What changed in this filing

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Item 1. Financial Statements

2021-08-05 compared with 2021-05-06 · 130 added, 81 removed, 390 unchanged (35% of the section changed)

1 unchanged sentence

Condensed Consolidated Statements of Operations

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(In thousands, except per share amounts)

4 unchanged sentences

Research and development costs 5,942 4,449 10,702 9,405

Other expenses, net 2,554 3,175

Income from operations 42,853 37,543

Gain related to litigation settlement ( 82,858 ) — ( 82,858 ) —

Other (income) expenses, net ( 547 ) 3,827 2,007 7,002

Income (loss) from operations 132,476 ( 12,879 ) 175,329 24,664

Interest and other financial expense, net 8,951 8,277 18,910 17,888

Reclassification of actuarial losses from AOCI 1,224 2,654 2,452 5,052

Pre-tax income before equity in earnings of affiliated companies 31,666 25,534

Income tax expense 8,274 7,635

Pre-tax income (loss) before earnings in affiliated companies and income taxes 122,301 ( 23,810 ) 153,967 1,724

Income tax expense (benefit) 33,490 ( 5,879 ) 41,764 1,756

Equity in earnings of affiliated companies, net of tax 247 151 393 285

Net income $ 23,538 $ 18,032

Net income (loss) $ 89,058 $ ( 17,780 ) $ 112,596 $ 253

Weighted-average shares outstanding:

6 unchanged sentences

Orion Engineered Carbons S.A.

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended March 31,

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(In thousands)

Net income $ 23,538 $ 18,032

Net income (loss) $ 89,058 $ ( 17,780 ) $ 112,596 $ 253

Other comprehensive income (loss), net of tax

3 unchanged sentences

Gains on defined benefit plans 717 1,595 1,926 3,442

Other comprehensive loss ( 2,728 ) ( 22,844 )

Other comprehensive income (loss) 8,989 585 6,261 ( 22,259 )

Comprehensive income (loss) $ 98,047 $ ( 17,195 ) $ 118,857 $ ( 22,006 )

2 unchanged sentences

Condensed Consolidated Balance Sheets

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(In thousands, except share amounts)

17 unchanged sentences

Total assets $ 1,538,458 $ 1,389,793

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

27 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands)

1 unchanged sentence

Net income $ 112,596 $ 253

Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation of property, plant and equipment and amortization of intangible assets and right of use assets 50,800 45,722

4 unchanged sentences

Reclassification of actuarial losses from AOCI 2,452 5,052

Other operating non-cash items 204 360

Changes in operating assets and liabilities, net of effects of businesses acquired:

Other operating non-cash items, net ( 3,020 ) 908

Changes in operating assets and liabilities, net:

Trade receivables ( 71,014 ) 59,471

3 unchanged sentences

Income tax liabilities 32,456 8,624

Other assets and liabilities ( 9,226 ) ( 711 )

Other assets and liabilities, net 3,192 3,865

Net cash provided by operating activities 85,067 90,615

8 unchanged sentences

Taxes paid for shares issued under net settlement feature ( 36 ) ( 1,202 )

Net cash provided by financing activities 25,623 94,560

Net cash provided by (used in) financing activities ( 16,552 ) 81,723

Increase (decrease) in cash, cash equivalents and restricted cash 10,207 82,937

14 unchanged sentences

Balance at March 31, 2021 60,590,526 85,323 ( 7,345 ) 68,356 107,945 ( 51,432 ) 202,847

Net income — — — — 89,058 — 89,058

Other comprehensive income, net of tax — — — — — 8,989 8,989

Share based compensation — — — 1,216 — — 1,216

Balance at June 30, 2021 60,590,526 $ 85,323 $ ( 7,345 ) $ 69,572 $ 197,003 $ ( 42,443 ) $ 302,110

(In thousands, except per share amounts) Number Amount Treasury shares Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total

