Interest expense, net 12.0 10.3 Depreciation and amortization 32.9 36.4 Corporate Unallocated (2) 22.4 21.9 Adjusted EBITDA Addbacks (3) 63.4 58.5 Segment Adjusted EBITDA $ 223.3 $ 78.9 (2) Corporate unallocated includes corporate overhead costs and certain other income and expenses. (3) Adjusted EBITDA addbacks for the three months ended March 31, 2021 and 2020 are as follows: Three Months Ended March 31, 2021 2020 Net gain on disposition of businesses and assets $ (0.2) $ (0.4) Restructuring and other charges (Note 16) 0.4 1.8 Acquisition transaction and integration net costs (Note 14) 6.0 0.1 Acquisition purchase price hedge loss (Note 8) 55.0 — Asset impairment charges or write-offs (Note 9) — 38.3 Other items (a) 2.2 18.7 Total Adjusted EBITDA Addbacks $ 63.4 $ 58.5 (a) Other items for the three months ended March 31, 2021 primarily relate to fees incurred in conjunction with certain of the Company’s strategic initiatives. Other items for the three months ended March 31, 2020 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, and IT services, which was substantially completed in 2020, as well as fees incurred in conjunction with certain of the Company’s strategic initiatives. |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 and 2020: Three Months Ended Cumulative March 31, Life-to-date 2021 2020 Charges Segment Corporate Restructuring Program Accelerated depreciation $ — $ 1.3 $ 2.9 Employee termination benefits 0.3 0.3 19.8 Contract terminations — 1.2 2.8 Decommissioning and other — — 0.2 Corporate Program Subtotal $ 0.3 $ 2.8 $ 25.7 N/A (1) Other Restructurings 0.1 0.3 Various Total Restructuring Charges $ 0.4 $ 3.1 (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, which continued through the three months ended March 31, 2021. The Company expects to incur a limited amount of incremental employee termination benefit charges through the end of 2021, and the majority of these benefits are expected to be paid by the end of 2021. 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. The following table provides a roll forward of the liability balances associated with the Company’s restructuring activities as of March 31, 2021. Employee termination benefit and contract termination charges are primarily recorded within “Accrued expenses and other current liabilities” in the condensed consolidated balance sheets. Balance at Balance at December 31, 2020 Expenses Deductions (1) March 31, 2021 Employee termination benefits $ 8.4 $ 0.3 $ (3.5) $ 5.2 Contract terminations 0.1 — — 0.1 Decommissioning and other — 0.1 (0.1) — Total $ 8.5 $ 0.4 $ (3.6) $ 5.3 (1) Primarily includes payments made against the existing accrual, as well as immaterial impacts of foreign currency remeasurement. placeholder |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 and 2020 Adjustments Plans, Net Hedges, Net Total Balance as of December 31, 2020 $ (109.0) $ (71.9) $ (5.2) $ (186.1) Other comprehensive income 0.4 — 3.5 3.9 Amounts reclassified from AOCI to net income (1) — 1.1 1.1 2.2 Balance as of March 31, 2021 $ (108.6) $ (70.8) $ (0.6) $ (180.0) Balance as of 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 (loss) (1) — 0.6 (0.1) 0.5 Balance as of March 31, 2020 $ (96.0) $ (55.1) $ (3.1) $ (154.2) (1) The following is a summary of amounts reclassified from AOCI to net income (loss) for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, Statements of Operations AOCI Components 2021 2020 Classification Cash flow hedging items Foreign exchange cash flow hedges $ 0.3 $ (0.2) Cost of sales Interest rate swaps 0.8 0.1 Interest expense, net Total before tax 1.1 (0.1) Tax effect — — Provision for (benefit from) income taxes Total, net of tax $ 1.1 $ (0.1) Amortization of pension and other postretirement benefit plan items Prior service credit $ (0.2) $ (0.3) (a) Net actuarial loss 1.8 1.2 (a) Total before tax 1.6 0.9 Tax effect (0.5) (0.3) Provision for (benefit from) income taxes Total, net of tax $ 1.1 $ 0.6 (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, 2021 | |
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, 2021 and 2020: Three Months Ended March 31, (in millions, except per share data) 2021 2020 Earnings: Net income (loss) $ 71.5 $ (36.3) Shares: Weighted average ordinary shares outstanding 38.5 38.5 Dilutive effect of RSUs, option awards, and PSUs (1) 1.0 — Diluted weighted average ordinary shares outstanding 39.5 38.5 Income (loss) per share: Income (loss) per share—basic $ 1.86 $ (0.94) Income (loss) per share—diluted $ 1.81 $ (0.94) (1) Refer to Note 13 for discussion of RSUs, option awards, and PSUs granted to certain Company directors and employees. There were 0.5 million anti-dilutive shares that have been excluded from the computation of diluted earnings per share for the three months ended March 31, 2021. 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. placeholder |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 and 2020 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 2020 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 22, 2021. 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, 2021. However, actual results could differ from these estimates and assumptions. The December 31, 2020 condensed consolidated balance sheet data presented herein was derived from the Company’s December 31, 2020 audited consolidated financial statements, but does not include all disclosures required by GAAP for annual periods. |
Reclassifications | Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications pertain primarily to the Company’s resegmentation effective October 1, 2020. Refer to Notes 3 and 15 for further information. |
Net Sales (Tables)
Net Sales (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue [Table Text Block] | Latex Synthetic Engineered Base Three Months Ended Binders Rubber Materials Plastics Polystyrene Feedstocks Total March 31, 2021 United States $ 67.8 $ — $ 10.3 $ 62.5 $ — $ 3.4 $ 144.0 Europe 117.5 111.5 21.0 197.9 149.3 52.5 649.7 Asia-Pacific 63.8 12.7 34.2 48.8 117.6 — 277.1 Rest of World 1.8 — 0.3 19.7 — — 21.8 Total $ 250.9 $ 124.2 $ 65.8 $ 328.9 $ 266.9 $ 55.9 $ 1,092.6 March 31, 2020 United States $ 62.2 $ — $ 9.9 $ 60.7 $ — $ 2.6 $ 135.4 Europe 101.9 99.8 14.9 150.1 109.8 29.1 505.6 Asia-Pacific 52.3 1.9 22.9 26.8 73.0 13.1 190.0 Rest of World 2.7 — — 19.8 — — 22.5 Total $ 219.1 $ 101.7 $ 47.7 $ 257.4 $ 182.8 $ 44.8 $ 853.5 |
Investments in Unconsolidated_2
Investments in Unconsolidated Affiliates (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Investments in Unconsolidated Affiliates | |
Summarized Financial Information of Unconsolidated Affiliates | Three Months Ended March 31, 2021 2020 Sales $ 423.0 $ 322.2 Gross profit $ 65.4 $ 7.2 Net income (loss) $ 51.1 $ (8.3) |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventories | |
