Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 28, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-36473 | |
Entity Registrant Name | Trinseo PLC | |
Entity Incorporation, State or Country Code | L2 | |
Entity Tax Identification Number | 00-0000000 | |
Entity Address, Address Line One | 440 East Swedesford Road | |
Entity Address, Address Line Two | Suite 301 | |
Entity Address, City or Town | Wayne | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19087 | |
City Area Code | 610 | |
Local Phone Number | 240-3200 | |
Title of 12(b) Security | Ordinary Shares, par value $0.01 per share | |
Trading Symbol | TSE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 35,146,342 | |
Entity Central Index Key | 0001519061 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 217.1 | $ 211.7 |
Accounts receivable, net of allowance for doubtful accounts (March 31, 2023: $6.9; December 31, 2022: $7.3) | 622.5 | 586 |
Inventories | 502.6 | 553.6 |
Other current assets | 34.1 | 39.4 |
Total current assets | 1,376.3 | 1,390.7 |
Investments in unconsolidated affiliates | 252.7 | 255.1 |
Property, plant and equipment, net of accumulated depreciation (March 31, 2023: $708.4; December 31, 2022: $668.8) | 681 | 691.1 |
Other assets | ||
Goodwill | 414.2 | 410.4 |
Other intangible assets, net | 759.4 | 772 |
Right-of-use assets - operating, net | 73 | 76.1 |
Deferred income tax assets | 114.2 | 97.3 |
Deferred charges and other assets | 70.7 | 67.5 |
Total other assets | 1,431.5 | 1,423.3 |
Total assets | 3,741.5 | 3,760.2 |
Current liabilities | ||
Short-term borrowings and current portion of long-term debt | 16.6 | 16 |
Accounts payable | 454.6 | 438.1 |
Current lease liabilities - operating | 16.7 | 17.1 |
Income taxes payable | 2.7 | 9.9 |
Accrued expenses and other current liabilities | 227.2 | 208.3 |
Total current liabilities | 717.8 | 689.4 |
Noncurrent liabilities | ||
Long-term debt, net of unamortized deferred financing fees | 2,299.9 | 2,301.6 |
Noncurrent lease liabilities - operating | 57.2 | 60.2 |
Deferred income tax liabilities | 53.7 | 59.8 |
Other noncurrent obligations | 236.7 | 228.9 |
Total noncurrent liabilities | 2,647.5 | 2,650.5 |
Commitments and contingencies (Note 13) | ||
Shareholders' equity | ||
Ordinary shares, $0.01 nominal value, 4,000.0 shares authorized (March 31, 2023: 39.3 shares issued and 35.2 shares outstanding; December 31, 2022: 39.2 shares issued and 35.1 shares outstanding) | 0.4 | 0.4 |
Preferred shares, €0.01 nominal value, 1,000.0 shares authorized (no shares issued or outstanding) | ||
Additional paid-in-capital | 493.3 | 486.7 |
Treasury shares, at cost (March 31, 2023: 4.1 shares; December 31, 2022: 4.1 shares) | (200) | (200) |
Retained earnings | 210.4 | 264.5 |
Accumulated other comprehensive loss | (127.9) | (131.3) |
Total shareholders' equity | 376.2 | 420.3 |
Total liabilities and shareholders' equity | $ 3,741.5 | $ 3,760.2 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) shares in Thousands, $ in Millions | Mar. 31, 2023 USD ($) $ / shares shares | Mar. 31, 2023 € / shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2022 € / shares |
Allowance for doubtful accounts | $ | $ 6.9 | $ 7.3 | ||
Accumulated depreciation | $ | $ 708.4 | $ 668.8 | ||
Ordinary shares, nominal value | $ / shares | $ 0.01 | $ 0.01 | ||
Ordinary shares, shares authorized | 4,000,000 | 4,000,000 | ||
Ordinary shares, shares issued | 39,300 | 39,200 | ||
Ordinary shares, shares outstanding | 35,200 | 35,100 | ||
Treasury stock, shares | 4,100 | 4,100 | ||
Preferred stock, par value | € / shares | € 0.01 | € 0.01 | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||
Preferred stock, shares issued | 0 | 0 | ||
Preferred stock, shares outstanding | 0 | 0 | ||
Deferred Ordinary Shares | ||||
Ordinary shares, nominal value | € / shares | € 1 | € 1 | ||
Ordinary shares, shares authorized | 25 | 25 | ||
Ordinary shares, shares issued | 25 | 25 | ||
Ordinary shares, shares outstanding | 25 | 25 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Consolidated Statements of Operations | ||
Net sales | $ 996.3 | $ 1,386.7 |
Cost of sales | 959.1 | 1,210.7 |
Gross profit | 37.2 | 176 |
Selling, general and administrative expenses | 84.7 | 96.7 |
Equity in earnings of unconsolidated affiliates | 17.6 | 21.6 |
Impairment and other charges | 0.3 | 36.3 |
Operating income (loss) | (30.2) | 64.6 |
Interest expense, net | 38.3 | 21.9 |
Other expense (income), net | (2.9) | 3 |
Income (loss) from continuing operations before income taxes | (65.6) | 39.7 |
Provision for (benefit from) income taxes | (16.7) | 22.6 |
Net income (loss) from continuing operations | (48.9) | 17.1 |
Net loss from discontinued operations, net of income taxes | (0.4) | |
Net income (loss) | $ (48.9) | $ 16.7 |
Earnings Per Share | ||
Weighted average shares- basic | 35 | 37.3 |
Net income (loss) per share- basic: continuing operations | $ (1.40) | $ 0.46 |
Net income (loss) per share- basic: discontinued operations | (0.01) | |
Net income (loss) per share- basic | $ (1.40) | $ 0.45 |
Weighted average shares- diluted | 35 | 38.1 |
Net income (loss) per share- diluted: continuing operations | $ (1.40) | $ 0.45 |
Net income (loss) per share- diluted: discontinued operations | (0.01) | |
Net income (loss) per share- diluted | $ (1.40) | $ 0.44 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Consolidated Statements of Comprehensive Income (Loss) | ||
Net income (loss) | $ (48.9) | $ 16.7 |
Other comprehensive income (loss), net of tax: | ||
Cumulative translation adjustments (net of tax of $0.0 and $0.0) | 10.5 | (4.3) |
Net gain (loss) on cash flow hedges (net of tax (benefit) of $(2.5) and $0.0) | (7.4) | 1.5 |
Amounts reclassified from accumulated other comprehensive income | 0.3 | 0.3 |
Total other comprehensive income (loss), net of tax | 3.4 | (2.5) |
Comprehensive income (loss) | $ (45.5) | $ 14.2 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Consolidated Statements of Comprehensive Income (Loss) | ||
Cumulative translation adjustments, tax | $ 0 | $ 0 |
Net gain (loss) on cash flow hedges, tax | $ (2.5) | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders Equity - USD ($) shares in Millions, $ in Millions | Common Stock | Additional Paid-In Capital | Treasury Shares | Accumulated other comprehensive income(Loss) | Retained Earnings | Total |
Balance at beginning of period at Dec. 31, 2021 | $ 0.4 | $ 468.1 | $ (50) | $ (147.2) | $ 741.8 | $ 1,013.1 |
Balance at beginning of period, shares at Dec. 31, 2021 | 37.9 | |||||
Balance at beginning of period, Treasury shares at Dec. 31, 2021 | 1 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 16.7 | 16.7 | ||||
Other comprehensive income | (2.5) | (2.5) | ||||
Share-based compensation activity | 7.6 | 7.6 | ||||
Share-based compensation activity, shares | 0.2 | |||||
Purchase of treasury shares | $ (50) | (50) | ||||
Purchase of treasury shares, shares | (0.9) | 0.9 | ||||
Dividends on ordinary shares | (12.1) | (12.1) | ||||
Balance at end of period at Mar. 31, 2022 | $ 0.4 | 475.7 | $ (100) | (149.7) | 746.4 | 972.8 |
Balance at end of period, shares at Mar. 31, 2022 | 37.2 | |||||
Balance at end of period, Treasury shares at Mar. 31, 2022 | 1.9 | |||||
Balance at beginning of period at Dec. 31, 2022 | $ 0.4 | 486.7 | $ (200) | (131.3) | 264.5 | $ 420.3 |
Balance at beginning of period, shares at Dec. 31, 2022 | 35.1 | 35.1 | ||||
Balance at beginning of period, Treasury shares at Dec. 31, 2022 | 4.1 | 4.1 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (48.9) | $ (48.9) | ||||
Other comprehensive income | 3.4 | 3.4 | ||||
Share-based compensation activity | 6.6 | 6.6 | ||||
Share-based compensation activity, shares | 0.1 | |||||
Dividends on ordinary shares | (5.2) | (5.2) | ||||
Balance at end of period at Mar. 31, 2023 | $ 0.4 | $ 493.3 | $ (200) | $ (127.9) | $ 210.4 | $ 376.2 |
Balance at end of period, shares at Mar. 31, 2023 | 35.2 | 35.2 | ||||
Balance at end of period, Treasury shares at Mar. 31, 2023 | 4.1 | 4.1 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Shareholders Equity (Parenthetical)) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Consolidated Statements of Shareholders' Equity | ||
Dividends on ordinary shares | $ 0.14 | $ 0.32 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net income (loss) | $ (48.9) | $ 16.7 |
Less: Net loss from discontinued operations | (0.4) | |
Net income (loss) from continuing operations | (48.9) | 17.1 |
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used in) operating activities - continuing operations | ||
Depreciation and amortization | 56 | 53 |
Amortization of deferred financing fees and issuance discount | 2.3 | 2.3 |
Deferred income tax (benefit) | (16.6) | 9 |
Share-based compensation expense | 8.2 | 8.3 |
Earnings of unconsolidated affiliates, net of dividends | 2.4 | (14.1) |
Unrealized net (gain) loss on foreign exchange forward contracts | 1.5 | (2.6) |
Unrealized net loss on commodity economic swap contracts | 5.8 | |
Gain on sale of businesses and other assets | (0.3) | |
Impairment charges or write-offs | 0.3 | 0.7 |
Changes in assets and liabilities | ||
Accounts receivable | (29.2) | (79.8) |
Inventories | 55.1 | (66.2) |
Accounts payable and other current liabilities | 26.5 | 42 |
Income taxes payable | (7) | 5.9 |
Other assets, net | 3.8 | 12.7 |
Other liabilities, net | (14.8) | 6.8 |
Cash provided by (used in) operating activities - continuing operations | 45.4 | (5.2) |
Cash provided by operating activities - discontinued operations | 0.2 | |
Cash provided by (used in) operating activities | 45.4 | (5) |
Cash flows from investing activities | ||
Capital expenditures | (21.8) | (23.9) |
Cash paid for asset or business acquisitions, net of cash acquired ($0.0 and $1.0) | (22.2) | |
Cash used in investing activities - continuing operations | (21.8) | (46.1) |
Cash used in investing activities - discontinued operations | (0.9) | |
Cash used in investing activities | (21.8) | (47) |
Cash flows from financing activities | ||
Short-term borrowings, net | (2.7) | (3.6) |
Purchase of treasury shares | (51.9) | |
Dividends paid | (11.8) | (12.4) |
Proceeds from exercise of option awards | 0.1 | 1.7 |
Withholding taxes paid on restricted share units | (1.3) | (0.8) |
Acquisition-related contingent consideration payment | (1.2) | |
Repurchases and repayments of long-term debt | (3.6) | (3.6) |
Cash used in financing activities | (20.5) | (70.6) |
Effect of exchange rates on cash | 2.3 | (1.7) |
Net change in cash, cash equivalents, and restricted cash | 5.4 | (124.3) |
Cash, cash equivalents, and restricted cash-beginning of period | 211.7 | 573 |
Cash, cash equivalents, and restricted cash-end of period | 217.1 | 448.7 |
Cash and cash equivalents-end of period | $ 217.1 | $ 448.7 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Basis of Presentation | |
Basis of Presentation | NOTE 1—BASIS OF PRESENTATION The unaudited interim condensed consolidated financial statements of Trinseo PLC and its subsidiaries (the “Company”) as of and for the periods ended March 31, 2023 and 2022 were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect all adjustments, consisting only of normal recurring adjustments, which, in the opinion of management, are considered necessary for the fair statement of the results for the periods presented. Because they cover interim periods, the statements and related notes to the financial statements do not include all disclosures normally provided in annual financial statements, and therefore, these statements should be read in conjunction with the 2022 audited consolidated financial statements included within the Company’s Annual Report on Form 10-K (“Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on February 27, 2023. The Company’s condensed consolidated financial statements presented herein reflect the latest estimates and assumptions made by management that affect the reported amounts and related disclosures as of and for the period ended March 31, 2023. However, actual results could differ from these estimates and assumptions. The December 31, 2022 condensed consolidated balance sheet data presented herein was derived from the Company’s December 31, 2022 audited consolidated financial statements, but does not include all disclosures required by GAAP for annual periods. Throughout this Quarterly Report, unless otherwise indicated, amounts and activity are presented on a continuing operations basis. |
Recent Accounting Guidance
Recent Accounting Guidance | 3 Months Ended |
Mar. 31, 2023 | |
Recent Accounting Guidance | |
Recent Accounting Guidance | NOTE 2—RECENT ACCOUNTING GUIDANCE As of March 31, 2023, there was no recently issued accounting standards which would have a material effect on the Company’s condensed consolidated financial statements. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2023 | |
Acquisitions | |
Acquisitions | NOTE 3—ACQUISITIONS Acquisition of Heathland B.V. On January 3, 2022, the Company completed the acquisition of Heathland B.V. (“Heathland”) from Heathland Holding B.V. (“Heathland Holding”), through the purchase of all issued and outstanding shares (the “Heathland Acquisition”). Heathland is a leading collector and recycler of post-consumer and post-industrial plastic wastes in Europe. The total purchase price consideration is estimated to be $29.3 million, including an initial cash purchase price of $22.9 million which was paid during the three months ended March 31, 2022, as well as $6.4 million of contingent cash consideration, representing the fair value of certain earn-out payments. The maximum amount of potential earn-out payments is $6.8 million, which will become payable to Heathland Holding as and when the related performance milestones or thresholds are achieved over the three-year period following the date of acquisition. Heathland results are included within the Plastics Solution segment. The Company allocated the purchase price of the acquisition to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. Refer to the Annual Report for further information. In February 2023, the Company delivered the first year earn-out to Heathland Holding based on its first related performance milestones or threshold in the amount of $1.2 million. |
Divestitures and Discontinued O
Divestitures and Discontinued Operations | 3 Months Ended |
Mar. 31, 2023 | |
Divestitures and Discontinued Operations | |
Divestitures and Discontinued Operations | NOTE 4—DIVESTITURES AND DISCONTINUED OPERATIONS On December 1, 2021, the Company completed the divestiture of its Synthetic Rubber business to Synthos S.A. and certain of its subsidiaries (together, “Synthos”) for a purchase price of $402.4 million, which reflected a reduction of approximately $41.6 million for the assumption of pension liabilities by Synthos and $47.0 million for net working capital (excluding inventory) retained by Trinseo. Refer to the Annual Report for further information. At closing, the Company and Synthos executed a long-term supply agreement, in which Trinseo will supply Synthos certain raw materials used in the Synthetic Rubber business subsequent to the sale. For the three months ended March 31, 2023, the Company recorded $13.5 million in net sales and $15.4 million in cost of sales related to the supply agreement, which is recorded in continuing operations. The results of the Synthetic Rubber business for the three months ended March 31, 2023 was insignificant. The following table summarizes the results of the Synthetic Rubber business for the three months ended March 31, 2022, which are reflected as discontinued operations in the Company’s condensed consolidated statements of operations: Three Months Ended March 31, 2022 Net sales $ 0.1 Cost of sales 0.7 Gross loss (0.6) Selling, general and administrative expenses (0.2) Operating loss (0.4) Other expense, net — Loss from discontinued operations before income taxes (0.4) Provision for income taxes — Net loss from discontinued operations $ (0.4) |
Net Sales
Net Sales | 3 Months Ended |
Mar. 31, 2023 | |
Net Sales | |
Net Sales | NOTE 5—NET SALES Refer to the Annual Report for information on the Company's accounting policies and further background related to its net sales. The following table provides disclosure of net sales to external customers by primary geographical market (based on the location where sales originated), by segment for the three months ended March 31, 2023 and 2022. Engineered Latex Plastics Three Months Ended Materials Binders Solutions Polystyrene Feedstocks Total March 31, 2023 United States $ 110.9 $ 67.6 $ 68.7 $ — $ 3.6 $ 250.8 Europe 73.5 128.1 165.3 138.5 39.4 544.8 Asia-Pacific 18.9 50.7 27.8 70.6 — 168.0 Rest of World 2.9 1.7 28.1 — — 32.7 Total $ 206.2 $ 248.1 $ 289.9 $ 209.1 $ 43.0 $ 996.3 March 31, 2022 United States $ 138.4 $ 82.2 $ 84.5 $ — $ 3.9 $ 309.0 Europe 118.7 150.9 246.6 214.6 66.4 797.2 Asia-Pacific 35.3 71.7 37.2 103.4 — 247.6 Rest of World 2.8 1.9 28.2 — — 32.9 Total $ 295.2 $ 306.7 $ 396.5 $ 318.0 $ 70.3 $ 1,386.7 |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliates | 3 Months Ended |
