Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 16, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | Kraton Corp | ||
Entity Central Index Key | 1,321,646 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | KRA | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 31,693,898 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 921,653,972 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 89,052 | $ 121,749 |
Receivables, net of allowances of $824 and $814 | 196,683 | 200,860 |
Inventories of products | 367,796 | 327,996 |
Inventories of materials and supplies | 25,643 | 22,392 |
Prepaid expense | 13,963 | 35,851 |
Other current assets | 36,615 | 37,658 |
Total current assets | 729,752 | 746,506 |
Property, plant, and equipment, less accumulated depreciation of $526,759 and $411,418 | 958,723 | 906,722 |
Goodwill | 774,319 | 770,012 |
Intangible assets, less accumulated amortization of $197,318 and $144,946 | 406,863 | 439,198 |
Investment in unconsolidated joint venture | 12,380 | 11,195 |
Debt issuance costs | 2,340 | 3,511 |
Deferred income taxes | 8,462 | 6,907 |
Other long-term assets | 39,688 | 22,594 |
Total assets | 2,932,527 | 2,906,645 |
Current liabilities: | ||
Current portion of long-term debt | 42,647 | 41,825 |
Accounts payable-trade | 169,265 | 150,081 |
Other payables and accruals | 119,624 | 130,398 |
Due to related party | 19,176 | 14,669 |
Total current liabilities | 350,712 | 336,973 |
Long-term debt, net of current portion | 1,574,881 | 1,697,700 |
Deferred income taxes | 148,148 | 211,396 |
Other long-term liabilities | 192,267 | 170,339 |
Total liabilities | 2,266,008 | 2,416,408 |
Commitments and contingencies (note 12) | ||
Kraton stockholders’ equity: | ||
Preferred stock, $0.01 par value; 100,000 shares authorized; none issued | 0 | 0 |
Common stock, $0.01 par value; 500,000 shares authorized; 31,605 shares issued and outstanding at December 31, 2017; 30,960 shares issued and outstanding at December 31, 2016 | 316 | 310 |
Additional paid in capital | 377,957 | 361,682 |
Retained earnings | 356,503 | 254,439 |
Accumulated other comprehensive loss | (98,295) | (158,530) |
Total Kraton stockholders’ equity | 636,481 | 457,901 |
Noncontrolling interest | 30,038 | 32,336 |
Total equity | 666,519 | 490,237 |
Total liabilities and equity | $ 2,932,527 | $ 2,906,645 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Receivables, allowances | $ 824 | $ 814 |
Less accumulated depreciation | 526,759 | 411,418 |
Intangible assets, accumulated amortization | $ 197,318 | $ 144,946 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 31,605,000 | 30,960,000 |
Common stock, shares outstanding (in shares) | 31,605,000 | 30,960,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Revenue | $ 1,960,362 | $ 1,744,104 | $ 1,034,626 |
Cost of goods sold | 1,418,459 | 1,265,079 | 805,970 |
Gross profit | 541,903 | 479,025 | 228,656 |
Operating expenses: | |||
Research and development | 40,725 | 39,491 | 31,024 |
Selling, general, and administrative | 161,892 | 177,625 | 117,308 |
Depreciation and amortization | 137,162 | 125,658 | 62,093 |
Operating income | 202,124 | 136,251 | 18,231 |
Disposition and exit of business activities | 0 | 28,416 | 0 |
Loss on extinguishment of debt | (35,389) | (13,423) | 0 |
Earnings of unconsolidated joint venture | 486 | 394 | 406 |
Interest expense, net | (132,459) | (138,952) | (24,223) |
Income (loss) before income taxes | 34,762 | 12,686 | (5,586) |
Income tax benefit (expense) | 57,884 | 91,954 | (6,943) |
Consolidated net income (loss) | 92,646 | 104,640 | (12,529) |
Net loss attributable to noncontrolling interest | 4,903 | 2,668 | 1,994 |
Net income (loss) attributable to Kraton | $ 97,549 | $ 107,308 | $ (10,535) |
Earnings (loss) per common share: | |||
Basic (in dollars per share) | $ 3.12 | $ 3.48 | $ (0.34) |
Diluted (in dollars per share) | $ 3.07 | $ 3.43 | $ (0.34) |
Weighted average common shares outstanding: | |||
Basic (in shares) | 30,654 | 30,180 | 30,574 |
Diluted (in shares) | 31,140 | 30,621 | 30,574 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) attributable to Kraton | $ 97,549 | $ 107,308 | $ (10,535) |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments, net of tax of $0 | 63,077 | (6,736) | (44,125) |
Unrealized gain on cash flow hedges, net of tax of $584 and tax benefit of $290 | 3,156 | 515 | 0 |
Reclassification of loss on cash flow hedge | 879 | 0 | 0 |
(Increase) decrease in benefit plans liability, net of tax of $2,241, $4,392, and $2,683 | (6,877) | (13,741) | 4,775 |
Other comprehensive income (loss), net of tax | 60,235 | (19,962) | (39,350) |
Comprehensive income attributable to Kraton | 157,784 | 87,346 | (49,885) |
Comprehensive loss attributable to noncontrolling interest | (2,298) | (1,916) | (3,416) |
Consolidated comprehensive income (loss) | $ 155,486 | $ 85,430 | $ (53,301) |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Foreign currency translation adjustments, tax effect | $ 0 | $ 0 | $ 0 |
Unrealized gain (loss), tax effect | 584 | (290) | |
(Increase) decrease in pension liability, tax effect | $ (2,241) | $ (4,392) | $ 2,683 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Total Kraton Equity | Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest |
Beginning Balance at Dec. 31, 2014 | $ 468,151 | $ 430,483 | $ 318 | $ 361,342 | $ 168,041 | $ (99,218) | $ 37,668 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (12,529) | (10,535) | (10,535) | (1,994) | |||
Other comprehensive income (loss) | (40,772) | (39,350) | (39,350) | (1,422) | |||
Retired treasury stock from employee tax withholdings | (578) | (578) | (578) | ||||
Retired treasury stock from share repurchases | (31,321) | (31,321) | (16) | (20,930) | (10,375) | ||
Exercise of stock options | 1,026 | 1,026 | 1 | 1,025 | |||
Non-cash compensation related to equity awards | 9,015 | 9,015 | 3 | 9,012 | |||
Ending Balance at Dec. 31, 2015 | 392,992 | 358,740 | 306 | 349,871 | 147,131 | (138,568) | 34,252 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 104,640 | 107,308 | 107,308 | (2,668) | |||
Other comprehensive income (loss) | (19,210) | (19,962) | (19,962) | 752 | |||
Retired treasury stock from employee tax withholdings | (975) | (975) | (1) | (974) | |||
Exercise of stock options | 4,456 | 4,456 | 2 | 4,454 | |||
Non-cash compensation related to equity awards | 8,334 | 8,334 | 3 | 8,331 | |||
Ending Balance at Dec. 31, 2016 | 490,237 | 457,901 | 310 | 361,682 | 254,439 | (158,530) | 32,336 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative effect adjustment upon adoption of ASU 2016-09 | 4,515 | 4,515 | 4,515 | ||||
Net income (loss) | 92,646 | 97,549 | 97,549 | (4,903) | |||
Other comprehensive income (loss) | 62,840 | 60,235 | 60,235 | 2,605 | |||
Retired treasury stock from employee tax withholdings | (2,298) | (2,298) | (1) | (2,297) | |||
Exercise of stock options | 10,952 | 10,952 | 5 | 10,947 | |||
Non-cash compensation related to equity awards | 7,627 | 7,627 | 2 | 7,625 | |||
Ending Balance at Dec. 31, 2017 | $ 666,519 | $ 636,481 | $ 316 | $ 377,957 | $ 356,503 | $ (98,295) | $ 30,038 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Consolidated net income (loss) | $ 92,646 | $ 104,640 | $ (12,529) |
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 137,162 | 125,658 | 62,093 |
Amortization of debt premium and original issue discount | 6,169 | 7,987 | (174) |
Amortization of debt issuance costs | 8,420 | 8,741 | 2,233 |
Loss on disposal of property, plant, and equipment | 514 | 665 | 237 |
Disposition and exit of business activities | 0 | (28,416) | 0 |
Loss on extinguishment of debt | 35,389 | 13,423 | 0 |
Earnings (loss) from unconsolidated joint venture, net of dividends received | (49) | 15 | (43) |
Deferred income tax benefit | (66,004) | (12,609) | (3,114) |
Release of valuation allowance | 0 | (86,273) | 0 |
Share-based compensation | 7,627 | 8,334 | 9,015 |
Decrease (increase) in: | |||
Accounts receivable | 19,237 | (17,526) | (5,149) |
Inventories of products, materials, and supplies | (22,269) | 26,252 | 47,530 |
Other assets | 12,941 | (8,181) | (5,466) |
Increase (decrease) in: | |||
Accounts payable-trade | 8,275 | 13,177 | (7,910) |
Other payables and accruals | 13,463 | (23,455) | 21,232 |
Other long-term liabilities | (1,802) | 5,881 | (163) |
Due to related party | 3,721 | 155 | (3,945) |
Net cash provided by operating activities | 255,440 | 138,468 | 103,847 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Kraton purchase of property, plant, and equipment | (99,223) | (99,205) | (57,065) |
KFPC purchase of property, plant, and equipment | (17,103) | (20,386) | (69,105) |
Purchase of software and other intangibles | (6,265) | (5,862) | (2,572) |
Acquisition, net of cash acquired | 0 | (1,312,105) | 0 |
Sale of assets | 0 | 72,803 | 0 |
Net cash used in investing activities | (122,591) | (1,364,755) | (128,742) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from debt | 739,167 | 1,787,965 | 30,000 |
Repayments of debt | (938,006) | (485,133) | (30,000) |
KFPC proceeds from debt | 48,207 | 36,896 | 80,094 |
KFPC repayments of debt | (16,244) | 0 | 0 |
Capital lease payments | (964) | (272) | (133) |
Purchase of treasury stock | (2,298) | (975) | (31,899) |
Proceeds from the exercise of stock options | 10,952 | 4,456 | 1,026 |
Settlement of interest rate swap | (879) | (5,155) | 0 |
Settlement of foreign currency hedges | (716) | 0 | 0 |
Debt issuance costs | (14,330) | (57,646) | (1,957) |
Net cash provided by (used in) financing activities | (175,111) | 1,280,136 | 47,131 |
Effect of exchange rate differences on cash | 9,565 | (2,149) | (6,005) |
Net increase (decrease) in cash and cash equivalents | (32,697) | 51,700 | 16,231 |
Cash and cash equivalents, beginning of period | 121,749 | 70,049 | 53,818 |
Cash and cash equivalents, end of period | 89,052 | 121,749 | 70,049 |
Supplemental disclosures: | |||
Cash paid (received) during the period for income taxes, net of refunds received | (5,395) | 10,723 | 6,340 |
Cash paid during the period for interest, net of capitalized interest | 103,995 | 115,706 | 21,157 |
Capitalized interest | 4,042 | 5,825 | 4,185 |
Supplemental non-cash disclosures: | |||
Property, plant, and equipment accruals | 19,720 | 31,677 | 16,883 |
Asset acquired through capital lease | $ 0 | $ 1,679 | $ 681 |
Description of Business, Basis
Description of Business, Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Description of Business, Basis of Presentation and Significant Accounting Policies | Description of Business, Basis of Presentation and Significant Accounting Policies Description of Business . We are a leading global specialty chemicals company that manufactures styrenic block copolymers (“SBCs”), specialty polymers, and high-value performance products primarily derived from pine wood pulping co-products. Our operations are managed through two operating segments: (i) Polymer segment and (ii) Chemical segment. Operating results for Arizona Chemical are included in the accompanying consolidated financial statements since the date of acquisition. Basis of Presentation . The accompanying consolidated financial statements are for us and our consolidated subsidiaries, each of which is a wholly-owned subsidiary, except our 50% investment in our joint venture, Kraton Formosa Polymers Corporation (“KFPC”), located in Mailiao, Taiwan. KFPC is a variable interest entity for which we have determined that we are the primary beneficiary and, therefore, have consolidated into our financial statements. Our 50% investment in our joint venture located in Kashima, Japan, is accounted for under the equity method of accounting. All significant intercompany transactions have been eliminated. Significant Accounting Policies . These financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary to fairly present our results of operations and financial position. Use of Estimates . The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include: • the useful lives of fixed assets; • estimates of fair value for assets acquired and liabilities assumed in a purchase business combination; • allowances for doubtful accounts and sales returns; • the valuation of derivatives, deferred taxes, property, plant and equipment, inventory, and share-based compensation; and • liabilities for employee benefit obligations, environmental matters, asset retirement obligations, income tax uncertainties, and other contingencies. Cash and Cash Equivalents . It is our policy to invest our excess cash in investment instruments whose value is not subject to market fluctuations, such as bank deposits or certificates of deposit. Other permitted investments include commercial paper of major U.S. corporations with ratings of A1 by Standard & Poor’s Ratings Group or P1 by Moody’s Investor Services, Inc., loan participations of major U.S. corporations with a short term credit rating of A1/P1 and direct obligations of the U.S. government or its agencies. We consider all investments having a remaining maturity, at the time of purchase, of three months or less to be cash equivalents. Receivables . Receivables are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts represents our best estimate of the amount of probable credit losses in our existing receivables and is determined based on our assessment of the credit worthiness of individual customers, historical write-off experience, and global economic data. We review the allowance for doubtful accounts quarterly. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. We do not have significant off-balance sheet credit exposure related to our customers. Inventories . Our inventory is principally comprised of finished goods inventory and raw materials. Inventory values include all costs directly associated with manufacturing of our products. Inventories are stated at the lower of cost or market as primarily determined on a first-in, first-out basis. We evaluate the carrying cost of our inventory on a quarterly basis for this purpose. If the cost of the inventories exceeds their market value, provisions are made for the differences between the cost and the market value. Derivative Instruments and Hedging Activities . We account for derivatives and hedging activities in accordance with ASC 815, “Derivatives and Hedging,” which requires entities to recognize all derivative instruments as either assets or liabilities in the balance sheet at their respective fair values. For derivatives designated in cash flow hedging relationships, changes in the fair value are either offset through earnings against the change in fair value of the hedged item attributable to the risk being hedged or recognized in accumulated other comprehensive income (loss), to the extent the derivative is effective at offsetting the changes in cash flows being hedged until the hedged item affects earnings. For all hedging relationships, we formally document the hedging relationship and our risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method used to measure ineffectiveness. We also formally assess both at the inception of the hedging relationship and on an ongoing basis, whether the derivatives that are used in hedging relationships are highly effective in offsetting changes in cash flows of hedged transactions. For derivative instruments that are designated and qualify as part of a cash flow hedging relationship, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. We discontinue hedge accounting prospectively when we determine that the derivative is no longer effective in offsetting cash flows attributable to the hedged risk, the derivative expires or is sold, terminated, or exercised, and the cash flow hedge is de-designated because a forecasted transaction is not probable of occurring, or we remove the designation of the cash flow hedge. In all situations in which hedge accounting is discontinued and the derivative remains outstanding, we continue to carry the derivative at its fair value on the balance sheet and recognize any subsequent changes in its fair value in earnings. When it is probable that a forecasted transaction will not occur, we discontinue hedge accounting and recognize immediately in earnings gains and losses that were accumulated in other comprehensive income (loss) related to the hedging relationship. Property, Plant, and Equipment. Property, plant, and equipment are stated at cost, net of accumulated depreciation. Major renewals and improvements which extend the useful lives of equipment are capitalized. Repair and maintenance costs are expensed as incurred. Disposals are removed at carrying cost less accumulated depreciation with any resulting gain or loss reflected in earnings. We capitalize interest costs which are incurred as part of the cost of constructing major facilities and equipment. Depreciation is recognized using the straight-line method over the following estimated useful lives: Machinery and equipment 20 years Building and land improvements 20 years Manufacturing control equipment 10 years Office equipment 5 years Research equipment and facilities 5 years Vehicles 5 years Computer hardware and information systems 3 years Major Maintenance Activities. Major maintenance is expensed as incurred. Goodwill. We record goodwill when the purchase price of an acquired business exceeds the fair value of the net identifiable assets acquired. Goodwill is allocated to the reporting unit level based on the estimated fair value at the date of acquisition. Goodwill was recorded as a result of the Arizona Chemical Acquisition and is recorded in the Chemical operating segment. Goodwill is tested for impairment at the reporting unit level annually or more frequently as deemed necessary. Our annual measurement date for testing impairment is October 1st. The assessment is performed in three steps. We assess qualitative factors, or step zero, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is more likely than not that an impairment exists utilizing the qualitative method, we then utilize step one to test for impairment via estimating the fair value of our reporting units utilizing a combination of market and income approaches through the application of discounted cash flows to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value, including goodwill. If potential impairments are identified, we perform step two to measure the impairment loss through a full fair value allocation of the assets and liabilities of the reporting unit utilizing the acquisition method of accounting. Asset Retirement Obligations (“ARO”). We have determined that we have contractual or regulatory requirements to decommission and perform other remediation for many of our manufacturing and research facilities upon retirement. We account for ARO’s pursuant to the provisions of ASC 410-20, “Asset Retirement Obligations.” ASC 410-20 requires us to record the fair value of an ARO as a liability in the period in which we have a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the assets. The ARO is also capitalized as part of the carrying cost of the asset and is depreciated over the life of the asset. The recognition of an ARO requires us to make numerous estimates, assumptions, and judgments regarding such factors as the existence of a legal obligation for an ARO; estimated probabilities; amounts and timing of settlements; the credit-adjusted risk-free rate to be used; discount rate and inflation rates. Subsequent to the initial measurement of the ARO, the obligation is adjusted at the end of each period to reflect accretion of the liability to its non-discounted amount and changes in either the timing or the amount of the original estimated future cash flows underlying the obligation. Revisions also result in increases or decreases in the carrying cost of these assets. Increases in the ARO liability due to accretion is charged to depreciation and amortization expense. The related capitalized cost, including revisions thereto, is charged to depreciation and amortization expense. Long-Lived Assets. In accordance with the Impairment or Disposal of Long-Lived Assets Subsections of ASC 360-10, “Property, Plant, and Equipment—Overall,” long-lived assets, such as property, plant, and equipment, and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, we first compare the undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Intangible Assets. Intangible assets are stated at cost, net of accumulated amortization. We have intangible assets related to technology, customer relationships, tradenames/trademarks, and software as detailed in Note 6 Detail of Certain Balance Sheet Accounts to the consolidated financial statements. Intangible assets are amortized using the straight-line method over the asset's estimated useful life as follows: Technology 15 years Customer relationships 15 years Tradenames/trademarks 15 years Software 10 years Pension and Other Postretirement Plans. We sponsor noncontributory defined benefit pension plans and a post-retirement benefit plan. We annually evaluate significant assumptions related to the benefits and obligations of these plans. Our estimation of the projected benefit obligations and related benefit expense requires that certain assumptions be made regarding such variables as expected return on plan assets, discount rates, rates of future compensation increases, estimated future employee turnover rates and retirement dates, distribution election rates, mortality rates, retiree utilization rates for health care services, and health care cost trend rates. The determination of the appropriate assumptions requires considerable judgment concerning future events and has a significant impact on the amount of the obligations and expense recorded. We rely in part on actuarial studies when determining the appropriateness of certain of the assumptions used in determining the benefit obligations and the annual expenses for these plans. Investment in Unconsolidated Joint Venture. Our 50% equity investment in a manufacturing joint venture at our Kashima site is accounted for under the equity method with our share of the operating results of the joint venture classified within earnings of unconsolidated joint venture. We evaluate our equity method investment for impairment when events or changes in circumstances indicate, in our judgment, that the carrying value of such investment may have experienced an other-than-temporary decline in value. When evidence of loss in value has occurred, we compare the estimated fair value of the investment to the carrying value of the investment to determine whether impairment has occurred. We assess the fair value of our equity method investment using commonly accepted techniques, and may use more than one method, including, but not limited to, recent third party comparable sales, internally developed analysis and analysis from outside advisors. If the estimated fair value is less than the carrying value and we consider the decline in value to be other than temporary, the excess of the carrying value over the estimated fair value is recognized in the financial statements as an impairment. Debt Issuance Costs. We capitalize financing fees and other costs related to issuing long-term debt. We amortize these costs using the effective interest method, except for costs related to revolving debt, which are amortized using the straight-line method. The amortization of debt issuance costs are recorded in interest expense. Contingencies . We are routinely involved in litigation, claims, and disputes incidental to our business. Professional judgment is required to classify the likelihood of these contingencies occurring. All relevant information that can be acquired concerning the uncertain set of circumstances needs to be obtained and used to determine the probability classification. A contingency is categorized as probable, reasonably possible, or remote. A contingency is classified as probable if the future event or events are likely to occur. For the probable contingencies, a loss is accrued and disclosed as of the date of the financial statements if it is both probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. A reasonably possible contingency occurs if the chance of the future event or events happening is more than remote but less than likely (reasonably possible but not probable). We disclose the loss contingencies in the footnotes to the financial statements but do not recognize any liability. A remote contingency is one where the chance of the future event or events occurring is slight. We neither accrue for nor disclose the liability in the notes to the financial statements. For loss contingencies, our accounting policy is to expense legal costs as incurred. Environmental Costs. Environmental costs are expensed as incurred unless the expenditures extend the economic useful life of the relevant assets. Costs that extend the economic useful life of assets are capitalized and depreciated over the remaining life of those assets. Liabilities are recorded when environmental assessments, or remedial efforts are probable, and the cost can be reasonably estimated. Disclosures about Fair Value of Financial Instruments. For cash and cash equivalents, receivables, accounts payable, and certain accrued expenses, the carrying amount approximates fair value due to the short maturities of these instruments. For long-term debt instruments and interest rate swap agreements, fair value is estimated based upon market values (if applicable) or on the current interest rates available to us for debt with similar terms and remaining maturities. Considerable judgment is required in developing these estimates. Revenue Recognition. Revenue is recognized in accordance with the provisions of ASC 605, “Revenue Recognition—Overall,” when the revenue is realized or realizable, and has been earned. Revenue for product sales is recognized when risk and title to the product transfer to the customer, which usually occurs at the time shipment is made. The majority of our sales are transacted with the shipping term free on board shipping point or, with respect to countries other than the U.S., an equivalent basis. As such, title to the product passes when the product is delivered to the freight carrier. Our standard terms of delivery are included in our contracts of sale, order confirmation documents, and invoices. Shipping and other transportation costs charged to customers are recorded in both revenue and cost of goods sold. Revenue is recognized net of value-added taxes. We have entered into agreements with some of our customers whereby they earn rebates from us when the volume of their purchases of our product reach certain agreed upon levels. We recognize the rebate obligation ratably as a reduction of revenue. Research and Development Expenses. Research and development costs are expensed as incurred. Share-Based Compensation . Share-based compensation cost is measured at the grant date based on the fair value of the award. We recognize these costs using the straight-line method over the requisite service period. We estimate the fair value of performance-based restricted share units using a combination of Monte Carlo simulations and internal metrics. The expected term represents the period of time that performance share units granted are expected to be outstanding. Our expected volatilities are based on historical volatilities for Kraton and the members of the peer group. The risk free interest rate for the periods within the contractual life of the performance-based restricted share units is equal to the yield, as of the valuation date, of the zero coupon U.S. Treasury STRIPS that have a remaining term equal to the length of the remaining performance period. The expected dividend yield is assumed to be zero , which is the equivalent of reinvesting dividends in the underlying company's stock. Forfeitures are recognized when they occur. See Note 5 Share-Based Compensation to the consolidated financial statements. Leases. Our leases are classified as either operating or capital leases at the inception of the lease. A lease is deemed a capital lease when any one of the following conditions is met: (1) ownership of the asset is transferred to the lessee at the end of the lease term; (2) the lease contains a bargain purchase option; (3) the lease term is 75% or more of the asset’s useful life; or (4) the net present value of future minimum lease payments is equal to 90% or more of the asset’s fair market value. All other leases are classified as an operating lease. The capital lease obligation is classified as either a current liability or long term liability based on the lease payment schedule, and is offset by an asset purchased pursuant to the lease which is depreciated over the lesser of the lease term or the asset useful life, in accordance with our depreciation policy. For operating leases that contain escalating rent payment clauses, we use the straight-line method to record lease expense. Income Taxes. We conduct operations in separate legal entities in different jurisdictions. As a result, income tax amounts are reflected in these consolidated financial statements for each of those jurisdictions. Income taxes are recorded utilizing an asset and liability approach. This method gives consideration to the future tax consequences associated with the differences between the financial accounting and tax basis of the assets and liabilities as well as the ultimate realization of any deferred tax asset resulting from such differences. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, we believe it is more likely than not that we will realize the benefits of these deductible differences, net of the existing valuation allowances. See Note 11 Income Taxes to the consolidated financial statements. We provide liabilities for uncertain tax positions for federal, state, local, and international exposures, including interest and penalties, relating to periods subject to audit. The development of liabilities for uncertain tax positions for these exposures requires judgment about tax issues, potential outcomes, and timing. We assess tax positions and record tax benefits based upon management's evaluation of facts, circumstances, and information available at the respective reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon settlement with a tax authority. For those tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the consolidated financial statements. We have established valuation allowances against a variety of deferred tax assets, including net operating loss carryforwards, foreign tax credits and other income tax credits. Valuation allowances take into consideration our expected ability to realize these deferred tax assets and reduce the value of such assets to the amount that is deemed more likely than not to be recoverable. Our ability to realize these deferred tax assets is dependent on achieving our forecast of future taxable operating income over an extended period of time. We review our forecast in relation to actual results and expected trends on a quarterly basis. If we fail to achieve our operating income targets, we may change our assessment regarding the recoverability of our net deferred tax assets and such change could result in a valuation allowance being recorded against some or all of our net deferred tax assets. A change in our valuation allowance would impact our income tax benefit (expense) and our stockholders’ equity and could have a significant impact on our results of operations or financial condition in future periods. Foreign Currency Translation and Foreign Currency Exchange Rates. Financial statements of our operations outside the U.S. where the local currency is considered to be the functional currency are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and the average exchange rate for each period for revenue, expenses, gains, losses, and cash flows. The effects of translating such operations into U.S. dollars are included as a component of accumulated other comprehensive income (loss). |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Adoption of Accounting Standards. We have implemented all new accounting pronouncements that are in effect and that management believes would materially impact our financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . This standard changes the measurement principle for inventory from the lower of cost or market to the lower of cost or net realizable value. ASU 2015-11 defines net realizable value as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The guidance must be applied on a prospective basis and is effective for periods beginning after December 15, 2016, with early adoption permitted. We adopted ASU 2015-11 as of January 1, 2017 and there was no material impact to our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 817) . The ASU changes seven aspects of the accounting for share-based payment award transactions, including: (1) accounting for income taxes; (2) classification of excess tax benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes; (6) practical expedient - expected term (nonpublic only); (7) intrinsic value (nonpublic only). The standard was effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. We adopted ASU 2016-09 as of January 1, 2017. The element of the update that has an impact on our financial statements is the accounting for income taxes. Excess tax benefits and tax deficiencies on stock-based compensation awards are now included in our tax provision within our consolidated statement of operations as discrete items in the reporting period in which they occur, rather than previous accounting of recording in additional paid-in capital on our consolidated balance sheets. The Company reversed deferred tax liabilities of $4.5 million for all excess tax deficiencies or benefits that had not been previously recognized as a cumulative-effect adjustment to retained earnings. Prior to January 1, 2017, the employee share-based compensation expense was recorded net of estimated forfeiture rates and subsequently adjusted at the vesting date, as appropriate. On a go forward basis, we elected to recognize actual forfeiture rates by reducing the employee share-based compensation expense in the same period as the forfeitures occur. The adoption of this accounting standard did not impact our consolidated statements of operations or consolidated statements of cash flows for the periods presented. New Accounting Standards to be Adopted in Future Periods In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , updated by ASU No. 2015-14 Deferral of the Effective Date , which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. In August 2015, the effective date for the standard was deferred by one year and the standard is now effective for public entities for annual and interim periods beginning after December 15, 2017. Early adoption is permitted based on the original effective date. Our revenue is primarily generated from the sale of finished product to customers. Those sales predominantly contain a single delivery element and revenue is recognized at a single point in time, when ownership and risk of loss transfers. These are largely un-impacted by the new standard. We completed our analysis during 2017 and there is no material change to our financial position, results of operations, and cash flows. We adopted ASU 2014-09 and its amendment on a modified retrospective effective January 1, 2018. Although there is no material impact, will will have expanded disclosures in our notes to consolidated financial statements related to revenue recognition under the new standard. We have implemented changes to our accounting policies and practices, business processes, systems, and controls to support the new revenue recognition and disclosure requirements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires that an entity must recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 and early adoption is permitted. We are still analyzing the quantitative impact of adoption; therefore, the effects of this standard on our financial position, results of operations, and cash flows are not yet known. As we complete our overall assessment, we are identifying and preparing to implement changes to our accounting policies and practices, business processes, systems and controls to support the new revenue recognition and disclosure requirements. Our assessment will be completed during fiscal year 2018 and we expect to adopt the ASU 2016-02 effective January 1, 2019. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) . The ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. Our analysis of ASU 2016-15 was completed during 2017 and there is no material change to our financial position, results of operations, and cash flows. We adopted ASU 2016-15 effective January 1, 2018. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . This standard is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and early adoption is permitted for annual or interim goodwill impairment tests performed on testing dates after January 1, 2017. Our evaluation of this standard is currently ongoing. 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 Post-retirement Benefit Cost . The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted as of the beginning of a year for which financial statements (interim and annual) have not been issued. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component. Our service costs were $6.5 million and $6.1 million for the years ended December 31, 2017 and 2016 , respectively. Our evaluation of this standard is currently ongoing and we will adopt ASU 2017-07 effective on January 1, 2018. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . This standard is effective for fiscal years beginning after December 15, 2018, and early adoption is permitted for any interim period after issuance of the ASU. Our evaluation of this standard is currently ongoing. |