Schedule of Inventories | March 31, December 31, 2021 2020 Finished goods $ 193.5 $ 174.0 Raw materials and semi-finished goods 229.5 169.1 Supplies 40.0 41.0 Total $ 463.0 $ 384.1 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt | |
Schedule of Debt [Table Text Block] | March 31, 2021 December 31, 2020 Interest Rate as of Maturity Date Carrying Amount Unamortized Deferred Financing Fees Total Debt, Less Unamortized Deferred Financing Fees Carrying Amount Unamortized Deferred Financing Fees (1) Total Debt, Less Senior Credit Facility 2024 Term Loan B 2.109% September 2024 $ 677.3 $ (10.2) $ 667.1 $ 677.3 $ (10.8) $ 666.5 2022 Revolving Facility (2) Various September 2022 — — — — — — 2029 Senior Notes 5.125% April 2029 450.0 (2.2) 447.8 — — — 2025 Senior Notes 5.375% September 2025 500.0 (5.9) 494.1 500.0 (6.2) 493.8 Accounts Receivable Securitization Facility (3) Various September 2021 — — — — — — Other indebtedness Various Various 9.8 — 9.8 10.7 — 10.7 Total debt $ 1,637.1 $ (18.3) $ 1,618.8 $ 1,188.0 $ (17.0) $ 1,171.0 Less: current portion (4) (13.7) (12.3) Total long-term debt, net of unamortized deferred financing fees $ 1,605.1 $ 1,158.7 (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) As of March 31, 2021, under the 2022 Revolving Facility, the Company had a capacity of $375.0 million and funds available for borrowing of $360.0 million (net of $15.0 million outstanding letters of credit). 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. (3) As of March 31, 2021, this facility had a borrowing capacity of $150.0 million, and the Company had approximately $150.0 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, 2021 and December 31, 2020, the current portion of long-term debt was primarily related to $8.7 million and $7.0 million, respectively, of the scheduled future principal payments on the 2024 Term Loan B. |
Redemption Price as Percentage of Principal Amount to Applicable Date of Redemption | 12-month period commencing April 1 in Year Percentage 2024 102.563 % 2025 101.281 % 2026 and thereafter 100.000 % |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill. | |
Changes in Carrying Amount of Goodwill, by Segment | Latex Synthetic Engineered Base Americas Binders Rubber Materials Plastics Polystyrene Feedstocks Styrenics Total Balance at December 31, 2020 $ 17.1 $ 12.1 $ 16.0 $ 24.2 $ 4.8 $ — $ — $ 74.2 Foreign currency impact (0.8) (0.5) (0.7) (1.1) (0.2) — — (3.3) Balance at March 31, 2021 $ 16.3 $ 11.6 $ 15.3 $ 23.1 $ 4.6 $ — $ — $ 70.9 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments [Abstract] | |
Notional Amounts of Most Significant Net Foreign Exchange Hedge Positions Outstanding | March 31, Buy / (Sell) 2021 Euro (1) $ 665.2 Chinese Yuan $ (53.9) Swiss Franc $ 27.9 New Taiwan Dollar $ 20.4 Indonesian Rupiah $ (12.6) (1) Amount includes $1.2 billion of notional for the forward currency hedge arrangement on the euro-denominated purchase price of the Arkema PMMA business, offset by $0.5 billion of notional for foreign currency hedges to sell euros. |
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, 2021 March 31, 2020 Cost of Interest expense, net Acquisition purchase price hedge loss Other expense, net Cost of Interest expense, net Acquisition purchase price hedge loss 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 $ (890.6) $ (12.0) $ (55.0) $ (2.7) $ (783.8) $ (10.3) $ — $ (1.6) Effects of cash flow hedge instruments: Foreign exchange cash flow hedges Amount of gain (loss) reclassified from AOCI into income $ (0.3) $ — $ — $ — $ 0.2 $ — $ — $ — Interest rate swaps Amount of loss reclassified from AOCI into income $ — $ (0.8) $ — $ — $ — $ (0.1) $ — $ — Effects of net investment hedge instruments: Cross currency swaps Amount of gain excluded from effectiveness testing (1) $ — $ 1.9 $ — $ — $ — $ 3.4 $ — $ — Effects of derivatives not designated as hedge instruments: Foreign exchange forward contracts Amount of gain (loss) recognized in income (2) $ — $ — $ (55.0) $ 19.7 $ — $ — $ — $ 13.8 (1) Amount for the three months ended March 31, 2020 represents both the 2017 CCS through its settlement on February 26, 2020 and the 2020 CCS from when it was entered into on February 26, 2020 through March 31, 2021. (2) The $55.0 million loss incurred from the change in fair value of the forward currency hedge arrangement on the euro-denominated purchase price of the Arkema PMMA business during the three months ended March 31, 2021 is presented separately in the condensed consolidated statements of operations from the gains recorded on the Company’s other foreign exchange forward contracts. |
Schedule of Effect of Hedges on AOCI | ` Gain (Loss) Recognized in AOCI on Balance Sheet Three Months Ended March 31, 2021 2020 Designated as Cash Flow Hedges Foreign exchange cash flow hedges $ 3.7 $ 2.1 Interest rate swaps 0.9 (5.8) Total $ 4.6 $ (3.7) Designated as Net Investment Hedges Cross currency swaps (CCS) (1) $ 26.2 $ 22.9 Total $ 26.2 $ 22.9 (1) Amount for the three months ended March 31, 2020 represents both the 2017 CCS through its settlement on February 26, 2020 and 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, 2021 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 $ 16.1 $ 1.6 $ — $ 4.1 $ 21.8 Deferred charges and other assets — — — — — Gross derivative asset position 16.1 1.6 — 4.1 21.8 Less: Counterparty netting (7.3) — — — (7.3) Net derivative asset position $ 8.8 $ 1.6 $ — $ 4.1 $ 14.5 Liability Derivatives: Accounts payable (1) $ (49.5) $ — $ (3.3) $ — $ (52.8) Other noncurrent obligations — — (1.6) (39.4) (41.0) Gross derivative liability position (49.5) — (4.9) (39.4) (93.8) Less: Counterparty netting 7.3 — — — 7.3 Net derivative liability position $ (42.2) $ — $ (4.9) $ (39.4) $ (86.5) Total net derivative position $ (33.4) $ 1.6 $ (4.9) $ (35.3) $ (72.0) December 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 (1) $ 8.2 $ — $ — $ 5.0 $ 13.2 Deferred charges and other assets — — — — — Gross derivative asset position 8.2 — — 5.0 13.2 Less: Counterparty netting (6.5) — — — (6.5) Net derivative asset position $ 1.7 $ — $ — $ 5.0 $ 6.7 Liability Derivatives: Accounts payable $ (8.3) $ (2.1) $ (3.4) $ — $ (13.8) Other noncurrent obligations — — (2.5) (66.5) (69.0) Gross derivative liability position (8.3) (2.1) (5.9) (66.5) (82.8) Less: Counterparty netting 6.5 — — — 6.5 Net derivative liability position $ (1.8) $ (2.1) $ (5.9) $ (66.5) $ (76.3) Total net derivative position $ (0.1) $ (2.1) $ (5.9) $ (61.5) $ (69.6) (1) Balances as of March 31, 2021 and December 31, 2020 include a $47.7 million payable and a $7.3 million receivable, respectively, representing the fair value of the forward currency hedge arrangement on the euro-denominated purchase price of the Arkema PMMA business. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Measurements | |
