16 unchanged sentences
Included within long-term borrowings on the consolidated balance sheets were deferred debt issuance costs and unamortized bond original issue discount.
−Removed: Assuming no changes in the $805.9 million of variable-rate debt levels from December 31, 2021, we estimate that a hypothetical change of 100-basis points in the LIBOR interest rates from 2021 would impact annual interest expense by $8.1 million.
+Added: Assuming no changes in the $805.9 million of variable-rate debt levels from December 31, 2022, we estimate that a hypothetical change of 100-basis points in the secured overnight financing rate (SOFR) from 2022 would impact annual interest expense by $8.1 million.
If the actual changes in commodities, foreign currency or interest pricing is substantially different than expected, the net impact of commodity risk, foreign currency risk or interest rate risk on our cash flow may be materially different than that disclosed above.
6 unchanged sentences
These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control.
+Added: These forward-looking statements include, but are not limited to, statements regarding the Company’s intent to repurchase, from time to time, the Company’s common stock.
Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements.
We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.
−Removed: The payment of cash dividends is subject to the discretion of our board of directors and will be determined in light of then-current conditions, including our earnings, our operations, our financial conditions, our capital requirements and other factors deemed relevant by our board of directors.
+Added: The payment of cash dividends is subject to the discretion of our board of directors and will be determined in light of then-current conditions, including our earnings, our operations, our
+Added: financial conditions, our capital requirements and other factors deemed relevant by our board of directors.
In the future, our board of directors may change our dividend policy, including the frequency or amount of any dividend, in light of then-existing conditions.
13 unchanged sentences
Chairman, President and Chief Executive Officer
−Removed: Vice President and Chief Financial Officer
+Added: Senior Vice President and Chief Financial Officer
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
81 unchanged sentences
Accumulated other comprehensive loss ( 495.9 ) ( 488.0 )
−Removed: Retained earnings (accumulated deficit) 1,013.8 ( 155.1 )
+Added: Retained earnings 2,224.5 1,013.8
Total shareholders’ equity 2,543.6 2,652.2
16 unchanged sentences
Non-operating pension income 38.7 35.7 18.9
−Removed: Other income — — 11.2
Income (loss) before taxes 1,676.0 1,538.7 ( 1,020.0 )
13 unchanged sentences
Net income (loss) $ 1,326.9 $ 1,296.7 $ ( 969.9 )
−Removed: Other comprehensive income (loss), net of tax:
−Removed: Foreign currency translation adjustments, net ( 30.3 ) 27.8 ( 9.1 )
−Removed: Unrealized gains (losses) on derivative contracts, net 1.4 35.0 ( 15.4 )
+Added: Other comprehensive (loss) income, net of tax:
+Added: Foreign currency translation adjustments ( 27.7 ) ( 30.3 ) 27.8
+Added: Unrealized (losses) gains on derivative contracts, net ( 55.3 ) 1.4 35.0
Pension and postretirement liability adjustments, net 46.8 188.5 14.8
Amortization of prior service costs and actuarial losses, net 28.3 42.3 35.9
−Removed: Total other comprehensive income (loss), net of tax 201.9 113.5 ( 152.4 )
+Added: Total other comprehensive (loss) income, net of tax ( 7.9 ) 201.9 113.5
Comprehensive income (loss) $ 1,319.0 $ 1,498.6 $ ( 856.4 )
20 unchanged sentences
Balance at beginning of year $ ( 488.0 ) $ ( 689.9 ) $ ( 803.4 )
−Removed: Other comprehensive income (loss) 201.9 113.5 ( 152.4 )
+Added: Other comprehensive (loss) income ( 7.9 ) 201.9 113.5
Balance at end of year $ ( 495.9 ) $ ( 488.0 ) $ ( 689.9 )
1 unchanged sentence
Balance at beginning of year $ 1,013.8 $ ( 155.1 ) $ 941.1
−Removed: Lease accounting adoption adjustment — — 11.2
Net income (loss) 1,326.9 1,296.7 ( 969.9 )
12 unchanged sentences
Goodwill impairment — — 699.8
−Removed: Gain on disposition of non-consolidated affiliate — — ( 11.2 )
Gains on disposition of property, plant and equipment ( 13.0 ) ( 1.4 ) —
3 unchanged sentences
Deferred income taxes ( 32.4 ) ( 42.7 ) ( 18.4 )
−Removed: Write-off of equipment and facility included in restructuring charges — — 58.9
Qualified pension plan contributions ( 1.3 ) ( 1.1 ) ( 2.1 )
15 unchanged sentences
Proceeds from disposition of property, plant and equipment 14.9 3.2 —
−Removed: Proceeds from disposition of non-consolidated affiliate — — 20.0
Net investing activities ( 259.7 ) ( 197.4 ) ( 835.7 )
10 unchanged sentences
Effect of exchange rate changes on cash and cash equivalents ( 2.0 ) ( 0.8 ) 0.5
−Removed: Net (decrease) increase in cash and cash equivalents ( 9.2 ) ( 31.2 ) 42.1
+Added: Net increase (decrease) in cash and cash equivalents 13.5 ( 9.2 ) ( 31.2 )
Cash and cash equivalents, beginning of year 180.5 189.7 220.9
13 unchanged sentences
The Chlor Alkali Products and Vinyls segment manufactures and sells chlorine and caustic soda, ethylene dichloride and vinyl chloride monomer, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, hydrochloric acid, hydrogen, bleach products and potassium hydroxide.
−Removed: The Epoxy segment produces and sells a full range of epoxy materials and precursors, including aromatics (acetone, bisphenol, cumene and phenol), allyl chloride, epichlorohydrin, liquid epoxy resins, solid epoxy resins and downstream products such as converted epoxy resins and additives.
+Added: The Epoxy segment produces and sells a full range of epoxy materials and precursors, including aromatics (acetone, bisphenol, cumene and phenol), allyl chloride, epichlorohydrin, liquid epoxy resins, solid epoxy resins and systems and growth products such as converted epoxy resins and additives.
The Winchester segment produces and sells sporting ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges.
6 unchanged sentences
Accordingly, we include only our share of earnings or losses of these affiliates in consolidated net income (loss).
−Removed: Certain reclassifications were made to prior year amounts to conform to the 2021 presentation.
Revenue Recognition
18 unchanged sentences
However, a portion of our revenue is derived from long-term contracts which have contract periods that vary between one to multi-year.
−Removed: Certain of these contracts represent contracts with minimum purchase obligations, which
−Removed: can be substantially different than the actual revenue recognized.
−Removed: Such contracts consist of varying types of products across our chemical businesses.
+Added: Certain of these contracts represent contracts with minimum purchase obligations, which can be substantially different than the actual revenue recognized.
+Added: Such contracts consist of varying types of products across our
+Added: chemical businesses.
Certain contracts include variable volumes and/or variable pricing with pricing provisions tied to commodity, consumer price or other indices.
10 unchanged sentences
Other operating income (expense) consists of miscellaneous operating income items, which are related to our business activities, and gains (losses) on disposition of property, plant and equipment.
−Removed: Other operating income for the year ended December 31, 2021 included a $ 1.4 million gain on the sale of a terminal facility.
−Removed: Other operating income for the year ended December 31, 2020 included an $ 0.8 million gain on the sale of land.
+Added: Other operating income for the year ended December 31, 2022 included $ 13.0 million of gains for the sale of two former manufacturing facilities.
+Added: Other operating income for the year ended December 31, 2021 included an $ 1.4 million gain on the sale of a terminal facility.
Other Income (Expense)
3 unchanged sentences
dollar (USD) or local currency as the functional currency, where applicable.
−Removed: For foreign entities where the USD is the functional currency, gains and losses resulting from balance sheet translations are included in selling and administration.
+Added: For foreign entities where the USD is the functional currency, gains and losses resulting from balance sheet remeasurement are included in selling and administration.
For foreign entities where the local currency is the functional currency, assets and liabilities denominated in local currencies are translated into USD at end-of-period exchange rates and the resultant translation adjustments are included in accumulated other comprehensive loss.
23 unchanged sentences
Elements of costs in inventories include raw materials, direct labor and manufacturing overhead.
+Added: See Note 7 “Inventories” for additional information.
Property, Plant and Equipment
5 unchanged sentences
Expenditures for maintenance and repairs are charged to expense when incurred while the costs of significant improvements, which extend the useful life of the underlying asset, are capitalized.
−Removed: Property, plant and equipment are reviewed for impairment when conditions indicate that the carrying values of the assets may not be recoverable.
+Added: Property, plant and equipment are reviewed for impairment when conditions indicate that the carrying values of the asset group may not be recoverable.
Such impairment conditions include an extended period of idleness or a plan of disposal.
−Removed: If such impairment indicators are present or other factors exist that indicate that the carrying amount of an asset may not be recoverable, we determine whether impairment has occurred through the use of an undiscounted cash flow analysis at the lowest level for which identifiable cash flows exist.
−Removed: For our Chlor Alkali Products and Vinyls, Epoxy and Winchester segments, the lowest level for which identifiable cash flows exist is the operating facility level or an appropriate grouping of operating facilities level.
−Removed: The amount of impairment loss, if any, is measured by the difference between the net book value of the assets and the estimated fair value of the related assets.
−Removed: In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02 “Leases,” (ASU 2016-02) which supersedes Accounting Standards Codification (ASC) 840 “Leases” and creates a new topic, ASC 842 “Leases” (ASC 842).
−Removed: Subsequent to the issuance of ASU 2016-02, ASC 842 was amended by various
−Removed: updates that amend and clarify the impact and implementation of the aforementioned update.
−Removed: We adopted these updates on January 1, 2019 using the optional transition method, which requires application of these updates beginning on the date of adoption with the cumulative effect of initially applying these updates recognized at the date of initial adoption.
−Removed: In addition, we elected the following practical expedients:
−Removed: • We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification.
−Removed: • We elected the practical expedient related to land easements, allowing us to carry forward our accounting treatment for land easements on existing agreements.
−Removed: • We elected the short-term practical expedient for all classes of lease assets, which allows us to not record leases with an initial term of 12 months or less on the balance sheet, and instead recognize the expense straight-line over the lease term.
