What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-04-28 compared with 2022-10-27 · 158 added, 237 removed, 116 unchanged (77% of the section changed)

7 unchanged sentences

All of our business segments are capital intensive manufacturing businesses.

The Chlor Alkali Products and Vinyls segment manufactures and sells chlorine and caustic soda, ethylene dichloride (EDC) and vinyl chloride monomer, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, hydrochloric acid, hydrogen, bleach products and potassium hydroxide.

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.

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.

The Epoxy segment produces and sells a full range of epoxy materials and precursors, including aromatics (acetone 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.

1 unchanged sentence

2023 Overview

Net income for the three and nine months ended September 30, 2022 was $315.2 million and $1,130.3 million, respectively, compared to $390.7 million and $990.1 million, respectively, for the comparable prior year periods in 2021.

For the three months ended September 30, 2022, the decrease in net income from the prior year was primarily due to lower operating results across all of our business segments.

For the nine months ended September 30, 2022, the increase in net income from the prior year was primarily due to improved operating results within our Chlor Alkali Products and Vinyls and Winchester business segments and lower interest expense, partially offset by a decline in Epoxy operating results.

During first quarter 2022, our Epoxy segment began to experience weaker epoxy resin demand in Europe , which was exacerbated by the uncertainty following the Russian invasion of Ukraine.

During second quarter 2022, our Epoxy segment also experienced weaker epoxy resin demand in North America and South America.

During the third quarter we have seen global economic conditions continue to deteriorate in both European and North American demand particularly in epoxy and vinyls intermediates, which has been aggravated by increased Chinese exports precipitated by continuing weak Chinese domestic demand.

The Epoxy business is unwilling to sell incremental volume into poor-quality markets and operating the epoxy resin facilities at less than 50% operating rates is impractical.

As a result of these factors and high natural gas and electrical power costs, we temporarily suspended epoxy resin production at our Stade, Germany, Freeport, TX and Guaruja, Brazil facilities at different times during the first nine months of 2022 to allow us to reduce our participation in these weak markets.

Chlor Alkali Products and Vinyls reported segment income of $253.9 million and $929.0 million for the three and nine months ended September 30, 2022, respectively.

Chlor Alkali Products and Vinyls segment results for third quarter 2022 were lower than in the comparable prior year period primarily due to lower volumes and higher raw material and operating costs, partially offset by higher pricing across all products except vinyls intermediates.

Chlor Alkali Products and Vinyls segment

results for the nine months ended September 30, 2022 were higher than in the comparable prior year period primarily due to higher pricing across all products, partially offset by higher raw material and operating costs and lower volumes across all products.

Epoxy reported segment income of $80.1 million and $358.0 million for the three and nine months ended September 30, 2022, respectively.

Epoxy segment results were lower than in the comparable prior year periods primarily due to lower volumes across all products and higher raw material costs, primarily benzene and propylene, and higher operating costs, partially offset by higher product prices.

Winchester reported segment income of $89.0 million and $327.2 million for the three and nine months ended September 30, 2022, respectively.

Winchester segment results for the third quarter were lower than in the comparable prior year period primarily due to lower commercial volumes and higher commodity and operating costs, partially offset by increased commercial ammunition pricing and higher military and law enforcement sales.

Winchester segment results for the nine months ended September 30, 2022 were higher than in the comparable prior year period primarily due to increased commercial ammunition pricing, partially offset by higher commodity and operating costs and lower volumes.

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.

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

During the nine months ended September 30, 2022, we repurchased and retired 20.8 million shares of common stock at a total value of $1,100.6 million, most of which were repurchased under prior authorized share repurchase programs.

As of September 30, 2022, we have $1,951.6 million of remaining authorized common stock to be purchased under our $2.0 billion share repurchase program.

Subsequent Event

On October 11, 2022, we entered into a new $1,550.0 million senior credit facility (Senior Credit Facility) that replaced our existing $1,150.0 million senior credit facility (2021 Senior Credit Facility).

Pursuant to the agreement, the aggregate commitments under our senior revolving credit facility were increased from $800.0 million to $1,200.0 million (Senior Revolving Credit Facility) and the aggregate principal amount under our senior term loan facility remained at $350.0 million (Senior Term Loan).