Acquisition of Arizona Chemical
Acquisition of Arizona Chemical | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisition of Arizona Chemical | Acquisition of Arizona Chemical On January 6, 2016, we acquired all of the capital stock of Arizona Chemical for a purchase price of $1,361.9 million . In accordance with the sale and purchase agreement, we finalized the purchase price with the sellers and received an additional $5.1 million of cash during the year ended December 31, 2016 . We have accounted for the Arizona Chemical Acquisition using the purchase method of accounting for business combinations. Accordingly, the purchase price has been allocated to the underlying assets and liabilities in proportion to their respective fair values. The excess of the purchase price over the estimated fair value of the net assets acquired has been recorded as goodwill. Following the close of the Arizona Chemical Acquisition, the operating results of Arizona Chemical are reported as a separate operating segment, “Chemical segment.” See Note 14 Industry Segments and Foreign Operations for further information. Goodwill has been calculated as the excess of the consideration transferred over the net assets acquired and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. See Note 14 Industry Segments and Foreign Operations for further information regarding our reportable segments. Goodwill recognized as a result of the acquisition is not deductible for tax purposes. |
Disposition and Exit of Busines
Disposition and Exit of Business Activities | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposition and Exit of Business Activities | Disposition and Exit of Business Activities Exit of NEXAR TM In June 2016, we exited our NEXAR TM product line due to the loss of certain key customers. We recorded a loss related to this exit activity of $8.6 million during the year ended December 31, 2016 . This loss includes $5.3 million for the write off of inventory and associated disposal costs and $3.2 million for the write off of fixed assets. Disposition of Joint Venture In May 2016, as the result of a legal settlement with our joint venture partner BASF, S.A., we dissolved our joint venture in Paulinia, Brazil. As part of the settlement, we obtained 100% interests in the joint venture and the real estate, building, and other assets of the joint venture located at our Paulinia, Brazil, manufacturing facility. In accordance with ASC 323-10-35 Dissolution of a Joint Venture , we recorded a gain of $3.2 million during the year ended December 31, 2016 for the fair market value of these assets less the carrying value of our investment in the joint venture. Sale of Belpre Compounding Unit On January 29, 2016, we sold certain assets including intellectual property, inventory, equipment, and other intangible assets associated with our Belpre, Ohio, compounding unit (the “BCU”) for total proceeds of $72.8 million . We recognized a gain on the sale of $38.2 million during the year ended December 31, 2016 . In connection with the sale, we entered into an exclusive polymer supply agreement with a seven year term and a compound manufacturing agreement for a transition period of up to two years with the purchaser. During the fourth quarter of 2016, we amended the polymer supply agreement and settled a dispute with the buyer resulting in a $7.6 million charge to our consolidated statements of operations. Exit of Solution Resinates In December 2016, we exited our solution resinates product line and recorded a loss related to this exit activity of $4.4 million during the year ended December 31, 2016 . This loss includes $2.9 million for the write off of fixed assets and $1.5 million associated with demolition costs and disposal of inventory. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Share-based Compensation [Abstract] | |
Share-Based Compensation | Share-Based Compensation We account for share-based awards under the provisions of ASC 718, Compensation—Stock Compensation, which established the accounting for share-based awards exchanged for employee services. Accordingly, share-based compensation cost is measured at the grant date based on the fair value of the award and we expense these costs using the straight-line method over the requisite service period. Upon adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 817) , we now recognize actual forfeitures by reducing the employee share-based compensation expense in the same period as the forfeitures occur. Share-based compensation expense was approximately $7.6 million , $8.3 million , and $9.0 million , tax effected by $2.7 million and $3.0 million for the years ended December 31, 2017 and 2016 , respectively, and there was no tax impact in 2015 due to our net loss. Our unrecognized compensation expense related to our share-based awards was as follows as of December 31, 2017 : Unrecognized Compensation Expense Weighted Average Remaining Recognition Period (In thousands) Restricted stock awards $ 4,788 1.10 Restricted stock units $ 1,069 1.11 Performance stock units $ 4,187 1.12 2016 Equity and Cash Incentive Plan. On May 18, 2016, the stockholders approved the Kraton Corporation 2016 Equity and Cash Incentive Plan (the “2016 Plan”). The 2016 Plan replaced the Company's 2009 Equity Incentive Plan and shares forfeited in the 2009 Equity Incentive Plan will be added to the 2016 Plan until 2019. Under the 2016 Plan, there are a total of 2,771,356 shares of our common stock reserved for issuance. As of December 31, 2017 and 2016 there were 1,960,748 and 2,704,829 shares of our common stock available for issuance, respectively. Non-qualified Stock Option Activity Non-qualified option activities for the year ended December 31, 2017 are as follows: Options Weighted Average Exercise Price Aggregate (1) Weighted Average Remaining Contractual Term (In thousands) (In thousands) Outstanding at December 31, 2016 1,173 $ 24.94 Granted — — Exercised (469 ) 23.32 Forfeited — — Expired (28 ) 36.40 Outstanding at December 31, 2017 676 $ 25.59 $ 15,722 3.64 Exercisable at December 31, 2017 676 $ 25.59 $ 15,722 3.64 ________________________________________________ (1) The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option as of December 31, 2017 . These options have a ten year term. During the year ended December 31, 2017 , net proceeds of $11.0 million were received from the exercise of stock options. Years Ended December 31, 2017 2016 2015 (In thousands) Options exercised $ 469 $ 229 $ 64 Total intrinsic value of options exercised $ 11,667 $ 2,080 $ 411 Restricted Stock Awards and Restricted Stock Units We may grant to certain employees time-vested restricted stock awards and time-vested restricted share units. Holders of restricted share units do not have any beneficial ownership in the common stock underlying the restricted share units and the grant represents an unsecured promise to deliver common stock on a future date. Actual shares of common stock underlying the restricted share units will not be issued until the earlier of the passage of the vesting period, a change in control that also results in the termination of the grantee’s employment, or the death/disability of the participant. We awarded 180,666 , 257,141 , and 280,353 shares of restricted stock to our employees, which are subject to a three -year cliff vesting, during the years ended December 31, 2017 , 2016 , and 2015 , respectively. We issued 25,975 , 39,504 , and 32,584 shares of common stock to members of the board of directors during the years ended December 31, 2017 , 2016 , and 2015 , respectively, which vested on the grant date. We granted 40,189 , 77,757 , and 52,845 restricted share units to our employees during the years ended December 31, 2017 , 2016 , and 2015 , respectively, which are subject to a three -year cliff vesting. The following table represents the non-vested restricted stock awards and restricted share units granted, vested, and forfeited during 2017 . Restricted Stock Awards Restricted Stock Units Shares Weighted- Shares Weighted- (In thousands) (In thousands) Non-vested shares at December 31, 2016 586 $ 20.50 134 $ 18.56 Granted 207 28.25 40 27.90 Vested (207 ) 24.92 (45 ) 21.21 Forfeited (26 ) 20.99 (2 ) 22.23 Non-vested shares at December 31, 2017 560 $ 21.70 127 $ 20.16 The aggregate intrinsic value was $7.6 million and the weighted average remaining contractual term was 1.11 for restricted stock units. The total fair value of shares vested during the years ended December 31, 2017 , 2016 , and 2015 pursuant to restricted stock awards and restricted share units was $7.4 million , $4.0 million , and $3.6 million , respectively. Performance Share Units We may grant to certain employees performance share units, which vest after the achievement of performance criteria and time vesting established at grant. Holders of performance share units do not have any beneficial ownership in the shares of our common stock underlying the performance share units, and the grant represents an unsecured promise to deliver shares of our common stock on a future date. The performance share units vest at the end of a three -year period assuming continued employment and assuming the Company’s achievement of the performance measures established by our Compensation Committee when the performance share units were initially granted. When performance share units vest, a number of shares of our common stock from 0% to 200% of the initial grant amount will be issued, depending on the level of achievement of such performance measures. We granted 163,846 , 287,819 , and 240,536 performance share units to our employees during the years ended December 31, 2017 , 2016 , and 2015 , respectively. The following table represents the non-vested performance share units granted, vested, and forfeited during 2017 . Shares Weighted- average Grant-date Fair Value Aggregate (1) Weighted Average Remaining Contractual Term (In thousands) (In thousands) Non-vested shares at December 31, 2016 464 $ 20.19 Granted 164 31.45 Vested (28 ) 26.97 Forfeited (14 ) 25.18 Non-vested shares at December 31, 2017 586 $ 22.72 $ 28,627 1.12 ________________________________________________ (1) The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option as of December 31, 2017 . The total fair value of shares vested during the year ended December 31, 2017 pursuant to performance share units was $0.8 million . Weighted-Average Assumptions for Performance Share Unit Grant Date Fair Value For the performance share units granted in 2017 , a component of the performance targets was based on relative total shareholder return over the three-year performance cycle compared to an industry peer group. The weighted average fair value using a Monte Carlo simulation model and the corresponding weighted average assumptions for the performance share units granted were as follows: 2017 2016 2015 Risk-free interest rate 1.55 % 0.83 % 0.95 % Expected dividend yield — % — % — % Expected volatility 37.4 % 33.0 % 29.7 % Fair value per performance share award $ 34.84 $ 19.24 $ 24.75 |
Detail of Certain Balance Sheet
Detail of Certain Balance Sheet Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Detail of Certain Balance Sheet Accounts | Detail of Certain Balance Sheet Accounts December 31, 2017 2016 (In thousands) Inventories of products: Finished products $ 270,562 $ 248,143 Work in progress 6,925 5,648 Raw materials 100,594 86,864 Inventories of products, gross 378,081 340,655 Inventory reserves (10,285 ) (12,659 ) Inventories of products, net $ 367,796 $ 327,996 Property, plant, and equipment: Land $ 38,176 $ 34,109 Buildings 171,506 131,036 Plant and equipment (1) 1,208,199 910,658 Construction in progress 67,601 242,337 Property, plant, and equipment 1,485,482 1,318,140 Less accumulated depreciation 526,759 411,418 Property, plant, and equipment, net of accumulated depreciation $ 958,723 $ 906,722 Intangible assets: Contractual agreements $ 264,581 $ 258,646 Technology 146,449 145,320 Customer relationships 60,547 59,977 Tradenames/trademarks 80,138 77,666 Software 52,466 42,535 Intangible assets 604,181 584,144 Less accumulated amortization: Contractual agreements 44,435 20,757 Technology 53,086 44,698 Customer relationships 33,871 31,863 Tradenames/trademarks 35,770 25,363 Software 30,156 22,265 Accumulated amortization 197,318 144,946 Intangible assets, net of accumulated amortization $ 406,863 $ 439,198 ________________________________________________ (1) Plant and equipment includes $5.6 million and $7.2 million of assets related to capital leases as of December 31, 2017 and December 31, 2016 , respectively. December 31, 2017 2016 (In thousands) Other payables and accruals: Employee related $ 41,250 $ 33,947 Interest payable 23,615 10,135 Property, plant, and equipment accrual 10,404 26,260 Other 44,355 60,056 Total other payables and accruals $ 119,624 $ 130,398 Other long-term liabilities: Pension and other postretirement benefits $ 147,209 $ 138,188 Other 45,058 32,151 Total other long-term liabilities $ 192,267 $ 170,339 Depreciation expense for property, plant, and equipment was approximately $84.5 million , $80.5 million , and $50.5 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively. Amortization expense for intangible assets was approximately $52.4 million , $44.9 million , and $11.2 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively. Estimated amortization expense for each of the next five years is as follows: December 31: Amortization Expense (In thousands) 2018 $ 49,974 2019 $ 41,718 2020 $ 38,400 2021 $ 37,119 2022 $ 36,776 Changes in accumulated other comprehensive income (loss) by component were as follows: Cumulative Foreign Currency Translation Net Unrealized Gain on Cash Flow Hedges Unrealized Loss on Net Investment Hedges Benefit Plans Liability, Net of Tax Total (In thousands) Balance at December 31, 2015 $ (65,995 ) $ — $ (1,926 ) $ (70,647 ) $ (138,568 ) Other comprehensive income (loss) before reclassifications (6,736 ) 515 — (16,157 ) (22,378 ) Amounts reclassified from accumulated other comprehensive loss — — 2,416 (1) 2,416 Net other comprehensive income (loss) for the year (6,736 ) 515 — (13,741 ) (19,962 ) Balance at December 31, 2016 (72,731 ) 515 (1,926 ) (84,388 ) (158,530 ) Other comprehensive income (loss) before reclassifications 63,077 3,156 — (9,040 ) 57,193 Amounts reclassified from accumulated other comprehensive loss — 879 (2) — 2,163 (1) 3,042 Net other comprehensive income (loss) for the year 63,077 4,035 — (6,877 ) 60,235 Balance at December 31, 2017 $ (9,654 ) $ 4,550 $ (1,926 ) $ (91,265 ) $ (98,295 ) ________________________________________________ (1) The reclassifications from accumulated other comprehensive loss is for the change in benefit plans liability represents amortization of net actuarial losses and prior service costs. The tax impact was $0.7 million and $0.8 million for the years ended December 31, 2017 and 2016, respectively. These costs are allocated between cost of goods sold, selling, general, and administrative and research and development expenses in the Consolidated Statement of Operations. See Note 13. Employee Benefits for further information related to net periodic benefit cost for pension and other post-retirement benefit plans. (2) The reclassifications from accumulated other comprehensive loss is related to the exit of interest rate swaps related to prepayments under our USD Tranche. The tax impact was $0.1 million for the year ended December 31, 2017. These costs are recorded in loss on extinguishment of debt in the Consolidated Statement of Operations. |
Earnings per Share ("EPS")
Earnings per Share ("EPS") | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share ("EPS") | Earnings per Share (“EPS”) Basic EPS is computed by dividing net income attributable to Kraton by the weighted-average number of shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to Kraton by the diluted weighted-average number of shares outstanding during the period and, accordingly, reflects the potential dilution that could occur if securities or other agreements to issue common stock, such as stock options, were exercised, settled, or converted into common stock and were dilutive. The diluted weighted-average number of shares used in our diluted EPS calculation is determined using the treasury stock method. Unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as our restricted stock awards are considered to be participating securities and therefore the two-class method is used for purposes of calculating EPS. Under the two-class method, a portion of net income is allocated to these participating securities and therefore is excluded from the calculation of EPS allocated to common stock. These shares are subject to forfeiture and restrictions on transfer until vested and have identical voting, income, and distribution rights to the unrestricted common shares outstanding. We withheld 68,815 , 55,821 , and 28,273 shares of restricted stock upon vesting to satisfy employee payroll tax withholding requirements for the years ended December 31, 2017 , 2016 , and 2015 , respectively. We immediately retired all shares withheld and the transactions were reflected in additional paid in capital in the Consolidated Statements of Changes in Equity and as a purchase of treasury stock in the Consolidated Statements of Cash Flows. The computation of diluted EPS excludes weighted average restricted share units of 134,038 for the year ended December 31, 2015 , as they are anti-dilutive due to a net loss attributable to Kraton for this period. The computation of diluted EPS excludes weighted average performance share units of 33,296 for the year ended December 31, 2015 , as they are anti-dilutive due to a net loss attributable to Kraton for this period. In addition, the computation of diluted EPS also excludes the effect of performance share units for which the performance contingencies had not been met as of the reporting date, amounting to 585,838 , 436,143 , and 296,684 at December 31, 2017 , 2016 , and 2015 , respectively. The computation of diluted earnings per share excludes the effect of the potential exercise of stock options that are anti-dilutive. We did not exclude any options for the year ended December 31, 2017 and excluded 284,690 and 1,465,609 for the years ended December 31, 2016 , and 2015 , respectively. The calculations of basic and diluted EPS are as follows: Year Ended December 31, 2017 Net Weighted Earnings (In thousands, except per share data) Basic: As reported $ 97,549 31,241 Amounts allocated to unvested restricted shares (1,832 ) (587 ) Amounts available to common stockholders 95,717 30,654 $ 3.12 Diluted: Amounts allocated to unvested restricted shares 1,832 587 Non participating share units 170 Stock options added under the treasury stock method 316 Amounts reallocated to unvested restricted shares (1,804 ) (587 ) Amounts available to stockholders and assumed conversions $ 95,745 31,140 $ 3.07 Year Ended December 31, 2016 Net Weighted Earnings (In thousands, except per share data) Basic: As reported $ 107,308 30,843 Amounts allocated to unvested restricted shares (2,307 ) (663 ) Amounts available to common stockholders 105,001 30,180 $ 3.48 Diluted: Amounts allocated to unvested restricted shares 2,307 663 Non participating share units 205 Stock options added under the treasury stock method 236 Amounts reallocated to unvested restricted shares (2,274 ) (663 ) Amounts available to stockholders and assumed conversions $ 105,034 30,621 $ 3.43 Year Ended December 31, 2015 Net Weighted Loss (In thousands, except per share data) Basic: As reported $ (10,535 ) 31,128 Amounts allocated to unvested restricted shares 187 (554 ) Amounts available to common stockholders (10,348 ) 30,574 $ (0.34 ) Diluted: Amounts allocated to unvested restricted shares (187 ) 554 Non participating share units — Stock options added under the treasury stock method — Amounts reallocated to unvested restricted shares 187 (554 ) Amounts available to stockholders and assumed conversions $ (10,348 ) 30,574 $ (0.34 ) Share Repurchase Program. On October 27, 2014, our board of directors approved a share repurchase program, which allowed for the repurchase of outstanding shares of our common stock having an aggregate purchase price of up to $50.0 million . We repurchased shares of our common stock in the open market at prevailing market prices and through a trading program under Rule 10b5-1. From the inception of the program through December 31, 2015 , we repurchased a total of 2,549,683 shares of our common stock at an average price of $19.58 per share and a total cost of $50.0 million (including trading commissions). The share repurchase plan was financed with available cash and the program was completed in 2015 . |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consists of the following: December 31, 2017 December 31, 2016 Principal Discount Debt Issuance Cost Total Principal Discount Debt Issuance Cost Total (In thousands) USD Tranche $ 485,000 $ (13,373 ) $ (13,986 ) $ 457,641 $ 1,278,000 $ (34,085 ) $ (31,662 ) $ 1,212,253 Euro Tranche 198,265 — (3,517 ) 194,748 — — — — 10.5% Senior Notes 440,000 (13,267 ) (14,409 ) 412,324 440,000 (15,038 ) (16,329 ) 408,633 7.0% Senior Notes 400,000 — (7,424 ) 392,576 — — — — ABL Facility — — — — — — — — KFPC Loan Agreement 149,919 — (196 ) 149,723 115,854 — (257 ) 115,597 KFPC Revolving Credit Facilities 8,430 — — 8,430 — — — — Capital lease obligation 2,086 — — 2,086 3,042 — — 3,042 Total debt 1,683,700 (26,640 ) (39,532 ) 1,617,528 1,836,896 (49,123 ) (48,248 ) 1,739,525 Less current portion of total debt 42,647 — — 42,647 41,825 — — 41,825 Long-term debt $ 1,641,053 $ (26,640 ) $ (39,532 ) $ 1,574,881 $ 1,795,071 $ (49,123 ) $ (48,248 ) $ 1,697,700 Senior Secured Term Loan Facility. In January 2016, we entered into a senior secured term loan facility (the “Term Loan Facility”) pursuant to which Kraton Polymers LLC (the “U.S. Term Loan Borrower”) made U.S. dollar denominated term loan borrowings in an aggregate principal amount of $1,350.0 million . On August 16, 2017, we entered into a Fourth Amendment (the “Fourth Amendment”) to the credit agreement governing the Term Loan Facility (as amended, the “Credit Amendment”) pursuant to which Kraton Polymers Holdings B.V., a wholly-owned Dutch subsidiary of Kraton Corporation (the “Euro Term Loan Borrower” and, together with the U.S. Term Loan Borrower, the “Term Loan Borrowers”), borrowed a new tranche of term loans denominated in Euros in an aggregate principal amount equal to €260.0 million , or approximately $312.4 million . The proceeds from borrowings under the Euro Tranche were used, together with available cash, to pay down $366.0 million of the outstanding borrowings under the USD Tranche. As of December 31, 2017 , we had $485.0 million in borrowings under the USD Tranche and €165.0 million , or approximately $198.3 million , in borrowings under the Euro Tranche. The outstanding borrowings under the USD Tranche also reflect prepayments in the amount of $72.0 million during the three months ended March 31, 2016 using proceeds received from the sale of our compounding business, and a prepayment in the amount of $392.0 million during the three months ended March 31, 2017, using the proceeds received in connection with the offering of the 7.0% Senior Notes (see below description of borrowings). The maturity date of the Term Loan Facility is January 6, 2022 . Subject to compliance with certain covenants and other conditions, contained within the Credit Agreement, the Term Loan Borrowers have the option to borrow up to $350.0 million of incremental term loans plus an additional amount subject to a senior secured net leverage ratio. Borrowings under the USD Tranche bear interest at a rate per annum equal to an applicable margin, plus, at our option, either (a) an adjusted LIBOR rate (subject to a 1.0% floor) determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for statutory reserve requirements or (b) an alternate base rate (subject to a 2.0% floor) determined by reference to the highest of (1) the prime rate of Credit Suisse AG, (2) the federal funds effective rate plus 0.5% and (3) the one month adjusted LIBOR rate plus 1.0% per annum. Pursuant to the Fourth Amendment, the applicable margins for adjusted LIBOR rate and alternate base rate borrowings under the USD Tranche were decreased from 4.0% to 3.0% for adjusted LIBOR rate borrowings and 3.0% to 2.0% for alternate base rate borrowings, respectively. Borrowings under the Euro Tranche bear interest at an adjusted EURIBOR rate (subject to a 0.75% floor) determined by reference to the costs of funds for Euro deposits for the interest period relevant to such borrowing adjusted for statutory reserve requirements plus 2.5% . We are also required to pay customary agency fees in connection with the Term Loan Facility. As of the date of this filing, the effective interest rate for the USD Tranche is LIBOR plus 3.0% and the effective interest rate for the Euro Tranche is 3.25% . Voluntary prepayments on the Term Loan Facility may be made without premium or penalty other than customary “breakage” costs with respect to LIBOR or EURIBOR loans and other than a 1.0% of the Term Loan Facility. Pursuant to the Fourth Amendment, the period during which such prepayment premium may be required under each of the Euro Tranche and the USD Tranche was reset until six months after the effective date of the Fourth Amendment. In the event we have consolidated excess cash flow for any fiscal year, we are required to prepay an amount of borrowings under the Term Loan Facility equal to at least 50% of such cash flow by the 90th day after the end of the fiscal year. The prepayment percentage is reduced to 25% if our senior secured net leverage ratio is under 2.5 : 1.0 or 0% if our senior secured net leverage ratio is below 2.0 : 1.0 . The USD Tranche is guaranteed by Kraton Corporation and certain of our wholly-owned domestic subsidiaries (the “U.S. Term Loan Guarantors”). The Euro Tranche is guaranteed by each of the U.S. Term Loan Guarantors, the U.S. Term Loan Borrower and certain other Dutch subsidiaries of Kraton Corporation (the “Dutch Term Loan Guarantors”), including those Dutch subsidiaries that are also either a borrower or a guarantor under the Euro tranche facility under the ABL Facility. The obligations under the Term Loan Facility are secured, subject to certain exceptions, by (i) a first-lien pledge of 100% of the equity interests held by Kraton Corporation, the U.S. Term Loan Borrower and the other U.S. Term Loan Guarantors in their respective first-tier domestic subsidiaries and 65% of the equity interests directly held by such entities in their first-tier foreign subsidiaries, (ii) a first-priority security interest in substantially all tangible and intangible assets of Kraton Corporation, the U.S. Term Loan Borrower and the other U.S. Term Loan Guarantors, other than the ABL Priority Collateral (as defined below), and (iii) a perfected second-priority security interest in all of the ABL Priority Collateral. The Euro Tranche is also secured by a first-lien pledge of 100% of the equity interests in the Euro Term Loan Borrower and the Dutch Term Loan Guarantors and a first-lien pledge of any intercompany notes or instruments evidencing intercompany indebtedness owed to the Euro Term Loan Borrower or the guarantors of the Euro Tranche that are not U.S. Term Loan Guarantors. The Term Loan Facility contains a number of customary affirmative and negative covenants. As of the date of this filing, we were in compliance with the covenants under the Term Loan Facility. 10.5% Senior Notes due 2023. Kraton Polymers LLC and its wholly-owned financing subsidiary Kraton Polymers Capital Corporation issued $440.0 million aggregate principal amount of 10.5% Senior Notes due 2023 (the “ 10.5% Senior Notes”) that mature on April 15, 2023 . The 10.5% Senior Notes are general unsecured, senior obligations and are unconditionally guaranteed on a senior unsecured basis by each of Kraton Corporation and certain of our wholly-owned domestic subsidiaries. We pay interest on the 10.5% Senior Notes at 10.5% per annum, semi-annually in arrears on April 15 and October 15 of each year. Prior to October 15, 2018, we may redeem up to 40.0% of the aggregate principal amount of the 10.5% Senior Notes with the net proceeds of certain equity offerings at a redemption price equal to 110.5% of the principal amount of the 10.5% Senior Notes plus accrued and unpaid interest, if any, to the date of redemption. At any time prior to October 15, 2018, we may redeem some or all of the 10.5% Senior Notes at a redemption price equal to 100.0% of the principal amount of the notes redeemed plus accrued and unpaid interest, if any, to the redemption date and a “make-whole” premium. On or a fter October 15, 2018, 2019, 2020, and 2021 and thereafter, we may redeem all or a part of the 10.5% Senior Notes for 107.875% , 105.250% , 102.625% , and 100.0% of the principal amount, respectively. 