Mar. 31, 2023 | |
Investments in Unconsolidated Affiliates | |
Investments in Unconsolidated Affiliates | NOTE 6—INVESTMENTS IN UNCONSOLIDATED AFFILIATES The Company is currently supplemented by one joint venture, Americas Styrenics LLC (“Americas Styrenics,” a styrene and polystyrene joint venture with Chevron Phillips Chemical Company LP), which is accounted for using the equity method. The results of Americas Styrenics are included within its own reporting segment. Americas Styrenics is a privately held company; therefore, a quoted market price for its equity interests is not available. The summarized financial information of the Company’s unconsolidated affiliate is shown below. Three Months Ended March 31, 2023 2022 Sales $ 443.3 $ 524.4 Gross profit $ 52.9 $ 48.1 Net income $ 37.8 $ 36.1 As of March 31, 2023 and December 31, 2022, the Company’s investment in Americas Styrenics was $252.7 million and $255.1 million, respectively, which was $7.0 million and $8.4 million greater than the Company’s 50% share of the underlying net assets of Americas Styrenics, respectively. This amount represents the difference between the book value of assets held by the joint venture and the Company’s 50% share of the total recorded value of the joint venture’s assets, inclusive of certain adjustments to conform with the Company’s accounting policies. This difference is being amortized over a weighted average remaining useful life of approximately 1.8 years as of March 31, 2023. The Company received dividends of $20.0 million and $7.5 million from Americas Styrenics during the three months ended March 31, 2023 and 2022, respectively. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2023 | |
Inventories | |
Inventories | NOTE 7—INVENTORIES Inventories consisted of the following: March 31, December 31, 2023 2022 Finished goods $ 195.3 $ 218.4 Raw materials and semi-finished goods 265.9 295.6 Supplies 41.4 39.6 Total $ 502.6 $ 553.6 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt | |
Debt | NOTE 8—DEBT Refer to the Annual Report for definitions of capitalized terms not included herein and further background on the Company’s debt structure discussed below. The Company was in compliance with all debt related covenants as of March 31, 2023 and December 31, 2022. As of March 31, 2023 and December 31, 2022, debt consisted of the following: March 31, 2023 December 31, 2022 Interest Rate as of March 31, 2023 Maturity Date Carrying Amount Unamortized Deferred Financing Fees (1) Total Debt, Less Unamortized Deferred Financing Fees Carrying Amount Unamortized Deferred Financing Fees (1) Total Debt, Less Unamortized Deferred Financing Fees Senior Credit Facility 2024 Term Loan B 6.840% September 2024 $ 661.7 $ (4.4) $ 657.3 $ 663.4 $ (5.1) $ 658.3 2028 Term Loan B 7.340% May 2028 734.1 (13.8) 720.3 735.9 (14.4) 721.5 2026 Revolving Facility (2) Various May 2026 — — — — — — 2029 Senior Notes 5.125% April 2029 447.0 (12.5) 434.5 447.0 (12.9) 434.1 2025 Senior Notes 5.375% September 2025 500.0 (3.4) 496.6 500.0 (3.7) 496.3 Accounts Receivable Securitization Facility (3) Various November 2024 — — — — — — Other indebtedness Various Various 7.8 — 7.8 7.4 — 7.4 Total debt $ 2,350.6 $ (34.1) $ 2,316.5 $ 2,353.7 $ (36.1) $ 2,317.6 Less: current portion (4) (16.6) (16.0) Total long-term debt, net of unamortized deferred financing fees $ 2,299.9 $ 2,301.6 (1) This caption does not include deferred financing fees related to the Company’s revolving facilities, which are included within “Deferred charges and other assets” on the condensed consolidated balance sheets. (2) As of March 31, 2023, under the 2026 Revolving Facility, the Company had a capacity of $375.0 million and $22.0 million outstanding letters of credit. As of March 31, 2023, the Company had funds available for borrowing of $100.5 million (net of the applicable $12.0 million outstanding letters of credit as defined in the secured credit agreement), which reflects the borrowing limit imposed by the springing covenant. The springing covenant applies when 30% or more of the 2026 Revolving Facility’s capacity is drawn which then requires the Company to meet a first lien net leverage ratio (as defined in the secured credit agreement) not to exceed 3.50 x at the end of each financial quarter. As of March 31, 2023, the first lien net leverage ratio was 4.85 x and the outstanding borrowings did not exceed the 30% threshold. Additionally, the Company is required to pay a quarterly commitment fee in respect of any unused commitments under this facility equal to 0.375% per annum. (3) As of March 31, 2023, this facility had a borrowing capacity of $150.0 million, and the Company had approximately $150.0 million of accounts receivable available to support this facility, based on the pool of eligible accounts receivable. (4) The current portion of long-term debt was primarily related to $14.5 million of the scheduled future principal payments on both the 2024 Term Loan B and 2028 Term Loan B as of March 31, 2023 and December 31, 2022. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible assets | |
Goodwill | NOTE 9—GOODWILL The following table shows changes in the carrying amount of goodwill, by segment, from December 31, 2022 to March 31, 2023: Engineered Latex Plastics Americas Materials Binders Solutions Polystyrene Feedstocks Styrenics Total Balance at December 31, 2022 $ 348.9 $ 14.8 $ 42.5 $ 4.2 $ — $ — $ 410.4 Foreign currency impact 2.6 0.3 0.8 0.1 — — 3.8 Balance at March 31, 2023 $ 351.5 $ 15.1 $ 43.3 $ 4.3 $ — $ — $ 414.2 As a result of the Company’s fourth quarter 2022 impairment testing, an impairment charge was taken for the PMMA business and Aristech Surfaces reporting units primarily due to the continuation of the challenging macroeconomic environment experienced in 2022 into the fourth quarter of 2022, including significantly lower demand for building & construction and wellness applications, which led to lower operating results including slower growth projections, and a prolonged drop in market capitalization, as well as an increase in the weighted average cost of capital. This goodwill may be at risk for future impairment due to the remaining fair value being equal to carrying value as a result of the recorded impairment. While the challenging macroeconomic environment has continued to impact these businesses in the first quarter of 2023, the Company performed qualitative analyses over this goodwill, including consideration of current and estimated future financial results of the related businesses, general and industry-specific economic conditions, changes in reporting unit carrying values and potential changes to the assumptions used in the previous fair value calculations. Based on these analyses, the Company has not identified any triggering events since the fourth quarter of 2022 impairment test indicating that is more likely than not that goodwill is impaired. Should these conditions persist, or other events occur indicating that the estimated future cash flows of these businesses have declined, the Company may be required to record future non-cash impairment charges related to goodwill. As of March 31, 2023 and December 31, 2022, the reported balance of goodwill included accumulated impairment losses of $297.1 million in the Engineered Materials segment. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments | |
Derivative Instruments | NOTE 10—DERIVATIVE INSTRUMENTS The Company’s ongoing business operations expose it to various risks, including fluctuating foreign exchange rates, interest rate risk, and commodity price risk, in particular natural gas. To manage these risks, the Company periodically enters into derivative financial instruments, such as foreign exchange forward contracts, interest rate swap agreements, and commodity swaps agreements, forward contracts, or options. The Company does not hold or enter into financial instruments for trading or speculative purposes. All derivatives are recorded on the condensed consolidated balance sheets at fair value. Foreign Exchange Forward Contracts Certain subsidiaries have assets and liabilities denominated in currencies other than their respective functional currencies, which creates foreign exchange risk. The Company’s principal strategy in managing its exposure to changes in foreign currency exchange rates is to naturally hedge the foreign currency-denominated liabilities on its balance sheet against corresponding assets of the same currency, such that any changes in liabilities due to fluctuations in exchange rates are offset by changes in their corresponding foreign currency assets. In order to further reduce this exposure, the Company also uses foreign exchange forward contracts to economically hedge the impact of the variability in exchange rates on assets and liabilities denominated in certain foreign currencies. These derivative contracts are not designated for hedge accounting treatment. As of March 31, 2023, the Company had open foreign exchange forward contracts with a notional U.S. dollar equivalent absolute value of $657.5 million. The following table displays the notional amounts of the most significant net foreign exchange hedge positions outstanding as of March 31, 2023: March 31, Buy / (Sell) 2023 Euro $ (520.9) Chinese Yuan $ (48.4) South Korean Won $ (21.8) Swiss Franc $ (19.6) Swedish Krona $ 14.7 Open foreign exchange forward contracts as of March 31, 2023 had maturities occurring over a period of two months. Foreign Exchange Cash Flow Hedges The Company also enters into forward contracts, as deemed appropriate, with the objective of managing the currency risk associated with forecasted U.S. dollar-denominated raw materials purchases by one of its subsidiaries whose functional currency is the euro. By entering into these forward contracts, which are designated as cash flow hedges, the Company buys a designated amount of U.S. dollars and sells euros at the prevailing market rate to mitigate the risk associated with the fluctuations in the euro-to-U.S. dollar foreign currency exchange rates. The qualifying hedge contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in Accumulated Other Comprehensive Income (“AOCI”) to the extent effective, and reclassified to cost of sales in the period during which the transaction affects earnings or it becomes probable that the forecasted transaction will not occur. The Company had no open foreign exchange cash flow hedges as of Commodity Cash Flow Hedges & Commodity Economic Hedges The Company purchases certain commodities, primarily natural gas, to operate facilities and generate heat and steam for various manufacturing processes, which purchases are subject to price volatility. In order to manage the risk of price fluctuations associated with these commodity purchases, as deemed appropriate, the Company may enter into commodity swaps, forward contracts, or options. As of March 31, 2023, the Company had open commodity swap agreements, which effectively convert a portion of its natural gas costs into a fixed rate obligation. These commodity derivatives are designated as cash flow hedges, and as such, the contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in AOCI to the extent effective, and reclassified to cost of sales in the period during which the transaction affects earnings or it becomes probable that the forecasted transaction will not occur. Open commodity cash flow hedges as of March 31, 2023 had maturities occurring over a period of 21 months and had a notional value of approximately 964 thousand megawatt hours of natural gas purchases. The Company may also enter into certain commodity swap agreements to economically hedge the impact of these price fluctuations, which are not designated for hedge accounting treatment. Open commodity economic hedges as of March 31, 2023 had maturities occurring over a period of 24 months and had a notional value of approximately 895 thousand megawatt hours of natural gas purchases. Interest Rate Swaps On September 6, 2017, the Company issued the 2024 Term Loan B, which currently bears an interest rate of LIBOR plus 2.00%, subject to a 0.00% LIBOR floor. In order to reduce the variability in interest payments associated with the Company’s variable rate debt, during 2017 the Company entered into certain interest rate swap agreements to convert a portion of these variable rate borrowings into a fixed rate obligation. These interest rate swap agreements are designated as cash flow hedges, and as such, the contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in AOCI to the extent effective, and reclassified to interest expense in the period during which the transaction affects earnings or it becomes probable that the forecasted transaction will not occur. Under the terms of the swap agreements, with a net notional U.S. dollar equivalent of $200.0 million and an effective date of September 29, 2017, the Company was required to pay the counterparties a stream of fixed interest payments at a rate of 1.81%, and in turn, receives variable interest payments based on 1-month LIBOR from the counterparties. These interest rate swap agreements matured in September 2022, and the Company has no remaining open interest rate swap agreements. Net Investment Hedge The Company accounts for its cross currency swaps (“CCS”) under the spot method, meaning that changes in the fair value of the hedge included in the assessment of effectiveness (changes due to spot foreign exchange rates) are recorded within AOCI, where they remain until either the sale or substantially complete liquidation of the subsidiary subject to the hedge. Additionally, the initial value of any component excluded from the assessment of effectiveness is recognized in income using a systematic and rational method over the life of the hedging instrument and any difference between the change in the fair value of the excluded component and amounts recognized in income under that systematic and rational method is recognized in AOCI. When applicable, the Company amortizes any initial excluded component value of a CCS as a reduction of “Interest expense, net” in the condensed consolidated statements of operations using the straight-line method over the remaining term of the related CCS. Additionally, interest receipts and payments are accrued under the terms of the Company’s CCS and are recognized within “Interest expense, net” in the condensed consolidated statements of operations. The Company entered into a CCS arrangement (the “2017 CCS”) on September 1, 2017, swapping U.S. dollar principal and interest payments of $500.0 million at an interest rate of 5.375% on its 2025 Senior Notes for euro-denominated payments of €420.0 million at a weighted average interest rate of 3.45% for approximately five years. On February 26, 2020, the Company settled its 2017 CCS and replaced it with a new CCS arrangement (the “2020 CCS”) that carried substantially the same terms as the 2017 CCS. Under the 2020 CCS, the Company notionally exchanged $500.0 million at an interest rate of 5.375% for €459.3 million at a weighted average interest rate of 3.672% for approximately 2.7 years, with a final maturity of November 3, 2022. The cash flows under the 2020 CCS are aligned with the Company’s principal and interest obligations on its 5.375% 2025 Senior Notes. On April 7, 2022, the Company settled its existing 2020 CCS, which were set to mature in November 2022. Upon settlement of the 2020 CCS, the Company realized net cash proceeds of $1.9 million. Summary of Derivative Instruments The following table presents the effect of the Company’s derivative instruments, including those not designated for hedge accounting treatment, on the condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022: Location and Amount of Gain (Loss) Recognized in Statements of Operations Three Months Ended Three Months Ended March 31, 2023 March 31, 2022 Cost of sales Interest expense, net Other (expense) income, net Cost of sales Interest expense, net Other (expense) income, net Total amount of income and (expense) line items presented in the statements