The Senior Credit Facility will mature in October 2027.

On October 11, 2022, we also amended our existing Receivables Financing Agreement which increases the aggregate borrowing capacity from $300.0 million to $425.0 million and extends the maturity to October 2025.

The invasion of Ukraine by Russia and the sanctions imposed in response to this crisis have increased the level of economic and political uncertainty.

Russia sales represented less than 0.5% of our total sales for the full year 2021 and were minimal for 2022.

During the first quarter of 2022, we ceased all sales to and purchases from Russia.

Additionally, sanctions from the U.S.

and the European Union continue to evolve, along with the overall impact the invasion has on the global economic and political environment.

We continue to closely monitor the changing environment, including the increased volatility and heightened degree of uncertainty resulting from the invasion.

As of now, the direct impact on our operations has not been significant, but we are unable to fully determine the future impact the invasion and the corresponding global response will have on our business.

Net income for the three months ended March 31, 2023 was $156.3 million compared to $393.0 million for the comparable prior year period in 2022.

For the three months ended March 31, 2023, the decrease in net income from the prior year was primarily due to lower operating results across all of our business segments.

On January 10, 2023, Blue Water Alliance (BWA), our joint venture with Mitsui & Co., Ltd.

(Mitsui), began operations after receiving all necessary regulatory approvals.

BWA is an independent global trader of ECU-based derivatives, focused on globally traded caustic soda and ethylene dichloride (EDC).

Olin holds 51% interest and exercises control in BWA and the joint venture is consolidated in our consolidated financial statements with Mitsui’s 49% interest in BWA classified as noncontrolling interest.

All intercompany accounts and transactions are eliminated in consolidation.

Chlor Alkali Products and Vinyls reported segment income of $245.9 million for the three months ended March 31, 2023, respectively.

Chlor Alkali Products and Vinyls segment results for first quarter 2023 were lower than in the comparable prior year period primarily due to lower volumes, partially offset by higher pricing across all products except vinyls intermediates.

Epoxy reported segment income of $21.4 million for the three months ended March 31, 2023.

Epoxy segment results were lower than in the comparable prior year period primarily due to lower volumes and lower pricing, which were both impacted by record exports out of Asia into Europe and North America markets.

Partially offsetting the lower volumes and prices were lower raw material and operating costs.

Winchester reported segment income of $61.0 million for the three months ended March 31, 2023.

Winchester segment results were lower than in the comparable prior year period primarily due to lower commercial volumes and higher commodity and operating costs.

Liquidity and Share Repurchases

During the three months ended March 31, 2023, we repurchased and retired 3.6 million shares of common stock at a total value of $206.1 million.

As of March 31, 2023, we have $1,497.2 million of remaining authorized common stock to be purchased under our 2022 Repurchase Authorization Program.

During the three months ended March 31, 2023, we had net borrowings of $192.6 million with $140.0 million borrowed under our Senior Revolving Credit Facility and an incremental $55.0 million drawn under our Receivables Financing Agreement.

The proceeds were used to fund inventory built in advance of a planned maintenance turnaround and our normal seasonal working capital growth during the first quarter.

Consolidated Results of Operations

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

2022 2021 2022 2021

Three Months Ended March 31,

($ in millions, except per share data)

4 unchanged sentences

Restructuring charges 60.9 3.1

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

Other operating income 0.5 —

Operating income 230.4 546.5

5 unchanged sentences

Net income $ 154.0 $ 393.0

Net income per common share:

Net loss attributable to noncontrolling interests (2.3) —

Net income attributable to Olin Corporation $ 156.3 $ 393.0

Net income attributable to Olin Corporation per common share:

Basic $ 1.19 $ 2.54

Diluted $ 1.16 $ 2.48

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

Sales for the three months ended September 30, 2022 were $2,321.7 million compared to $2,340.1 million in the same period last year, a decrease of $18.4 million, or 1%.

Epoxy sales decreased by $233.6 million primarily due to lower volumes partially offset by higher product pricing.

Chlor Alkali Products and Vinyls sales increased by $201.1 million primarily due to higher pricing across all products except vinyls intermediates, partially offset by lower volumes.