7.0% Senior Notes due 2025. Kraton Polymers LLC and its wholly-owned financing subsidiary Kraton Polymers Capital Corporation issued $400.0 million aggregate principal amount of 7.0% Senior Notes due 2025 (the “ 7.0% Senior Notes”) in March 2017, which mature on April 15, 2025 . The 7.0% Senior Notes are general unsecured, senior obligations and are unconditionally guaranteed on a senior unsecured basis by each of Kraton Corporation and certain of our wholly-owned domestic subsidiaries. We pay interest on the Senior Notes at 7.0% per annum, semi-annually in arrears on January 15 and July 15 of each year. We made the first interest payment on July 15, 2017. Prior to April 15, 2020, we may redeem up to 40.0% of the aggregate principal amount of the 7.0% Senior Notes with the net proceeds of certain equity offerings at a redemption price equal to 107.0% of the principal amount of the 7.0% Senior Notes plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. At any time prior to April 15, 2020, we may redeem some or all of the 7.0% Senior Notes at a redemption price equal to 100.0% of the principal amount of the notes redeemed plus accrued and unpaid interest, if any, to, but excluding, the redemption date and a “make-whole” premium. On and a fter April 15, 2020, 2021, and 2022 and thereafter, we may redeem all or a part of the 7.0% Senior Notes for 105.250% , 102.625% , and 100.0% of the principal amount, respectively. ABL Facility. In January 2016, we entered into an amended and restated asset-based revolving credit facility that provides financing of up to $250.0 million (the “ABL Facility”). We did not have any borrowings drawn under this facility as of December 31, 2017 . Borrowing availability under the ABL Facility is subject to borrowing base limitations based on the level of receivables and inventory available for security. Revolver commitments under the ABL Facility consist of U.S. and Dutch revolving credit facility commitments, and the terms of the ABL Facility require the U.S. revolver commitment comprises at least 60.0% of the commitments under the ABL Facility. The ABL Facility provides that we have the right at any time to request up to $100.0 million of additional commitments under this facility, provided that we satisfy additional conditions described in the credit agreement and provided further that the U.S. revolver commitment comprises at least 60.0% of the commitments after giving effect to such increase. We cannot guarantee that all of the lending counterparties contractually committed to fund a revolving credit draw request will actually fund future requests, although we currently believe that each of the counterparties would meet their funding requirements. The ABL Facility terminates on January 6, 2021; however, we may, from time to time, request that the lenders extend the maturity of their commitments; provided among other things, that at no time shall there be more than four different maturity dates under the ABL Facility. Borrowings under the ABL Facility bear interest at a rate per annum equal to the applicable margin plus (1) a base rate determined by reference to the prime rate of Bank of America, N.A. in the jurisdiction where the currency is being funded or (2) LIBOR for loans that bear interest based on LIBOR. The initial applicable margin for borrowings under the ABL Facility is 0.5% with respect to U.S. base rate borrowings and 1.5% with respect to LIBOR or borrowings made on a European base rate. The applicable margin ranges from 0.5% to 1.0% with respect to U.S. base rate borrowings and 1.5% to 2.0% for LIBOR or borrowings made on a European base rate per annum based on the average excess availability for the prior fiscal quarter. In addition to paying interest on outstanding principal amounts under the ABL Facility, we are required to pay a commitment fee in respect of the un-utilized commitments at an annual rate of 0.375% . All of the obligations under the ABL Facility are guaranteed by Kraton Corporation and certain of our wholly-owned domestic subsidiaries (the “ABL U.S. Guarantors”). Certain foreign obligations under the ABL Facility are also guaranteed by certain other wholly-owned subsidiaries of Kraton Corporation (the “ABL Dutch Guarantors”). In connection with the Fourth Amendment, on August 16, 2017, we entered into a First Amendment and Consent to the ABL Facility (the “ABL Amendment). The ABL Amendment provides, among other things, that any foreign subsidiary of Kraton Corporation that becomes a guarantor under the Euro Tranche will also become a guarantor under the Euro tranche facility of the ABL Facility. All obligations under the ABL Facility are secured, subject to certain exceptions, by (i) a first-priority security interest in, among other things, accounts receivable, inventory and cash of the ABL U.S. Guarantors (the “ABL Priority Collateral”), and (ii) a perfected second-priority security interest in substantially all tangible and intangible assets of the ABL U.S. Guarantors that are not ABL Priority Collateral. Certain foreign obligations under the ABL Facility are also secured, subject to certain exceptions, by, a first priority security interest in, among other things, accounts, inventory and cash of the ABL Dutch Guarantors. The ABL Facility contains a number of customary affirmative and negative covenants, including a financial covenant requiring us to maintain a minimum fixed charge coverage ratio of 1.0 : 1.0 if borrowing availability under the ABL Facility is below a specified amount. As of the date of this filing, we were in compliance with the covenants under the ABL Facility. KFPC Loan Agreement. On July 17, 2014, KFPC executed a syndicated loan agreement (the “KFPC Loan Agreement”) in the amount of 5.5 billion New Taiwan Dollars (“NTD”), or approximately $185.5 million (converted at the December 31, 2017 exchange rate), to provide additional funding to construct the hydrogenated styrenic block copolymer (“HSBC”) facility in Taiwan and to provide funding for working capital requirements and/or general corporate purposes. The KFPC Loan Agreement is comprised of a NTD 4.3 billion Tranche A, or approximately $144.7 million , to fund KFPC’s capital expenditures, and a NTD 1.2 billion Tranche B, or approximately $40.8 million , to fund working capital requirements and/or general corporate purposes. As of December 31, 2017 , NTD 4.4 billion , or approximately $149.9 million , was drawn on the KFPC Loan Agreement. The facility period of the KFPC Loan Agreement is five years from January 17, 2015 (the first drawdown date). KFPC was able to draw on the KFPC Loan Agreement for the first 28 months following the first drawdown date, which ended in May 2017. Subject to certain conditions, KFPC can request a two -year extension of the term of the KFPC Loan Agreement. The total outstanding principal amount is payable in six semi-annual installments. The first installment payment was made on July 17, 2017 and each subsequent payment will be due every six months thereafter. The first five installments will be in an amount equal to 10% of the outstanding principal amount and the final installment will be in an amount equal to the remaining 50% of the outstanding principal amount. In the event the extension period is granted, the final 50% of the outstanding principal amount shall be repaid in five equal semi-annual installments with the first installment due on the original final maturity date. The KFPC Loan Agreement is subject to a variable interest rate composed of a fixed 0.8% margin plus the three-month or six-month fixing rate of the Taipei Interbank Offered Rate (depending on the interest period selected by KFPC in the drawdown request or the interest period notice), subject to a floor of 1.7% . Interest is payable on a monthly basis. For the year ended December 31, 2017 , our effective interest rate for borrowings on the KFPC Loan Agreement was 1.8% . The KFPC Loan Agreement contains certain financial covenants which change during the term of the KFPC Loan Agreement. The financial covenants include a maximum debt to equity ratio of 2.0 to 1.0 in 2017 and 1.2 to 1.0 in 2018; a minimum tangible net worth requirement of $50.0 million through 2018, which will increase to $100.0 million in 2019; and a minimum interest coverage ratio requirement of 5.0 :1.0 commencing in 2017. Due to a waiver received from the majority of lenders, we are no longer subject to the 2017 financial covenants. In each case, these covenants are calculated and tested on an annual basis at December 31 st each year. Formosa Petrochemical Corporation and Kraton Polymers LLC are the guarantors of the KFPC Loan Agreement with each guarantor guaranteeing 50.0% of the indebtedness. KFPC Revolving Credit Facilities. During the fourth quarter of 2017, KFPC executed two revolving credit facilities to provide funding for working capital requirements and/or general corporate purposes. The revolving credit facility in the amount of NTD 700.0 million , or approximately $23.1 million , expires September 29, 2018 (the “NTD 700.0 million Facility”) and the revolving credit facility in the amount of NTD 500.0 million , or approximately $16.9 million , expires November 20, 2018 (the “NTD 500.0 million Facility”). Both revolving credit facilities are subject to a variable interest rate. Interest on borrowings denominated in NTD for the NTD 700.0 million Facility are composed of the adjustable rate for consumer loans plus a 0.21% margin, subject to a 1.2% floor and interest on borrowings denominated in NTD for the NTD 500.0 million Facility are composed of TAIBOR plus a premium of 0.5% . As of December 31, 2017, NTD 250 million , or approximately $8.4 million , was drawn on the NTD 700.0 million Facility and we had no borrowing under the NTD 500.0 million Facility. Debt Issuance Costs. We capitalize debt issuance costs related to issuing long-term debt and amortize these costs using the effective interest method, except for costs related to revolving debt, which are amortized using the straight-line method. Amortization of debt issuance costs are recorded as a component of interest expense and the accelerated write-off of debt issuance costs in connection with refinancing activities are recorded as a component of loss on extinguishment of debt. In connection with our January 2017 repricing of our USD Tranche and our offering of 7.0% Senior Notes in March 2017, we deferred $2.0 million and $7.8 million of debt issuance costs, respectively. In connection with our August 2017 repricing of our USD Tranche and borrowings under our Euro Tranche, we deferred $1.3 million and $3.9 million of debt issuance costs, respectively. We recorded a $33.7 million loss on extinguishment of debt related to previously capitalized deferred financing costs and original issue discount on our Term Loan Facility in connection with our $758.0 million pay down of our Term Loan Facility during the year ended December 31, 2017 . In conjunction with the closing of the Arizona Chemical Acquisition on January 6, 2016, we amended and restated our asset-based revolving credit facility (“ABL Facility”) and the debt issuance costs associated with these efforts were recorded within other current assets and debt issuance costs in the accompanying Consolidated Balance Sheets. We deferred $61.3 million of debt issuance costs related to the debt financing in conjunction with the Arizona Chemical Acquisition, of which $8.8 million was deferred in the fourth quarter of 2015, $1.7 million was carried over from our previous debt issuance costs and $50.8 million was deferred during the year ended December 31, 2016 . In connection with our January 2016 refinancing, we charged to interest expense $5.0 million of unamortized debt issuance costs related to our previously existing indebtedness. We had net debt issuance cost of $43.0 million as of December 31, 2017 , of which $3.5 million related to our ABL Facility which is recorded as an asset (of which $1.2 million was included in other current assets) and $39.5 million is recorded as a reduction to long-term debt. We had net debt issuance cost of $52.9 million as of December 31, 2016 , of which $4.7 million related to our ABL Facility which is recorded as an asset (of which $1.2 million was included in other current assets) and $48.2 million is recorded as a reduction to long-term debt. We amortized $8.4 million , $8.7 million , and $2.2 million during the years ended December 31, 2017 , 2016 , and 2015 , respectively. Debt Maturities. The principal payments on our outstanding total debt as of December 31, 2017 , are as follows: December 31: Principal Payments (In thousands) 2018 $ 42,647 2019 33,484 2020 83,467 2021 190 2022 683,467 Thereafter 840,445 Total debt $ 1,683,700 See Note 9 Fair Value Measurements, Financial Instruments, and Credit Risk to the consolidated financial statements for fair value information related to our long-term debt. |
Fair Value Measurements, Financ
Fair Value Measurements, Financial Instruments, and Credit Risk | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Financial Instruments, and Credit Risk | Fair Value Measurements, Financial Instruments, and Credit Risk ASC 820, “Fair Value Measurements and Disclosures” defines fair value, establishes a consistent framework for measuring fair value and expands disclosure requirements about fair value measurements. ASC 820 requires entities to, among other things, maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. In accordance with ASC 820, these two types of inputs have created the following fair value hierarchy: • Level 1—Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets; • Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including: • Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in markets that are not active; • Inputs other than quoted prices that is observable for the asset or liability; and • Inputs that are derived principally from or corroborated by observable market data by correlation or other means; and • Level 3—Inputs that are unobservable and reflect our assumptions used in pricing the asset or liability based on the best information available under the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows). Recurring Fair Value Measurements . The following tables set forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2017 and December 31, 2016 , respectively. These financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of their fair value and their placement within the fair value hierarchy. Fair Value Measurements at Reporting Date Using Balance Sheet Location December 31, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Derivative asset – current Other current assets $ 1,629 $ — $ 1,629 $ — Derivative asset – noncurrent Other long-term assets 3,801 — 3,801 — Retirement plan asset—noncurrent Other long-term assets 2,435 2,435 — — Derivative liability – current Other payables and accruals 399 — 399 — Total $ 8,264 $ 2,435 $ 5,829 $ — Fair Value Measurements at Reporting Date Using Balance Sheet Location December 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Derivative asset – current Other current assets $ 243 $ — $ 243 $ — Derivative asset – noncurrent Other long-term assets 568 — 568 — Retirement plan asset—noncurrent Other long-term assets 1,894 1,894 — — Total $ 2,705 $ 1,894 $ 811 $ — The use of derivatives creates exposure to credit risk relating to potential losses that could be recognized in the event that the counterparties to these instruments fail to perform their obligations under the contracts. We seek to minimize this risk by limiting our counterparties to major financial institutions with acceptable credit ratings and monitoring the total value of positions with individual counterparties. In the event of a default by one of our counterparties, we may not receive payments provided for under the terms of our derivatives. Nonrecurring Fair Value Measurements. Our long-lived assets, such as property, plant, and equipment, and purchased intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. When impairment has occurred, such long-lived assets are written down to fair value. For the years ended December 31, 2017 , 2016 , and 2015 we determined that there was no impairment related to our long-lived assets. The following table presents the carrying values and approximate fair values of our debt. December 31, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value (In thousands) USD Tranche (significant other observable inputs – level 2) $ 485,000 $ 490,762 $ 1,278,000 $ 1,293,975 Euro Tranche (significant other observable inputs – level 2) $ 198,265 $ 200,495 $ — $ — 10.5% Senior Notes (quoted prices in active market for identical assets – level 1) $ 440,000 $ 499,171 $ 440,000 $ 501,600 7.0% Senior Notes (quoted prices in active market for identical assets – level 1) $ 400,000 $ 432,028 $ — $ — Capital lease obligation (significant other observable inputs – level 2) $ 2,086 $ 2,086 $ 3,042 $ 3,042 KFPC Loan Agreement (significant unobservable inputs – level 3) $ 149,919 $ 149,919 $ 115,854 $ 115,854 KFPC Revolving Credit Facilities (significant unobservable inputs – level 3) $ 8,430 $ 8,430 $ — $ — The KFPC Loan Agreement is a variable rate instrument, and as such, the fair value approximates the carrying value. Financial Instruments Interest Rate Swap Agreements. Periodically, we enter into interest rate swap agreements to hedge or otherwise protect against interest rate fluctuations on a portion of our variable rate debt. These interest rate swap agreements are designated as cash flow hedges on our exposure to the variability of future cash flows. In an effort to convert a substantial portion of our future interest payments pursuant to the USD Tranche to a fixed interest rate, in February and March 2016 we entered into a series of interest rate swap agreements with an aggregate notional value of $925.4 million , effective dates of January 3, 2017 and maturity dates of December 31, 2020. We exited out of $440.4 million of our interest rate swaps during the year ended December 31, 2017 . As a result, at December 31, 2017 the total notional value of our interest rate swaps was $485.0 million . We recorded an unrealized gain of $3.7 million and $0.8 million for the years ended December 31, 2017 and 2016 , respectively, in accumulated other comprehensive income (loss) related to the effective portion of these interest rate swap agreements. Foreign Currency Hedges. Periodically, we enter into foreign currency agreements to hedge or otherwise protect against fluctuations in foreign currency exchange rates. These agreements do not qualify for hedge accounting and gains/losses resulting from both the up-front premiums and/or settlement of the hedges at expiration of the agreements are recognized in the period in which they are incurred. We settled these hedges and recorded a loss of $0.9 million , $3.0 million , and $5.8 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively, which are recorded in cost of goods sold in the Consolidated Statement of Operations. These contracts are structured such that these gains/losses from the mark-to-market impact of the hedging instruments materially offset the underlying foreign currency exchange gains/losses to reduce the overall impact of foreign currency exchange movements throughout the period. Credit Risk The use of derivatives creates exposure to credit risk in the event that the counterparties to these instruments fail to perform their obligations under the contracts, which we seek to minimize by limiting our counterparties to major financial institutions with acceptable credit ratings and by monitoring the total value of positions with individual counterparties. We analyze our counterparties’ financial condition prior to extending credit and we establish credit limits and monitor the appropriateness of those limits on an ongoing basis. We also obtain cash, letters of credit, or other acceptable forms of security from customers to provide credit support, where appropriate, based on our financial analysis of the customer and the contractual terms and conditions applicable to each transaction. |
Restructuring Charges
Restructuring Charges | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges During the three months ended March 31, 2017, we announced plans to stop producing USBC product grades in Paulinia, Brazil, and streamline production for producing Cariflex TM polyisoprene latex. We recorded $1.0 million of severance, all of which was paid during the three months ended March 31, 2017, and which was primarily recorded in cost of goods sold. For the years ended December 31, 2017 , 2016 , and 2015 , restructuring and restructuring-related expenses amounted to $7.5 million , $2.4 million , and $1.7 million , respectively. Restructuring expenses in 2016 and 2015 were primarily comprised of professional services and advisory costs related to our cost reset initiative. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income taxes are recorded utilizing an asset and liability approach. This method gives consideration to the future tax consequences associated with the differences between the financial accounting and tax basis of the assets and liabilities as well as the ultimate realization of any deferred tax asset resulting from such differences. Our income tax benefit was a $57.9 million , a $92.0 million benefit , and a $6.9 million expense for the years ended December 31, 2017 , 2016 , and 2015 , respectively. Our effective tax rates for the years ended December 31, 2017 , 2016 , and 2015 were a 166.5% benefit , a 724.8% benefit , and a 124.3% expense , respectively. Our effective tax rates differed from the U.S. corporate statutory tax rate of 35.0% , primarily due to the mix of pre-tax income or loss earned in certain jurisdictions and the change in our valuation allowance. Excluding the change in our valuation allowance and the impact of U.S. tax reform, our effective tax rates would have been a benefit of 31.3% , 38.9% , and 75.4% for the years ended December 31, 2017 , 2016 , and 2015 , respectively. The provision for income taxes is comprised of the following: Years Ended December 31, 2017 2016 2015 (In thousands) Current tax expense: U.S. $ (522 ) $ (4,460 ) $ (34 ) Foreign (7,598 ) (2,469 ) (10,023 ) Current tax expense (8,120 ) (6,929 ) (10,057 ) Deferred tax benefit: U.S. 57,248 91,626 2,683 Foreign 8,756 7,257 431 Deferred tax benefit 66,004 98,883 3,114 Income tax benefit (expense) $ 57,884 $ 91,954 $ (6,943 ) Income (loss) before income taxes is comprised of the following: Years Ended December 31, 2017 2016 2015 (In thousands) Income (loss) before income taxes: U.S. $ (17,177 ) $ (4,556 ) $ (41,455 ) Foreign 51,939 17,242 35,869 Income (loss) before income taxes $ 34,762 $ 12,686 $ (5,586 ) The provision for income taxes differs from the amount computed by applying the U.S. corporate statutory income tax rate to income (loss) before income taxes for the reasons set forth below: Years Ended December 31, 2017 2016 2015 (In thousands) Income taxes at the statutory rate $ (12,167 ) $ (4,440 ) $ 1,955 Foreign tax rate differential 15,920 4,779 1,639 State taxes, net of federal benefit 373 (597 ) 315 Permanent differences 9,288 889 88 Tax credits 2,647 4,924 46 Alternative minimum tax (2,647 ) (593 ) — Transaction costs — (753 ) — Uncertain tax positions 627 1,809 (126 ) Valuation allowance (1,703 ) 87,020 (11,156 ) Impact of tax reform 48,717 — — Other (3,171 ) (1,084 ) 296 Income tax benefit (expense) $ 57,884 $ 91,954 $ (6,943 ) Years Ended December 31, 2017 2016 2015 Income taxes at the statutory rate (35.0 )% (35.0 )% (35.0 )% Foreign tax rate differential 45.8 37.7 (29.3 ) State taxes, net of federal benefit 1.1 (4.7 ) (5.6 ) Permanent differences 26.7 7.0 (1.6 ) Tax credits 7.6 38.8 (0.8 ) Alternative minimum tax (7.6 ) (4.7 ) — Transaction costs — (5.9 ) — Uncertain tax positions 1.8 14.3 2.3 Valuation allowance (4.9 ) 685.9 199.7 Impact of tax reform 140.1 — — Other (9.1 ) (8.6 ) (5.4 ) Effective tax rate 166.5 % 724.8 % 124.3 % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as net operating loss and tax credit carryforwards. The tax effects of temporary differences are comprised of the following: December 31, 2017 2016 (In thousands) Deferred tax assets: Net operating loss carryforwards $ 73,712 $ 128,408 Tax credit carryforwards 9,643 11,461 Inventory 5,339 8,568 Benefit plans accrual 29,561 38,736 Other accruals and reserves 10,295 11,278 Valuation allowance for deferred tax assets (51,278 ) (44,695 ) Deferred tax assets 77,272 153,756 Deferred tax liabilities: Property, plant, and equipment 106,407 148,164 Intangible assets 92,195 153,380 Investment in subsidiaries 18,356 56,701 Deferred tax liabilities 216,958 358,245 Net deferred tax liabilities $ 139,686 $ 204,489 December 31, 2017 2016 (In thousands) Net deferred tax liabilities consist of: Non-current deferred tax assets $ 8,462 $ 6,907 Non-current deferred tax liabilities 148,148 211,396 Net deferred tax liabilities $ 139,686 $ 204,489 As of December 31, 2017 , we had $297.1 million of net operating loss carryforwards, of which $153.7 million relates to foreign jurisdictions and $143.4 million relates to the U.S., which will expire beginning in 2024 through 2037 , if not utilized. We expect to generate sufficient taxable income in future years that will allow utilization of the portion of the net operating loss carryforwards for which no valuation allowance has been provided. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. We consider all available material evidence, both positive and negative, in assessing the appropriateness of a valuation allowance for our deferred tax assets. In determining whether a valuation allowance is required during the period, we evaluate primarily, the cumulative earnings and losses in recent years, historical taxable income or losses as it relates to our ability to utilize operating loss and tax credit carryforwards within the expiration period, trends indicating earnings or losses expected in future years along with our ability in prior years to reasonably project these future trends or operating results, length of the carryback and carryforward period, and prudent and feasible tax-planning strategies, particularly related to operational changes and the impact on the timing or taxability of relative amounts. As of December 31, 2017 and December 31, 2016 , a valuation allowance of $51.3 million and $44.7 million , respectively, has been provided for net operating loss carryforwards and other deferred tax assets. We increased our valuation allowance by $6.6 million during the year ended December 31, 2017 , which includes a $4.9 million increase related to changes in other comprehensive income (loss) and $1.7 million primarily related to current period net operating losses in the U.S. As of December 31, 2017 , $35.9 million and $8.8 million of the $51.3 million valuation allowance relates to net deferred tax assets in France and United Kingdom, respectively. During the year ended December 31, 2016 , we released $55.5 million of the valuation allowances, of which $87.0 million primarily related to our U.S. net operating loss carryforwards and other deferred tax assets, partially offset by $31.3 million of new valuation allowances assumed in connection with the Arizona Chemical Acquisition. As of December 31, 2016 , $30.5 million and $8.5 million of the $44.7 million valuation allowance relates to net deferred tax assets in France and United Kingdom, respectively. We consider the reversal of deferred tax liabilities within the net operating loss carryforward period, projected future taxable income and tax planning strategies in making this assessment. Excluding the change in our valuation allowance and impact of U.S. tax reform, our effective tax rates would have been a benefit of 31.3% and 38.9% for the years ended December 31, 2017 and 2016 , respectively. Following the acquisition of Arizona Chemical on January 6, 2016, we released $87.0 million of the valuation allowance related to the U.S. net operating loss carryforwards and other deferred tax assets. In assessing the appropriateness of the U.S. valuation allowance as of the acquisition date, we considered the significant cumulative earnings in recent years as well as consistent historical taxable income of our U.S. combined operations. Additionally, we consider our ability to utilize net operating loss carryforwards to offset future taxable income generated by our U.S. combined operations. Under U.S. tax law, we are permitted to utilize tax loss carryforwards as an offset to taxable income generated by members of our U.S. consolidated group, with the exception of a few separate state regulations. We do not expect any tax loss limitations under IRC §382 that would impact our utilization of the federal carryforwards in the future. We project that we will have sufficient combined pre-tax earnings in the U.S. to utilize net operating loss carryforwards within the expiration period. We maintain valuation allowance for carryforwards related to our foreign tax credits and certain state tax losses. On December 22, 2017, the U.S. Tax Cuts and Jobs Act (“Tax Act”) introduced significant changes to U.S. income tax law, which included a reduction to the U.S. statutory tax rate from 35.0% to 21.0% and a limitation on net operating loss carryforwards generated in 2018 and beyond. Additionally, the Tax Act extends bonus depreciation provisions and limits the amount of interest expense deductible in future years. In 2017, we were subject to a one-time transition tax on accumulated foreign subsidiary earnings not previously subject to U.S. income tax. The Staff of the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118, which provides registrants a measurement period to report the impact of the new U.S. tax law. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, we have made reasonable estimates of the effects and recorded provisional amounts in our financial statements as of December 31, 2017. As we collect and prepare necessary data, and interpret the Tax Act and any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, we may make adjustments to the provisional amounts. Those adjustments may materially impact our provision for income taxes and effective tax rate in the period in which the adjustments are made. The accounting for the tax effects of the Tax Act will be completed in 2018. Certain items or estimates that result in impacts of the Tax Act being provisional include: the deemed repatriation tax on post-1986 accumulated earnings and profits, the deferred tax rate change effect of the new law, certain deferred taxes related to employee compensation, valuation allowances on certain deferred taxes, deferred taxes related to outside basis differences in certain foreign investments, detailed foreign earnings calculation for the most recent period, project foreign cash balances for certain foreign subsidiaries, and finalized computations of foreign tax credit availability. In addition, the companies 2017 U.S. income tax returns will not be finalized until later in 2018, and while historically this process has resulted in offsetting changes in estimates in current and deferred taxes for items which are timing related, the reduction of the U.S. tax rate will result in adjustment to our income tax provision or benefit when recorded. Finally, we consider it likely that further technical guidance regarding the new Tax Act provisions, as well as clarity regarding state income tax conformity to current federal tax code, may be issued. In accordance with the Tax Act, our previously untaxed accumulated foreign earnings are subjected to U.S. income tax at a rate of 15.5% to the extent of foreign cash and certain other net current assets and 8.0% on the remaining earnings. We recorded a provisional amount for our one-time transitional tax liability and income tax expense of $46.3 million . We have recorded provisional amounts based on estimates of the effects of the Tax Act as the analysis requires significant data from our foreign subsidiaries that is not regularly collected or analyzed. The impact of the Tax Act to our deferred taxes was a benefit of $95.0 million , of which $68.9 million relates to the reduction of the U.S. statutory tax rate from 35.0% to 21.0% for years after 2017 and the remaining relates to changes in our investments in foreign subsidiaries. We have remeasured our deferred taxes as of December 31, 2017 to reflect the reduced rate that will apply in future periods when these deferred taxes are settled or realized. Although the tax rate reduction is known, we have not collected the necessary data to complete our analysis of the effect of the Tax Act on the underlying deferred taxes and as such, the amounts recorded as of December 31, 2017 are provisional. As we complete our analysis of the Tax Act and incorporate additional guidance that may be issued by the U.S. Treasury Department, the IRS or other standard-setting bodies, we may identify additional effects not reflected as of December 31, 2017. For the period ending December 31, 2017 , a portion of the unremitted foreign earnings are permanently reinvested in the corresponding country of origin. Accordingly, we have not provided deferred taxes for the differences between the book basis and underlying tax basis in those subsidiaries or on the foreign currency translation adjustment amounts related to such operations. We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. For our U.S. federal income tax returns, the statute of limitations has expired through the tax year ended December 31, 2003. As a result of net operating loss carryforwards from 2004, the statute remains open for all years subsequent to 2003. In addition, open tax years for state and foreign jurisdictions remain subject to examination. We recognize the tax impact of certain tax positions only when it is more likely than not those such positions are sustainable. The taxes are recorded in accordance with ASC 740-10, “ Accounting for Uncertainty in Income Taxes ,” which prescribes the minimum recognition threshold. As of December 31, 2017 and December 31, 2016 , we had $24.4 million and $24.5 million , respectively, of unrecognized tax benefits related to uncertain foreign tax positions, all of which, if recognized, would impact our effective tax rate. For the years ending December 31, 2017 , 2016 , and 2015 , we recorded $1.2 million , $1.2 million , and $0.2 million in interest and penalties related to unrecognized tax benefits within the provision for income taxes. As of December 31, 2017 and December 31, 2016 , we had $4.9 million and $4.4 million of penalties and interest included in the total unrecognized tax benefits. We believe that no current tax positions that have resulted in unrecognized tax benefits will significantly increase or decrease within one year. The following presents a roll forward of our unrecognized tax benefits including associated interest and penalties. December 31, 2017 2016 (In thousands) Balance at January 1 $ 24,527 $ 4,346 Increase in current year tax positions 323 1,546 Increase in prior year tax positions 2,140 813 Increase due to Arizona Chemical Acquisition — 23,089 Decrease in prior year tax positions (312 ) — Lapse of statute of limitations (2,257 ) (1,946 ) Settlements — (3,321 ) Balance at December 31 $ 24,421 $ 24,527 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Lease Commitments We have entered into various long-term non-cancelable operating leases. Future minimum lease commitments at December 31, 2017 are as follows: 2018 — $23.4 million ; 2019 — $20.9 million ; 2020 — $17.9 million ; 2021 — $10.7 million ; 2022 — $6.7 million ; and 2023 and thereafter — $10.6 million . For the years ended December 31, 2017 , 2016 , and 2015 , we recorded $29.0 million , $30.5 million and $18.1 million in rent expense, respectively. (b) Environmental and Safety Matters Our finished products are not generally classified as hazardous under U.S. environmental laws. However, our operations involve the handling, transportation, treatment, and disposal of potentially hazardous materials that are extensively regulated by environmental, health and safety laws, regulations, and permit requirements. Environmental permits required for our operations are subject to periodic renewal and can be revoked or modified for cause or when new or revised environmental requirements are implemented. Changing and increasingly stringent environmental requirements can affect the manufacturing, handling, processing, distribution and use of our chemical products and the raw materials used to produce such products and, if so affected, our business and operations may be materially and adversely affected. In addition, changes in environmental requirements can cause us to incur substantial costs in upgrading or redesigning our facilities and processes, including waste treatment, disposal, and other waste handling practices and equipment. We conduct environmental management programs designed to maintain compliance with applicable environmental requirements at all of our facilities. We routinely conduct inspection and surveillance programs designed to detect and respond to leaks or spills of regulated hazardous substances and to identify and correct identified regulatory deficiencies. However, a business risk inherent with chemical operations is the potential for personal injury and property damage claims from employees, contractors and their employees, and nearby landowners and occupants. While we believe our business operations and facilities generally are operated in compliance, in all material respects, with all applicable environmental and health and safety requirements, we cannot be sure that past practices or future operations will not result in material claims or regulatory action, require material environmental expenditures, or result in exposure or injury claims by employees, contractors and their employees, and the public. Some risk of environmental costs and liabilities are inherent in our operations and products, as it is with other companies engaged in similar businesses. Our Paulinia, Brazil, and Belpre, Ohio, facilities are subject to a number of actual and/or potential environmental liabilities primarily relating to contamination caused by former operations at those facilities. Some environmental laws could impose on us the entire costs of cleanup regardless of fault, legality of the original disposal, or ownership of the disposal site. In some cases, the governmental entity with jurisdiction could seek an assessment for damage to the natural resources caused by contamination from those sites. Shell Chemicals has agreed, subject to certain limitations, in time and amounts, to indemnify us against most environmental liabilities related to the acquired facilities that arise from conditions existing prior to the closing. We had no material operating expenditures for environmental fines, penalties, government imposed remedial, or corrective actions in each of the years ended December 31, 2017 , 2016 , and 2015 . As of December 31, 2017 and 2016 , we have recorded an environment obligation and corresponding receivable of $2.9 million and $3.1 million , respectively, relating to an indemnification agreement with International Paper, our Chemical segment's former owner. (c) Legal Proceedings We received an initial notice from the tax authorities in Brazil during the fourth quarter of 2012 in connection with tax credits that were generated from the purchase of certain goods which were subsequently applied by us against taxes owed. The tax authorities are currently assessing R$7.0 million , or approximately $2.1 million . We have appealed the assertion by the tax authorities in Brazil that the goods purchased were not eligible to earn the credits. While the outcome of this proceeding cannot be predicted with certainty, we do not expect this matter to have a material adverse effect upon our financial position, results of operations, or cash flows. We and certain of our subsidiaries, from time to time, are parties to various other legal proceedings, claims, and disputes that have arisen in the ordinary course of business. These claims may involve significant amounts, some of which would not be covered by insurance. A substantial settlement payment or judgment in excess of our accruals could have a material adverse effect on our financial position, results of operations or cash flows. While the outcome of these proceedings cannot be predicted with certainty, we do not expect any of these existing matters, individually or in the aggregate, to have a material adverse effect upon our financial position, results of operations or cash flows. (d) Asset Retirement Obligations (“ARO”) The changes in the aggregate carrying amount of our ARO liability are as follows: December 31, 2017 2016 (In thousands) Beginning balance $ 8,863 $ 10,078 Obligations assumed in the Arizona Chemical Acquisition — 1,908 Additional accruals 439 2,146 Revision in estimated cash flows (387 ) — Accretion expense 323 375 Obligations settled (4,096 ) (5,511 ) Foreign currency translation 570 (133 ) Ending balance $ 5,712 $ 8,863 Pursuant to the indemnity included in the February 2001 separation agreement from Shell Chemical, we recorded a receivable of $0.2 million and $3.5 million as of December 31, 2017 and 2016 , respectively, . |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee Benefits U.S. Retirement Benefit Plans. We have two U.S. noncontributory defined benefit pension plans (“U.S. Pension Plans”). Our Polymer segment U.S. Pension Plans covers all salaried and hourly wage employees in the U.S. who were employed by us on or before December 31, 2005. Employees who began their employment with us after December 31, 2005 are not covered by our Pension Plans. The benefits under the Pension Plans are based primarily on years of service and employees’ pay near retirement. For our employees who were employed as of March 1, 2001 and who: (1) were previously employed by Shell Chemicals; and (2) elected to transfer their pension assets to us, we consider the total combined Shell Chemicals and Kraton service when calculating the employee’s pension benefit. For those employees who: (1) elected to retire from Shell Chemicals; or (2) elected not to transfer their pension benefit, only Kraton service (since March 1, 2001) is considered when calculating benefits. Our Chemical segment U.S. Pension Plans cover all U.S. employees hired prior to July 2004 and certain retirees of the Company participate in International Paper’s defined benefit pension plans. International Paper remains responsible for all benefits related to years of service prior to December 31, 2007. The Company implemented its own defined benefit pension plan for then eligible U.S. employees on March 1, 2007. Based on the funded status and a related change in accrued pension obligations we reported an increase in our accumulated other comprehensive loss of approximately $3.4 million and $4.1 million as of December 31, 2017 and 2016 , respectively Non-U.S. Retirement Benefit Plans. The Company sponsors defined benefit pension and retirement plans in certain foreign subsidiaries. Generally, the Company’s non-U.S. defined benefit pension plans are funded using the projected benefit as a target in countries where funding of benefit plans is required. Based on the funded status and a related change in accrued pension obligations we reported an increase in our accumulated other comprehensive loss of approximately $4.2 million and $13.3 million as of December 31, 2017 and 2016 , respectively The 2017 measurement date of the Pension Plan’s assets and obligations was December 31, 2017 . Information concerning the pension obligation, plan assets, amounts recognized in our financial statements, and underlying actuarial and other assumptions are as follows: U.S. Plans Non-U.S. Plans December 31, December 31, 2017 2016 2017 2016 (In thousands) Change in benefit obligation: Benefit obligation at beginning of period $ 171,943 $ 152,511 $ 84,252 $ 1,711 Service cost 3,191 3,288 2,749 2,239 Interest cost 7,330 7,416 2,195 3,121 Participant contributions — — 30 41 Benefits paid (5,812 ) (9,753 ) (5,430 ) (4,430 ) Expenses and taxes — — (92 ) — Plan amendments — — 9 322 Settlements — — (370 ) — Acquisition — 14,118 — 79,576 Actuarial (gain) loss 12,499 4,363 1,997 15,322 Exchange rate (gain) loss — — 8,865 (13,650 ) Benefit obligation at end of period 189,151 171,943 94,205 84,252 Change in plan assets: Fair value at beginning of period 105,107 97,561 43,594 — Return on plan assets 14,881 6,737 1,500 3,694 Employer contributions 7,655 1,396 4,832 3,685 Participant contributions — — 30 41 Benefits paid (5,812 ) (9,753 ) (5,430 ) (4,430 ) Expenses and taxes — — (92 ) — Settlements — — (370 ) (51 ) Acquisition — 9,166 — 49,054 Exchange rate (gain) loss — — 4,337 (8,399 ) Fair value at end of period 121,831 105,107 48,401 43,594 Funded status at end of period $ (67,320 ) $ (66,836 ) $ (45,804 ) $ (40,658 ) Amounts recognized on balance sheet: Current liabilities $ — $ — $ (2,637 ) $ (726 ) Noncurrent liabilities (67,320 ) (66,836 ) (43,167 ) (39,932 ) $ (67,320 ) $ (66,836 ) $ (45,804 ) $ (40,658 ) Amounts recognized in accumulated other comprehensive loss: Prior service costs $ — $ — $ 348 $ 307 Net actuarial loss 57,000 53,604 17,168 12,972 Amounts recognized in accumulated other comprehensive loss $ 57,000 $ 53,604 $ 17,516 $ 13,279 Accumulated benefit obligations $ 177,154 $ 160,625 $ 89,755 $ 79,983 Estimated Future Cash Flows. The following employer contributions and benefit payments, which reflect expected future service, as appropriate, are expected to be paid: U.S. Plans Non-U.S. Plans (In thousands) Employer Contributions 2018 Employer contribution $ 7,341 $ 5,852 Benefit Payments 2018 $ 6,413 $ 4,851 2019 6,782 4,848 2020 7,114 5,160 2021 7,619 5,002 2022 8,083 5,124 Years 2023-2026 48,481 28,993 $ 84,492 $ 53,978 Net Periodic Pension Costs. Net periodic pension costs consist of the following components: U.S. Plans Non-U.S. Plans Years Ended December 31, Years Ended December 31, 2017 2016 2015 2017 2016 2015 (In thousands) Service cost benefits earned during the period $ 3,191 $ 3,288 $ 3,528 $ 2,749 $ 2,239 $ — Interest on prior year’s projected benefit obligation 7,330 7,416 6,483 2,195 3,121 — Expected return on plan assets (9,401 ) (9,355 ) (8,459 ) (2,575 ) (3,583 ) — One-time settlement costs — — — 45 — — Amortization of prior service costs — — — 11 9 — Amortization of net actuarial loss 3,622 2,868 4,239 165 21 — Net periodic pension costs $ 4,742 $ 4,217 $ 5,791 $ 2,590 $ 1,807 $ — The estimated losses that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in fiscal 2018 are as follows: U.S. Plans Non-U.S. Plans (In thousands) Amortization of prior service costs $ — $ 13 Amortization of net actuarial loss 4,900 656 $ 4,900 $ 669 Significant Assumptions. Discount rates are determined annually and are based on rates of return of high-quality long-term fixed income securities currently available and expected to be available during the maturity of the pension benefits. U.S. Plans Non-U.S. Plans December 31, December 31, 2017 2016 2017 2016 Weighted average assumptions used to determine benefit obligations: Discount rate 3.86 % 4.29 % 2.29 % 2.54 % Rates of increase in salary compensation level 3.00 % 3.00 % 3.15 % 3.21 % Expected long-term rate of return on plan assets 8.00 % 8.36 % 5.49 % 5.49 % Weighted average assumptions used to determine net periodic benefit cost: Discount rate 4.29 % 4.57 % 2.54 % 3.59 % Rates of increase in salary compensation level 3.00 % 3.00 % 3.21 % 3.11 % Expected long-term rate of return on plan assets 8.36 % 8.50 % 5.49 % 3.50 % Our management relied in part on actuarial studies in establishing the expected long-term rate of return on assets assumption. The studies include a review of anticipated future long-term performance of individual asset classes and consideration of the appropriate asset allocation strategy given the anticipated requirements of the Pension Plans to determine the average rate of earnings expected on the funds invested to provide for the Pension Plan benefits. While the studies give appropriate consideration to recent fund performance and historical returns, the assumption is primarily a long-term, prospective rate. Based on our most recent study, the expected long-term return assumption for our U.S. Pension Plans effective for 2017 will be 8.4% and 5.5% for our non-U.S. Pension Plans. Pension Plan Assets. We maintain target allocation percentages among various asset classes based on an investment policy established for our Pension Plans. The target allocation is designed to achieve long term objectives of return, while mitigating downside risk and considering expected cash flows. Our investment policy is reviewed from time to time to ensure consistency with our long term objective. Our Pension Plan asset allocations at December 31, 2017 and 2016 by asset category are as follows: U.S. Plans Non-U.S. Plans Target Allocation Percentage of Plan Target Allocation Percentage of Plan 2017 2017 2016 2017 2017 2016 Equity 50.0 % 59.9 % 53.8 % 50.0 % 49.4 % 48.4 % Debt 30.0 40.0 36.8 50.0 49.4 50.8 Other 20.0 0.1 9.4 — 1.2 0.8 Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % No pension assets were invested in debt or equity securities of Kraton at December 31, 2017 or 2016 . The inputs and methodology used for valuing securities are not an indication of the risk associated with investing in those securities. The following is a description of the primary valuation methodologies used for assets measured at fair value: • Common/Collective Trust Funds: Valued at the net asset value per unit held at year end as quoted by the funds. • Mutual Funds, Real Estate Funds, and Other Funds: Valued at the net asset value of shares held at year end as quoted in the active market. • Insurance contracts for purposes of funding pension benefits. A summary of total investments for our pension plan assets measured at fair value is presented below. See Note 9 Fair Value Measurements, Financial Instruments, and Credit Risk to the consolidated financial statements for a detailed description of fair value measurements and the hierarchy established for Level 1, 2, and 3 valuation inputs. Pension Plan Assets Fair Value Measurements at December 31, 2017 Total Quoted Prices In Active Markets Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Equity $ 96,833 $ 48,537 $ 48,296 $ — Debt 72,694 21,437 51,257 — Other 705 427 — 278 Total $ 170,232 $ 70,401 $ 99,553 $ 278 Pension Plan Assets Fair Value Measurements at December 31, 2016 Total Quoted Prices In Active Markets Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Equity $ 77,644 $ 24,270 $ 53,374 $ — Debt 60,857 16,897 43,960 — Other 10,201 9,912 — 289 Total $ 148,702 $ 51,079 $ 97,334 $ 289 (b) Other Retirement Benefit Plans. Certain employees were eligible to participate in non-qualified defined benefit restoration plans (“BRP”), which were intended to restore certain benefits under the Pension Plan in the U.S. and the Kraton Savings Plan in the U.S., that would otherwise be lost due to certain limitations imposed by law on tax-qualified plans. On November 26, 2014, the Company terminated the Pension Plan BRP effective November 30, 2014. As a result of this termination, future benefit accruals were eliminated and the lump sum amount for each participant was paid in December 2015. As such, a curtailment event was recognized at December 1, 2014 resulting in a curtailment expense of $0.4 million in the year ended December 31, 2014 and a settlement expense of $0.8 million in the year ended December 31, 2015. For the year ended December 31, 2015 , we made contributions related to the Pension Plan BRP of $2.3 million . Due to the termination and final settlement, there was no remaining liability for this plan as of December 31, 2015 . (c) Postretirement Benefits Other Than Pensions. Health and welfare benefits are provided to benefit eligible employees in the U.S. who retire from Kraton and were employed by us prior to January 1, 2006. Retirees under the age of 65 are eligible for the same medical, dental, and vision plans as active employees, but with an annual cap on premiums that vary based on years of service and ranges from $7,000 to $10,000 per employee. Our subsidy schedule for medical plans is based on accredited service at retirement. Retirees are responsible for the full cost of premiums for postretirement dental and vision coverage. In general, the plans stipulate that health and welfare benefits are paid as covered expenses as incurred. We accrue the cost of these benefits during the period in which the employee renders the necessary service. Employees who were retirement eligible as of February 28, 2001, have the option to participate in either Shell Chemicals' or Kraton's postretirement health and welfare plans. ASC 715, “Compensation-Retirement Benefits,” requires that we measure the plans’ assets and obligations that determine our funded status at the end of each fiscal year. The 2017 measurement date of the plans’ assets and obligations was December 31, 2017 . We are also required to recognize as a component of accumulated other comprehensive loss the changes in funded status that occurred during the year that are not recognized as part of new periodic benefit cost. Based on the funded status of our postretirement benefit plan as of December 31, 2017 and 2016 , we reported an increase in our accumulated other comprehensive loss of approximately $1.2 million and an increase of $0.8 million , respectively, and a related change in accrued pension obligations. Information concerning the plan obligation, the funded status and amounts recognized in our financial statements and underlying actuarial and other assumptions are as follows: December 31, 2017 2016 (In thousands) Change in benefit obligation: Benefit obligation at beginning of period $ 33,247 $ 30,867 Service cost 557 543 Interest cost 1,370 1,398 Benefits and expenses paid (premiums) (1,148 ) (929 ) Actuarial (gain) loss 1,825 1,368 Benefit obligation at end of period 35,851 33,247 Change in plan assets (1) : Fair value at beginning of period — — Employer contributions 1,148 929 Benefits paid (1,148 ) (929 ) Fair value at end of period — — Funded status at end of year $ 35,851 $ 33,247 ___________________________________________ (1) Shell Chemicals has committed to a future cash payment related to retiree medical expenses based on a specified dollar amount per employee, if certain contractual commitments are met. We have recorded an asset of approximately $8.1 million and $9.1 million as our estimate of the present value of this commitment as of December 31, 2017 and 2016 , respectively. December 31, 2017 2016 (In thousands) Amounts recognized in the balance sheet: Current liabilities $ (1,492 ) $ (1,587 ) Noncurrent liabilities (34,359 ) (31,660 ) $ (35,851 ) $ (33,247 ) Amounts recognized in accumulated other comprehensive loss: Net actuarial loss $ 10,294 $ 9,067 $ 10,294 $ 9,067 Net periodic benefit costs consist of the following components: Years Ended December 31, 2017 2016 2015 (In thousands) Service cost $ 557 $ 543 $ 597 Interest cost 1,370 1,398 1,271 Amortization of net actuarial loss 598 608 757 Net periodic benefit costs $ 2,525 $ 2,549 $ 2,625 December 31, 2017 2016 Weighted average assumptions used to determine benefit obligations: Measurement date 12/31/2017 12/31/2016 Discount rate 3.81 % 4.18 % Rates of increase in salary compensation level N/A N/A Weighted average assumptions used to determine net periodic benefit cost: Discount rate 4.18 % 4.45 % Rates of increase in salary compensation level N/A N/A Expected long-term rate of return on plan assets N/A N/A December 31, 2017 2016 Assumed Pre-65 health care cost trend rates: Health care cost trend rate assumed for next year 8.50 % 7.00 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 4.50 % 5.00 % Year that the rate reaches the ultimate trend rate 2026 2021 December 31, 2017 2016 Assumed Post-65 health care cost trend rates: Health care cost trend rate assumed for next year 7.50 % 7.00 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 4.50 % 5.00 % Year that the rate reaches the ultimate trend rate 2024 2021 Discount rates are determined annually and are based on rates of return of high-quality long-term fixed income securities currently available and expected to be available during the maturity of the postretirement benefit plan. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A 1.0% change in assumed health care cost trend rates would have the following effect (in thousands): 1% Increase 1% Decrease Effect on total of service and interest cost components $ 20 $ (31 ) Effect on postretirement benefit obligation $ 487 $ (569 ) (d) Kraton Savings Plan. The Kraton Savings Plan, as adopted on March 1, 2001, covers substantially all U.S. employees, including executive officers. Through automatic payroll deduction, participants have the option to defer up to 60% of eligible earnings in any combination of pretax and/or post-tax contributions, subject to annual dollar limitations set forth in the Internal Revenue Code. Under this plan, we have two types of employer contributions: (1) We make standard matching contributions of 50.0% of the first 6.0% contributed by the employee from start of employment and we make matching contributions of 100.0% of the first 6.0% contributed by the employee after completing five years of service. (2) We make enhanced employer contributions of 4.0% for all employees. For our employees who were employed as of February 28, 2001, and who were previously employed by Shell Chemicals, we recognize their Shell Chemicals years of service for purposes of determining employer contributions under our Plan. Our contributions to the plan for the years ended December 31, 2017 , 2016 , and 2015 , were $8.5 million , $7.5 million , and $4.1 million , respectively. |
Industry Segment and Foreign Op
Industry Segment and Foreign Operations | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Industry Segment and Foreign Operations | Industry Segment and Foreign Operations Commensurate with the acquisition on January 6, 2016, Arizona Chemical became a separate operating segment with our operations managed through two operating segments: (i) Polymer segment and (ii) Chemical segment. In accordance with the provisions of ASC 280, “ Segment Reporting ,” our chief operating decision-maker has been identified as the President and Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire company. • Polymer Segment . Our Polymer segment is comprised of our SBCs and other engineered polymers business. • Chemical Segment . Our Chemical segment is comprised of our pine-based specialty products business. Our chief operating decision maker uses operating income (loss) as the primary measure of each segment's operating results in order to allocate resources and in assessing the company's performance. In accordance with ASC 280, Segment Reporting , we have presented operating income (loss) for each segment. The following table summarizes our operating results by segment. We currently do not have sales between segments. Year Ended December 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 Polymer Chemical Total Polymer Chemical (1) Total Total (2) (In thousands) Revenue $ 1,199,676 $ 760,686 $ 1,960,362 $ 1,024,737 $ 719,367 $ 1,744,104 $ 1,034,626 Cost of goods sold 889,896 528,563 1,418,459 750,112 514,967 1,265,079 805,970 Gross profit 309,780 232,123 541,903 274,625 204,400 479,025 228,656 Operating expenses: Research and development 28,829 11,896 40,725 28,322 11,169 39,491 31,024 Selling, general, and administrative 95,551 66,341 161,892 108,482 69,143 177,625 117,308 Depreciation and amortization 67,998 69,164 137,162 59,930 65,728 125,658 62,093 Operating income $ 117,402 $ 84,722 202,124 $ 77,891 $ 58,360 136,251 18,231 Disposition and exit of business activities — 28,416 — Loss on extinguishment of debt (35,389 ) (13,423 ) — Earnings of unconsolidated joint venture 486 394 406 Interest expense, net (132,459 ) (138,952 ) (24,223 ) Income (loss) before income taxes $ 34,762 $ 12,686 $ (5,586 ) ________________________________________________ (1) Our Chemical segment operating results were impacted by $24.7 million of amortization of step-up to fair market value of their inventories and $41.2 million of higher depreciation and amortization as a result of purchase accounting adjustments for property, plant, and equipment and intangibles. (2) Our totals for the year ended December 31, 2015 are representative of only our Polymer segment. The following table presents long-lived assets including goodwill and total assets. December 31, 2017 December 31, 2016 Polymer Chemical Total Polymer Chemical Total (In thousands) Property, plant, and equipment, net $ 561,109 $ 397,614 $ 958,723 $ 548,994 $ 357,728 $ 906,722 Investment in unconsolidated joint venture $ 12,380 $ — $ 12,380 $ 11,195 $ — $ 11,195 Goodwill $ — $ 774,319 $ 774,319 $ — $ 770,012 $ 770,012 Total assets $ 1,125,626 $ 1,806,901 $ 2,932,527 $ 1,127,273 $ 1,779,372 $ 2,906,645 During the years ended December 31, 2017 , 2016 , and 2015 , no single customer accounted for 10.0% or more of our total revenue. For geographic reporting, revenue is attributed to the geographic location in which the customers’ facilities are located. Long-lived assets consist primarily of property, plant, and equipment, which are attributed to the geographic location in which they are located and presented at historical cost. Following is a summary of revenue by geographic region: December 31, 2017 December 31, 2016 December 31, 2015 Total Total Total (In thousands) Revenue: United States $ 690,247 $ 656,233 $ 324,103 Germany 199,076 171,257 121,346 All other countries 1,071,039 916,614 589,177 $ 1,960,362 $ 1,744,104 $ 1,034,626 Following is a summary of long-lived assets by geographic region: December 31, 2017 December 31, 2016 Total Total (In thousands) Long-lived assets, at cost: United States $ 851,454 $ 789,067 Taiwan 182,644 167,907 France 138,770 117,965 Brazil 82,508 73,017 Germany 72,100 60,568 All other countries 158,006 109,616 $ 1,485,482 $ 1,318,140 Our capital expenditures for the Polymer segment, excluding capital expenditures by the KFPC joint venture, were $50.1 million and $59.4 million during the year ended December 31, 2017 and 2016 , respectively, and capital expenditures for our Chemical segment were $49.1 million and $39.8 million during the year ended December 31, 2017 and 2016 , respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions We own a 50.0% equity investment in an SBC manufacturing joint venture in Kashima, Japan. Our outstanding payables were $17.7 million as of December 31, 2017 and were recorded in “Due to related party” liability on the Condensed Consolidated Balance Sheets. Our total purchases from the joint venture were $39.6 million , $30.3 million , and $30.4 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively. We own a 50% variable interest in KFPC, an HSBC manufacturing joint venture in Mailiao, Taiwan. The KFPC joint venture is fully consolidated in our financial statements, and our joint venture partner, Formosa Petrochemical Corporation (“FPCC”), is a related party affiliate. Under the terms of the joint venture agreement, FPCC is to provide certain site services and raw materials to KFPC. Our outstanding payables were $1.5 million as of December 31, 2017 and were recorded in “Due to related party” liability on the Condensed Consolidated Balance Sheets. Our total purchases from this joint venture were $14.4 million for the year ended December 31, 2017 . Charges from and amounts due to FPCC are immaterial for the years ended December 31, 2016 and 2015 . See Note 16 Variable Interest Entity , for further discussion related to the KFPC joint venture. |
Variable Interest Entity
Variable Interest Entity | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entity | Variable Interest Entity We hold a variable interest in a joint venture with FPCC to build, own and operate a 30 kiloton HSBC plant at FPCC’s petrochemical site in Mailiao, Taiwan. Kraton and FPCC are each 50% owners of the joint venture company, KFPC. Under the provisions of an offtake agreement with KFPC, we have exclusive rights to purchase all production from KFPC. Additionally, the agreement requires us to purchase a minimum of eighty percent of the plant production capacity each year at a defined fixed margin. This offtake agreement represents a variable interest that provides us the power to direct the most significant activities of KFPC and exposes us to the economic variability of the joint venture. As such, we have determined that we are the primary beneficiary of this variable interest entity, and therefore, we have consolidated KFPC in our financial statements and reflected FPCC’s 50% percent ownership as a noncontrolling interest. The following table summarizes the carrying amounts of assets and liabilities as of December 31, 2017 and 2016 for KFPC before intercompany eliminations. See Note 8 Long Term Debt , for further discussion related to the KFPC Loan Agreement executed on July 17, 2014. December 31, 2017 December 31, 2016 (In thousands) Cash and cash equivalents $ 13,848 $ 14,150 Other current assets 21,399 13,385 Property, plant, and equipment 173,363 167,579 Intangible assets 9,585 9,403 Other long-term assets 13,972 2,495 Total assets $ 232,167 $ 207,012 Current portion of long-term debt $ 41,745 $ 11,585 Current liabilities 13,938 26,743 Long-term debt 116,408 104,012 Total liabilities $ 172,091 $ 142,340 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) The following table sets forth a summary of our quarterly financial information for each of the four quarters ended December 31, 2017 and December 31, 2016 : First Quarter (1) Second Quarter (2) Third Quarter (3) Fourth Quarter (4) Total (In thousands, except per share data) 2017 Revenue $ 458,125 $ 525,320 $ 510,947 $ 465,970 $ 1,960,362 Gross profit $ 143,366 $ 147,256 $ 128,719 $ 122,562 $ 541,903 Operating income $ 59,323 $ 61,605 $ 41,508 $ 39,688 $ 202,124 Net income (loss) attributable to Kraton $ 6,413 $ 25,561 $ (4,033 ) $ 69,608 $ 97,549 Earnings (loss) per common share Basic $ 0.21 $ 0.82 $ (0.13 ) $ 2.21 $ 3.12 Diluted $ 0.20 $ 0.81 $ (0.13 ) $ 2.17 $ 3.07 Weighted average common shares outstanding Basic 30,430 30,585 30,625 30,944 30,654 Diluted 30,851 31,066 30,625 31,454 31,140 2016 Revenue $ 419,923 $ 454,649 $ 454,143 $ 415,389 $ 1,744,104 Gross profit $ 93,818 $ 131,897 $ 135,256 $ 118,054 $ 479,025 Operating income (loss) $ 3,226 $ 46,787 $ 50,817 $ 35,421 $ 136,251 Net income (loss) attributable to Kraton $ 88,087 $ 7,401 $ 15,560 $ (3,740 ) $ 107,308 Earnings (loss) per common share Basic $ 2.87 $ 0.24 $ 0.50 $ (0.12 ) $ 3.48 Diluted $ 2.84 $ 0.24 $ 0.49 $ (0.12 ) $ 3.43 Weighted average common shares outstanding Basic 30,026 30,158 30,221 30,306 30,180 Diluted 30,289 30,586 30,783 30,306 30,621 _______________________________________ (1) The first quarter of 2017 was negatively impacted by a $19.7 million loss on extinguishment of debt and $4.9 million of acquisition related transactions, severance expenses, and other restructuring related charges. The first quarter of 2016 was positively impacted by a $45.3 million gain on sale of assets, partially offset by a $24.7 million of higher costs of goods sold for our Chemical segment related to the fair value adjustment in purchase accounting for their inventory, $13.4 million loss on extinguishment of debt and $11.7 million of acquisition related transactions, severance expenses, and other restructuring related charges. (2) The second quarter of 2017 was negatively impacted by $4.4 million of KFPC startup costs and $3.8 million of acquisition related transactions, severance expenses, and other restructuring related charges. The second quarter of 2016 was negatively impacted by $5.3 million of disposition and exit of business activities and $7.6 million of acquisition related transactions, severance expenses, and other restructuring related charges. (3) The third quarter of 2017 was negatively impacted by a $15.6 million loss on extinguishment of debt. The third quarter of 2016 was negatively impacted by $7.7 million of acquisition related transactions, severance expenses, and other restructuring related charges. (4) The fourth quarter of 2017 was negatively impacted by $4.0 million of KFPC startup costs and $3.4 million of weather related costs. The fourth quarter 2016 was also negatively impacted by $11.6 million of disposition and exit of business activities and $6.5 million of acquisition related transactions, severance expenses, and other restructuring related charges. Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted earnings per share information may not equal annual basic and diluted earnings per share. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Evaluation of Other Subsequent Events. We have evaluated significant events and transactions that occurred after the balance sheet date and determined that there were no events or transactions that require recognition or disclosure in our consolidated financial statements for the period ended December 31, 2017 . |