Schedule of Assets and Liabilities at Fair Value on Recurring Basis | March 31, 2021 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 $ — $ 8.8 $ — $ 8.8 Foreign exchange forward contracts—(Liabilities) — (42.2) — (42.2) Foreign exchange cash flow hedges—Assets — 1.6 — 1.6 Interest rate swaps—(Liabilities) — (4.9) — (4.9) Cross currency swaps—Assets — 4.1 — 4.1 Cross currency swaps—(Liabilities) — (39.4) — (39.4) Total fair value $ — $ (72.0) $ — $ (72.0) December 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 $ — $ 1.7 $ — $ 1.7 Foreign exchange forward contracts—(Liabilities) — (1.8) — (1.8) Foreign exchange cash flow hedges—(Liabilities) — (2.1) — (2.1) Interest rate swaps—(Liabilities) — (5.9) — (5.9) Cross currency swaps—Assets — 5.0 — 5.0 Cross currency swaps—(Liabilities) — (66.5) — (66.5) Total fair value $ — $ (69.6) $ — $ (69.6) |
Estimated Fair Value of Outstanding Debt Not Carried at Fair Value | As of As of March 31, 2021 December 31, 2020 2029 Senior Notes $ 463.0 $ — 2025 Senior Notes 514.1 513.5 2024 Term Loan B 673.1 674.0 Total fair value $ 1,650.2 $ 1,187.5 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Provision for Income Taxes | |
Schedule of Effective Tax Rate | Three Months Ended March 31, 2021 2020 Effective income tax rate 22.8 % 24.6 % |
Pension Plans and Other Postr_2
Pension Plans and Other Postretirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Pension Plans and Other Postretirement Benefits | |
Schedule of Net Periodic Benefit Costs | Three Months Ended March 31, 2021 2020 Defined Benefit Pension Plans Service cost $ 5.4 $ 4.3 Interest cost 0.5 0.8 Expected return on plan assets (0.1) (0.3) Amortization of prior service credit (0.2) (0.3) Amortization of net loss 1.8 1.2 Net periodic benefit cost $ 7.4 $ 5.7 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 March 31, Unrecognized Weighted 2021 2020 Compensation Cost Average Years RSUs $ 1.8 $ 1.7 $ 12.9 2.2 Options 1.2 1.0 3.9 1.5 PSUs 0.5 0.5 5.0 2.3 Total share-based compensation expense $ 3.5 $ 3.2 |
Summary of Awards Granted and Weighted Average Grant-Date Fair Value | Three Months Ended March 31, 2021 Awards Granted Weighted Average Grant Date Fair Value per Award RSUs 109,748 $ 61.11 Options 161,769 23.04 PSUs 49,463 61.06 |
Option Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Weighted-average Assumptions | Three Months Ended March 31, 2021 Expected term (in years) 5.50 Expected volatility 48.76 % Risk-free interest rate 0.64 % Dividend yield 1.75 % |
Performance Share Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Weighted-average Assumptions | Three Months Ended March 31, 2021 Expected term (in years) 3.00 Expected volatility 58.00 % Risk-free interest rate 0.20 % Share price $ 61.06 |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segments | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Latex Synthetic Engineered Base Americas Three Months Ended (1) Binders Rubber Materials Plastics Polystyrene Feedstocks Styrenics March 31, 2021 $ 17.7 $ 14.2 $ 8.1 $ 66.1 $ 47.7 $ 46.6 $ 22.9 March 31, 2020 $ 21.5 $ 15.3 $ 8.2 $ 28.5 $ 11.8 $ (16.2) $ 9.8 (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, 2021 2020 Income (loss) before income taxes $ 92.6 $ (48.2) Interest expense, net 12.0 10.3 Depreciation and amortization 32.9 36.4 Corporate Unallocated (2) 22.4 21.9 Adjusted EBITDA Addbacks (3) 63.4 58.5 Segment Adjusted EBITDA $ 223.3 $ 78.9 (2) Corporate unallocated includes corporate overhead costs and certain other income and expenses. (3) Adjusted EBITDA addbacks for the three months ended March 31, 2021 and 2020 are as follows: Three Months Ended March 31, 2021 2020 Net gain on disposition of businesses and assets $ (0.2) $ (0.4) Restructuring and other charges (Note 16) 0.4 1.8 Acquisition transaction and integration net costs (Note 14) 6.0 0.1 Acquisition purchase price hedge loss (Note 8) 55.0 — Asset impairment charges or write-offs (Note 9) — 38.3 Other items (a) 2.2 18.7 Total Adjusted EBITDA Addbacks $ 63.4 $ 58.5 (a) Other items for the three months ended March 31, 2021 primarily relate to fees incurred in conjunction with certain of the Company’s strategic initiatives. Other items for the three months ended March 31, 2020 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, and IT services, which was substantially completed in 2020, as well as fees incurred in conjunction with certain of the Company’s strategic initiatives. |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring | |
Detail of Restructuring Charges | Three Months Ended Cumulative March 31, Life-to-date 2021 2020 Charges Segment Corporate Restructuring Program Accelerated depreciation $ — $ 1.3 $ 2.9 Employee termination benefits 0.3 0.3 19.8 Contract terminations — 1.2 2.8 Decommissioning and other — — 0.2 Corporate Program Subtotal $ 0.3 $ 2.8 $ 25.7 N/A (1) Other Restructurings 0.1 0.3 Various Total Restructuring Charges $ 0.4 $ 3.1 (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, which continued through the three months ended March 31, 2021. The Company expects to incur a limited amount of incremental employee termination benefit charges through the end of 2021, and the majority of these benefits are expected to be paid by the end of 2021. 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. |
Rollforward of Liability Balances | Balance at Balance at December 31, 2020 Expenses Deductions (1) March 31, 2021 Employee termination benefits $ 8.4 $ 0.3 $ (3.5) $ 5.2 Contract terminations 0.1 — — 0.1 Decommissioning and other — 0.1 (0.1) — Total $ 8.5 $ 0.4 $ (3.6) $ 5.3 (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 (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Shareholders' Equity. | |
Components of AOCI, Net of Income Taxes | Cumulative Pension & Other Translation Postretirement Benefit Cash Flow Three Months Ended March 31, 2021 and 2020 Adjustments Plans, Net Hedges, Net Total Balance as of December 31, 2020 $ (109.0) $ (71.9) $ (5.2) $ (186.1) Other comprehensive income 0.4 — 3.5 3.9 Amounts reclassified from AOCI to net income (1) — 1.1 1.1 2.2 Balance as of March 31, 2021 $ (108.6) $ (70.8) $ (0.6) $ (180.0) Balance as of 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 (loss) (1) — 0.6 (0.1) 0.5 Balance as of March 31, 2020 $ (96.0) $ (55.1) $ (3.1) $ (154.2) |