of operations in which the effects of derivative instruments are recorded $ (959.1) $ (38.3) $ 2.9 $ (1,210.7) $ (21.9) $ (3.0) The effects of cash flow hedge instruments: Commodity cash flow hedges Amount of loss reclassified from AOCI into income $ (6.4) $ — $ — $ — $ — $ — Interest rate swaps Amount of loss reclassified from AOCI into income $ — $ — $ — $ — $ (0.8) $ — The effects of net investment hedge instruments: Cross currency swaps Amount of gain excluded from effectiveness testing $ — $ — $ — $ — $ 2.1 $ — The effects of derivatives not designated as hedge instruments: Foreign exchange forward contracts Amount of gain (loss) recognized in income $ — $ — $ (7.8) $ — $ — $ 8.8 Commodity economic hedges Amount of loss recognized in income $ (12.4) $ — $ — $ — $ — $ — The following table presents the effect of cash flow and net investment hedge accounting on AOCI for the three months ended March 31, 2023 and 2022: ` Gain (Loss) Recognized in AOCI on Balance Sheet Three Months Ended March 31, 2023 2022 Designated as Cash Flow Hedges Commodity cash flow hedges $ (9.9) $ — Interest rate swaps — 1.5 Total $ (9.9) $ 1.5 Designated as Net Investment Hedges Cross currency swaps (CCS) $ — $ 6.1 Total $ — $ 6.1 Gain (Loss) Recognized in Other expense (income), net in Statement of Operations Three Months Ended March 31, 2023 2022 Settlements and changes in the fair value of forward contracts (not designated as hedges) $ (7.8) $ 8.8 Remeasurement of foreign currency-denominated assets and liabilities $ 10.5 $ (10.2) Total $ 2.7 $ (1.4) The Company expects to reclassify in the next twelve months an approximate $23.0 million net loss from AOCI into earnings related to the Company’s outstanding commodity cash flow hedges as of March 31, 2023, based on current commodity price indices. The following tables summarize the gross and net unrealized gains and losses, as well as the balance sheet classification, of outstanding derivatives recorded in the condensed consolidated balance sheets: March 31, 2023 Foreign Exchange Commodity Commodity Balance Sheet Forward Economic Cash Flow Classification Contracts Hedges Hedges Total Asset Derivatives: Accounts receivable, net of allowance $ 0.1 $ — $ 0.1 $ 0.2 Gross derivative asset position 0.1 — 0.1 0.2 Less: Counterparty netting (0.1) — (0.1) (0.2) Net derivative asset position $ — $ — $ — $ — Liability Derivatives: Accounts payable $ (12.5) $ (13.5) $ (23.1) $ (49.1) Other noncurrent obligations — (1.9) (2.5) (4.4) Gross derivative liability position (12.5) (15.4) (25.6) (53.5) Less: Counterparty netting 0.1 — 0.1 0.2 Net derivative liability position $ (12.4) $ (15.4) $ (25.5) $ (53.3) Total net derivative position $ (12.4) $ (15.4) $ (25.5) $ (53.3) December 31, 2022 Foreign Exchange Commodity Commodity Balance Sheet Forward Economic Cash Flow Classification Contracts Hedges Hedges Total Asset Derivatives: Accounts receivable, net of allowance $ 0.2 $ — $ — $ 0.2 Gross derivative asset position 0.2 — — 0.2 Less: Counterparty netting (0.1) — — (0.1) Net derivative asset position $ 0.1 $ — $ — $ 0.1 Liability Derivatives: Accounts payable $ (11.1) $ (5.3) $ (11.3) $ (27.7) Other noncurrent obligations — (1.3) (0.9) (2.2) Gross derivative liability position (11.1) (6.6) (12.2) (29.9) Less: Counterparty netting 0.1 — — 0.1 Net derivative liability position $ (11.0) $ (6.6) $ (12.2) $ (29.8) Total net derivative position $ (10.9) $ (6.6) $ (12.2) $ (29.7) Forward contracts, interest rate swaps, commodity forward contracts, swaps, or options, and cross currency swaps are entered into with a limited number of counterparties, each of which allows for net settlement of all contracts through a single payment in a single currency in the event of a default on or termination of any one contract. As such, in accordance with the Company’s accounting policy, these derivative instruments are recorded on a net basis by counterparty within the condensed consolidated balance sheets. Refer to Notes 11 and 18 of the condensed consolidated financial statements for further information regarding the fair value of the Company’s derivative instruments and the related changes in AOCI. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | NOTE 11—FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date. Level 1—Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3—Valuation is based upon other unobservable inputs that are significant to the fair value measurement. The following table summarizes the basis used to measure certain assets and liabilities at fair value on a recurring basis in the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022: March 31, 2023 Quoted Prices in Active Markets for Identical Items Significant Other Observable Inputs Significant Unobservable Inputs Assets (Liabilities) at Fair Value (Level 1) (Level 2) (Level 3) Total Foreign exchange forward contracts—(Liabilities) $ — $ (12.4) $ — $ (12.4) Commodity economic hedges—(Liabilities) — (15.4) — (15.4) Commodity cash flow hedges—(Liabilities) — (25.5) — (25.5) Total fair value $ — $ (53.3) $ — $ (53.3) December 31, 2022 Quoted Prices in Active Markets for Identical Items Significant Other Observable Inputs Significant Unobservable Inputs Assets (Liabilities) at Fair Value (Level 1) (Level 2) (Level 3) Total Foreign exchange forward contracts—Assets $ — $ 0.1 $ — $ 0.1 Foreign exchange forward contracts—(Liabilities) — (11.0) — (11.0) Commodity economic hedges—(Liabilities) — (6.6) — (6.6) Commodity cash flow hedges—(Liabilities) — (12.2) — (12.2) Total fair value $ — $ (29.7) $ — $ (29.7) The Company uses an income approach to value its derivative instruments, utilizing discounted cash flow techniques, considering the terms of the contract and observable market information available as of the reporting date, such as interest rate yield curves and currency spot and forward rates. Significant inputs to the valuation for these derivative instruments are obtained from broker quotations or from listed or over-the-counter market data, and are classified as Level 2 in the fair value hierarchy. Nonrecurring Fair Value Measurements The Company measured certain financial assets at fair value on a nonrecurring basis during the year ended December 31, 2022, which were still held as of March 31, 2023. These financial assets represent the Company’s styrene monomer assets in Boehlen, Germany, which it continued to operate until the fourth quarter of 2022 when the Company decided to close this plant in connection with the asset restructuring plan. Refer to Note 17 for further information. These assets were measured at fair value using underlying fixed asset records in conjunction with the use of industry experience and available market data, which are classified as Level 3 significant unobservable inputs in the fair value hierarchy. During the three months ended March 31, 2023, the Company recorded additional impairment charges There were no other financial assets Fair Value of Debt Instruments The following table presents the estimated fair value of the Company’s outstanding debt not carried at fair value as of March 31, 2023 and December 31, 2022: As of As of March 31, 2023 December 31, 2022 2029 Senior Notes $ 269.1 $ 292.3 2028 Term Loan B 662.1 687.1 2025 Senior Notes 406.8 416.9 2024 Term Loan B 653.8 645.6 Total fair value $ 1,991.8 $ 2,041.9 The fair value of the Company’s debt facilities above (each Level 2 securities) is determined using over-the-counter market quotes and benchmark yields received from independent vendors. Fair value amount presented reflect the Company’s carrying value of debt, net of original issuance discount. There were no other significant financial instruments outstanding as of March 31, 2023 and December 31, 2022. |
Provision For Income Taxes
Provision For Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Provision For Income Taxes | |
Provision For Income Taxes | NOTE 12—PROVISION FOR INCOME TAXES Three Months Ended March 31, 2023 2022 Effective income tax rate 25.4 % 56.9 % Benefit from income taxes for the three months ended March 31, 2023 totaled $16.7 million, resulting in an effective tax rate of 25.4%. Provision for income taxes for the three months ended March 31, 2022 totaled $22.6 million, resulting in an effective tax rate of 56.9%. The most significant driver of the decrease in the effective income tax rate for the three months ended March 31, 2023 compared to the prior year was the change in the Company’s forecasted jurisdictional mix of earnings, where income expected to be generated in higher rate jurisdictions exceeds income expected to be generated in lower rate jurisdictions, partially offset by losses not anticipated to provide a tax benefit. The effective income tax rate for the three months ended March 31, 2022 was primarily impacted by a $35.6 million charge related to the European Commission request for information, as described within Note 13 in the condensed consolidated financial statements, for which the Company estimates no tax benefit. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies. | |
Commitments and Contingencies | NOTE 13—COMMITMENTS AND CONTINGENCIES Environmental Matters Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on current law, existing technologies and other information. Pursuant to the terms of the agreement associated with the Company’s formation, the pre-closing environmental liabilities were retained by Dow, and Dow agreed, subject to temporal, monetary, and other limitations to indemnify the Company from and against environmental liabilities incurred or relating to the predecessor periods. Other than certain immaterial environmental liabilities assumed as part of the PMMA Acquisition and the Aristech Surfaces Acquisition, no material environmental claims have been asserted against the Company, and the Company does not have any material accrued obligations for any Superfund Sites. As of March 31, 2023 and December 31, 2022, the Company had $3.5 million of accrued obligations for environmental remediation or restoration costs, which were recorded at fair value within the opening balance sheets of the PMMA business and Aristech Surfaces during 2021. On March 24, 2023, due to equipment failure at the Bristol, Pennsylvania facility, operated by our wholly-owned subsidiary, Altuglas LLC, an accidental release of a latex emulsion product occurred, which ultimately flowed into a local waterway (the “Bristol Spill”). We reported the event and cooperated closely with local, state, and federal authorities on the response activities. Water sampling conducted by the authorities did not detect site-related material in the waterway. See “Litigation Matters” Inherent uncertainties exist in the Company’s potential environmental liabilities primarily due to unknown conditions, whether future claims may fall outside the scope of the indemnity, changing governmental regulations and legal standards regarding liability, and evolving technologies for handling site remediation and restoration. In connection with the Company’s existing indemnification, the possibility is considered remote that environmental remediation costs will have a material adverse impact on the condensed consolidated financial statements over the next 12 months. Purchase Commitments In the normal course of business, the Company has certain raw material purchase contracts where it is required to purchase certain minimum volumes at current market prices. These commitments range from one Asset Retirement Obligations The Company has built certain manufacturing facilities on leased land and is required to remove these facilities at the end of the corresponding contract term. Legal obligations for these demolition and decommissioning activities exist in connection with the retirement of these assets triggered upon closure of the facilities. In instances when the Company plans to continue operations at these facilities indefinitely, and therefore, a reasonable estimate of fair value cannot be determined, an asset retirement obligation is not recognized. In connection with the Asset Restructuring Plan as described within Note 17, the Company concluded the Boehlen, Germany site no longer had an indeterminate life. Accordingly, during the fourth quarter of 2022, the Company recorded the fair value of an asset retirement obligation and a corresponding asset retirement cost, which was capitalized as part of the carrying amount of the related long-lived assets and depreciated over the asset’s shortened useful life. The asset retirement cost was fully depreciated during the fourth quarter of 2022. Balance at Change in asset retirement obligation March 31, 2023 Balance at beginning of period $ 35.8 Obligations incurred 0.9 Settlements (2.2) Accretion expense 0.5 Currency translation adjustment 0.6 Balance at end of period $ 35.6 Accretion expense is included within “Selling, general and administrative expenses” in the condensed consolidated statement of operations. The current portion of the asset retirement obligation is recorded within “Accrued expenses and other current liabilities” and the long-term portion is recorded within “Other noncurrent obligations” in the condensed consolidated balance sheets. As of March 31, 2023 and December 31, 2022, the current portion was $24.6 million and $25.3 million, respectively, and the long-term portion was $11.0 million and $10.5 million, respectively. Litigation Matters From time to time, the Company may be subject to various legal claims and proceedings incidental to the normal conduct of business, relating to such matters as employees, product liability, antitrust/competition, past waste disposal practices and release of chemicals into the environment. While it is impossible at this time to determine with certainty the ultimate outcome of these routine claims, the Company does not believe that the ultimate resolution of these claims will have a material adverse effect on the Company’s results of operations, financial condition or cash flow. Legal costs, including those legal costs expected to be incurred in connection with a loss contingency, are expensed as incurred. Legal Proceedings related to the Bristol Spill (a) Jonnie Helfrich v. Trinseo PLC (No. 2:23-cv-01525) (United States District Court for the Eastern District of Pennsylvania) On April 20, 2023, a complaint was filed which purports to be on behalf of a class of purchasers of the Company’s securities between May 3, 2021 and March 27, 2023. It names as defendants the Company and our chief executive officer and chief financial officer, and seeks unspecified damages and other relief for alleged violations of Sections 10(b) and 20(a) of, and Rule 10b-5 under, of the Securities Exchange Act of 1934. Given the early stage of this matter, we are not able to estimate whether a material loss to our business is probable or remote, or estimate a potential range of loss, if any. The Company intends to vigorously defend this action. (b) Timothy McGraw, Emily Cohen & Danielle Byrd v. Altuglas LLC and Trinseo LLC (Court of Common Pleas of Philadelphia County) On March 29, 2023, a putative class action complaint was filed which seeks to certify a class that could potentially include all persons and entities that reside in the area served by the Baxter Drinking Water Treatment Plant. The plaintiffs allege claims of breach of duty of care based on negligence as a result of the Bristol Spill, as well as other causes of action, and seek compensatory damages, restitution, or refund of damages, including actual, statutory, and punitive damages, as well as injunctive relief. Given the early stage of this matter, we are not able to estimate whether a material loss to our business is probable or remote, or estimate a potential range of loss, if any. The Company intends to vigorously defend this action. (c) Environmental Proceedings On March 25, 2023, the Company received a Notice of Federal Interest from the United States Coast Guard (“USCG”), identifying the Company as a “potentially responsible party” (“PRP”) related to the Bristol Spill. The Company also received a Notice of Federal Assumption and an Administrative Order, dated April 20, 2023 from the USCG, identifying the Company as a PRP related to the Bristol Spill. The USCG notices and order do not designate specific fines or penalties against the Company. It is not possible at this time for the Company to estimate its ultimate liability pursuant to the USCG notices or order, or other potential administrative actions related to the Bristol Spill, whether a material loss to our business is probable or remote, or estimate a potential range of loss, if any. Synthos Matter On November 21, 2022, the Company received formal notice from the German Arbitration Institute that Synthos had initiated an arbitration dispute on October 14, 2022 against Trinseo and its following subsidiaries: Trinseo Deutschland GmbH, Trinseo Belgium BV, Trinseo Europe GmbH, and Trinseo Export GmbH, related to Synthos’ purchase of Trinseo’s Rubber Business in 2021. As discussed in Note 4, Synthos and Trinseo are parties to an asset purchase agreement (“APA”) dated May 21, 2021, whereby Trinseo transferred its Rubber Business to Synthos, pending regulatory approval and other administrative pre-closing conditions, for an enterprise value of approximately $491.0 million. This transaction formally closed on December 1, 2021. Synthos claims that Trinseo did not properly disclose certain information including the natural gas pricing mechanism for the steam which is supplied by a third party to the Rubber Business. Synthos is seeking non-monetary restitution and monetary damages related to the spike of utility prices in Germany that commenced in the fall of 2021. The Company believes it has valid and prevailing defenses to Synthos’ claims and intends to vigorously defend itself against all allegations. European Commission Request for Information On June 6, 2018, Trinseo Europe GmbH, a subsidiary of the Company, received a request for information in the form of a letter from the European Commission Directorate General for Competition (the “European Commission”) related to styrene monomer commercial activity in the European Economic Area. The Company subsequently commenced an internal investigation into these commercial activities and discovered instances of inappropriate activity. As a result of further developments in this matter, during the first quarter of 2022, the Company recorded a charge of $35.6 million which is included within “Impairment and other charges” on the condensed consolidated statements of operations. In November 2022, the Company reached a final settlement with the European Commission in respect of this matter of $33.8 million, adjusted for foreign exchange rate impacts, which was subsequently paid in full in December 2022. |
