What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-16 compared with 2023-02-17 · 141 added, 165 removed, 1022 unchanged (23% of the section changed)

21 unchanged sentences

We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded U.S.

Amines from its assessment of internal control over financial reporting as of December 31, 2022 because it was acquired by the Company in a purchase business combination during 2022.

We have also excluded U.S.

Amines from our audit of internal control over financial reporting.

Amines is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent 4.1% and 3.0%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2022.

Definition and Limitations of Internal Control over Financial Reporting

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A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in

accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of the Customer Relationships Intangible Asset - Acquisition of U.S.

Amines Limited

As described in Note 2 to the consolidated financial statements, in February 2022, the Company acquired U.S.

Amines for a purchase price of approximately $97 million, net of cash acquired.

The acquisition included a customer relationships intangible asset valued at $33 million, which reflects the value of the benefit derived from incremental revenue and related cash flows that are a direct result of the customer relationships.

The fair value for the customer relationships intangible asset was determined by management using the multi-period excess earnings method.

Management applied significant judgments and assumptions in determining the fair value of the customer relationships, including gross margin rates, the discount rate and the customer attrition rate.

The principal considerations for our determination that performing procedures relating to the valuation of the customer relationships intangible asset - acquisition of U.S.

Amines Limited is a critical audit matter are (i) the significant judgment by management when determining the fair value of the customer relationships intangible asset;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's significant assumptions related to the gross margin rates, the discount rate, and the customer attrition rate;

Quantitative Goodwill Impairment Assessment

As described in Note 2 to the consolidated financial statements, the Company’s goodwill balance was $56 million as of December 31, 2023.

Goodwill is subject to impairment testing annually and has historically been tested as of March 31, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable.

Management first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test.

As of March 31, 2023, based on the results of management’s assessment of qualitative factors, it was determined that it was not necessary to perform the quantitative goodwill impairment test.

Beginning in the fourth quarter of 2023, management changed the annual impairment assessment date to the last day of October close and performed an additional impairment assessment as of October 28, 2023.

Due to the share price and current market trend, management performed a quantitative impairment assessment as of October 28, 2023.

Potential impairment is identified by comparing the fair value of the reporting unit to its carrying value, including goodwill.

Fair value for the reporting unit is estimated by management based on a combination of the discounted future cash flow model (income approach) and the application of current market multiples for comparable publicly-traded companies (market approach).

Under the income approach, the fair value of the reporting unit is estimated based on the discounted present value of the projected future cash flows.

Management’s cash flow projections for the reporting unit included significant judgments and assumptions, including revenue growth rate, EBITDA margin, and weighted average cost of capital rate.

Under the market approach, management uses selected financial information of publicly-traded companies that compare to the reporting unit to derive a market-based multiple.

The principal considerations for our determination that performing procedures relating to the quantitative goodwill impairment assessment is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting unit;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the revenue growth rate, EBITDA margin, and weighted average cost of capital rate used in the income approach;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including over management's valuation of the customer relationships intangible asset acquired.

These procedures also included, among others, (i) reading the purchase agreement;

(ii) testing management’s process for determining the fair value of the customer relationships intangible asset;

(iii) evaluating the appropriateness of the multi-period excess earnings method;

(iv) testing the completeness and accuracy of the underlying data used in the method;

and (v) evaluating the reasonableness of the significant assumptions used by management related to the gross margin rates, the discount rate, and the customer attrition rate.

Evaluating management’s assumptions related to the gross margin rates and the customer attrition rate involved evaluating whether the assumptions were reasonable considering (i) the current and past performance of U.S.

Amines and AdvanSix’s most similar business unit;

(ii) consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the multi-period excess earnings method and (ii) the discount rate and the customer attrition rate assumptions.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the reporting unit.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the reporting unit;

(ii) evaluating the appropriateness of the income approach;

(iii) testing the completeness and accuracy of underlying data used in the income approach;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to the revenue growth rate, EBITDA margin, and weighted average cost of capital rate.

Evaluating management’s assumptions related to the revenue growth rate and EBITDA margin involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit;

(ii) the consistency with external market and industry data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluating (i) the appropriateness of the income approach and (ii) the reasonableness of the weighted average cost of capital rate assumption.

/s/ PricewaterhouseCoopers LLP

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Pension obligation adjustments 140 1,640 7,847

Other comprehensive income (loss), net of tax 2,342 9,593 ( 6,681 )

Other comprehensive income, net of tax 53 2,342 9,593

Comprehensive income $ 54,676 $ 174,228 $ 149,384

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Operating lease liabilities – short-term 32,053 37,472

Income taxes payable 8,033 30

Deferred income and customer advances 15,678 34,430

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Amortization of deferred financing fees 618 618 677

Operational asset adjustments ( 4,472 ) — —

Changes in assets and liabilities, net of business acquisitions:

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Accounts payable ( 20,756 ) 55,863 15,676

Income taxes payable 8,003 ( 9,693 ) 9,717

Accrued liabilities ( 5,569 ) ( 3,122 ) 14,654

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Net change in cash and cash equivalents ( 1,217 ) 15,885 4,494

Cash and cash equivalents at beginning of period 15,100 10,606 7,050

Cash and cash equivalents at the end of period $ 30,985 $ 15,100 $ 10,606

Cash and cash equivalents at beginning of year 30,985 15,100 10,606

Cash and cash equivalents at the end of year $ 29,768 $ 30,985 $ 15,100

Supplemental non-cash investing activities:

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Stock-based compensation — — 11,299 — — — 11,299

Dividends — — — ( 3,518 ) — — ( 3,518 )

Balance at December 31, 2021 31,755,430 318 195,931 411,516 ( 36 ) ( 6,539 ) 601,190

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AdvanSix Inc.