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | Three Months Ended March 31, Statements of Operations AOCI Components 2021 2020 Classification Cash flow hedging items Foreign exchange cash flow hedges $ 0.3 $ (0.2) Cost of sales Interest rate swaps 0.8 0.1 Interest expense, net Total before tax 1.1 (0.1) Tax effect — — Provision for (benefit from) income taxes Total, net of tax $ 1.1 $ (0.1) Amortization of pension and other postretirement benefit plan items Prior service credit $ (0.2) $ (0.3) (a) Net actuarial loss 1.8 1.2 (a) Total before tax 1.6 0.9 Tax effect (0.5) (0.3) Provision for (benefit from) income taxes Total, net of tax $ 1.1 $ 0.6 (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, 2021 | |
Earnings Per Share | |
Schedule of Earnings per Share Basic and Diluted | Three Months Ended March 31, (in millions, except per share data) 2021 2020 Earnings: Net income (loss) $ 71.5 $ (36.3) Shares: Weighted average ordinary shares outstanding 38.5 38.5 Dilutive effect of RSUs, option awards, and PSUs (1) 1.0 — Diluted weighted average ordinary shares outstanding 39.5 38.5 Income (loss) per share: Income (loss) per share—basic $ 1.86 $ (0.94) Income (loss) per share—diluted $ 1.81 $ (0.94) (1) Refer to Note 13 for discussion of RSUs, option awards, and PSUs granted to certain Company directors and employees. There were 0.5 million anti-dilutive shares that have been excluded from the computation of diluted earnings per share for the three months ended March 31, 2021. 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. |
Net Sales (Details)
Net Sales (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 1,092.6 | $ 853.5 |
Latex Binders Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 250.9 | 219.1 |
Synthetic Rubber Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 124.2 | 101.7 |
Engineered Materials [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 65.8 | 47.7 |
Base Plastics [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 328.9 | 257.4 |
Polystyrene [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 266.9 | 182.8 |
Feedstocks [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 55.9 | 44.8 |
United States [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 144 | 135.4 |
United States [Member] | Latex Binders Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 67.8 | 62.2 |
United States [Member] | Engineered Materials [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 10.3 | 9.9 |
United States [Member] | Base Plastics [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 62.5 | 60.7 |
United States [Member] | Feedstocks [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 3.4 | 2.6 |
Europe [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 649.7 | 505.6 |
Europe [Member] | Latex Binders Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 117.5 | 101.9 |
Europe [Member] | Synthetic Rubber Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 111.5 | 99.8 |
Europe [Member] | Engineered Materials [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 21 | 14.9 |
Europe [Member] | Base Plastics [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 197.9 | 150.1 |
Europe [Member] | Polystyrene [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 149.3 | 109.8 |
Europe [Member] | Feedstocks [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 52.5 | 29.1 |
Asia-Pacific [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 277.1 | 190 |
Asia-Pacific [Member] | Latex Binders Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 63.8 | 52.3 |
Asia-Pacific [Member] | Synthetic Rubber Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 12.7 | 1.9 |
Asia-Pacific [Member] | Engineered Materials [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 34.2 | 22.9 |
Asia-Pacific [Member] | Base Plastics [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 48.8 | 26.8 |
Asia-Pacific [Member] | Polystyrene [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 117.6 | 73 |
Asia-Pacific [Member] | Feedstocks [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 13.1 | |
Rest of World [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 21.8 | 22.5 |
Rest of World [Member] | Latex Binders Segment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1.8 | 2.7 |
Rest of World [Member] | Engineered Materials [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0.3 | |
Rest of World [Member] | Base Plastics [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 19.7 | $ 19.8 |
Investments in Unconsolidated_3
Investments in Unconsolidated Affiliates (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021USD ($)item | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||
Number of joint ventures | item | 1 | ||
Equity in earnings of unconsolidated affiliates | $ 22.9 | $ 9.8 | |
Assets | |||
Current assets | 2,205 | $ 1,517.1 | |
Total assets | 3,480.1 | 2,845.2 | |
Liabilities | |||
Current liabilities | 677.6 | 533.3 | |
Total noncurrent liabilities | 2,126.2 | $ 1,721.6 | |
Summarized Financial Information, Net Income | |||
Gross profit | 202 | 69.7 | |
Net income (loss) | 71.5 | (36.3) | |
Americas Styrenics | |||
Summarized Financial Information, Net Income | |||
Net sales | 423 | 322.2 | |
Gross profit | 65.4 | 7.2 | |
Net income (loss) | $ 51.1 | $ (8.3) |
Investments in Unconsolidated_4
Investments in Unconsolidated Affiliates - Americas Styrenics (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Investments in Unconsolidated Affiliates | |||
Investments in unconsolidated affiliates | $ 248,100,000 | $ 240,100,000 | |
Americas Styrenics | |||
Investments in Unconsolidated Affiliates | |||
Investments in unconsolidated affiliates | 248,100,000 | 240,100,000 | |
Investment in unconsolidated affiliates-difference between carrying amount and underlying equity | $ 13,700,000 | $ 16,300,000 | |
Percentage of ownership underlying net assets | 50.00% | 50.00% | |
Amortized weighted average remaining useful life | 3.0 | ||
Dividends received from operating activities | $ 15,000,000 | $ 0 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Inventories | ||
Finished goods | $ 193.5 | $ 174 |
Raw materials and semi-finished goods | 229.5 | 169.1 |
Supplies | 40 | 41 |
Total | $ 463 | $ 384.1 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) € in Millions, $ in Millions | 3 Months Ended | |||||
Mar. 31, 2021USD ($) | Mar. 24, 2021 | Dec. 31, 2020USD ($) | Feb. 26, 2020USD ($) | Feb. 26, 2020EUR (€) | Sep. 01, 2017USD ($) | |
Debt Instruments | ||||||
Carrying amount | $ 1,637.1 | $ 1,188 | ||||
Unamortized deferred financing fees | (18.3) | (17) | ||||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | 1,618.8 | 1,171 | ||||
Less: current portion | (13.7) | (12.3) | ||||
Total long-term debt, net of unamortized deferred financing fees | $ 1,605.1 | 1,158.7 | ||||
2024 Term Loan B | ||||||
Debt Instruments | ||||||
Interest rate at end of period (as a percent) | 2.109% | |||||
Carrying amount | $ 677.3 | 677.3 | ||||