6 unchanged sentences

Balance at March 31, 2020 60,487,117 85,323 ( 8,515 ) 62,930 84,284 ( 57,206 ) 166,816

Net loss — — — — ( 17,780 ) — ( 17,780 )

Other comprehensive income, net of tax — — — — — 585 585

Share based compensation — — — 1,199 — — 1,199

Balance at June 30, 2020 60,487,117 $ 85,323 $ ( 8,515 ) $ 64,129 $ 66,504 $ ( 56,621 ) $ 150,820

See accompanying Notes to these Condensed Consolidated Financial Statements

46 unchanged sentences

The company’s right-of-use assets (“ROU”) assets and lease liabilities related to operating and finance leases reflected in the Consolidated Balance Sheets are as follows:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(In thousands)

16 unchanged sentences

Inventories, net of obsolete, unmarketable and slow-moving reserves are as follows:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(In thousands)

4 unchanged sentences

Accounts Receivable

The company had the following accounts receivable as of March 31, 2021 and December 31, 2020:

March 31, 2021 December 31, 2020

The company had the following accounts receivable as of June 30, 2021 and December 31, 2020:

June 30, 2021 December 31, 2020

(In thousands)

3 unchanged sentences

Debt and Other Obligations

The Company had the following debt arrangements in place as of March 31, 2021 and December 31, 2020:

March 31, 2021 December 31, 2020

The Company had the following debt arrangements in place as of June 30, 2021 and December 31, 2020:

June 30, 2021 December 31, 2020

(In thousands)

Term loan $ 8,261 $ 8,479

Current portion of term loan $ 8,319 $ 8,479

Deferred debt issuance costs - term loan ( 1,434 ) ( 1,501 )

8 unchanged sentences

To fund operating activities and generally safeguard the Company’s liquidity, the Company has entered into a revolving credit facility (“RCF”) of € 250 million ($ 297 million).

As of March 31, 2021, the total commitment of $ 293 million is split between a $ 94 million RCF tranche and $ 199 million of bilateral ancillary facilities established directly with several banks under the RCF.

As of March 31, 2021, and December 31, 2020, no RCF borrowings, as defined in the Credit Agreement, had been drawn.

However, as of March 31, 2021 and December 31, 2020, $ 83.0 million and $ 70.3 million, respectively, of drawings under ancillary facilities reduced the overall amount available under the RCF to $ 210 million and $ 236.5 million, respectively.

As of June 30, 2021, the total commitment of $ 297 million is split between a $ 95 million RCF tranche and $ 202 million of bilateral ancillary facilities established directly with several banks under the RCF.

As of June 30, 2021, and December 31, 2020, no RCF borrowings, as defined in the Credit Agreement, had been drawn.

However, as of June 30, 2021 and December 31, 2020, $ 44.8 million and $ 70.3 million, respectively, of drawings under ancillary facilities reduced the overall amount available under the RCF to $ 252.3 million and $ 236.5 million, respectively.

(b) Local bank loans and other short-term borrowings

As of March 31, 2021, the Company had partially drawn its uncommitted local credit line in Korea by $ 4.4 million and in Brazil by $ 1.7 million (December 31, 2020:

As of June 30, 2021, the Company had partially drawn its uncommitted local credit line in Korea by $ 4.4 million and in Brazil by $ 2.0 million (December 31, 2020:

$ 4.6 million and $ 0.8 million), respectively.

1 unchanged sentence

Under the agreement, we sold 260 thousand EUA certificates for € 10.04 million cash to a counterparty.

The counterparty has

The counterparty has an obligation to resell, and we have the obligation to purchase, the same or substantially the same EUA certificates at December 22, 2021

Orion Engineered Carbons S.A

Notes to the Condensed Consolidated Financial Statements—(continued)

an obligation to resell, and we have the obligation to purchase, the same or substantially the same EUA certificates at December 22, 2021 for € 10.06 million.

for € 10.06 million.

The difference between the consideration received and the amount of consideration to be paid is recognized as interest expense.