Pension Plans And Other Postret
Pension Plans And Other Postretirement Benefits | 3 Months Ended |
Mar. 31, 2023 | |
Pension Plans and Other Postretirement Benefits | |
Pension Plans and Other Postretirement Benefits | NOTE 14—PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS The components of net periodic benefit costs for all significant plans were as follows: Three Months Ended Three Months Ended March 31, March 31, Non-U.S. Defined Benefit Pension Plans U.S. Defined Benefit Pension 2023 2022 2023 2022 Net periodic benefit cost Service cost $ 2.0 $ 3.2 $ 0.1 $ 0.2 Interest cost 1.7 0.7 0.2 0.2 Expected return on plan assets (0.2) (0.1) (0.1) (0.2) Amortization of prior service credit (0.1) (0.1) — — Amortization of net loss (0.8) 0.7 — — Net periodic benefit cost $ 2.6 $ 4.4 $ 0.2 $ 0.2 The Company had less than $0.2 million of net periodic benefit costs for its other postretirement plans for the three months ended March 31, 2023 and 2022. Service cost related to the Company’s defined benefit pension plans and other postretirement plans is included within “Cost of sales” and “Selling, general and administrative expenses,” whereas all other components of net periodic benefit cost are included within “Other expense (income), net” in the condensed consolidated statements of operations. As of March 31, 2023 and December 31, 2022, the Company’s benefit obligations included primarily in “Other noncurrent obligations” in the condensed consolidated balance sheets were $183.4 million and $177.8 million, respectively. The Company made cash contributions and benefit payments to unfunded plans of approximately $1.7 million during the three months ended March 31, 2023. The Company expects to make additional cash contributions, including benefit payments to unfunded plans, of approximately $11.4 million to its defined benefit plans for the remainder of 2023. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Compensation. | |
Share-Based Compensation | NOTE 15—SHARE-BASED COMPENSATION Refer to the Annual Report for definitions of capitalized terms not included herein and further background on the Company’s share-based compensation programs included in the tables below. The following table summarizes the Company’s share-based compensation expense for the three months ended March 31, 2023 and 2022, as well as unrecognized compensation cost as of March 31, 2023: As of Three Months Ended March 31, 2023 March 31, Unrecognized Weighted 2023 2022 Compensation Cost Average Years RSUs $ 4.8 $ 4.6 $ 13.5 2.0 Options 2.6 3.0 3.9 1.6 PSUs 0.8 0.7 7.4 2.4 Total share-based compensation expense $ 8.2 $ 8.3 The following table summarizes awards granted and the respective weighted average grant date fair value for the three months ended March 31, 2023: Three Months Ended March 31, 2023 Awards Granted Weighted Average Grant Date Fair Value per Award RSUs 394,292 $ 24.10 Options 438,727 10.86 PSUs 219,238 20.23 Option Awards The following are the weighted average assumptions used within the Black-Scholes pricing model for the Company’s option awards granted during the three months ended March 31, 2023: Three Months Ended March 31, 2023 Expected term (in years) 5.50 Expected volatility 54.01 % Risk-free interest rate 4.06 % Dividend yield 2.00 % The expected volatility assumption is determined based on the historical volatility of the Company’s publicly traded ordinary shares. The expected term of option awards represents the period of time that option awards granted are expected to be outstanding. For the option awards granted during the three months ended March 31, 2023, the simplified method was used to calculate the expected term, given the Company’s limited historical exercise data. The risk-free interest rate for the periods within the expected term of option awards is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is estimated based on historical and expected dividend activity. Performance Share Units (PSUs) The following are the weighted average assumptions used within the Monte Carlo valuation model for PSUs granted during the three months ended March 31, 2023: Three Months Ended March 31, 2023 Expected term (in years) 3.00 Expected volatility 62.60 % Risk-free interest rate 4.41 % Share price $ 24.08 Determining the fair value of PSUs requires considerable judgment, including estimating the expected volatility of the price of the Company’s ordinary shares, the correlation between the Company’s share price and that of its peer companies, and the expected rate of interest. The expected volatility for each grant is determined based on the historical volatility of the Company’s ordinary shares. The expected term of PSUs represents the length of the performance period. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for a duration equivalent to the performance period. The share price is the closing price of the Company’s ordinary shares on the grant date. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2023 | |
Segments | |
Segments | NOTE 16—SEGMENTS The Company operates under six segments: Engineered Materials, Latex Binders, Plastics Solutions, Polystyrene, Feedstocks, and Americas Styrenics. On January 1, 2023, the Base Plastics segment was renamed to Plastics Solutions to better reflect Trinseo’s strategic focus on providing solutions in areas such as sustainability and material substitution. The Engineered Materials segment includes the Company’s compounds and blends products sold into higher growth and value applications, such as consumer electronics and medical, as well as soft thermoplastic elastomers (“TPEs”) products which are sold into markets such as footwear and automotive. Additionally, PMMA and MMA products, which are sold into a variety of applications including automotive, building & construction, medical, consumer electronics, and wellness, among others. The Latex Binders segment produces styrene-butadiene latex (“SB latex”) and other latex polymers and binders, primarily for coated paper and packaging board, carpet and artificial turf backings, as well as a number of performance latex binders applications, such as adhesive, building and construction and the technical textile paper market. The Plastics Solutions segment contains the results of the acrylonitrile-butadiene-styrene (“ABS”), styrene-acrylonitrile (“SAN”), and polycarbonate (“PC”) businesses, as well as compounds and blends for automotive and other applications. The Plastics Solutions segment also includes the results of Heathland, which was acquired in the first quarter of 2022. The Polystyrene segment includes a variety of general purpose polystyrenes (“GPPS”) and polystyrene that has been modified with polybutadiene rubber to increase its impact resistant properties (“HIPS”). The Feedstocks segment includes the Company’s production and procurement of styrene monomer outside of North America, which is used as a key raw material in many of the Company’s products, including polystyrene, SB latex, and ABS resins. Lastly, the Americas Styrenics segment consists solely of the operations of the Company’s The following table provides disclosure of the Company’s segment Adjusted EBITDA, which is used to measure segment operating performance and is defined below, for the three months ended March 31, 2023 and 2022. Asset and intersegment sales information by reporting segment is not regularly reviewed or included with the Company’s reporting to the chief operating decision maker. Therefore, this information has not been disclosed below. Refer to Note 5 for the Company’s net sales to external customers by segment for the three months ended March 31, 2023 and 2022. Engineered Latex Plastics Americas Three Months Ended (1) Materials Binders Solutions Polystyrene Feedstocks Styrenics March 31, 2023 $ (11.7) $ 26.0 $ 25.6 $ 15.7 $ (10.8) $ 17.6 March 31, 2022 $ 34.7 $ 30.2 $ 68.6 $ 45.3 $ 4.1 $ 21.6 (1) The Company’s primary measure of segment operating performance is Adjusted EBITDA, which is defined as income from continuing operations before interest expense, net; provision for income taxes; depreciation and amortization expense; loss on extinguishment of long-term debt; asset impairment charges; gains or losses on the dispositions of businesses and assets; restructuring charges; acquisition related costs and benefits and other items. Segment Adjusted EBITDA is a key metric that is used by management to evaluate business performance in comparison to budgets, forecasts, and prior year financial results, providing a measure that management believes reflects core operating performance by removing the impact of transactions and events that would not be considered a part of core operations. Other companies in the industry may define segment Adjusted EBITDA differently than the Company, and as a result, it may be difficult to use segment Adjusted EBITDA, or similarly named financial measures, that other companies may use to compare the performance of those companies to the Company’s segment performance. The reconciliation of income from continuing operations before income taxes to segment Adjusted EBITDA is as follows: Three Months Ended March 31, 2023 2022 Income (loss) from continuing operations before income taxes $ (65.6) $ 39.7 Interest expense, net 38.3 21.9 Depreciation and amortization 56.0 53.0 Corporate Unallocated (2) 26.1 26.9 Adjusted EBITDA Addbacks (3) 7.6 63.0 Segment Adjusted EBITDA $ 62.4 $ 204.5 (2) Corporate unallocated includes corporate overhead costs and certain other income and expenses. (3) Adjusted EBITDA addbacks for the three months ended March 31, 2023 and 2022 are as follows: Three Months Ended March 31, 2023 2022 Net gain on disposition of businesses and assets $ — $ (0.3) Restructuring and other charges (Note 17) 3.7 0.4 Acquisition transaction and integration net costs (Note 3) — 3.2 Asset impairment charges or write-offs (Note 11) 0.3 0.7 European Commission request for information (Note 13) — 35.6 Other items (a) 3.6 23.4 Total Adjusted EBITDA Addbacks $ 7.6 $ 63.0 (a) Other items for the three months ended March 31, 2023 and 2022 primarily relate to fees incurred in conjunction with certain of the Company’s strategic initiatives, as well as our transition to a new enterprise resource planning system. |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring | |
Restructuring | NOTE 17—RESTRUCTURING Refer to the Annual Report for further details regarding the Company’s previously announced restructuring activities included in the tables below. Restructuring charges are included within “Selling, general and administrative expenses” in the condensed consolidated statements of operations. The following table provides detail of the Company’s restructuring charges for the three months ended March 31, 2023 and 2022: Three Months Ended Cumulative March 31, Life-to-date 2023 2022 Charges Segment Asset Restructuring Plan (1) Feedstocks: Accelerated depreciation $ 0.9 $ — $ 36.0 Feedstocks Employee termination benefits (0.2) — 3.7 Feedstocks Contract terminations 2.5 — 2.9 Feedstocks Decommissioning and other 0.5 — 3.7 Feedstocks Plastics Solutions: Accelerated depreciation — — 1.4 Plastics Solutions Employee termination benefits (0.4) — 3.0 Plastics Solutions Decommissioning and other 0.7 — 0.7 Plastics Solutions Engineered Materials: Accelerated depreciation 3.1 — 6.3 Engineered Materials Employee termination benefits — — 2.4 Engineered Materials Decommissioning and other 0.6 — 4.3 Engineered Materials Asset Restructuring Plan subtotal $ 7.7 $ — $ 64.4 Transformational Restructuring Program Employee termination benefits $ — $ 0.3 $ 8.8 Transformational Restructuring Program Subtotal $ — $ 0.3 $ 8.8 N/A (2) Other Restructurings — 0.1 Various Total Restructuring Charges $ 7.7 $ 0.4 (1) In December 2022, the Company announced an asset restructuring plan designed to reduce costs, improve profitability, reduce exposure to cyclical markets and elevated natural gas prices, and address market overcapacity. The asset restructuring plan includes (i) closure of manufacturing operations at the styrene production facility in Boehlen, Germany, (ii) closure of one of its production lines at the Stade, Germany polycarbonate plant, and (iii) closure of the PMMA sheet manufacturing site in Matamoros, Mexico. The program is expected to be substantially completed by the end of 2024. In connection with this restructuring plan, during the three months ended March 31, 2023, the Company incurred employee termination benefit charges of $(0.6) million, contract termination charges of $2.5 million, accelerated depreciation charges of $4.0 million, and decommissioning and other charges of $1.8 million. Production at all facilities have ceased and decommissioning activities are expected to continue through the end of 2024. The Company expects to incur incremental contract termination charges of $17.6 million, decommissioning and other charges of $2.2 million, as well as a limited amount of incremental employee termination benefit charges, the majority of which is expected to be paid by the end of 2024. Of the total incremental charges, $18.6 million is expected to be incurred in the Feedstocks segment, and $1.2 million is expected to be incurred in the Plastics Solution segment. On April 4, 2023, the Company entered into an agreement to sell its land, buildings and equipment in Matamoros, Mexico for a cash consideration of approximately $19.0 million. The transaction is expected to close within the second quarter of 2023. (2) In May 2021, the Company approved a transformational restructuring program associated with the Company’s strategic initiatives. The Company expects to incur incremental employee termination benefit charges related to impacted employees as of March 31, 2023 of less than $1.0 million, the majority of which are expected to be paid in 2023. As this was identified as a corporate-related activity, the charges related to this restructuring program were not allocated to a specific segment, but rather included within corporate unallocated. Refer to Note 13 for further information regarding the asset retirement obligation. The following table provides a roll forward of the other liability balances associated with the Company’s restructuring activities as of March 31, 2023. Employee termination benefit and contract termination charges are primarily recorded within “Accrued expenses and other current liabilities” in the condensed consolidated balance sheets. Balance at Balance at December 31, 2022 Expenses Deductions (1) March 31, 2023 Employee termination benefits $ 13.3 $ (0.6) $ (2.1) $ 10.6 Contract terminations — 2.5 (2.5) — Decommissioning and other — 1.8 (1.8) — Total $ 13.3 $ 3.7 $ (6.4) $ 10.6 (1) Primarily includes payments made against the existing accrual, as well as immaterial impacts of foreign currency remeasurement. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss). | |