Unamortized deferred financing fees | (10.2) | (10.8) | ||||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | 667.1 | 666.5 | ||||
Less: current portion | $ (8.7) | (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 | |||||
Letters of credit, amount outstanding | $ 15 | |||||
Commitment fee (as a percent) | 0.375% | |||||
Maximum borrowing capacity | $ 375 | |||||
2025 Senior Notes | ||||||
Debt Instruments | ||||||
Interest rate | 5.375% | 5.375% | 5.375% | 5.375% | ||
Carrying amount | $ 500 | 500 | ||||
Unamortized deferred financing fees | (5.9) | (6.2) | ||||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | $ 494.1 | 493.8 | $ 500 | € 459.3 | $ 500 | |
2029 Senior Notes | ||||||
Debt Instruments | ||||||
Interest rate | 5.125% | 5.125% | ||||
Carrying amount | $ 450 | |||||
Unamortized deferred financing fees | (2.2) | |||||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | 447.8 | |||||
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 | $ 150 | |||||
Accounts Receivable Securitization Facility [Member] | Base Rate [Member] | ||||||
Debt Instruments | ||||||
Interest rate | 1.95% | |||||
Other Indebtedness [Member] | ||||||
Debt Instruments | ||||||
Carrying amount | $ 9.8 | 10.7 | ||||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | $ 9.8 | $ 10.7 |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - USD ($) $ in Millions | May 03, 2021 | Mar. 24, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instruments | ||||
Unamortized deferred financing fees | $ 18.3 | $ 17 | ||
2029 Senior Notes | ||||
Debt Instruments | ||||
Debt instrument issued | $ 450 | |||
Debt instrument, stated interest rate | 5.125% | 5.125% | ||
Unamortized deferred financing fees | $ 2.2 | |||
Capitalization of issuance costs | $ 2.2 | |||
Amortization period | 8 years | |||
2029 Senior Notes | Subsequent Event [Member] | ||||
Debt Instruments | ||||
Debt instrument issued | $ 450 | |||
2029 Senior Notes | Period prior to April 1, 2024 | ||||
Debt Instruments | ||||
Debt instrument, redemption price percentage | 100.00% | |||
Aggregate principal amount that may be redeemed, as a percent | 40.00% | |||
Redemption price, as percentage of principal | 105.125% | |||
2029 Senior Notes | 12-month period commencing April 1, 2024 | ||||
Debt Instruments | ||||
Debt instrument, redemption price percentage | 102.563% | |||
2029 Senior Notes | 12-month period commencing April 1, 2025 | ||||
Debt Instruments | ||||
Debt instrument, redemption price percentage | 101.281% | |||
2029 Senior Notes | 12-month period commencing April 1, 2026 and thereafter | ||||
Debt Instruments | ||||
Debt instrument, redemption price percentage | 100.00% | |||
2028 Term Loan B | Subsequent Event [Member] | ||||
Debt Instruments | ||||
Debt instrument issued | $ 750 | |||
2028 Term Loan B | LIBOR [Member] | Subsequent Event [Member] | ||||
Debt Instruments | ||||
Debt instrument, margin rate | 2.50% | |||
2028 Term Loan B | LIBOR [Member] | Minimum | Subsequent Event [Member] | ||||
Debt Instruments | ||||
Debt instrument, margin rate | 0.00% |
Goodwill (Details)
Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 74.2 |
Foreign currency impact | (3.3) |
Ending Balance | 70.9 |
Latex Binders Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 17.1 |
Foreign currency impact | (0.8) |
Ending Balance | 16.3 |
Synthetic Rubber Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 12.1 |
Foreign currency impact | (0.5) |
Ending Balance | 11.6 |
Engineered Materials [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 16 |
Foreign currency impact | (0.7) |
Ending Balance | 15.3 |
Base Plastics [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 24.2 |
Foreign currency impact | (1.1) |
Ending Balance | 23.1 |
Polystyrene [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 4.8 |
Foreign currency impact | (0.2) |
Ending Balance | $ 4.6 |
Derivative Instruments (Details
Derivative Instruments (Details) € in Millions, $ in Millions | Feb. 26, 2020USD ($) | Sep. 01, 2017USD ($) | Mar. 31, 2021USD ($)item | Dec. 31, 2020USD ($) | Feb. 26, 2020EUR (€) | Apr. 01, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 01, 2017EUR (€) |
Derivative Instruments | ||||||||
Total debt | $ 1,618.8 | $ 1,171 | ||||||
Initial excluded component value | $ 23.6 | |||||||
Foreign Exchange Forward Contracts | ||||||||
Derivative Instruments | ||||||||
Derivative term | 3 months | |||||||
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments - Economic | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | $ 819 | |||||||
Foreign Exchange Forward Contracts | Designated as Hedging Instrument | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | $ 72 | |||||||
Derivative term | 9 months | |||||||
Number of subsidiaries participating | item | 1 | |||||||
Cross Currency Swap | ||||||||
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% | ||||||
Cumulative translation adjustment, net of tax | $ 13.8 | $ 38 | ||||||
Cash proceeds | $ 51.6 | |||||||
Interest Rate Swap | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | $ 200 | |||||||
Fixed interest rate per agreement (as a percent) | 1.81% | |||||||
LIBOR rate at end of period (as a percent) | 0.11% | |||||||
2025 Senior Notes | ||||||||
Derivative Instruments | ||||||||
Total debt | $ 500 | $ 500 | $ 494.1 | 493.8 | € 459.3 | |||
Interest rate | 5.375% | 5.375% | 5.375% | 5.375% | 5.375% | |||
2024 Term Loan B | ||||||||
Derivative Instruments | ||||||||
Total debt | $ 667.1 | $ 666.5 | ||||||
2024 Term Loan B | LIBOR [Member] | ||||||||
Derivative Instruments | ||||||||
Debt instrument, margin rate | 2.00% | |||||||
Variable rate floor (as a percent) | 0.00% | |||||||
Euro [Member] | Buy | Arkema | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | $ 1.2 | |||||||
Euro [Member] | (Sell) | Arkema | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | 0.5 | |||||||
Euro [Member] | Foreign Exchange Forward Contracts | Buy | Not Designated as Hedging Instruments - Economic | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | 665.2 | |||||||
Chinese Yuan [Member] | Foreign Exchange Forward Contracts | (Sell) | Not Designated as Hedging Instruments - Economic | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | 53.9 | |||||||
Swiss Franc [Member] | Foreign Exchange Forward Contracts | Buy | Not Designated as Hedging Instruments - Economic | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | 27.9 | |||||||
Taiwan, New Dollars | Foreign Exchange Forward Contracts | Buy | Not Designated as Hedging Instruments - Economic | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | 20.4 | |||||||
Indonesian Rupiah [Member] | Foreign Exchange Forward Contracts | (Sell) | Not Designated as Hedging Instruments - Economic | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | $ 12.6 |
