What changed in this filing

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Item 1. Financial Statements

2022-10-27 compared with 2022-07-29 · 158 added, 105 removed, 635 unchanged (29% of the section changed)

3 unchanged sentences

(In millions, except per share data)

June 30, 2022 December 31, 2021 June 30, 2021

September 30, 2022 December 31, 2021 September 30, 2021

Current assets:

40 unchanged sentences

(In millions, except per share data)

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

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

4 unchanged sentences

Restructuring charges 7.6 3.6 14.3 24.5

Other operating income 3.3 0.5 3.3 0.5

Other operating income (expense) 13.0 ( 0.5 ) 16.3 —

Operating income 393.5 549.0 1,505.4 1,325.2

3 unchanged sentences

Income before taxes 367.9 504.3 1,432.2 1,147.7

Income tax provision (benefit) 118.6 ( 18.5 ) 249.2 44.0

Income tax provision 52.7 113.6 301.9 157.6

Net income $ 315.2 $ 390.7 $ 1,130.3 $ 990.1

9 unchanged sentences

(In millions)

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

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

10 unchanged sentences

(In millions, except per share data)

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

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

28 unchanged sentences

(In millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating Activities

2 unchanged sentences

Stock-based compensation 10.4 5.0

Gains on disposition of property, plant and equipment ( 13.0 ) —

Loss on debt extinguishment — 47.6

14 unchanged sentences

Capital expenditures ( 168.4 ) ( 135.8 )

Proceeds from disposition of property, plant and equipment 14.9 —

Net investing activities ( 153.5 ) ( 135.8 )

10 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 3.5 ) ( 1.1 )

Net increase in cash and cash equivalents 124.1 83.1

Net (decrease) increase in cash and cash equivalents ( 16.9 ) 116.4

Cash and cash equivalents, beginning of year 180.5 189.7

27 unchanged sentences

These actions and related activities were completed during the second quarter of 2021.

For both the three and six months ended June 30, 2021, we recorded pretax restructuring charges of $ 10.1 million for employee severance and related benefit costs related to these actions.

For the three and nine months ended September 30, 2021, we recorded pretax restructuring charges of $ 0.2 million and $ 10.3 million for employee severance and related benefit costs related to these actions.

We do no t expect to incur additional restructuring charges related to these actions.

2 unchanged sentences

On October 21, 2021, we announced that we had made a decision to permanently cease operations of the remaining 50 % of our diaphragm-grade chlor alkali capacity, representing an additional 200,000 tons, at our McIntosh, AL facility (collectively, McIntosh Plan).

The closure is expected to be completed by the end of the third quarter of 2022.

For the three months ended June 30, 2022 and 2021, we recorded pretax restructuring charges of $ 0.7 million and $ 0.4 million, respectively, for lease and other contract termination costs and for facility exit costs related to this action.

For the six months ended June 30, 2022 and 2021, we recorded pretax restructuring charges of $ 1.6 million and $ 4.8 million, respectively, for lease and other contract termination costs and for facility exit costs related to this action.

The closure was completed during third quarter of 2022.

For the three months ended September 30, 2022 and 2021, we recorded pretax restructuring charges of $ 5.5 million and $ 0.4 million, respectively, for write-off of equipment and facility costs, lease and other contract termination costs and for facility exit costs related to this action.

For the nine months ended September 30, 2022 and 2021, we recorded pretax restructuring charges of $ 7.1 million and $ 5.2 million, respectively, for write-off of equipment and facility costs, lease and other contract termination costs and for facility exit costs related to this action.

We expect to incur additional restructuring charges through 2026 of approximately $ 30 million related to these actions.

On January 18, 2021, we announced we had made the decision to permanently close our trichloroethylene and anhydrous hydrogen chloride liquefaction facilities in Freeport, TX (collectively, Freeport 2021 Plan), which were completed in the fourth quarter of 2021.

For the three months ended June 30, 2022 and 2021, we recorded pretax restructuring charges of $ 1.2 million and $ 2.8 million, respectively, for facility exit costs related to these actions.

For the six months ended June 30, 2022 and 2021, we recorded pretax restructuring charges of $ 1.5 million and $ 4.1 million, respectively, for facility exit costs related to these actions.

For the three months ended September 30, 2022 and 2021, we recorded pretax restructuring charges of $ 0.4 million and $ 1.6 million, respectively, for facility exit costs related to these actions.

For the nine months ended September 30, 2022 and 2021, we recorded pretax restructuring charges of $ 1.9 million and $ 5.7 million, respectively, for facility exit costs related to these actions.

We expect to incur additional restructuring charges through 2024 of approximately $ 20 million related to these actions.

1 unchanged sentence

The VDC facility and related chlor alkali plant were closed during the fourth quarter of 2020 and second quarter of 2021, respectively.

For the three months ended June 30, 2022 and 2021, we recorded pretax restructuring charges of $ 1.5 million and $ 0.4 million, respectively, for facility exit costs related to these actions.

For the six months ended June 30, 2022 and 2021, we recorded pretax restructuring charges of $ 3.2 million and $ 1.2 million, respectively, for facility exit costs related to these actions.

For the three months ended September 30, 2022 and 2021, we recorded pretax restructuring charges of $ 1.7 million and $ 1.0 million, respectively, for facility exit costs related to these actions.

For the nine months ended September 30, 2022 and 2021, we recorded pretax restructuring charges of $ 4.9 million and $ 2.2 million, respectively, for facility exit costs related to these actions.

We expect to incur additional restructuring charges through 2025 of approximately $ 30 million related to these actions.