Accumulated Other Comprehensive Income (Loss) | NOTE 18—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The components of AOCI, net of income taxes, consisted of: Cumulative Pension & Other Translation Postretirement Benefit Cash Flow Three Months Ended March 31, 2023 and 2022 Adjustments Plans, Net Hedges, Net Total Balance as of December 31, 2022 $ (151.2) $ 29.0 $ (9.1) $ (131.3) Other comprehensive income (loss) 10.5 — (13.2) (2.7) Amounts reclassified from AOCI to net income (1) — 0.3 5.8 6.1 Balance as of March 31, 2023 $ (140.7) $ 29.3 $ (16.5) $ (127.9) Balance as of December 31, 2021 $ (114.3) $ (33.6) $ 0.7 $ (147.2) Other comprehensive income (loss) (4.3) — 0.7 (3.6) Amounts reclassified from AOCI to net income (1) — 0.3 0.8 1.1 Balance as of March 31, 2022 $ (118.6) $ (33.3) $ 2.2 $ (149.7) (1) The following is a summary of amounts reclassified from AOCI to net income (loss) for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, Statements of Operations AOCI Components 2023 2022 Classification Cash flow hedging items Commodity cash flow hedges $ 6.4 $ — Cost of sales Interest rate swaps — 0.8 Interest expense, net Total before tax 6.4 0.8 Tax effect (0.6) — Provision for (benefit from) income taxes Total, net of tax $ 5.8 $ 0.8 Amortization of pension and other postretirement benefit plan items Prior service cost (credit) $ 0.1 $ (0.1) (a) Net actuarial loss 0.3 0.6 (a) Total before tax 0.4 0.5 Tax effect (0.1) (0.2) Provision for (benefit from) income taxes Total, net of tax $ 0.3 $ 0.3 (a) These AOCI components are included in the computation of net periodic benefit costs (see Note 14). . |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share | |
Earnings Per Share | NOTE 19—EARNINGS PER SHARE Basic earnings per ordinary share (“basic EPS”) is computed by dividing net income available to ordinary shareholders by the weighted average number of the Company’s ordinary shares outstanding for the applicable period. Diluted earnings per ordinary share (“diluted EPS”) is calculated using net income available to ordinary shareholders divided by diluted weighted average ordinary shares outstanding during each period, which includes unvested RSUs, option awards, and PSUs. Diluted EPS considers the impact of potentially dilutive securities except in periods in which there is a loss from continuing operations because the inclusion of the potential ordinary shares would have an anti-dilutive effect. The following table presents basic EPS and diluted EPS for the three months ended March 31, 2023 and 2022. Three Months Ended March 31, (in millions, except per share data) 2023 2022 Earnings: Net income (loss) from continuing operations $ (48.9) $ 17.1 Net loss from discontinued operations — (0.4) Net income (loss) $ (48.9) $ 16.7 Shares: Weighted average ordinary shares outstanding 35.0 37.3 Dilutive effect of RSUs, option awards, and PSUs (1) — 0.8 Diluted weighted average ordinary shares outstanding 35.0 38.1 Income (loss) per share: Income (loss) per share—basic: Continuing operations $ (1.40) $ 0.46 Discontinued operations — (0.01) Income (loss) per share—basic $ (1.40) $ 0.45 Income (loss) per share—diluted: Continuing operations $ (1.40) $ 0.45 Discontinued operations — (0.01) Income (loss) per share—diluted $ (1.40) $ 0.44 (1) Refer to Note 15 for discussion of RSUs, option awards, and PSUs granted to certain Company directors and employees. As the Company recorded a net loss from continuing operations for the three months ended March 31, 2023, potential shares related to equity-based awards have been excluded from the calculation of diluted EPS, as doing so would be anti-dilutive. There were 0.9 million anti-dilutive shares that have been excluded from the computation of diluted earnings per share for the three months ended March 31, 2022. |
Impairment and Other Charges
Impairment and Other Charges | 3 Months Ended |
Mar. 31, 2023 | |
Impairment and Other Charges. | |
Impairment and Other Charges | NOTE 20—IMPAIRMENT AND OTHER CHARGES Impairment and other charges consisted of the following: Three Months Ended March 31, 2023 2022 Asset impairment charges or write-offs (Note 11) $ 0.3 $ 0.7 European Commission request for information (Note 13) — 35.6 Total $ 0.3 $ 36.3 |
Recent Accounting Guidance (Pol
Recent Accounting Guidance (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Recent Accounting Guidance | |
Basis of Presentation | The unaudited interim condensed consolidated financial statements of Trinseo PLC and its subsidiaries (the “Company”) as of and for the periods ended March 31, 2023 and 2022 were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect all adjustments, consisting only of normal recurring adjustments, which, in the opinion of management, are considered necessary for the fair statement of the results for the periods presented. Because they cover interim periods, the statements and related notes to the financial statements do not include all disclosures normally provided in annual financial statements, and therefore, these statements should be read in conjunction with the 2022 audited consolidated financial statements included within the Company’s Annual Report on Form 10-K (“Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on February 27, 2023. The Company’s condensed consolidated financial statements presented herein reflect the latest estimates and assumptions made by management that affect the reported amounts and related disclosures as of and for the period ended March 31, 2023. However, actual results could differ from these estimates and assumptions. The December 31, 2022 condensed consolidated balance sheet data presented herein was derived from the Company’s December 31, 2022 audited consolidated financial statements, but does not include all disclosures required by GAAP for annual periods. Throughout this Quarterly Report, unless otherwise indicated, amounts and activity are presented on a continuing operations basis. |
Divestitures and Discontinued_2
Divestitures and Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Discontinued Operations, Held-for-sale | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Summary of the assets and liabilities classified as held-for-sale and results reflected as discontinued operations | Three Months Ended March 31, 2022 Net sales $ 0.1 Cost of sales 0.7 Gross loss (0.6) Selling, general and administrative expenses (0.2) Operating loss (0.4) Other expense, net — Loss from discontinued operations before income taxes (0.4) Provision for income taxes — Net loss from discontinued operations $ (0.4) |
Net Sales (Tables)
Net Sales (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Net Sales | |
Disaggregation of Revenue [Table Text Block] | Engineered Latex Plastics Three Months Ended Materials Binders Solutions Polystyrene Feedstocks Total March 31, 2023 United States $ 110.9 $ 67.6 $ 68.7 $ — $ 3.6 $ 250.8 Europe 73.5 128.1 165.3 138.5 39.4 544.8 Asia-Pacific 18.9 50.7 27.8 70.6 — 168.0 Rest of World 2.9 1.7 28.1 — — 32.7 Total $ 206.2 $ 248.1 $ 289.9 $ 209.1 $ 43.0 $ 996.3 March 31, 2022 United States $ 138.4 $ 82.2 $ 84.5 $ — $ 3.9 $ 309.0 Europe 118.7 150.9 246.6 214.6 66.4 797.2 Asia-Pacific 35.3 71.7 37.2 103.4 — 247.6 Rest of World 2.8 1.9 28.2 — — 32.9 Total $ 295.2 $ 306.7 $ 396.5 $ 318.0 $ 70.3 $ 1,386.7 |
Investments in Unconsolidated_2
Investments in Unconsolidated Affiliates (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investments in Unconsolidated Affiliates | |
Summarized financial information of unconsolidated affiliates | Three Months Ended March 31, 2023 2022 Sales $ 443.3 $ 524.4 Gross profit $ 52.9 $ 48.1 Net income $ 37.8 $ 36.1 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventories | |
Schedule of Inventories | March 31, December 31, 2023 2022 Finished goods $ 195.3 $ 218.4 Raw materials and semi-finished goods 265.9 295.6 Supplies 41.4 39.6 Total $ 502.6 $ 553.6 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt | |
Schedule of Debt | March 31, 2023 December 31, 2022 Interest Rate as of March 31, 2023 Maturity Date Carrying Amount Unamortized Deferred Financing Fees (1) Total Debt, Less Unamortized Deferred Financing Fees Carrying Amount Unamortized Deferred Financing Fees (1) Total Debt, Less Unamortized Deferred Financing Fees Senior Credit Facility 2024 Term Loan B 6.840% September 2024 $ 661.7 $ (4.4) $ 657.3 $ 663.4 $ (5.1) $ 658.3 2028 Term Loan B 7.340% May 2028 734.1 (13.8) 720.3 735.9 (14.4) 721.5 2026 Revolving Facility (2) Various May 2026 — — — — — — 2029 Senior Notes 5.125% April 2029 447.0 (12.5) 434.5 447.0 (12.9) 434.1 2025 Senior Notes 5.375% September 2025 500.0 (3.4) 496.6 500.0 (3.7) 496.3 Accounts Receivable Securitization Facility (3) Various November 2024 — — — — — — Other indebtedness Various Various 7.8 — 7.8 7.4 — 7.4 Total debt $ 2,350.6 $ (34.1) $ 2,316.5 $ 2,353.7 $ (36.1) $ 2,317.6 Less: current portion (4) (16.6) (16.0) Total long-term debt, net of unamortized deferred financing fees $ 2,299.9 $ 2,301.6 (1) This caption does not include deferred financing fees related to the Company’s revolving facilities, which are included within “Deferred charges and other assets” on the condensed consolidated balance sheets. (2) As of March 31, 2023, under the 2026 Revolving Facility, the Company had a capacity of $375.0 million and $22.0 million outstanding letters of credit. As of March 31, 2023, the Company had funds available for borrowing of $100.5 million (net of the applicable $12.0 million outstanding letters of credit as defined in the secured credit agreement), which reflects the borrowing limit imposed by the springing covenant. The springing covenant applies when 30% or more of the 2026 Revolving Facility’s capacity is drawn which then requires the Company to meet a first lien net leverage ratio (as defined in the secured credit agreement) not to exceed 3.50 x at the end of each financial quarter. As of March 31, 2023, the first lien net leverage ratio was 4.85 x and the outstanding borrowings did not exceed the 30% threshold. Additionally, the Company is required to pay a quarterly commitment fee in respect of any unused commitments under this facility equal to 0.375% per annum. (3) As of March 31, 2023, this facility had a borrowing capacity of $150.0 million, and the Company had approximately $150.0 million of accounts receivable available to support this facility, based on the pool of eligible accounts receivable. (4) The current portion of long-term debt was primarily related to $14.5 million of the scheduled future principal payments on both the 2024 Term Loan B and 2028 Term Loan B as of March 31, 2023 and December 31, 2022. |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible assets | |
Changes in Carrying Amount of Goodwill, by Segment | Engineered Latex Plastics Americas Materials Binders Solutions Polystyrene Feedstocks Styrenics Total Balance at December 31, 2022 $ 348.9 $ 14.8 $ 42.5 $ 4.2 $ — $ — $ 410.4 Foreign currency impact 2.6 0.3 0.8 0.1 — — 3.8 Balance at March 31, 2023 $ 351.5 $ 15.1 $ 43.3 $ 4.3 $ — $ — $ 414.2 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments | |
Notional Amounts of Most Significant Net Foreign Exchange Hedge Positions Outstanding | March 31, Buy / (Sell) 2023 Euro $ (520.9) Chinese Yuan $ (48.4) South Korean Won $ (21.8) Swiss Franc $ (19.6) Swedish Krona $ 14.7 |
Schedule of Effect of Derivative Instruments on Statements of Operations | Location and Amount of Gain (Loss) Recognized in Statements of Operations Three Months Ended Three Months Ended March 31, 2023 March 31, 2022 Cost of sales Interest expense, net Other (expense) income, net Cost of sales Interest expense, net Other (expense) income, net Total amount of income and (expense) line items presented in the statements of operations in which the effects of derivative instruments are recorded $ (959.1) $ (38.3) $ 2.9 $ (1,210.7) $ (21.9) $ (3.0) The effects of cash flow hedge instruments: Commodity cash flow hedges Amount of loss reclassified from AOCI into income $ (6.4) $ — $ — $ — $ — $ — Interest rate swaps Amount of loss reclassified from AOCI into income $ — $ — $ — $ — $ (0.8) $ — The effects of net investment hedge instruments: Cross currency swaps Amount of gain excluded from effectiveness testing $ — $ — $ — $ — $ 2.1 $ — The effects of derivatives not designated as hedge instruments: Foreign exchange forward contracts Amount of gain (loss) recognized in income $ — $ — $ (7.8) $ — $ — $ 8.8 Commodity economic hedges Amount of loss recognized in income $ (12.4) $ — $ — $ — $ — $ — |
Schedule of Effect of Hedges on AOCI | ` Gain (Loss) Recognized in AOCI on Balance Sheet Three Months Ended March 31, 2023 2022 Designated as Cash Flow Hedges Commodity cash flow hedges $ (9.9) $ — Interest rate swaps — 1.5 Total $ (9.9) $ 1.5 Designated as Net Investment Hedges Cross currency swaps (CCS) $ — $ 6.1 Total $ — $ 6.1 Gain (Loss) Recognized in Other expense (income), net in Statement of Operations Three Months Ended March 31, 2023 2022 Settlements and changes in the fair value of forward contracts (not designated as hedges) $ (7.8) $ 8.8 Remeasurement of foreign currency-denominated assets and liabilities $ 10.5 $ (10.2) Total $ 2.7 $ (1.4) |
Schedule of Gross and Net Unrealized Gains and Losses and Balance Sheet Classification | March 31, 2023 Foreign Exchange Commodity Commodity Balance Sheet Forward Economic Cash Flow Classification Contracts Hedges Hedges Total Asset Derivatives: Accounts receivable, net of allowance $ 0.1 $ — $ 0.1 $ 0.2 Gross derivative asset position 0.1 — 0.1 0.2 Less: Counterparty netting (0.1) — (0.1) (0.2) Net derivative asset position $ — $ — $ — $ — Liability Derivatives: Accounts payable $ (12.5) $ (13.5) $ (23.1) $ (49.1) Other noncurrent obligations — (1.9) (2.5) (4.4) Gross derivative liability position (12.5) (15.4) (25.6) (53.5) Less: Counterparty netting 0.1 — 0.1 0.2 Net derivative liability position $ (12.4) $ (15.4) $ (25.5) $ (53.3) Total net derivative position $ (12.4) $ (15.4) $ (25.5) $ (53.3) December 31, 2022 Foreign Exchange Commodity Commodity Balance Sheet Forward Economic Cash Flow Classification Contracts Hedges Hedges Total Asset Derivatives: Accounts receivable, net of allowance $ 0.2 $ — $ — $ 0.2 Gross derivative asset position 0.2 — — 0.2 Less: Counterparty netting (0.1) — — (0.1) Net derivative asset position $ 0.1 $ — $ — $ 0.1 Liability Derivatives: Accounts payable $ (11.1) $ (5.3) $ (11.3) $ (27.7) Other noncurrent obligations — (1.3) (0.9) (2.2) Gross derivative liability position (11.1) (6.6) (12.2) (29.9) Less: Counterparty netting 0.1 — — 0.1 Net derivative liability position $ (11.0) $ (6.6) $ (12.2) $ (29.8) Total net derivative position $ (10.9) $ (6.6) $ (12.2) $ (29.7) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Measurements | |
Schedule of Assets and Liabilities at Fair Value on Recurring Basis | March 31, 2023 Quoted Prices in Active Markets for Identical Items Significant Other Observable Inputs Significant Unobservable Inputs Assets (Liabilities) at Fair Value (Level 1) (Level 2) (Level 3) Total Foreign exchange forward contracts—(Liabilities) $ — $ (12.4) $ — $ (12.4) Commodity economic hedges—(Liabilities) — (15.4) — (15.4) Commodity cash flow hedges—(Liabilities) — (25.5) — (25.5) Total fair value $ — $ (53.3) $ — $ (53.3) December 31, 2022 Quoted Prices in Active Markets for Identical Items Significant Other Observable Inputs Significant Unobservable Inputs Assets (Liabilities) at Fair Value (Level 1) (Level 2) (Level 3) Total Foreign exchange forward contracts—Assets $ — $ 0.1 $ — $ 0.1 Foreign exchange forward contracts—(Liabilities) — (11.0) — (11.0) Commodity economic hedges—(Liabilities) — (6.6) — (6.6) Commodity cash flow hedges—(Liabilities) — (12.2) — (12.2) Total fair value $ — $ (29.7) $ — $ (29.7) |
Estimated Fair Value of Outstanding Debt Not Carried at Fair Value | As of As of March 31, 2023 December 31, 2022 2029 Senior Notes $ 269.1 $ 292.3 2028 Term Loan B 662.1 687.1 2025 Senior Notes 406.8 416.9 2024 Term Loan B 653.8 645.6 Total fair value $ 1,991.8 $ 2,041.9 |
Provision For Income Taxes (Tab