Derivative Instruments - Income
Derivative Instruments - Income Statements (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Cost of sales | $ 890.6 | $ 783.8 |
Interest expense, net | 12 | 10.3 |
Gain (Loss) on Derivative Instruments, Net, Pretax | (55) | |
Other expense, net | 2.7 | 1.6 |
Total amounts of income and expense, derivative instruments | (55) | |
Amount of gain (loss) recognized in income, not designated | (55) | |
Cost of Sales | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Cost of sales | 890.6 | 783.8 |
Acquisition purchase price hedge loss | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Gain (Loss) on Derivative Instruments, Net, Pretax | (55) | |
Total amounts of income and expense, derivative instruments | (55) | |
Interest Expense, Net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Interest expense, net | 12 | 10.3 |
Other Expense, Net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Other expense, net | 2.7 | 1.6 |
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments - Economic | Acquisition purchase price hedge loss | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of gain (loss) recognized in income, not designated | (55) | |
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments - Economic | Other Expense, Net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of gain (loss) recognized in income, not designated | 19.7 | 13.8 |
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 | (0.3) | 0.2 |
Cross Currency Swap | Interest Expense, Net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of gain excluded from effectiveness testing | 1.9 | 3.4 |
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 | $ (0.8) | $ (0.1) |
Derivative Instruments - Effect
Derivative Instruments - Effect on AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative Instruments | ||
Gain (Loss) Recognized in AOCI, Cash flow hedges | $ 4.6 | $ (3.7) |
Gain (Loss) Recognized in AOCI, Net investment hedges | 26.2 | 22.9 |
Foreign Exchange Forward Contracts | ||
Derivative Instruments | ||
Gain (Loss) Recognized in AOCI, Cash flow hedges | 3.7 | 2.1 |
Cross Currency Swap | ||
Derivative Instruments | ||
Gain (Loss) Recognized in AOCI, Net investment hedges | 26.2 | 22.9 |
Interest Rate Swap | ||
Derivative Instruments | ||
Gain (Loss) Recognized in AOCI, Cash flow hedges | $ 0.9 | $ (5.8) |
Derivative Instruments - Gains
Derivative Instruments - Gains and Losses text (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Foreign exchange transaction gains (losses) | $ (19.9) | $ (14) |
Maximum | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Reclassification expected during next 12 months | (1.7) | |
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 | $ 19.7 | $ 13.8 |
Derivative Instruments - Financ
Derivative Instruments - Financial Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | $ 21.8 | $ 13.2 |
Counterparty netting, derivative assets | (7.3) | (6.5) |
Net derivative asset position | 14.5 | 6.7 |
Gross derivative liability position | (93.8) | (82.8) |
Counterparty netting, derivative liabilities | 7.3 | 6.5 |
Net derivative liability position | (86.5) | (76.3) |
Total net derivative position | (72) | (69.6) |
Accounts Receivable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 21.8 | 13.2 |
Accounts Receivable | Arkema | ||
Derivatives, Financial Assets and Liabilities | ||
Derivative assets | 7.3 | |
Accounts Payable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | (52.8) | (13.8) |
Accounts Payable | Arkema | ||
Derivatives, Financial Assets and Liabilities | ||
Liabilities at fair value | 47.7 | |
Other Noncurrent Obligations | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | (41) | (69) |
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments - Economic | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 16.1 | 8.2 |
Counterparty netting, derivative assets | (7.3) | (6.5) |
Net derivative asset position | 8.8 | 1.7 |
Gross derivative liability position | (49.5) | (8.3) |
Counterparty netting, derivative liabilities | 7.3 | 6.5 |
Net derivative liability position | (42.2) | (1.8) |
Total net derivative position | (33.4) | (0.1) |
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments - Economic | Accounts Receivable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 16.1 | 8.2 |
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments - Economic | Accounts Payable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | (49.5) | (8.3) |
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 | (2.1) | |
Net derivative liability position | (2.1) | |
Total net derivative position | 1.6 | (2.1) |
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 | (2.1) | |
Interest Rate Swap | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | (4.9) | (5.9) |
Net derivative liability position | (4.9) | (5.9) |
Total net derivative position | (4.9) | (5.9) |
Interest Rate Swap | Accounts Payable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | (3.3) | (3.4) |
Interest Rate Swap | Other Noncurrent Obligations | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | (1.6) | (2.5) |
Cross Currency Swap | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 4.1 | 5 |
Net derivative asset position | 4.1 | 5 |
Gross derivative liability position | (39.4) | (66.5) |
Net derivative liability position | (39.4) | (66.5) |
Total net derivative position | (35.3) | (61.5) |
Cross Currency Swap | Accounts Receivable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 4.1 | 5 |
Cross Currency Swap | Other Noncurrent Obligations | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative liability position | $ (39.4) | $ (66.5) |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities at Fair Value, Recurring (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | |
Fair Value Measurements | |||
Total net derivative position | $ (72) | $ (69.6) | |
Impairment loss on assets | $ 38.3 | ||
Boehlen Location [Member] | |||
Fair Value Measurements | |||
Impairment loss on assets | 10.3 | ||
Schkopau PBR Location [Member] | |||
Fair Value Measurements | |||
Impairment loss on assets | $ 28 | ||
Property Plant And Equipment At Fair Value [Member] | Boehlen Location [Member] | |||
Fair Value Measurements | |||
Assets at fair value, nonrecurring | 3.5 | 3.7 | |
Property Plant And Equipment At Fair Value [Member] | Schkopau PBR Location [Member] | |||
Fair Value Measurements | |||
Assets at fair value, nonrecurring | 1.5 | 1.6 | |
Interest Rate Swap | |||
Fair Value Measurements | |||
Total net derivative position | (4.9) | (5.9) | |
Cross Currency Swap | |||
Fair Value Measurements | |||
Total net derivative position | (35.3) | (61.5) | |
Designated as Hedging Instrument | Foreign Exchange Forward Contracts | |||