3 unchanged sentences

This 220,000 ton reduction was entirely from diaphragm cell capacity.

For the three months ended June 30, 2022 and 2021, we recorded pretax restructuring charges of $ 0.2 million and $ 0.3 million, respectively, for facility exit costs and lease and other contract termination costs related to these actions.

For the six months ended June 30, 2022 and 2021, we recorded pretax restructuring charges of $ 0.4 million and $ 0.7 million, respectively, for facility exit costs and lease and other contract termination costs related to these actions.

We expect to incur additional restructuring charges through 2022 of approximately less than $ 1 million related to these capacity reductions.

The following table summarizes the 2022 and 2021 activities by major component of these restructuring actions and the remaining balances of accrued restructuring costs as of June 30, 2022 and 2021:

For the three months ended September 30, 2021, we recorded pretax restructuring charges of $ 0.4 million for facility exit costs and lease and other contract termination costs related to these actions.

For the nine months ended September 30, 2022 and 2021, we recorded pretax restructuring charges of $ 0.4 million and $ 1.1 million, respectively, for facility exit costs and lease and other contract termination costs related to these actions.

We do no t expect to incur additional restructuring charges related to these capacity reductions.

The following table summarizes the 2022 and 2021 activities by major component of these restructuring actions and the remaining balances of accrued restructuring costs as of September 30, 2022 and 2021:

Employee severance and related benefit costs Lease and other contract termination costs Facility exit costs Write-off of equipment and facility Total

4 unchanged sentences

Second quarter 10.1 0.5 3.4 — 14.0

Third quarter 0.2 0.5 2.9 — 3.6

Amounts utilized ( 3.5 ) ( 1.3 ) ( 8.6 ) — ( 13.4 )

Balance at June 30, 2021 $ 10.6 $ 6.1 $ — $ — $ 16.7

Balance at September 30, 2021 $ 8.6 $ 6.0 $ — $ — $ 14.6

Balance at January 1, 2022 $ 6.9 $ 5.4 $ — $ — $ 12.3

2 unchanged sentences

Second quarter — 0.2 3.1 0.3 3.6

Third quarter — — 4.9 2.7 7.6

Amounts utilized ( 4.3 ) ( 1.3 ) ( 10.6 ) ( 3.4 ) ( 19.6 )

Balance at June 30, 2022 $ 3.2 $ 4.7 $ — $ — $ 7.9

The following table summarizes the cumulative restructuring charges of these restructuring actions by major component through June 30, 2022:

Balance at September 30, 2022 $ 2.6 $ 4.4 $ — $ — $ 7.0

The following table summarizes the cumulative restructuring charges of these restructuring actions by major component through September 30, 2022:

Chlor Alkali Products and Vinyls Corporate/other Total

7 unchanged sentences

Total cumulative restructuring charges $ 12.7 $ 8.4 $ 71.5 $ 182.7 $ 10.3 $ 285.6

As of June 30, 2022, we have incurred cash expenditures of $ 131.3 million and non-cash charges of $ 138.8 million related to these restructuring actions.

As of September 30, 2022, we have incurred cash expenditures of $ 137.1 million and non-cash charges of $ 141.5 million related to these restructuring actions.

The remaining balance of $ 7.0 million is expected to be paid out through 2028.

ACCOUNTS RECEIVABLES

We maintain a $ 300.0 million Receivables Financing Agreement (Receivables Financing Agreement) that is scheduled to mature on September 28, 2024.

The Receivables Financing Agreement includes a minimum borrowing requirement of 50 % of the facility limit or available borrowing capacity, whichever is less.

As of September 30, 2022, we maintained a $ 300.0 million Receivables Financing Agreement (Receivables Financing Agreement) that was scheduled to mature on September 28, 2024.

The Receivables Financing Agreement included a minimum borrowing requirement of 50 % of the facility limit or available borrowing capacity, whichever was less.

Under the Receivables Financing Agreement, our eligible trade receivables are used for collateralized borrowings and continue to be serviced by us.

In addition, the Receivables Financing Agreement incorporates the net leverage ratio covenant that is contained in the $ 1,615.0 million senior credit facility.

As of June 30, 2022, $ 666.3 million of our trade receivables were pledged as collateral and we had $ 300.0 million drawn with no additional borrowing capacity available under the Receivables Financing Agreement.

As of December 31, 2021 and June 30, 2021, we had $ 300.0 million and $ 125.0 million, respectively, drawn under the Receivables Financing Agreement.

In addition, the Receivables Financing Agreement incorporated the net leverage ratio covenant that is contained in the 2021 Senior Credit Facility.

As of September 30, 2022, $ 655.2 million of our trade receivables were pledged as collateral and we had $ 300.0 million drawn with no additional borrowing capacity available under the Receivables Financing Agreement.

As of December 31, 2021 and September 30, 2021, we had $ 300.0 million and $ 150.0 million, respectively, drawn under the Receivables Financing Agreement.

On October 11, 2022, we amended the Receivables Financing Agreement which increased the facility limit to $ 425.0 million and extended the scheduled termination date of the Receivables Financing Agreement to October 14, 2025 (Amended Receivables Financing Agreement).

The Amended Receivables Financing Agreement incorporates the net leverage ratio covenant that is contained in the Senior Credit Facility.

Olin also has trade accounts receivable factoring arrangements (AR Facilities) and pursuant to the terms of the AR Facilities, certain of our domestic subsidiaries may sell their accounts receivable up to a maximum of $ 207.7 million and certain of our foreign subsidiaries may sell their accounts receivable up to a maximum of € 42.9 million.