SCHEDULE II_VALUATION AND QUALI
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES For the Years Ended December 31, 2017 , 2016 , and 2015 (In thousands) Balance at Beginning of Period Net Expenses Write-offs Balance at End of Period Allowance for doubtful accounts: Year Ended December 31, 2017 $ 814 $ 590 $ (580 ) $ 824 Year Ended December 31, 2016 $ 244 $ 590 $ (20 ) $ 814 Year Ended December 31, 2015 $ 245 $ 31 $ (32 ) $ 244 Balance at Beginning of Period Net Expenses Foreign Currency Balance at End of Period Inventory reserves: Year Ended December 31, 2017 $ 13,580 $ (2,410 ) $ 282 $ 11,452 Year Ended December 31, 2016 $ 11,228 $ 2,569 $ (217 ) $ 13,580 Year Ended December 31, 2015 $ 11,028 $ 171 $ 29 $ 11,228 |
Description of Business, Basi28
Description of Business, Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation . The accompanying consolidated financial statements are for us and our consolidated subsidiaries, each of which is a wholly-owned subsidiary, except our 50% investment in our joint venture, Kraton Formosa Polymers Corporation (“KFPC”), located in Mailiao, Taiwan. KFPC is a variable interest entity for which we have determined that we are the primary beneficiary and, therefore, have consolidated into our financial statements. Our 50% investment in our joint venture located in Kashima, Japan, is accounted for under the equity method of accounting. All significant intercompany transactions have been eliminated. |
Significant Accounting Policies | Significant Accounting Policies . These financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary to fairly present our results of operations and financial position. |
Use of Estimates | Use of Estimates . The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include: • the useful lives of fixed assets; • estimates of fair value for assets acquired and liabilities assumed in a purchase business combination; • allowances for doubtful accounts and sales returns; • the valuation of derivatives, deferred taxes, property, plant and equipment, inventory, and share-based compensation; and • liabilities for employee benefit obligations, environmental matters, asset retirement obligations, income tax uncertainties, and other contingencies. |
Cash and Cash Equivalents | Cash and Cash Equivalents . It is our policy to invest our excess cash in investment instruments whose value is not subject to market fluctuations, such as bank deposits or certificates of deposit. Other permitted investments include commercial paper of major U.S. corporations with ratings of A1 by Standard & Poor’s Ratings Group or P1 by Moody’s Investor Services, Inc., loan participations of major U.S. corporations with a short term credit rating of A1/P1 and direct obligations of the U.S. government or its agencies. We consider all investments having a remaining maturity, at the time of purchase, of three months or less to be cash equivalents. |
Receivables | Receivables . Receivables are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts represents our best estimate of the amount of probable credit losses in our existing receivables and is determined based on our assessment of the credit worthiness of individual customers, historical write-off experience, and global economic data. We review the allowance for doubtful accounts quarterly. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. We do not have significant off-balance sheet credit exposure related to our customers. |
Inventories | Inventories . Our inventory is principally comprised of finished goods inventory and raw materials. Inventory values include all costs directly associated with manufacturing of our products. Inventories are stated at the lower of cost or market as primarily determined on a first-in, first-out basis. We evaluate the carrying cost of our inventory on a quarterly basis for this purpose. If the cost of the inventories exceeds their market value, provisions are made for the differences between the cost and the market value. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities . We account for derivatives and hedging activities in accordance with ASC 815, “Derivatives and Hedging,” which requires entities to recognize all derivative instruments as either assets or liabilities in the balance sheet at their respective fair values. For derivatives designated in cash flow hedging relationships, changes in the fair value are either offset through earnings against the change in fair value of the hedged item attributable to the risk being hedged or recognized in accumulated other comprehensive income (loss), to the extent the derivative is effective at offsetting the changes in cash flows being hedged until the hedged item affects earnings. For all hedging relationships, we formally document the hedging relationship and our risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method used to measure ineffectiveness. We also formally assess both at the inception of the hedging relationship and on an ongoing basis, whether the derivatives that are used in hedging relationships are highly effective in offsetting changes in cash flows of hedged transactions. For derivative instruments that are designated and qualify as part of a cash flow hedging relationship, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. We discontinue hedge accounting prospectively when we determine that the derivative is no longer effective in offsetting cash flows attributable to the hedged risk, the derivative expires or is sold, terminated, or exercised, and the cash flow hedge is de-designated because a forecasted transaction is not probable of occurring, or we remove the designation of the cash flow hedge. In all situations in which hedge accounting is discontinued and the derivative remains outstanding, we continue to carry the derivative at its fair value on the balance sheet and recognize any subsequent changes in its fair value in earnings. When it is probable that a forecasted transaction will not occur, we discontinue hedge accounting and recognize immediately in earnings gains and losses that were accumulated in other comprehensive income (loss) related to the hedging relationship. |
Property, Plant and Equipment | Property, Plant, and Equipment. Property, plant, and equipment are stated at cost, net of accumulated depreciation. Major renewals and improvements which extend the useful lives of equipment are capitalized. Repair and maintenance costs are expensed as incurred. Disposals are removed at carrying cost less accumulated depreciation with any resulting gain or loss reflected in earnings. We capitalize interest costs which are incurred as part of the cost of constructing major facilities and equipment. |
Major Maintenance Activities | Major Maintenance Activities. Major maintenance is expensed as incurred. |
Goodwill | Goodwill. We record goodwill when the purchase price of an acquired business exceeds the fair value of the net identifiable assets acquired. Goodwill is allocated to the reporting unit level based on the estimated fair value at the date of acquisition. Goodwill was recorded as a result of the Arizona Chemical Acquisition and is recorded in the Chemical operating segment. Goodwill is tested for impairment at the reporting unit level annually or more frequently as deemed necessary. Our annual measurement date for testing impairment is October 1st. The assessment is performed in three steps. We assess qualitative factors, or step zero, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is more likely than not that an impairment exists utilizing the qualitative method, we then utilize step one to test for impairment via estimating the fair value of our reporting units utilizing a combination of market and income approaches through the application of discounted cash flows to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value, including goodwill. If potential impairments are identified, we perform step two to measure the impairment loss through a full fair value allocation of the assets and liabilities of the reporting unit utilizing the acquisition method of accounting. |
Asset Retirement Obligations | Asset Retirement Obligations (“ARO”). We have determined that we have contractual or regulatory requirements to decommission and perform other remediation for many of our manufacturing and research facilities upon retirement. We account for ARO’s pursuant to the provisions of ASC 410-20, “Asset Retirement Obligations.” ASC 410-20 requires us to record the fair value of an ARO as a liability in the period in which we have a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the assets. The ARO is also capitalized as part of the carrying cost of the asset and is depreciated over the life of the asset. The recognition of an ARO requires us to make numerous estimates, assumptions, and judgments regarding such factors as the existence of a legal obligation for an ARO; estimated probabilities; amounts and timing of settlements; the credit-adjusted risk-free rate to be used; discount rate and inflation rates. Subsequent to the initial measurement of the ARO, the obligation is adjusted at the end of each period to reflect accretion of the liability to its non-discounted amount and changes in either the timing or the amount of the original estimated future cash flows underlying the obligation. Revisions also result in increases or decreases in the carrying cost of these assets. Increases in the ARO liability due to accretion is charged to depreciation and amortization expense. The related capitalized cost, including revisions thereto, is charged to depreciation and amortization expense. |
Long-Lived Assets | Long-Lived Assets. In accordance with the Impairment or Disposal of Long-Lived Assets Subsections of ASC 360-10, “Property, Plant, and Equipment—Overall,” long-lived assets, such as property, plant, and equipment, and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, we first compare the undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. |
Intangible Assets | Intangible Assets. Intangible assets are stated at cost, net of accumulated amortization. We have intangible assets related to technology, customer relationships, tradenames/trademarks, and software as detailed in Note 6 Detail of Certain Balance Sheet Accounts to the consolidated financial statements. Intangible assets are amortized using the straight-line method over the asset's estimated useful life as follows: Technology 15 years Customer relationships 15 years Tradenames/trademarks 15 years Software 10 years |
Pension and Other Postretirement Plans | Pension and Other Postretirement Plans. We sponsor noncontributory defined benefit pension plans and a post-retirement benefit plan. We annually evaluate significant assumptions related to the benefits and obligations of these plans. Our estimation of the projected benefit obligations and related benefit expense requires that certain assumptions be made regarding such variables as expected return on plan assets, discount rates, rates of future compensation increases, estimated future employee turnover rates and retirement dates, distribution election rates, mortality rates, retiree utilization rates for health care services, and health care cost trend rates. The determination of the appropriate assumptions requires considerable judgment concerning future events and has a significant impact on the amount of the obligations and expense recorded. We rely in part on actuarial studies when determining the appropriateness of certain of the assumptions used in determining the benefit obligations and the annual expenses for these plans. |
Investment in Unconsolidated Joint Venture | Investment in Unconsolidated Joint Venture. Our 50% equity investment in a manufacturing joint venture at our Kashima site is accounted for under the equity method with our share of the operating results of the joint venture classified within earnings of unconsolidated joint venture. We evaluate our equity method investment for impairment when events or changes in circumstances indicate, in our judgment, that the carrying value of such investment may have experienced an other-than-temporary decline in value. When evidence of loss in value has occurred, we compare the estimated fair value of the investment to the carrying value of the investment to determine whether impairment has occurred. We assess the fair value of our equity method investment using commonly accepted techniques, and may use more than one method, including, but not limited to, recent third party comparable sales, internally developed analysis and analysis from outside advisors. If the estimated fair value is less than the carrying value and we consider the decline in value to be other than temporary, the excess of the carrying value over the estimated fair value is recognized in the financial statements as an impairment. |
Debt Issuance Costs | Debt Issuance Costs. We capitalize financing fees and other costs related to issuing long-term debt. We amortize these costs using the effective interest method, except for costs related to revolving debt, which are amortized using the straight-line method. The amortization of debt issuance costs are recorded in interest expense. |
Contingencies | Contingencies . We are routinely involved in litigation, claims, and disputes incidental to our business. Professional judgment is required to classify the likelihood of these contingencies occurring. All relevant information that can be acquired concerning the uncertain set of circumstances needs to be obtained and used to determine the probability classification. A contingency is categorized as probable, reasonably possible, or remote. A contingency is classified as probable if the future event or events are likely to occur. For the probable contingencies, a loss is accrued and disclosed as of the date of the financial statements if it is both probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. A reasonably possible contingency occurs if the chance of the future event or events happening is more than remote but less than likely (reasonably possible but not probable). We disclose the loss contingencies in the footnotes to the financial statements but do not recognize any liability. A remote contingency is one where the chance of the future event or events occurring is slight. We neither accrue for nor disclose the liability in the notes to the financial statements. For loss contingencies, our accounting policy is to expense legal costs as incurred. |
Environmental Costs | Environmental Costs. Environmental costs are expensed as incurred unless the expenditures extend the economic useful life of the relevant assets. Costs that extend the economic useful life of assets are capitalized and depreciated over the remaining life of those assets. Liabilities are recorded when environmental assessments, or remedial efforts are probable, and the cost can be reasonably estimated. |
Disclosures about Fair Value of Financial Instruments | Disclosures about Fair Value of Financial Instruments. For cash and cash equivalents, receivables, accounts payable, and certain accrued expenses, the carrying amount approximates fair value due to the short maturities of these instruments. For long-term debt instruments and interest rate swap agreements, fair value is estimated based upon market values (if applicable) or on the current interest rates available to us for debt with similar terms and remaining maturities. Considerable judgment is required in developing these estimates. |
Revenue Recognition | Revenue Recognition. Revenue is recognized in accordance with the provisions of ASC 605, “Revenue Recognition—Overall,” when the revenue is realized or realizable, and has been earned. Revenue for product sales is recognized when risk and title to the product transfer to the customer, which usually occurs at the time shipment is made. The majority of our sales are transacted with the shipping term free on board shipping point or, with respect to countries other than the U.S., an equivalent basis. As such, title to the product passes when the product is delivered to the freight carrier. Our standard terms of delivery are included in our contracts of sale, order confirmation documents, and invoices. Shipping and other transportation costs charged to customers are recorded in both revenue and cost of goods sold. Revenue is recognized net of value-added taxes. We have entered into agreements with some of our customers whereby they earn rebates from us when the volume of their purchases of our product reach certain agreed upon levels. We recognize the rebate obligation ratably as a reduction of revenue. |
Research and Development Expenses | Research and Development Expenses. Research and development costs are expensed as incurred. |
Share-Based Compensation | Share-Based Compensation . Share-based compensation cost is measured at the grant date based on the fair value of the award. We recognize these costs using the straight-line method over the requisite service period. We estimate the fair value of performance-based restricted share units using a combination of Monte Carlo simulations and internal metrics. The expected term represents the period of time that performance share units granted are expected to be outstanding. Our expected volatilities are based on historical volatilities for Kraton and the members of the peer group. The risk free interest rate for the periods within the contractual life of the performance-based restricted share units is equal to the yield, as of the valuation date, of the zero coupon U.S. Treasury STRIPS that have a remaining term equal to the length of the remaining performance period. The expected dividend yield is assumed to be zero , which is the equivalent of reinvesting dividends in the underlying company's stock. Forfeitures are recognized when they occur. See Note 5 Share-Based Compensation to the consolidated financial statements. |
Leases | Leases. Our leases are classified as either operating or capital leases at the inception of the lease. A lease is deemed a capital lease when any one of the following conditions is met: (1) ownership of the asset is transferred to the lessee at the end of the lease term; (2) the lease contains a bargain purchase option; (3) the lease term is 75% or more of the asset’s useful life; or (4) the net present value of future minimum lease payments is equal to 90% or more of the asset’s fair market value. All other leases are classified as an operating lease. The capital lease obligation is classified as either a current liability or long term liability based on the lease payment schedule, and is offset by an asset purchased pursuant to the lease which is depreciated over the lesser of the lease term or the asset useful life, in accordance with our depreciation policy. For operating leases that contain escalating rent payment clauses, we use the straight-line method to record lease expense. |
Income Taxes | Income Taxes. We conduct operations in separate legal entities in different jurisdictions. As a result, income tax amounts are reflected in these consolidated financial statements for each of those jurisdictions. Income taxes are recorded utilizing an asset and liability approach. This method gives consideration to the future tax consequences associated with the differences between the financial accounting and tax basis of the assets and liabilities as well as the ultimate realization of any deferred tax asset resulting from such differences. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, we believe it is more likely than not that we will realize the benefits of these deductible differences, net of the existing valuation allowances. See Note 11 Income Taxes to the consolidated financial statements. We provide liabilities for uncertain tax positions for federal, state, local, and international exposures, including interest and penalties, relating to periods subject to audit. The development of liabilities for uncertain tax positions for these exposures requires judgment about tax issues, potential outcomes, and timing. We assess tax positions and record tax benefits based upon management's evaluation of facts, circumstances, and information available at the respective reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon settlement with a tax authority. For those tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the consolidated financial statements. We have established valuation allowances against a variety of deferred tax assets, including net operating loss carryforwards, foreign tax credits and other income tax credits. Valuation allowances take into consideration our expected ability to realize these deferred tax assets and reduce the value of such assets to the amount that is deemed more likely than not to be recoverable. Our ability to realize these deferred tax assets is dependent on achieving our forecast of future taxable operating income over an extended period of time. We review our forecast in relation to actual results and expected trends on a quarterly basis. If we fail to achieve our operating income targets, we may change our assessment regarding the recoverability of our net deferred tax assets and such change could result in a valuation allowance being recorded against some or all of our net deferred tax assets. A change in our valuation allowance would impact our income tax benefit (expense) and our stockholders’ equity and could have a significant impact on our results of operations or financial condition in future periods. |
Foreign Currency Translation and Foreign Currency Exchange Rates | Foreign Currency Translation and Foreign Currency Exchange Rates. Financial statements of our operations outside the U.S. where the local currency is considered to be the functional currency are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and the average exchange rate for each period for revenue, expenses, gains, losses, and cash flows. The effects of translating such operations into U.S. dollars are included as a component of accumulated other comprehensive income (loss). |
Adoption of Accounting Standards and New Accounting Standards | Adoption of Accounting Standards. We have implemented all new accounting pronouncements that are in effect and that management believes would materially impact our financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . This standard changes the measurement principle for inventory from the lower of cost or market to the lower of cost or net realizable value. ASU 2015-11 defines net realizable value as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The guidance must be applied on a prospective basis and is effective for periods beginning after December 15, 2016, with early adoption permitted. We adopted ASU 2015-11 as of January 1, 2017 and there was no material impact to our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 817) . The ASU changes seven aspects of the accounting for share-based payment award transactions, including: (1) accounting for income taxes; (2) classification of excess tax benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes; (6) practical expedient - expected term (nonpublic only); (7) intrinsic value (nonpublic only). The standard was effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. We adopted ASU 2016-09 as of January 1, 2017. The element of the update that has an impact on our financial statements is the accounting for income taxes. Excess tax benefits and tax deficiencies on stock-based compensation awards are now included in our tax provision within our consolidated statement of operations as discrete items in the reporting period in which they occur, rather than previous accounting of recording in additional paid-in capital on our consolidated balance sheets. The Company reversed deferred tax liabilities of $4.5 million for all excess tax deficiencies or benefits that had not been previously recognized as a cumulative-effect adjustment to retained earnings. Prior to January 1, 2017, the employee share-based compensation expense was recorded net of estimated forfeiture rates and subsequently adjusted at the vesting date, as appropriate. On a go forward basis, we elected to recognize actual forfeiture rates by reducing the employee share-based compensation expense in the same period as the forfeitures occur. The adoption of this accounting standard did not impact our consolidated statements of operations or consolidated statements of cash flows for the periods presented. New Accounting Standards to be Adopted in Future Periods In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , updated by ASU No. 2015-14 Deferral of the Effective Date , which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. In August 2015, the effective date for the standard was deferred by one year and the standard is now effective for public entities for annual and interim periods beginning after December 15, 2017. Early adoption is permitted based on the original effective date. Our revenue is primarily generated from the sale of finished product to customers. Those sales predominantly contain a single delivery element and revenue is recognized at a single point in time, when ownership and risk of loss transfers. These are largely un-impacted by the new standard. We completed our analysis during 2017 and there is no material change to our financial position, results of operations, and cash flows. We adopted ASU 2014-09 and its amendment on a modified retrospective effective January 1, 2018. Although there is no material impact, will will have expanded disclosures in our notes to consolidated financial statements related to revenue recognition under the new standard. We have implemented changes to our accounting policies and practices, business processes, systems, and controls to support the new revenue recognition and disclosure requirements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires that an entity must recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 and early adoption is permitted. We are still analyzing the quantitative impact of adoption; therefore, the effects of this standard on our financial position, results of operations, and cash flows are not yet known. As we complete our overall assessment, we are identifying and preparing to implement changes to our accounting policies and practices, business processes, systems and controls to support the new revenue recognition and disclosure requirements. Our assessment will be completed during fiscal year 2018 and we expect to adopt the ASU 2016-02 effective January 1, 2019. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) . The ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. Our analysis of ASU 2016-15 was completed during 2017 and there is no material change to our financial position, results of operations, and cash flows. We adopted ASU 2016-15 effective January 1, 2018. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . This standard is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and early adoption is permitted for annual or interim goodwill impairment tests performed on testing dates after January 1, 2017. Our evaluation of this standard is currently ongoing. 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 Post-retirement Benefit Cost . The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted as of the beginning of a year for which financial statements (interim and annual) have not been issued. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component. Our service costs were $6.5 million and $6.1 million for the years ended December 31, 2017 and 2016 , respectively. Our evaluation of this standard is currently ongoing and we will adopt ASU 2017-07 effective on January 1, 2018. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . This standard is effective for fiscal years beginning after December 15, 2018, and early adoption is permitted for any interim period after issuance of the ASU. Our evaluation of this standard is currently ongoing. |
Description of Business, Basi29
Description of Business, Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Estimated useful lives of property, plant and equipment | Depreciation is recognized using the straight-line method over the following estimated useful lives: Machinery and equipment 20 years Building and land improvements 20 years Manufacturing control equipment 10 years Office equipment 5 years Research equipment and facilities 5 years Vehicles 5 years Computer hardware and information systems 3 years |
Schedule of intangible assets | Intangible assets are amortized using the straight-line method over the asset's estimated useful life as follows: Technology 15 years Customer relationships 15 years Tradenames/trademarks 15 years Software 10 years |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Share-based Compensation [Abstract] | |
Schedule of unrecognized compensation expense | Our unrecognized compensation expense related to our share-based awards was as follows as of December 31, 2017 : Unrecognized Compensation Expense Weighted Average Remaining Recognition Period (In thousands) Restricted stock awards $ 4,788 1.10 Restricted stock units $ 1,069 1.11 Performance stock units $ 4,187 1.12 |
Schedule of option activity | Non-qualified option activities for the year ended December 31, 2017 are as follows: Options Weighted Average Exercise Price Aggregate (1) Weighted Average Remaining Contractual Term (In thousands) (In thousands) Outstanding at December 31, 2016 1,173 $ 24.94 Granted — — Exercised (469 ) 23.32 Forfeited — — Expired (28 ) 36.40 Outstanding at December 31, 2017 676 $ 25.59 $ 15,722 3.64 Exercisable at December 31, 2017 676 $ 25.59 $ 15,722 3.64 ________________________________________________ (1) The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option as of December 31, 2017 . |
Summary of additional information regarding outstanding and exercisable options | Years Ended December 31, 2017 2016 2015 (In thousands) Options exercised $ 469 $ 229 $ 64 Total intrinsic value of options exercised $ 11,667 $ 2,080 $ 411 |
Schedule of non-vested restricted stock awards, restricted share units | The following table represents the non-vested restricted stock awards and restricted share units granted, vested, and forfeited during 2017 . Restricted Stock Awards Restricted Stock Units Shares Weighted- Shares Weighted- (In thousands) (In thousands) Non-vested shares at December 31, 2016 586 $ 20.50 134 $ 18.56 Granted 207 28.25 40 27.90 Vested (207 ) 24.92 (45 ) 21.21 Forfeited (26 ) 20.99 (2 ) 22.23 Non-vested shares at December 31, 2017 560 $ 21.70 127 $ 20.16 |
Schedule of non-vested performance-based units activity | The following table represents the non-vested performance share units granted, vested, and forfeited during 2017 . Shares Weighted- average Grant-date Fair Value Aggregate (1) Weighted Average Remaining Contractual Term (In thousands) (In thousands) Non-vested shares at December 31, 2016 464 $ 20.19 Granted 164 31.45 Vested (28 ) 26.97 Forfeited (14 ) 25.18 Non-vested shares at December 31, 2017 586 $ 22.72 $ 28,627 1.12 ________________________________________________ (1) The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option as of December 31, 2017 . |
Summary of weighted-average assumptions for performance shares pricing | The weighted average fair value using a Monte Carlo simulation model and the corresponding weighted average assumptions for the performance share units granted were as follows: 2017 2016 2015 Risk-free interest rate 1.55 % 0.83 % 0.95 % Expected dividend yield — % — % — % Expected volatility 37.4 % 33.0 % 29.7 % Fair value per performance share award $ 34.84 $ 19.24 $ 24.75 |
Detail of Certain Balance She31
Detail of Certain Balance Sheet Accounts Detail of Certain Balance Sheet Accounts (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Detail of certain balance sheet accounts - assets | December 31, 2017 2016 (In thousands) Inventories of products: Finished products $ 270,562 $ 248,143 Work in progress 6,925 5,648 Raw materials 100,594 86,864 Inventories of products, gross 378,081 340,655 Inventory reserves (10,285 ) (12,659 ) Inventories of products, net $ 367,796 $ 327,996 Property, plant, and equipment: Land $ 38,176 $ 34,109 Buildings 171,506 131,036 Plant and equipment (1) 1,208,199 910,658 Construction in progress 67,601 242,337 Property, plant, and equipment 1,485,482 1,318,140 Less accumulated depreciation 526,759 411,418 Property, plant, and equipment, net of accumulated depreciation $ 958,723 $ 906,722 Intangible assets: Contractual agreements $ 264,581 $ 258,646 Technology 146,449 145,320 Customer relationships 60,547 59,977 Tradenames/trademarks 80,138 77,666 Software 52,466 42,535 Intangible assets 604,181 584,144 Less accumulated amortization: Contractual agreements 44,435 20,757 Technology 53,086 44,698 Customer relationships 33,871 31,863 Tradenames/trademarks 35,770 25,363 Software 30,156 22,265 Accumulated amortization 197,318 144,946 Intangible assets, net of accumulated amortization $ 406,863 $ 439,198 ________________________________________________ (1) Plant and equipment includes $5.6 million and $7.2 million of assets related to capital leases as of December 31, 2017 and December 31, 2016 , respectively. |