−Removed: • We elected the practical expedient to not separate lease components from non-lease components for all asset classes.
−Removed: Adoption of these updates resulted in the recording of operating lease assets and lease liabilities on our consolidated balance sheet of $ 291.9 million as of January 1, 2019.
−Removed: Our assets and liabilities for finance leases remained unchanged.
−Removed: We also recognized the cumulative effect of applying these updates as an adjustment to retained earnings of $ 11.2 million, net of tax, which was primarily related to the recognition of previously deferred sale/leaseback gains.
−Removed: Our consolidated statements of operations and cash flows, along with our compliance with all covenants and restrictions under all our outstanding credit agreements, were not impacted by this adoption.
+Added: If such impairment indicators are present or other factors exist that indicate that the carrying amount of an asset group may not be recoverable, we determine whether impairment has occurred through the use of an undiscounted cash flow analysis at the lowest level for which identifiable cash flows exist.
+Added: For our Chlor Alkali Products and Vinyls, Epoxy and Winchester segments, the lowest level for which identifiable cash flows exist is the operating facility level or an appropriate grouping of operating facilities level, which represents the asset group.
+Added: The amount of impairment loss, if any, is measured by the difference between the net book value of the assets and the estimated fair value of the related asset group.
+Added: See Note 8 “Property, Plant and Equipment” for additional information.
We determine if an arrangement is a lease at inception of the contract.
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We have no additional restrictions or covenants imposed by our lease contracts.
+Added: See Note 21 “Leases” for additional information.
Asset Retirement Obligations
8 unchanged sentences
Spending ( 8.7 ) ( 8.1 )
−Removed: Foreign currency translation adjustments — 0.1
Adjustments 1.0 10.1
5 unchanged sentences
Goodwill is not amortized, but is reviewed for impairment annually in the fourth quarter and/or when circumstances or other events indicate that impairment may have occurred.
−Removed: ASC 350 “Intangibles—Goodwill and Other” (ASC 350) permits entities to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the goodwill impairment test.
+Added: Accounting Standards Codification (ASC) 350 “Intangibles—Goodwill and Other” (ASC 350) permits entities to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the goodwill impairment test.
Circumstances that are considered as part of the qualitative assessment and could trigger a quantitative impairment test include, but are not limited to:
29 unchanged sentences
and a significant restructuring charge within a reporting unit.
−Removed: Based upon our qualitative assessment, it is more likely than not that the fair value of our intangible assets are greater than the carrying amount as of December 31, 2021.
−Removed: No impairment of our intangible assets were recorded in 2021, 2020 or 2019.
+Added: See Note 10 “Goodwill and Intangible Assets” for additional information.
Environmental Liabilities and Expenditures
2 unchanged sentences
Environmental costs are capitalized if the costs increase the value of the property and/or mitigate or prevent contamination from future operations.
+Added: See Note 20 “Environmental” for additional information.
Deferred taxes are provided for differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
−Removed: A valuation allowance is provided to offset deferred tax assets if, based on the available evidence, it is more likely than not that some or all of the value of the deferred tax assets will not be realized.
+Added: A valuation allowance is provided to
+Added: offset deferred tax assets if, based on the available evidence, it is more likely than not that some or all of the value of the deferred tax assets will not be realized.
+Added: See Note 14 “Income Taxes” for additional information.
Derivative Financial Instruments
4 unchanged sentences
The hedge accounting treatment provides for the deferral of gains or losses on derivative instruments until such time as the related transactions occur.
+Added: See Note 23 “Derivative Financial Instruments” for additional information.
Concentration of Credit Risk
14 unchanged sentences
Consideration was given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
+Added: See Note 24 “Fair Value Measurements” for additional information.
Retirement-Related Benefits
2 unchanged sentences
Changes in liability due to changes in actuarial assumptions such as discount rate, rate of compensation increases and mortality, as well as annual deviations between what was assumed and what was experienced by the plan are treated as actuarial gains or losses.
−Removed: The principle underlying the required attribution approach is that employees render service over their average remaining service lives on a relatively smooth basis and, therefore, the accounting for benefits earned under the pension or non-pension postretirement benefits plans should follow the same relatively smooth pattern.
+Added: The principle underlying the required attribution approach is that employees render service over their average remaining service lives on a relatively smooth basis and, therefore, the accounting for benefits
+Added: earned under the pension or non-pension postretirement benefits plans should follow the same relatively smooth pattern.
Substantially all domestic defined benefit pension plan participants are no longer accruing benefits;
therefore, actuarial gains and losses are amortized based upon the remaining life expectancy of the inactive plan participants.
−Removed: For the years ended December 31, 2021 and 2020, the average remaining life expectancy of the inactive participants in the domestic defined benefit pension plan were 17 years and 18 years, respectively.
+Added: For both the years ended December 31, 2022 and 2021, the average remaining life expectancy of the inactive participants in the domestic defined benefit pension plan were 17 years.
One of the key assumptions for the net periodic pension calculation is the expected long-term rate of return on plan assets, used to determine the “market-related value of assets.” The “market-related value of assets” recognizes differences between the plan’s actual return and expected return over a five year period.
13 unchanged sentences
Changes in fair value of liability awards during the requisite service period are recognized as compensation cost over that period.
−Removed: The fair value of each option granted, which typically vests ratably over three years , but not less than one year , was estimated on the date of grant, using the Black-Scholes option-pricing model with the following assumptions:
−Removed: 2021 2020 2019
−Removed: Dividend yield 2.76 % 4.60 % 3.05 %
−Removed: Risk-free interest rate 0.94 % 1.44 % 2.51 %
−Removed: Expected volatility 44 % 36 % 34 %
−Removed: Expected life (years) 6.0 6.0 6.0
−Removed: Weighted-average grant fair value (per option) $ 9.91 $ 3.64 $ 6.76
−Removed: Weighted-average exercise price $ 28.99 $ 17.33 $ 26.26
−Removed: Shares granted 1,154,700 2,663,100 1,578,200
−Removed: Dividend yield was based on our current dividend yield as of the option grant date.
−Removed: Risk-free interest rate was based on zero coupon U.S.
−Removed: Treasury securities rates for the expected life of the options.
−Removed: Expected volatility was based on our historical stock price movements, as we believe that historical experience is the best available indicator of the expected volatility.
−Removed: Expected life of the option grant was based on historical exercise and cancellation patterns, as we believe that historical experience is the best estimate for future exercise patterns.
−Removed: Performance share awards are denominated in shares of our stock and are paid half in cash and half in stock.
−Removed: Payouts for performance share awards are based on two criteria:
−Removed: (1) 50 % of the award is based on Olin’s total shareholder returns (TSR) over the applicable three -year performance cycle in relation to the TSR over the same period among a portfolio of public companies which are selected in concert with outside compensation consultants and (2) 50 % of the award is based on Olin’s net income over the applicable three -year performance cycle in relation to the net income goal for such period as set by the compensation committee of Olin’s board of directors.
−Removed: The expense associated with performance shares is recorded based on our estimate of our performance relative to the respective target.
−Removed: The fair value of each performance stock award based on net income was estimated on the date of grant, using the current stock price.
−Removed: The fair value of each performance stock award based on TSR was estimated on the date of grant, using a Monte Carlo simulation model with the following weighted average assumptions:
−Removed: Grant date 2021
−Removed: Risk-free interest rate 0.23 %
−Removed: Expected volatility of Olin common stock 55 %
−Removed: Expected average volatility of peer companies 50 %
−Removed: Average correlation coefficient of peer companies 0.50
−Removed: Expected life (years) 3.0
−Removed: Grant date fair value (TSR based award) $ 39.96
−Removed: Grant date fair value (net income based award) $ 28.99
−Removed: Awards granted 248,700
−Removed: Risk-free interest rate was based on zero coupon U.S.
−Removed: Treasury securities rates for the expected life of the performance stock awards.
−Removed: Expected volatility of Olin common stock and peer companies was based on historical stock price movements, as we believe that historical experience is the best available indicator of the expected volatility.
−Removed: The average correlation coefficient of peer companies was determined based on historical trends of Olin’s common stock price compared to the peer companies.
−Removed: Expected life of the performance stock award grant was based on historical exercise and cancellation patterns, as we believe that historical experience is the best estimate of future exercise patterns.
+Added: See Note 17 “Stock-based Compensation” for additional information.
Share Repurchases
−Removed: Under our share repurchase programs, we may pursue various share repurchase strategies, which include entering into accelerated share repurchase (ASR) agreements with third-party financial institutions to repurchase shares of Olin’s common stock.
−Removed: Under an ASR agreement, Olin pays a specified amount to the financial institution and receives an initial delivery of shares.
+Added: Under our share repurchase programs, we may pursue various share repurchase strategies, which include open market transactions or through privately negotiated transactions, including under an accelerated share repurchase (ASR) agreement, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.
+Added: Under an ASR agreement, which is typically with a third-party financial institution to repurchase shares of Olin’s common stock, Olin pays a specified amount to the financial institution and receives an initial delivery of shares.
This initial delivery of shares represents the minimum number of shares that Olin may receive under the agreement.
2 unchanged sentences
RECENT ACCOUNTING PRONOUNCEMENTS
−Removed: In March 2020, the FASB issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (ASU 2020-04) which creates a new topic, ASC 848 “Reference Rate Reform” (ASC 848).
−Removed: Subsequent to the issuance of ASU 2020-04, ASC 848 was amended by ASU 2021-01, “Scope” which amended and clarified the application and scope aforementioned update.
−Removed: This update provides optional guidance to ease the potential accounting burden associated with transition away from reference rates that are expected to be discontinued at the end of 2021, at which time financial institutions will no longer be required to report information that is currently used to determine the London Interbank Offered Rate (LIBOR) and other reference rates.
−Removed: This update allows companies to treat contract amendments to existing contracts for the purpose of establishing a new reference rate as continuations of those contracts without additional analysis, as long as the modification was made to establish a new reference rate.
−Removed: This update applies prospectively to contract modifications.
−Removed: The optional guidance was effective on March 12, 2020 and can be adopted beginning January 1, 2020 or any date thereafter until December 31, 2022, at which time the optional guidance can no longer be applied to contract amendments to existing contracts.