2 unchanged sentences

The following table summarizes the AR Facilities activity:

September 30,

($ in millions)

4 unchanged sentences

The factoring discount paid under the AR Facilities is recorded as interest expense on the condensed statements of operations.

The factoring discount was $ 0.4 million and $ 0.3 million for the three months ended June 30, 2022 and 2021, respectively, and $ 0.9 million and $ 0.7 million for the six months ended June 30, 2022 and 2021, respectively.

The agreements are without recourse and therefore no recourse liability had been recorded as of June 30, 2022, December 31, 2021 or June 30, 2021.

Our condensed balance sheets included an allowance for doubtful accounts receivables of $ 15.0 million, $ 12.3 million and $ 12.4 million and other receivables of $ 50.3 million, $ 65.3 million and $ 72.8 million at June 30, 2022, December 31, 2021 and June 30, 2021, respectively, which were included in receivables, net.

The factoring discount was $ 0.9 million and $ 0.3 million for the three months ended September 30, 2022 and 2021, respectively, and $ 1.8 million and $ 1.0 million for the nine months ended September 30, 2022 and 2021, respectively.

The agreements are without recourse and therefore no recourse liability had been recorded as of September 30, 2022, December 31, 2021 or September 30, 2021.

Our condensed balance sheets included an allowance for doubtful accounts receivables of $ 12.5 million, $ 12.3 million and $ 12.2 million and other receivables of $ 58.0 million, $ 65.3 million and $ 68.1 million at September 30, 2022, December 31, 2021 and September 30, 2021, respectively, which were included in receivables, net.

Inventories consisted of the following:

June 30, 2022 December 31,

2021 June 30, 2021

September 30, 2022 December 31,

2021 September 30, 2021

($ in millions)

7 unchanged sentences

Inventories under the LIFO method are based on annual estimates of quantities and costs as of year-end;

therefore, the condensed financial statements at June 30, 2022 reflect certain estimates relating to inventory quantities and costs at December 31, 2022.

The replacement cost of our inventories would have been approximately $ 166.0 million, $ 106.5 million and $ 89.6 million higher than reported at June 30, 2022, December 31, 2021 and June 30, 2021, respectively.

therefore, the condensed financial statements at September 30, 2022 reflect certain estimates relating to inventory quantities and costs at December 31, 2022.

The replacement cost of our inventories would have been approximately $ 154.3 million, $ 106.5 million and $ 95.7 million higher than reported at September 30, 2022, December 31, 2021 and September 30, 2021, respectively.

Included in other assets were the following:

June 30, 2022 December 31, 2021 June 30, 2021

September 30, 2022 December 31, 2021 September 30, 2021

($ in millions)

2 unchanged sentences

Other assets $ 1,090.7 $ 1,131.8 $ 1,152.4

Amortization expense of $ 17.6 million and $ 17.3 million for the three months ended June 30, 2022 and 2021, respectively, and amortization expense of $ 35.2 million and $ 34.8 million for the six months ended June 30, 2022 and 2021, respectively, was recognized within cost of goods sold related to our long-term supply contracts and is reflected in depreciation and amortization on the condensed statements of cash flows.

Amortization expense of $ 17.6 million and $ 17.3 million for the three months ended September 30, 2022 and 2021, respectively, and amortization expense of $ 52.8 million and $ 52.1 million for the nine months ended September 30, 2022 and 2021, respectively, was recognized within cost of goods sold related to our long-term supply contracts and is reflected in depreciation and amortization on the condensed statements of cash flows.

GOODWILL AND INTANGIBLE ASSETS

4 unchanged sentences

Foreign currency translation adjustment 0.1 — 0.1

Balance at June 30, 2021 $ 1,275.3 $ 144.9 $ 1,420.2

Balance at September 30, 2021 $ 1,275.4 $ 144.9 $ 1,420.3

Balance at January 1, 2022 $ 1,275.6 $ 145.0 $ 1,420.6

Foreign currency translation adjustment 0.5 0.1 0.6

Balance at June 30, 2022 $ 1,275.9 $ 145.0 $ 1,420.9

Balance at September 30, 2022 $ 1,276.1 $ 145.1 $ 1,421.2

Intangible assets consisted of the following:

June 30, 2022 December 31, 2021 June 30, 2021

September 30, 2022 December 31, 2021 September 30, 2021

Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net

7 unchanged sentences

Diluted net income per share reflects the dilutive effect of stock-based compensation.

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

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

8 unchanged sentences

Diluted net income per share $ 2.18 $ 2.38 $ 7.44 $ 6.07

The computation of dilutive shares does not include 0.8 million and 0.1 million shares for the three months ended June 30, 2022 and 2021, respectively, and 0.8 million and 1.1 million shares for the six months ended June 30, 2022 and 2021, respectively, as their effect would have been anti-dilutive.

The computation of dilutive shares does not include 0.7 million shares for both the three and nine months ended September 30, 2022 and 0.1 million shares for both the three and nine months ended September 30, 2021, as their effect would have been anti-dilutive.

ENVIRONMENTAL

1 unchanged sentence

Environmental provisions charged to income, which are included in costs of goods sold, were as follows:

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

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

3 unchanged sentences

Environmental expense $ 7.4 $ 3.6 $ 18.0 $ 8.6

Environmental expense for the six months ended June 30, 2021 includes $ 2.2 million of insurance recoveries for environmental costs incurred and expensed in prior periods.