Winchester sales increased by $14.1 million, primarily due to increased commercial ammunition pricing partially offset by lower volumes.

Gross margin decreased $179.5 million for the three months ended September 30, 2022 compared to the prior year.

Epoxy gross margin decreased by $138.2 million, Winchester gross margin decreased by $29.3 million and Chlor Alkali Products and Vinyls gross margin decreased by $7.8 million.

Gross margin decreases across all business segments were primarily due to lower volumes and higher raw material and operating costs, partially offset by higher product pricing.

Gross margin as a percentage of sales decreased to 21% in 2022 from 28% in 2021.

Selling and administration expenses for the three months ended September 30, 2022 were $92.7 million, a decrease of $14.5 million from the prior year.

The decrease was primarily due to lower variable incentive compensation expense of $11.8 million, which includes mark-to-market adjustments on stock-based compensation expense, partially offset by higher legal and legal-related settlement expenses of $2.7 million and an unfavorable foreign currency impact of $1.1 million.

Selling and administration expenses as a percentage of sales decreased to 4% in 2022 from 5% in 2021.

Restructuring charges for the three months ended September 30, 2022 and 2021 were $7.6 million and $3.6 million, respectively.

During 2021, we announced that we had made the decision to permanently close our diaphragm-grade chlor alkali capacity at our McIntosh, AL facility which resulted in pretax restructuring charges for the three months ended September 30, 2022 and 2021 of $5.5 million and $0.4 million, respectively.

Other operating income (expense) for the three months ended September 30, 2022 included $13.0 million of gains for the sale of two former manufacturing facilities.

Interest expense decreased by $18.0 million for the three months ended September 30, 2022.

Interest expense for the three months ended September 30, 2021 included $6.7 million of bond redemption premiums and $2.0 million for write-off of deferred debt issuance costs related to financing transactions during third quarter 2021.

Without these items, interest expense decreased by $9.3 million, primarily due to a lower level of debt outstanding.

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

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

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

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

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

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

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

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

Sales for the nine months ended September 30, 2022 were $7,399.2 million compared to $6,480.2 million in the same period last year, an increase of $919.0 million, or 14%.

Chlor Alkali Products and Vinyls sales increased by $1,015.5 million primarily due to higher product pricing, partially offset by lower volumes across all products.

Winchester sales increased by $87.5 million, primarily due to increased commercial ammunition pricing partially offset by lower volumes.

Epoxy sales decreased by $184.0 million, primarily due to lower volumes partially offset by higher product pricing.

Gross margin increased $135.0 million for the nine months ended September 30, 2022 compared to the prior year.

Chlor Alkali Products and Vinyls gross margin increased by $225.2 million and Winchester gross margin increased by $18.8 million primarily due to higher product pricing, partially offset by higher raw material and operating costs and lower volumes.

Epoxy gross margin decreased by $93.7 million primarily due to lower volumes and higher raw material and operating costs, partially offset by higher product pricing.

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Sales for the three months ended March 31, 2023 were $1,844.3 million compared to $2,461.4 million in the same period last year, a decrease of $617.1 million, or 25%.

Epoxy sales decreased by $428.8 million, primarily due to lower volumes, including the closure of our Cumene facility and one of our bisphenol (BisA) production lines.

Chlor Alkali Products and Vinyls sales decreased by $128.1 million primarily due to lower volumes, partially offset by product sold by BWA and higher prices across all products except vinyls intermediates.

Winchester sales decreased by $60.2 million, primarily due to lower commercial sales volumes.

Gross margin decreased $251.3 million for the three months ended March 31, 2023 compared to the prior year.

Epoxy gross margin decreased by $120.4 million primarily due to lower volumes.

Chlor Alkali Products and Vinyls gross margin decreased by $75.2 million primarily due to lower volumes partially offset by higher prices across all products except vinyls intermediates.

Winchester gross margin decreased by $58.0 million primarily due to lower commercial volumes.

Gross margin as a percentage of sales decreased to 22% in 2023 from 27% in 2022.

Selling and administration expenses for the nine months ended September 30, 2022 were $296.0 million, a decrease of $18.7 million from the prior year.

