Document And Entity Information
Document And Entity Information | 6 Months Ended |
Jun. 30, 2017shares | |
Document And Entity Information [Abstract] | |
Entity Registrant Name | POLYONE CORP |
Entity Central Index Key | 1,122,976 |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2017 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q2 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Shares, Shares Outstanding | 81,791,536 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Sales | $ 814.1 | $ 758.2 | $ 1,610.8 | $ 1,497.1 |
Cost of sales | 626.1 | 576.3 | 1,240.5 | 1,138.6 |
Gross margin | 188 | 181.9 | 370.3 | 358.5 |
Selling and administrative expense | 108 | 100.1 | 206.3 | 206.3 |
Operating income | 80 | 81.8 | 164 | 152.2 |
Interest expense, net | (15.2) | (14.6) | (29.8) | (29.2) |
Debt extinguishment costs | 0 | (0.4) | (0.3) | (0.4) |
Other (expense) income, net | (1.4) | 0.1 | (2.5) | 0.1 |
Income from continuing operations before income taxes | 63.4 | 66.9 | 131.4 | 122.7 |
Income tax expense | (13.8) | (16.8) | (33.5) | (34.4) |
Net income from continuing operations | 49.6 | 50.1 | 97.9 | 88.3 |
(Loss) income from discontinued operations, net of income taxes | (231) | (0.1) | (232.4) | 0.7 |
Net (loss) income | (181.4) | 50 | (134.5) | 89 |
Net loss attributable to noncontrolling interests | 0 | 0 | 0 | 0.1 |
Net (loss) income attributable to PolyOne common shareholders | $ (181.4) | $ 50 | $ (134.5) | $ 89.1 |
Earnings (loss) per common share attributable to PolyOne common shareholders - Basic: | ||||
Earnings from continuing operations per common share attributable to PolyOne common shareholders - Basic (in USD per share) | $ 0.61 | $ 0.59 | $ 1.20 | $ 1.05 |
Earnings (loss) from discontinued operations per common share attributable to PolyOne common shareholders - Basic (in USD per share) | (2.83) | 0 | (2.84) | 0.01 |
Earnings (loss) per common share attributable to PolyOne common shareholders - Basic (in USD per share) | (2.22) | 0.59 | (1.64) | 1.06 |
Earnings (loss) per common share attributable to PolyOne common shareholders - Diluted: | ||||
Earnings from continuing operations per common share attributable to PolyOne common shareholders - Diluted (in USD per share) | 0.60 | 0.59 | 1.19 | 1.04 |
Earnings (loss) from discontinued operations per common share attributable to PolyOne common shareholders - Diluted (in USD per share) | (2.80) | 0 | (2.82) | 0.01 |
Earnings (loss) per common share attributable to PolyOne common shareholders - Diluted (in USD per share) | $ (2.20) | $ 0.59 | $ (1.63) | $ 1.05 |
Weighted-average shares used to compute earnings per common share: | ||||
Basic (in shares) | 81.8 | 84.1 | 81.9 | 84.4 |
Plus dilutive impact of share-based compensation (in shares) | 0.7 | 0.6 | 0.7 | 0.5 |
Diluted (in shares) | 82.5 | 84.7 | 82.6 | 84.9 |
Anti-dilutive shares not included in diluted common shares outstanding (in shares) | 0 | 0 | 0.1 | 0.2 |
Cash dividends declared per share of common stock (in USD per share) | $ 0.135 | $ 0.12 | $ 0.27 | $ 0.24 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (181.4) | $ 50 | $ (134.5) | $ 89 |
Other comprehensive (loss) income | ||||
Translation adjustments | 13 | (4.1) | 19.4 | (4.3) |
Unrealized loss on available-for-sale securities | (0.2) | 0 | (0.1) | 0 |
Total comprehensive (loss) income | (168.6) | 45.9 | (115.2) | 84.7 |
Comprehensive loss attributable to noncontrolling interests | 0 | 0 | 0 | 0.1 |
Comprehensive (loss) income attributable to PolyOne common shareholders | $ (168.6) | $ 45.9 | $ (115.2) | $ 84.8 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 191.1 | $ 225.5 |
Accounts receivable, net | 435.7 | 325.6 |
Inventories, net | 296 | 266.4 |
Current assets held-for-sale | 142.6 | 86.5 |
Other current assets | 69.9 | 45.5 |
Total current assets | 1,135.3 | 949.5 |
Property, net | 435.6 | 426.3 |
Goodwill | 598.5 | 532.7 |
Intangible assets, net | 403.4 | 342.7 |
Non-current assets held for sale | 0 | 347.4 |
Other non-current assets | 139.8 | 139.8 |
Total assets | 2,712.6 | 2,738.4 |
Current liabilities: | ||
Short-term and current portion of long-term debt | 17.6 | 18.5 |
Accounts payable | 376.8 | 320.9 |
Current liabilities held-for-sale | 39.5 | 45.3 |
Accrued expenses and other current liabilities | 112.3 | 125.2 |
Total current liabilities | 546.2 | 509.9 |
Non-current liabilities: | ||
Long-term debt | 1,382.5 | 1,239.4 |
Pension and other post-retirement benefits | 63.6 | 63.1 |
Non-current liabilities held for sale | 0 | 52.8 |
Other non-current liabilities | 162.2 | 147.7 |
Total non-current liabilities | 1,608.3 | 1,503 |
Shareholders’ equity: | ||
PolyOne shareholders’ equity | 557.3 | 724.7 |
Noncontrolling interests | 0.8 | 0.8 |
Total equity | 558.1 | 725.5 |
Total liabilities and shareholders’ equity | $ 2,712.6 | $ 2,738.4 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating Activities | ||
Net (loss) income | $ (134.5) | $ 89 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Loss from classification to held for sale, net of tax | 229.3 | 0 |
Depreciation and amortization | 52.6 | 49.2 |
Accelerated depreciation and fixed asset charges associated with restructuring activities | 0.9 | 4.1 |
Gain from the sale of closed facilities | (3.1) | 0 |
Debt extinguishment costs | 0.3 | 0.4 |
Share-based compensation expense | 5.7 | 4.3 |
Change in assets and liabilities, net of the effect of acquisitions: | ||
Increase in accounts receivable | (98.5) | (84.3) |
Increase in inventories | (17.8) | (4.3) |
Increase in accounts payable | 39.5 | 21.6 |
Decrease in pension and other post-retirement benefits | (6.7) | (27.1) |
(Decrease) increase in accrued expenses and other assets and liabilities - net | (24) | 1.7 |
Net cash provided by operating activities | 43.7 | 54.6 |
Investing Activities | ||
Capital expenditures | (34.1) | (39.6) |
Business acquisitions | (137.9) | (72.8) |
Sale of assets | 9.8 | 9 |
Net cash used by investing activities | (162.2) | (103.4) |
Financing Activities | ||
Borrowings under credit facilities | 699.6 | 471.2 |
Repayments under credit facilities | (555) | (471.4) |
Purchase of common shares for treasury | (34.3) | (39.6) |
Cash dividends paid | (22.2) | (20.7) |
Repayment of long-term debt | (3.3) | (2.8) |
Payments of withholding tax on share awards | (2.7) | (4.4) |
Debt financing costs | (1.9) | (0.6) |
Net cash provided (used) by financing activities | 80.2 | (68.3) |
Effect of exchange rate changes on cash | 2.7 | (1.3) |
Decrease in cash and cash equivalents | (35.6) | (118.4) |
Cash and cash equivalents at beginning of period | 226.7 | 279.8 |