The condensed balance sheets included reserves for future environmental expenditures to investigate and remediate known sites amounting to $ 148.9 million, $ 147.3 million and $ 148.4 million at June 30, 2022, December 31, 2021 and June 30, 2021, respectively, of which $ 123.9 million, $ 122.3 million and $ 129.4 million, respectively, were classified as other noncurrent liabilities.

Environmental expense for the nine months ended September 30, 2021 includes $ 2.2 million of insurance recoveries for environmental costs incurred and expensed in prior periods.

The condensed balance sheets included reserves for future environmental expenditures to investigate and remediate known sites amounting to $ 149.3 million, $ 147.3 million and $ 147.7 million at September 30, 2022, December 31, 2021 and September 30, 2021, respectively, of which $ 124.3 million, $ 122.3 million and $ 128.7 million, respectively, were classified as other noncurrent liabilities.

Environmental exposures are difficult to assess for numerous reasons, including the identification of new sites, developments at sites resulting from investigatory studies, advances in technology, changes in environmental laws and regulations and their application, changes in regulatory authorities, the scarcity of reliable data pertaining to identified sites, the difficulty in assessing the involvement and financial capability of other Potentially Responsible Parties (PRPs), our ability to obtain contributions from other parties and the lengthy time periods over which site remediation occurs.

23 unchanged sentences

We, and our subsidiaries, are defendants in various other legal actions (including proceedings based on alleged exposures to asbestos) incidental to our past and current business activities.

As of June 30, 2022, December 31, 2021 and June 30, 2021, our condensed balance sheets included accrued liabilities for these other legal actions of $ 14.5 million, $ 14.2 million and $ 12.9 million, respectively.

As of September 30, 2022, December 31, 2021 and September 30, 2021, our condensed balance sheets included accrued liabilities for these other legal actions of $ 14.2 million, $ 14.2 million and $ 13.1 million, respectively.

These liabilities do not include costs associated with legal representation.

5 unchanged sentences

SHAREHOLDERS’ EQUITY

On July 28, 2022, our Board of Directors authorized a share repurchase program for the purchase of shares of common stock at an aggregate price of up to $ 2.0 billion.

On July 28, 2022, our Board of Directors authorized a share repurchase program for the purchase of shares of common stock at an aggregate price of up to $ 2.0 billion (the 2022 Repurchase Authorization).

This program will terminate upon the purchase of $ 2.0 billion of common stock.

On November 1, 2021, our Board of Directors authorized a share repurchase program for the purchase of shares of common stock at an aggregate price of up to $ 1.0 billion.

This program will terminate upon the purchase of $ 1.0 billion of our common stock.

This program terminated upon the purchase of $ 1.0 billion of our common stock during the third quarter of 2022.

On April 26, 2018, our Board of Directors authorized a share repurchase program for the purchase of shares of common stock at an aggregate price of up to $ 500.0 million.

This program terminated upon the purchase of $ 500.0 million of our common stock during the first quarter of 2022.

For the six months ended June 30, 2022, 12.6 million shares of common stock were repurchased and retired at a total value of $ 689.7 million.

There were zero shares repurchased for the six months ended June 30, 2021.

As of June 30, 2022, 11.6 million shares of common stock have been repurchased and retired at a total value of $ 637.5 million under the 2021 Repurchase Authorization program, and $ 362.5 million of common stock remained authorized to be repurchased under the program.

We issued 0.9 million and 2.4 million shares representing stock options exercised for the six months ended June 30, 2022 and 2021, respectively, with a total value of $ 20.9 million and $ 50.2 million, respectively.

For the nine months ended September 30, 2022 and 2021, 20.8 million and 1.5 million shares, respectively, of common stock were repurchased and retired at a total value of $ 1,100.6 million and $ 68.3 million, respectively.

As of September 30, 2022, 1.1 million shares of common stock have been repurchased and retired at a total value of $ 48.4 million under the 2022 Repurchase Authorization program, and $ 1,951.6 million of common stock remained authorized to be repurchased under the program.

We issued 0.9 million and 2.8 million shares representing stock options exercised for the nine months ended September 30, 2022 and 2021, respectively, with a total value of $ 21.3 million and $ 58.3 million, respectively.

The following table represents the activity included in accumulated other comprehensive loss:

5 unchanged sentences

Second quarter 2.4 41.8 — 44.2

Third quarter ( 14.0 ) 41.7 — 27.7

Reclassification adjustments of (gains) losses into income:

1 unchanged sentence

Second quarter — ( 20.4 ) 13.7 ( 6.7 )

Third quarter — ( 23.5 ) 13.4 ( 10.1 )

Tax provision:

1 unchanged sentence

Second quarter — ( 5.1 ) ( 3.0 ) ( 8.1 )

Third quarter — ( 4.4 ) ( 2.7 ) ( 7.1 )

Net change ( 23.0 ) 37.1 32.0 46.1

Balance at June 30, 2021 $ 10.4 $ 44.7 $ ( 709.4 ) $ ( 654.3 )

Balance at September 30, 2021 $ ( 3.6 ) $ 58.5 $ ( 698.7 ) $ ( 643.8 )

Balance at January 1, 2022 $ ( 10.9 ) $ 22.8 $ ( 499.9 ) $ ( 488.0 )

2 unchanged sentences

Second quarter ( 26.0 ) ( 36.4 ) — ( 62.4 )

Third quarter ( 25.1 ) 6.6 — ( 18.5 )

Reclassification adjustments of (gains) losses into income:

1 unchanged sentence

Second quarter — ( 36.1 ) 9.0 ( 27.1 )

Third quarter — ( 17.8 ) 9.1 ( 8.7 )

Tax (provision) benefit :

1 unchanged sentence

Second quarter — 17.5 ( 2.3 ) 15.2

Third quarter — 2.5 ( 2.1 ) 0.4

Net change ( 61.6 ) ( 33.0 ) 20.3 ( 74.3 )

Balance at June 30, 2022 $ ( 47.4 ) $ ( 1.5 ) $ ( 486.6 ) $ ( 535.5 )

Balance at September 30, 2022 $ ( 72.5 ) $ ( 10.2 ) $ ( 479.6 ) $ ( 562.3 )

Net income and cost of goods sold included reclassification adjustments for realized gains and losses on derivative contracts from accumulated other comprehensive loss.