Provision For Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Provision For Income Taxes | |
Schedule of Effective Tax Rate | Three Months Ended March 31, 2023 2022 Effective income tax rate 25.4 % 56.9 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies. | |
Schedule of asset retirement cost | Balance at Change in asset retirement obligation March 31, 2023 Balance at beginning of period $ 35.8 Obligations incurred 0.9 Settlements (2.2) Accretion expense 0.5 Currency translation adjustment 0.6 Balance at end of period $ 35.6 |
Pension Plans and Other Postr_2
Pension Plans and Other Postretirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Pension Plans and Other Postretirement Benefits | |
Schedule of Net Periodic Benefit Costs | Three Months Ended Three Months Ended March 31, March 31, Non-U.S. Defined Benefit Pension Plans U.S. Defined Benefit Pension 2023 2022 2023 2022 Net periodic benefit cost Service cost $ 2.0 $ 3.2 $ 0.1 $ 0.2 Interest cost 1.7 0.7 0.2 0.2 Expected return on plan assets (0.2) (0.1) (0.1) (0.2) Amortization of prior service credit (0.1) (0.1) — — Amortization of net loss (0.8) 0.7 — — Net periodic benefit cost $ 2.6 $ 4.4 $ 0.2 $ 0.2 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Share-Based Compensation Expense and Unrecognized Compensation Cost | As of Three Months Ended March 31, 2023 March 31, Unrecognized Weighted 2023 2022 Compensation Cost Average Years RSUs $ 4.8 $ 4.6 $ 13.5 2.0 Options 2.6 3.0 3.9 1.6 PSUs 0.8 0.7 7.4 2.4 Total share-based compensation expense $ 8.2 $ 8.3 |
Summary of Awards Granted and Weighted Average Grant-Date Fair Value | Three Months Ended March 31, 2023 Awards Granted Weighted Average Grant Date Fair Value per Award RSUs 394,292 $ 24.10 Options 438,727 10.86 PSUs 219,238 20.23 |
Option Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Weighted-average Assumptions | Three Months Ended March 31, 2023 Expected term (in years) 5.50 Expected volatility 54.01 % Risk-free interest rate 4.06 % Dividend yield 2.00 % |
Performance Share Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Weighted-average Assumptions | Three Months Ended March 31, 2023 Expected term (in years) 3.00 Expected volatility 62.60 % Risk-free interest rate 4.41 % Share price $ 24.08 |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segments | |
Reconciliation of Segment Reporting to Consolidated | Engineered Latex Plastics Americas Three Months Ended (1) Materials Binders Solutions Polystyrene Feedstocks Styrenics March 31, 2023 $ (11.7) $ 26.0 $ 25.6 $ 15.7 $ (10.8) $ 17.6 March 31, 2022 $ 34.7 $ 30.2 $ 68.6 $ 45.3 $ 4.1 $ 21.6 (1) The Company’s primary measure of segment operating performance is Adjusted EBITDA, which is defined as income from continuing operations before interest expense, net; provision for income taxes; depreciation and amortization expense; loss on extinguishment of long-term debt; asset impairment charges; gains or losses on the dispositions of businesses and assets; restructuring charges; acquisition related costs and benefits and other items. Segment Adjusted EBITDA is a key metric that is used by management to evaluate business performance in comparison to budgets, forecasts, and prior year financial results, providing a measure that management believes reflects core operating performance by removing the impact of transactions and events that would not be considered a part of core operations. Other companies in the industry may define segment Adjusted EBITDA differently than the Company, and as a result, it may be difficult to use segment Adjusted EBITDA, or similarly named financial measures, that other companies may use to compare the performance of those companies to the Company’s segment performance. |
Reconciliation of IBT to Adjusted EBITDA | Three Months Ended March 31, 2023 2022 Income (loss) from continuing operations before income taxes $ (65.6) $ 39.7 Interest expense, net 38.3 21.9 Depreciation and amortization 56.0 53.0 Corporate Unallocated (2) 26.1 26.9 Adjusted EBITDA Addbacks (3) 7.6 63.0 Segment Adjusted EBITDA $ 62.4 $ 204.5 (2) Corporate unallocated includes corporate overhead costs and certain other income and expenses. (3) Adjusted EBITDA addbacks for the three months ended March 31, 2023 and 2022 are as follows: Three Months Ended March 31, 2023 2022 Net gain on disposition of businesses and assets $ — $ (0.3) Restructuring and other charges (Note 17) 3.7 0.4 Acquisition transaction and integration net costs (Note 3) — 3.2 Asset impairment charges or write-offs (Note 11) 0.3 0.7 European Commission request for information (Note 13) — 35.6 Other items (a) 3.6 23.4 Total Adjusted EBITDA Addbacks $ 7.6 $ 63.0 (a) Other items for the three months ended March 31, 2023 and 2022 primarily relate to fees incurred in conjunction with certain of the Company’s strategic initiatives, as well as our transition to a new enterprise resource planning system. |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring | |
Detail of Restructuring Charges | Three Months Ended Cumulative March 31, Life-to-date 2023 2022 Charges Segment Asset Restructuring Plan (1) Feedstocks: Accelerated depreciation $ 0.9 $ — $ 36.0 Feedstocks Employee termination benefits (0.2) — 3.7 Feedstocks Contract terminations 2.5 — 2.9 Feedstocks Decommissioning and other 0.5 — 3.7 Feedstocks Plastics Solutions: Accelerated depreciation — — 1.4 Plastics Solutions Employee termination benefits (0.4) — 3.0 Plastics Solutions Decommissioning and other 0.7 — 0.7 Plastics Solutions Engineered Materials: Accelerated depreciation 3.1 — 6.3 Engineered Materials Employee termination benefits — — 2.4 Engineered Materials Decommissioning and other 0.6 — 4.3 Engineered Materials Asset Restructuring Plan subtotal $ 7.7 $ — $ 64.4 Transformational Restructuring Program Employee termination benefits $ — $ 0.3 $ 8.8 Transformational Restructuring Program Subtotal $ — $ 0.3 $ 8.8 N/A (2) Other Restructurings — 0.1 Various Total Restructuring Charges $ 7.7 $ 0.4 (1) In December 2022, the Company announced an asset restructuring plan designed to reduce costs, improve profitability, reduce exposure to cyclical markets and elevated natural gas prices, and address market overcapacity. The asset restructuring plan includes (i) closure of manufacturing operations at the styrene production facility in Boehlen, Germany, (ii) closure of one of its production lines at the Stade, Germany polycarbonate plant, and (iii) closure of the PMMA sheet manufacturing site in Matamoros, Mexico. The program is expected to be substantially completed by the end of 2024. In connection with this restructuring plan, during the three months ended March 31, 2023, the Company incurred employee termination benefit charges of $(0.6) million, contract termination charges of $2.5 million, accelerated depreciation charges of $4.0 million, and decommissioning and other charges of $1.8 million. Production at all facilities have ceased and decommissioning activities are expected to continue through the end of 2024. The Company expects to incur incremental contract termination charges of $17.6 million, decommissioning and other charges of $2.2 million, as well as a limited amount of incremental employee termination benefit charges, the majority of which is expected to be paid by the end of 2024. Of the total incremental charges, $18.6 million is expected to be incurred in the Feedstocks segment, and $1.2 million is expected to be incurred in the Plastics Solution segment. On April 4, 2023, the Company entered into an agreement to sell its land, buildings and equipment in Matamoros, Mexico for a cash consideration of approximately $19.0 million. The transaction is expected to close within the second quarter of 2023. (2) In May 2021, the Company approved a transformational restructuring program associated with the Company’s strategic initiatives. The Company expects to incur incremental employee termination benefit charges related to impacted employees as of March 31, 2023 of less than $1.0 million, the majority of which are expected to be paid in 2023. As this was identified as a corporate-related activity, the charges related to this restructuring program were not allocated to a specific segment, but rather included within corporate unallocated. |
Rollforward of Liability Balances | Balance at Balance at December 31, 2022 Expenses Deductions (1) March 31, 2023 Employee termination benefits $ 13.3 $ (0.6) $ (2.1) $ 10.6 Contract terminations — 2.5 (2.5) — Decommissioning and other — 1.8 (1.8) — Total $ 13.3 $ 3.7 $ (6.4) $ 10.6 (1) Primarily includes payments made against the existing accrual, as well as immaterial impacts of foreign currency remeasurement. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss). | |
Components of AOCI, Net of Income Taxes | Cumulative Pension & Other Translation Postretirement Benefit Cash Flow Three Months Ended March 31, 2023 and 2022 Adjustments Plans, Net Hedges, Net Total Balance as of December 31, 2022 $ (151.2) $ 29.0 $ (9.1) $ (131.3) Other comprehensive income (loss) 10.5 — (13.2) (2.7) Amounts reclassified from AOCI to net income (1) — 0.3 5.8 6.1 Balance as of March 31, 2023 $ (140.7) $ 29.3 $ (16.5) $ (127.9) Balance as of December 31, 2021 $ (114.3) $ (33.6) $ 0.7 $ (147.2) Other comprehensive income (loss) (4.3) — 0.7 (3.6) Amounts reclassified from AOCI to net income (1) — 0.3 0.8 1.1 Balance as of March 31, 2022 $ (118.6) $ (33.3) $ 2.2 $ (149.7) (1) The following is a summary of amounts reclassified from AOCI to net income (loss) for the three months ended March 31, 2023 and 2022: |
Summary of amounts reclassified from AOCI to net income (loss) | Three Months Ended March 31, Statements of Operations AOCI Components 2023 2022 Classification Cash flow hedging items Commodity cash flow hedges $ 6.4 $ — Cost of sales Interest rate swaps — 0.8 Interest expense, net Total before tax 6.4 0.8 Tax effect (0.6) — Provision for (benefit from) income taxes Total, net of tax $ 5.8 $ 0.8 Amortization of pension and other postretirement benefit plan items Prior service cost (credit) $ 0.1 $ (0.1) (a) Net actuarial loss 0.3 0.6 (a) Total before tax 0.4 0.5 Tax effect (0.1) (0.2) Provision for (benefit from) income taxes Total, net of tax $ 0.3 $ 0.3 (a) These AOCI components are included in the computation of net periodic benefit costs (see Note 14). |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share | |
Schedule of Earnings per Share Basic and Diluted | Three Months Ended March 31, (in millions, except per share data) 2023 2022 Earnings: Net income (loss) from continuing operations $ (48.9) $ 17.1 Net loss from discontinued operations — (0.4) Net income (loss) $ (48.9) $ 16.7 Shares: Weighted average ordinary shares outstanding 35.0 37.3 Dilutive effect of RSUs, option awards, and PSUs (1) — 0.8 Diluted weighted average ordinary shares outstanding 35.0 38.1 Income (loss) per share: Income (loss) per share—basic: Continuing operations $ (1.40) $ 0.46 Discontinued operations — (0.01) Income (loss) per share—basic $ (1.40) $ 0.45 Income (loss) per share—diluted: Continuing operations $ (1.40) $ 0.45 Discontinued operations — (0.01) Income (loss) per share—diluted $ (1.40) $ 0.44 (1) Refer to Note 15 for discussion of RSUs, option awards, and PSUs granted to certain Company directors and employees. As the Company recorded a net loss from continuing operations for the three months ended March 31, 2023, potential shares related to equity-based awards have been excluded from the calculation of diluted EPS, as doing so would be anti-dilutive. There were 0.9 million anti-dilutive shares that have been excluded from the computation of diluted earnings per share for the three months ended March 31, 2022. |
Impairment and Other Charges (T
Impairment and Other Charges (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Impairment and Other Charges. | |
Schedule of Other Charges | Three Months Ended March 31, 2023 2022 Asset impairment charges or write-offs (Note 11) $ 0.3 $ 0.7 European Commission request for information (Note 13) — 35.6 Total $ 0.3 $ 36.3 |
Acquisitions - Heathland B.V (D
Acquisitions - Heathland B.V (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |||
Jan. 03, 2022 | Feb. 28, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||||
Cash acquired from acquisition | $ 0 | $ 1 | |||
Contingent consideration payment | 1.2 | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | $ 414.2 | $ 410.4 | |||
Heathland B.V. | |||||
Business Acquisition [Line Items] | |||||
Contingent payments to be paid | $ 6.4 | ||||
Consideration paid upon signing the agreement | $ 22.9 | ||||
Contingent consideration payment | $ 1.2 | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Purchase price consideration | 29.3 | ||||
Heathland B.V. | Maximum | |||||
Business Acquisition [Line Items] | |||||
Consideration paid upon signing the agreement | $ 6.8 |
Divestitures and Discontinued_3
Divestitures and Discontinued Operations (Details) - Emulsion Polymers, Synthetic Rubber - Disposal Group, Disposed of by Sale, Not Discontinued Operations $ in Millions | Dec. 01, 2021 USD ($) |
Disclosures by disposal group | |
Consideration | $ 402.4 |
Pension and other postretirement benefits | 41.6 |
Working capital target | $ 47 |
Divestitures and Discontinued_4
Divestitures and Discontinued Operations - Results (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Discontinued Operation, Income (Loss) from Discontinued Operation Disclosures [Abstract] | ||
Net sales | $ 0.1 | |
Cost of sales | 0.7 | |
Gross loss | (0.6) | |
Selling, general and administrative expenses | (0.2) | |
Operating loss | (0.4) | |
Loss from discontinued operations before income taxes | (0.4) | |
Net loss from discontinued operations | $ (0.4) | |
Emulsion Polymers, Synthetic Rubber | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||
Discontinued Operation, Income (Loss) from Discontinued Operation Disclosures [Abstract] | ||
Net sales related to supply agreement | $ 13.5 | |
Cost of sales related to supply agreement | $ 15.4 |
Net Sales (Details)
Net Sales (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 996.3 | $ 1,386.7 |
Engineered Materials | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 206.2 | 295.2 |
Latex Binders | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 248.1 | 306.7 |
Base Plastics | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 289.9 | 396.5 |
Polystyrene | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 209.1 | 318 |
Feedstocks | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 43 | 70.3 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 250.8 | 309 |
United States | Engineered Materials | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 110.9 | 138.4 |
United States | Latex Binders | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 67.6 | 82.2 |
United States | Base Plastics | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 68.7 | 84.5 |
United States | Feedstocks | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 3.6 | 3.9 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 544.8 | 797.2 |
Europe | Engineered Materials | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 73.5 | 118.7 |
Europe | Latex Binders | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 128.1 | 150.9 |
Europe | Base Plastics | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 165.3 | 246.6 |
Europe | Polystyrene | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 138.5 | 214.6 |
Europe | Feedstocks | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 39.4 | 66.4 |
Asia-Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 168 | 247.6 |
Asia-Pacific | Engineered Materials | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 18.9 | 35.3 |
Asia-Pacific | Latex Binders | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 50.7 | 71.7 |
Asia-Pacific | Base Plastics | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 27.8 | 37.2 |
Asia-Pacific | Polystyrene | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 70.6 | 103.4 |
Rest of World | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 32.7 | 32.9 |
Rest of World | Engineered Materials | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2.9 | 2.8 |
Rest of World | Latex Binders | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1.7 | 1.9 |
Rest of World | Base Plastics | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 28.1 | $ 28.2 |
Investments in Unconsolidated_3
Investments in Unconsolidated Affiliates (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) item | Mar. 31, 2022 USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||