−Removed: We adopted the provisions of this update on January 1, 2020 and will apply this guidance prospectively to contract modifications that are entered into for the purpose of establishing a new reference rate.
−Removed: The adoption of this update did not have a material impact on our consolidated financial statements.
+Added: We do not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying consolidated financial statements.
RESTRUCTURING CHARGES
−Removed: Olin committed to a productivity initiative to align the organization with our new operating model and improve efficiencies (collectively, Productivity Plan).
+Added: As a result of weak global resin demand and higher cost structures within the European region, we began a review of our global Epoxy asset footprint to optimize the most productive and cost effective assets to support our strategic operating model.
+Added: We committed to and completed a plan during the fourth quarter of 2022 to close down one of our bisphenol (BisA) production lines at our Stade, Germany site (collectively, Stade Plan).
+Added: For the year ended December 31, 2022, we recorded pretax restructuring charges of $ 8.0 million for employee severance and related benefit costs and the write-off of equipment and facility costs related to this action.
+Added: We expect to incur additional restructuring charges through 2024 of approximately $ 10 million related to this action.
+Added: Olin committed to a productivity initiative to align the organization with our strategic operating model and improve efficiencies (collectively, Productivity Plan).
These actions and related activities were completed during the second quarter of 2021.
1 unchanged sentence
We do not expect to incur additional restructuring charges related to these actions.
−Removed: May 18, 2021, we announced that we had made the decision to permanently close approximately 20 % of our diaphragm-grade chlor alkali capacity, representing 225,000 tons, at our Plaquemine, LA facility (Plaquemine Plan).
−Removed: The closure was completed in the second quarter of 2021.
−Removed: We do not expect to incur restructuring charges related to these actions.
On March 15, 2021, we announced that we had made the decision to permanently close approximately 50 % of our diaphragm-grade chlor alkali capacity, representing 200,000 tons, at our McIntosh, AL facility.
1 unchanged sentence
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).
−Removed: The closure is expected to be completed by the end of the third quarter of 2022.
−Removed: For the year ended December 31, 2021, we recorded pretax restructuring charges of $ 5.6 million for lease and other contract termination costs related to these actions.
+Added: The closure was completed during third quarter of 2022.
+Added: For the years ended December 31, 2022 and 2021, we recorded pretax restructuring charges of $ 8.3 million and $ 5.6 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 2027 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.
−Removed: For the year ended December 31, 2021, we recorded pretax restructuring charges of $ 6.5 million for facility exit costs related to these actions.
+Added: For the years ended December 31, 2022 and 2021, we recorded pretax restructuring charges of $ 2.6 million and $ 6.5 million, respectively, for facility exit costs related to these actions.
We expect to incur additional restructuring charges through 2024 of approximately $ 15 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.
−Removed: For the year ended December 31, 2021, we recorded pretax restructuring charges of $ 3.9 million for facility exit costs and employee severance and related benefit costs related to these actions.
−Removed: For the year ended December 31, 2020, we recorded pretax restructuring charges of $ 3.8 million for non-cash impairment of equipment and facilities related to these actions.
+Added: For the years ended December 31, 2022, 2021 and 2020, we recorded pretax restructuring charges of $ 6.0 million, $ 3.9 million and $3.8 million, respectively, for facility exit costs related to these actions.
We expect to incur additional restructuring charges through 2026 of approximately $ 30 million related to these actions.
−Removed: On December 10, 2018, we announced that we had made the decision to permanently close the ammunition assembly operations at our Winchester facility in Geelong, Australia.
−Removed: Subsequent to the facility’s closure, products for customers in the region are sourced from Winchester manufacturing facilities located in the United States.
−Removed: For the year ended December 31, 2019, we recorded pretax restructuring charges of $ 0.4 million for the write-off of equipment and facility costs, employee severance and related benefit costs, lease and other contract termination costs and facility exit costs related to this action.
−Removed: For the year ended December 31, 2019, we also recorded additional pretax restructuring charges of $ 1.4 million for employee severance and related benefit costs related to our Winchester operations.
On March 21, 2016, we announced that we had made the decision to close a combined total of 433,000 tons of chlor alkali capacity across three separate locations (collectively, Chlor Alkali 2016 Plan).
2 unchanged sentences
This 220,000 ton reduction was entirely from diaphragm cell capacity.
−Removed: For the years ended December 31, 2021, 2020 and 2019, we recorded pretax restructuring charges of $ 1.6 million, $ 5.2 million and $ 15.8 million, respectively, for the lease and other contract termination costs, employee severance and related benefit costs and facility exit costs related to these actions.
−Removed: We expect to incur additional restructuring charges through 2022 of approximately $ 1 million related to these capacity reductions.
+Added: For the years ended December 31, 2022, 2021 and 2020, we recorded pretax restructuring charges of $ 0.4 million, $ 1.6 million and $ 5.2 million, respectively, for the lease and other contract termination costs and facility exit costs related to these actions.
+Added: We do not expect to incur additional restructuring charges related to these capacity reductions.
The following table summarizes the 2022, 2021 and 2020 activities by major component of these restructuring actions and the remaining balances of accrued restructuring costs as of December 31, 2022, 2021 and 2020:
12 unchanged sentences
The following table summarizes the cumulative restructuring charges of these restructuring actions by major component through December 31, 2022:
−Removed: Chlor Alkali Products and Vinyls Corporate/other Total
−Removed: McIntosh Plan Freeport 2021 Plan Freeport 2019 Plan Chlor Alkali 2016 Plan Productivity Plan
+Added: Chlor Alkali Products and Vinyls Epoxy Corporate/other Total
+Added: McIntosh Plan Freeport 2021 Plan Freeport 2019 Plan Chlor Alkali 2016 Plan Stade
+Added: Plan Productivity Plan
($ in millions)
23 unchanged sentences
ACCOUNTS RECEIVABLES
−Removed: During 2021, we amended our existing $ 250.0 million Receivables Financing Agreement which expanded the borrowing capacity to $ 300.0 million (Receivables Financing Agreement) and extended the maturity to September 24, 2024.
−Removed: The Receivables Financing Agreement includes a minimum borrowing requirement of 50 % of the facility limit or available borrowing capacity, whichever is less.
−Removed: The administrative agent for our Receivables Financing Agreement is PNC Bank, National Association.
+Added: On October 11, 2022, we amended our existing $ 300.0 million Receivables Financing Agreement which increased the facility limit to $ 425.0 million and extended the maturity to October 14, 2025 (Receivables Financing Agreement).
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 $ 1,550.0 million senior credit facility.
−Removed: As of December 31, 2021 and 2020, we had $ 300.0 million and $ 125.0 million, respectively, drawn under the agreement.
−Removed: As of December 31, 2021, $ 556.2 million of our trade receivables were pledged as collateral and we had no additional borrowing capacity under the Receivables Financing Agreement.
+Added: As of both December 31, 2022 and 2021, we had $ 300.0 million drawn under the agreement.
+Added: As of December 31, 2022, $ 654.0 million of our trade receivables were pledged as collateral and we had $ 125.0 million of additional borrowing capacity under the Receivables Financing Agreement.
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.
16 unchanged sentences
Finished goods 559.3 523.3
+Added: Inventories excluding LIFO reserve 1,097.7 974.8
LIFO reserve ( 155.8 ) ( 106.5 )
18 unchanged sentences
Interest capitalized was $ 3.1 million, $ 3.2 million and $ 6.4 million for 2022, 2021 and 2020, respectively.
−Removed: The consolidated statements of cash flows for the years ended December 31, 2021, 2020 and 2019, included increases of $ 6.4 million and $ 31.0 million and a decrease of $ 5.7 million, respectively, to capital expenditures, with the corresponding change to accounts payable and accrued liabilities, related to purchases of property, plant and equipment included in accounts payable and accrued liabilities at December 31, 2021, 2020 and 2019.
+Added: The consolidated statements of cash flows for the years ended December 31, 2022, 2021 and 2020, included a (decrease) increase of $( 4.2 ) million, $ 6.4 million and $ 31.0 million, respectively, to capital expenditures, with the corresponding change to accounts payable and accrued liabilities, related to purchases of property, plant and equipment included in accounts payable and accrued liabilities at December 31, 2022, 2021 and 2020.
Included in other assets were the following:
4 unchanged sentences
We have entered into various arrangements for the long-term supply of ethylene and electricity.
−Removed: A payment of $ 461.0 million was made during the second quarter of 2020 associated with a previously executed option to reserve additional ethylene at producer economics.
+Added: A payment of $ 461.0 million was made during 2020 associated with a previously executed option to reserve additional ethylene at producer economics.
The original liability was discounted and recorded at present value as of March 31, 2017.
−Removed: For the years ended December 31, 2020 and 2019, $ 4.0 million and $ 17.0 million, respectively, of interest expense was recorded for accretion of the 2020 payment liability discount.
+Added: For the year ended December 31, 2020, $ 4.0 million of interest expense was recorded for accretion of the 2020 payment liability discount.
During the year ended December 31, 2020, a payment of $ 75.8 million was made associated with the resolution of a dispute over the allocation to Olin of certain capital costs incurred at our Plaquemine, LA site.
1 unchanged sentence
For the years ended December 31, 2022, 2021 and 2020, amortization expense of $ 70.4 million, $ 69.4 million and $ 56.0 million, respectively, was recognized within cost of goods sold related to our supply contracts and is reflected in depreciation and amortization on the consolidated statements of cash flows.
−Removed: We estimate that amortization expense will be approximately $ 70 million in 2022, 2023, 2024, 2025 and 2026 related to our long-term supply contracts.
+Added: We estimate that amortization expense will be approximately $ 70 million in 2023 and 2024 and $ 75 million in 2025, 2026 and 2027 related to our long-term supply contracts.
The long-term supply contracts are monitored for impairment each reporting period.
−Removed: On January 1, 2019, we sold our 9.1 % limited partnership interest in Bay Gas Storage Company, Ltd.
−Removed: (Bay Gas) for $ 20.0 million.
−Removed: The sale closed on February 7, 2019 which resulted in a gain of $ 11.2 million for the year ended December 31, 2019 which was recorded to other income in the consolidated statements of operations.