7 unchanged sentences

Sales are attributed to geographic areas based on customer location.

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

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

12 unchanged sentences

Restructuring charges ( 7.6 ) ( 3.6 ) ( 14.3 ) ( 24.5 )

Other operating income 3.3 0.5 3.3 0.5

Other operating income (expense) 13.0 ( 0.5 ) 16.3 —

Interest expense ( 36.0 ) ( 54.0 ) ( 103.4 ) ( 204.4 )

2 unchanged sentences

Income before taxes $ 367.9 $ 504.3 $ 1,432.2 $ 1,147.7

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

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

18 unchanged sentences

Total sales $ 2,321.7 $ 2,340.1 $ 7,399.2 $ 6,480.2

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

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

15 unchanged sentences

Stock-based compensation expense (benefit) was as follows:

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

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

37 unchanged sentences

The average correlation coefficient of peer companies was determined based on historical trends of Olin’s common stock price compared to the peer companies.

During 2022, activity of our outstanding debt included:

Long-term Debt Borrowings (Repayments)

Nine Months Ended September 30, 2022

Debt Instrument ($ in millions)

Senior Revolving Credit Facility $ 170.0

Receivables Financing Agreement 45.0

Total borrowings $ 215.0

5.50% senior notes due 2022 $ ( 200.0 )

Senior Revolving Credit Facility ( 170.0 )

Receivables Financing Agreement ( 45.0 )

Finance leases ( 0.9 )

Total repayments $ ( 415.9 )

Long-term debt repayments, net $ ( 200.9 )

During 2021, activity of our outstanding debt included:

Long-term Debt Borrowings (Repayments) Loss on Debt Extinguishment

Nine Months Ended September 30, 2021 Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021

Debt Instrument ($ in millions)

Senior Term Loans $ 315.0

Receivables Financing Agreement 75.0

Total borrowings $ 390.0

10.00% senior notes due 2025 $ ( 500.0 ) $ — $ 30.9

9.75% senior notes due 2023 ( 120.0 ) — 3.7

5.625% senior notes due 2029 ( 79.0 ) 6.0 8.9

5.00% senior notes due 2030 ( 26.0 ) 1.5 2.1

Senior Term Loans ( 465.0 ) 1.2 2.0

Receivables Financing Agreement ( 50.0 ) — —

Finance leases ( 1.1 ) — —

Total repayments $ ( 1,241.1 ) $ 8.7 $ 47.6

Long-term debt repayments, net $ ( 851.1 )

Senior Credit Facility

We maintain a $ 1,615.0 million senior credit facility (Senior Credit Facility) which includes a senior delayed-draw term loan facility with aggregate commitments of $ 315.0 million (Delayed Draw Term Loan), a senior term loan facility with aggregate commitments of $ 500.0 million (2020 Term Loan and together with the Delayed Draw Term Loan, the Senior Term Loans) and a senior revolving credit facility with aggregate commitments in an amount equal to $ 800.0 million (Senior Revolving Credit Facility).

The maturity date for the Senior Credit Facility is July 16, 2024.

On March 30, 2021, Olin drew the entire $ 315.0 million of the Delayed Draw Term Loan and used the proceeds to fund the redemption of the 10.00 % senior notes due October 15, 2025 (2025 Notes).

During 2021, we repaid $ 465.0 million of the Senior Term Loans.

As of September 30, 2022, we maintained an existing senior credit facility (2021 Senior Credit Facility) which included outstanding senior term loans of $ 350.0 million and a senior revolving credit facility with aggregate commitments in an amount

equal to $ 800.0 million (2021 Senior Revolving Credit Facility).

The maturity date for the 2021 Senior Credit Facility was July 16, 2024.

On March 30, 2021, Olin drew the entire $ 315.0 million of the 2021 delayed draw term loan, included within the 2021 Senior Credit Facility, and used the proceeds to fund the redemption of the 10.00 % senior notes due October 15, 2025 (2025 Notes).

During 2021, we repaid $ 465.0 million of the outstanding senior term loans.

These repayments satisfied all future required quarterly installments of the senior term loans.

The Senior Revolving Credit Facility includes a $ 100.0 million letter of credit subfacility.

At June 30, 2022, we had $ 799.6 million available under our $ 800.0 million Senior Revolving Credit Facility because we had issued $ 0.4 million of letters of credit.

We were in compliance with all covenants and restrictions under all our outstanding credit agreements as of June 30, 2022, and no event of default had occurred that would permit the lenders under our outstanding credit agreements to accelerate the debt if not cured.

The 2021 Senior Revolving Credit Facility included a $ 100.0 million letter of credit subfacility.

At September 30, 2022, we had $ 799.6 million available under our $ 800.0 million 2021 Senior Revolving Credit Facility because we had issued $ 0.4 million of letters of credit.