At March 31, 2021, the amount outstanding is $ 11.8 million.

At June 30, 2021, the amount outstanding was $ 12.0 million.

Due to the short maturity, the carrying value approximates the fair value.

For additional information relating to our debt, see Note H.

Debt and Other Obligations , included in our Annual Report in Form 10-K for the year ended December 31, 2020.

Financial Instruments and Fair Value Measurement

8 unchanged sentences

For financial assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period.

The following table shows the fair value measurement at March 31, 2021 and December 31, 2020.

The following table shows the fair value measurement at June 30, 2021 and December 31, 2020.

All measurements are based on observable inputs such as interest rates and are classified as Level 2 within the fair value hierarchy:

Fair Value Hierarchy March 31, 2021 December 31, 2020

Fair Value Hierarchy June 30, 2021 December 31, 2020

(In thousands)

11 unchanged sentences

Generally, the level of benefit depends on the length of service and the remuneration.

Net periodic defined benefit pension benefit costs include the following:

Orion Engineered Carbons S.A

Notes to the Condensed Consolidated Financial Statements—(continued)

Three Months Ended March 31,

Net periodic defined benefit pension benefit costs include the following:

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(In thousands)

4 unchanged sentences

Service costs were recorded within income from operations under selling, general and administrative expenses, interest cost in interest and other financial expense, net.

The actuarial losses associated with the pension obligations recorded in prior years in accumulated other comprehensive income exceeding 10 % of the defined benefit obligation are recorded ratably over the current year through profit and loss separately from income from operations and amounted to $ 1.2 million and $ 2.4 million for the three months ended March 31, 2021 and 2020, respectively.

The amortization of actuarial losses, associated with the pension obligations recorded in prior years, in accumulated other comprehensive income exceeding 10 % of the defined benefit obligation are recorded ratably in the Condensed Consolidated Statements of Operations.

Restructuring Expenses

7 unchanged sentences

Charges ( 322 ) — — — ( 322 )

Cost charged against liabilities (assets) — — — — —

Cash paid ( 43 ) — — — ( 43 )

1 unchanged sentence

Provision at March 31, 2021 3,041 219 4,062 — 7,322

Provision at January 1, 2020 $ 3,400 $ 561 $ 488 $ 317 $ 4,765

Charges ( 323 ) — 1,043 — 720

Cost charged against liabilities (assets) — — — — —

Cash paid ( 49 ) ( 225 ) — — ( 274 )

Foreign currency translation adjustment 46 6 41 — 93

Provision at June 30, 2021 $ 2,715 $ — $ 5,146 $ — $ 7,861

Expenses Demolition and

Removal Costs Ground

Costs Other Total

(In thousands)

Provision at January 1, 2020 $ 3,400 $ 561 $ 488 $ 317 $ 4,766

Cash paid ( 514 ) ( 402 ) ( 252 ) ( 263 ) ( 1,431 )

Foreign currency translation adjustment ( 81 ) ( 11 ) ( 14 ) ( 6 ) ( 112 )

Provision at March 31, 2020 $ 2,805 $ 148 $ 222 $ 48 $ 3,223

Cash paid ( 486 ) ( 74 ) ( 148 ) — ( 708 )

Foreign currency translation adjustment 53 2 2 1 58

Provision at June 30, 2020 $ 2,372 $ 76 $ 76 $ 49 $ 2,573

Accumulated Other Comprehensive Income/(Loss)

Comprehensive income (loss) combines net income (loss) and other comprehensive income items, which are reported as components of stockholders’ equity in the accompanying Consolidated Balance Sheets.

Changes in each component of Accumulated other comprehensive income (loss) (“AOCI”), net of tax, are as follows for the three months ended March 31, 2021 and 2020.