The decrease was primarily due to lower variable incentive compensation expense of $27.3 million, which includes mark-to-market adjustments on stock-based compensation expense, partially offset by higher legal and legal-related settlement expenses of $10.1 million and an unfavorable foreign currency impact of $5.0 million.

Selling and administration expenses as a percentage of sales decreased to 4% in 2022 from 5% in 2021.

Restructuring charges for the nine months ended September 30, 2022 and 2021 were $14.3 million and $24.5 million, respectively.

The decrease in charges was primarily due to a productivity initiative to align the organization with our new operating model and improve efficiencies, which was completed during the second quarter of 2021, which resulted in pretax restructuring charges of $10.1 million for the nine months ended September 30, 2021.

During 2021, we announced that we had made the decision to permanently close our diaphragm-grade chlor alkali capacity at our McIntosh, AL facility which resulted in pretax restructuring charges for the nine months ended September 30, 2022 and 2021 of $7.1 million and $5.2 million, respectively.

On December 11, 2019, we announced that we had made the decision to permanently close a chlor alkali plant with a capacity of 230,000 tons and our vinylidene chloride (VDC) production facility, both in Freeport, TX, which resulted in pretax restructuring charges for the nine months ended September 30, 2022 and 2021 of $4.9 million and $2.2 million, respectively.

Other operating income (expense) for the nine months ended September 30, 2022 included $13.0 million of gains for the sale of two former manufacturing facilities.

Interest expense decreased by $101.0 million for the nine months ended September 30, 2022.

Interest expense for the nine months ended September 30, 2021 included $37.7 million of bond redemption premiums and $9.9 million for write-off of deferred debt issuance costs and recognition of deferred fair value interest rate swap losses related to financing transactions during 2021.

Without these items, interest expense decreased by $53.4 million, primarily due to a lower level of debt outstanding and lower average interest rates.

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

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

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

The effective tax rate for the nine months ended September 30, 2021 included a benefit from a net decrease in the valuation allowance related to deferred tax assets in foreign jurisdictions, a benefit associated with

prior year tax positions, a benefit associated with stock-based compensation, an expense from remeasurement of deferred taxes due to an increase in our state effective tax rates and an expense from a change in tax contingencies.

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

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

Selling and administration expenses for the three months ended March 31, 2023 were $111.8 million, an increase of $7.5 million from the prior year.

The increase was primarily due to higher stock-based compensation expense of $4.2 million, which includes mark-to-market adjustments and an unfavorable foreign currency impact of $2.5 million.

Selling and administration expenses as a percentage of sales increased to 6% in 2023 from 4% in 2022.

Restructuring charges for the three months ended March 31, 2023 and 2022 were $60.9 million and $3.1 million, respectively.

The increase in charges was primarily due to our decision to cease operations at our Cumene facility in Terneuzen, Netherlands and solid epoxy resin production at our facilities in Gumi, South Korea and Guaruja, Brazil which resulted in pretax restructuring charges of $55.9 million for the three months ended March 31, 2023.

Interest expense increased by $9.5 million for the three months ended March 31, 2023 from the prior year primarily due to higher average interest rates partially offset by lower level of debt outstanding.

The effective tax rate for the three months ended March 31, 2023 included a benefit associated with stock-based compensation, a benefit from remeasurement of deferred taxes due to a decrease in our state effective tax rates, a benefit associated with prior year tax positions, an expense from a net increase in the valuation allowance related to deferred tax assets in foreign jurisdictions, and an expense from a change in tax contingencies, resulting in a net $5.2 million tax benefit.

After giving consideration to these items, the effective tax rate for the three months ended March 31, 2023 of 23.6% was higher than the 21% U.S.

federal statutory rate primarily due to state and foreign income taxes and an increase in the valuation allowance related to losses in foreign jurisdictions, partially offset by favorable permanent salt depletion deductions.

The effective tax rate for the three months ended March 31, 2022 included a benefit associated with prior year tax, stock-based compensation and a change in tax contingencies, resulting in a net $2.3 million tax benefit.

After giving consideration to these items, the effective tax rate for the three months ended March 31, 2022 of 25.4% was higher than the 21% U.S.

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

Segment Results

3 unchanged sentences

The three operating segments reflect the organization used by our management for purposes of allocating resources and assessing performance.