We were in compliance with all covenants and restrictions under all our outstanding credit agreements as of September 30, 2022, and no event of default had occurred that would permit the lenders under our outstanding credit agreements to accelerate the debt if not cured.

In the future, our ability to generate sufficient operating cash flows, among other factors, will determine the amounts available to be borrowed under these facilities.

1 unchanged sentence

The limitation, if an amendment or waiver from our lenders is not obtained, could restrict our ability to borrow the maximum amounts available under the 2021 Senior Revolving Credit Facility and the Receivables Financing Agreement.

As of June 30, 2022, there were no covenants or other restrictions that limited our ability to borrow.

As of September 30, 2022, there were no covenants or other restrictions that limited our ability to borrow.

Other Financing

Interest expense for the three and six months ended June 30, 2021 included a loss on extinguishment of debt of $ 15.4 million and $ 38.9 million, which included $ 12.3 million and $ 31.0 million, respectively, of bond redemption premiums and $ 3.1 million and $ 7.9 million, respectively, for write-off of deferred debt issuance costs and recognition of deferred fair value interest rate swap losses related to financing transactions during 2021.

The cash payments related to the early redemption premiums for the debt extinguishments are classified as cash outflows from financing activities on the consolidated statements of cash flows for the six months ended June 30, 2021

For the six months ended June 30, 2021, we paid debt issuance costs of $ 3.1 million primarily for the amendments to our Senior Credit Facility.

Interest expense for the three and nine months ended September 30, 2021 included a loss on extinguishment of debt of $ 8.7 million and $ 47.6 million, which included $ 6.7 million and $ 37.7 million, respectively, of bond redemption premiums and $ 2.0 million and $ 9.9 million, respectively, for write-off of deferred debt issuance costs and recognition of deferred fair value interest rate swap losses related to financing transactions during 2021.

For the nine months ended September 30, 2021, we paid debt issuance costs of $ 3.8 million primarily for the amendments to our 2021 Senior Credit Facility.

Subsequent Event

On October 11, 2022, we entered into a new $ 1,550.0 million senior credit facility (Senior Credit Facility) that replaced our 2021 Senior Credit Facility.

The Senior Credit Facility includes a senior term loan facility with aggregate commitments of $ 350.0 million (Term Loan Facility) and a senior revolving credit facility with aggregate commitments of $ 1,200.0 million (Senior Revolving Credit Facility).

The Term Loan Facility was fully drawn on the closing date with the proceeds of the Term Loan Facility used to refinance the loans and commitments outstanding under the 2021 Senior Credit Facility.

The Term Loan Facility will require principal amortization amounts payable beginning March 31, 2023 at a rate of 0.625 % per quarter through the end of 2024, increasing to 1.250 % per quarter thereafter until maturity.

The maturity date for the Senior Credit Facility is October 11, 2027.

CONTRIBUTING EMPLOYEE OWNERSHIP PLAN

1 unchanged sentence

We provide a contribution to an individual retirement contribution account maintained with the CEOP equal to an amount of between 5.0 % and 7.5 % of the employee’s eligible compensation.

The defined contribution plan expense for the three months ended June 30, 2022 and 2021 was $ 8.8 million and $ 8.6 million, respectively, and for the six months ended June 30, 2022 and 2021 was $ 19.4 million and $ 17.3 million, respectively.

The defined contribution plan expense for the three months ended September 30, 2022 and 2021 was $ 9.6 million and $ 9.3 million, respectively, and for the nine months ended September 30, 2022 and 2021 was $ 28.9 million and $ 26.6 million, respectively.

Company matching contributions are invested in the same investment allocation as the employee’s contribution.

Our matching contributions for eligible employees for the three months ended June 30, 2022 and 2021 were $ 3.6 million and $ 3.7 million, respectively, and for the six months ended June 30, 2022 and 2021 were $ 6.7 million and $ 6.9 million, respectively.

Our matching contributions for eligible employees for the three months ended September 30, 2022 and 2021 were $ 4.0 million and $ 3.5 million, respectively, and for the nine months ended September 30, 2022 and 2021 were $ 10.8 million and $ 10.4 million, respectively.

PENSION PLANS AND RETIREMENT BENEFITS

9 unchanged sentences

Pension Benefits Other Postretirement Benefits

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

Three Months Ended September 30, Three Months Ended September 30,

2022 2021 2022 2021

7 unchanged sentences

Pension Benefits Other Postretirement Benefits

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

Nine Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

6 unchanged sentences

Net periodic benefit (income) cost $ ( 24.5 ) $ ( 20.6 ) $ 2.8 $ 3.5

We made cash contributions to our international qualified defined benefit pension plans of $ 0.8 million and $ 0.6 million for the six months ended June 30, 2022 and 2021, respectively.

The effective tax rate for the three months ended June 30, 2022 included a benefit associated with prior year tax positions and stock-based compensation, resulting in a net $ 8.5 million tax benefit.

After giving consideration to these items, the effective tax rate for the three months ended June 30, 2022 of 23.5 % was higher than the 21 % U.S.

We made cash contributions to our international qualified defined benefit pension plans of $ 0.9 million and $ 1.0 million for the nine months ended September 30, 2022 and 2021, respectively.

The effective tax rate for the three months ended September 30, 2022 included a net $ 36.6 million tax benefit primarily associated with a legal entity liquidation.

After giving consideration to this benefit, the effective tax rate for the three months ended September 30, 2022 of 24.3 % was higher than the 21 % U.S.

federal statutory rate primarily due to state and foreign income taxes, partially offset by foreign income exclusions and favorable permanent salt depletion deductions.