Orion Engineered Carbons S.A

Notes to the Condensed Consolidated Financial Statements—(continued)

Changes in each component of Accumulated other comprehensive income (loss) (“AOCI”), net of tax, for the three and six months ended June 30, 2021 and 2020 are as follows:

Currency Translation Adjustments Hedging Activities Adjustments Pension and Other Postretirement Benefit Liability Adjustment Total

7 unchanged sentences

Balance at March 31, 2021 ( 31,638 ) ( 12,327 ) ( 7,467 ) ( 51,432 )

Other comprehensive income before reclassifications 7,195 1,057 — 8,252

Income tax effects before reclassifications 522 ( 347 ) — 175

Amounts reclassified from AOCI — — 1,224 1,224

Income tax effects on reclassifications — — ( 398 ) ( 398 )

Currency translation AOCI — ( 155 ) ( 109 ) ( 264 )

Balance at June 30, 2021 $ ( 23,921 ) $ ( 11,772 ) $ ( 6,750 ) $ ( 42,443 )

Currency Translation Adjustments Hedging Activities Adjustments Pension and Other Postretirement Benefit Liability Adjustment Total

1 unchanged sentence

Balance at January 1, 2020 $ ( 12,282 ) $ ( 10,891 ) $ ( 11,189 ) $ ( 34,362 )

Other comprehensive income/(loss) before reclassifications ( 22,735 ) ( 1,241 ) — ( 23,976 )

Other comprehensive loss before reclassifications ( 22,735 ) ( 1,241 ) — ( 23,976 )

Income tax effects before reclassifications ( 1,336 ) 426 — ( 910 )

3 unchanged sentences

Balance at March 31, 2020 ( 36,353 ) ( 11,511 ) ( 9,342 ) ( 57,206 )

The amounts reclassified out of AOCI and into the Condensed Consolidated Statement of Operations for the three months ended March 31, 2021 and 2020 are as follows:

Affected Line Item in the Condensed Consolidated

Statements of Operations Three Months Ended March 31,

(In thousands)

Amortization of actuarial losses Reclassification of actuarial losses from AOCI $ 1,228 $ 2,398

Total before tax 1,228 2,398

Tax impact ( 394 ) ( 776 )

Total after tax $ 834 $ 1,623

The amounts recorded in prior years in AOCI exceeding 10 % of the defined benefit obligation are recorded ratably as reclassification of actuarial losses over the current year through profit and loss separately from income from operations and amounted to $ 1.2 million and $ 2.4 million for the three months ended March 31, 2021 and 2020, respectively.

Other comprehensive income (loss) before reclassifications 799 ( 2,224 ) — ( 1,425 )

Income tax effects before reclassifications ( 169 ) 708 — 539

Amounts reclassified from AOCI — — 2,654 2,654

Income tax effects on reclassifications — — ( 904 ) ( 904 )

Currency translation AOCI — ( 124 ) ( 155 ) ( 279 )

Balance at June 30, 2020 $ ( 35,723 ) $ ( 13,151 ) $ ( 7,747 ) $ ( 56,621 )

Earnings Per Share

4 unchanged sentences

The following table reflects the income and share data used in the basic and diluted EPS computations:

Three Months Ended March 31,

Net income for the period - attributable to ordinary equity holders of the parent (in thousands) $ 23,538 $ 18,032

Weighted average number of ordinary shares (in thousands of shares) 60,648 60,276

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(In thousands, except per share amounts)

Net income (loss) for the period - attributable to ordinary equity holders of the parent $ 89,058 $ ( 17,780 ) $ 112,596 $ 253

Weighted average number of ordinary shares 60,652 60,487 60,649 60,361

Basic EPS $ 1.47 $ ( 0.30 ) $ 1.86 $ —

Dilutive effect of share based payments (in thousands of shares) 164 1,115

Weighted average number of diluted ordinary shares (in thousands of shares) 60,812 61,391

Dilutive effect of share based payments 91 776 72 946

Weighted average number of diluted ordinary shares 60,743 61,263 60,721 61,307

Diluted EPS $ 1.47 $ ( 0.29 ) $ 1.85 $ —

5 unchanged sentences

Adjustments to the estimated annual effective income tax rate are recognized in the period when such estimates are revised.