(“AdvanSix”, the “Company”, “we,” "us" or “our”) plays a critical role in global supply chains, innovating and delivering essential products for our customers in a wide variety of end markets and applications that touch people’s lives, such as building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives and electronics.

(“AdvanSix”, the “Company”, “we,” "us" or “our”) is a diversified chemistry company playing a critical role in global supply chains, innovating and delivering essential products for our customers in a wide variety of end markets and applications that touch people’s lives, such as building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives and electronics.

Our reliable and sustainable supply of quality products emerges from the integrated value chain of our five U.S.-based manufacturing facilities.

AdvanSix strives to deliver best-in-class customer experiences and differentiated products in the industries of nylon solutions, chemical intermediates and plant nutrients, guided by our core values of Safety, Integrity, Accountability and Respect.

AdvanSix strives to deliver best-in-class customer experiences and differentiated products in the industries of nylon solutions, plant nutrients and chemical intermediates, guided by our core values of Safety, Integrity, Accountability and Respect.

We evaluated segment reporting in accordance with Accounting Standards Codification Topic (“ASC”) 280.

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The separation was completed by Honeywell distributing (the "Distribution") all of the then outstanding shares of common stock of AdvanSix on October 1, 2016 (the “Distribution Date”) through a dividend in kind of AdvanSix common stock, par value $ 0.01 per share, to holders of Honeywell common stock as of the close of business on the record date of September 16, 2016 who held their shares through the Distribution Date.

Since early 2020, the novel coronavirus (COVID-19) has continued to spread, with confirmed cases worldwide, and with certain jurisdictions experiencing resurgences, including as a result of variant strains.

The pandemic and related containment measures have had a substantial impact on businesses around the world and on global, regional and national economies, including disruptions to supply chains, volatility in demand, production and sales across most industries, volatility within global financial markets, inflationary pressures in commodity pricing and an increasingly dynamic workforce environment.

The continuously evolving nature of this pandemic and the pace and shape of a full recovery may continue to have an impact on the United States and global economies.

The Company’s Consolidated Financial Statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and reported amounts of revenue and expenses during the reporting periods presented.

The Company continues to consider the impact of COVID-19 on the estimates and assumptions used for the financial statements.

The Company experienced a material impact on its second quarter 2020 results of operations associated with lower demand, particularly in nylon, caprolactam and phenol, and a decrease in overall sales volume related to global markets and the economic impact of COVID-19.

Starting in the second half of 2020, demand improved to pre-COVID-19 levels with states, regions and countries in various phases of re-opening and continued administration of vaccines for COVID-19.

The Company will continue to monitor developments and execute operational and safety mitigation plans as necessary and previously disclosed.

As the situation surrounding COVID-19 remains fluid and unpredictable, the Company cannot reasonably estimate with any degree of certainty the future impact COVID-19 may have on the Company’s results of operations, financial position, and liquidity.

Basis of Presentation

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The Company includes spare and other parts in inventory which are used in support of production or production facilities operations and are valued based on weighted average cost.

Inventories valued at LIFO amounted to $ 215.5 million and $ 149.6 million at December 31, 2022 and 2021.

Inventories valued at LIFO amounted to $ 195.6 million and $ 202.9 million at December 31, 2023 and 2022, respectively.

Had such LIFO inventories been valued at current costs, their carrying values would have been approximately $ 95.2 million and $ 64.8 million higher at December 31, 2023 and 2022.

Inventories valued at FIFO amounted to $ 16.2 million and $ 12.6 million at December 31, 2023 and 2022, respectively.

Property, Plant, Equipment – Property, plant, equipment asset values are recorded at cost, including any asset retirement obligations, less accumulated depreciation.

For financial reporting, the straight-line method of depreciation is used over the estimated useful lives of 10 to 40 years for buildings and improvements and 3 to 35 years for machinery and equipment.

Our machinery and equipment includes (1) assets used in short production cycles or subject to high corrosion, such as instrumentation, controls and insulation systems with useful lives up to 15 years, (2) standard plant assets, such as boilers and railcars, with useful lives ranging from 15 to 30 years and (3) major process equipment that can be used for long durations with effective preventative maintenance and repair, such as cooling towers, compressors, tanks and turbines with useful lives ranging from 5 to 40 years.

Our machinery and equipment includes (1) assets used in short production cycles or subject to high corrosion, such as instrumentation, controls and insulation systems with useful lives of 3 to 30 years, (2) standard plant assets, such as boilers and railcars, with useful lives ranging from 3 to 30 years and (3) major process equipment that can be used for long durations with effective preventative maintenance and repair, such as cooling towers, compressors, tanks and turbines with useful lives ranging from 3 to 35 years.

Recognition of the fair value of obligations associated with the retirement of tangible long-lived assets is required when there is a legal obligation to incur such costs.

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The Company also evaluates the estimated useful lives of long-lived assets if circumstances warrant and revises such estimates based on current events.

Goodwill – The Company had goodwill of $ 56.2 million and $ 17.6 million as of December 31, 2022 and 2021, respectively.

Goodwill is subject to impairment testing annually as of March 31, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable.

Goodwill – The Company had goodwill of $ 56.2 million at December 31, 2023 and 2022.

Management first assesses qualitative factors as described in ASC 350 to determine whether it is necessary to perform the quantitative goodwill impairment test.

Potential impairment is identified by comparing the fair value of a reporting unit to the carrying value, including goodwill.

The Company completed its annual goodwill impairment test as of March 31, 2023 and, based on the results of the Company's assessment of qualitative factors, it was determined that it was not necessary to perform the quantitative goodwill impairment test.