Chlorine used in our Epoxy segment is transferred at cost from the Chlor Alkali Products and Vinyls segment.

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

2022 2021 2022 2021

Chlorine and caustic soda used in our Epoxy segment is transferred at cost from the Chlor Alkali Products and Vinyls segment.

Three Months Ended March 31,

($ in millions)

9 unchanged sentences

Environmental expense (3.2) (5.6)

(7.4) (3.6) (18.0) (8.6)

Other corporate and unallocated costs (34.3) (30.3)

Restructuring charges (60.9) (3.1)

Other operating income (expense) (2)

13.0 (0.5) 16.3 —

Other operating income 0.5 —

Interest expense (42.4) (32.9)

(36.0) (54.0) (103.4) (204.4)

Interest income 1.1 0.4

1 unchanged sentence

Income before taxes $ 194.8 $ 523.6

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

(2) Other operating income (expense) for both the three and nine months ended September 30, 2022 included $13.0 million of gains for the sale of two former manufacturing facilities.

(3) Interest expense for the three and nine months ended September 30, 2021 included a loss on extinguishment of debt of $8.7 million and $47.6 million, respectively, which includes bond redemption premiums, write-off of deferred debt issuance costs and recognition of deferred fair value interest rate swap losses associated with the optional prepayment of existing debt.

Chlor Alkali Products and Vinyls

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

Chlor Alkali Products and Vinyls sales for the three months ended September 30, 2022 were $1,263.5 million compared to $1,062.4 million for the same period in 2021, an increase of $201.1 million, or 19%.

The sales increase was primarily due to higher pricing across all products except vinyls intermediates partially offset by lower volumes.

Chlor Alkali Products and Vinyls segment income was $253.9 million for the three months ended September 30, 2022 compared to $263.0 million for the same period in 2021.

The decrease in segment results of $9.1 million was due to higher raw material and operating costs ($174.5 million), primarily increased natural gas and electrical power costs, lower volumes ($115.4 million) and increased costs associated with product purchased from other parties ($68.2 million), partially offset by higher prices across all products except vinyls intermediates ($349.0 million).

Chlor Alkali Products and Vinyls segment results included depreciation and amortization expense of $121.1 million and $116.7 million for the three months ended September 30, 2022 and 2021, respectively.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

Chlor Alkali Products and Vinyls sales for the nine months ended September 30, 2022 were $3,912.2 million compared to $2,896.7 million for the same period in 2021, an increase of $1,015.5 million, or 35%.

The sales increase was primarily due to higher pricing, partially offset by lower volumes across all products.

Chlor Alkali Products and Vinyls segment income was $929.0 million for the nine months ended September 30, 2022 compared to $703.0 million for the same period in 2021.

Chlor Alkali Products and Vinyls 2021 operating results were favorably impacted by Winter Storm Uri ($121.4 million), which includes a net one-time benefit associated with Olin’s customary financial hedges and contracts maintained to provide protection from rapid and dramatic changes in energy costs, partially offset by unabsorbed fixed manufacturing costs and storm-related maintenance costs.

Without the impact of Winter Storm Uri, the increase in segment results of $347.4 million was due to higher prices across all products ($1,249.3 million), partially offset by higher raw material and operating costs ($459.2 million), primarily increased natural gas and electrical power costs, lower volumes across all products ($250.4 million) and increased costs associated with product purchased from other parties ($192.3 million).

Chlor Alkali Products and Vinyls segment results included depreciation and amortization expense of $364.6 million and $347.0 million for the nine months ended September 30, 2022 and 2021, respectively.

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

Epoxy sales for the three months ended September 30, 2022 were $644.1 million compared to $877.7 million for the same period in 2021, a decrease of $233.6 million, or 27%.

The sales decrease was due to lower volumes ($298.7 million) and an unfavorable effect of foreign currency translation ($45.9 million), partially offset by higher product prices ($111.0 million).

Epoxy segment income was $80.1 million for the three months ended September 30, 2022 compared to $215.2 million for the same period in 2021.

The decrease in segment results of $135.1 million was due to lower volumes ($160.3 million), higher raw material costs ($63.1 million), primarily benzene and propylene, and higher operating costs ($22.7 million).