Income tax expense for the three months ended March 31, 2021 amounted to $ 8.3 million compared to $ 7.6 million for the three months ended March 31, 2020, reflecting the income during this current period.

Our effective income tax rate for the three months ended March 31, 2021, was 26.0 %, compared with 29.8 % for the corresponding period of 2020.

The decrease in our effective tax rate was primarily attributable to the positive effects of discrete tax items from a deferred tax gain of $ 0.7 million due to the reassessment of recoverability of deferred tax assets in Brazil and the U.S.

Our effective income tax rate for the three months ended March 31, 2020 was 29.8 %, compared with 33.4 % for the corresponding period of 2019.

The decrease in our effective tax rate was primarily attributable to the discrete tax gain of $ 0.7 million due to the refund of prior year taxes in connection with the land sale in South Korea during 2018, offset by the unfavorable deferred tax expense of $ 0.8 million due to the revaluation of the realizability of deferred tax assets and the earnings mix by geography and tax jurisdiction.

The effective income tax rate for the three months ended March 31, 2021 varied from the German overall tax rate of 32.0 %, due to the Company’s reassessment of the recoverability of deferred tax assets and its projected earnings mix by geography and tax jurisdiction.

The effective income tax rate of 29.8 % for the three months ended March 31, 2020 varied from the German overall tax rate of 32.0 %, due to the Company’s reassessment of the recoverability of deferred tax assets and its projected earnings mix by geography and tax jurisdiction.

The effective income tax rate of 26.0 % for the three months ended March 31, 2021 deviated from the estimated annual tax rate of 28.2 % for 2021, due to the impact of discrete tax items.

The effective tax rate of 29.8 % for the three months ended March 31, 2020 deviated from the estimated annual tax rate of 29.2 % for 2020, due to the impact of discrete tax items.

Income tax expense for the six months ended June 30, 2021 amounted to $ 41.8 million compared to $ 1.8 million for the six months ended June 30, 2020.

Income tax expense for the three months ended June 30, 2021 amounted to $ 33.5 million compared to income tax benefit of $ 5.9 million for the three months ended June 30, 2020.

For the three and six months ended June 30, 2021 and 2020, our effective income tax rates were as follows:

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Effective income tax rates 27.3 % 24.8 % 27.1 % 87.4 %

The decrease in our effective tax rate for the six months ended June 30, 2021 was primarily attributable to the impact of a discrete deferred tax gain of $ 1.4 million on the revaluation of realizability of certain deferred tax assets compared with an discrete deferred tax expense of $ 1.2 million within the six months ended June 30, 2020 in relation to the lower pre-tax income 2020.

The increase in our effective tax rate for the three months ended June 30, 2021 was primarily attributable to the impact of a discrete deferred tax gain of $ 0.7 million due to the reassessment of the recoverability of deferred tax assets compared with an discrete deferred tax expense of $ 1.0 million within the three months ended June 30, 2020 in relation to the negative pre-tax income.

Commitments and Contingencies

11 unchanged sentences

EPA subsequently sent notices under Section 113(a) of the Clean Air Act in 2010 alleging violations of Prevention of Significant Deterioration (“PSD”) and Title V permitting requirements under the Clean Air Act at the Company’s Belpre (Ohio) facility.

In October 2012, the Company received a corresponding notice and finding of violation (a “NOV”) alleging the failure to obtain PSD and Title V permits reflecting Best Available Control Technology (“BACT”) at several units of the Company’s Ivanhoe (Louisiana) facility, and in January 2013 the Company also received a NOV issued by the EPA for its facility in Borger (Texas) alleging the failure to obtain PSD and Title V permits reflecting BACT during the years 1996 to 2008.

A comparable NOV for the Company’s U.S.