Beginning in the fourth quarter of 2023, and for subsequent annual periods thereafter, the Company voluntarily changed the annual impairment assessment date to the last day of our October close, and thus performed an additional impairment test during 2023 as of October 28, 2023.

We believe this measurement date, which represents a change in the method of applying an accounting principle, better aligns with the timing of our strategic business planning process and financial forecasts, which are key components of the annual impairment tests and are typically completed in the fourth quarter of our fiscal year.

Based on share price and current market trend, the Company determined it would not qualify for a qualitative analysis and thus performed a quantitative analysis.

If the carrying amount of a reporting unit exceeds its estimated fair value, an impairment loss is recorded based on the difference between the fair value and the carrying amount, not to exceed the associated carrying value of goodwill.

Fair value for the reporting unit was determined based on a combination of the discounted future cash flow model (income approach) and the application of current market multiples for comparable publicly-traded companies (market approach).

Under the income approach, the fair value of the reporting unit is estimated based on the discounted present value of the projected future cash flows.

Management's cash flow projections for the reporting unit included significant judgements and assumptions, including revenue growth rate, EBITDA margin and weighted average cost of capital rate.

Under the market approach, management uses selected financial information of publicly-traded companies that compare to the reporting unit to derive a market-based multiple.

The Company completed its annual goodwill impairment test as of October 28, 2023 and, based on the results of the Company's assessment, it concluded that the estimated fair value of the reporting unit was in excess of its carrying value resulting in no impairment.

Although management believes its estimate of fair value is reasonable, it is dependent on numerous economic and business assumptions and reflects management’s best estimates at a particular point in time.

Changes in the factors and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time in which such impairments are recognized.

If future financial performance falls below the Company's expectations including prolonged unfavorable economic conditions, or there are negative revisions to significant assumptions, or if the Company's market capitalization declines, and if such a decline becomes indicative that the fair value of our reporting unit has declined below its carrying value, the Company may need to record a material, non-cash goodwill impairment charge in a future period.

Finite-Lived Intangible Assets – Other intangible assets with determinable lives consist of customer relationships, trademarks, patents and other intangibles and are amortized over their estimated useful lives, ranging from 5 to 20 years.

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Acquisitions" to the consolidated financial statements included in Item 8 of this Form 10-K, in February 2022, the Company acquired U.S.

Amines Limited ("U.S.

Amines") for a purchase price of approximately $ 97 million, net of cash acquired.

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Certain master services agreements (including with respect to our largest customer) may contain minimum purchase volumes which can be satisfied by the customer on a periodic basis by choosing from various products offered by the Company.

In these cases, a performance obligation is created when a customer submits a purchase order for a

specific product at a specified price, typically providing for delivery within the next 60 days.

In these cases, a performance obligation is created when a customer submits a purchase order for a specific product at a specified price, typically providing for delivery within the next 60 days.

Management considers the performance obligation with respect to such purchase order satisfied at the point in time when control of the product is transferred to the customer, which is indicated by shipment of the product and transfer of title and risk of loss to the customer.

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Forfeitures are estimated at the time of grant to recognize expense for those awards that are expected to vest and are based on our historical forfeiture rates.

Dividend Equivalents – If a dividend is authorized by the Board for stockholders of common stock, holders of unvested RSUs and unvested PSUs will have their accounts credited with dividend equivalents in the form and in an amount equal to the dividend that the holder would have received had the shares underlying the RSUs and PSUs been distributed at the time that such dividend was paid.

holder would have received had the shares underlying the RSUs and PSUs been distributed at the time that such dividend was paid.

Dividend equivalents are subject to the same vesting, forfeiture, performance and payment restrictions as the respective equity award for which it is attributable.

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The benefit of tax positions taken or expected to be taken in our income tax returns are recognized in the financial statements if such positions are more likely than not of being sustained upon examination by taxing authorities.

Differences between tax positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits”.

A liability is recognized (or amount of net operating loss carryover or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740.

Differences between tax positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits.” A liability is recognized (or amount of net operating loss carryover or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740.

Interest costs and related penalties related to unrecognized tax benefits are required to be calculated, if applicable.

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Recent Accounting Pronouncements – The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”).

Any ASUs not currently adopted were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.

On December 21, 2022, the FASB issued ASU No.

2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848.

When the FASB issued ASU No.

2020-04 in 2020, the Board included a sunset provision within Topic 848 based on the expectation that LIBOR would cease being published on December 31, 2021 and thus, the board set a sunset provision date for December 31, 2022 - 12 months after the expected cessation date of LIBOR.

However, in March 2021, the Board accounted the intended cessation date of the overnight 1-, 3-, 6-, and 12-month tenors of LIBOR would be June 30, 2023, which is beyond the previously established sunset provision date of December 31.

Therefore, the amendments in ASU 2022-06 address this, and defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024.

The amendments in ASU 2022-06 apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

The guidance is effective for all entities upon issuance of this update.

The Company adopted ASU 2022-06 effective December 21, 2022, which did not have any impact on the Company's consolidated financial position or results of operations upon adoption.

ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.

On December 13, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The amendments in this ASU require that public business entities, on an annual basis, disclose specific categories in the rate reconciliation and provide additional information for reconciling items that are equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate.

The amendments also require that the Company disclose the following (net of refunds received):

(1) the amount of income taxes paid disaggregated by federal (national), state, and foreign taxes and (2) the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than 5 percent of total income taxes paid.

Additionally, the amendments in this update eliminate the requirement for all entities to disclose the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months or to make a statement that an estimate of the range cannot be made, and remove the requirement to disclose the cumulative amount of each type of temporary difference when a deferred tax liability is not recognized because of the exceptions to comprehensive recognition of deferred taxes related to subsidiaries and corporate joint ventures.

The guidance is effective for public business entities for annual periods beginning after December 15, 2024.