GOODWILL AND INTANGIBLE ASSETS
3 unchanged sentences
Balance at January 1, 2021 $ 1,275.3 $ 144.9 $ 1,420.2
−Removed: Goodwill impairment ( 557.6 ) ( 142.2 ) ( 699.8 )
Foreign currency translation adjustment 0.3 0.1 0.4
3 unchanged sentences
During the fourth quarter of 2022, we performed our qualitative assessment of goodwill.
−Removed: Based upon our qualitative assessment, it is more likely than not that the fair value of our reporting units are greater than their carrying amounts as of December 31, 2021.
−Removed: No impairment charges were recorded for 2021.
+Added: Based upon our qualitative assessment, it was more likely than not that the fair value of our reporting units were greater than their carrying amounts as of December 31, 2022.
+Added: No impairment charges were recorded for 2022 or 2021.
During the first quarter of 2020, our market capitalization declined significantly compared to the fourth quarter of 2019.
14 unchanged sentences
During the three months ended September 30, 2020, we identified a triggering event associated with a sustained significant overall decrease in our stock price.
−Removed: As a result, we performed an updated quantitative goodwill impairment test during the third quarter of 2020.
+Added: As a result, we performed an updated quantitative goodwill
+Added: impairment test during the third quarter of 2020.
We used a discounted cash flow approach to develop the estimated fair value of our reporting units.
−Removed: Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors.
+Added: The fair value determinations required considerable judgment and were sensitive to changes in underlying assumptions, estimates and market factors.
The discount rate, profitability assumptions and terminal growth rate of our reporting units and the supply and demand fundamentals of the chlor alkali industry were the material assumptions utilized in the discounted cash flow model used to estimate the fair value of each reporting unit.
−Removed: The discount rate reflects a weighted-average cost of capital, which is calculated, in part based on observable market data.
−Removed: Some of this data (such as the risk free or treasury rate and the pretax cost of debt) are based on the market data at a point in time.
−Removed: Other data (such as the equity risk premium) are based upon market data over time for a peer group of companies in the chemical manufacturing or distribution industries with a market capitalization premium added, as applicable.
+Added: The discount rate reflected a weighted-average cost of capital, which was calculated, in part based on observable market data.
+Added: Some of this data (such as the risk free or treasury rate and the pretax cost of debt) were based on the market data at a point in time.
+Added: Other data (such as the equity risk premium) were based upon market data over time for a peer group of companies in the chemical manufacturing or distribution industries with a market capitalization premium added, as applicable.
Also factoring into the discount rate was a market participant’s perceived risk (such as the company specific risk premium) in the valuation implied by the sustained reduction in our stock price.
−Removed: The discounted cash flow analysis requires estimates, assumptions and judgments about future events.
−Removed: Our analysis uses our internally generated long-range plan.
−Removed: Specifically, the assumptions in our long-range plan about terminal growth rates, forecasted capital expenditures and changes in future working capital requirements are used to determine the implied fair value of each reporting unit.
−Removed: The long-range plan reflects management judgment, supplemented by independent chemical industry analyses which provide multi-year industry operating and pricing forecasts.
−Removed: As a further indicator that each reporting unit has been valued appropriately using a discounted cash flow model, the aggregate fair value of all reporting units is reconciled to the total market value of Olin.
−Removed: Due to the sustained decline in our stock price, the decrease in the value of our reporting units reflects a market participant’s perceived risk in the valuation implied by the sustained reduction in our stock price.
+Added: The discounted cash flow analysis required estimates, assumptions and judgments about future events.
+Added: Our analysis used our internally generated long-range plan.
+Added: Specifically, the assumptions in our long-range plan about terminal growth rates, forecasted capital expenditures and changes in future working capital requirements were used to determine the implied fair value of each reporting unit.
+Added: The long-range plan reflected management judgment, supplemented by independent chemical industry analyses which provided multi-year industry operating and pricing forecasts.
+Added: As a further indicator that each reporting unit had been valued appropriately using a discounted cash flow model, the aggregate fair value of all reporting units was reconciled to the total market value of Olin.
+Added: Due to the sustained decline in our stock price, the decrease in the value of our reporting units reflected a market participant’s perceived risk in the valuation implied by the sustained reduction in our stock price.
As a result of this assessment, the carrying values of our Chlor Alkali Products and Vinyls and Epoxy reporting units exceeded the fair values which resulted in pre-tax goodwill impairment charges of $ 557.6 million and $ 142.2 million, respectively, for the year ended December 31, 2020.
The goodwill impairment charge was calculated as the amount that the carrying value of the reporting unit, including any goodwill, exceeded its fair value and therefore the carrying value of our reporting units equaled their fair value upon completion of the goodwill impairment test.
−Removed: We believe the assumptions used in our goodwill impairment analysis are appropriate and result in reasonable estimates of the implied fair value of each reporting unit.
−Removed: However, given the economic environment and the uncertainties regarding the impact on our business, there can be no assurance that our estimates and assumptions, made for purposes of our goodwill impairment testing, will prove to be an accurate prediction of the future.
+Added: We believe the assumptions used in our goodwill impairment analysis were appropriate and resulted in reasonable estimates of the implied fair value of each reporting unit.
+Added: However, given the economic environment at the time and the uncertainties regarding the impact on our business, there can be no assurance that our estimates and assumptions, made for purposes of our goodwill impairment testing, will prove to be an accurate prediction of the future.
If our assumptions regarding future performance are not achieved, or if our stock price experiences further sustained declines, we may be required to record additional goodwill impairment charges in future periods.
It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such charge would be material.
−Removed: During the fourth quarter of 2019, we performed our triennial quantitative goodwill impairment test for our reporting units.
−Removed: Based on the analysis, the estimated fair value of our reporting units exceeded the carrying value of the reporting units.
−Removed: No impairment charges were recorded for 2019.
Intangible assets consisted of the following:
6 unchanged sentences
Amortization expense relating to intangible assets was $ 55.3 million, $ 63.1 million and $ 62.9 million in 2022, 2021 and 2020, respectively.
−Removed: We estimate that amortization expense will be approximately $ 55 million in 2022, approximately $ 37 million in both 2023 and 2024, approximately $ 36 million in 2025 and approximately $ 35 million in 2026.
+Added: We estimate that amortization expense will be approximately $ 37 million in both 2023 and 2024, approximately $ 36 million in 2025 and approximately $ 35 million in both 2026 and 2027.
+Added: During the fourth quarter of 2022, we performed our qualitative assessment of our intangible assets.
+Added: Based upon our qualitative impairment assessment, it is more likely than not that the fair value of our intangible assets are greater than the carrying amount as of December 31, 2022.
+Added: No impairment of our intangible assets were recorded in 2022, 2021 or 2020.
Notes payable:
9 unchanged sentences
5.00% senior notes, due 2030 515.3 515.3
−Removed: 5.125% senior notes, due 2027 500.0 500.0
−Removed: 5.00% senior notes, due 2030 515.3 550.0
Receivables Financing Agreement (See Note 6) 300.0 300.0
3 unchanged sentences
Unamortized bond original issue discount ( 0.2 ) ( 0.3 )
−Removed: Interest rate swaps — ( 1.8 )
Total debt 2,580.7 2,779.3
2 unchanged sentences
Senior Credit Facility
+Added: On October 11, 2022, we entered into a $ 1,550.0 million senior credit facility (Senior Credit Facility) that replaced our 2021 Senior Credit Facility.
+Added: 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).
+Added: 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.
+Added: 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.
+Added: The maturity date for the Senior Credit Facility is October 11, 2027.
+Added: The Senior Revolving Credit Facility includes a $ 100.0 million letter of credit subfacility.
+Added: At December 31, 2022, we had $ 1,199.6 million available under our $ 1,200.0 million Senior Revolving Credit Facility because we had issued $ 0.4 million of letters of credit.
On February 24, 2021, we entered into a $ 1,615.0 million senior secured credit facility (2021 Senior Credit Facility) that amended our existing $ 1,300.0 million senior secured credit facility.
On July 28, 2021, the liens on the collateral provided under the 2021 Senior Credit Facility were released based on the achievement of a net leverage ratio below 3.50 for the prior two consecutive fiscal quarters.
−Removed: The Senior Credit Facility includes a senior delayed-draw term loan facility with aggregate commitments of $ 315.0 million (2021 Delayed Draw Term Loan), a senior term loan facility with aggregate commitments of $ 500.0 million (2020 Term Loan and together with the 2021 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).
−Removed: The maturity date for the Senior Credit Facility is July 16, 2024.
+Added: The 2021 Senior Credit Facility included a senior delayed-draw term loan facility with aggregate commitments of $ 315.0 million (2021 Delayed Draw Term Loan), a senior term loan facility with aggregate commitments of $ 500.0 million (2020 Term Loan and together with the 2021 Delayed Draw Term Loan, the 2021 Senior Term Loans) and a senior revolving credit facility with aggregate commitments in an amount equal to $ 800.0 million (2021 Senior Revolving Credit Facility).
+Added: The maturity date for the 2021 Senior Credit Facility was July 16, 2024.
The amendment modified the pricing grid for the 2021 Senior Credit Facility by reducing applicable interest rates on the borrowings under the facility.
1 unchanged sentence
During the year ended December 31, 2021, we repaid $ 465.0 million of the 2021 Senior Term Loans.
−Removed: These repayments satisfied all future required quarterly installments of the Senior Term Loans.
−Removed: The Senior Revolving Credit Facility includes a $ 100.0 million letter of credit subfacility.
−Removed: At December 31, 2021, 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.
−Removed: On May 8, 2020, we entered into a $ 1,300.0 million senior secured credit facility (Senior Secured Credit Facility) that amended our then existing five-year, $ 2,000.0 million senior credit facility.
−Removed: The Senior Secured Credit Facility included a senior secured delayed-draw term loan facility with aggregate commitments of $ 500.0 million (2020 Delayed Draw Term Loan) and a senior secured revolving credit facility with aggregate commitments in an amount equal to $ 800.0 million (Senior Secured Revolving Credit Facility).