Detail of certain balance sheet accounts - other liabilities and accumulated other comprehensive loss | December 31, 2017 2016 (In thousands) Other payables and accruals: Employee related $ 41,250 $ 33,947 Interest payable 23,615 10,135 Property, plant, and equipment accrual 10,404 26,260 Other 44,355 60,056 Total other payables and accruals $ 119,624 $ 130,398 Other long-term liabilities: Pension and other postretirement benefits $ 147,209 $ 138,188 Other 45,058 32,151 Total other long-term liabilities $ 192,267 $ 170,339 |
Estimated amortization expense | Estimated amortization expense for each of the next five years is as follows: December 31: Amortization Expense (In thousands) 2018 $ 49,974 2019 $ 41,718 2020 $ 38,400 2021 $ 37,119 2022 $ 36,776 |
Changes in accumulated other comprehensive income (loss) | Changes in accumulated other comprehensive income (loss) by component were as follows: Cumulative Foreign Currency Translation Net Unrealized Gain on Cash Flow Hedges Unrealized Loss on Net Investment Hedges Benefit Plans Liability, Net of Tax Total (In thousands) Balance at December 31, 2015 $ (65,995 ) $ — $ (1,926 ) $ (70,647 ) $ (138,568 ) Other comprehensive income (loss) before reclassifications (6,736 ) 515 — (16,157 ) (22,378 ) Amounts reclassified from accumulated other comprehensive loss — — 2,416 (1) 2,416 Net other comprehensive income (loss) for the year (6,736 ) 515 — (13,741 ) (19,962 ) Balance at December 31, 2016 (72,731 ) 515 (1,926 ) (84,388 ) (158,530 ) Other comprehensive income (loss) before reclassifications 63,077 3,156 — (9,040 ) 57,193 Amounts reclassified from accumulated other comprehensive loss — 879 (2) — 2,163 (1) 3,042 Net other comprehensive income (loss) for the year 63,077 4,035 — (6,877 ) 60,235 Balance at December 31, 2017 $ (9,654 ) $ 4,550 $ (1,926 ) $ (91,265 ) $ (98,295 ) ________________________________________________ (1) The reclassifications from accumulated other comprehensive loss is for the change in benefit plans liability represents amortization of net actuarial losses and prior service costs. The tax impact was $0.7 million and $0.8 million for the years ended December 31, 2017 and 2016, respectively. These costs are allocated between cost of goods sold, selling, general, and administrative and research and development expenses in the Consolidated Statement of Operations. See Note 13. Employee Benefits for further information related to net periodic benefit cost for pension and other post-retirement benefit plans. (2) The reclassifications from accumulated other comprehensive loss is related to the exit of interest rate swaps related to prepayments under our USD Tranche. The tax impact was $0.1 million for the year ended December 31, 2017. These costs are recorded in loss on extinguishment of debt in the Consolidated Statement of Operations. |
Earnings per Share ("EPS") (Tab
Earnings per Share ("EPS") (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Calculations of basic and diluted EPS | The calculations of basic and diluted EPS are as follows: Year Ended December 31, 2017 Net Weighted Earnings (In thousands, except per share data) Basic: As reported $ 97,549 31,241 Amounts allocated to unvested restricted shares (1,832 ) (587 ) Amounts available to common stockholders 95,717 30,654 $ 3.12 Diluted: Amounts allocated to unvested restricted shares 1,832 587 Non participating share units 170 Stock options added under the treasury stock method 316 Amounts reallocated to unvested restricted shares (1,804 ) (587 ) Amounts available to stockholders and assumed conversions $ 95,745 31,140 $ 3.07 Year Ended December 31, 2016 Net Weighted Earnings (In thousands, except per share data) Basic: As reported $ 107,308 30,843 Amounts allocated to unvested restricted shares (2,307 ) (663 ) Amounts available to common stockholders 105,001 30,180 $ 3.48 Diluted: Amounts allocated to unvested restricted shares 2,307 663 Non participating share units 205 Stock options added under the treasury stock method 236 Amounts reallocated to unvested restricted shares (2,274 ) (663 ) Amounts available to stockholders and assumed conversions $ 105,034 30,621 $ 3.43 Year Ended December 31, 2015 Net Weighted Loss (In thousands, except per share data) Basic: As reported $ (10,535 ) 31,128 Amounts allocated to unvested restricted shares 187 (554 ) Amounts available to common stockholders (10,348 ) 30,574 $ (0.34 ) Diluted: Amounts allocated to unvested restricted shares (187 ) 554 Non participating share units — Stock options added under the treasury stock method — Amounts reallocated to unvested restricted shares 187 (554 ) Amounts available to stockholders and assumed conversions $ (10,348 ) 30,574 $ (0.34 ) |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consists of the following: December 31, 2017 December 31, 2016 Principal Discount Debt Issuance Cost Total Principal Discount Debt Issuance Cost Total (In thousands) USD Tranche $ 485,000 $ (13,373 ) $ (13,986 ) $ 457,641 $ 1,278,000 $ (34,085 ) $ (31,662 ) $ 1,212,253 Euro Tranche 198,265 — (3,517 ) 194,748 — — — — 10.5% Senior Notes 440,000 (13,267 ) (14,409 ) 412,324 440,000 (15,038 ) (16,329 ) 408,633 7.0% Senior Notes 400,000 — (7,424 ) 392,576 — — — — ABL Facility — — — — — — — — KFPC Loan Agreement 149,919 — (196 ) 149,723 115,854 — (257 ) 115,597 KFPC Revolving Credit Facilities 8,430 — — 8,430 — — — — Capital lease obligation 2,086 — — 2,086 3,042 — — 3,042 Total debt 1,683,700 (26,640 ) (39,532 ) 1,617,528 1,836,896 (49,123 ) (48,248 ) 1,739,525 Less current portion of total debt 42,647 — — 42,647 41,825 — — 41,825 Long-term debt $ 1,641,053 $ (26,640 ) $ (39,532 ) $ 1,574,881 $ 1,795,071 $ (49,123 ) $ (48,248 ) $ 1,697,700 |
Schedule of principal payments on outstanding total debt | Debt Maturities. The principal payments on our outstanding total debt as of December 31, 2017 , are as follows: December 31: Principal Payments (In thousands) 2018 $ 42,647 2019 33,484 2020 83,467 2021 190 2022 683,467 Thereafter 840,445 Total debt $ 1,683,700 |
Fair Value Measurements, Fina34
Fair Value Measurements, Financial Instruments, and Credit Risk (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of fair value measurements at reporting date | Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of their fair value and their placement within the fair value hierarchy. Fair Value Measurements at Reporting Date Using Balance Sheet Location December 31, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Derivative asset – current Other current assets $ 1,629 $ — $ 1,629 $ — Derivative asset – noncurrent Other long-term assets 3,801 — 3,801 — Retirement plan asset—noncurrent Other long-term assets 2,435 2,435 — — Derivative liability – current Other payables and accruals 399 — 399 — Total $ 8,264 $ 2,435 $ 5,829 $ — Fair Value Measurements at Reporting Date Using Balance Sheet Location December 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Derivative asset – current Other current assets $ 243 $ — $ 243 $ — Derivative asset – noncurrent Other long-term assets 568 — 568 — Retirement plan asset—noncurrent Other long-term assets 1,894 1,894 — — Total $ 2,705 $ 1,894 $ 811 $ — |
Summary of carrying values and approximate fair values of long-term debt | The following table presents the carrying values and approximate fair values of our debt. December 31, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value (In thousands) USD Tranche (significant other observable inputs – level 2) $ 485,000 $ 490,762 $ 1,278,000 $ 1,293,975 Euro Tranche (significant other observable inputs – level 2) $ 198,265 $ 200,495 $ — $ — 10.5% Senior Notes (quoted prices in active market for identical assets – level 1) $ 440,000 $ 499,171 $ 440,000 $ 501,600 7.0% Senior Notes (quoted prices in active market for identical assets – level 1) $ 400,000 $ 432,028 $ — $ — Capital lease obligation (significant other observable inputs – level 2) $ 2,086 $ 2,086 $ 3,042 $ 3,042 KFPC Loan Agreement (significant unobservable inputs – level 3) $ 149,919 $ 149,919 $ 115,854 $ 115,854 KFPC Revolving Credit Facilities (significant unobservable inputs – level 3) $ 8,430 $ 8,430 $ — $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Expense for Income Taxes | The provision for income taxes is comprised of the following: Years Ended December 31, 2017 2016 2015 (In thousands) Current tax expense: U.S. $ (522 ) $ (4,460 ) $ (34 ) Foreign (7,598 ) (2,469 ) (10,023 ) Current tax expense (8,120 ) (6,929 ) (10,057 ) Deferred tax benefit: U.S. 57,248 91,626 2,683 Foreign 8,756 7,257 431 Deferred tax benefit 66,004 98,883 3,114 Income tax benefit (expense) $ 57,884 $ 91,954 $ (6,943 ) |
Income Before Income Taxes | Income (loss) before income taxes is comprised of the following: Years Ended December 31, 2017 2016 2015 (In thousands) Income (loss) before income taxes: U.S. $ (17,177 ) $ (4,556 ) $ (41,455 ) Foreign 51,939 17,242 35,869 Income (loss) before income taxes $ 34,762 $ 12,686 $ (5,586 ) |
Reconciliation of Statutory Income Tax Rate | The provision for income taxes differs from the amount computed by applying the U.S. corporate statutory income tax rate to income (loss) before income taxes for the reasons set forth below: Years Ended December 31, 2017 2016 2015 (In thousands) Income taxes at the statutory rate $ (12,167 ) $ (4,440 ) $ 1,955 Foreign tax rate differential 15,920 4,779 1,639 State taxes, net of federal benefit 373 (597 ) 315 Permanent differences 9,288 889 88 Tax credits 2,647 4,924 46 Alternative minimum tax (2,647 ) (593 ) — Transaction costs — (753 ) — Uncertain tax positions 627 1,809 (126 ) Valuation allowance (1,703 ) 87,020 (11,156 ) Impact of tax reform 48,717 — — Other (3,171 ) (1,084 ) 296 Income tax benefit (expense) $ 57,884 $ 91,954 $ (6,943 ) Years Ended December 31, 2017 2016 2015 Income taxes at the statutory rate (35.0 )% (35.0 )% (35.0 )% Foreign tax rate differential 45.8 37.7 (29.3 ) State taxes, net of federal benefit 1.1 (4.7 ) (5.6 ) Permanent differences 26.7 7.0 (1.6 ) Tax credits 7.6 38.8 (0.8 ) Alternative minimum tax (7.6 ) (4.7 ) — Transaction costs — (5.9 ) — Uncertain tax positions 1.8 14.3 2.3 Valuation allowance (4.9 ) 685.9 199.7 Impact of tax reform 140.1 — — Other (9.1 ) (8.6 ) (5.4 ) Effective tax rate 166.5 % 724.8 % 124.3 % |
Significant Components of Deferred Tax Assets and Liabilities | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as net operating loss and tax credit carryforwards. The tax effects of temporary differences are comprised of the following: December 31, 2017 2016 (In thousands) Deferred tax assets: Net operating loss carryforwards $ 73,712 $ 128,408 Tax credit carryforwards 9,643 11,461 Inventory 5,339 8,568 Benefit plans accrual 29,561 38,736 Other accruals and reserves 10,295 11,278 Valuation allowance for deferred tax assets (51,278 ) (44,695 ) Deferred tax assets 77,272 153,756 Deferred tax liabilities: Property, plant, and equipment 106,407 148,164 Intangible assets 92,195 153,380 Investment in subsidiaries 18,356 56,701 Deferred tax liabilities 216,958 358,245 Net deferred tax liabilities $ 139,686 $ 204,489 December 31, 2017 2016 (In thousands) Net deferred tax liabilities consist of: Non-current deferred tax assets $ 8,462 $ 6,907 Non-current deferred tax liabilities 148,148 211,396 Net deferred tax liabilities $ 139,686 $ 204,489 |
Rollforward of Unrecognized Tax Benefits | The following presents a roll forward of our unrecognized tax benefits including associated interest and penalties. December 31, 2017 2016 (In thousands) Balance at January 1 $ 24,527 $ 4,346 Increase in current year tax positions 323 1,546 Increase in prior year tax positions 2,140 813 Increase due to Arizona Chemical Acquisition — 23,089 Decrease in prior year tax positions (312 ) — Lapse of statute of limitations (2,257 ) (1,946 ) Settlements — (3,321 ) Balance at December 31 $ 24,421 $ 24,527 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Changes in Aggregate Carrying Amount of Asset Retirement Obligation Liability | The changes in the aggregate carrying amount of our ARO liability are as follows: December 31, 2017 2016 (In thousands) Beginning balance $ 8,863 $ 10,078 Obligations assumed in the Arizona Chemical Acquisition — 1,908 Additional accruals 439 2,146 Revision in estimated cash flows (387 ) — Accretion expense 323 375 Obligations settled (4,096 ) (5,511 ) Foreign currency translation 570 (133 ) Ending balance $ 5,712 $ 8,863 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Plan Obligation, Plan Assets, Amounts Recognized in Financial Statements and Underlying Actuarial and Other Assumptions | Information concerning the plan obligation, the funded status and amounts recognized in our financial statements and underlying actuarial and other assumptions are as follows: December 31, 2017 2016 (In thousands) Change in benefit obligation: Benefit obligation at beginning of period $ 33,247 $ 30,867 Service cost 557 543 Interest cost 1,370 1,398 Benefits and expenses paid (premiums) (1,148 ) (929 ) Actuarial (gain) loss 1,825 1,368 Benefit obligation at end of period 35,851 33,247 Change in plan assets (1) : Fair value at beginning of period — — Employer contributions 1,148 929 Benefits paid (1,148 ) (929 ) Fair value at end of period — — Funded status at end of year $ 35,851 $ 33,247 ___________________________________________ (1) Shell Chemicals has committed to a future cash payment related to retiree medical expenses based on a specified dollar amount per employee, if certain contractual commitments are met. We have recorded an asset of approximately $8.1 million and $9.1 million as our estimate of the present value of this commitment as of December 31, 2017 and 2016 , respectively. December 31, 2017 2016 (In thousands) Amounts recognized in the balance sheet: Current liabilities $ (1,492 ) $ (1,587 ) Noncurrent liabilities (34,359 ) (31,660 ) $ (35,851 ) $ (33,247 ) Amounts recognized in accumulated other comprehensive loss: Net actuarial loss $ 10,294 $ 9,067 $ 10,294 $ 9,067 Information concerning the pension obligation, plan assets, amounts recognized in our financial statements, and underlying actuarial and other assumptions are as follows: U.S. Plans Non-U.S. Plans December 31, December 31, 2017 2016 2017 2016 (In thousands) Change in benefit obligation: Benefit obligation at beginning of period $ 171,943 $ 152,511 $ 84,252 $ 1,711 Service cost 3,191 3,288 2,749 2,239 Interest cost 7,330 7,416 2,195 3,121 Participant contributions — — 30 41 Benefits paid (5,812 ) (9,753 ) (5,430 ) (4,430 ) Expenses and taxes — — (92 ) — Plan amendments — — 9 322 Settlements — — (370 ) — Acquisition — 14,118 — 79,576 Actuarial (gain) loss 12,499 4,363 1,997 15,322 Exchange rate (gain) loss — — 8,865 (13,650 ) Benefit obligation at end of period 189,151 171,943 94,205 84,252 Change in plan assets: Fair value at beginning of period 105,107 97,561 43,594 — Return on plan assets 14,881 6,737 1,500 3,694 Employer contributions 7,655 1,396 4,832 3,685 Participant contributions — — 30 41 Benefits paid (5,812 ) (9,753 ) (5,430 ) (4,430 ) Expenses and taxes — — (92 ) — Settlements — — (370 ) (51 ) Acquisition — 9,166 — 49,054 Exchange rate (gain) loss — — 4,337 (8,399 ) Fair value at end of period 121,831 105,107 48,401 43,594 Funded status at end of period $ (67,320 ) $ (66,836 ) $ (45,804 ) $ (40,658 ) Amounts recognized on balance sheet: Current liabilities $ — $ — $ (2,637 ) $ (726 ) Noncurrent liabilities (67,320 ) (66,836 ) (43,167 ) (39,932 ) $ (67,320 ) $ (66,836 ) $ (45,804 ) $ (40,658 ) Amounts recognized in accumulated other comprehensive loss: Prior service costs $ — $ — $ 348 $ 307 Net actuarial loss 57,000 53,604 17,168 12,972 Amounts recognized in accumulated other comprehensive loss $ 57,000 $ 53,604 $ 17,516 $ 13,279 Accumulated benefit obligations $ 177,154 $ 160,625 $ 89,755 $ 79,983 |
Estimated Future Benefit Payments | The following employer contributions and benefit payments, which reflect expected future service, as appropriate, are expected to be paid: U.S. Plans Non-U.S. Plans (In thousands) Employer Contributions 2018 Employer contribution $ 7,341 $ 5,852 Benefit Payments 2018 $ 6,413 $ 4,851 2019 6,782 4,848 2020 7,114 5,160 2021 7,619 5,002 2022 8,083 5,124 Years 2023-2026 48,481 28,993 $ 84,492 $ 53,978 |
Components of Net Periodic Pension Costs | Net periodic benefit costs consist of the following components: Years Ended December 31, 2017 2016 2015 (In thousands) Service cost $ 557 $ 543 $ 597 Interest cost 1,370 1,398 1,271 Amortization of net actuarial loss 598 608 757 Net periodic benefit costs $ 2,525 $ 2,549 $ 2,625 Net periodic pension costs consist of the following components: U.S. Plans Non-U.S. Plans Years Ended December 31, Years Ended December 31, 2017 2016 2015 2017 2016 2015 (In thousands) Service cost benefits earned during the period $ 3,191 $ 3,288 $ 3,528 $ 2,749 $ 2,239 $ — Interest on prior year’s projected benefit obligation 7,330 7,416 6,483 2,195 3,121 — Expected return on plan assets (9,401 ) (9,355 ) (8,459 ) (2,575 ) (3,583 ) — One-time settlement costs — — — 45 — — Amortization of prior service costs — — — 11 9 — Amortization of net actuarial loss 3,622 2,868 4,239 165 21 — Net periodic pension costs $ 4,742 $ 4,217 $ 5,791 $ 2,590 $ 1,807 $ — |
Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) | The estimated losses that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in fiscal 2018 are as follows: U.S. Plans Non-U.S. Plans (In thousands) Amortization of prior service costs $ — $ 13 Amortization of net actuarial loss 4,900 656 $ 4,900 $ 669 |
Weighted Average Assumptions used to Determine Benefit Obligation and Net Periodic Benefit Cost | Discount rates are determined annually and are based on rates of return of high-quality long-term fixed income securities currently available and expected to be available during the maturity of the pension benefits. U.S. Plans Non-U.S. Plans December 31, December 31, 2017 2016 2017 2016 Weighted average assumptions used to determine benefit obligations: Discount rate 3.86 % 4.29 % 2.29 % 2.54 % Rates of increase in salary compensation level 3.00 % 3.00 % 3.15 % 3.21 % Expected long-term rate of return on plan assets 8.00 % 8.36 % 5.49 % 5.49 % Weighted average assumptions used to determine net periodic benefit cost: Discount rate 4.29 % 4.57 % 2.54 % 3.59 % Rates of increase in salary compensation level 3.00 % 3.00 % 3.21 % 3.11 % Expected long-term rate of return on plan assets 8.36 % 8.50 % 5.49 % 3.50 % December 31, 2017 2016 Weighted average assumptions used to determine benefit obligations: Measurement date 12/31/2017 12/31/2016 Discount rate 3.81 % 4.18 % Rates of increase in salary compensation level N/A N/A Weighted average assumptions used to determine net periodic benefit cost: Discount rate 4.18 % 4.45 % Rates of increase in salary compensation level N/A N/A Expected long-term rate of return on plan assets N/A N/A |
Pension Plan Asset Allocations by Asset Category | Our Pension Plan asset allocations at December 31, 2017 and 2016 by asset category are as follows: U.S. Plans Non-U.S. Plans Target Allocation Percentage of Plan Target Allocation Percentage of Plan 2017 2017 2016 2017 2017 2016 Equity 50.0 % 59.9 % 53.8 % 50.0 % 49.4 % 48.4 % Debt 30.0 40.0 36.8 50.0 49.4 50.8 Other 20.0 0.1 9.4 — 1.2 0.8 Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % |
Fair Values of Pension Plan Assets by Asset Category | A summary of total investments for our pension plan assets measured at fair value is presented below. See Note 9 Fair Value Measurements, Financial Instruments, and Credit Risk to the consolidated financial statements for a detailed description of fair value measurements and the hierarchy established for Level 1, 2, and 3 valuation inputs. Pension Plan Assets Fair Value Measurements at December 31, 2017 Total Quoted Prices In Active Markets Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Equity $ 96,833 $ 48,537 $ 48,296 $ — Debt 72,694 21,437 51,257 — Other 705 427 — 278 Total $ 170,232 $ 70,401 $ 99,553 $ 278 Pension Plan Assets Fair Value Measurements at December 31, 2016 Total Quoted Prices In Active Markets Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) Equity $ 77,644 $ 24,270 $ 53,374 $ — Debt 60,857 16,897 43,960 — Other 10,201 9,912 — 289 Total $ 148,702 $ 51,079 $ 97,334 $ 289 |
Assumed Health Care Cost Trend Rates | December 31, 2017 2016 Assumed Pre-65 health care cost trend rates: Health care cost trend rate assumed for next year 8.50 % 7.00 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 4.50 % 5.00 % Year that the rate reaches the ultimate trend rate 2026 2021 December 31, 2017 2016 Assumed Post-65 health care cost trend rates: Health care cost trend rate assumed for next year 7.50 % 7.00 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 4.50 % 5.00 % Year that the rate reaches the ultimate trend rate 2024 2021 |
Effect of One Percentage Point Change in Assumed Health Care Cost Trend Rates | A 1.0% change in assumed health care cost trend rates would have the following effect (in thousands): 1% Increase 1% Decrease Effect on total of service and interest cost components $ 20 $ (31 ) Effect on postretirement benefit obligation $ 487 $ (569 ) |
Industry Segment and Foreign 38
Industry Segment and Foreign Operations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Sales Revenue for Primary Product Lines | The following table summarizes our operating results by segment. We currently do not have sales between segments. Year Ended December 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 Polymer Chemical Total Polymer Chemical (1) Total Total (2) (In thousands) Revenue $ 1,199,676 $ 760,686 $ 1,960,362 $ 1,024,737 $ 719,367 $ 1,744,104 $ 1,034,626 Cost of goods sold 889,896 528,563 1,418,459 750,112 514,967 1,265,079 805,970 Gross profit 309,780 232,123 541,903 274,625 204,400 479,025 228,656 Operating expenses: Research and development 28,829 11,896 40,725 28,322 11,169 39,491 31,024 Selling, general, and administrative 95,551 66,341 161,892 108,482 69,143 177,625 117,308 Depreciation and amortization 67,998 69,164 137,162 59,930 65,728 125,658 62,093 Operating income $ 117,402 $ 84,722 202,124 $ 77,891 $ 58,360 136,251 18,231 Disposition and exit of business activities — 28,416 — Loss on extinguishment of debt (35,389 ) (13,423 ) — Earnings of unconsolidated joint venture 486 394 406 Interest expense, net (132,459 ) (138,952 ) (24,223 ) Income (loss) before income taxes $ 34,762 $ 12,686 $ (5,586 ) ________________________________________________ (1) Our Chemical segment operating results were impacted by $24.7 million of amortization of step-up to fair market value of their inventories and $41.2 million of higher depreciation and amortization as a result of purchase accounting adjustments for property, plant, and equipment and intangibles. (2) Our totals for the year ended December 31, 2015 are representative of only our Polymer segment. |
Schedule of Assets by Segments | The following table presents long-lived assets including goodwill and total assets. December 31, 2017 December 31, 2016 Polymer Chemical Total Polymer Chemical Total (In thousands) Property, plant, and equipment, net $ 561,109 $ 397,614 $ 958,723 $ 548,994 $ 357,728 $ 906,722 Investment in unconsolidated joint venture $ 12,380 $ — $ 12,380 $ 11,195 $ — $ 11,195 Goodwill $ — $ 774,319 $ 774,319 $ — $ 770,012 $ 770,012 Total assets $ 1,125,626 $ 1,806,901 $ 2,932,527 $ 1,127,273 $ 1,779,372 $ 2,906,645 |
Sales Revenue by Geographic Region | Following is a summary of revenue by geographic region: December 31, 2017 December 31, 2016 December 31, 2015 Total Total Total (In thousands) Revenue: United States $ 690,247 $ 656,233 $ 324,103 Germany 199,076 171,257 121,346 All other countries 1,071,039 916,614 589,177 $ 1,960,362 $ 1,744,104 $ 1,034,626 |
Long-Lived Assets by Geographic Region | Following is a summary of long-lived assets by geographic region: December 31, 2017 December 31, 2016 Total Total (In thousands) Long-lived assets, at cost: United States $ 851,454 $ 789,067 Taiwan 182,644 167,907 France 138,770 117,965 Brazil 82,508 73,017 Germany 72,100 60,568 All other countries 158,006 109,616 $ 1,485,482 $ 1,318,140 |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Fair Value and Carrying Value of Assets and Liabilities | The following table summarizes the carrying amounts of assets and liabilities as of December 31, 2017 and 2016 for KFPC before intercompany eliminations. See Note 8 Long Term Debt , for further discussion related to the KFPC Loan Agreement executed on July 17, 2014. December 31, 2017 December 31, 2016 (In thousands) Cash and cash equivalents $ 13,848 $ 14,150 Other current assets 21,399 13,385 Property, plant, and equipment 173,363 167,579 Intangible assets 9,585 9,403 Other long-term assets 13,972 2,495 Total assets $ 232,167 $ 207,012 Current portion of long-term debt $ 41,745 $ 11,585 Current liabilities 13,938 26,743 Long-term debt 116,408 104,012 Total liabilities $ 172,091 $ 142,340 |
Selected Quarterly Financial 40
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financials Data | The following table sets forth a summary of our quarterly financial information for each of the four quarters ended December 31, 2017 and December 31, 2016 : First Quarter (1) Second Quarter (2) Third Quarter (3) Fourth Quarter (4) Total (In thousands, except per share data) 2017 Revenue $ 458,125 $ 525,320 $ 510,947 $ 465,970 $ 1,960,362 Gross profit $ 143,366 $ 147,256 $ 128,719 $ 122,562 $ 541,903 Operating income $ 59,323 $ 61,605 $ 41,508 $ 39,688 $ 202,124 Net income (loss) attributable to Kraton $ 6,413 $ 25,561 $ (4,033 ) $ 69,608 $ 97,549 Earnings (loss) per common share Basic $ 0.21 $ 0.82 $ (0.13 ) $ 2.21 $ 3.12 Diluted $ 0.20 $ 0.81 $ (0.13 ) $ 2.17 $ 3.07 Weighted average common shares outstanding Basic 30,430 30,585 30,625 30,944 30,654 Diluted 30,851 31,066 30,625 31,454 31,140 2016 Revenue $ 419,923 $ 454,649 $ 454,143 $ 415,389 $ 1,744,104 Gross profit $ 93,818 $ 131,897 $ 135,256 $ 118,054 $ 479,025 Operating income (loss) $ 3,226 $ 46,787 $ 50,817 $ 35,421 $ 136,251 Net income (loss) attributable to Kraton $ 88,087 $ 7,401 $ 15,560 $ (3,740 ) $ 107,308 Earnings (loss) per common share Basic $ 2.87 $ 0.24 $ 0.50 $ (0.12 ) $ 3.48 Diluted $ 2.84 $ 0.24 $ 0.49 $ (0.12 ) $ 3.43 Weighted average common shares outstanding Basic 30,026 30,158 30,221 30,306 30,180 Diluted 30,289 30,586 30,783 30,306 30,621 _______________________________________ (1) The first quarter of 2017 was negatively impacted by a $19.7 million loss on extinguishment of debt and $4.9 million of acquisition related transactions, severance expenses, and other restructuring related charges. The first quarter of 2016 was positively impacted by a $45.3 million gain on sale of assets, partially offset by a $24.7 million of higher costs of goods sold for our Chemical segment related to the fair value adjustment in purchase accounting for their inventory, $13.4 million loss on extinguishment of debt and $11.7 million of acquisition related transactions, severance expenses, and other restructuring related charges. (2) The second quarter of 2017 was negatively impacted by $4.4 million of KFPC startup costs and $3.8 million of acquisition related transactions, severance expenses, and other restructuring related charges. The second quarter of 2016 was negatively impacted by $5.3 million of disposition and exit of business activities and $7.6 million of acquisition related transactions, severance expenses, and other restructuring related charges. (3) The third quarter of 2017 was negatively impacted by a $15.6 million loss on extinguishment of debt. The third quarter of 2016 was negatively impacted by $7.7 million of acquisition related transactions, severance expenses, and other restructuring related charges. (4) The fourth quarter of 2017 was negatively impacted by $4.0 million of KFPC startup costs and $3.4 million of weather related costs. The fourth quarter 2016 was also negatively impacted by $11.6 million of disposition and exit of business activities and $6.5 million of acquisition related transactions, severance expenses, and other restructuring related charges. |
Description of Business, Basi41
Description of Business, Basis of Presentation and Significant Accounting Policies - Additional Information (Details) - segment | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Number of operating segments | 2 | ||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Minimum | |||
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Lease term as percent of asset’s useful life | 75.00% | ||
Lease payments as percent of asset’s fair market value | 90.00% | ||
KFPC | |||
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Percentage of investment in joint venture | 50.00% |
Description of Business, Basi42
Description of Business, Basis of Presentation and Significant Accounting Policies - Estimated Useful Lives of Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Machinery and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, years | 20 years |
Building and land improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, years | 20 years |
Manufacturing control equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, years | 10 years |
Office equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, years | 5 years |
Research equipment and facilities | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, years | 5 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, years | 5 years |
Computer hardware and information systems | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, years | 3 years |
Description of Business, Basi43
Description of Business, Basis of Presentation and Significant Accounting Policies - Estimated Useful Life of Assets (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Technology | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of assets, years | 15 years |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of assets, years | 15 years |
Tradenames/trademarks | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of assets, years | 15 years |
Software | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of assets, years | 10 years |
New Accounting Pronouncements N
New Accounting Pronouncements New Accounting Pronouncements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect adjustment upon adoption of ASU 2016-09 | $ 4,515 | |
Service cost | $ 6,500 | 6,100 |
Accounting Standards Update 2016-09 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect adjustment upon adoption of ASU 2016-09 | $ 4,500 |
Acquisition of Arizona Chemic45
Acquisition of Arizona Chemical (Details) - Arizona Chemical - USD ($) $ in Millions | Jan. 06, 2016 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||
Consideration transferred | $ 1,361.9 | |
Cash acquired from acquisition | $ 5.1 |
Disposition and Exit of Busin46
Disposition and Exit of Business Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | May 31, 2016 | Jan. 29, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Disposition and exit of business activities | $ (11,600) | $ 0 | $ 28,416 | $ 0 | |||
BASF, S.A. | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Percentage of investment in joint venture | 100.00% | ||||||
Disposal Group | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Disposition and exit of business activities | $ (5,300) | ||||||
Disposal Group | NEXAR | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Disposition and exit of business activities | (8,600) | ||||||
Disposal Group | NEXAR | Inventories | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loss on write-down | 5,300 | ||||||
Disposal Group | NEXAR | Assets | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loss on write-down | 3,200 | ||||||
Disposal Group | BASF, S.A. Joint Venture | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Disposition and exit of business activities | 3,200 | ||||||
Disposal Group | Belpre Compounding Unit | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Disposition and exit of business activities | $ 38,200 | ||||||
Consideration | $ 72,800 | ||||||
Disposal Group | Belpre Compounding Unit | Polymer | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Polymer supply agreement, transition period | 7 years | ||||||
Compound manufacturing agreement, transition period | 2 years | ||||||
Loss on contract termination | $ 7,600 | ||||||
Disposal Group | Solution Resinates | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Disposition and exit of business activities | $ (4,400) | ||||||
Disposal Group | Solution Resinates | Inventories | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loss on write-down | 1,500 | ||||||
Disposal Group | Solution Resinates | Assets | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loss on write-down | $ 2,900 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | May 18, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense, net of tax | $ 7,600,000 | $ 8,300,000 | $ 9,000,000 | |
Tax impact to share-based compensation expense | $ 2,700,000 | $ 3,000,000 | 0 | |
Common stock reserved for issuance (in shares) | 2,771,356 | |||
Common stock available for issuance (in shares) | 1,960,748 | 2,704,829 | ||
Proceeds from the exercise of stock options | $ 10,952,000 | $ 4,456,000 | $ 1,026,000 | |
Aggregate intrinsic value | $ 7,600,000 | |||
Weighted average remaining contractual terms | 1 year 1 month 10 days | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period of options, years | 10 years | |||
Proceeds from the exercise of stock options | $ 11,000,000 | |||
Restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awarded shares (in shares) | 180,666 | 257,141 | 280,353 | |
Weighted average remaining recognition period | 3 years | 3 years | 3 years | |
Share units granted to employees (in shares) | 207,000 | |||
Total fair value of shares vested | $ 7,400,000 | $ 4,000,000 | $ 3,600,000 | |