Early adoption of the amendments in this update are permitted for annual financial statements that have not yet been issued.

The Company is evaluating the pronouncement and does not expect adoption to have a material impact on the Company's consolidated financial position or results of operations.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280).

The amendments in this ASU require incremental disclosures about the Company's reportable segments, but do not change the definition of a segment or the guidance for determining reportable segments.

The incremental disclosures should include (1) significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, (2) an amount for other segment items by reportable segment and a description of its composition, (3) profit or loss and assets currently required by Topic 280 in interim periods, (4) clarification if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources and (5) the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

The guidance is effective for public entities with fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

Additionally, public entities should apply the amendments retrospectively to all prior periods presented in the financial statements, unless impractical.

The Company is evaluating the pronouncement and does not expect adoption to have a material impact on the Company's consolidated financial position or results of operations.

In September 2022, the FASB issued ASU No.

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The amendments in this ASU require that a buyer in a supplier finance program disclose sufficient quantitative and qualitative information about its supplier finance programs to allow a user of the financial statements to understand the program’s nature, activity during the period, changes from period to period and potential magnitude.

On a retrospective basis, for each annual reporting period, an entity should disclose the key terms of the program, including a description of the payment terms, assets pledged as security or other forms of guarantees, the confirmed amount outstanding that remains unpaid, a description of where the obligations are presented in the balance sheet and a roll-forward of those obligations confirmed as well as the amount of obligations subsequently paid.

obligations subsequently paid.

In each interim reporting period, an entity should disclose the amount of confirmed obligations outstanding.

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Early adoption of the amendments in this update is permitted.

The Company will adopt ASU 2022-04, effective January 1, 2023, and does not expect adoption to have a material impact on the Company's consolidated financial position or results of operations upon adoption.

The Company adopted ASU 2022-04, effective January 1, 2023, which did not have a material impact on the Company's consolidated financial position or results of operations upon adoption.

On August 5, 2020, the FASB issued ASU No.

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Early adoption of the amendments in this update is permitted, but no earlier than fiscal years, including interim periods within those fiscal years, beginning after December 15, 2020.

adopted ASU 2020-06 effective January 1, 2022, which did not have any impact on the Company's consolidated financial position or results of operations upon adoption.

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

The amendments of ASU No.

2020-04 are effective for companies as of March 12, 2020 through December 31, 2022.

An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued.

The amendments in this update apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform and provide optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met.

The Company adopted ASU 2020-04 effective September 30, 2021, which did not have a material impact on the Company's consolidated financial position or results of operations upon adoption.

On December 18, 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

The ASU removes the exception to the general principles in FASB Accounting Standards Codification ("ASC") 740, Income Taxes, associated with the incremental approach for intra-period tax allocation, accounting for basis differences when there are ownership changes in foreign investments and interim-period income tax accounting for year-to-date losses that exceed anticipated losses.

In addition, the ASU improves the application of income tax related guidance and simplifies U.S.

GAAP when accounting for franchise taxes that are partially based on income, transactions with government resulting in a step-up in tax basis goodwill, separate financial statements of legal entities not subject to tax, and enacted changes in tax laws in interim periods.

Different transition approaches, retrospective, modified retrospective, or prospective, will apply to each income tax simplification provision.

The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

Early adoption of the amendments in this update is permitted, including adoption in any interim period.

The Company adopted ASU 2019-12 effective January 1, 2021, which did not have a material impact on the Company’s consolidated financial position or results of operations upon adoption.

The Company adopted ASU 2020-06 effective January 1, 2022, which did not have any impact on the Company's consolidated financial position or results of operations upon adoption.

We serve approximately 400 customers annually in approximately 50 countries and across a wide variety of industries.

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The Company’s revenue by product line, and related approximate percentage of total sales for 2023, 2022 and 2021 were as follows:

Years Ended December 31,

Twelve Months Ended December 31, 2023 and 2022

2023 2022 2021

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Caprolactam 298,375 19 % 319,863 16 % 316,132 19 %

Chemical Intermediates 511,515 26 % 544,504 32 % 369,130 32 %

Ammonium Sulfate 440,915 29 % 629,021 33 % 401,092 24 %

Chemical Intermediates 437,677 29 % 511,515 26 % 544,504 32 %

$ 1,533,599 100 % $ 1,945,640 100 % $ 1,684,625 100 %

The Company’s revenues by geographic area, and related approximate percentage of total sales for 2023, 2022 and 2021 were as follows:

Years Ended December 31,

Twelve Months Ended December 31, 2023 and 2022

2023 2022 2021

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Less amounts recognized in revenues ( 40,668 )

Ending balance September 30, 2022 $ 34,430

Ending balance December 31, 2023 $ 15,678

The Company expects to recognize as revenue the December 31, 2023 ending balance of Deferred income and customer advances within one year or less.

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2023 2022 2021

Current Provision:

Current Provision (benefit):

$ 20,707 $ 31,165 $ 34,079

3,159 6,463 6,504

Total current provision $ 37,676 $ 40,618 $ ( 8,664 )

Deferred Provision:

Total current provision (benefit) $ 23,913 $ 37,676 $ 40,618

Deferred Provision (benefit):

$ ( 8,886 ) $ 13,874 $ 2,256

( 427 ) 2,355 2,445

Total deferred provision 16,229 4,707 17,620

Total deferred provision (benefit) ( 9,313 ) 16,229 4,707

Total income tax expense (benefit) $ 14,600 $ 53,905 $ 45,325

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state income tax rate change 0.2 % — % 0.8 %

Energy credit

Excess tax benefits of equity compensation

( 1.5 ) % — % — %

Forfeitures, cancellations and shortfalls of equity compensation — % — % 0.3 %

Executive compensation limitations 1.0 % 0.7 % 1.0 %

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21.1 % 23.9 % 24.5 %

The Company's effective income tax rate for 2023 approximated the U.S.