Fair Value Measurements | |||
Total net derivative position | 1.6 | (2.1) | |
Not Designated as Hedging Instruments - Economic | Foreign Exchange Forward Contracts | |||
Fair Value Measurements | |||
Total net derivative position | (33.4) | (0.1) | |
Recurring | |||
Fair Value Measurements | |||
Total net derivative position | (72) | (69.6) | |
Recurring | Interest Rate Swap | |||
Fair Value Measurements | |||
Liabilities at fair value | (4.9) | (5.9) | |
Recurring | Cross Currency Swap | |||
Fair Value Measurements | |||
Assets at fair value | 4.1 | 5 | |
Liabilities at fair value | (39.4) | (66.5) | |
Recurring | Significant Other Observable Inputs (Level 2) | |||
Fair Value Measurements | |||
Total net derivative position | (72) | (69.6) | |
Recurring | Significant Other Observable Inputs (Level 2) | Interest Rate Swap | |||
Fair Value Measurements | |||
Liabilities at fair value | (4.9) | (5.9) | |
Recurring | Significant Other Observable Inputs (Level 2) | Cross Currency Swap | |||
Fair Value Measurements | |||
Assets at fair value | 4.1 | 5 | |
Liabilities at fair value | (39.4) | (66.5) | |
Recurring | Designated as Hedging Instrument | Foreign Exchange Forward Contracts | |||
Fair Value Measurements | |||
Assets at fair value | 1.6 | ||
Liabilities at fair value | (2.1) | ||
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 | (2.1) | ||
Recurring | Not Designated as Hedging Instruments - Economic | Foreign Exchange Forward Contracts | |||
Fair Value Measurements | |||
Assets at fair value | 8.8 | 1.7 | |
Liabilities at fair value | (42.2) | (1.8) | |
Recurring | Not Designated as Hedging Instruments - Economic | Significant Other Observable Inputs (Level 2) | Foreign Exchange Forward Contracts | |||
Fair Value Measurements | |||
Assets at fair value | 8.8 | 1.7 | |
Liabilities at fair value | $ (42.2) | $ (1.8) |
Fair Value Measurements - Items
Fair Value Measurements - Items not at Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | $ 1,650.2 | $ 1,187.5 |
2029 Senior Notes | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | 463 | |
2025 Senior Notes | Significant Other Observable Inputs (Level 2) | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | 514.1 | 513.5 |
2024 Term Loan B | Significant Other Observable Inputs (Level 2) | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | $ 673.1 | $ 674 |
Provision for Income Taxes (Det
Provision for Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Provision for Income Taxes | ||
Effective tax rate | (22.80%) | 24.60% |
Provision for income taxes | $ 21.1 | $ (11.9) |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
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, 2021 | |
Maximum | |
Loss Contingencies [Line Items] | |
Purchase commitment period | 7 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, 2021 | Mar. 31, 2020 | |
Defined Benefit Pension Plans | ||
Net periodic benefit cost | ||
Service cost | $ 5.4 | $ 4.3 |
Interest cost | 0.5 | 0.8 |
Expected return on plan assets | (0.1) | (0.3) |
Amortization of prior service cost (credit) | (0.2) | (0.3) |
Amortization of net (gain) loss | 1.8 | 1.2 |
Net periodic benefit cost | $ 7.4 | $ 5.7 |
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 |
Amounts recognized in other comprehensive income (loss) | ||
Net periodic benefit cost | $ 7.4 | $ 5.7 |
Other Postretirement Plans | Maximum | ||
Net periodic benefit cost | ||
Net periodic benefit cost | 0.1 | 0.1 |
Amounts recognized in other comprehensive income (loss) | ||
Net periodic benefit cost | $ 0.1 | $ 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, 2021 | Dec. 31, 2020 | |
Net amounts recognized in the balance sheets at December 31 | ||
Noncurrent liabilities | $ (326) | $ (337.5) |
Cash contributions and benefit payments to unfunded plans | 1.6 | |
Expected contributions, remainder of current year | $ 4.7 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Expense (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 3.5 | $ 3.2 |
Restricted Share Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | 1.8 | 1.7 |
Unrecognized compensation cost | $ 12.9 | |
Weighted-average period of recognition | 2 years 2 months 12 days | |
Option Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 1.2 | 1 |
Unrecognized compensation cost, options | $ 3.9 | |
Weighted-average period of recognition | 1 year 6 months | |
Performance Share Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 0.5 | $ 0.5 |
Unrecognized compensation cost | $ 5 | |
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, 2021$ / sharesshares | |
Other-than-Options, Shares Activity | |
Granted, Shares | shares | 109,748 |
Other-than-Options, FV Activity | |
Granted, Weighted-Average Grant Date Fair Value per Share | $ / shares | $ 61.11 |
Share-Based Compensation - Opti
Share-Based Compensation - Options and PSUs (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Options, Additional Disclosures | |
Proceeds from exercise of option awards | $ | $ 9 |
Option Awards | |
Options Outstanding Roll Forward | |
Granted, Options | shares | 161,769 |
Options, Additional Disclosures | |
Unrecognized compensation cost, options | $ | $ 3.9 |
Fair Value Assumptions | |
Expected term (in years) | 5 years 6 months |
Expected volatility | 48.76% |
Risk-free interest rate | 0.64% |
Dividend yield | 1.75% |
Options granted, Weighted average grant date fair value | $ 23.04 |
Performance Share Units | |
Fair Value Assumptions | |
Expected term (in years) | 3 years |
Expected volatility | 58.00% |
Risk-free interest rate | 0.20% |
Share Price | $ 61.06 |
Other-than-Options, Shares Activity | |
Granted, Shares | shares | 49,463 |
Other-than-Options, FV Activity | |
Granted, Weighted-Average Grant Date Fair Value per Share | $ 61.06 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Acquisition (Details) € in Millions, $ in Millions | May 03, 2021USD ($) | May 03, 2021EUR (€) | Mar. 24, 2021USD ($) |
2028 Term Loan B | Subsequent Event [Member] | |||
Business Acquisition [Line Items] | |||
Debt instrument issued | $ 750 | ||
2029 Senior Notes | |||
Business Acquisition [Line Items] | |||
Debt instrument issued | $ 450 | ||
2029 Senior Notes | Subsequent Event [Member] | |||
Business Acquisition [Line Items] | |||
Debt instrument issued | 450 | ||
Arkema | Subsequent Event [Member] | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 1,360 | € 1,137 |
Segments - Reconciliation of Se
Segments - Reconciliation of Segment Reporting to Consolidated (Details) $ in Millions | Oct. 01, 2020segment | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) |
Segment Reporting Information [Line Items] | ||||
Number of operating segments unchanged | segment | 5 | |||