Restricted stock awards | Board Of Directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock to members (in shares) | 25,975 | 39,504 | 32,584 | |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share units granted to employees (in shares) | 40,189 | 77,757 | 52,845 | |
Restricted stock units | Cliff Vesting | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average remaining recognition period | 3 years | |||
Performance stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average remaining recognition period | 3 years | |||
Share units granted to employees (in shares) | 163,846 | 287,819 | 240,536 | |
Aggregate intrinsic value | $ 28,627,000 | |||
Weighted average remaining contractual terms | 1 year 1 month 13 days | |||
Total fair value of shares vested | $ 800,000 | |||
Performance stock units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of number of shares of common stock to initial grant value to be issued when performance shares units vest | 0.00% | |||
Performance stock units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of number of shares of common stock to initial grant value to be issued when performance shares units vest | 200.00% |
Share-Based Compensation - Unre
Share-Based Compensation - Unrecognized Compensation Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Restricted stock awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Expense | $ 4,788 |
Weighted Average Remaining Recognition Period | 1 year 1 month 6 days |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Expense | $ 1,069 |
Weighted Average Remaining Recognition Period | 1 year 1 month 10 days |
Performance stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Expense | $ 4,187 |
Weighted Average Remaining Recognition Period | 1 year 1 month 13 days |
Share-Based Compensation - Opti
Share-Based Compensation - Option Activities (Detail) - Non-qualified Stock Options $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Options | |
Outstanding beginning balance (in shares) | shares | 1,173,374 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | (469,000) |
Forfeited (in shares) | shares | 0 |
Expired (in shares) | shares | (28,000) |
Outstanding ending balance (in shares) | shares | 675,516 |
Exercisable at end of year (in shares) | shares | 676,000 |
Weighted Average Exercise Price | |
Outstanding beginning balance (in dollars per share) | $ / shares | $ 24.94 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 23.32 |
Forfeited (in dollars per share) | $ / shares | 0 |
Expired (in dollars per share) | $ / shares | 36.40 |
Outstanding ending balance (in dollars per share) | $ / shares | 25.59 |
Exercisable at end of year (in dollars per share) | $ / shares | $ 25.59 |
Outstanding options, Aggregate Intrinsic Value | $ | $ 15,722 |
Outstanding options, Weighted Average Remaining Contractual Term | 3 years 7 months 21 days |
Outstanding options, Aggregate Intrinsic Value | $ | $ 15,722 |
Exercisable options, Weighted Average Remaining Contractual Term | 3 years 7 months 21 days |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Additional Information Regarding Outstanding and Exercisable Options (Detail) - Stock Options - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options exercised | $ 469 | $ 0 | $ 0 |
Total intrinsic value of options exercised | $ 11,667 | $ 2,080 | $ 411 |
Share-Based Compensation - Non-
Share-Based Compensation - Non-Vested Restricted Stock Awards, Restricted Share Units and Performance Share Units (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restricted stock awards | |||
Shares | |||
Non-vested shares, beginning balance (in shares) | 586,000 | ||
Granted (in shares) | 207,000 | ||
Vested (in shares) | (207,000) | ||
Forfeited (in shares) | (26,000) | ||
Non-vested shares, ending balance (in shares) | 560,000 | 586,000 | |
Weighted- average Grant-date Fair Value | |||
Non-vested shares, beginning balance (in dollars per share) | $ 20.50 | ||
Granted (in dollars per share) | 28.25 | ||
Vested (in dollars per share) | 24.92 | ||
Forfeited (in dollars per share) | 20.99 | ||
Non-vested shares, ending balance (in dollars per share) | $ 21.70 | $ 20.50 | |
Restricted stock units | |||
Shares | |||
Non-vested shares, beginning balance (in shares) | 134,000 | ||
Granted (in shares) | 40,189 | 77,757 | 52,845 |
Vested (in shares) | (45,000) | ||
Forfeited (in shares) | (2,000) | ||
Non-vested shares, ending balance (in shares) | 127,000 | 134,000 | |
Weighted- average Grant-date Fair Value | |||
Non-vested shares, beginning balance (in dollars per share) | $ 18.56 | ||
Granted (in dollars per share) | 27.90 | ||
Vested (in dollars per share) | 21.21 | ||
Forfeited (in dollars per share) | 22.23 | ||
Non-vested shares, ending balance (in dollars per share) | $ 20.16 | $ 18.56 | |
Performance stock units | |||
Shares | |||
Non-vested shares, beginning balance (in shares) | 464,000 | ||
Granted (in shares) | 163,846 | 287,819 | 240,536 |
Vested (in shares) | (28,000) | ||
Forfeited (in shares) | (14,000) | ||
Non-vested shares, ending balance (in shares) | 586,000 | 464,000 | |
Weighted- average Grant-date Fair Value | |||
Non-vested shares, beginning balance (in dollars per share) | $ 20.19 | ||
Granted (in dollars per share) | 31.45 | ||
Vested (in dollars per share) | 26.97 | ||
Forfeited (in dollars per share) | 25.18 | ||
Non-vested shares, ending balance (in dollars per share) | $ 22.72 | $ 20.19 |
Share-Based Compensation - Perf
Share-Based Compensation - Performance share units (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Performance stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.55% | 0.83% | 0.95% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 37.40% | 33.00% | 29.70% |
Fair value per performance share award | $ 34.84 | $ 19.24 | $ 24.75 |
Detail of Certain Balance She53
Detail of Certain Balance Sheet Accounts - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Aggregate depreciation expense for property, plant and equipment | $ 84.5 | $ 80.5 | $ 50.5 |
Aggregate amortization expense for intangible assets | $ 52.4 | $ 44.9 | $ 11.2 |
Detail of Certain Balance She54
Detail of Certain Balance Sheet Accounts - Inventories of Products and Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventories of products: | ||
Finished products | $ 270,562 | $ 248,143 |
Work in progress | 6,925 | 5,648 |
Raw materials | 100,594 | 86,864 |
Inventories of products, gross | 378,081 | 340,655 |
Inventory reserves | (10,285) | (12,659) |
Inventories of products, net | 367,796 | 327,996 |
Property, plant, and equipment: | ||
Land | 38,176 | 34,109 |
Buildings | 171,506 | 131,036 |
Plant and equipment | 1,208,199 | 910,658 |
Construction in progress | 67,601 | 242,337 |
Property, plant, and equipment | 1,485,482 | 1,318,140 |
Less accumulated depreciation | 526,759 | 411,418 |
Property, plant, and equipment, net of accumulated depreciation | 958,723 | 906,722 |
Intangible assets: | ||
Intangible assets | 604,181 | 584,144 |
Accumulated amortization | 197,318 | 144,946 |
Intangible assets, net of accumulated amortization | 406,863 | 439,198 |
Capital lease obligation | 2,086 | 3,042 |
Plant and Equipment | ||
Intangible assets: | ||
Capital lease obligation | 5,600 | 7,200 |
Contractual agreements | ||
Intangible assets: | ||
Intangible assets | 264,581 | 258,646 |
Accumulated amortization | 44,435 | 20,757 |
Technology | ||
Intangible assets: | ||
Intangible assets | 146,449 | 145,320 |
Accumulated amortization | 53,086 | 44,698 |
Customer relationships | ||
Intangible assets: | ||
Intangible assets | 60,547 | 59,977 |
Accumulated amortization | 33,871 | 31,863 |
Tradenames/trademarks | ||
Intangible assets: | ||
Intangible assets | 80,138 | 77,666 |
Accumulated amortization | 35,770 | 25,363 |
Software | ||
Intangible assets: | ||
Intangible assets | 52,466 | 42,535 |
Accumulated amortization | $ 30,156 | $ 22,265 |
Detail of Certain Balance She55
Detail of Certain Balance Sheet Accounts - Other Liabilities and Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other payables and accruals: | ||
Employee related | $ 41,250 | $ 33,947 |
Interest payable | 23,615 | 10,135 |
Property, plant, and equipment accrual | 10,404 | 26,260 |
Other | 44,355 | 60,056 |
Total other payables and accruals | 119,624 | 130,398 |
Other long-term liabilities: | ||
Pension and other postretirement benefits | 147,209 | 138,188 |
Other | 45,058 | 32,151 |
Total other long-term liabilities | $ 192,267 | $ 170,339 |
Detail of Certain Balance She56
Detail of Certain Balance Sheet Accounts - Estimated Amortization Expense (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Estimated amortization expense | |
2,018 | $ 49,974 |
2,019 | 41,718 |
2,020 | 38,400 |
2,021 | 37,119 |
2,022 | $ 36,776 |
Detail of Certain Balance She57
Detail of Certain Balance Sheet Accounts - Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ (158,530) | $ (138,568) | |
Other comprehensive income (loss) before reclassifications | 57,193 | (22,378) | |
Amounts reclassified from accumulated other comprehensive loss | 3,042 | 2,416 | |
Other comprehensive income (loss), net of tax | 60,235 | (19,962) | $ (39,350) |
Ending balance | (98,295) | (158,530) | (138,568) |
Tax impact on benefit plan | 700 | 800 | |
Tax impact on derivatives | 100 | ||
Cumulative Foreign Currency Translation | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (72,731) | (65,995) | |
Other comprehensive income (loss) before reclassifications | 63,077 | (6,736) | |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | |
Other comprehensive income (loss), net of tax | 63,077 | (6,736) | |
Ending balance | (9,654) | (72,731) | (65,995) |
Net Unrealized Gain on Cash Flow Hedges | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 515 | 0 | |
Other comprehensive income (loss) before reclassifications | 3,156 | 515 | |
Amounts reclassified from accumulated other comprehensive loss | 879 | ||
Other comprehensive income (loss), net of tax | 4,035 | 515 | |
Ending balance | 4,550 | 515 | 0 |
Unrealized Loss on Net Investment Hedges | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (1,926) | (1,926) | |
Other comprehensive income (loss) before reclassifications | 0 | 0 | |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | |
Other comprehensive income (loss), net of tax | 0 | 0 | |
Ending balance | (1,926) | (1,926) | (1,926) |
Benefit Plans Liability, Net of Tax | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (84,388) | (70,647) | |
Other comprehensive income (loss) before reclassifications | (9,040) | (16,157) | |
Amounts reclassified from accumulated other comprehensive loss | 2,163 | 2,416 | |
Other comprehensive income (loss), net of tax | (6,877) | (13,741) | |
Ending balance | $ (91,265) | $ (84,388) | $ (70,647) |
Earnings per Share ("EPS") - Ad
Earnings per Share ("EPS") - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 27, 2014 | |
Earnings Per Share Basic [Line Items] | ||||
Weighted average share units outstanding (in shares) | 316,000 | 236,000 | 0 | |
Aggregate purchase price | $ 50,000,000 | |||
Number of repurchased common stock (in shares) | 2,549,683 | |||
Average price of repurchased common stock (in dollars per share) | $ 19.58 | |||
Total repurchase cost (excluding trading commissions) | $ 50,000,000 | |||
Restricted stock awards | ||||
Earnings Per Share Basic [Line Items] | ||||
Shares paid for tax withholding for share based compensation (in shares) | 68,815 | 55,821 | 28,273 | |
Restricted stock units | ||||
Earnings Per Share Basic [Line Items] | ||||
Weighted average share units outstanding (in shares) | 134,038 | |||
Performance stock units | ||||
Earnings Per Share Basic [Line Items] | ||||
Weighted average share units outstanding (in shares) | 33,296 | |||
Anti-dilutive securities excluded from computation, have not met performance contingencies (in shares) | 585,838 | 436,143 | 296,684 | |
Stock Options | ||||
Earnings Per Share Basic [Line Items] | ||||
Anti-dilutive securities excluded from computation (in shares) | 284,690 | 1,465,609 |
Earnings per Share ("EPS") - Ef
Earnings per Share ("EPS") - Effects of Share-Based Compensation Awards on Diluted Weighted-Average Number of Shares Outstanding used in Calculating Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Basic: | |||||||||||
Net income (loss) attributable to Kraton | $ 69,608 | $ (4,033) | $ 25,561 | $ 6,413 | $ (3,740) | $ 15,560 | $ 7,401 | $ 88,087 | $ 97,549 | $ 107,308 | $ (10,535) |
Amounts allocated to unvested restricted shares | (1,832) | (2,307) | 187 | ||||||||
Amounts available to common stockholders | $ 95,717 | $ 105,001 | $ (10,348) | ||||||||
Weighted Average Shares Outstanding, Basic | |||||||||||
As reported (in shares) | 31,241 | 30,843 | 31,128 | ||||||||
Amounts allocated to unvested restricted shares (in shares) | (587) | (663) | (554) | ||||||||
Amounts available to common stockholders (in shares) | 30,944 | 30,625 | 30,585 | 30,430 | 30,306 | 30,221 | 30,158 | 30,026 | 30,654 | 30,180 | 30,574 |
Diluted: | |||||||||||
Amounts allocated to unvested restricted shares | $ 1,832 | $ 2,307 | $ (187) | ||||||||
Amounts reallocated to unvested restricted shares | (1,804) | (2,274) | 187 | ||||||||
Amounts available to stockholders and assumed conversions | $ 95,745 | $ 105,034 | $ (10,348) | ||||||||
Weighted Average Shares Outstanding, Diluted | |||||||||||
Amounts allocated to unvested restricted shares (in shares) | 587 | 663 | 554 | ||||||||
Non participating share units (in shares) | 170 | 205 | 0 | ||||||||
Stock options added under the treasury stock method (in shares) | 316 | 236 | 0 | ||||||||
Amounts reallocated to unvested restricted shares (in shares) | (587) | (663) | (554) | ||||||||
Amounts available to stockholders and assumed conversions (in shares) | 31,454 | 30,625 | 31,066 | 30,851 | 30,306 | 30,783 | 30,586 | 30,289 | 31,140 | 30,621 | 30,574 |
Earnings Per Share, Basic (in dollars per share) | $ 2.21 | $ (0.13) | $ 0.82 | $ 0.21 | $ (0.12) | $ 0.50 | $ 0.24 | $ 2.87 | $ 3.12 | $ 3.48 | $ (0.34) |
Earnings Per Share, Diluted (in dollars per share) | $ 2.17 | $ (0.13) | $ 0.81 | $ 0.20 | $ (0.12) | $ 0.49 | $ 0.24 | $ 2.84 | $ 3.07 | $ 3.43 | $ (0.34) |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) $ in Thousands, TWD in Billions | Dec. 31, 2017USD ($) | Dec. 31, 2017TWD | Aug. 31, 2017USD ($) | Mar. 31, 2017 | Dec. 31, 2016USD ($) | Jan. 06, 2016 |
Debt Instrument [Line Items] | ||||||
Total debt | $ 1,683,700 | $ 1,836,896 | ||||
Discount | (26,640) | (49,123) | ||||
Debt Issuance Costs | (39,532) | (48,248) | ||||
Total | 1,617,528 | 1,739,525 | ||||
Capital lease obligation | 2,086 | 3,042 | ||||
Current portion of long-term debt | 42,647 | 41,825 | ||||
Long-term debt, noncurrent maturities | 1,641,053 | 1,795,071 | ||||
Long-term debt | 1,574,881 | 1,697,700 | ||||
KFPC Loan Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | 149,919 | TWD 4.4 | 115,854 | |||
Discount | 0 | 0 | ||||
Debt Issuance Costs | (196) | (257) | ||||
Total | 149,723 | 115,597 | ||||
KFPC Revolving Credit Facilities | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | 8,430 | 0 | ||||
Discount | 0 | 0 | ||||
Debt Issuance Costs | 0 | 0 | ||||
Total | 8,430 | 0 | ||||
ABL Facility | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | 0 | 0 | ||||
Discount | 0 | 0 | ||||
Debt Issuance Costs | 0 | 0 | ||||
Total | 0 | 0 | ||||
Medium-term Notes | USD Tranche | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | 485,000 | 1,278,000 | ||||
Discount | (13,373) | (34,085) | ||||
Debt Issuance Costs | (13,986) | (31,662) | ||||
Total | 457,641 | 1,212,253 | ||||
Medium-term Notes | Euro Tranche | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | 198,265 | 0 | ||||
Discount | 0 | 0 | ||||
Debt Issuance Costs | (3,517) | $ (3,900) | 0 | |||
Total | 194,748 | 0 | ||||
Senior Notes | USD Tranche | ||||||
Debt Instrument [Line Items] | ||||||
Debt Issuance Costs | $ (1,300) | |||||
Senior Notes | 10.5% Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | 440,000 | 440,000 | ||||
Discount | (13,267) | (15,038) | ||||
Debt Issuance Costs | (14,409) | (16,329) | ||||
Total | 412,324 | 408,633 | ||||
Debt instrument interest rate | 10.50% | |||||
Senior Notes | 7.0% Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | 400,000 | 0 | ||||
Discount | 0 | 0 | ||||
Debt Issuance Costs | (7,424) | 0 | ||||
Total | $ 392,576 | $ 0 | ||||
Debt instrument interest rate | 7.00% |
Long-Term Debt - Senior Secured
Long-Term Debt - Senior Secured Credit Facilities (Details) | Aug. 16, 2017USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Feb. 21, 2018 | Dec. 31, 2017EUR (€) | Aug. 16, 2017EUR (€) | Jan. 31, 2016USD ($) |
Debt Instrument [Line Items] | ||||||||||
Outstanding amount | $ 1,683,700,000 | $ 1,836,896,000 | ||||||||
Repayments of debt | $ 938,006,000 | 485,133,000 | $ 30,000,000 | |||||||
Term Loan | Secured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percent of premium in after closing or subsequent repricing | 1.00% | 1.00% | ||||||||
Percent of consolidated excess cash flow to be prepay | 50.00% | 50.00% | ||||||||
First-lien pledge, percent of equity interests held | 100.00% | 100.00% | ||||||||
Term Loan | Secured Debt | If Leverage Ratio under 2.5 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percent of consolidated excess cash flow to be prepay | 25.00% | 25.00% | ||||||||
Term Loan | Secured Debt | If Leverage Ratio under 2.5 | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Leverage ratio required | 250.00% | |||||||||
Term Loan | Secured Debt | If Leverage Ratio under 2.0 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percent of consolidated excess cash flow to be prepay | 0.00% | 0.00% | ||||||||
Term Loan | Secured Debt | If Leverage Ratio under 2.0 | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Leverage ratio required | 200.00% | |||||||||
USD Tranche | Term Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Outstanding amount | $ 485,000,000 | 1,278,000,000 | ||||||||
USD Tranche | Term Loan | LIBOR Rate Plus | Subsequent Event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument interest rate | 3.00% | |||||||||
USD Tranche | Term Loan | Secured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face amount | $ 1,350,000,000 | |||||||||
Extinguishment of debt, amount | $ 366,000,000 | |||||||||
Repayments of debt | $ 392,000,000 | $ 72,000,000 | ||||||||
Percent of equity interests directly held in first-tier foreign subsidiaries | 65.00% | 65.00% | ||||||||
USD Tranche | Term Loan | Secured Debt | LIBOR Rate Plus | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate floor | 1.00% | |||||||||
Percentage added to basis | 4.00% | |||||||||
USD Tranche | Term Loan | Secured Debt | LIBOR Rate Plus | One month adjusted LIBOR rate plus 1.0% per annum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage added to basis | 1.00% | |||||||||
USD Tranche | Term Loan | Secured Debt | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate floor | 2.00% | |||||||||
Percentage added to basis | 3.00% | |||||||||
USD Tranche | Term Loan | Secured Debt | Federal Funds Rate | Federal funds effective rate plus 0.5% | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage added to basis | 0.50% | |||||||||
USD Tranche | Senior Notes | Secured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Extinguishment of debt, amount | $ 758,000,000 | |||||||||
Debt instrument interest rate | 2.50% | 2.50% | ||||||||
USD Tranche | Senior Notes | Secured Debt | LIBOR Rate Plus | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage added to basis | 0.75% | |||||||||
Incremental Term Loans | Term Loan | Secured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face amount | 350,000,000 | |||||||||
Euro Tranche | Term Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Outstanding amount | $ 198,265,000 | 0 | ||||||||
Euro Tranche | Term Loan | Secured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face amount | $ 312,400,000 | € 260,000,000 | ||||||||
Outstanding amount | € | € 165,000,000 | |||||||||
First-lien pledge, percent of equity interests held | 100.00% | 100.00% | ||||||||
Euro Tranche | Term Loan | Secured Debt | Subsequent Event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, fixed interest rate | 3.25% | |||||||||
7.0% Senior Notes | Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face amount | $ 400,000,000 | |||||||||
Outstanding amount | $ 400,000,000 | $ 0 | ||||||||
Debt instrument interest rate | 7.00% |
Long-Term Debt - Senior Notes (
Long-Term Debt - Senior Notes (Details) - Senior Notes - USD ($) | Apr. 15, 2022 | Oct. 15, 2021 | Apr. 15, 2021 | Oct. 15, 2020 | Apr. 15, 2020 | Apr. 14, 2020 | Oct. 15, 2019 | Oct. 15, 2018 | Oct. 14, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Jan. 06, 2016 |
10.5% Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Senior note face amount | $ 440,000,000 | |||||||||||
Debt instrument interest rate | 10.50% | |||||||||||
7.0% Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Senior note face amount | $ 400,000,000 | |||||||||||
Debt instrument interest rate | 7.00% | |||||||||||
Scenario, Forecast | 10.5% Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Percentage of principal amount redeemed | 40.00% | |||||||||||
Redemption price, percentage | 100.00% | 102.625% | 105.25% | 107.875% | 100.00% | |||||||
Scenario, Forecast | 7.0% Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Percentage of principal amount redeemed | 40.00% | |||||||||||
Redemption price, percentage | 100.00% | 102.625% | 105.25% | 100.00% | ||||||||
Up to 40% | Scenario, Forecast | 10.5% Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Redemption price, percentage | 110.50% | |||||||||||
Up to 40% | Scenario, Forecast | 7.0% Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Redemption price, percentage | 107.00% |
Long-Term Debt - ABL Facility (
Long-Term Debt - ABL Facility (Details) - ABL Facility - Revolving Credit Facility - USD ($) | Jan. 06, 2016 | Jan. 31, 2016 |
Debt Instrument [Line Items] | ||
Credit facility, borrowing capacity | $ 250,000,000 | |
Minimum percent required of federal outstanding commitments | 60.00% | |
Credit facility, additional borrowing capacity | $ 100,000,000 | |
Unused capacity, commitment fee percentage | 0.375% | |
Fixed charge coverage ratio | 100.00% | |
Base Rate | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 0.50% | |
Base Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 0.50% | |
Base Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 1.00% | |
LIBOR Rate Plus | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 1.50% | |
LIBOR Rate Plus | Minimum | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 1.50% | |
LIBOR Rate Plus | Maximum | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 2.00% | |
With Additional Increase | ||
Debt Instrument [Line Items] | ||
Minimum percent required of federal outstanding commitments | 60.00% |
Long-Term Debt - KFPC Loan Agre
Long-Term Debt - KFPC Loan Agreement (Details) | Jul. 17, 2014USD ($) | Dec. 31, 2017USD ($)installment | Sep. 30, 2016 | Dec. 31, 2017USD ($)installment | Jan. 01, 2019USD ($) | Dec. 31, 2018 | Dec. 31, 2017TWDinstallment | Dec. 31, 2016USD ($) | Jul. 17, 2014TWD |
Debt Instrument [Line Items] | |||||||||
Outstanding amount | $ 1,683,700,000 | $ 1,683,700,000 | $ 1,836,896,000 | ||||||
KFPC Loan Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility, borrowing capacity | $ 185,500,000 | TWD 5,500,000,000 | |||||||
Loan agreement term (in years) | 5 years | ||||||||
Line of credit facility, fixed interest rate | 0.80% | 0.80% | |||||||
Percentage added to basis | 1.70% | ||||||||
Interest rate during period | 1.80% | ||||||||
Debt to equity ratio | 2 | 2 | 2 | ||||||
Minimum tangible net worth required | $ 50,000,000 | ||||||||
Interest coverage ratio | 5 | 5 | 5 | ||||||
Outstanding amount | $ 149,919,000 | $ 149,919,000 | TWD 4,400,000,000 | 115,854,000 | |||||
KFPC Loan Agreement | Kraton Polymers LLC | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of indebtedness payable | 50.00% | 50.00% | |||||||
KFPC Loan Agreement | Scenario, Forecast | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt to equity ratio | 1.2 | ||||||||
Minimum tangible net worth required | $ 100,000,000 | ||||||||
KFPC Loan Agreement | Tranche A | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility, borrowing capacity | $ 144,700,000 | TWD 4,290,000,000 | |||||||
KFPC Loan Agreement | Tranche B | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility, borrowing capacity | $ 40,800,000 | TWD 1,210,000,000 | |||||||
KFPC Loan Agreement | First Five Installments | |||||||||
Debt Instrument [Line Items] | |||||||||
Payment of outstanding principal amount (as a percent) | 10.00% | 10.00% | |||||||
KFPC Loan Agreement | Final Installment | |||||||||
Debt Instrument [Line Items] | |||||||||
Payment of outstanding principal amount (as a percent) | 50.00% | 50.00% | |||||||
Revolving Credit Facility | KFPC Loan Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Loan agreement drawdown term (in months) | 28 months | ||||||||
Loan agreement extension term (in years) | 2 years | ||||||||
Number of semi-annual principal installments | installment | 6 | 6 | 6 | ||||||
Loan agreement subsequent payments, term (in months) | 6 months | ||||||||
Revolving Credit Facility | Kraton Formosa Polymers Corporation, Expires September 29, 2018 | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility, borrowing capacity | $ 23,100,000 | $ 23,100,000 | TWD 700,000,000 | ||||||
Line of credit facility, fixed interest rate | 0.21% | 0.21% | 0.21% | ||||||
Percentage added to basis | 1.20% | ||||||||
Outstanding amount | $ 8,400,000 | $ 8,400,000 | TWD 250,000,000 | ||||||
Revolving Credit Facility | Kraton Formosa Polymers Corporation, Expires September 29, 2018 | TAIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage added to basis | 0.50% | ||||||||
Revolving Credit Facility | Kraton Formosa Polymers Corporation, Expires November 20, 2018 | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility, borrowing capacity | $ 16,900,000 | 16,900,000 | 500,000,000 | ||||||
Outstanding amount | 0 | 0 | TWD 0 | ||||||
KFPC Short Term Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding amount | $ 8,430,000 | $ 8,430,000 | $ 0 |
Long-Term Debt - Debt Issuance
Long-Term Debt - Debt Issuance Cost (Details) - USD ($) $ in Thousands | Aug. 16, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 31, 2017 | Jan. 31, 2017 | Jan. 31, 2016 |
Debt Instrument [Line Items] | ||||||||||||
Debt issuance costs | $ 39,532 | $ 39,532 | $ 48,248 | |||||||||
Loss on extinguishment of debt | $ 15,600 | $ 19,700 | $ 13,400 | 35,389 | 13,423 | $ 0 | ||||||
Debt issuance costs | 43,000 | 43,000 | 52,900 | |||||||||
Amortization of debt issuance costs | 4,000 | $ 4,400 | 8,420 | 8,741 | 2,233 | |||||||
Long-term debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issuance costs | 39,500 | 39,500 | 1,700 | $ 5,000 | ||||||||
Arizona Chemical | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issuance costs | 61,300 | $ 7,800 | 61,300 | $ 8,800 | $ 2,000 | |||||||
Debt issuance costs | 50,800 | |||||||||||
7.0% Senior Notes | Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument interest rate | 7.00% | |||||||||||
Debt issuance costs | 7,424 | 7,424 | 0 | |||||||||
USD Tranche | Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issuance costs | $ 1,300 | |||||||||||
USD Tranche | Senior Notes | Secured Debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument interest rate | 2.50% | |||||||||||
Loss on extinguishment of debt | 33,700 | |||||||||||
Extinguishment of debt, amount | 758,000 | |||||||||||
USD Tranche | Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issuance costs | 13,986 | 13,986 | 31,662 | |||||||||
USD Tranche | Term Loan | Secured Debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Extinguishment of debt, amount | $ 366,000 | |||||||||||
Euro Tranche | Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issuance costs | 3,517 | 3,517 | 0 | $ 3,900 | ||||||||
ABL Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issuance costs | 0 | 0 | 0 | |||||||||
Debt issuance costs | 3,500 | 3,500 | 4,700 | |||||||||
ABL Facility | Long-term debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issuance costs | 48,200 | |||||||||||
ABL Facility | Other current assets | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issuance costs | $ 1,200 | $ 1,200 | $ 1,200 |
Long-Term Debt - Remaining Prin
Long-Term Debt - Remaining Principal Payments on Outstanding Total Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2,018 | $ 42,647 | |
2,019 | 33,484 | |
2,020 | 83,467 | |
2,021 | 190 | |
2,022 | 683,467 | |
Thereafter | 840,445 | |
Total debt | $ 1,683,700 | $ 1,836,896 |
Fair Value Measurements, Fina67
Fair Value Measurements, Financial Instruments, and Credit Risk - Summary of Fair Value Measurements at Reporting Date (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Derivatives Fair Value [Line Items] | ||
Total | $ 8,264 | $ 2,705 |
Other current assets | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset – current | 1,629 | 243 |
Other long-term assets | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset – noncurrent | 3,801 | 568 |
Retirement plan asset—noncurrent | 2,435 | 1,894 |
Other payables and accruals | ||
Derivatives Fair Value [Line Items] | ||
Derivative liability – current | 399 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Derivatives Fair Value [Line Items] | ||
Total | 2,435 | 1,894 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other current assets | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset – current | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other long-term assets | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset – noncurrent | 0 | 0 |
Retirement plan asset—noncurrent | 2,435 | 1,894 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other payables and accruals | ||
Derivatives Fair Value [Line Items] | ||
Derivative liability – current | 0 | |
Significant Other Observable Inputs (Level 2) | ||
Derivatives Fair Value [Line Items] | ||
Total | 5,829 | 811 |
Significant Other Observable Inputs (Level 2) | Other current assets | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset – current | 1,629 | 243 |
Significant Other Observable Inputs (Level 2) | Other long-term assets | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset – noncurrent | 3,801 | 568 |
Retirement plan asset—noncurrent | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Other payables and accruals | ||
Derivatives Fair Value [Line Items] | ||
Derivative liability – current | 399 | |
Significant Unobservable Inputs (Level 3) | ||
Derivatives Fair Value [Line Items] | ||
Total | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Other current assets | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset – current | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Other long-term assets | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset – noncurrent | 0 | 0 |
Retirement plan asset—noncurrent | 0 | $ 0 |
Significant Unobservable Inputs (Level 3) | Other payables and accruals | ||
Derivatives Fair Value [Line Items] | ||
Derivative liability – current | $ 0 |
Fair Value Measurements, Fina68
Fair Value Measurements, Financial Instruments, and Credit Risk - Carrying Values and Approximate Fair Values of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying Value | KFPC Loan Agreement | Significant Unobservable Inputs (Level 3) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt | $ 149,919 | $ 115,854 |
Carrying Value | KFPC Revolving Credit Facilities | Significant Unobservable Inputs (Level 3) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt | 8,430 | 0 |
Carrying Value | Capital Lease Obligations | Significant Other Observable Inputs (Level 2) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt | 2,086 | 3,042 |
Carrying Value | USD Tranche | Medium-term Notes | Significant Other Observable Inputs (Level 2) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt | 485,000 | 1,278,000 |
Carrying Value | Euro Tranche | Medium-term Notes | Significant Other Observable Inputs (Level 2) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt | 198,265 | 0 |
Carrying Value | 10.5% Senior Notes | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt | 440,000 | 440,000 |
Carrying Value | 7.0% Senior Notes | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt | 400,000 | 0 |
Fair Value | KFPC Loan Agreement | Significant Unobservable Inputs (Level 3) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt | 149,919 | 115,854 |
Fair Value | KFPC Revolving Credit Facilities | Significant Unobservable Inputs (Level 3) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt | 8,430 | 0 |
Fair Value | Capital Lease Obligations | Significant Other Observable Inputs (Level 2) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt | 2,086 | 3,042 |
Fair Value | USD Tranche | Medium-term Notes | Significant Other Observable Inputs (Level 2) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt | 490,762 | 1,293,975 |
Fair Value | Euro Tranche | Medium-term Notes | Significant Other Observable Inputs (Level 2) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt | 200,495 | 0 |
Fair Value | 10.5% Senior Notes | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt | 499,171 | 501,600 |
Fair Value | 7.0% Senior Notes | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt | $ 432,028 | $ 0 |
Fair Value Measurements, Fina69
Fair Value Measurements, Financial Instruments, and Credit Risk - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 03, 2017 | |
Derivative [Line Items] | ||||
Notional amount | $ 925,400,000 | |||
Interest Rate Swap | ||||
Derivative [Line Items] | ||||
Notional amount | $ 485,000,000 | |||
Unrealized gain on derivatives | 3,700,000 | $ 800,000 | ||
Interest Rate Swap | Short | ||||
Derivative [Line Items] | ||||