−Removed: The maturity date for the Senior Secured Credit Facility was July 16, 2024.
−Removed: The amendment modified the financial covenants of the Senior Secured Credit Facility to be less restrictive and expanded the permitted use of proceeds of the 2020 Delayed Draw Term Loan to include general corporate purposes.
−Removed: The amendment also required that the obligations under the Senior Secured Credit Facility be guaranteed by certain of our domestic subsidiaries, which were also guarantors of Olin’s outstanding notes, with the exception of the $ 200.0 million senior notes due 2022.
−Removed: The obligations under the Senior Secured Credit Facility were also secured by liens on substantially all of Olin’s and the subsidiary guarantors’ personal property (Collateral), other than certain principal properties and capital stock of subsidiaries, and subject to certain other exceptions.
−Removed: The amendment provided that substantially all guarantees under the Senior Secured Credit Facility and liens on the Collateral could be released when our net leverage ratio was below 3.50 to 1.00 for two consecutive fiscal quarters.
−Removed: On October 15, 2020, Olin drew the entire $ 500.0 million of the 2020 Delayed Draw Term Loan.
−Removed: The 2020 Delayed Draw Term Loan included principal amortization amounts payable beginning the quarter ending after the facility was fully drawn at a rate of 5.0 % per annum for the first two years, increasing to 7.5 % per annum for the following year and to 10.0 % per annum for the last two years.
−Removed: Under the Senior Credit Facility, we may select various floating-rate borrowing options.
−Removed: The actual interest rate paid on borrowings under the Senior Credit Facility is based on a pricing grid which is dependent upon the net leverage ratio as calculated under the terms of the applicable facility for the prior fiscal quarter.
−Removed: The Senior Credit Facility includes various customary restrictive covenants, including restrictions related to the ratio of debt to earnings before interest expense, taxes, depreciation and amortization (net leverage ratio) and the ratio of earnings before interest expense, taxes, depreciation and amortization to interest expense (coverage ratio).
−Removed: The calculation of debt in our net leverage ratio excludes borrowings under the Receivables Financing Agreement, up to a maximum of $ 250.0 million, and is reduced by all unrestricted cash and cash equivalents.
−Removed: Compliance with these covenants is determined quarterly.
We were in compliance with all covenants and restrictions under all our outstanding credit agreements as of December 31, 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.
5 unchanged sentences
During 2022 and 2021, activity of our outstanding debt included:
−Removed: Long-term Debt Borrowings (Repayments) Loss on Debt Extinguishment (1)
−Removed: Long-term Debt Borrowings (Repayments) Loss on Debt Extinguishment (1)
December 31, 2022 Year Ended
December 31, 2021
+Added: Long-term Debt Borrowings (Repayments) Long-term Debt Borrowings (Repayments) Loss on Debt Extinguishment (1)
Debt Instrument ($ in millions)
+Added: Senior Revolving Credit Facility $ 320.0 $ —
Senior Term Loans — 315.0
Receivables Financing Agreement 95.0 225.0
−Removed: 9.50% senior notes due 2025 — 497.5
Total borrowings $ 415.0 $ 540.0
−Removed: 10.00% senior notes due 2025 $ ( 500.0 ) $ 30.9 $ — $ —
−Removed: 9.50% senior notes due 2025 ( 391.4 ) 103.8 — —
−Removed: 9.75% senior notes due 2023 ( 120.0 ) 3.7 ( 600.0 ) 20.4
−Removed: 5.625% senior notes due 2029 ( 80.7 ) 9.0 — —
−Removed: 5.00% senior notes due 2030 ( 34.7 ) 2.8 — —
+Added: 10.00% senior notes, due 2025 (Blue Cube 2025 Notes) $ — $ ( 500.0 ) $ 30.9
+Added: 9.50% senior notes, due 2025 (2025 Notes) — ( 391.4 ) 103.8
+Added: 9.75% senior notes, due 2023 (2023 Notes) — ( 120.0 ) 3.7
+Added: 5.625% senior notes, due 2029 (2029 Notes) — ( 80.7 ) 9.0
+Added: 5.00% senior notes, due 2030 (2030 Notes) — ( 34.7 ) 2.8
+Added: 5.50% senior notes, due 2022 (2022 Notes) ( 200.0 ) — — —
+Added: Senior Revolving Credit Facility ( 320.0 ) — —
Senior Term Loans — ( 465.0 ) 2.0
2 unchanged sentences
Total repayments $ ( 616.1 ) $ ( 1,643.1 ) $ 152.2
−Removed: Long-term debt (repayments) borrowings, net $ ( 1,103.1 ) $ 520.3
+Added: Long-term debt repayments, net $ ( 201.1 ) $ ( 1,103.1 )
(1) Loss on debt extinguishment is included as interest expense in the consolidated statements of operations.
−Removed: The loss includes the payment of bond redemption premiums of $ 137.7 million and $ 14.6 million for the years ended December 31, 2021 and 2020, respectively, as well as the write-off of deferred debt issuance costs, write-off of bond original issue discount and recognition of deferred fair value interest rate swap losses of $ 14.5 million and $ 5.8 million for the years ended December 31, 2021 and 2020, respectively, associated with the optional prepayment of existing debt.
−Removed: 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 year ended December 31, 2021 and 2020.
−Removed: The consolidated statements of cash flows for the year ended December 31, 2020 reflects the correction of previously presented early redemption premiums, which increased cash flows from net operating activities and decreased cash flows from net financing activities by $ 14.6 million.
−Removed: In the fourth quarter of 2021, we completed a cash tender offer to purchase a principal amount of $ 391.4 million of the outstanding 9.50 % Senior Notes due 2025 (2025 Notes).
+Added: The loss includes the payment of bond redemption premiums of $ 137.7 million for the year ended December 31, 2021, as well as the write-off of deferred debt issuance costs, write-off of bond original issue discount and recognition of deferred fair value interest rate swap losses of $ 14.5 million for the year ended December 31, 2021, associated with the optional prepayment of existing debt.
+Added: 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 year ended December 31, 2021.
+Added: During the year ended December 31, 2022, Olin redeemed the full aggregate principal amount $ 200.0 million of the outstanding 2022 Notes which became due utilizing cash on hand.
+Added: In the fourth quarter of 2021, we completed a cash tender offer to purchase a principal amount of $ 391.4 million of the outstanding 2025 Notes.
This action resulted in total redemption premiums of $ 99.4 million.
The 2025 Notes were redeemed by drawing $ 150.0 million of the Receivables Financing Agreement along with utilizing cash on hand.
−Removed: During the year ended December 31, 2021, we repurchased, through open market transactions, a principal amount of $ 80.7 million of the outstanding aggregate principal amount of 5.625 % senior notes due August 1, 2029 (2029 Notes) and $ 34.7 million of the outstanding aggregate principal amount of 5.00 % senior notes due February 1, 2030 (2030 Notes).
+Added: During the year ended December 31, 2021, we repurchased, through open market transactions, a principal amount of $ 80.7 million of the outstanding aggregate principal amount of the 2029 Notes and $ 34.7 million of the outstanding aggregate principal amount of the 2030 Notes.
These actions resulted in total redemption premiums of $ 10.4 million.
−Removed: On March 31, 2021, Olin redeemed $ 315.0 million of the outstanding 10.00 % senior notes due October 15, 2025 (Blue Cube 2025 Notes) and on May 14, 2021, Olin redeemed the remaining $ 185.0 million of the outstanding Blue Cube 2025 Notes.
+Added: On March 31, 2021, Olin redeemed $ 315.0 million of the outstanding Blue Cube 2025 Notes and on May 14, 2021, Olin redeemed the remaining $ 185.0 million of the outstanding Blue Cube 2025 Notes.
The Blue Cube 2025 Notes were redeemed at 105.00 % of the principal amount of the Blue Cube 2025 Notes, resulting in a redemption premium of $ 25.0 million.
The Blue Cube 2025 Notes were redeemed by drawing $ 315.0 million of the 2021 Delayed Draw Term Loan along with utilizing cash on hand.
−Removed: On January 15, 2021, Olin redeemed the remaining $ 120.0 million of the outstanding 9.75 % senior notes due 2023 (2023 Notes).
+Added: On January 15, 2021, Olin redeemed the remaining $ 120.0 million of the outstanding 2023 Notes.
The 2023 Notes were redeemed at 102.438 % of the principal amount of the 2023 Notes, resulting in a redemption premium of $ 2.9 million.
The remaining 2023 Notes were redeemed by utilizing $ 122.9 million of cash on hand.
−Removed: On October 15, 2020, Olin redeemed $ 600.0 million of the outstanding 2023 Notes.
−Removed: The 2023 Notes were redeemed at 102.438 % of the principal amount of the 2023 Notes, resulting in a redemption premium of $ 14.6 million.
−Removed: The 2023 Notes were redeemed by drawing $ 500.0 million of the Delayed Draw Term Loan Facility along with utilizing $ 114.6 million of cash on hand.
−Removed: On May 19, 2020, Olin issued $ 500.0 million aggregate principal amount of 9.50 % senior notes due June 1, 2025 (2025 Notes).
−Removed: The 2025 Notes were issued at 99.5 % of par value, the discount from which is included within long-term debt in the consolidated balance sheets.
−Removed: Interest on the 2025 Notes is payable semi-annually beginning on December 1, 2020.
−Removed: Proceeds from the 2025 Notes were used for general corporate purposes.
−Removed: For the years ended December 31, 2021, 2020 and 2019, we recognized interest expense of $ 14.5 million, $ 5.8 million and $ 2.8 million, respectively, for the write-off of deferred debt issuance costs, write-off of bond original issue discount and recognition of deferred fair value interest rate swap losses.
+Added: For the years ended December 31, 2021 and 2020, we recognized interest expense of $ 14.5 million and $ 5.8 million, respectively, for the write-off of deferred debt issuance costs, write-off of bond original issue discount and recognition of deferred fair value interest rate swap losses.
For the years ended December 31, 2022, 2021 and 2020, we paid debt issuance costs of $ 4.4 million, $ 3.9 million and $ 10.3 million, respectively, related to financing transactions.