These decreases were partially offset by higher product prices ($111.0 million).

A significant percentage of our Euro denominated sales are of products manufactured within Europe.

As a result, the impact of foreign currency translation on revenue is primarily offset by the impact of foreign currency translation on raw materials and manufacturing costs also denominated in Euros.

Epoxy segment results included depreciation and amortization expense of $20.1 million and $21.1 million for the three months ended September 30, 2022 and 2021, respectively.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

Epoxy sales for the nine months ended September 30, 2022 were $2,206.3 million compared to $2,390.3 million for the same period in 2021, a decrease of $184.0 million, or 8%.

The sales decrease was primarily due to lower volumes ($644.2 million) and an unfavorable effect of foreign currency translation ($110.9 million), partially offset by higher product prices ($571.1 million).

Epoxy segment income was $358.0 million for the nine months ended September 30, 2022 compared to $445.7 million for the same period in 2021.

Epoxy 2021 operating results were unfavorably impacted by Winter Storm Uri ($21.5 million), which included unabsorbed fixed manufacturing costs and storm-related maintenance costs.

Without the impact of Winter Storm Uri, the decrease in segment results of $109.2 million was primarily due to lower volumes ($324.9 million), higher raw material costs ($269.6 million), primarily benzene and propylene, and higher operating costs ($85.8 million), primarily increased natural gas and electrical power costs, partially offset by higher product prices ($571.1 million).

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Chlor Alkali Products and Vinyls sales for the three months ended March 31, 2023 were $1,117.1 million compared to $1,245.2 million for the same period in 2022, a decrease of $128.1 million, or 10%.

The sales decrease was primarily due to lower volumes, partially offset by product sold by BWA and higher prices across all products except vinyls intermediates.

Chlor Alkali Products and Vinyls segment income was $245.9 million for the three months ended March 31, 2023 compared to $328.6 million for the same period in 2022.

The decrease in segment results of $82.7 million was due to lower volumes across all products ($181.5 million) and increased costs associated with product purchased from other parties ($32.1

million), partially offset by higher prices across all products except vinyls intermediates ($123.0 million) and lower raw material and operating costs ($7.9 million).

Chlor Alkali Products and Vinyls segment results included depreciation and amortization expense of $114.4 million and $123.1 million for the three months ended March 31, 2023 and 2022, respectively.

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Epoxy sales for the three months ended March 31, 2023 were $360.7 million compared to $789.5 million for the same period in 2022, a decrease of $428.8 million, or 54%.

The sales decrease was primarily due to lower volumes ($194.0 million), the closure of our Cumene facility and one of our BisA production lines ($184.7 million), lower product prices ($42.6 million) and an unfavorable effect of foreign currency translation ($7.5 million).

Epoxy segment income was $21.4 million for the three months ended March 31, 2023 compared to $138.0 million for the same period in 2022.

The decrease in segment results of $116.6 million was primarily due to lower volumes ($117.5 million) and lower product prices ($42.6 million), which were both impacted by record exports out of Asia into Europe and North America markets, partially offset by lower raw material and operating costs ($43.5 million).

A significant percentage of our Euro denominated sales are of products manufactured within Europe.

Epoxy segment results included depreciation and amortization expense of $60.9 million and $63.5 million for the nine months ended September 30, 2022 and 2021, respectively.

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

Winchester sales were $414.1 million for the three months ended September 30, 2022 compared to $400.0 million for the same period in 2021, an increase of $14.1 million, or 4%.

The increase was due to higher ammunition sales to military customers ($15.6 million) and law enforcement agencies ($7.8 million), partially offset by lower ammunition sales to commercial customers ($9.3 million).

Commercial ammunition sales were impacted from lower volumes partially offset by improved pricing.

Winchester segment income was $89.0 million for the three months ended September 30, 2022 compared to $115.3 million for the same period in 2021, a decrease of $26.3 million.

The decrease in segment results was due to higher commodity and operating costs ($19.3 million) and lower volumes ($21.1 million), partially offset by higher product pricing ($14.1 million).