Federal statutory rate of 21%.

Increases to the effective income tax rate due primarily to state taxes and executive compensation limitations, were materially offset by research tax credits, excess tax benefits of equity compensation and the foreign-derived intangible income deduction.

The Company's effective income tax rate for 2022 and 2021 was higher compared to the U.S.

Federal statutory rate of 21% due primarily to state taxes and executive compensation deduction limitations partially offset by research tax credits and the foreign-derived intangible income deduction.

The Company's effective income tax rate for 2020 was lower compared to the U.S.

Federal statutory rate of 21% due primarily to the impact of research and energy tax credits.

This was partially offset by state taxes, executive compensation deduction limitations and a shortfall on the vesting of equity compensation.

Under a provision included in the Coronavirus Aid, Relief, and Economic Security ("CARES") Act, the Company filed a Federal net operating loss (NOL) carryback claim in July 2020 which generated a refund of previously paid taxes in the amount of $ 12.3 million.

The refund was received in the first quarter of 2021.

Although the carryback claim generated a $ 12.3 million refund, it also resulted in the loss of prior year permanent tax benefits, the impact of which, is reflected in the above table under "Other, net" above, for the year ended December 31, 2020.

On August 16, 2022, the Inflation Reduction Act of 2022 (the "IRA") was signed into law.

This legislation includes significant changes relating to tax, climate change, energy and health care.

Among other provisions, the IRA introduces a book minimum tax assessed on financial statement income of certain large corporations and an excise tax on share repurchases.

The Company does not anticipate these provisions will have a material impact on our results of operations or financial condition, when effective.

Among other provisions, the IRA introduces a corporate alternative minimum tax ("CAMT") on adjusted financial statement income of certain large corporations and a 1% excise tax on share repurchases.

The Company is not currently subject to the CAMT which became effective for tax years beginning after December 31, 2022.

The 1% excise tax is generally applicable to publicly traded corporations for the net value of certain stock that the corporation repurchases during the year and is also effective for tax years beginning after December 31, 2022.

The impact of any excise tax imposed on the Company for share repurchases is generally accounted for as an equity transaction with no consequences to the Company's results in operations, and this provision of the law does not currently have a material impact on the Company's financial condition.

The IRA also includes significant extensions, expansions and enhancements related to climate and energy tax credits designed to encourage investment in the adoption and expansion of renewable and alternative energy sources.

The Company is evaluating these provisions of the law.

The Company continues to evaluate these energy credit provisions of the law in relation to our sustainability and environmental, social and governance initiatives.

The Pillar Two Global Anti-Base Erosion rules issued by t he Organization for Economic Co-operation and Development ("OECD"), a global policy forum, introduced a global minimum tax of 15% which would apply to multinational groups with consolidated financial statement revenue in excess of EUR 750 million.

Nearly all OECD member jurisdictions have agreed in principle to adopt these provisions and numerous jurisdictions, including jurisdictions where the Company operates, have enacted these rules effective January 1, 2024.

The Company has evaluated the impact of these rules and currently believes they will not have any material impact on financial results through 2026 due to certain transitional safe harbors.

We will continue to monitor and refine our assessment as further guidance is made available.

As of December 31, 2023 and 2022, there were no unrecognized tax benefits recorded by the Company.

Although there are no unrecognized income tax benefits, when applicable, the Company’s policy is to report interest expense and penalties related to unrecognized income tax benefits in the income tax provision.

The Company uses the flow-through method to account for investment tax credits, including certain energy credits.

Under this method, investment tax credits are recognized as a reduction to income tax expense in the year they are earned.

The Company is subject to taxation in the United States and various states and foreign jurisdictions.

The company closed its federal tax examination for periods 2017 through 2019 in January 2023.

There are no current examinations by state or foreign tax authorities;

There are no current material tax examinations by state or foreign tax authorities;

however, tax years 2019 through 2023 generally remain open under the statute of limitations and are subject to examination by the tax authorities.

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The net deferred taxes are primarily related to U.S.

As of 2022, we recognized a state NOL carryforward in Illinois for $ 0.6 million which begins to expire in 2031.

The Company has no material federal or state tax credit carryforwards remaining as of December 31, 2022.

We believe that the state NOL carryforward, tax credit carryforwards and other deferred tax assets are more likely than not to be realized and we have no t recorded a valuation allowance against the deferred tax assets.

The Company has no material state net operating losses (NOL) carryforwards and no federal or state tax credit carryforwards remaining as of December 31, 2023.

We believe that the state NOL carryforward and other deferred tax assets are more likely than not to be realized and we have no t recorded a valuation allowance against the deferred tax assets.

In February 2022, the Company acquired the stock of U.S.

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Acquisitions" for further details.

As of December 31, 2022, there was an increase of $ 4.2 million in our Deferred tax assets noted in the table above as Capitalization of research expenses.

As of December 31, 2023 and 2022, there was a $ 6.6 million and $ 4.2 million Deferred tax asset, respectively noted in the table above as Capitalization of research expenses.

This relates to a provision within the Tax Cuts and Jobs Act, which requires, for tax purposes, the capitalization and amortization of research and development expenses effective for years beginning after December 31, 2021.

There continues to be potential legislation surrounding this provision in the law that we monitor.

On January 31, 2024, the U.S.

House of Representatives approved a tax bill, which among other provisions, aims to reinstate 100% bonus depreciation for property placed in service in 2023 and through 2025 and to allow taxpayers to expense domestic research costs retroactively back to 2022 and prospectively through tax years beginning before 2026.

Enactment remains uncertain and the Company continues to monitor the ongoing developments in the proposed legislation.