The effective tax rate for the three months ended June 30, 2021 included a benefit from a net decrease in the valuation allowance related to deferred tax assets in foreign jurisdictions, a benefit associated with prior year tax positions, a benefit associated with stock-based compensation and an expense from a change in tax contingencies.

The effective tax rate for the three months ended September 30, 2021 included a benefit associated with prior year tax positions, a benefit associated with stock-based compensation, an expense from a net increase in the valuation allowance related to deferred tax assets in foreign jurisdictions and an expense from a change in tax contingencies.

These factors resulted in a net $ 1.1 million tax benefit.

After giving consideration to these items, the effective tax rate for the three months ended June 30, 2021 of 22.4 % was higher than the 21 % U.S.

federal statutory rate primarily due to state taxes, foreign income inclusions

and foreign income taxes, partially offset by a net decrease in the valuation allowance related to utilization of losses in foreign jurisdictions and favorable permanent salt depletion deductions.

The effective tax rate for the six months ended June 30, 2022 included a benefit associated with prior year tax positions and stock-based compensation, resulting in a net $ 10.8 million tax benefit.

After giving consideration to these items, the effective tax rate for the six months ended June 30, 2022 of 24.4 % was higher than the 21 % U.S.

After giving consideration to these items, the effective tax rate for the three months ended September 30, 2021 of 22.7 % was higher than the 21 % U.S.

federal statutory rate primarily due to state taxes, foreign income inclusions and foreign

income taxes, partially offset by a net decrease in the valuation allowance related to utilization of losses in foreign jurisdictions and favorable permanent salt depletion deductions.

The effective tax rate for the nine months ended September 30, 2022 included a net $ 47.5 million tax benefit primarily associated with a legal entity liquidation, prior year tax positions and stock-based compensation.

After giving consideration to these items, the effective tax rate for the nine months ended September 30, 2022 of 24.4 % was higher than the 21 % U.S.

federal statutory rate primarily due to state and foreign income taxes, partially offset by foreign income exclusions and favorable permanent salt depletion deductions.

The effective tax rate for the six months ended June 30, 2021 included a benefit from a net decrease in the valuation allowance related to deferred tax assets in foreign jurisdictions, a benefit associated with prior year tax positions, a benefit associated with stock-based compensation, an expense from remeasurement of deferred taxes due to an increase in our state effective tax rates and an expense from a change in tax contingencies.

The effective tax rate for the nine months ended September 30, 2021 included a benefit from a net decrease in the valuation allowance related to deferred tax assets in foreign jurisdictions, a benefit associated with prior year tax positions, a benefit associated with stock-based compensation, an expense from remeasurement of deferred taxes due to an increase in our state effective tax rates and an expense from a change in tax contingencies.

These factors resulted in a net $ 96.7 million tax benefit.

After giving consideration to these items, the effective tax rate for the six months ended June 30, 2021 of 21.6 % was higher than the 21 % U.S.

After giving consideration to these items, the effective tax rate for the nine months ended September 30, 2021 of 22.2 % was higher than the 21 % U.S.

federal statutory rate primarily due to state taxes, foreign income inclusions and foreign income taxes, partially offset by a net decrease in the valuation allowance related to utilization of losses in foreign jurisdictions and favorable permanent salt depletion deductions.

As of June 30, 2022, we had $ 46.0 million of gross unrecognized tax benefits, which would have a net $ 45.4 million impact on the effective tax rate, if recognized.

As of June 30, 2021, we had $ 40.8 million of gross unrecognized tax benefits, of which $ 40.6 million would have impacted the effective tax rate, if recognized.

As of September 30, 2022, we had $ 44.8 million of gross unrecognized tax benefits, which would have a net $ 44.7 million impact on the effective tax rate, if recognized.

As of September 30, 2021, we had $ 44.6 million of gross unrecognized tax benefits, of which $ 44.4 million would have impacted the effective tax rate, if recognized.

The amount of unrecognized tax benefits was as follows:

September 30,

($ in millions)

5 unchanged sentences

Balance at end of period $ 44.8 $ 44.6

As of June 30, 2022, we believe it is reasonably possible that our total amount of unrecognized tax benefits will decrease by approximately $ 12.3 million over the next twelve months.

As of September 30, 2022, we believe it is reasonably possible that our total amount of unrecognized tax benefits will decrease by approximately $ 11.5 million over the next twelve months.

The anticipated reduction primarily relates to settlements with taxing authorities and the expiration of federal, state and foreign statutes of limitation.

24 unchanged sentences

We enter into forward sales and purchase contracts to manage currency risk to offset our net exposures, by currency, related to the foreign currency denominated monetary assets and liabilities of our operations.

At June 30, 2022, we had outstanding forward contracts to buy foreign currency with a notional value of $ 235.5 million and to sell foreign currency with a notional value of $ 81.0 million.

At September 30, 2022, we had outstanding forward contracts to buy foreign currency with a notional value of $ 273.6 million and to sell foreign currency with a notional value of $ 96.0 million.

All of the currency derivatives expire within one year and are for U.S.

3 unchanged sentences

At December 31, 2021, we had outstanding forward contracts to buy foreign currency with a notional value of $ 199.0 million and to sell foreign currency with a notional value of $ 124.4 million.

At June 30, 2021, we had outstanding forward contracts to buy foreign currency with a notional value of $ 270.8 million and to sell foreign currency with a notional value of $ 99.7 million.

At September 30, 2021, we had outstanding forward contracts to buy foreign currency with a notional value of $ 320.6 million and to sell foreign currency with a notional value of $ 114.6 million.