Winchester segment income included depreciation and amortization expense of $6.1 million and $5.7 million for the three months ended September 30, 2022 and 2021, respectively.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

Winchester sales were $1,280.7 million for the nine months ended September 30, 2022 compared to $1,193.2 million for the same period in 2021, an increase of $87.5 million, or 7%.

The increase was due to higher ammunition sales to commercial customers ($83.0 million) and law enforcement agencies ($11.9 million), partially offset by lower sales to military customers ($7.4 million).

Commercial ammunition sales benefited from improved pricing partially offset by lower volumes.

Winchester segment income was $327.2 million for the nine months ended September 30, 2022 compared to $310.3 million for the same period in 2021, an increase of $16.9 million.

The increase in segment results was due to higher product pricing ($114.0 million), partially offset by higher commodity and operating costs ($74.5 million) and lower volumes ($22.6 million).

Winchester segment income included depreciation and amortization expense of $18.2 million and $16.8 million for the nine months ended September 30, 2022 and 2021, respectively.

Epoxy segment results included depreciation and amortization expense of $14.5 million and $20.4 million for the three months ended March 31, 2023 and 2022, respectively.

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Winchester sales were $366.5 million for the three months ended March 31, 2023 compared to $426.7 million for the same period in 2022, a decrease of $60.2 million, or 14%.

The decrease was due to lower ammunition sales to commercial customers ($113.7 million), partially offset by higher sales to military customers ($45.9 million) and law enforcement agencies ($7.6 million).

Commercial ammunition sales were primarily impacted by lower volumes.

Winchester segment income was $61.0 million for the three months ended March 31, 2023 compared to $118.9 million for the same period in 2022, a decrease of $57.9 million.

The decrease in segment results was due to lower volumes ($46.9 million), higher commodity and operating costs ($11.0 million).

Winchester segment income included depreciation and amortization expense of $6.2 million for both the three months ended March 31, 2023 and 2022.

Corporate/Other

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

For the three months ended September 30, 2022, charges to income for environmental investigatory and remedial activities were $7.4 million compared to $3.6 million for the three months ended September 30, 2021.

These charges related primarily to expected future investigatory and remedial activities associated with past manufacturing operations and former waste disposal sites.

For the three months ended September 30, 2022, other corporate and unallocated costs were $27.5 million compared to $36.8 million for the three months ended September 30, 2021, a decrease of $9.3 million.

The decrease was primarily due to an lower variable incentive compensation costs ($12.8 million), which includes mark-to-market adjustments on stock-based compensation expense, partially offset by higher higher legal and legal-related settlement expenses ($1.5 million) and an unfavorable foreign currency impact ($1.1 million).

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

For the nine months ended September 30, 2022, charges to income for environmental investigatory and remedial activities were $18.0 million compared to $8.6 million for the nine months ended September 30, 2021, which included $2.2 million of insurance recoveries for environmental costs incurred and expensed in prior periods.

Without these recoveries, charges to income for environmental investigatory and remedial activities for the nine months ended September 30, 2021 would have been $10.8 million.

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

For the three months ended March 31, 2023, charges to income for environmental investigatory and remedial activities were $3.2 million compared to $5.6 million for the three months ended March 31, 2022.

These charges related primarily to expected future investigatory and remedial activities associated with past manufacturing operations and former waste disposal sites.

For the nine months ended September 30, 2022, other corporate and unallocated costs were $92.8 million compared to $100.7 million for the nine months ended September 30, 2021, a decrease of $7.9 million.

The decrease was primarily due to lower variable incentive compensation costs ($25.5 million), which includes mark-to-market adjustments on stock-based compensation expense, partially offset by higher legal and legal-related settlement expenses ($8.4 million) and an unfavorable foreign currency impact ($5.0 million).

We expect operating income for the fourth quarter 2022 to be sequentially lower than third quarter 2022 of $393.5 million.

We expect Chlor Alkali Products and Vinyls fourth quarter segment results to be slightly lower than third quarter 2022 levels, as we expect chlorine and caustic soda pricing to continue to improve, while vinyls intermediates pricing is likely to remain under pressure.

Epoxy and Winchester segment fourth quarter results are expected to seasonally decline from third quarter 2022 levels.

Other Corporate and Unallocated costs in 2022 are expected to be comparable to the $135.1 million in 2021.