The Company's accounting policy is to record the tax impacts of Global intangible low-taxed income as a period cost.

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We use the implicit rate when readily determinable.

The operating lease ROU asset also includes any lease pre-payments made and excludes lease incentives.

The operating lease ROU asset also includes any lease pre-payments made and excludes lease

Our lease terms may include options to extend or terminate the lease and, when it is reasonably certain that such an option will be exercised, it is included in the determination of the corresponding assets and liabilities.

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Total $ 96,014 $ 2,197

As of December 31, 2022, we have additional operating and finance leases that have not yet commenced for approximately $ 5.8 million and $ 0.7 million, respectively.

As of December 31, 2023, we have additional operating leases that have not yet commenced for approximately $ 114.2 million.

These leases will commence during 2023 with lease terms of up to 7 years.

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The fair values of the debt are based on quoted inactive market prices and are therefore classified as Level 2 within the valuation hierarchy.

Scheduled principal repayments under the Long-term Debt and Credit Agreement subsequent to December 31, 2022 are as follows:

Credit Agreement

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The Second Amended and Restated Credit Agreement had a five-year term with a scheduled maturity date of February 21, 2023.

The Second Amended and Restated Credit Agreement contained revisions to various financial ratios, customary covenants limiting the ability of the Company and its subsidiaries to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock of the Company, enter into transactions with affiliates, make investments, make capital expenditures, merge or consolidate with others or dispose of assets, as well as financial covenants that require the Company to maintain interest coverage and leverage ratios at levels specified in the Second Amended and Restated Credit Agreement.

These covenants placed limits on how we conduct our business, and in the event of certain defaults, our repayment obligations could be accelerated.

In addition, the Second Amendment also amended certain administrative provisions associated with the LIBOR Successor Rate (as defined in the Second Amended and Restated Credit Agreement).

The obligations under the Second Amended and Restated Credit Agreement were secured by a pledge of assets and liens on substantially all of the assets of AdvanSix.

On October 27, 2021, the Company completed a refinancing of its existing senior secured revolving credit facility under the Second Amended and Restated Credit Agreement by entering into a new Credit Agreement (the “Credit Agreement”), among the Company, the lenders party thereto, the swing line lenders party thereto, the letter of credit issuers party thereto and Truist Bank, as administrative agent, which provides for a new senior secured revolving credit facility in an aggregate principal amount of $ 500 million (the “Revolving Credit Facility”).

On October 27, 2021, the Company completed a refinancing of the Second Amended and Restated Credit Agreement by entering into a new Credit Agreement (the “Credit Agreement”), among the Company, the lenders party thereto, the swing line lenders party thereto, the letter of credit issuers party thereto and Truist Bank, as administrative agent, which provides for a senior secured revolving credit facility in an aggregate principal amount of $ 500 million (the “Revolving Credit Facility”).

The Revolving Credit Facility has a scheduled maturity date of October 27, 2026.

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The Company has the option to establish a new class of term loans and/or increase the amount of the Revolving Credit Facility in an aggregate principal amount for all such incremental term loans and increases of the Revolving Credit Facility of up to the sum of (x) $ 175 million plus (y) an amount such that the Company’s Consolidated First Lien Secured Leverage Ratio (as defined in the Credit Agreement) would not be greater than 2.75 to 1.00, in each case, to the extent that any one or more lenders, whether or not currently party to the Credit Agreement, commits to be a lender for such amount or any portion thereof.

Borrowings under the Credit Agreement bear interest at a rate equal to either the sum of a base rate plus a margin ranging from 0.25 % to 1.25 % or the sum of a Eurodollar rate plus a margin ranging from 1.25 % to 2.25 %, with either such margin varying according to the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement).

With the cessation of LIBOR on June 30, 2023 and subject to the First Amendment to the Credit Agreement, dated as of June 27, 2023, the Eurodollar Rate was replaced with the Adjusted Term SOFR as an alternative benchmark rate for purposes of the Credit Agreement.

The transition was effective July 1, 2023.

Borrowings under the Credit Agreement bear interest at a rate equal to either the sum of a base rate plus a margin ranging from 0.25 % to 1.25 % or the sum of an Adjusted Term SOFR rate plus a margin ranging from 1.25 % to 2.25 %, with either such margin varying according to the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement).

The Company is also required to pay a commitment fee in respect of unused commitments under the Revolving Credit Facility, if any, at a rate ranging from 0.15 % to 0.35 % per annum depending on the Company’s Consolidated Leverage Ratio.

As of October 27, 2021, the applicable margin under the Credit Agreement was 0.375 % for base rate loans and 1.375 % for Eurodollar loans and the applicable commitment fee rate was 0.175 % per annum.

In conjunction with the cessation of LIBOR, as of July 1, 2023, the applicable margin under the Credit Agreement was 0.25 % for base rate loans and 1.25 % for Adjusted Term SOFR loans and the applicable commitment fee rate was 0.15 % per annum.

Substantially all tangible and intangible assets of the Company and its domestic subsidiaries are pledged as collateral to secure the obligations under the Credit Agreement.

As of October 27, 2021, the Company borrowed $ 150 million under the Revolving Credit Facility.

Borrowings under the Revolving Credit Facility are subject to customary borrowing conditions.

The Credit Agreement contains customary covenants limiting the ability of the Company and its subsidiaries to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock of the Company, enter into transactions with affiliates, make investments, make capital expenditures, merge or consolidate with others or dispose of assets.

The Credit Agreement also contains

financial covenants that require the Company to maintain a Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of not less than 3.00 to 1.00 and to maintain a Consolidated Leverage Ratio of (i) 4.00 to 1.00 or less for the fiscal quarter ended December 31, 2021, through and including the fiscal quarter ending September 30, 2023 and (ii) 3.75 to 1.00 or less for each fiscal quarter thereafter (subject to the Company’s option to elect a consolidated leverage ratio increase in connection with certain acquisitions).