Cash Flow Hedges

1 unchanged sentence

We had the following notional amounts of outstanding commodity contracts that were entered into to hedge forecasted purchases:

June 30, 2022 December 31, 2021 June 30, 2021

September 30, 2022 December 31, 2021 September 30, 2021

($ in millions)

3 unchanged sentences

Total notional $ 272.1 $ 224.3 $ 225.8

As of June 30, 2022, the counterparties to these commodity contracts were Wells Fargo Bank, N.A., Citibank, N.A., JPMorgan Chase Bank, National Association and Bank of America Corporation, all of which are major financial institutions.

As of September 30, 2022, the counterparties to these commodity contracts were Wells Fargo Bank, N.A., Citibank, N.A., JPMorgan Chase Bank, National Association and Bank of America Corporation, all of which are major financial institutions.

We use cash flow hedges for certain raw material and energy costs such as copper, zinc, lead, ethane, electricity and natural gas to provide a measure of stability in managing our exposure to price fluctuations associated with forecasted purchases of raw materials and energy used in our manufacturing process.

At June 30, 2022, we had open derivative contract positions through 2027.

If all open futures contracts had been settled on June 30, 2022, we would have recognized a pretax loss of $ 1.9 million.

If commodity prices were to remain at June 30, 2022 levels, approximately $ 4.0 million of deferred losses, net of tax, would be reclassified into earnings during the next twelve months.

At September 30, 2022, we had open derivative contract positions through 2027.

If all open futures contracts had been settled on September 30, 2022, we would have recognized a pretax loss of $ 13.1 million.

If commodity prices were to remain at September 30, 2022 levels, approximately $ 10.8 million of deferred losses, net of tax, would be reclassified into earnings during the next twelve months.

The actual effect on earnings will be dependent on actual commodity prices when the forecasted transactions occur.

4 unchanged sentences

In 2021, we redeemed the 2025 Notes, which resulted in recognition of the outstanding deferred swap loss.

For the three and six months ended June 30, 2021, $ 0.6 million and $ 1.8 million, respectively, of expense was recorded to interest expense on the accompanying condensed statements of operations related to these swap agreements.

For the nine months ended September 30, 2021, $ 1.8 million of expense was recorded to interest expense on the accompanying condensed statements of operations related to these swap agreements.

Financial Statement Impacts

3 unchanged sentences

The table disaggregates our net derivative assets and liabilities into gross components on a contract-by-contract basis before giving effect to master netting arrangements:

June 30, 2022 December 31, 2021 June 30, 2021

September 30, 2022 December 31, 2021 September 30, 2021

($ in millions)

10 unchanged sentences

Commodity contracts - gains 3.8 7.9 13.7

Commodity contracts - losses ( 0.1 ) — —

Total other assets 3.7 7.9 13.7

19 unchanged sentences

Amount of Gain (Loss)

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

Three Months Ended September 30, Nine Months Ended September 30,

Location of Gain (Loss) 2022 2021 2022 2021

18 unchanged sentences

If the threshold is exceeded, cash is either provided by the counterparty to us if the value of the derivatives is our asset, or cash is provided by us to the counterparty if the value of the derivatives is our liability.

As of June 30, 2022, December 31, 2021 and June 30, 2021, this threshold was not exceeded.

As of September 30, 2022, December 31, 2021 and September 30, 2021, this threshold was not exceeded.

In all instances where we are party to a master netting agreement, we offset the receivable or payable recognized upon payment of cash collateral against the fair value amounts recognized for derivative instruments that have also been offset under such master netting agreements.

14 unchanged sentences

We evaluate our hierarchy disclosures each quarter.

The following table summarizes the assets and liabilities measured at fair value in the condensed balance sheets:

The following table summarizes the assets and liabilities measured at fair value in the

condensed balance sheets:

Fair Value Measurements

Balance at June 30, 2022 Level 1 Level 2 Level 3 Total

Balance at September 30, 2022 Level 1 Level 2 Level 3 Total

Assets ($ in millions)

12 unchanged sentences

Total Liabilities $ — $ 3.8 $ — $ 3.8

Balance at June 30, 2021

Balance at September 30, 2021

Commodity contracts $ — $ 79.3 $ — $ 79.3

Foreign exchange contracts — 0.6 — 0.6

Total Assets $ — $ 79.9 $ — $ 79.9

Commodity contracts $ — $ 2.2 $ — $ 2.2

Foreign exchange contracts — 4.8 — 4.8

9 unchanged sentences

Since our long-term debt instruments may not be actively traded, the inputs used to measure the fair value of our long-term debt are based on current market rates for debt of similar risk and maturities and is classified as Level 2 in the fair value measurement hierarchy.

As of June 30, 2022, December 31, 2021 and June 30, 2021, the fair value measurements of debt were $ 2,635.3 million, $ 2,921.0 million and $ 3,669.2 million, respectively.

As of September 30, 2022, December 31, 2021 and September 30, 2021, the fair value measurements of debt were $ 2,386.5 million, $ 2,921.0 million and $ 3,287.9 million, respectively.

Nonrecurring Fair Value Measurements

In addition to assets and liabilities that are recorded at fair value on a recurring basis, we record assets and liabilities at fair value on a nonrecurring basis as required by ASC 820.

There were no assets or liabilities measured at fair value on a nonrecurring basis as of June 30, 2022, December 31, 2021 and June 30, 2021.

There were no assets or liabilities measured at fair value on a nonrecurring basis as of September 30, 2022, December 31, 2021 and September 30, 2021.

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