9 unchanged sentences
Our domestic qualified defined benefit pension plan provides that if, within three years following a change of control of Olin, any corporate action is taken or filing made in contemplation of, among other things, a plan termination or merger or other transfer of assets or liabilities of the plan, and such termination, merger or transfer thereafter takes place, plan benefits would automatically be increased for affected participants (and retired participants) to absorb any plan surplus (subject to applicable collective bargaining requirements).
−Removed: During 2019, we made a discretionary cash contribution to our domestic qualified defined benefit pension plan of $ 12.5 million.
Based on our plan assumptions and estimates, we will not be required to make any cash contributions to the domestic qualified defined benefit pension plan at least through 2023.
9 unchanged sentences
Interest cost 57.3 4.1 61.4 48.4 2.9 51.3
−Removed: Actuarial (gain) loss ( 163.7 ) ( 41.7 ) ( 205.4 ) 203.5 31.6 235.1
+Added: Actuarial gain ( 556.1 ) ( 113.7 ) ( 669.8 ) ( 163.7 ) ( 41.7 ) ( 205.4 )
Benefits paid ( 139.3 ) ( 6.1 ) ( 145.4 ) ( 138.5 ) ( 11.4 ) ( 149.9 )
21 unchanged sentences
We recorded a $ 37.2 million after-tax benefit ($ 59.9 million pretax) to shareholders’ equity as of December 31, 2022 for our pension plans.
−Removed: This benefit primarily reflected a 50 -basis point increase in the domestic pension plans’ discount rate and favorable performance on plan assets during 2021.
+Added: This benefit primarily reflected a 260 -basis point increase in the domestic pension plans’ discount rate and a 230 -basis point increase in the international defined benefit pension plans’ discount rate, partially offset by unfavorable performance on plan assets during 2022.
In 2021, we recorded a $ 185.6 million after-tax benefit ($ 245.9 million pretax) to shareholders’ equity as of December 31, 2021 for our pension plans.
−Removed: This benefit primarily reflected favorable performance on plan assets during 2020, partially offset by an 80 -basis point decrease in the domestic pension plans’ discount rate.
−Removed: The $ 205.4 million actuarial gain for 2021 was primarily due to a 50 -basis point increase in the domestic pension plans’ discount rate.
−Removed: The $ 235.1 million actuarial loss for 2020 was primarily due to an 80 -basis point decrease in the domestic pension plans’ discount rate.
+Added: This benefit primarily reflected a 50 -basis point decrease in the domestic pension plans’ discount rate and favorable performance on plan assets during 2021.
+Added: The $ 669.8 million actuarial gain for 2022 was primarily due to a 260 -basis point increase in the domestic pension plans’ discount rate and a 230 -basis point increase in the international defined benefit pension plans’ discount rate.
+Added: The $ 205.4 million actuarial loss for 2021 was primarily due to an 50 -basis point increase in the domestic pension plans’ discount rate.
Amounts recognized in the consolidated balance sheets consisted of:
3 unchanged sentences
($ in millions)
+Added: Prepaid benefit cost in noncurrent assets $ — $ 3.9 $ 3.9 $ — $ — $ —
Accrued benefit in current liabilities ( 0.5 ) ( 0.2 ) ( 0.7 ) ( 0.6 ) ( 0.1 ) ( 0.7 )
135 unchanged sentences
The net asset value is based on the underlying investments, which are valued using inputs such as quoted market prices of identical instruments, discounted future cash flows, independent appraisals and market-based comparable data.
−Removed: Absolute return strategies are commingled funds which reflect the fair value of our ownership interest in these funds.
−Removed: The investments in these commingled funds include some or all of the above asset classes and are primarily valued at net asset values based on the underlying investments, which are valued consistent with the methodologies described above for each asset class.
POSTRETIREMENT BENEFITS
11 unchanged sentences
Interest cost 0.8 0.3 1.1 0.7 0.3 1.0
−Removed: Actuarial (gain) loss ( 2.7 ) ( 1.1 ) ( 3.8 ) 3.5 0.6 4.1
+Added: Actuarial gain ( 8.0 ) ( 4.2 ) ( 12.2 ) ( 2.7 ) ( 1.1 ) ( 3.8 )
Benefits paid ( 4.4 ) ( 0.4 ) ( 4.8 ) ( 3.8 ) ( 0.3 ) ( 4.1 )
7 unchanged sentences
We recorded a $ 9.6 million after-tax benefit ($ 12.2 million pretax) to shareholders’ equity as of December 31, 2022 for our other postretirement plans.
−Removed: In 2020, we recorded an after-tax charge of $ 3.1 million ($ 4.1 million pretax) to shareholders’ equity as of December 31, 2020 for our other postretirement plans.
+Added: In 2021, we recorded an after-tax benefit of $ 2.9 million ($ 3.8 million pretax) to shareholders’ equity as of December 31, 2021 for our other postretirement plans.
Amounts recognized in the consolidated balance sheets consisted of:
47 unchanged sentences
377.8 295.4 ( 29.9 )
−Removed: Deferred provision (benefit):
+Added: Deferred (benefit) provision:
Federal ( 32.1 ) 39.1 ( 36.0 )
17 unchanged sentences
Share-based payments ( 0.3 ) ( 0.7 ) —
−Removed: Dividends paid to Contributing Employee Ownership Plan — — 1.1
Return to provision ( 0.6 ) ( 0.5 ) 0.3
federal tax credits ( 0.1 ) — 0.2
+Added: Legal entity liquidation ( 2.0 ) — —
Goodwill impairment charge — — ( 13.3 )
1 unchanged sentence
Effective tax rate 20.8 % 15.7 % 4.9 %
+Added: The effective tax rate for 2022 included a benefit associated with a legal entity liquidation, a benefit associated with prior year tax positions, a benefit associated with stock-based compensation, a benefit from remeasurement of deferred taxes due to a decrease in our state effective tax rates, an expense associated with a net increase in the valuation allowance related to state tax credits and an expense from a change in tax contingencies.
+Added: These factors resulted in a net $ 60.2 million tax benefit.
+Added: After giving consideration to these items, the effective tax rate for 2022 of 24.4 % was higher than the 21.0 % U.S.
+Added: federal statutory rate primarily due to state taxes, an increase in the valuation allowance related to losses in foreign jurisdictions and foreign income taxes, partially offset by foreign income exclusions and favorable permanent salt depletion deductions.
The effective tax rate for 2021 included benefits from a net decrease in the valuation allowance related to deferred tax assets in foreign jurisdictions and domestic tax credits, 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.
7 unchanged sentences
federal statutory rate as foreign income taxes, foreign income inclusions and a net increase in the valuation allowance related to losses in foreign jurisdictions were offset by state taxes and favorable permanent salt depletion deductions.
−Removed: The effective tax rate for 2019 included benefits associated with the finalization of the Internal Revenue Service (IRS) review of years 2013 to 2015 U.S.
−Removed: income tax claims, stock-based compensation, prior year tax positions, foreign tax law changes, a remeasurement of deferred taxes due to a decrease in our state effective tax rates and a change in tax contingencies.
−Removed: The effective tax rate also included expenses associated with a net increase in the valuation allowance primarily related to foreign deferred tax assets and liabilities.
−Removed: These factors resulted in a net $ 19.4 million tax benefit.
−Removed: After giving consideration to these items, the effective tax rate for 2019 of 16.8 % was lower than the 21.0 % U.S.
−Removed: federal statutory rate primarily due to state taxes and a net increase in the valuation allowance related to losses in foreign jurisdictions, partially offset by foreign income taxes and favorable permanent salt depletion deductions.
Components of Deferred Tax Assets and Liabilities 2022 2021
9 unchanged sentences
Capital loss carryforward 0.2 0.5
−Removed: Interest deduction limitation — 7.0
+Added: Other miscellaneous items 2.5 —
Total deferred tax assets 296.3 346.5
15 unchanged sentences
At December 31, 2022, we had deferred state tax assets of $ 18.8 million relating to state tax credits, which will expire in years 2023 through 2037, if not utilized.
−Removed: At December 31, 2021, we had a capital loss carryforward of $ 2.2 million (representing $ 0.5 million of deferred tax assets) which is available to offset future consolidated capital gains that will expire in years 2022 through 2025, if not utilized.
At December 31, 2022, we had foreign tax credits of $ 12.6 million, that will expire in years 2027 through 2031, if not utilized.
2 unchanged sentences
The remaining $ 11.3 million (representing $ 2.0 million of deferred tax assets) do not expire.
−Removed: As of December 31, 2021, we had recorded a valuation allowance of $ 70.1 million, compared to $ 239.6 million as of December 31, 2020.
−Removed: The decrease of $ 169.5 million is primarily due to a release of the $ 156.9 million valuation allowance related to deferred tax assets of our German operations, of which $ 103.8 million was released in the second quarter of 2021.
+Added: As of December 31, 2022, we had recorded a valuation allowance of $ 76.4 million, compared to $ 70.1 million as of December 31, 2021 and $ 239.6 million as of December 31, 2020.
+Added: The decrease of $169.5 million in 2021 is primarily due to a release of the $ 156.9 million valuation allowance related to deferred tax assets of our German operations, of which $ 103.8 million was released in the second quarter of 2021.
As a result of significant taxable income during the first six months of 2021, our German operations reported cumulative income before tax (adjusted for permanent items) over the previous twelve quarters.
55 unchanged sentences
Restructuring reserves (current portion only) 13.6 12.2
+Added: Derivative contracts 42.5 3.5
Other 61.8 58.0
12 unchanged sentences
They vest in increments of 25 % for each additional year and after 5 years of service, they are 100 % vested in the value of the contributions that we have made to their accounts.
−Removed: Employees may transfer any or all of the value of the investments, including Olin common stock, to any one or combination of investments available in the CEOP.
−Removed: Employees may transfer balances daily and may elect to transfer any percentage of the balance in the fund from which the transfer is made.
−Removed: However, when transferring out of a fund, employees are prohibited from trading out of the fund to which the transfer was made for seven calendar days.
−Removed: This limitation does not apply to trades into the money market fund or the Olin Common Stock Fund.
+Added: Effective in February 2023, employees will immediately vest in matching contributions.