Number of joint ventures | item | 1 | |
Summarized Financial Information, Net Income | ||
Gross profit | $ 37.2 | $ 176 |
Net income (loss) | (48.9) | 16.7 |
AmSty | ||
Summarized Financial Information, Net Income | ||
Sales | 443.3 | 524.4 |
Gross profit | 52.9 | 48.1 |
Net income (loss) | $ 37.8 | $ 36.1 |
Investments in Unconsolidated_4
Investments in Unconsolidated Affiliates - Americas Styrenics (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Investments in Unconsolidated Affiliates | |||
Investments in unconsolidated affiliates | $ 252.7 | $ 255.1 | |
AmSty | |||
Investments in Unconsolidated Affiliates | |||
Investments in unconsolidated affiliates | $ 252.7 | $ 255.1 | |
Percentage of ownership underlying net assets | 50% | 50% | |
Amortized weighted average remaining useful life | P1Y9M18D | ||
Dividends received from operating activities | $ 20 | $ 7.5 | |
Unconsolidated affiliates | |||
Investments in Unconsolidated Affiliates | |||
Investment in unconsolidated affiliates-difference between carrying amount and underlying equity | $ 7 | $ 8.4 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Inventories | ||
Finished goods | $ 195.3 | $ 218.4 |
Raw materials and semi-finished goods | 265.9 | 295.6 |
Supplies | 41.4 | 39.6 |
Total | $ 502.6 | $ 553.6 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) € in Millions, $ in Millions | 3 Months Ended | ||||
Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Feb. 26, 2020 USD ($) | Feb. 26, 2020 EUR (€) | Sep. 01, 2017 USD ($) | |
Debt Instruments | |||||
Carrying amount | $ 2,350.6 | $ 2,353.7 | |||
Unamortized deferred financing fees | (34.1) | (36.1) | |||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | 2,316.5 | 2,317.6 | |||
Less: current portion | (16.6) | (16) | |||
Total long-term debt, net of unamortized deferred financing fees | 2,299.9 | 2,301.6 | |||
Letter of Credit [Member] | |||||
Debt Instruments | |||||
Line of credit | 22 | ||||
Term Loan B | |||||
Debt Instruments | |||||
Less: current portion | $ (14.5) | (14.5) | |||
2024 Term Loan B | |||||
Debt Instruments | |||||
Interest rate at end of period (as a percent) | 6.84% | ||||
Carrying amount | $ 661.7 | 663.4 | |||
Unamortized deferred financing fees | (4.4) | (5.1) | |||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | $ 657.3 | 658.3 | |||
2028 Term Loan B | |||||
Debt Instruments | |||||
Interest rate at end of period (as a percent) | 7.34% | ||||
Carrying amount | $ 734.1 | 735.9 | |||
Unamortized deferred financing fees | (13.8) | (14.4) | |||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | 720.3 | 721.5 | |||
2026 Revolving Facility | |||||
Debt Instruments | |||||
Funds available for borrowings | 100.5 | ||||
Letters of credit, amount outstanding | $ 12 | ||||
Commitment fee (as a percent) | 0.375% | ||||
Maximum borrowing capacity | $ 375 | ||||
Percentage of Revolving Facility borrowing capacity covenant trigger | 30% | ||||
Net leverage ratio | 4.85 | ||||
2026 Revolving Facility | Maximum | |||||
Debt Instruments | |||||
Net leverage ratio | 3.50 | ||||
2029 Senior Notes | |||||
Debt Instruments | |||||
Interest rate | 5.125% | ||||
Carrying amount | $ 447 | 447 | |||
Unamortized deferred financing fees | (12.5) | (12.9) | |||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | $ 434.5 | 434.1 | |||
2025 Senior Notes | |||||
Debt Instruments | |||||
Interest rate | 5.375% | 5.375% | 5.375% | 5.375% | |
Carrying amount | $ 500 | 500 | |||
Unamortized deferred financing fees | (3.4) | (3.7) | |||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | 496.6 | 496.3 | $ 500 | € 459.3 | $ 500 |
Accounts Receivable Securitization Facility | |||||
Debt Instruments | |||||
Carrying amount | 0 | 0 | |||
Unamortized deferred financing fees | 0 | 0 | |||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | 0 | 0 | |||
Maximum borrowing capacity | 150 | ||||
Accounts receivable available to support facility | 150 | ||||
Other Indebtedness | |||||
Debt Instruments | |||||
Carrying amount | 7.8 | 7.4 | |||
Total Debt, Less Unamortized Deferred Financing Fees, Current and Noncurrent | $ 7.8 | $ 7.4 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | ||
Beginning Balance | $ 410.4 | |
Foreign currency impact | 3.8 | |
Ending Balance | 414.2 | $ 410.4 |
Engineered Materials | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 348.9 | |
Impairment losses | 297.1 | 297.1 |
Foreign currency impact | 2.6 | |
Ending Balance | 351.5 | 348.9 |
Latex Binders | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 14.8 | |
Foreign currency impact | 0.3 | |
Ending Balance | 15.1 | 14.8 |
Base Plastics | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 42.5 | |
Foreign currency impact | 0.8 | |
Ending Balance | 43.3 | 42.5 |
Polystyrene | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 4.2 | |
Foreign currency impact | 0.1 | |
Ending Balance | $ 4.3 | $ 4.2 |
Derivative Instruments (Details
Derivative Instruments (Details) MWh in Thousands, € in Millions, $ in Millions | 3 Months Ended | |||||||
Apr. 07, 2022 USD ($) | Feb. 26, 2020 USD ($) | Sep. 06, 2017 | Sep. 01, 2017 USD ($) | Mar. 31, 2023 USD ($) MWh item | Dec. 31, 2022 USD ($) | Feb. 26, 2020 EUR (€) | Sep. 01, 2017 EUR (€) | |
Derivative Instruments | ||||||||
Total debt | $ 2,316.5 | $ 2,317.6 | ||||||
Foreign exchange forward contracts | ||||||||
Derivative Instruments | ||||||||
Derivative term | 2 months | |||||||
Foreign exchange forward contracts | Not Designated as Hedging Instruments | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | $ 657.5 | |||||||
Foreign exchange forward contracts | Designated as Hedging Instrument | ||||||||
Derivative Instruments | ||||||||
Number of subsidiaries participating | item | 1 | |||||||
Foreign exchange forward contracts | Designated as Hedging Instrument | Cash Flow Hedges | ||||||||
Derivative Instruments | ||||||||
Amount hedged | $ 0 | |||||||
Cross currency swaps | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | € | € 420 | |||||||
Derivative term | 2 years 8 months 12 days | 5 years | ||||||
Cross currency swap weighted average interest rate (as a percent) | 3.672% | 3.45% | ||||||
Cash proceeds | $ 1.9 | |||||||
Interest rate swaps | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | $ 200 | |||||||
Fixed interest rate per agreement (as a percent) | 1.81% | |||||||
Commodity Contract | ||||||||
Derivative Instruments | ||||||||
Derivative term | 24 months | |||||||
Number of megawatt hours of natural gas purchases | MWh | 895 | |||||||
Commodity Contract | Cash Flow Hedges | ||||||||
Derivative Instruments | ||||||||
Derivative term | 21 months | |||||||
Number of megawatt hours of natural gas purchases | MWh | 964 | |||||||
2025 Senior Notes | ||||||||
Derivative Instruments | ||||||||
Total debt | $ 500 | $ 500 | $ 496.6 | 496.3 | € 459.3 | |||
Interest rate | 5.375% | 5.375% | 5.375% | 5.375% | 5.375% | |||
2024 Term Loan B | ||||||||
Derivative Instruments | ||||||||
Total debt | $ 657.3 | $ 658.3 | ||||||
Debt instrument, margin rate | 2% | |||||||
Variable rate floor (as a percent) | 0% | |||||||
Euro | Foreign exchange forward contracts | (Sell) | Not Designated as Hedging Instruments | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | 520.9 | |||||||
Chinese Yuan | Foreign exchange forward contracts | (Sell) | Not Designated as Hedging Instruments | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | 48.4 | |||||||
Swedish Krona | Foreign exchange forward contracts | Buy | Not Designated as Hedging Instruments | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | 14.7 | |||||||
South Korean Won | Foreign exchange forward contracts | (Sell) | Not Designated as Hedging Instruments | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | 21.8 | |||||||
New Taiwan Dollar | Foreign exchange forward contracts | (Sell) | Not Designated as Hedging Instruments | ||||||||
Derivative Instruments | ||||||||
Derivative contracts, notional amount | $ 19.6 |
Derivative Instruments - Income
Derivative Instruments - Income Statements (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Cost of Sales | $ (959.1) | $ (1,210.7) |
Interest expense, net | 38.3 | 21.9 |
Other expense (income), net | (2.9) | 3 |
Cost of Sales | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Cost of Sales | (959.1) | (1,210.7) |
Amount of gain (loss) recognized in income, not designated | (12.4) | |
Interest Expense, Net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Interest expense, net | (38.3) | (21.9) |
Other expense, net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Other expense (income), net | 2.9 | (3) |
Foreign exchange forward contracts | Not Designated as Hedging Instruments | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of gain (loss) recognized in income, not designated | (7.8) | 8.8 |
Foreign exchange forward contracts | Not Designated as Hedging Instruments | Other expense, net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of gain (loss) recognized in income, not designated | (7.8) | 8.8 |
Cross currency swaps | Interest Expense, Net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of gain excluded from effectiveness testing | 2.1 | |
Interest rate swaps | Interest Expense, Net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of loss reclassified from AOCI into income, interest rate cash flow hedges | $ (0.8) | |
Commodity Contract | Cash Flow Hedges | Cost of Sales | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of gain reclassified from AOCI into income, commodity cash flow hedges | $ (6.4) |
Derivative Instruments - Effect
Derivative Instruments - Effect on AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Derivative Instruments | ||
Gain (Loss) Recognized in AOCI, Cash flow hedges | $ (9.9) | $ 1.5 |
Gain (Loss) Recognized in AOCI, Net investment hedges | 6.1 | |
Commodity Contract | ||
Derivative Instruments | ||
Gain (Loss) Recognized in AOCI, Cash flow hedges | $ (9.9) | |
Interest rate swaps | ||
Derivative Instruments | ||
Gain (Loss) Recognized in AOCI, Cash flow hedges | 1.5 | |
Cross currency swaps | ||
Derivative Instruments | ||
Gain (Loss) Recognized in AOCI, Net investment hedges | $ 6.1 |
Derivative Instruments - Gains
Derivative Instruments - Gains and Losses in Other expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Foreign exchange transaction gains (losses) | $ 10.5 | $ (10.2) |
Derivative, Gain (Loss) on Derivative, Net, Total | $ 2.7 | $ (1.4) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Reclassification expected during next 12 months | $ 23 | |
Foreign exchange forward contracts | Not Designated as Hedging Instruments | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of gain (loss) recognized in income, not designated | (7.8) | $ 8.8 |
Foreign exchange forward contracts | Not Designated as Hedging Instruments | Other expense, net | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Amount of gain (loss) recognized in income, not designated | $ (7.8) | $ 8.8 |
Derivative Instruments - Financ
Derivative Instruments - Financial Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | $ 0.2 | $ 0.2 |
Counterparty netting, derivative assets | (0.1) | |
Net derivative asset position | 0.1 | |
Liabilities at fair value | $ (49.1) | $ (27.7) |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accounts Payable, Current | Accounts Payable, Current |
Gross derivative liability position | $ (53.5) | $ (29.9) |
Counterparty netting, derivative liabilities | 0.2 | 0.1 |
Net derivative liability position | (53.3) | (29.8) |
Total net derivative position | (53.3) | (29.7) |
Other noncurrent obligations. | ||
Derivatives, Financial Assets and Liabilities | ||
Liabilities at fair value | $ (4.4) | $ (2.2) |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Accounts Receivable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | $ 0.2 | $ 0.2 |
Counterparty netting, derivative assets | (0.2) | |
Foreign exchange forward contracts | Not Designated as Hedging Instruments | ||
Derivatives, Financial Assets and Liabilities | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Accounts and Other Receivables, Net, Current | |
Gross derivative asset position | 0.1 | $ 0.2 |
Counterparty netting, derivative assets | (0.1) | |
Net derivative asset position | 0.1 | |
Liabilities at fair value | $ (12.5) | $ (11.1) |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accounts Payable, Current | Accounts Payable, Current |
Gross derivative liability position | $ (12.5) | $ (11.1) |
Counterparty netting, derivative liabilities | 0.1 | 0.1 |
Net derivative liability position | (12.4) | (11) |
Total net derivative position | (12.4) | (10.9) |
Foreign exchange forward contracts | Not Designated as Hedging Instruments | Accounts Receivable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 0.1 | 0.2 |
Counterparty netting, derivative assets | (0.1) | |
Commodity Contract | ||
Derivatives, Financial Assets and Liabilities | ||
Liabilities at fair value | (13.5) | (5.3) |
Gross derivative liability position | (15.4) | (6.6) |
Net derivative liability position | (15.4) | (6.6) |
Total net derivative position | (15.4) | (6.6) |
Commodity Contract | Other noncurrent obligations. | ||
Derivatives, Financial Assets and Liabilities | ||
Liabilities at fair value | $ (1.9) | $ (1.3) |
Commodity Contract | Not Designated as Hedging Instruments | ||
Derivatives, Financial Assets and Liabilities | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accounts Payable, Current | Accounts Payable, Current |
Commodity Contract | Cash Flow Hedges | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | $ 0.1 | |
Liabilities at fair value | (23.1) | $ (11.3) |
Gross derivative liability position | (25.6) | (12.2) |
Counterparty netting, derivative liabilities | 0.1 | |
Net derivative liability position | (25.5) | (12.2) |
Total net derivative position | (25.5) | (12.2) |
Commodity Contract | Cash Flow Hedges | Other noncurrent obligations. | ||
Derivatives, Financial Assets and Liabilities | ||
Liabilities at fair value | (2.5) | $ (0.9) |
Commodity Contract | Cash Flow Hedges | Accounts Receivable | ||
Derivatives, Financial Assets and Liabilities | ||
Gross derivative asset position | 0.1 | |
Counterparty netting, derivative assets | $ (0.1) | |
Commodity Contract | Cash Flow Hedges | Not Designated as Hedging Instruments | ||
Derivatives, Financial Assets and Liabilities | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accounts Payable, Current |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities at Fair Value, Recurring (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Fair Value Measurements | |||
Liabilities at fair value | $ (49.1) | $ (27.7) | |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accounts Payable, Current | Accounts Payable, Current | |
Total net derivative position | $ (53.3) | $ (29.7) | |
Impairment loss on assets | $ 0.3 | $ 0.7 | |
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] | Impairment And Other charges | ||
Boehlen Location | |||
Fair Value Measurements | |||
Impairment loss on assets | $ 0.3 | ||
Property Plant And Equipment At Fair Value | Boehlen Location | |||
Fair Value Measurements | |||
Assets at fair value, nonrecurring | 3.2 | 3.2 | |
Commodity Contract | |||
Fair Value Measurements | |||
Liabilities at fair value | (13.5) | (5.3) | |
Total net derivative position | (15.4) | (6.6) | |
Commodity Contract | Cash Flow Hedges | |||
Fair Value Measurements | |||
Liabilities at fair value | (23.1) | (11.3) | |
Total net derivative position | (25.5) | $ (12.2) | |
Not Designated as Hedging Instruments | Foreign exchange forward contracts | |||
Fair Value Measurements | |||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Accounts and Other Receivables, Net, Current | ||
Liabilities at fair value | $ (12.5) | $ (11.1) | |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accounts Payable, Current | Accounts Payable, Current | |
Total net derivative position | $ (12.4) | $ (10.9) | |
Not Designated as Hedging Instruments | Commodity Contract | |||
Fair Value Measurements | |||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accounts Payable, Current | Accounts Payable, Current | |
Not Designated as Hedging Instruments | Commodity Contract | Cash Flow Hedges | |||
Fair Value Measurements | |||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accounts Payable, Current | ||
Recurring | |||
Fair Value Measurements | |||
Total net derivative position | $ (53.3) | $ (29.7) | |
Recurring | Level 2 | |||
Fair Value Measurements | |||
Total net derivative position | (53.3) | (29.7) | |