Orion Engineered Carbons S.A

Notes to the Condensed Consolidated Financial Statements—(continued)

(Louisiana) facility, and in January 2013 the Company also received a NOV issued by the EPA for its facility in Borger (Texas) alleging the failure to obtain PSD and Title V permits reflecting BACT during the years 1996 to 2008.

A comparable NOV for the Company’s U.S.

facility in Orange (Texas) was issued by the EPA in February 2013;

27 unchanged sentences

The SNOX TM technology has not been used previously in the carbon black industry.

Orion Engineered Carbons S.A

Notes to the Condensed Consolidated Financial Statements—(continued)

Orion’s Share Purchase Agreement with Evonik in connection with the acquisition of the carbon black business line from Evonik Industries AG, completed on July 29, 2011 (“Acquisition), provides for a partial indemnity from Evonik against various exposures, including, but not limited to, capital investments, fines and costs arising in connection with Clean Air Act violations that occurred prior to July 29, 2011.

Orion’s Share Purchase Agreement with Evonik in connection with the acquisition of the carbon black business line from Evonik Industries AG, completed on July 29, 2011 (“Acquisition), provided for a partial indemnity from Evonik against various exposures, including, but not limited to, capital investments, fines and costs arising in connection with Clean Air Act violations that occurred prior to July 29, 2011.

Except for certain less relevant allegations contained in the second NOV received for the Company’s facility in Orange (Texas) in March 2016, all of the other allegations made by the EPA with regard to all four of the Company’s U.S.

facilities - as discussed above - relate to alleged violations before July 29, 2011.

The indemnity provides for a recovery from Evonik of a share of the costs (including fines), expenses (including reasonable attorney’s fees, but excluding costs for maintenance and control in the ordinary course of business and any internal cost of monitoring the remedy), liabilities, damages and losses suffered and is subject to various contractual provisions including provisions set forth in the Share Purchase Agreement with Evonik, such as a de minimis clause, a basket, overall caps (which apply to all covered exposures and all covered environmental exposures, in the aggregate), damage mitigation and cooperation requirements, as well as a statute of limitations provision.

Due to the cost-sharing and cap provisions in Evonik’s indemnity, the Company expects that substantial costs it has already incurred and will incur in this EPA enforcement initiative and the EPA CD likely will substantially exceed the scope of the indemnity.

In addition, Evonik signaled that it is not honoring Orion’s claims under the indemnity.

In June 2019, Orion initiated arbitration proceedings to enforce its rights against Evonik.

Evonik in turn has submitted certain counterclaims related to a tax indemnity and cost reimbursement against Orion, which counterclaims we do not believe to be material.

Although Orion believes that it is entitled to the indemnity and that its rights thereunder are enforceable, there is no assurance that the Company will be able to recover costs or expenditures incurred under the indemnity as it expects or at all.

The indemnity provided for a recovery from Evonik of a share of the costs (including fines), expenses (including reasonable attorney’s fees, but excluding costs for maintenance and control in the ordinary course of business and any internal cost of monitoring the remedy), liabilities, damages and losses suffered and was subject to various contractual provisions including provisions set forth in the Share Purchase Agreement with Evonik, such as a de minimis clause, a basket, overall caps (which apply to all covered exposures and all covered environmental exposures, in the aggregate), damage mitigation and cooperation requirements, as well as a statute of limitations provision.

In June 2021, Orion and Evonik agreed to settle their disputes.

Evonik made a one-time cash payment € 66.55 million ($ 79.5 million) to Orion which resolved all pending claims and counterclaims of $ 3.4 million.

In the Condensed Consolidated Financial Statements, we recorded a gain aggregating $ 82.9 million.

Pledges and guarantees

The Company has pledged the majority of its assets (amongst others shares in affiliates, bank accounts and receivables) within the different regions excluding China as collateral under the Credit Agreement.

As of March 31, 2021, the Company had guarantees totaling $ 18.8 million issued by various financial institutions.

As of June 30, 2021, the Company had guarantees totaling $ 16.9 million issued by various financial institutions.