Cash and cash equivalents at end of period | $ 191.1 | $ 161.4 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 1 — BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Form 10-Q instructions and in the opinion of management contain all adjustments, including those that are normal recurring, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. These interim financial statements should be read in conjunction with the financial statements and accompanying notes included in the annual report on Form 10-K for the year ended December 31, 2016 of PolyOne Corporation. When used in this quarterly report on Form 10-Q, the terms “we,” “us,” “our”, "PolyOne" and the “Company” mean PolyOne Corporation and its consolidated subsidiaries. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be attained in subsequent periods or for the year ending December 31, 2017 . Historical information has been retrospectively adjusted to reflect the classification of discontinued operations. Discontinued operations are further discussed in Note 3, Discontinued Operations . Accounting Standards Adopted In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09), which simplifies the accounting for share-based payment transactions. Excess tax benefits and deficiencies reflect the difference between the book expense and the tax deduction of share based compensation. Book expense is based on an estimated fair value of the award at the grant date and the tax deduction is based on the actual value of the award at the exercise or vesting date. Such book and tax differences are required to be recognized as income tax expense or benefit in the Consolidated Statements of Income rather than additional paid-in capital. Further, the update allows an entity to make a policy election to recognize forfeitures as they occur or estimate the number of awards expected to be forfeited. We have adopted ASU 2016-09 as of January 1, 2017. As a result of this adoption, certain reclassifications of the prior period presentation have been made to conform to the presentation for the current period. The excess tax benefits are classified as an operating activity, rather than a financing activity, and the cash paid for shares withheld to satisfy statutory tax withholding obligations are classified as a financing activity ( $4.4 million for the six months ended June 30, 2016) on the Consolidated Statement of Cash Flows. Also, we elected to continue to estimate forfeitures rather than account for them as they occur. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. This standard removes the second step of the goodwill impairment test, where a determination of the fair value of individual assets and liabilities of a reporting unit were needed to measure the goodwill impairment. Under this updated standard, goodwill impairment will now be the amount by which a reporting unit’s fair value is less than its carrying value. Any impairment is not to exceed the respective carrying value of goodwill. We have adopted this update for any impairment test performed after January 1, 2017. Accounting Standards Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASU 2014-09). Under this standard, a company recognizes revenue when it transfers promised goods or services to customers for an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard implements a five-step process for revenue recognition that focuses on transfer of control. We are analyzing the impact of the standard on our contract portfolio and reviewing our current accounting policies and practices to identify the impact of the new standard. The implementation team has identified our revenue streams and is currently assessing the adoption method and the expected impact that ASU 2014-09, along with the subsequent updates and clarifications, will have on our Consolidated Financial Statements as well as future disclosure requirements, processes and internal controls. The Company will adopt ASU 2014-09 no later than the required date of January 1, 2018. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02), which requires a lessee to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with a lease term of more than twelve months. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of expenses and cash flows arising from a lease. The Company will adopt ASU 2016-02 no later than the required date of January 1, 2019. We are currently assessing the impact this standard will have on our Consolidated Financial Statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other than Inventory (ASU 2016-16), which requires companies to recognize the income tax effects of intercompany sales or transfers of assets, other than inventory, in the income statement as income tax expense (or benefit) in the period the sale or transfer occurs. There would be no material impact on our Consolidated Financial Statements from intercompany transactions completed as of December 31, 2016 and June 30, 2017. We will continue to assess the impact of ASU 2016-16 on future transactions and the Company will adopt ASU 2016-16 no later than the required date of January 1, 2018. In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07) . This standard requires the presentation of the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. All other components of net periodic benefit cost will be presented below operating income. The Company will adopt ASU 2017-07 no later than the required date of January 1, 2018. For detail on the components of our annual net periodic benefit cost please see Note 10, Employee Benefit Plans in our annual report on Form 10-K for the year ended December 31, 2016 . |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Business Combinations | Note 2 — BUSINESS COMBINATIONS On June 8, 2017, the Company completed the acquisition of Rutland Plastic Technologies, Inc. (Rutland). Rutland is a leading producer of specialty inks and an innovator in textile screen printing solutions and service. The results of operations of Rutland are reported in the Color, Additives and Inks segment subsequent to the acquisition date. Goodwill recognized as a result of this acquisition is not deductible for tax purposes. On January 3, 2017, the Company completed the acquisition of SilCoTec, Inc. (SilCoTec), a leading producer of innovative silicone colorants, dispersions and formulations. The results of operations of SilCoTec are reported in the Color, Additives and Inks segment subsequent to the acquisition date. Goodwill recognized as a result of this acquisition is deductible for tax purposes. The combined purchase price of Rutland and SilCoTec was $137.9 million , net of cash acquired. The preliminary purchase price allocation for Rutland and SilCoTec resulted in goodwill of $66.8 million , intangible assets of $68.8 million , net working capital of $18.9 million and deferred tax liabilities of $24.6 million . The intangible assets that have been acquired are being amortized over a period of 5 to 20 years. On July 26, 2016 , the Company completed the acquisition of substantially all of the assets of Gordon Composites, Inc. (Gordon Composites), Polystrand, Inc. (Polystrand) and Gordon Holdings, Inc. (Gordon Holdings). Gordon Composites develops high strength profiles and laminates for use in vertical and crossbow archery, sports and recreation equipment, prosthetics and office furniture systems. Polystrand operates in the advanced area of continuous reinforced thermoplastic composite technology space, a next generation material science that delivers the high strength and lightweight characteristics of composites, further enhanced with the design flexibility to form more complex shapes. The purchase price for Gordon Composites, Polystrand and Gordon Holdings was $85.5 million and the results of operations of the acquired businesses are included in the Company's Consolidated Statements of Income for the period subsequent to the date of the acquisition and are reported in the Specialty Engineered Materials segment. The final purchase price allocation resulted in goodwill of $36.2 million and in intangible assets of $30.0 million . Goodwill recognized as a result of this acquisition is deductible for tax purposes. The definite-lived intangible assets that have been acquired are being amortized over a period of 20 years. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 3 — DISCONTINUED OPERATIONS On July 19, 2017, PolyOne divested its Designed Structures and Solutions segment (DSS) to an affiliate of Arsenal Capital Partners for $115.0 million cash, subject to a working capital adjustment. The sale resulted in the recognition of an estimated after-tax loss of $229.3 million in the second quarter of 2017 which is reflected within the Loss from discontinued operations, net of income taxes line of the Condensed Consolidated Statements of Income. PolyOne has classified the DSS assets and liabilities as held-for-sale for all periods presented in the accompanying Condensed Consolidated Balance Sheets and has classified the DSS operating results and the loss on the sale, net of tax, as discontinued operations in the accompanying Condensed Consolidated Statement of Income for all periods presented. Previously, DSS was included as a separate operating segment. The following table summarizes the discontinued operations associated with DSS for the three and six months ended June 30, 2017 and 2016: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2017 2016 2017 2016 Sales $ 104.2 $ 103.3 $ 206.3 $ 211.4 Loss from classification to held for sale $ (295.9 ) $ — $ (295.9 ) $ — (Loss) income from operations (3.0 ) (0.3 ) (5.3 ) 0.9 (Loss) income before taxes (298.9 ) (0.3 ) (301.2 ) 0.9 Income tax benefit (expense) 67.9 0.2 68.8 (0.2 ) (Loss) income from discontinued operations, net of taxes $ (231.0 ) $ (0.1 ) $ (232.4 ) $ 0.7 The following table summarizes the assets and liabilities of DSS as of June 30, 2017 and December 31, 2016: (In millions) June 30, 2017 December 31, 2016 Assets: Current assets: Total current assets $ 96.0 $ 86.5 Non-current assets: Property, net 178.8 181.4 Goodwill 144.7 144.7 Intangible assets, net 18.8 20.8 Other non-current assets 0.2 0.5 Total non-current assets 342.5 347.4 Net asset impairment for classification to held for sale (295.9 ) — Assets held-for-sale $ 142.6 $ 433.9 Liabilities: Current liabilities: Total current liabilities $ 38.5 $ 45.3 Non-current liabilities: Deferred income taxes — 51.3 Other 1.0 1.5 Total non-current liabilities 1.0 52.8 Liabilities held-for-sale $ 39.5 $ 98.1 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 4 — GOODWILL AND INTANGIBLE ASSETS Goodwill as of June 30, 2017 and December 31, 2016 , and changes in the carrying amount of goodwill by segment were as follows: (In millions) Specialty Color, Performance PolyOne Total Balance December 31, 2016 $ 173.5 $ 346.4 $ 11.2 $ 1.6 $ 532.7 Acquisition of businesses — 65.5 — — 65.5 Currency translation and other adjustments (0.4 ) 0.7 — — 0.3 Balance June 30, 2017 $ 173.1 $ 412.6 $ 11.2 $ 1.6 $ 598.5 Indefinite and finite-lived intangible assets consisted of the following: As of June 30, 2017 (In millions) Acquisition Accumulated Currency Net Customer relationships $ 253.2 $ (55.2 ) $ — $ 198.0 Patents, technology and other 154.3 (49.0 ) (0.2 ) 105.1 Indefinite-lived trade names 100.3 — — 100.3 Total $ 507.8 $ (104.2 ) $ (0.2 ) $ 403.4 As of December 31, 2016 (In millions) Acquisition Accumulated Currency Net Customer relationships $ 205.1 $ (49.9 ) $ (0.3 ) $ 154.9 Patents, technology and other 132.3 (44.4 ) (0.4 ) 87.5 Indefinite-lived trade names 100.3 — — 100.3 Total $ 437.7 $ (94.3 ) $ (0.7 ) $ 342.7 |
Inventories, Net
Inventories, Net | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Note 5 — INVENTORIES, NET Components of Inventories, net are as follows: (In millions) June 30, 2017 December 31, 2016 Finished products $ 183.0 $ 177.4 Work in process 5.4 4.5 Raw materials and supplies 107.6 84.5 Inventories, net $ 296.0 $ 266.4 |
Property, Net
Property, Net | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Net | Note 6 — PROPERTY, NET Components of Property, net are as follows: (In millions) June 30, 2017 December 31, 2016 Land and land improvements $ 39.8 $ 38.7 Buildings 293.7 285.2 Machinery and equipment 1,001.4 966.3 Property, gross 1,334.9 1,290.2 Less accumulated depreciation and amortization (899.3 ) (863.9 ) Property, net $ 435.6 $ 426.3 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7 — INCOME TAXES During the three months ended June 30, 2017 and 2016, the Company’s effective tax rate of 21.8% and 25.1% , respectively, was below the Company's federal statutory rate of 35.0% primarily due to the favorable impact of foreign tax rate differences on foreign earnings. During the first half of 2017 and 2016, the Company’s effective tax rate of 25.5% and 28.0% , respectively, was below the Company's federal statutory rate of 35.0% primarily due to the favorable impact of foreign tax rate differences on foreign earnings. |
Financing Arrangements
Financing Arrangements | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Note 8 — FINANCING ARRANGEMENTS Debt consists of the following instruments: As of June 30, 2017 (In millions) Principal Amount Unamortized discount and debt issuance cost Net Debt Weighted average interest rate Senior secured term loan due 2022 $ 640.7 $ 8.6 $ 632.1 3.22 % Senior secured revolving credit facility due 2022 145.5 — 145.5 2.73 % 5.25% senior notes due 2023 600.0 6.5 593.5 5.25 % Other debt (1) 29.0 — 29.0 Total long-term debt $ 1,415.2 $ 15.1 $ 1,400.1 Less short-term and current portion of long-term debt 17.6 — 17.6 Total long-term debt, net of current portion $ 1,397.6 $ 15.1 $ 1,382.5 As of December 31, 2016 (In millions) Principal Amount Unamortized discount and debt issuance cost Net Debt Weighted average interest rate Senior secured term loan due 2022 $ 644.0 $ 8.7 $ 635.3 3.61 % 5.25% senior notes due 2023 600.0 7.1 592.9 5.25 % Other debt (1) 29.7 — 29.7 Total long-term debt $ 1,273.7 $ 15.8 $ 1,257.9 Less short-term and current portion of long-term debt 18.5 — 18.5 Total long-term debt, net of current portion $ 1,255.2 $ 15.8 $ 1,239.4 (1) Other debt includes capital lease obligations of $17.6 million and $17.4 million as of June 30, 2017 and December 31, 2016, respectively. The agreements governing our senior secured revolving credit facility and our secured term loan, and the indentures and credit agreements governing other debt, contain a number of customary financial and restrictive covenants that, among other things, limit our ability to: consummate asset sales, incur additional debt or liens, consolidate or merge with any entity or transfer or sell all or substantially all of our assets, pay dividends or make certain other restricted payments, make investments, enter into transactions with affiliates, create dividend or other payment restrictions with respect to subsidiaries, make capital investments and alter the business we conduct. As of June 30, 2017 , we were in compliance with all covenants. The estimated fair value of PolyOne’s debt instruments at June 30, 2017 and December 31, 2016 was $ 1,430.0 million and $ 1,271.7 million , respectively, compared to carrying values of $ 1,400.1 million and $1,257.9 million as of June 30, 2017 and December 31, 2016 , respectively. The fair value of PolyOne’s debt instruments was estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities and represent Level 2 measurements within the fair value hierarchy. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Note 9 — SEGMENT INFORMATION Operating income is the primary measure that is reported to our chief operating decision maker for purposes of allocating resources to the segments and assessing their performance. Operating income at the segment level does not include: corporate general and administrative expenses that are not allocated to segments; intersegment sales and profit eliminations; charges related to specific strategic initiatives such as the consolidation of operations; restructuring activities, including employee separation costs resulting from personnel reduction programs, plant realignment costs; executive separation agreements; share-based compensation costs; asset impairments; environmental remediation costs and other liabilities for facilities no longer owned or closed in prior years; gains and losses on the divestiture of joint ventures and equity investments; actuarial gains and losses associated with our pension and other post-retirement benefit plans; and certain other items that are not included in the measure of segment profit or loss that is reported to and reviewed by our chief operating decision maker. These costs are included in Corporate and eliminations . PolyOne has four reportable segments: (1) Color, Additives and Inks; (2) Specialty Engineered Materials; (3) Performance Products and Solutions; and (4) PolyOne Distribution. Previously, PolyOne had five reportable segments, however, as a result of the divestiture of DSS we have removed DSS as a separate operating segment and its results are presented as a discontinued operation. Historical information has been retrospectively adjusted to reflect these changes. Please see Note 3, Discontinued Operations for additional information. Segment information for the three and six months ended June 30, 2017 and 2016 is as follows: Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 (In millions) Sales to Total Sales Operating Sales to Total Sales Operating Color, Additives and Inks $ 218.1 $ 223.7 $ 38.6 $ 206.0 $ 212.2 $ 38.2 Specialty Engineered Materials 146.1 158.7 20.3 131.6 143.3 21.4 Performance Products and Solutions 163.3 184.2 22.3 152.0 172.8 21.3 PolyOne Distribution 286.6 290.8 20.3 268.6 272.6 17.8 Corporate and eliminations — (43.3 ) (21.5 ) — (42.7 ) (16.9 ) Total $ 814.1 $ 814.1 $ 80.0 $ 758.2 $ 758.2 $ 81.8 Six Months Ended June 30, 2017 Six Months Ended June 30, 2016 (In millions) Sales to Total Sales Operating Sales to Total Sales Operating Color, Additives and Inks $ 424.6 $ 435.5 $ 73.7 $ 407.2 $ 417.1 $ 73.1 Specialty Engineered Materials 292.7 317.8 43.9 260.0 284.3 44.8 Performance Products and Solutions 325.5 367.9 44.4 297.2 339.0 41.0 PolyOne Distribution 568.0 576.9 38.9 532.7 541.4 35.3 Corporate and eliminations — (87.3 ) (36.9 ) — (84.7 ) (42.0 ) Total $ 1,610.8 $ 1,610.8 $ 164.0 $ 1,497.1 $ 1,497.1 $ 152.2 Total Assets (In millions) June 30, 2017 December 31, 2016 Color, Additives and Inks $ 1,125.8 $ 923.8 Specialty Engineered Materials 558.0 542.8 Performance Products and Solutions 271.2 241.8 PolyOne Distribution 238.6 207.0 Corporate and eliminations 376.4 389.1 Total assets from continuing operations 2,570.0 2,304.5 Assets held for sale 142.6 433.9 Total assets $ 2,712.6 $ 2,738.4 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10 — COMMITMENTS AND CONTINGENCIES Environmental — We have been notified by federal and state environmental agencies and by private parties that we may be a potentially responsible party (PRP) in connection with the environmental investigation and remediation of certain sites. While government agencies frequently assert that PRPs are jointly and severally liable at these sites, in our experience, the interim and final allocations of liability costs are generally made based on the relative contribution of waste. We may also initiate corrective and preventive environmental projects of our own to ensure safe and lawful activities at our operations. We believe that compliance with current governmental regulations at all levels will not have a material adverse effect on our financial position, results of operations or cash flows. In September 2007, the United States District Court for the Western District of Kentucky in the case of Westlake Vinyls, Inc. v. Goodrich Corporation, et al., held that PolyOne must pay the remediation costs at the former Goodrich Corporation Calvert City facility (now largely owned and operated by Westlake Vinyls), together with certain defense costs of Goodrich Corporation. The rulings also provided that PolyOne can seek indemnification for contamination attributable to Westlake Vinyls. Following the Court rulings, the parties to the litigation agreed to settle all claims regarding past environmental costs incurred at the site. The settlement agreement provides a mechanism to pursue allocation of future remediation costs at the Calvert City site to Westlake Vinyls. While we do not currently assume any allocation of costs in our current accrual, we will adjust our accrual, in the future, consistent with any such future allocation of costs. A remedial investigation and feasibility study (RIFS) is underway at Calvert City. The United States Environmental Protection Agency (USEPA) provided a final remedial investigation report in 2015 and assumed responsibility for the completion of the feasibility study. In 2016, the USEPA conducted additional site investigations from which results are still being reviewed. We continue to pursue available insurance coverage related to this matter and recognize gains as we receive reimbursement. On March 13, 2013, PolyOne acquired Spartech Corporation (Spartech). One of Spartech's subsidiaries, Franklin-Burlington Plastics, Inc. (Franklin-Burlington), operated a plastic resin compounding facility in Kearny, New Jersey, located adjacent to the Passaic River. The USEPA has requested that companies located in the area of the lower Passaic River, including Franklin-Burlington, cooperate in an investigation of contamination of approximately 17 miles of the lower Passaic River (the lower Passaic River Study Area). In response, Franklin-Burlington and approximately 70 other companies (collectively, the Cooperating Parties) agreed, pursuant to an Administrative Order on Consent (AOC) with the USEPA, to assume responsibility for development of a RIFS of the lower Passaic River Study Area. By agreeing to bear a portion of the cost of the RIFS, Franklin-Burlington did not admit to any liability or agree to bear any remediation or natural resource damage costs. In 2015, the Cooperating Parties submitted to the USEPA a remedial investigation report for the lower Passaic River Study Area. In March 2016, the USEPA issued a Record of Decision selecting a remedy for an eight -mile portion of the lower Passaic River Study Area at an estimated and discounted cost of $1.4 billion . In September 2016, the USEPA reached an agreement with Occidental Chemical Corporation (OCC), which orders OCC to perform the remedial design for the lower eight mile portion of the Passaic River. As of June 30, 2017 , we have concluded that the same uncertainties that limited our ability to reasonably estimate an accrual at December 31, 2016 still exist and any potential accrual will not be material to our Consolidated Financial Statements. During the six months ended June 30, 2017 and 2016 , PolyOne recognized $7.2 million and $3.8 million , respectively, of expense related to environmental remediation activities. These expenses are included within Cost of sales within our Condensed Consolidated Statements of Income . Our Consolidated Balance Sheet includes accruals totaling $116.3 million and $117.3 million as of June 30, 2017 and December 31, 2016 , respectively, based on our estimates of probable future environmental expenditures relating to previously contaminated sites. These undiscounted amounts are included in Accrued expenses and other liabilities and Other non-current liabilities on the accompanying Consolidated Balance Sheets. The accruals represent our best estimate of probable future costs that we can reasonably estimate, based upon currently available information and technology and our view of the most likely remedy. Depending upon the results of future testing, completion and results of remedial investigation and feasibility studies, the ultimate remediation alternatives undertaken, changes in regulations, technology development, new information, newly discovered conditions and other factors, it is reasonably possible that we could incur additional costs in excess of the amount accrued at June 30, 2017 . However, such additional costs, if any, cannot be currently estimated. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Equity | Note 11 — EQUITY Changes in accumulated other comprehensive loss year-to-date as of June 30, 2017 and 2016 were as follows: (In millions) Cumulative Translation Adjustment Pension and Other Post-Retirement Benefits Unrealized Gain in Available-for-Sale Securities Total Balance at January 1, 2017 $ (99.8 ) $ 5.2 $ 0.4 $ (94.2 ) Translation adjustments 19.4 — — 19.4 Unrealized gain on available-for-sale securities — — (0.1 ) (0.1 ) Balance at June 30, 2017 $ (80.4 ) $ 5.2 $ 0.3 $ (74.9 ) Balance at January 1, 2016 $ (76.8 ) $ 5.2 $ 0.3 $ (71.3 ) Translation adjustments (4.3 ) — — (4.3 ) Balance at June 30, 2016 $ (81.1 ) $ 5.2 $ 0.3 $ (75.6 ) |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12 — SUBSEQUENT EVENTS On July 6, 2017, the Company completed the acquisition of Mesa Industries, Inc. (Mesa), a United States producer of color and additive materials and services. The results of operations of Mesa will be reported in the Color, Additives and Inks segment subsequent to the acquisition date. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Form 10-Q instructions and in the opinion of management contain all adjustments, including those that are normal recurring, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. These interim financial statements should be read in conjunction with the financial statements and accompanying notes included in the annual report on Form 10-K for the year ended December 31, 2016 of PolyOne Corporation. When used in this quarterly report on Form 10-Q, the terms “we,” “us,” “our”, "PolyOne" and the “Company” mean PolyOne Corporation and its consolidated subsidiaries. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be attained in subsequent periods or for the year ending December 31, 2017 . Historical information has been retrospectively adjusted to reflect the classification of discontinued operations. Discontinued operations are further discussed in Note 3, Discontinued Operations . |
Accounting Standards Adopted and Not Yet Adopted | Accounting Standards Adopted In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09), which simplifies the accounting for share-based payment transactions. Excess tax benefits and deficiencies reflect the difference between the book expense and the tax deduction of share based compensation. Book expense is based on an estimated fair value of the award at the grant date and the tax deduction is based on the actual value of the award at the exercise or vesting date. Such book and tax differences are required to be recognized as income tax expense or benefit in the Consolidated Statements of Income rather than additional paid-in capital. Further, the update allows an entity to make a policy election to recognize forfeitures as they occur or estimate the number of awards expected to be forfeited. We have adopted ASU 2016-09 as of January 1, 2017. As a result of this adoption, certain reclassifications of the prior period presentation have been made to conform to the presentation for the current period. The excess tax benefits are classified as an operating activity, rather than a financing activity, and the cash paid for shares withheld to satisfy statutory tax withholding obligations are classified as a financing activity ( $4.4 million for the six months ended June 30, 2016) on the Consolidated Statement of Cash Flows. Also, we elected to continue to estimate forfeitures rather than account for them as they occur. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. This standard removes the second step of the goodwill impairment test, where a determination of the fair value of individual assets and liabilities of a reporting unit were needed to measure the goodwill impairment. Under this updated standard, goodwill impairment will now be the amount by which a reporting unit’s fair value is less than its carrying value. Any impairment is not to exceed the respective carrying value of goodwill. We have adopted this update for any impairment test performed after January 1, 2017. Accounting Standards Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASU 2014-09). Under this standard, a company recognizes revenue when it transfers promised goods or services to customers for an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard implements a five-step process for revenue recognition that focuses on transfer of control. We are analyzing the impact of the standard on our contract portfolio and reviewing our current accounting policies and practices to identify the impact of the new standard. The implementation team has identified our revenue streams and is currently assessing the adoption method and the expected impact that ASU 2014-09, along with the subsequent updates and clarifications, will have on our Consolidated Financial Statements as well as future disclosure requirements, processes and internal controls. The Company will adopt ASU 2014-09 no later than the required date of January 1, 2018. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02), which requires a lessee to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with a lease term of more than twelve months. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of expenses and cash flows arising from a lease. The Company will adopt ASU 2016-02 no later than the required date of January 1, 2019. We are currently assessing the impact this standard will have on our Consolidated Financial Statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other than Inventory (ASU 2016-16), which requires companies to recognize the income tax effects of intercompany sales or transfers of assets, other than inventory, in the income statement as income tax expense (or benefit) in the period the sale or transfer occurs. There would be no material impact on our Consolidated Financial Statements from intercompany transactions completed as of December 31, 2016 and June 30, 2017. We will continue to assess the impact of ASU 2016-16 on future transactions and the Company will adopt ASU 2016-16 no later than the required date of January 1, 2018. In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07) . This standard requires the presentation of the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. All other components of net periodic benefit cost will be presented below operating income. The Company will adopt ASU 2017-07 no later than the required date of January 1, 2018. For detail on the components of our annual net periodic benefit cost please see Note 10, Employee Benefit Plans in our annual report on Form 10-K for the year ended December 31, 2016 . |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The following table summarizes the discontinued operations associated with DSS for the three and six months ended June 30, 2017 and 2016: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2017 2016 2017 2016 Sales $ 104.2 $ 103.3 $ 206.3 $ 211.4 Loss from classification to held for sale $ (295.9 ) $ — $ (295.9 ) $ — (Loss) income from operations (3.0 ) (0.3 ) (5.3 ) 0.9 (Loss) income before taxes (298.9 ) (0.3 ) (301.2 ) 0.9 Income tax benefit (expense) 67.9 0.2 68.8 (0.2 ) (Loss) income from discontinued operations, net of taxes $ (231.0 ) $ (0.1 ) $ (232.4 ) $ 0.7 The following table summarizes the assets and liabilities of DSS as of June 30, 2017 and December 31, 2016: (In millions) June 30, 2017 December 31, 2016 Assets: Current assets: Total current assets $ 96.0 $ 86.5 Non-current assets: Property, net 178.8 181.4 Goodwill 144.7 144.7 Intangible assets, net 18.8 20.8 Other non-current assets 0.2 0.5 Total non-current assets 342.5 347.4 Net asset impairment for classification to held for sale (295.9 ) — Assets held-for-sale $ 142.6 $ 433.9 Liabilities: Current liabilities: Total current liabilities $ 38.5 $ 45.3 Non-current liabilities: Deferred income taxes — 51.3 Other 1.0 1.5 Total non-current liabilities 1.0 52.8 Liabilities held-for-sale $ 39.5 $ 98.1 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Changes in Carrying Amount of Goodwill by Operating Segment | Goodwill as of June 30, 2017 and December 31, 2016 , and changes in the carrying amount of goodwill by segment were as follows: (In millions) Specialty Color, Performance PolyOne Total Balance December 31, 2016 $ 173.5 $ 346.4 $ 11.2 $ 1.6 $ 532.7 Acquisition of businesses — 65.5 — — 65.5 Currency translation and other adjustments (0.4 ) 0.7 — — 0.3 Balance June 30, 2017 $ 173.1 $ 412.6 $ 11.2 $ 1.6 $ 598.5 |
Schedule of Finite-Lived Intangible Assets | Indefinite and finite-lived intangible assets consisted of the following: As of June 30, 2017 (In millions) Acquisition Accumulated Currency Net Customer relationships $ 253.2 $ (55.2 ) $ — $ 198.0 Patents, technology and other 154.3 (49.0 ) (0.2 ) 105.1 Indefinite-lived trade names 100.3 — — 100.3 Total $ 507.8 $ (104.2 ) $ (0.2 ) $ 403.4 As of December 31, 2016 (In millions) Acquisition Accumulated Currency Net Customer relationships $ 205.1 $ (49.9 ) $ (0.3 ) $ 154.9 Patents, technology and other 132.3 (44.4 ) (0.4 ) 87.5 Indefinite-lived trade names 100.3 — — 100.3 Total $ 437.7 $ (94.3 ) $ (0.7 ) $ 342.7 |
Schedule of Indefinite-Lived Intangible Assets | Indefinite and finite-lived intangible assets consisted of the following: As of June 30, 2017 (In millions) Acquisition Accumulated Currency Net Customer relationships $ 253.2 $ (55.2 ) $ — $ 198.0 Patents, technology and other 154.3 (49.0 ) (0.2 ) 105.1 Indefinite-lived trade names 100.3 — — 100.3 Total $ 507.8 $ (104.2 ) $ (0.2 ) $ 403.4 As of December 31, 2016 (In millions) Acquisition Accumulated Currency Net Customer relationships $ 205.1 $ (49.9 ) $ (0.3 ) $ 154.9 Patents, technology and other 132.3 (44.4 ) (0.4 ) 87.5 Indefinite-lived trade names 100.3 — — 100.3 Total $ 437.7 $ (94.3 ) $ (0.7 ) $ 342.7 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Components of Inventories, Net | Components of Inventories, net are as follows: (In millions) June 30, 2017 December 31, 2016 Finished products $ 183.0 $ 177.4 Work in process 5.4 4.5 Raw materials and supplies 107.6 84.5 Inventories, net $ 296.0 $ 266.4 |
Property, Net (Tables)
Property, Net (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Components of Property, Net | Components of Property, net are as follows: (In millions) June 30, 2017 December 31, 2016 Land and land improvements $ 39.8 $ 38.7 Buildings 293.7 285.2 Machinery and equipment 1,001.4 966.3 Property, gross 1,334.9 1,290.2 Less accumulated depreciation and amortization (899.3 ) (863.9 ) Property, net $ 435.6 $ 426.3 |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Components of Debt | Debt consists of the following instruments: As of June 30, 2017 (In millions) Principal Amount Unamortized discount and debt issuance cost Net Debt Weighted average interest rate Senior secured term loan due 2022 $ 640.7 $ 8.6 $ 632.1 3.22 % Senior secured revolving credit facility due 2022 145.5 — 145.5 2.73 % 5.25% senior notes due 2023 600.0 6.5 593.5 5.25 % Other debt (1) 29.0 — 29.0 Total long-term debt $ 1,415.2 $ 15.1 $ 1,400.1 Less short-term and current portion of long-term debt 17.6 — 17.6 Total long-term debt, net of current portion $ 1,397.6 $ 15.1 $ 1,382.5 As of December 31, 2016 (In millions) Principal Amount Unamortized discount and debt issuance cost Net Debt Weighted average interest rate Senior secured term loan due 2022 $ 644.0 $ 8.7 $ 635.3 3.61 % 5.25% senior notes due 2023 600.0 7.1 592.9 5.25 % Other debt (1) 29.7 — 29.7 Total long-term debt $ 1,273.7 $ 15.8 $ 1,257.9 Less short-term and current portion of long-term debt 18.5 — 18.5 Total long-term debt, net of current portion $ 1,255.2 $ 15.8 $ 1,239.4 (1) Other debt includes capital lease obligations of $17.6 million and $17.4 million as of June 30, 2017 and December 31, 2016, respectively. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Segment information for the three and six months ended June 30, 2017 and 2016 is as follows: Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 (In millions) Sales to Total Sales Operating Sales to Total Sales Operating Color, Additives and Inks $ 218.1 $ 223.7 $ 38.6 $ 206.0 $ 212.2 $ 38.2 Specialty Engineered Materials 146.1 158.7 20.3 131.6 143.3 21.4 Performance Products and Solutions 163.3 184.2 22.3 152.0 172.8 21.3 PolyOne Distribution 286.6 290.8 20.3 268.6 272.6 17.8 Corporate and eliminations — (43.3 ) (21.5 ) — (42.7 ) (16.9 ) Total $ 814.1 $ 814.1 $ 80.0 $ 758.2 $ 758.2 $ 81.8 Six Months Ended June 30, 2017 Six Months Ended June 30, 2016 (In millions) Sales to Total Sales Operating Sales to Total Sales Operating Color, Additives and Inks $ 424.6 $ 435.5 $ 73.7 $ 407.2 $ 417.1 $ 73.1 Specialty Engineered Materials 292.7 317.8 43.9 260.0 284.3 44.8 Performance Products and Solutions 325.5 367.9 44.4 297.2 339.0 41.0 PolyOne Distribution 568.0 576.9 38.9 532.7 541.4 35.3 Corporate and eliminations — (87.3 ) (36.9 ) — (84.7 ) (42.0 ) Total $ 1,610.8 $ 1,610.8 $ 164.0 $ 1,497.1 $ 1,497.1 $ 152.2 Total Assets (In millions) June 30, 2017 December 31, 2016 Color, Additives and Inks $ 1,125.8 $ 923.8 Specialty Engineered Materials 558.0 542.8 Performance Products and Solutions 271.2 241.8 PolyOne Distribution 238.6 207.0 Corporate and eliminations 376.4 389.1 Total assets from continuing operations 2,570.0 2,304.5 Assets held for sale 142.6 433.9 Total assets $ 2,712.6 $ 2,738.4 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Changes in accumulated other comprehensive loss year-to-date as of June 30, 2017 and 2016 were as follows: (In millions) Cumulative Translation Adjustment Pension and Other Post-Retirement Benefits Unrealized Gain in Available-for-Sale Securities Total Balance at January 1, 2017 $ (99.8 ) $ 5.2 $ 0.4 $ (94.2 ) Translation adjustments 19.4 — — 19.4 Unrealized gain on available-for-sale securities — — (0.1 ) (0.1 ) Balance at June 30, 2017 $ (80.4 ) $ 5.2 $ 0.3 $ (74.9 ) Balance at January 1, 2016 $ (76.8 ) $ 5.2 $ 0.3 $ (71.3 ) Translation adjustments (4.3 ) — — (4.3 ) Balance at June 30, 2016 $ (81.1 ) $ 5.2 $ 0.3 $ (75.6 ) |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Payments of withholding tax on share awards | $ 2.7 | $ 4.4 |