Recurring | Not Designated as Hedging Instruments | Foreign exchange forward contracts | |||
Fair Value Measurements | |||
Assets at fair value | 0.1 | ||
Liabilities at fair value | (12.4) | (11) | |
Recurring | Not Designated as Hedging Instruments | Commodity Contract | |||
Fair Value Measurements | |||
Liabilities at fair value | (15.4) | (6.6) | |
Recurring | Not Designated as Hedging Instruments | Commodity Contract | Cash Flow Hedges | |||
Fair Value Measurements | |||
Liabilities at fair value | (25.5) | (12.2) | |
Recurring | Not Designated as Hedging Instruments | Level 2 | Foreign exchange forward contracts | |||
Fair Value Measurements | |||
Assets at fair value | 0.1 | ||
Liabilities at fair value | (12.4) | (11) | |
Recurring | Not Designated as Hedging Instruments | Level 2 | Commodity Contract | |||
Fair Value Measurements | |||
Liabilities at fair value | (15.4) | (6.6) | |
Recurring | Not Designated as Hedging Instruments | Level 2 | Commodity Contract | Cash Flow Hedges | |||
Fair Value Measurements | |||
Liabilities at fair value | $ (25.5) | (12.2) | |
Nonrecurring | |||
Fair Value Measurements | |||
Assets at fair value, nonrecurring | 0 | ||
Liabilities at fair value, nonrecurring | $ 0 |
Fair Value Measurements - Items
Fair Value Measurements - Items not at Fair Value (Details) - Level 2 - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value of Debt Instruments | ||
Total fair value of long term debt | $ 1,991.8 | $ 2,041.9 |
2029 Senior Notes | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | 269.1 | 292.3 |
2028 Term Loan B | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | 662.1 | 687.1 |
2025 Senior Notes | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | 406.8 | 416.9 |
2024 Term Loan B | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | $ 653.8 | $ 645.6 |
Provision For Income Taxes (Det
Provision For Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Provision For Income Taxes | ||
Effective tax rate | 25.40% | 56.90% |
Tax benefits | $ 0 | |
Provision for (benefit from) income taxes | $ (16.7) | 22.6 |
Change in valuation allowances | $ 35.6 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Millions | Mar. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) |
Commitments and Contingencies. | ||
Accrued obligations for environmental remediation and restoration costs | $ | $ 3.5 | $ 3.5 |
Environmental Loss Contingency, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities and Other Liabilities, Other Liabilities, Noncurrent | Accrued Liabilities and Other Liabilities, Other Liabilities, Noncurrent |
Environmental claims asserted | item | 0 |
Commitments and Contingencies -
Commitments and Contingencies - Purchase Commitments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Nov. 30, 2022 | |
Loss Contingencies [Line Items] | |||
European Commission investigation | $ 35.6 | ||
Estimated Liability relating to European Commission Request for Information | $ 33.8 | ||
Maximum | |||
Loss Contingencies [Line Items] | |||
Purchase commitment period | 4 years | ||
Minimum | |||
Loss Contingencies [Line Items] | |||
Purchase commitment period | 1 year |
Commitments and Contingencies_3
Commitments and Contingencies - Change in asset retirement obligation (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Change in asset retirement obligation | |
Balance at beginning of period | $ 35.8 |
Obligations incurred | 0.9 |
Settlements | (2.2) |
Accretion expense | 0.5 |
Currency translation adjustment | 0.6 |
Balance at end of period | $ 35.6 |
Commitments and Contingencies_4
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | May 31, 2021 |
Loss Contingencies [Line Items] | |||
Current portion | $ 24.6 | $ 25.3 | |
Long-term portion | $ 11 | $ 10.5 | |
Pending Litigation | Synthos | |||
Loss Contingencies [Line Items] | |||
Current portion | $ 491 |
Pension Plans and Other Postr_3
Pension Plans and Other Postretirement Benefits - Net Periodic Benefit Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
U.S. Plans And Non-U.S. Plans | ||
Net periodic benefit cost | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Pension plans | Non-U.S. Plans | ||
Net periodic benefit cost | ||
Service cost | $ 2 | $ 3.2 |
Interest cost | 1.7 | 0.7 |
Expected return on plan assets | (0.2) | (0.1) |
Amortization of prior service cost | (0.1) | (0.1) |
Amortization of net (gain) loss | (0.8) | 0.7 |
Net periodic benefit cost | 2.6 | 4.4 |
Pension plans | United States | ||
Net periodic benefit cost | ||
Service cost | 0.1 | 0.2 |
Interest cost | 0.2 | 0.2 |
Expected return on plan assets | (0.1) | (0.2) |
Net periodic benefit cost | 0.2 | 0.2 |
Other Postretirement Benefit Plans | Maximum | ||
Net periodic benefit cost | ||
Net periodic benefit cost | $ 0.2 | $ 0.2 |
Pension Plans and Other Postr_4
Pension Plans and Other Postretirement Benefits - Net Amounts Recognized (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Net amounts recognized in the balance sheets at December 31 | ||
Benefit obligations | $ 183.4 | $ 177.8 |
Cash contributions and benefit payments to unfunded plans | 1.7 | |
Additional cash contributions, including benefit payments to unfunded plans | $ 11.4 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Expense (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 8.2 | $ 8.3 |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | 4.8 | 4.6 |
Unrecognized compensation cost | $ 13.5 | |
Weighted-average period of recognition | 2 years | |
Option Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 2.6 | 3 |
Unrecognized compensation cost, options | $ 3.9 | |
Weighted-average period of recognition | 1 year 7 months 6 days | |
Performance Share Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 0.8 | $ 0.7 |
Unrecognized compensation cost | $ 7.4 | |
Weighted-average period of recognition | 2 years 4 months 24 days |
Share-Based Compensation - RSUs
Share-Based Compensation - RSUs (Details) - Restricted Stock Units | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Other-than-Options, Shares Activity | |
Granted, Shares | shares | 394,292 |
Other-than-Options, FV Activity | |
Granted, Weighted-Average Grant Date Fair Value per Share | $ / shares | $ 24.10 |
Share-Based Compensation - RSU
Share-Based Compensation - RSU Options and PSUs (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Restricted Stock Units | |
Other-than-Options, Shares Activity | |
Granted, Shares | shares | 394,292 |
Other-than-Options, FV Activity | |
Granted, Weighted-Average Grant Date Fair Value per Share | $ 24.10 |
Option Awards | |
Options Outstanding Roll Forward | |
Granted, Options | shares | 438,727 |
Fair Value Assumptions | |
Expected term (in years) | 5 years 6 months |
Expected volatility | 54.01% |
Risk-free interest rate | 4.06% |
Dividend yield | 2% |
Options granted, Weighted average grant date fair value | $ 10.86 |
Performance Share Units | |
Fair Value Assumptions | |
Expected term (in years) | 3 years |
Expected volatility | 62.60% |
Risk-free interest rate | 4.41% |
Share Price | $ 24.08 |
Other-than-Options, Shares Activity | |
Granted, Shares | shares | 219,238 |
Other-than-Options, FV Activity | |
Granted, Weighted-Average Grant Date Fair Value per Share | $ 20.23 |
Segments - Reconciliation of Se
Segments - Reconciliation of Segment Reporting to Consolidated (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | segment | 6 | ||
Adjusted EBITDA | $ 62.4 | $ 204.5 | |
Depreciation and amortization | 56 | 53 | |
Engineered Materials | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | (11.7) | 34.7 | |
Latex Binders | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | 26 | 30.2 | |
Base Plastics | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | 25.6 | 68.6 | |
Polystyrene | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | 15.7 | 45.3 | |
Feedstocks | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | (10.8) | 4.1 | |
Americas Styrenics | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | $ 17.6 | $ 21.6 | |
AmSty | |||
Segment Reporting Information [Line Items] | |||
Percentage of ownership underlying net assets | 50% | 50% | |
AmSty | Americas Styrenics | |||
Segment Reporting Information [Line Items] | |||
Percentage of ownership underlying net assets | 50% |
Segments - Reconciliation of Ne
Segments - Reconciliation of Net Income to Segment Adjusted EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Income (loss) from continuing operations before income taxes | $ (65.6) | $ 39.7 |
Interest expense, net | (38.3) | (21.9) |
Depreciation and amortization | 56 | 53 |
Corporate Unallocated | 26.1 | 26.9 |
Adjusted EBITDA addbacks | 7.6 | 63 |
Adjusted EBITDA | 62.4 | 204.5 |
Net gain on disposition of businesses and assets | (0.3) | |
Restructuring and other charges | 3.7 | 0.4 |
Acquisition transactions and integration net costs (benefit) | 3.2 | |
Asset impairment charges or write-offs | 0.3 | 0.7 |
European Commission Request for Information (Note 16) | 35.6 | |
Other items | 3.6 | 23.4 |
Corporate Unallocated | ||
Segment Reporting Information [Line Items] | ||
Interest expense, net | $ 38.3 | $ 21.9 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 04, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | $ 7.7 | $ 0.4 | |
Restructuring, Incurred Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, General and Administrative Expense | Selling, General and Administrative Expense | |
Restructuring Reserve [Roll Forward] | |||
Accrued charges/Balance at beginning of period | $ 13.3 | ||
Expenses | 3.7 | ||
Deductions | (6.4) | ||
Accrued charges/Balance at end of period | 10.6 | ||
MEXICO | |||
Restructuring Cost and Reserve [Line Items] | |||
Proceeds received on sale of property | $ 19 | ||
Transformational Restructuring Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | $ 0.3 | ||
Cumulative life-to-date charges | 8.8 | ||
Other Restructurings | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | 0.1 | ||
Accelerated Depreciation | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost | 4 | ||
Employee termination benefits | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | (0.6) | ||
Restructuring Reserve [Roll Forward] | |||
Accrued charges/Balance at beginning of period | 13.3 | ||
Expenses | (0.6) | ||
Deductions | (2.1) | ||
Accrued charges/Balance at end of period | 10.6 | ||
Employee termination benefits | Transformational Restructuring Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | $ 0.3 | ||
Cumulative life-to-date charges | 8.8 | ||
Employee termination benefits | Transformational Restructuring Program | Maximum | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring charges | 1 | ||
Contract Termination Charges [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | 2.5 | ||
Expected restructuring charges | 17.6 | ||
Restructuring Reserve [Roll Forward] | |||
Expenses | 2.5 | ||
Deductions | (2.5) | ||
Decommissioning and other | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | 1.8 | ||
Expected restructuring charges | 2.2 | ||
Restructuring Reserve [Roll Forward] | |||
Expenses | 1.8 | ||
Deductions | (1.8) | ||
Plastic Solution | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring charges | 1.2 | ||
Plastic Solution | Accelerated Depreciation | |||
Restructuring Cost and Reserve [Line Items] | |||
Cumulative life-to-date charges | 1.4 | ||
Plastic Solution | Employee termination benefits | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | (0.4) | ||
Cumulative life-to-date charges | 3 | ||
Plastic Solution | Decommissioning and other | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | 0.7 | ||
Cumulative life-to-date charges | 0.7 | ||
Feedstocks | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring charges | 18.6 | ||
Feedstocks | Accelerated Depreciation | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | 0.9 | ||
Cumulative life-to-date charges | 36 | ||
Feedstocks | Employee termination benefits | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | (0.2) | ||
Cumulative life-to-date charges | 3.7 | ||
Feedstocks | Contract Termination Charges [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | 2.5 | ||
Cumulative life-to-date charges | 2.9 | ||
Feedstocks | Decommissioning and other | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | 0.5 | ||
Cumulative life-to-date charges | 3.7 | ||
Engineered Materials | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | 7.7 | ||
Cumulative life-to-date charges | 64.4 | ||
Engineered Materials | Accelerated Depreciation | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | 3.1 | ||
Cumulative life-to-date charges | 6.3 | ||
Engineered Materials | Employee termination benefits | |||
Restructuring Cost and Reserve [Line Items] | |||
Cumulative life-to-date charges | 2.4 | ||
Engineered Materials | Decommissioning and other | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | 0.6 | ||
Cumulative life-to-date charges | $ 4.3 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Components (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 420.3 | $ 1,013.1 |
Balance at end of period | 376.2 | 972.8 |
Cumulative Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (151.2) | (114.3) |
Other comprehensive income (loss) | 10.5 | (4.3) |
Balance at end of period | (140.7) | (118.6) |
Pension & Other Postretirement Benefit Plans, Net | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | 29 | (33.6) |
Amounts reclassified from AOCI to net income | 0.3 | 0.3 |
Balance at end of period | 29.3 | (33.3) |
Cash Flow Hedges, Net | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (9.1) | 0.7 |
Other comprehensive income (loss) | (13.2) | 0.7 |
Amounts reclassified from AOCI to net income | 5.8 | 0.8 |
Balance at end of period | (16.5) | 2.2 |
Accumulated other comprehensive income(Loss) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (131.3) | (147.2) |
Other comprehensive income (loss) | (2.7) | (3.6) |
Amounts reclassified from AOCI to net income | 6.1 | 1.1 |
Balance at end of period | $ (127.9) | $ (149.7) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Reclassification (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Cost of sales | $ 959.1 | $ 1,210.7 |
Interest expense, net | 38.3 | 21.9 |
Income before income taxes | 65.6 | (39.7) |
Provision for income taxes | (16.7) | 22.6 |
Net income | 48.9 | (16.7) |
Pension & Other Postretirement Benefit Plans, Net | Reclassified from AOCI to net income (loss) | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Income before income taxes | 0.4 | 0.5 |
Provision for income taxes | (0.1) | (0.2) |
Net income | $ 0.3 | $ 0.3 |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent [Member] | Reclassified from AOCI to net income (loss) | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Prior service credit | $ 0.1 | $ (0.1) |
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent [Member] | Reclassified from AOCI to net income (loss) | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net actuarial loss | $ 0.3 | $ 0.6 |
Cash Flow Hedges, Net | Reclassified from AOCI to net income (loss) | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Interest expense, net | 0.8 | |
Income before income taxes | 6.4 | 0.8 |
Provision for income taxes | (0.6) | |
Net income | 5.8 | $ 0.8 |
Cash Flow Hedges, Net | Reclassified from AOCI to net income (loss) | Commodity Contract | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Cost of sales | $ 6.4 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings: | ||
Net income (loss) from continuing operations | $ (48.9) | $ 17.1 |
Net loss from discontinued operations, net of income taxes | (0.4) | |
Net income (loss) | $ (48.9) | $ 16.7 |
Shares: | ||
Weighted average ordinary shares outstanding | 35 | 37.3 |
Dilutive effect of RSUs, option awards and PSUs | 0.8 | |
Diluted weighted average ordinary shares outstanding | 35 | 38.1 |
Income (loss) per share | ||
Income (loss) per share-basic, Continuing operations | $ (1.40) | $ 0.46 |
Income (loss) per share-basic, Discontinued operations | (0.01) | |
Income (loss) per share-basic | (1.40) | 0.45 |
Income (loss) per share-diluted, Continuing operations | (1.40) | 0.45 |
Income (loss) per share-diluted, Discontinued operations | (0.01) | |
Income (loss) per share- diluted | $ (1.40) | $ 0.44 |
Anti-dilutive shares excluded | 0.9 |
Impairment and Other Charges (D
Impairment and Other Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Impairment and Other Charges. | ||
Asset impairment charges or write-offs (Note 11) | $ 0.3 | $ 0.7 |
European Commission request for information (Note 13) | 35.6 | |
Total | $ 0.3 | $ 36.3 |