Orion Engineered Carbons S.A

Notes to the Condensed Consolidated Financial Statements—(continued)

Financial Information by Segment

11 unchanged sentences

The following table shows the percent of revenue recognized in each of the Company’s reportable segment:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Rubber 61 % 53 % 61 % 60 %

1 unchanged sentence

Adjustment items are not allocated to the individual segments as they are managed on a group basis.

Segment reconciliation for the three months ended June 30, 2021 and 2020:

Rubber Specialties Corporate Total Segments

(In thousands)

Net sales from external customers $ 244,733 $ 156,243 $ — $ 400,976

Adjusted EBITDA $ 39,459 $ 39,356 $ — $ 78,815

Corporate charges — — ( 3,777 ) ( 3,777 )

Depreciation and amortization of intangible assets, right of use assets, and property, plant and equipment ( 14,102 ) ( 11,071 ) — ( 25,173 )

Gain related to litigation settlement

— — 82,858 82,858

Excluding equity in earnings of affiliated companies, net of tax ( 247 ) — — ( 247 )

Interest and other financial expense, net ( 8,951 ) ( 8,951 )

Reclassification of actuarial losses from AOCI ( 1,224 ) ( 1,224 )

Pre-tax income before earnings in affiliated companies and income taxes $ 122,301

Net sales from external customers $ 108,261 $ 94,387 $ — $ 202,648

Adjusted EBITDA $ ( 1,233 ) $ 16,470 $ — $ 15,237

Corporate charges — — ( 6,089 ) ( 6,089 )

Depreciation and amortization of intangible assets, right of use assets, and property, plant and equipment ( 12,261 ) ( 9,616 ) — ( 21,877 )

Gain related to litigation settlement — — — —

Excluding equity in earnings of affiliated companies, net of tax ( 151 ) — — ( 151 )

Interest and other financial expense, net ( 8,277 ) ( 8,277 )

Reclassification of actuarial losses from AOCI ( 2,654 ) ( 2,654 )

Pre-tax loss before earnings in affiliated companies and income taxes $ ( 23,810 )

Orion Engineered Carbons S.A

Notes to the Condensed Consolidated Financial Statements—(continued)

Segment reconciliation for the three months ended March 31, 2021 and 2020:

Segment reconciliation for the six months ended June 30, 2021 and 2020:

Rubber Specialties Corporate Total Segments

4 unchanged sentences

Depreciation and amortization of intangible assets, right of use assets, and property, plant and equipment ( 28,393 ) ( 22,407 ) — ( 50,800 )

Gain related to litigation settlement 82,858 82,858

Excluding equity in earnings of affiliated companies, net of tax ( 393 ) — — ( 393 )

1 unchanged sentence

Reclassification of actuarial losses from AOCI ( 2,452 ) ( 2,452 )

Pre-tax income before equity in earnings of affiliated companies 31,666

Pre-tax income before earnings in affiliated companies and income taxes $ 153,967

Net sales from external customers $ 324,489 $ 214,166 $ — $ 538,655

5 unchanged sentences

Reclassification of actuarial losses from AOCI ( 5,052 ) ( 5,052 )

Pre-tax income before equity in earnings of affiliated companies 25,534

Pre-tax income before earnings in affiliated companies and income taxes $ 1,724

The sales information noted above relates to external customers only.

“ Corporate ” includes income and expense that cannot be directly allocated to the business segments or are managed on corporate level and includes finance income and expenses, taxes and items with less bearing on the underlying core business.

In the Consolidated Statements of Operations, shipping and handling costs of $ 24.0 million and $ 11.6 million for the three months ended June 30, 2021 and 2020, respectively, and $ 46.5 million and $ 30.8 million for the six months ended June 30, 2021 and 2020, respectively, were reflected in Selling, general and administrative expenses.

Orion Engineered Carbons S.A.

1 unchanged sentence

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-Q

Item 1. Financial Statements