The Credit Agreement also contains financial covenants that require the Company to maintain a Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of not less than 3.00 to 1.00 and to maintain a Consolidated Leverage Ratio of (i) 4.00 to 1.00 or less for the fiscal quarter ended December 31, 2021, through and including the fiscal quarter ending September 30, 2023 and (ii) 3.75 to 1.00 or less for each fiscal quarter thereafter (subject to the Company’s option to elect a consolidated leverage ratio increase in connection with certain acquisitions).

If the Company does not comply with the covenants in the Credit Agreement, the lenders may, subject to customary cure rights, require the immediate payment of all amounts outstanding under the Revolving Credit Facility.

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Our plan allows eligible employees to contribute a portion of their cash compensation to the plan on a tax-deferred basis to save for their future retirement needs.

The Company matches 50 % of the first 8 % of contributions for employees covered by a collective bargaining agreement and matches 75 % of the first 8 % of the employee’s contribution election for all other employees.

The Company matches 50 % or 75 % of the first 8 % of contributions for employees covered by a collective bargaining agreement, dependent upon the terms of the respective collective bargaining agreement and matches 75 % of the first 8 % of the employee’s contribution election for all other employees.

The plan’s matching contributions vest after three years of service with the Company.

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Total $ — $ 20,000 $ 17,530

The Company plans to make pension plan contributions during 2023 sufficient to satisfy pension funding requirements of nil to $ 5.0 million as well as additional contributions in future years sufficient to satisfy pension funding requirements in those periods.

The Company expects to make pension plan contributions during 2024 sufficient to satisfy pension funding requirements of nil to $ 5.0 million as well as evaluate contributions in future years sufficient to satisfy pension funding requirements in those periods.

The pension plan assets are invested through a master trust fund.

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Financial and non-financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

In July 2019, the Company entered into an interest rate swap transaction related to its credit agreement.

The fair value of the interest rate swaps at December 31, 2022, 2021 and 2020 was a gain of approximately $ 0.2 million, and losses of approximately $ 0.7 million and $ 3.1 million, respectively, and is considered a Level 2 liability.

The pension plan assets are invested in collective investment trust funds.

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Investments valued using the net asset value method (NAV) (or its equivalent) practical expedient are excluded from the fair value hierarchy disclosure.

The Company’s Consolidated Balance Sheets also include Cash and cash equivalents, Accounts receivable and Accounts payable all of which are recorded at amounts which approximate fair value.

The Company’s Consolidated Balance Sheets include Cash and cash equivalents, Accounts receivable and Accounts payable all of which are recorded at amounts which approximate fair value.

The Company also has assets that are required to be recorded at fair value on a non-recurring basis.

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The Company manages its exposure to counterparty credit risk through specific minimum credit standards, diversification of counterparties, and procedures to monitor concentrations of credit risk.

The Company’s counterparties in derivative transactions are

substantial investment and commercial banks with significant experience using such derivative instruments.

The Company’s counterparties in derivative transactions are substantial investment and commercial banks with significant experience using such derivative instruments.

The Company monitors the impact of market risk on the fair value and cash flows of its derivative and other financial instruments considering reasonably possible changes in commodity prices, interest rates and foreign currency exchange rates and restricts the use of derivative financial instruments to hedging activities.

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At December 31, 2023 and 2022, we had zero contracts with notional amounts related to forward commodity agreements.

Interest Rate Risk Management – As of December 31, 2022, the company had one interest rate swap agreement outstanding for a total notional amount of $ 50 million to exchange floating for fixed rate interest payments for our LIBOR-based borrowings.

The interest rate swap had a fair value of zero at inception and was effective July 31, 2019 with a maturity date of February 21, 2023.

The interest rate swap has been designated as a cash flow hedge and converts the Company's interest rate payments on the first $ 50 million of variable-rate, 1-month LIBOR-based debt to a fixed interest rate.

As a result of this interest rate swap, interest payments on approximately 43 % of our borrowings, as of December 31, 2022, have been swapped from floating rate to fixed rate for the life of the swap, without an exchange of the underlying principal amount.

Liability Derivatives

2022 2021 2020

Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value

Derivatives designated as hedging instruments under ASC 815:

Interest Rate Contracts Accounts and other receivables, net $ 197 Accrued liabilities and Other liabilities $ ( 708 ) Accrued liabilities and Other liabilities $ ( 3,063 )

Total Derivatives $ 197 $ ( 708 ) $ ( 3,063 )

The following table summarizes adjustments related to cash flow hedge included in “Cash flow hedges”, in the Consolidated Statements of Comprehensive Income:

Loss on derivative instruments included in Accumulated other comprehensive loss at December 31, 2021 $ ( 708 )

Fair value adjustment 905

Gain on derivative instruments included in Accumulated other comprehensive loss at December 31, 2022 $ 197

At December 31, 2022, the Company expects to reclassify approximately $ 0.2 million of net losses on derivative instruments from Accumulated other comprehensive income ("AOCI") to earnings during the next 12 months due to the payment of variable interest associated with the floating rate debt with the remainder recognized in future periods through the expiration date.

The following table summarizes the reclassification of net losses on derivative instruments from AOCI into earnings:

Amount of Loss Recognized in Earnings

Twelve Months Ended December 31,

Interest Rate Contracts $ ( 671 ) $ 1,836

Total Derivatives $ ( 671 ) 1,836

Interest Rate Risk Management – The Company entered into an interest rate swap agreement for a total notional amount of $ 50 million to exchange floating for fixed rate interest payments for our LIBOR-based borrowings.