Accounting Standards Update 2016-09 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Payments of withholding tax on share awards | $ 4.4 |
Business Combinations (Narrativ
Business Combinations (Narrative) (Details) - USD ($) | Jul. 26, 2016 | Jun. 08, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 598,500,000 | $ 532,700,000 | ||
Rutland Plastic Technologies, Inc. | ||||
Business Acquisition [Line Items] | ||||
Goodwill expected to be deductible for tax purposes | $ 0 | |||
Rutland and SilCoTec | ||||
Business Acquisition [Line Items] | ||||
Purchase price, net of cash acquired | 137,900,000 | |||
Goodwill | 66,800,000 | |||
Intangible assets acquired | 68,800,000 | |||
Net working capital acquired | 18,900,000 | |||
Deferred tax liabilities acquired | $ 24,600,000 | |||
Gordon Holdings | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 36,200,000 | |||
Intangible assets acquired | $ 30,000,000 | |||
Acquired finite-lived intangible assets, weighted average useful life | 20 years | |||
Purchase price | $ 85,500,000 | |||
Minimum | Rutland and SilCoTec | ||||
Business Acquisition [Line Items] | ||||
Acquired finite-lived intangible assets, weighted average useful life | 5 years | |||
Maximum | Rutland and SilCoTec | ||||
Business Acquisition [Line Items] | ||||
Acquired finite-lived intangible assets, weighted average useful life | 20 years |
Discontinued Operations (Narrat
Discontinued Operations (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jul. 19, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss from classification to held for sale, net of tax | $ (229.3) | $ 0 | ||
Designed Structures and Solutions | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss from classification to held for sale, net of tax | $ (229.3) | |||
Subsequent Event | Designed Structures and Solutions | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash consideration | $ 115 |
Discontinued Operations Discont
Discontinued Operations Discontinued Operations (Schedule of Discontinued Operations)(Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||||
(Loss) income from discontinued operations, net of taxes | $ (231) | $ (0.1) | $ (232.4) | $ 0.7 | |
Current assets: | |||||
Total current assets | 142.6 | 142.6 | $ 86.5 | ||
Non-current assets: | |||||
Total non-current assets | 0 | 0 | 347.4 | ||
Current liabilities: | |||||
Total current liabilities | 39.5 | 39.5 | 45.3 | ||
Non-current liabilities: | |||||
Total non-current liabilities | 0 | 0 | 52.8 | ||
Designed Structures and Solutions | Discontinued Operations, Disposed of by Sale | |||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||||
Sales | 104.2 | 103.3 | 206.3 | 211.4 | |
Loss from classification to held for sale | 295.9 | 0 | 295.9 | 0 | |
(Loss) income from operations | (3) | (0.3) | (5.3) | 0.9 | |
(Loss) income before taxes | (298.9) | (0.3) | (301.2) | 0.9 | |
Income tax benefit (expense) | 67.9 | 0.2 | 68.8 | (0.2) | |
(Loss) income from discontinued operations, net of taxes | (231) | $ (0.1) | (232.4) | $ 0.7 | |
Current assets: | |||||
Total current assets | 96 | 96 | 86.5 | ||
Non-current assets: | |||||
Property, net | 178.8 | 178.8 | 181.4 | ||
Goodwill | 144.7 | 144.7 | 144.7 | ||
Intangible assets, net | 18.8 | 18.8 | 20.8 | ||
Other non-current assets | 0.2 | 0.2 | 0.5 | ||
Total non-current assets | 342.5 | 342.5 | 347.4 | ||
Net asset impairment for classification to held for sale | (295.9) | (295.9) | 0 | ||
Assets held-for-sale | 142.6 | 142.6 | 433.9 | ||
Current liabilities: | |||||
Total current liabilities | 38.5 | 38.5 | 45.3 | ||
Non-current liabilities: | |||||
Deferred income taxes | 0 | 0 | 51.3 | ||
Other | 1 | 1 | 1.5 | ||
Total non-current liabilities | 1 | 1 | 52.8 | ||
Liabilities held-for-sale | $ 39.5 | $ 39.5 | $ 98.1 |
Goodwill and Intangible Asset30
Goodwill and Intangible Assets (Goodwill and Changes in Carrying Amount of Goodwill by Operating Segment) (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Goodwill [Roll Forward] | |
Balance, beginning of period | $ 532.7 |
Acquisitions of businesses | 65.5 |
Currency translation and other adjustments | 0.3 |
Balance, end of period | 598.5 |
Specialty Engineered Materials | |
Goodwill [Roll Forward] | |
Balance, beginning of period | 173.5 |
Acquisitions of businesses | 0 |
Currency translation and other adjustments | (0.4) |
Balance, end of period | 173.1 |
Color, Additives and Inks | |
Goodwill [Roll Forward] | |
Balance, beginning of period | 346.4 |
Acquisitions of businesses | 65.5 |
Currency translation and other adjustments | 0.7 |
Balance, end of period | 412.6 |
Performance Products and Solutions | |
Goodwill [Roll Forward] | |
Balance, beginning of period | 11.2 |
Acquisitions of businesses | 0 |
Currency translation and other adjustments | 0 |
Balance, end of period | 11.2 |
PolyOne Distribution | |
Goodwill [Roll Forward] | |
Balance, beginning of period | 1.6 |
Acquisitions of businesses | 0 |
Currency translation and other adjustments | 0 |
Balance, end of period | $ 1.6 |
Goodwill and Intangible Asset31
Goodwill and Intangible Assets (Schedule of Indefinite and Finite-Lived Intangible Assets) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Intangible Assets [Line Items] | ||
Acquisition Cost | $ 507.8 | $ 437.7 |
Accumulated Amortization | (104.2) | (94.3) |
Currency Translation | (0.2) | (0.7) |
Intangible assets, net | 403.4 | 342.7 |
Indefinite-lived trade names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 100.3 | 100.3 |
Customer relationships | ||
Intangible Assets [Line Items] | ||
Acquisition Cost | 253.2 | 205.1 |
Accumulated Amortization | (55.2) | (49.9) |
Currency Translation | 0 | (0.3) |
Intangible assets, net | 198 | 154.9 |
Patents, technology and other | ||
Intangible Assets [Line Items] | ||
Acquisition Cost | 154.3 | 132.3 |
Accumulated Amortization | (49) | (44.4) |
Currency Translation | (0.2) | (0.4) |
Intangible assets, net | $ 105.1 | $ 87.5 |
Inventories, Net (Components of
Inventories, Net (Components of Inventories) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 183 | $ 177.4 |
Work in process | 5.4 | 4.5 |
Raw materials and supplies | 107.6 | 84.5 |
Inventories, net | $ 296 | $ 266.4 |
Property, Net (Details)
Property, Net (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property, gross | $ 1,334.9 | $ 1,290.2 |
Less accumulated depreciation and amortization | (899.3) | (863.9) |
Property, net | 435.6 | 426.3 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, gross | 39.8 | 38.7 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, gross | 293.7 | 285.2 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, gross | $ 1,001.4 | $ 966.3 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 21.80% | 25.10% | 25.50% | 28.00% |