Notional amount | 440,400,000 | |||
Foreign Currency Hedges | ||||
Derivative [Line Items] | ||||
Aggregate loss on settlement of hedges | $ 900,000 | $ 3,000,000 | $ 5,800,000 |
Restructuring Charges (Details)
Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring and restructuring-related expenses | $ 6.5 | $ 7.7 | $ 7.6 | $ 11.7 | $ 7.5 | $ 2.4 | $ 1.7 | |
Severance | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring and restructuring-related expenses | $ 1 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | |||
Income tax benefit (expense) | $ 57,884 | $ 91,954 | $ (6,943) |
Effective tax rates expense (benefit) | 166.50% | 724.80% | 124.30% |
Effective tax rate benefit, excluding change in valuation allowance | 31.30% | 38.90% | 75.40% |
Net operating loss carryforwards | $ 297,100 | ||
Valuation allowance for deferred tax assets | 51,278 | $ 44,695 | |
Change in valuation allowance | $ 6,600 | $ (55,500) | |
Tax Cuts and Jobs Act of 2017, transition tax, percent | 15.50% | ||
Transition tax on accumulated foreign earnings, remaining earnings, percent | 8.00% | ||
Tax Cuts and Jobs Act of 2017, transition tax for accumulated foreign earnings, liability | $ 46,300 | ||
Tax Cuts and Jobs Act of 2017, provisional income tax expense | 46,300 | ||
Tax Cuts and Jobs Act of 2017, change in tax rate, deferred tax | $ 95,000 | ||
Income taxes at the statutory rate | 35.00% | 35.00% | 35.00% |
Unrecognized tax benefits | $ 24,421 | $ 24,527 | $ 4,346 |
Unrecognized tax benefits, tax penalties and interest expense | 1,200 | 1,200 | $ 200 |
Unrecognized tax benefits, accrued income tax penalties and interest expense | 4,900 | 4,400 | |
Arizona Chemical | |||
Operating Loss Carryforwards [Line Items] | |||
Change in valuation allowance | 31,300 | ||
Other Comprehensive Income (Loss) | |||
Operating Loss Carryforwards [Line Items] | |||
Change in valuation allowance | 4,900 | ||
United States | |||
Operating Loss Carryforwards [Line Items] | |||
Change in valuation allowance | 1,700 | ||
France | |||
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance for deferred tax assets | 35,900 | 30,500 | |
United Kingdom | |||
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance for deferred tax assets | 8,800 | 8,500 | |
Valuation Allowance, Operating Loss Carryforwards | United States | |||
Operating Loss Carryforwards [Line Items] | |||
Change in valuation allowance | $ (87,000) | ||
Foreign | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 153,700 | ||
Domestic | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 143,400 | ||
Federal Tax Administration (FTA) | |||
Operating Loss Carryforwards [Line Items] | |||
Tax Cuts and Jobs Act of 2017, change in tax rate, deferred tax | $ 68,900 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current tax expense: | |||
U.S. | $ (522) | $ (4,460) | $ (34) |
Foreign | (7,598) | (2,469) | (10,023) |
Current tax expense | (8,120) | (6,929) | (10,057) |
Deferred tax benefit: | |||
U.S. | 57,248 | 91,626 | 2,683 |
Foreign | 8,756 | 7,257 | 431 |
Deferred tax benefit | 66,004 | 98,883 | 3,114 |
Income tax benefit (expense) | $ 57,884 | $ 91,954 | $ (6,943) |
Income Taxes - Income (Loss) Be
Income Taxes - Income (Loss) Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income (loss) before income taxes: | |||
U.S. | $ (17,177) | $ (4,556) | $ (41,455) |
Foreign | 51,939 | 17,242 | 35,869 |
Total income (loss) before income taxes | $ 34,762 | $ 12,686 | $ (5,586) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Income taxes at the statutory rate | $ (12,167) | $ (4,440) | $ 1,955 |
Foreign tax rate differential | 15,920 | 4,779 | 1,639 |
State taxes, net of federal benefit | 373 | (597) | 315 |
Permanent differences | 9,288 | 889 | 88 |
Tax credits | 2,647 | 4,924 | 46 |
Alternative minimum tax | (2,647) | (593) | 0 |
Transaction costs | 0 | (753) | 0 |
Uncertain tax positions | 627 | 1,809 | (126) |
Valuation allowance | (1,703) | 87,020 | (11,156) |
Impact of tax reform | 48,717 | 0 | 0 |
Other | (3,171) | (1,084) | 296 |
Income tax benefit (expense) | $ 57,884 | $ 91,954 | $ (6,943) |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Income taxes at the statutory rate | (35.00%) | (35.00%) | (35.00%) |
Foreign tax rate differential | 45.80% | 37.70% | (29.30%) |
State taxes, net of federal benefit | 1.10% | (4.70%) | (5.60%) |
Permanent differences | 26.70% | 7.00% | (1.60%) |
Tax credits | 7.60% | 38.80% | (0.80%) |
Alternative minimum tax | (7.60%) | (4.70%) | (0.00%) |
Transaction costs | (0.00%) | (5.90%) | (0.00%) |
Uncertain tax positions | 1.80% | 14.30% | 2.30% |
Valuation allowance | (4.90%) | 685.90% | 199.70% |
Impact of tax reform | 140.10% | (0.00%) | (0.00%) |
Other | (9.10%) | (8.60%) | (5.40%) |
Effective tax rate | 166.50% | 724.80% | 124.30% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 73,712 | $ 128,408 |
Tax credit carryforwards | 9,643 | 11,461 |
Inventory | 5,339 | 8,568 |
Benefit plans accrual | 29,561 | 38,736 |
Other accruals and reserves | 10,295 | 11,278 |
Valuation allowance for deferred tax assets | (51,278) | (44,695) |
Deferred tax assets | 77,272 | 153,756 |
Deferred tax liabilities: | ||
Property, plant, and equipment | 106,407 | 148,164 |
Intangible assets | 92,195 | 153,380 |
Investment in subsidiaries | 18,356 | 56,701 |
Deferred tax liabilities | 216,958 | 358,245 |
Net deferred tax liabilities | $ 139,686 | $ 204,489 |
Income Taxes - Deferred Taxes C
Income Taxes - Deferred Taxes Classifications (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Non-current deferred tax assets | $ 8,462 | $ 6,907 |
Non-current deferred tax liabilities | 148,148 | 211,396 |
Net deferred tax liabilities | $ 139,686 | $ 204,489 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning Balance | $ 24,527 | $ 4,346 |
Increase in current year tax positions | 323 | 1,546 |
Increase in prior year tax positions | 2,140 | 813 |
Increase due to Arizona Chemical Acquisition | 0 | 23,089 |
Decrease in prior year tax positions | (312) | 0 |
Lapse of statute of limitations | (2,257) | (1,946) |
Settlements | 0 | (3,321) |
Ending Balance | $ 24,421 | $ 24,527 |
Commitments and Contingencies -
Commitments and Contingencies - Lease Commitments (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease 2018 | $ 23.4 | ||
Operating lease 2019 | 20.9 | ||
Operating lease 2020 | 17.9 | ||
Operating lease 2021 | 10.7 | ||
Operating lease 2022 | 6.7 | ||
Operating lease 2023 and thereafter | 10.6 | ||
Rent expense | $ 29 | $ 30.5 | $ 18.1 |
Commitments and Contingencies79
Commitments and Contingencies - Environmental and Safety Matters (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Loss Contingencies [Line Items] | |||
Asset retirement obligation | $ 5,712 | $ 8,863 | $ 10,078 |
Chemical | |||
Loss Contingencies [Line Items] | |||
Asset retirement obligation | $ 2,900 | $ 3,100 |
Commitments and Contingencies80
Commitments and Contingencies - Legal Proceedings (Details) - Dec. 31, 2017 BRL in Millions, $ in Millions | USD ($) | BRL |
Commitments and Contingencies Disclosure [Abstract] | ||
Tax credit carryforward, amount | $ 2.1 | BRL 7 |
Commitments and Contingencies81
Commitments and Contingencies - Asset Retirement Obligations (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Asset Retirement Obligation | ||
Beginning balance | $ 8,863 | $ 10,078 |
Obligations assumed in the Arizona Chemical Acquisition | 0 | 1,908 |
Additional accruals | 439 | 2,146 |
Revision in estimated cash flows | (387) | 0 |
Accretion expense | 323 | 375 |
Obligations settled | (4,096) | (5,511) |
Foreign currency translation | 570 | (133) |
Ending balance | 5,712 | 8,863 |
Shell Chemicals | ||
Asset Retirement Obligation | ||
Beginning balance | 3,500 | |
Ending balance | $ 200 | $ 3,500 |
Employee Benefits - Additional
Employee Benefits - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Retirement Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Curtailment expense | $ 800,000 | $ 400,000 | ||
Employer contributions | 2,300,000 | |||
Post-Retirement Benefits Other Than Pensions | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Increase in benefit plans liability, net of tax | $ 1,200,000 | $ 800,000 | ||
Employer contributions | $ 1,148,000 | 929,000 | ||
Retirement age of employees | 65 years | |||
Post-Retirement Benefits Other Than Pensions | Minimum | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contribution per employee | $ 7,000 | |||
Post-Retirement Benefits Other Than Pensions | Maximum | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contribution per employee | $ 10,000 | |||
Post-Retirement Benefits Other Than Pensions | Polymer Segment Savings Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Eligible earnings deferral, maximum | 60.00% | |||
Employee contribution expense | $ 8,500,000 | 7,500,000 | $ 4,100,000 | |
Post-Retirement Benefits Other Than Pensions | Polymer Segment Savings Plan | One Year Service | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer standard contribution, rate | 50.00% | |||
Employee matching contribution, rate | 6.00% | |||
Post-Retirement Benefits Other Than Pensions | Polymer Segment Savings Plan | Five Year Service | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer standard contribution, rate | 100.00% | |||
Employee matching contribution, rate | 6.00% | |||
Number of years of service | 5 years | |||
Post-Retirement Benefits Other Than Pensions | Polymer Segment Savings Plan | Less Than Five Years Of Service | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employee enhanced contribution, rate | 4.00% | |||
Post-Retirement Benefits Other Than Pensions | Ripplewood Transaction Shell Chemicals | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Retirement plan asset—noncurrent | $ 8,100,000 | 9,100,000 | ||
U.S. Plans | Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Increase in benefit plans liability, net of tax | $ 3,400,000 | $ 4,100,000 | ||
Expected long-term return on assets under pension plan | 8.36% | 8.50% | ||
Employer contributions | $ 7,655,000 | $ 1,396,000 | ||
Non-U.S. Plans | Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Increase in benefit plans liability, net of tax | $ 4,200,000 | $ 13,300,000 | ||
Expected long-term return on assets under pension plan | 5.49% | 3.50% | ||
Employer contributions | $ 4,832,000 | $ 3,685,000 |
Employee Benefits - Pension Obl
Employee Benefits - Pension Obligation, Plan Assets, Amounts Recognized in Financial Statements and Underlying Actuarial Assumptions 123 (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Change in benefit obligation: | |||
Service cost | $ 6,500 | $ 6,100 | |
Pension Plan | |||
Change in plan assets: | |||
Fair value at beginning of period | 148,702 | ||
Fair value at end of period | 170,232 | 148,702 | |
Pension Plan | U.S. Plans | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of period | 171,943 | 152,511 | |
Service cost | 3,191 | 3,288 | $ 3,528 |
Interest cost | 7,330 | 7,416 | 6,483 |
Participant contributions | 0 | 0 | |
Benefits paid | (5,812) | (9,753) | |
Expenses and taxes | 0 | 0 | |
Plan amendments | 0 | 0 | |
Settlements | 0 | 0 | |
Acquisition | 0 | 14,118 | |
Actuarial (gain) loss | 12,499 | 4,363 | |
Exchange rate (gain) loss | 0 | 0 | |
Benefit obligation at end of period | 189,151 | 171,943 | 152,511 |
Change in plan assets: | |||
Fair value at beginning of period | 105,107 | 97,561 | |
Return on plan assets | 14,881 | 6,737 | |
Employer contributions | 7,655 | 1,396 | |
Participant contributions | 0 | 0 | |
Benefits paid | (5,812) | (9,753) | |
Expenses and taxes | 0 | 0 | |
Settlements | 0 | 0 | |
Acquisition | 0 | 9,166 | |
Exchange rate (gain) loss | 0 | 0 | |
Fair value at end of period | 121,831 | 105,107 | 97,561 |
Funded status at end of period | (67,320) | (66,836) | |
Amounts recognized on balance sheet: | |||
Current liabilities | 0 | 0 | |
Noncurrent liabilities | (67,320) | (66,836) | |
Defined benefit pension plan liabilities | (67,320) | (66,836) | |
Amounts recognized in accumulated other comprehensive loss: | |||
Prior service costs | 0 | 0 | |
Net actuarial loss | 57,000 | 53,604 | |
Amounts recognized in accumulated other comprehensive loss | 57,000 | 53,604 | |
Accumulated benefit obligation | 177,154 | 160,625 | |
Pension Plan | Non-U.S. Plans | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of period | 84,252 | 1,711 | |
Service cost | 2,749 | 2,239 | 0 |
Interest cost | 2,195 | 3,121 | 0 |
Participant contributions | 30 | 41 | |
Benefits paid | (5,430) | (4,430) | |
Expenses and taxes | (92) | 0 | |
Plan amendments | 9 | 322 | |
Settlements | (370) | 0 | |
Acquisition | 0 | 79,576 | |
Actuarial (gain) loss | 1,997 | 15,322 | |
Exchange rate (gain) loss | 8,865 | (13,650) | |
Benefit obligation at end of period | 94,205 | 84,252 | 1,711 |
Change in plan assets: | |||
Fair value at beginning of period | 43,594 | 0 | |
Return on plan assets | 1,500 | 3,694 | |
Employer contributions | 4,832 | 3,685 | |
Participant contributions | 30 | 41 | |
Benefits paid | (5,430) | (4,430) | |
Expenses and taxes | (92) | 0 | |
Settlements | (370) | (51) | |
Acquisition | 0 | 49,054 | |
Exchange rate (gain) loss | 4,337 | (8,399) | |
Fair value at end of period | 48,401 | 43,594 | $ 0 |
Funded status at end of period | (45,804) | (40,658) | |
Amounts recognized on balance sheet: | |||
Current liabilities | (2,637) | (726) | |
Noncurrent liabilities | (43,167) | (39,932) | |
Defined benefit pension plan liabilities | (45,804) | (40,658) | |
Amounts recognized in accumulated other comprehensive loss: | |||
Prior service costs | 348 | 307 | |
Net actuarial loss | 17,168 | 12,972 | |
Amounts recognized in accumulated other comprehensive loss | 17,516 | 13,279 | |
Accumulated benefit obligation | $ 89,755 | $ 79,983 |
Employee Benefits - Estimated F
Employee Benefits - Estimated Future Benefit Payments (Detail) - Pension Plan $ in Thousands | Dec. 31, 2017USD ($) |
U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2018 Employer contribution | $ 7,341 |
Benefit Payments | |
2,018 | 6,413 |
2,019 | 6,782 |
2,020 | 7,114 |
2,021 | 7,619 |
2,022 | 8,083 |
Years 2023-2026 | 48,481 |
Estimated future benefit payments, total | 84,492 |
Non-U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2018 Employer contribution | 5,852 |
Benefit Payments | |
2,018 | 4,851 |
2,019 | 4,848 |
2,020 | 5,160 |
2,021 | 5,002 |
2,022 | 5,124 |
Years 2023-2026 | 28,993 |
Estimated future benefit payments, total | $ 53,978 |
Employee Benefits - Components
Employee Benefits - Components of Net Periodic Pension Costs - United States Retirement Benefit Plan (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost benefits earned during the period | $ 6,500 | $ 6,100 | |
Pension Plan | U.S. Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost benefits earned during the period | 3,191 | 3,288 | $ 3,528 |
Interest on prior year’s projected benefit obligation | 7,330 | 7,416 | 6,483 |
Expected return on plan assets | (9,401) | (9,355) | (8,459) |
One-time settlement costs | 0 | 0 | 0 |
Amortization of prior service costs | 0 | 0 | 0 |
Amortization of net actuarial loss | 3,622 | 2,868 | 4,239 |
Net periodic pension costs | 4,742 | 4,217 | 5,791 |
Pension Plan | Non-U.S. Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost benefits earned during the period | 2,749 | 2,239 | 0 |
Interest on prior year’s projected benefit obligation | 2,195 | 3,121 | 0 |
Expected return on plan assets | (2,575) | (3,583) | 0 |
One-time settlement costs | 45 | 0 | 0 |
Amortization of prior service costs | 11 | 9 | 0 |
Amortization of net actuarial loss | 165 | 21 | 0 |
Net periodic pension costs | $ 2,590 | $ 1,807 | $ 0 |
Employee Benefits - Future Amor
Employee Benefits - Future Amortization (Details) - Pension Plan $ in Thousands | Dec. 31, 2017USD ($) |
U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Amortization of prior service costs | $ 0 |
Amortization of net actuarial loss | 4,900 |
Total | 4,900 |
Non-U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Amortization of prior service costs | 13 |
Amortization of net actuarial loss | 656 |
Total | $ 669 |
Employee Benefits - Weighted Av
Employee Benefits - Weighted Average Assumptions used to Determine Benefit Obligations and Net Periodic Benefit Cost - United States Retirement Benefit Plan (Detail) - Pension Plan | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
U.S. Plans | ||
Weighted average assumptions used to determine benefit obligations: | ||
Discount rate | 3.86% | 4.29% |
Rates of increase in salary compensation level | 3.00% | 3.00% |
Expected long-term rate of return on plan assets | 8.00% | 8.36% |
Weighted average assumptions used to determine net periodic benefit cost: | ||
Discount rate | 4.29% | 4.57% |
Rates of increase in salary compensation level | 3.00% | 3.00% |
Expected long-term rate of return on plan assets | 8.36% | 8.50% |
Non-U.S. Plans | ||
Weighted average assumptions used to determine benefit obligations: | ||
Discount rate | 2.29% | 2.54% |
Rates of increase in salary compensation level | 3.15% | 3.21% |
Expected long-term rate of return on plan assets | 5.49% | 5.49% |
Weighted average assumptions used to determine net periodic benefit cost: | ||
Discount rate | 2.54% | 3.59% |
Rates of increase in salary compensation level | 3.21% | 3.11% |
Expected long-term rate of return on plan assets | 5.49% | 3.50% |
Employee Benefits - Pension Pla
Employee Benefits - Pension Plan Asset Allocations by Asset Category (Detail) - Pension Plan | Dec. 31, 2017 | Dec. 31, 2016 |
U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Allocation | 100.00% | |
Percentage of Plan Assets | 100.00% | 100.00% |
U.S. Plans | Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Allocation | 50.00% | |
Percentage of Plan Assets | 59.90% | 53.80% |
U.S. Plans | Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Allocation | 30.00% | |
Percentage of Plan Assets | 40.00% | 36.80% |
U.S. Plans | Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Allocation | 20.00% | |
Percentage of Plan Assets | 0.10% | 9.40% |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Allocation | 100.00% | |
Percentage of Plan Assets | 100.00% | 100.00% |
Non-U.S. Plans | Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Allocation | 50.00% | |
Percentage of Plan Assets | 49.40% | 48.40% |
Non-U.S. Plans | Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Allocation | 50.00% | |
Percentage of Plan Assets | 49.40% | 50.80% |
Non-U.S. Plans | Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Allocation | 0.00% | |
Percentage of Plan Assets | 1.20% | 0.80% |
Employee Benefits - Fair Value
Employee Benefits - Fair Value of Pension Plan Assets (Detail) - Pension Plan - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 170,232 | $ 148,702 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 70,401 | 51,079 |
Significant Other Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 99,553 | 97,334 |
Significant Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 278 | 289 |
Common/Collective Trust Funds | Equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 96,833 | 77,644 |
Common/Collective Trust Funds | Equity | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 48,537 | 24,270 |
Common/Collective Trust Funds | Equity | Significant Other Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 48,296 | 53,374 |
Common/Collective Trust Funds | Equity | Significant Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Common/Collective Trust Funds | Debt | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 72,694 | 60,857 |
Common/Collective Trust Funds | Debt | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 21,437 | 16,897 |
Common/Collective Trust Funds | Debt | Significant Other Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 51,257 | 43,960 |
Common/Collective Trust Funds | Debt | Significant Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 705 | 10,201 |
Other | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 427 | 9,912 |
Other | Significant Other Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Other | Significant Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 278 | $ 289 |
Employee Benefits - Plan Obliga
Employee Benefits - Plan Obligation, Funded Status and Amounts Recognized in Financial Statements and Underlying Actuarial and Other Assumptions (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Change in benefit obligation: | |||
Service cost | $ 6,500 | $ 6,100 | |
Post-Retirement Benefits Other Than Pensions | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of period | 33,247 | 30,867 | |
Service cost | 557 | 543 | $ 597 |
Interest cost | 1,370 | 1,398 | 1,271 |
Benefits and expenses paid (premiums) | (1,148) | (929) | |
Actuarial (gain) loss | 1,825 | 1,368 | |
Benefit obligation at end of period | 35,851 | 33,247 | 30,867 |
Change in plan assets: | |||
Fair value at beginning of period | 0 | 0 | |
Employer contributions | 1,148 | 929 | |
Benefits paid | (1,148) | (929) | |
Fair value at end of period | 0 | 0 | $ 0 |
Funded status at end of year | 35,851 | 33,247 | |
Amounts recognized in the balance sheet: | |||
Current liabilities | (1,492) | (1,587) | |
Noncurrent liabilities | (34,359) | (31,660) | |
Defined benefit pension plan liabilities | (35,851) | (33,247) | |
Amounts recognized in accumulated other comprehensive loss: | |||
Net actuarial loss | 10,294 | 9,067 | |
Amounts recognized in accumulated other comprehensive loss | $ 10,294 | $ 9,067 |
Employee Benefits - Component91
Employee Benefits - Components of Net Periodic Pension Costs - Postretirement Benefits Other Than Pensions (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 6,500 | $ 6,100 | |
Post-Retirement Benefits Other Than Pensions | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 557 | 543 | $ 597 |
Interest cost | 1,370 | 1,398 | 1,271 |
Amortization of net actuarial loss | 598 | 608 | 757 |
Net periodic pension costs | $ 2,525 | $ 2,549 | $ 2,625 |
Employee Benefits - Weighted 92
Employee Benefits - Weighted Average Assumptions used to Determine Benefit Obligations and Net Periodic Benefit Cost - Postretirement Benefits Other Than Pensions (Detail) - Post-Retirement Benefits Other Than Pensions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted average assumptions used to determine benefit obligations: | ||
Discount rate | 3.81% | 4.18% |
Weighted average assumptions used to determine net periodic benefit cost: | ||
Discount rate | 4.18% | 4.45% |
Employee Benefits - Assumed Hea
Employee Benefits - Assumed Health Care Cost Trend Rates (Detail) - Post-Retirement Benefits Other Than Pensions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Pre-65 health care cost trend | ||
Assumed Pre-65 health care cost trend rates: | ||
Health care cost trend rate assumed for next year | 8.50% | 7.00% |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 4.50% | 5.00% |
Year that the rate reaches the ultimate trend rate | 2,026 | 2,021 |
Post-65 health care cost trend | ||
Assumed Pre-65 health care cost trend rates: | ||
Health care cost trend rate assumed for next year | 7.50% | 7.00% |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 4.50% | 5.00% |
Year that the rate reaches the ultimate trend rate | 2,024 | 2,021 |
Employee Benefits - Effect of O
Employee Benefits - Effect of One Percentage Point Change in Assumed Health Care Cost Trend Rates (Detail) - Post-Retirement Benefits Other Than Pensions $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Defined Benefit Plan, Effect of One-Percentage Point Change in Assumed Health Care Cost Trend Rate [Abstract] | |
Effect on total of service and interest cost components, 1% Increase | $ 20 |
Effect on postretirement benefit obligation, 1% Increase | 487 |
Effect on total of service and interest cost components, 1% Decrease | (31) |
Effect on postretirement benefit obligation, 1% Decrease | $ (569) |
Industry Segment and Foreign 95
Industry Segment and Foreign Operations - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | segment | 2 | ||
Capital expenditure | $ 99,223 | $ 99,205 | $ 57,065 |
Polymer | |||
Segment Reporting Information [Line Items] | |||
Capital expenditure | 50,100 | 59,400 | |
Chemical | |||
Segment Reporting Information [Line Items] | |||
Capital expenditure | $ 49,100 | $ 39,800 |
Industry Segment and Foreign 96
Industry Segment and Foreign Operations - Sales Revenue by Product Groups (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 465,970 | $ 510,947 | $ 525,320 | $ 458,125 | $ 415,389 | $ 454,143 | $ 454,649 | $ 419,923 | $ 1,960,362 | $ 1,744,104 | $ 1,034,626 |
Cost of goods sold | 1,418,459 | 1,265,079 | 805,970 | ||||||||
Gross profit | 122,562 | 128,719 | 147,256 | 143,366 | 118,054 | 135,256 | 131,897 | 93,818 | 541,903 | 479,025 | 228,656 |
Operating expenses | |||||||||||
Research and development | 40,725 | 39,491 | 31,024 | ||||||||
Selling, general, and administrative | 161,892 | 177,625 | 117,308 | ||||||||
Depreciation and amortization | 137,162 | 125,658 | 62,093 | ||||||||
Operating income | $ 39,688 | 41,508 | $ 61,605 | 59,323 | 35,421 | $ 50,817 | $ 46,787 | 3,226 | 202,124 | 136,251 | 18,231 |
Disposition and exit of business activities | $ (11,600) | 0 | 28,416 | 0 | |||||||
Loss on extinguishment of debt | $ (15,600) | $ (19,700) | (13,400) | (35,389) | (13,423) | 0 | |||||
Earnings of unconsolidated joint venture | 486 | 394 | 406 | ||||||||
Interest expense, net | (132,459) | (138,952) | (24,223) | ||||||||
Income (loss) before income taxes | 34,762 | 12,686 | (5,586) | ||||||||
Aggregate amortization expense | 52,400 | 44,900 | $ 11,200 | ||||||||
Polymer | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 1,199,676 | 1,024,737 | |||||||||
Cost of goods sold | 889,896 | 750,112 | |||||||||
Gross profit | 309,780 | 274,625 | |||||||||
Operating expenses | |||||||||||
Research and development | 28,829 | 28,322 | |||||||||
Selling, general, and administrative | 95,551 | 108,482 | |||||||||
Depreciation and amortization | 67,998 | 59,930 | |||||||||
Operating income | 117,402 | 77,891 | |||||||||
Chemical | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 760,686 | 719,367 | |||||||||
Cost of goods sold | 528,563 | 514,967 | |||||||||
Gross profit | 232,123 | 204,400 | |||||||||
Operating expenses | |||||||||||
Research and development | 11,896 | 11,169 | |||||||||
Selling, general, and administrative | 66,341 | 69,143 | |||||||||
Depreciation and amortization | 69,164 | 65,728 | |||||||||
Operating income | $ 84,722 | 58,360 | |||||||||
Aggregate amortization expense | $ 24,700 | 24,700 | |||||||||
Change in depreciation and amortization | $ 41,200 |
Industry Segment and Foreign 97
Industry Segment and Foreign Operations - Long-lived Assets Including Goodwill and Total Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | ||
Property, plant, and equipment | $ 958,723 | $ 906,722 |
Investment in unconsolidated joint venture | 12,380 | 11,195 |
Goodwill | 774,319 | 770,012 |
Total assets | 2,932,527 | 2,906,645 |
Polymer | ||
Segment Reporting Information [Line Items] | ||
Property, plant, and equipment | 561,109 | 548,994 |
Investment in unconsolidated joint venture | 12,380 | 11,195 |
Goodwill | 0 | 0 |
Total assets | 1,125,626 | 1,127,273 |
Chemical | ||
Segment Reporting Information [Line Items] | ||
Property, plant, and equipment | 397,614 | 357,728 |
Investment in unconsolidated joint venture | 0 | 0 |
Goodwill | 774,319 | 770,012 |
Total assets | $ 1,806,901 | $ 1,779,372 |
Industry Segment and Foreign 98
Industry Segment and Foreign Operations - Revenue by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 465,970 | $ 510,947 | $ 525,320 | $ 458,125 | $ 415,389 | $ 454,143 | $ 454,649 | $ 419,923 | $ 1,960,362 | $ 1,744,104 | $ 1,034,626 |
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 690,247 | 656,233 | 324,103 | ||||||||
Germany | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 199,076 | 171,257 | 121,346 | ||||||||
All other countries | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 1,071,039 | $ 916,614 | $ 589,177 |
Industry Segment and Foreign 99
Industry Segment and Foreign Operations - Long-Lived Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets, at cost | $ 1,485,482 | $ 1,318,140 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets, at cost | 851,454 | 789,067 |
Taiwan | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets, at cost | 182,644 | 167,907 |
France | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets, at cost | 138,770 | 117,965 |
Brazil | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets, at cost | 82,508 | 73,017 |
Germany | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets, at cost | 72,100 | 60,568 |
All other countries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets, at cost | $ 158,006 | $ 109,616 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
KFPC | Variable Interest Entity, Primary Beneficiary | |||
Related Party Transaction [Line Items] | |||
Due to related parties | $ 1.5 | ||
Ownership percentage | 50.00% | ||
Purchases from related party | $ 14.4 | ||
Styrenic Block Copolymer Joint Venture | |||
Related Party Transaction [Line Items] | |||
Percentage of equity investment | 50.00% | ||
Due to related parties | $ 17.7 | ||
Amounts of transaction | $ 39.6 | $ 30.3 | $ 30.4 |
Variable Interest Entity - Addi
Variable Interest Entity - Additional Information (Details) - Variable Interest Entity, Primary Beneficiary - KFPC | 12 Months Ended |
Dec. 31, 2017 | |
Variable Interest Entity [Line Items] | |
Ownership percentage | 50.00% |
Minimum percent to be purchased from plant production | 80.00% |
Variable Interest Entity - Summ
Variable Interest Entity - Summary of Assets and Liabilites at Carrying Value (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Variable Interest Entity [Line Items] | ||||
Cash and cash equivalents | $ 89,052 | $ 121,749 | $ 70,049 | $ 53,818 |
Other current assets | 36,615 | 37,658 | ||
Property, plant, and equipment | 958,723 | 906,722 | ||
Intangible assets | 406,863 | 439,198 | ||
Other long-term assets | 39,688 | 22,594 | ||
Total assets | 2,932,527 | 2,906,645 | ||
Current portion of long-term debt | 42,647 | 41,825 | ||
Current liabilities | 350,712 | 336,973 | ||
Long-term debt | 1,617,528 | 1,739,525 | ||
Total liabilities | 2,266,008 | 2,416,408 | ||
KFPC | ||||
Variable Interest Entity [Line Items] | ||||
Cash and cash equivalents | 13,848 | 14,150 | ||
Other current assets | 21,399 | 13,385 | ||
Property, plant, and equipment | 173,363 | 167,579 | ||
Intangible assets | 9,585 | 9,403 | ||
Other long-term assets | 13,972 | 2,495 | ||
Total assets | 232,167 | 207,012 | ||
Current portion of long-term debt | 41,745 | 11,585 | ||
Current liabilities | 13,938 | 26,743 | ||
Long-term debt | 116,408 | 104,012 | ||
Total liabilities | $ 172,091 | $ 142,340 |
Selected Quarterly Financial103
Selected Quarterly Financial Data (Unaudited) - Summary (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 465,970 | $ 510,947 | $ 525,320 | $ 458,125 | $ 415,389 | $ 454,143 | $ 454,649 | $ 419,923 | $ 1,960,362 | $ 1,744,104 | $ 1,034,626 |
Gross profit | 122,562 | 128,719 | 147,256 | 143,366 | 118,054 | 135,256 | 131,897 | 93,818 | 541,903 | 479,025 | 228,656 |
Operating income (loss) | 39,688 | 41,508 | 61,605 | 59,323 | 35,421 | 50,817 | 46,787 | 3,226 | 202,124 | 136,251 | 18,231 |
Net income (loss) attributable to Kraton | $ 69,608 | $ (4,033) | $ 25,561 | $ 6,413 | $ (3,740) | $ 15,560 | $ 7,401 | $ 88,087 | $ 97,549 | $ 107,308 | $ (10,535) |
Earnings (loss) per common share | |||||||||||
Basic (in dollars per share) | $ 2.21 | $ (0.13) | $ 0.82 | $ 0.21 | $ (0.12) | $ 0.50 | $ 0.24 | $ 2.87 | $ 3.12 | $ 3.48 | $ (0.34) |
Diluted (in dollars per share) | $ 2.17 | $ (0.13) | $ 0.81 | $ 0.20 | $ (0.12) | $ 0.49 | $ 0.24 | $ 2.84 | $ 3.07 | $ 3.43 | $ (0.34) |
Weighted average common shares outstanding | |||||||||||
Basic (in shares) | 30,944 | 30,625 | 30,585 | 30,430 | 30,306 | 30,221 | 30,158 | 30,026 | 30,654 | 30,180 | 30,574 |
Diluted (in shares) | 31,454 | 30,625 | 31,066 | 30,851 | 30,306 | 30,783 | 30,586 | 30,289 | 31,140 | 30,621 | 30,574 |
Selected Quarterly Financial104
Selected Quarterly Financial Data (Unaudited) - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | |||||||||||
Loss on extinguishment of debt | $ 15,600 | $ 19,700 | $ 13,400 | $ 35,389 | $ 13,423 | $ 0 | |||||
Acquisition related transactions, severance expenses, and other restructuring related charges | $ 3,800 | $ 4,900 | |||||||||
Aggregate amortization expense for intangible assets | 52,400 | 44,900 | 11,200 | ||||||||
Restructuring charges | $ 6,500 | $ 7,700 | $ 7,600 | 11,700 | 7,500 | 2,400 | 1,700 | ||||
Amortization of debt issuance costs | $ 4,000 | $ 4,400 | 8,420 | 8,741 | 2,233 | ||||||
Disposition and exit of business activities | $ (11,600) | $ 0 | 28,416 | $ 0 | |||||||
Weather related costs | $ 3,400 | ||||||||||
Disposal Group | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Disposition and exit of business activities | $ (5,300) | ||||||||||
Chemical | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Aggregate amortization expense for intangible assets | 24,700 | 24,700 | |||||||||
NEXAR | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Gain on disposition of assets | $ 45,300 | ||||||||||
NEXAR | Disposal Group | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Disposition and exit of business activities | $ (8,600) |
SCHEDULE II_VALUATION AND QU105
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for doubtful accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 814 | $ 244 | $ 245 |
Net Expenses | 590 | 590 | 31 |
Write-offs | (580) | (20) | (32) |
Balance at End of Period | 824 | 814 | 244 |
Inventory reserves | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 13,580 | 11,228 | 11,028 |
Net Expenses | (2,410) | 2,569 | 171 |
Foreign Currency | 282 | (217) | 29 |
Balance at End of Period | $ 11,452 | $ 13,580 | $ 11,228 |