The interest rate swap had a fair value of zero at inception, was effective July 31, 2019 and matured on February 21, 2023.

In accordance with ASC 815, the Company designated the interest rate swap as a cash flow hedge of floating-rate borrowings.

The interest rate swap converted the Company's interest rate payments on the first $ 50 million of variable-rate, 1-month LIBOR-based debt to a fixed interest rate.

The interest rate swap involved the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the interest rate swap without an exchange of the underlying principal amount.

At December 31, 2023, the Company has no derivatives designated as hedging instruments under ASC 815 and has had no fair value adjustments related to cash flow hedging for the year ended December 31, 2023.

For the year ended December 31, 2023, the Company reclassified a gain of $ 0.2 million on the cash flow hedge from Accumulated other comprehensive income ("AOCI") to earnings.

Commitments and Contingencies

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A liability is recognized for any contingency that is probable of occurrence and reasonably estimable.

The Company continually assesses the likelihood of adverse judgments or outcomes in these matters, as well as potential ranges of possible losses (taking into consideration any insurance recoveries), based on an analysis of each matter with the assistance of legal counsel and, if applicable, other experts.

The Company continually assesses the

likelihood of adverse judgments or outcomes in these matters, as well as potential ranges of possible losses (taking into consideration any insurance recoveries), based on an analysis of each matter with the assistance of legal counsel and, if applicable, other experts.

Given the uncertainty inherent in such lawsuits, investigations and disputes, the Company does not believe it is possible to develop estimates of reasonably possible loss in excess of current accruals for these matters.

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comprehensive income (loss)

— — ( 671 ) ( 671 )

Income tax expense (benefit)

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Forfeited ( 21 ) 27.81

Expired ( 56 ) 30.94

Outstanding at December 31, 2022 883 27.97 6.81 $ 8,870

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Commencing with the 2021 awards, a market-based factor has the potential to increase or decrease the performance award by 10 %.

This metric is calculated based upon how the Company's Total Shareholder Return compares to that of its peer group over the vesting period.

This metric is calculated based upon how the Company's Total Shareholder Return compared to that of its peer group over the vesting period.

Each grantee is granted a target level of PSUs and may earn between 0 % and 200 % of the target level depending on the Company’s performance against the financial goals.

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Customer relationships and trade-names are amortized on a straight-line basis over their expected useful lives of 15 to 20 years and 5 years, respectively.

The change in the carrying amount of goodwill was as follows:

Balance at December 31, 2021 $ 17,592

Acquisition of U.S.

Amines 38,600

Balance at December 31, 2022 $ 56,192

There was no change in the carrying amount of goodwill for the year ended December 31, 2023.

Finite-Lived Intangible Assets

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Total $ 56,371 $ ( 10,178 ) $ 46,193 $ 56,371 $ ( 7,129 ) $ 49,242

For the twelve months ended December 31, 2022 and 2021, the Company recorded amortization expense on intangible assets of $ 2.7 million and $ 1.2 million, respectively.

For the years ended December 31, 2023 and 2022, the Company recorded amortization expense on intangible assets of $ 3.0 million and $ 2.7 million, respectively.

The estimated aggregate amortization expense for each of the next five years is as follows:

In February 2022, the Company acquired the stock of U.S.

Amines, a leading North American producer of alkyl and specialty amines serving high-value end markets such as agrochemicals and pharmaceuticals for an estimated purchase price of approximately $ 97 million, net of cash acquired.

Amines, a leading North American producer of alkyl and specialty amines serving high-value end markets such as agrochemicals and pharmaceuticals for a purchase price of approximately $ 97.5 million, net of cash acquired.

Amines employs approximately 50 people in the United States at manufacturing facilities in Bucks, AL and Portsmouth, VA.

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("CIS") for approximately $ 9.5 million.

Supplier Finance Programs

The Company has entered into a supply chain finance program with a financial intermediary providing participating suppliers the option to be paid by the intermediary earlier than the original invoice due date.

AdvanSix’s responsibility is limited to making payments to the intermediary based upon payment terms negotiated with the suppliers, regardless of whether the intermediary pays the supplier in advance of the original due date.

The Company’s payment terms with suppliers are consistent, regardless of whether a vendor participates in the supply chain finance program or not.

All related agreements are terminable by either party upon at least 30 days’ notice.

The total amount due to the financial intermediaries to settle supplier invoices under all of its supplier finance programs was approximately $ 17 million at December 31, 2023 and 2022.

These amounts outstanding are included in Accounts payable .

Other Non-operating (Income) Expense, Net

For the year ended December 31, 2023, Other non-operating (income) expense, net primarily includes a pre-tax gain of approximately $ 11.4 million related to the Company's exit from the Oben alliance, the unfavorable impact to pre-tax income of approximately $ 4.5 million associated with a licensee of certain legacy ammonium sulfate fertilizer technology assets closing its facility and the unfavorable impact to pre-tax income of approximately $ 2.4 million from the exit of certain low-margin oximes products.

Subsequent Events

As announced on February 16, 2024, the Board declared a quarterly cash dividend of $ 0.160 per share on the Company's common stock, payable on March 18, 2024 to stockholders of record as of the close of business on March 4, 2024.

On February 17, 2023, the Company announced that the Board authorized a share repurchase program of up to an additional $ 75 million of the Company's common stock, which was in addition to the remaining capacity available under the previously approved share repurchase program.

Repurchases may be made, from time to time, on the open market, including through the use of trading plans intended to qualify under Rule 10b5-1 of the Exchange Act.

The size and timing of these repurchases will depend on pricing, market and economic conditions, legal and contractual requirements and other factors.

The share repurchase program has no expiration date and may be modified, suspended or discontinued at any time.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data