Federal statutory rate | 35.00% | 35.00% |
Financing Arrangements (Compone
Financing Arrangements (Components of Long-Term Debt) (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Long-term debt, principal amount | $ 1,415.2 | $ 1,273.7 |
Long-term debt, unamortized discount and debt issuance cost | 15.1 | 15.8 |
Total long-term debt | 1,400.1 | 1,257.9 |
Less short-term and current portion of long-term debt, Principal Amount | 17.6 | 18.5 |
Less short-term and current portion of long-term debt, Unamortized discount and debt issuance cost | 0 | 0 |
Less short-term and current portion of long-term debt | 17.6 | 18.5 |
Total long-term debt, net of current portion, Principal Amount | 1,397.6 | 1,255.2 |
Total long-term debt, net of current portion, Unamortized discount and debt issuance cost | 15.1 | 15.8 |
Total long-term debt, net of current portion | 1,382.5 | 1,239.4 |
Capital lease obligations included in other debt | 17.6 | 17.4 |
Senior secured term loan due 2022 | Secured Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, principal amount | 640.7 | 644 |
Long-term debt, unamortized discount and debt issuance cost | 8.6 | 8.7 |
Total long-term debt | $ 632.1 | $ 635.3 |
Weighted average interest rate | 3.22% | 3.61% |
Senior secured revolving credit facility due 2022 | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, principal amount | $ 145.5 | |
Long-term debt, unamortized discount and debt issuance cost | 0 | |
Total long-term debt | $ 145.5 | |
Weighted average interest rate | 2.73% | |
5.25% senior notes due 2023 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, principal amount | $ 600 | $ 600 |
Long-term debt, unamortized discount and debt issuance cost | 6.5 | 7.1 |
Total long-term debt | $ 593.5 | $ 592.9 |
Weighted average interest rate | 5.25% | 5.25% |
Interest rate of senior notes due 2023 | 5.25% | |
Other debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, principal amount | $ 29 | $ 29.7 |
Long-term debt, unamortized discount and debt issuance cost | 0 | 0 |
Total long-term debt | $ 29 | $ 29.7 |
Financing Arrangements (Narrati
Financing Arrangements (Narrative) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Fair value of debt instruments | $ 1,430 | $ 1,271.7 |
Amount of long-term debt | $ 1,400.1 | $ 1,257.9 |
Segment Information (Schedule o
Segment Information (Schedule of Segment Information) (Details) $ in Millions | Jul. 19, 2017segment | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)segment | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Segment Reporting Information [Line Items] | ||||||
Number of reportable segments | segment | 4 | |||||
Sales | $ 814.1 | $ 758.2 | $ 1,610.8 | $ 1,497.1 | ||
Operating Income | 80 | 81.8 | 164 | 152.2 | ||
Assets | 2,712.6 | 2,712.6 | $ 2,738.4 | |||
Color, Additives and Inks | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 218.1 | 206 | 424.6 | 407.2 | ||
Specialty Engineered Materials | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 146.1 | 131.6 | 292.7 | 260 | ||
Performance Products and Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 163.3 | 152 | 325.5 | 297.2 | ||
PolyOne Distribution | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 286.6 | 268.6 | 568 | 532.7 | ||
Operating Segments | Color, Additives and Inks | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 223.7 | 212.2 | 435.5 | 417.1 | ||
Operating Income | 38.6 | 38.2 | 73.7 | 73.1 | ||
Operating Segments | Specialty Engineered Materials | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 158.7 | 143.3 | 317.8 | 284.3 | ||
Operating Income | 20.3 | 21.4 | 43.9 | 44.8 | ||
Operating Segments | Performance Products and Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 184.2 | 172.8 | 367.9 | 339 | ||
Operating Income | 22.3 | 21.3 | 44.4 | 41 | ||
Operating Segments | PolyOne Distribution | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 290.8 | 272.6 | 576.9 | 541.4 | ||
Operating Income | 20.3 | 17.8 | 38.9 | 35.3 | ||
Corporate and eliminations | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | (43.3) | (42.7) | (87.3) | (84.7) | ||
Operating Income | (21.5) | $ (16.9) | (36.9) | $ (42) | ||
Continuing Operations | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets | 2,570 | 2,570 | 2,304.5 | |||
Continuing Operations | Operating Segments | Color, Additives and Inks | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets | 1,125.8 | 1,125.8 | 923.8 | |||
Continuing Operations | Operating Segments | Specialty Engineered Materials | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets | 558 | 558 | 542.8 | |||
Continuing Operations | Operating Segments | Performance Products and Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets | 271.2 | 271.2 | 241.8 | |||
Continuing Operations | Operating Segments | PolyOne Distribution | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets | 238.6 | 238.6 | 207 | |||
Continuing Operations | Corporate and eliminations | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets | 376.4 | 376.4 | 389.1 | |||
Discontinued Operations | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets | $ 142.6 | $ 142.6 | $ 433.9 | |||
Subsequent Event | ||||||
Segment Reporting Information [Line Items] | ||||||
Number of reportable segments | segment | 5 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2016mi | Mar. 04, 2016USD ($)mi | Mar. 13, 2013companymi | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Schedule of Equity Method Investments [Line Items] | ||||||
Accrued probable future environmental expenditures | $ 116.3 | $ 117.3 | ||||
Cost of Sales | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Expense related to environmental activities | $ 7.2 | $ 3.8 | ||||
Contamination of Passaic River Study Area | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Approximate number of other companies assuming responsibility | company | 70 | |||||
Contamination of Passaic River Study Area | Lower Passaic River | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Length of portion of river | mi | 8 | 8 | 17 | |||
Total estimated cost of remedy | $ 1,400 |
Equity (Schedule of Accumulated
Equity (Schedule of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 725.5 | |||
Translation adjustments | $ 13 | $ (4.1) | 19.4 | $ (4.3) |
Unrealized gain on available-for-sale securities | (0.2) | 0 | (0.1) | 0 |
Balance at end of period | 558.1 | 558.1 | ||
Cumulative Translation Adjustment | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (99.8) | (76.8) | ||
Translation adjustments | 19.4 | (4.3) | ||
Unrealized gain on available-for-sale securities | 0 | |||
Balance at end of period | (80.4) | (81.1) | (80.4) | (81.1) |
Pension and Other Post-Retirement Benefits | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 5.2 | 5.2 | ||
Translation adjustments | 0 | 0 | ||
Unrealized gain on available-for-sale securities | 0 | |||
Balance at end of period | 5.2 | 5.2 | 5.2 | 5.2 |
Unrealized Gain in Available-for-Sale Securities | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 0.4 | 0.3 | ||
Translation adjustments | 0 | 0 | ||
Unrealized gain on available-for-sale securities | (0.1) | |||
Balance at end of period | 0.3 | 0.3 | 0.3 | 0.3 |
Total | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (94.2) | (71.3) | ||
Balance at end of period | $ (74.9) | $ (75.6) | $ (74.9) | $ (75.6) |