+Added: Additionally, after 2 years of service, participants will be 50 % vested and after 3 years of service, participants will be 100 % vested in the value of the Company matching contributions made to the CEOP.
STOCK-BASED COMPENSATION
1 unchanged sentence
There were no significant capitalized stock-based compensation costs.
−Removed: Stock-based compensation granted includes stock options, performance stock awards, restricted stock awards and deferred directors’ compensation.
+Added: Stock-based compensation granted includes stock options, performance share awards, restricted stock awards and deferred directors’ compensation.
Stock-based compensation expense was as follows:
10 unchanged sentences
The stock option exercise price was set at the fair market value of common stock on the date of the grant, and the options have a ten-year term.
+Added: The fair value of each stock option granted, which typically vests ratably over three years , but not less than one year , was estimated on the date of grant, using the Black-Scholes option-pricing model with the following assumptions:
+Added: Grant date 2022 2021 2020
+Added: Dividend yield 1.60 % 2.76 % 4.60 %
+Added: Risk-free interest rate 1.93 % 0.94 % 1.44 %
+Added: Expected volatility 48 % 44 % 36 %
+Added: Expected life (years) 7.0 6.0 6.0
+Added: Weighted-average grant fair value (per option) $ 21.18 $ 9.91 $ 3.64
+Added: Weighted-average exercise price $ 49.71 $ 28.99 $ 17.33
+Added: Stock options granted 752,100 1,154,700 2,663,100
+Added: Dividend yield was based on our current dividend yield as of the option grant date.
+Added: Risk-free interest rate was based on zero coupon U.S.
+Added: Treasury securities rates for the expected life of the options.
+Added: Expected volatility was based on our historical stock price movements, as we believe that historical experience is the best available indicator of the expected volatility.
+Added: Expected life of the option grant was based on historical exercise and cancellation patterns, as we believe that historical experience is the best estimate for future exercise patterns
Stock option transactions were as follows:
36 unchanged sentences
Payouts for performance share awards are based on two criteria:
−Removed: (1) 50% of the award is based on Olin’s total shareholder returns over the applicable three -year performance cycle in relation to the total shareholder return over the same period among a portfolio of public companies which are selected in concert with outside compensation consultants and (2) 50% of the award is based on Olin’s net income over the applicable three -year performance cycle in relation to the net income goal for such period as set by the compensation committee of Olin’s board of directors.
+Added: (1) 50 % of the award is based on Olin’s total shareholder returns (TSR) over the applicable three -year performance cycle in relation to the TSR over the same period among a portfolio of public companies which are selected in concert with outside compensation consultants and (2) 50 % of the award is based on Olin’s net income over the applicable three -year performance cycle in relation to the net income goal for such period as set by the compensation committee of Olin’s board of directors.
The expense associated with performance shares is recorded based on our estimate of our performance relative to the respective target.
1 unchanged sentence
Granted shares reflects changes in assumptions associated with the expected achievement of the aforementioned criteria.
+Added: The fair value of each performance share award based on net income was estimated on the date of grant, using the current stock price.
+Added: The fair value of each performance share award based on TSR was estimated on the date of grant, using a Monte Carlo simulation model with the following weighted average assumptions:
+Added: Grant date 2022 2021
+Added: Risk-free interest rate 1.74 % 0.23 %
+Added: Expected volatility of Olin common stock 59 % 55 %
+Added: Expected average volatility of peer companies 47 % 50 %
+Added: Average correlation coefficient of peer companies 0.51 0.50
+Added: Expected life (years) 3 3
+Added: Grant date fair value (TSR based award) $ 64.13 $ 39.96
+Added: Grant date fair value (net income based award) $ 49.71 $ 28.99
+Added: Performance share awards granted 184,000 248,700
+Added: Risk-free interest rate was based on zero coupon U.S.
+Added: Treasury securities rates for the expected life of the performance share awards.
+Added: Expected volatility of Olin common stock and peer companies was based on historical stock price movements, as we believe that historical experience is the best available indicator of the expected volatility.
+Added: The average correlation coefficient of peer companies was determined based on historical trends of Olin’s common stock price compared to the peer companies.
+Added: Expected life of the performance share award grant was based on historical exercise and cancellation patterns, as we believe that historical experience is the best estimate of future exercise patterns.
Performance share transactions were as follows:
18 unchanged sentences
SHAREHOLDERS’ EQUITY
+Added: 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).
+Added: This program will terminate upon the purchase of $ 2.0 billion of common stock.
+Added: 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.
+Added: 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.
−Removed: This program will terminate upon the purchase of $ 500.0 million of our common stock.
−Removed: On November 1, 2021, our board of directors authorized an additional share repurchase program for the purchase of shares of common stock at an aggregate price of up to $ 1.0 billion.
−Removed: This program will terminate upon the purchase of $ 1.0 billion of our common stock.
−Removed: For the year ended December 31, 2021, 4.7 million were repurchased and retired at a cost of $ 251.9 million.
−Removed: On August 5, 2019, we entered into an accelerated share repurchase (ASR) agreement with Goldman Sachs & Co.
−Removed: LLC, a third-party financial institution, to repurchase $ 100.0 million of Olin’s common stock.
−Removed: This authorization was granted under the April 26, 2018 share repurchase program and reduced the remaining authorized repurchase amount under that program by $ 100.0 million.
−Removed: In connection with this agreement, we repurchased a total of 5.7 million shares under this ASR agreement.
−Removed: For the year ended December 31, 2019, 8.0 million shares were repurchased and retired at a cost of $ 145.9 million.
+Added: This program terminated upon the purchase of $ 500.0 million of our common stock during the first quarter of 2022.
+Added: For the years ended December 31, 2022 and 2021, 25.7 million and 4.7 million shares, respectively, of common stock have been repurchased and retired at a total value of $ 1,350.7 million and $ 251.9 million, respectively.
As of December 31, 2022, a cumulative total of 5.9 million shares were repurchased and retired at a cost of $ 298.5 million and $ 1,701.5 million of common stock remained authorized to be repurchased under the 2022 Repurchase Authorization program.
−Removed: As of December 31, 2021, there have been no repurchases under the 2021 Repurchase Authorization program and $ 1.0 billion of common stock remained authorized to be repurchased under this plan.
During 2022, 2021 and 2020, we issued 1.1 million, 3.4 million and 0.1 million shares, respectively, with a total value of $ 25.7 million, $ 72.4 million and $ 1.9 million, respectively, representing stock options exercised.
1 unchanged sentence
The following table represents the activity included in accumulated other comprehensive loss:
−Removed: Foreign Currency Translation Adjustment (net of taxes) Unrealized Gains (Losses) on Derivative Contracts (net of taxes) Pension and Other Postretirement Benefits (net of taxes) Accumulated Other Comprehensive Loss
+Added: Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Derivative Contracts (net of taxes) Pension and Other Postretirement Benefits (net of taxes) Accumulated Other Comprehensive Loss
($ in millions)
2 unchanged sentences
Reclassification adjustments of losses into income — 14.9 46.3 61.2
−Removed: Tax benefit — 4.8 26.9 31.7
+Added: Tax provision — ( 11.0 ) ( 22.2 ) ( 33.2 )
Net change 27.8 35.0 50.7 113.5
1 unchanged sentence
Unrealized gains ( 30.3 ) 182.0 249.7 401.4
−Removed: Reclassification adjustments of losses into income — 14.9 46.3 61.2
+Added: Reclassification adjustments of (gains) losses into income — ( 180.1 ) 54.3 ( 125.8 )
Tax provision — ( 0.5 ) ( 73.2 ) ( 73.7 )
3 unchanged sentences
Reclassification adjustments of (gains) losses into income — ( 58.2 ) 35.5 ( 22.7 )
−Removed: Tax provision — ( 0.5 ) ( 73.2 ) ( 73.7 )
+Added: Tax benefit (provision) — 18.5 ( 32.5 ) ( 14.0 )
Net change ( 27.7 ) ( 55.3 ) 75.1 ( 7.9 )
8 unchanged sentences
The three operating segments reflect the organization used by our management for purposes of allocating resources and assessing performance.
−Removed: Chlorine used in our Epoxy segment is transferred at cost from the Chlor Alkali Products and Vinyls segment.
+Added: Chlorine and caustic soda used in our Epoxy segment is transferred at cost from the Chlor Alkali Products and Vinyls segment.
Years ended December 31,
18 unchanged sentences
Non-operating pension income 38.7 35.7 18.9
−Removed: Other income — — 11.2
Income (loss) before taxes $ 1,676.0 $ 1,538.7 $ ( 1,020.0 )
109 unchanged sentences
Our leases have remaining lease terms of up to 92 years ( 15 years excluding land leases), some of which may include options to extend the leases for up to five years , and some of which may include options to terminate the leases within one year .
−Removed: The amounts for leases included in our consolidated balance sheet include:
+Added: The amounts for leases included in our consolidated balance sheets include:
Lease assets:
10 unchanged sentences
Total lease liabilities $ 366.2 $ 381.8
−Removed: (1) As of December 31, 2021 and 2020, assets recorded under finance leases were $ 7.6 million and $ 8.0 million, respectively, and accumulated depreciation associated with finance leases was $ 4.3 million and $ 3.5 million, respectively.
+Added: (1) As of December 31, 2022 and 2021, assets recorded under finance leases were $ 7.6 million for both years and accumulated depreciation associated with finance leases was $ 5.2 million and $ 4.3 million, respectively.
The components of lease expense are recorded to cost of goods sold and selling and administration expenses in the consolidated statement of operations, excluding interest on finance lease liabilities which is recorded to interest expense.
45 unchanged sentences
Finance leases 3.6 % 3.4 % 3.3 %
−Removed: As of December 31, 2021, we have additional operating leases for railcars that have not yet commenced of approximately $ 28 million which are expected to commence during 2022 and 2023 with lease terms between 3 years and 10 years.
−Removed: We also have additional operating leases for logistics equipment and real estate that have not yet commenced of approximately $ 6 million which are expected to commence during 2022 with lease terms between 3 years and 5 years.
+Added: As of December 31, 2022, we have additional operating leases that have not yet commenced of approximately $ 2 million which are expected to commence during 2023 with lease terms between 2 years and 5 years.