Number of new operating segments | segment | 2 | |||
Sales to external customers | $ 1,092.6 | $ 853.5 | ||
Equity in earnings of unconsolidated affiliates | 22.9 | 9.8 | ||
Adjusted EBITDA | 223.3 | 78.9 | ||
Investment in unconsolidated affiliates | 248.1 | $ 240.1 | ||
Depreciation and amortization | 32.9 | 36.4 | ||
Capital expenditures | 12.6 | 24.3 | ||
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 32.9 | 36.4 | ||
Latex Binders Segment | ||||
Segment Reporting Information [Line Items] | ||||
Sales to external customers | 250.9 | 219.1 | ||
Adjusted EBITDA | 17.7 | 21.5 | ||
Synthetic Rubber Segment | ||||
Segment Reporting Information [Line Items] | ||||
Sales to external customers | 124.2 | 101.7 | ||
Adjusted EBITDA | 14.2 | 15.3 | ||
Base Plastics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales to external customers | 328.9 | 257.4 | ||
Adjusted EBITDA | 66.1 | 28.5 | ||
Engineered Materials [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales to external customers | 65.8 | 47.7 | ||
Adjusted EBITDA | 8.1 | 8.2 | ||
Polystyrene [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales to external customers | 266.9 | 182.8 | ||
Adjusted EBITDA | 47.7 | 11.8 | ||
Feedstocks [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales to external customers | 55.9 | 44.8 | ||
Adjusted EBITDA | $ 46.6 | (16.2) | ||
Americas Styrenics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of ownership underlying net assets | 50.00% | |||
Adjusted EBITDA | $ 22.9 | $ 9.8 | ||
Americas Styrenics | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of ownership underlying net assets | 50.00% | 50.00% | ||
Investment in unconsolidated affiliates | $ 248.1 | $ 240.1 |
Segments - Recon. of Net Income
Segments - Recon. of Net Income to Segment Adjusted EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Income (loss) before income taxes | $ 92.6 | $ (48.2) |
Interest expense, net | (12) | (10.3) |
Depreciation and amortization | 32.9 | 36.4 |
Adjusted EBITDA addbacks | 63.4 | 58.5 |
Adjusted EBITDA | 223.3 | 78.9 |
Net (gain) loss on disposition of businesses and assets | (0.2) | (0.4) |
Restructuring and other charges | 0.4 | 1.8 |
Acquisition transactions and integration net costs (benefit) | 6 | 0.1 |
Acquisition purchase price hedge gain | 55 | |
Asset impairment charges or write-offs | 38.3 | |
Other items | 2.2 | 18.7 |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Income (loss) before income taxes | 92.6 | (48.2) |
Interest expense, net | 12 | 10.3 |
Depreciation and amortization | 32.9 | 36.4 |
Corporate Unallocated [Member] | ||
Segment Reporting Information [Line Items] | ||
Corporate Unallocated | $ 22.4 | $ 21.9 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | $ 0.4 | $ 3.1 |
Restructuring Reserve [Roll Forward] | ||
Accrued charges/Balance at beginning of period | 8.5 | |
Expenses | 0.4 | |
Payments/Deductions | (3.6) | |
Accrued charges/Balance at end of period | 5.3 | |
Corporate Restructuring Program | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 0.3 | 2.8 |
Cumulative life-to-date charges | 25.7 | |
Other Restructurings | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 0.1 | 0.3 |
Accelerated Depreciation | Corporate Restructuring Program | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 1.3 | |
Cumulative life-to-date charges | 2.9 | |
Employee Termination Benefit Charges | ||
Restructuring Reserve [Roll Forward] | ||
Accrued charges/Balance at beginning of period | 8.4 | |
Expenses | 0.3 | |
Payments/Deductions | (3.5) | |
Accrued charges/Balance at end of period | 5.2 | |
Employee Termination Benefit Charges | Corporate Restructuring Program | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 0.3 | 0.3 |
Cumulative life-to-date charges | 19.8 | |
Contract Termination | ||
Restructuring Reserve [Roll Forward] | ||
Accrued charges/Balance at beginning of period | 0.1 | |
Accrued charges/Balance at end of period | 0.1 | |
Contract Termination | Corporate Restructuring Program | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | $ 1.2 | |
Cumulative life-to-date charges | 2.8 | |
Decommissioning and Other Charges | ||
Restructuring Reserve [Roll Forward] | ||
Expenses | 0.1 | |
Payments/Deductions | (0.1) | |
Decommissioning and Other Charges | Corporate Restructuring Program | ||
Restructuring Cost and Reserve [Line Items] | ||
Cumulative life-to-date charges | $ 0.2 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Components (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 590.3 | $ 668.9 |
Balance at end of period | 676.3 | 603 |
Cumulative Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (109) | (106.7) |
Other comprehensive income (loss) | 0.4 | 10.7 |
Balance at end of period | (108.6) | (96) |
Pension and Other Postretirement Benefit Plans, Net | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (71.9) | (56.3) |
Other comprehensive income (loss) | 0.6 | |
Amounts reclassified from AOCI to net income | 1.1 | 0.6 |
Balance at end of period | (70.8) | (55.1) |
Accumulated Gain Loss Net Cash Flow Hedge Parent | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (5.2) | 0.6 |
Other comprehensive income (loss) | 3.5 | (3.6) |
Amounts reclassified from AOCI to net income | 1.1 | (0.1) |
Balance at end of period | (0.6) | (3.1) |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (186.1) | (162.4) |
Other comprehensive income (loss) | 3.9 | 7.7 |
Amounts reclassified from AOCI to net income | 2.2 | 0.5 |
Balance at end of period | $ (180) | $ (154.2) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Reclassification (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Cost of sales | $ 890.6 | $ 783.8 |
Interest expense, net | 12 | 10.3 |
Income before income taxes | (92.6) | 48.2 |
Provision for income taxes | 21.1 | (11.9) |
Net income | (71.5) | 36.3 |
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] | ||
Income before income taxes | 1.6 | 0.9 |
Provision for income taxes | (0.5) | (0.3) |
Net income | 1.1 | 0.6 |
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 | (0.2) | (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 | 1.8 | 1.2 |
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 | 0.3 | (0.2) |
Interest expense, net | 0.8 | 0.1 |
Income before income taxes | 1.1 | (0.1) |
Net income | $ 1.1 | $ (0.1) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings: | ||
Net income (loss) | $ 71.5 | $ (36.3) |
Shares: | ||
Weighted average ordinary shares outstanding | 38.5 | 38.5 |
Dilutive effect of RSUs and option awards | 1 | |
Diluted weighted average ordinary shares outstanding | 39.5 | 38.5 |
Income (loss) per share: | ||
Income per share- basic | $ 1.86 | $ (0.94) |
Income per share- diluted | $ 1.81 | $ (0.94) |
Anti-dilutive shares excluded | 0.5 |