COMMITMENTS AND CONTINGENCIES
5 unchanged sentences
Total commitments $ 6,661.6
−Removed: The above purchase commitments include raw material, capital expenditure and utility purchasing commitments utilized in our normal course of business for our projected needs.
+Added: The above purchase commitments include raw material, capital expenditure, long-term energy supply contracts and utility purchasing commitments utilized in our normal course of business for our projected needs.
Legal Matters
−Removed: Steel Chemicals (a wholly owned subsidiary of Olin) and other alleged caustic soda producers were named as defendants in six purported class action civil lawsuits filed March 22, 25 and 26, 2019 and April 12, 2019 in the U.S.
−Removed: District Court for the Western District of New York on behalf of the respective named plaintiffs and a putative class comprised of all persons and entities who purchased caustic soda in the U.S.
−Removed: directly from one or more of the defendants, their parents, predecessors, subsidiaries or affiliates at any time on or after October 1, 2015.
+Added: Steel Chemicals (a wholly owned subsidiary of Olin) and other caustic soda producers were named as defendants in six purported class action civil lawsuits filed March 22, 25 and 26, 2019 and April 12, 2019 in the U.S.
+Added: District Court for the Western District of New York.
+Added: Those cases were consolidated on May 22, 2019;
+Added: the claims in the consolidated “Direct Purchaser” lawsuit, as modified, are on behalf of the respective named plaintiffs and a putative class comprised of all persons and entities who purchased certain types of caustic soda in the U.S.
+Added: directly from one or more of the defendants, their parents, predecessors, subsidiaries or affiliates at any time on or after October 1, 2015 through December 31, 2018.
Steel Chemicals and other caustic soda producers were also named as defendants in two purported class action civil lawsuits filed July 25 and 29, 2019 in the U.S.
1 unchanged sentence
indirectly from distributors at any time on or after October 1, 2015.
−Removed: The other defendants named in the lawsuits are Occidental Petroleum Corporation, Occidental Chemical Corporation d/b/a OxyChem, Westlake Chemical Corporation, Shin-Etsu Chemical Co., Ltd., Shintech Incorporated, Formosa Plastics Corporation, and Formosa Plastics Corporation, U.S.A.
−Removed: The lawsuits allege the defendants conspired to fix, raise, maintain and stabilize the price of caustic soda, restrict domestic (U.S.) supply of caustic soda and allocate caustic soda customers.
−Removed: Plaintiffs seek an unspecified amount of damages and injunctive relief.
+Added: Those cases were consolidated and a consolidated, amended complaint in the “Indirect Purchaser” lawsuit was filed on August 23, 2021.
+Added: The other current defendants in the Direct Purchaser and Indirect Purchaser lawsuits are Occidental Chemical Corporation d/b/a OxyChem, Westlake Chemical Corporation, Shin-Etsu Chemical Co., Ltd., and Formosa Plastics Corporation, U.S.A.
+Added: The Direct Purchaser and Indirect Purchaser lawsuits allege the defendants conspired to fix, raise, maintain and stabilize the price of caustic soda, restrict domestic (U.S.) supply of caustic soda and allocate caustic soda customers.
+Added: Plaintiffs seek damages and injunctive relief.
Steel Chemical, Olin Canada ULC, 3229897 Nova Scotia Co.
4 unchanged sentences
The lawsuits allege the defendants conspired to fix, raise, maintain control, and stabilize the price of caustic soda, divide and allocate markets, sales, customers and territories, fix, maintain, control, prevent, restrict, lessen or eliminate production and supply of caustic soda, and agree to idle capacity of production and/or refrain from increasing their production capacity.
−Removed: Plaintiffs seek an unspecified amount of damages, including punitive damages.
−Removed: We believe we have meritorious legal positions and will continue to represent our interests vigorously in these matters.
+Added: Plaintiffs seek damages, including punitive damages.
+Added: We believe we have meritorious legal positions and will continue to represent our interests vigorously in the above matters.
Any losses related to these matters are not currently estimable because of unresolved questions of fact and law, but if resolved unfavorably to Olin, could have a material adverse effect on our financial position, cash flows or results of operations.
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.
−Removed: At December 31, 2021 and 2020, our consolidated balance sheets included liabilities for these other legal actions of $ 14.2 million and $ 13.5 million, respectively.
−Removed: These liabilities do not
−Removed: include costs associated with legal representation.
+Added: At December 31, 2022 and 2021, our consolidated balance sheets included accrued liabilities for these other legal actions of $ 14.4 million and $ 14.2 million, respectively.
+Added: These liabilities do not include costs associated with legal representation.
Based on our analysis, and considering the inherent uncertainties associated with litigation, we do not believe that it is reasonably possible that these other legal actions will materially adversely affect our financial position, cash flows or results of operations.
During the ordinary course of our business, contingencies arise resulting from an existing condition, situation or set of circumstances involving an uncertainty as to the realization of a possible gain contingency.
−Removed: In certain instances such as environmental projects, we are responsible for managing the clean-up and remediation of an environmental site.
+Added: In certain instances, such as environmental projects, we are responsible for managing the cleanup and remediation of an environmental site.
There exists the possibility of recovering a portion of these costs from other parties.
4 unchanged sentences
We have established policies and procedures governing our management of market risks and the use of financial instruments to manage exposure to such risks.
−Removed: ASC 815 requires an entity to recognize all derivatives as either assets or liabilities in the consolidated balance sheets and measure those instruments at fair value.
+Added: ASC 815 “Derivatives and Hedging” (ASC 815) requires an entity to recognize all derivatives as either assets or liabilities in the consolidated balance sheets and measure those instruments at fair value.
In accordance with ASC 815, we designate derivative contracts as cash flow hedges of forecasted purchases of commodities and forecasted interest payments related to variable-rate borrowings and designate certain interest rate swaps as fair value hedges of fixed-rate borrowings.
21 unchanged sentences
At December 31, 2022, we had open derivative contract positions through 2028.
−Removed: If all open futures contracts had been settled on December 31, 2021, we would have recognized a pretax gain of $ 30.3 million.
−Removed: If commodity prices were to remain at December 31, 2021 levels, approximately $ 17.3 million of deferred gains, net of tax, would be reclassified into earnings during the next twelve months.
+Added: If all open futures contracts had been settled on December 31, 2022, we would have recognized a pretax loss of $ 43.5 million.
+Added: If commodity prices were to remain at December 31, 2022 levels, approximately $ 30.5 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.
−Removed: We use interest rate swaps as a means of minimizing cash flow fluctuations that may arise from volatility in interest rates of our variable-rate borrowings.
−Removed: In July 2019, we terminated the remaining interest rate swaps designated as cash flow hedges which resulted in a gain of $ 1.8 million that was recognized in interest expense for the year ended December 31, 2019.
−Removed: For the year ended December 31, 2019, $ 4.3 million of income was recorded to interest expense on the accompanying consolidated statements of operations related to these swap agreements.
Fair Value Hedges
4 unchanged sentences
In 2021, we redeemed the 2025 Notes, which resulted in recognition of the outstanding deferred swap loss.
−Removed: For the years ended December 31, 2021, 2020 and 2019, $ 1.8 million, $ 0.4 million and $ 2.6 million, respectively, of expense was recorded to interest expense on the accompanying consolidated statements of operations related to these swap agreements.
+Added: For the years ended December 31, 2021 and 2020, $ 1.8 million and $ 0.4 million, respectively, of expense was recorded to interest expense on the accompanying consolidated statements of operations related to these swap agreements.
Financial Statement Impacts
15 unchanged sentences
Commodity contracts - gains 4.0 7.9
−Removed: Commodity contracts - losses — ( 0.2 )
Total other assets 4.0 7.9
Total Asset Derivatives (1)
−Removed: $ 34.7 $ 31.4
Liability Derivatives:
19 unchanged sentences
Derivatives – Cash Flow Hedges ($ in millions)
−Removed: Recognized in other comprehensive income (loss):
+Added: Recognized in other comprehensive (loss) income:
Commodity contracts ——— $ ( 15.6 ) $ 182.0 $ 31.1
−Removed: Interest rate contracts ——— — — ( 1.0 )
−Removed: $ 182.0 $ 31.1 $ ( 47.1 )
Reclassified from accumulated other comprehensive loss into income:
−Removed: Interest rate contracts Interest expense $ — $ — $ 4.3
Commodity contracts Cost of goods sold $ 58.2 $ 180.1 $ ( 14.9 )
−Removed: $ 180.1 $ ( 14.9 ) $ ( 26.8 )
Derivatives – Fair Value Hedges
1 unchanged sentence
Derivatives Not Designated as Hedging Instruments
+Added: Commodity Contracts Cost of goods sold $ 0.5 $ — $ —
Foreign exchange contracts Selling and administration $ ( 27.8 ) $ ( 22.0 ) $ 17.7
32 unchanged sentences
Commodity contracts $ — $ 3.2 $ — $ 3.2
+Added: Foreign exchange contracts — 0.6 — 0.6
Total Liabilities $ — $ 3.8 $ — $ 3.8
11 unchanged sentences
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.
−Removed: For the three months ended September 30, 2020, the carrying value of the Chlor Alkali Products and Vinyls and Epoxy reporting units’ goodwill was remeasured to fair value on a nonrecurring basis.
−Removed: The fair value of each reporting unit was calculated utilizing an income approach.
−Removed: The income approach uses a discounted cash flow model that requires various observable and nonobservable inputs, such as prices, volumes, expenses, capital expenditures, discount rates and projected long-term growth rates and terminal values.
−Removed: The resulting fair value Level 3 estimates were less than the reporting units’ carrying value which resulted in pre-tax goodwill impairment charge of $ 699.8 million.
−Removed: As part of our impairment analysis, the fair value of all reporting units was reconciled to the company’s market capitalization.
−Removed: See Note 10 “Goodwill and Intangibles” for additional information on the goodwill impairment.
−Removed: There were no other assets measured at fair value on a nonrecurring basis as of, or for the years ended, December 31, 2021 and 2020.
+Added: There were no assets measured at fair value on a nonrecurring basis as of December 31, 2022 and 2021.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
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.