During 2022, we anticipate environmental expenses in the $25 million range compared to $14.0 million in 2021.

We expect non-operating pension income in 2022 to be in the $40 million range compared to $35.7 million in 2021.

For the three months ended March 31, 2023, other corporate and unallocated costs were $34.3 million compared to $30.3 million for the three months ended March 31, 2022, an increase of $4.0 million.

The increase was primarily due to higher stock-based compensation costs ($4.2 million), which includes mark-to-market adjustments, and an unfavorable foreign currency impact ($2.5 million), partially offset by lower legal and legal-related settlement expenses ($1.0 million).

Restructurings

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.

As part of this review we announced operational cessations in the fourth quarter of 2022 and the first quarter of 2023.

On March 21, 2023, we announced we had made the decision to cease operations at our Cumene facility in Terneuzen, Netherlands and solid epoxy resin production at our facilities in Gumi, South Korea and Guaruja, Brazil.

The closures were completed in the first quarter 2023.

During the fourth quarter of 2022, we committed to and completed a plan to close down one of our BisA production lines at our Stade, Germany site.

For the three months ended March 31, 2023, we recorded pretax restructuring charges of $55.9 million for contract termination costs, the write-off of equipment and facility costs and facility exit costs related to the first quarter 2023 cessations.

For the three months ended March 31, 2023, we recorded additional pretax restructuring charges of $1.9 million for facility exit costs related to the fourth quarter 2022 BisA closure.

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

In 2023, we expect the on-going challenging global economic conditions to continue as we expect operating results to decline across all our business segments compared to 2022.

We expect our Chlor Alkali Products and Vinyls business to experience declining caustic soda market conditions and continued vinyls intermediates demand weakness.

We expect our Epoxy business to continue to be challenged by European and North American demand weakness, aggravated by elevated Asian exports and a muted recovery of Chinese domestic demand.

We expect the second quarter 2023 operating results from our Chemical businesses to be slightly lower than first quarter 2023 levels.

We expect our Winchester business second quarter 2023 results to increase sequentially from first quarter 2023 levels as commercial customer inventories become more normalized.

Overall, we expect Olin’s second quarter 2023 operating results to slightly decline from first quarter 2023 levels.

Other Corporate and Unallocated costs in 2023 are expected to be comparable with the $131.5 million in 2022.

During 2023, we anticipate environmental expenses in the $25 million to $30 million range, compared to $23.2 million in 2022.

We expect non-operating pension income in 2023 to be in the $20 million to $25 million range compared to $38.7 million in 2022.

Based on our plan assumptions and estimates, we will not be required to make any cash contributions to our domestic qualified defined benefit pension plan in 2023.

We have several international qualified defined benefit pension plans for which we anticipate cash contributions of less than $5 million in 2023.

In 2022, we currently expect our capital spending to be in the $200 million to $250 million range.

We expect 2022 depreciation and amortization expense to be in the $600 million range.

We currently believe the 2022 effective and cash tax rates will be approximately 25%.

In 2023, we currently expect our capital spending to be in the $200 million to $250 million range and we expect to make payments under other long-term supply contracts in the $50 million to $100 million range for energy modernization on the U.S.

We expect 2023 depreciation and amortization expense to be in the $550 million to $575 million range.

We currently believe the 2023 effective tax rates will be in the 25% to 30% range and our cash tax rate to be in the 30% to 35% range as a result of previously deferred international tax payments expected to be made in 2023.

Environmental Matters

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

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

2022 2021 2022 2021

($ in millions)

Provisions charged to income $ 7.4 $ 3.6 $ 18.0 $ 10.8

Recoveries for costs incurred and expensed — — — (2.2)

Environmental expense $ 7.4 $ 3.6 $ 18.0 $ 8.6

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

Environmental provisions charged to income, which are included in costs of goods sold, were $3.2 million and $5.6 million for the three months ended March 31, 2023 and 2022, respectively.

Our liabilities for future environmental expenditures were as follows:

September 30,

($ in millions)

10 unchanged sentences

With respect to unasserted claims, we accrue liabilities for costs that, in our experience, we expect to incur to protect our interests against those unasserted claims.

Our accrued liabilities for unasserted claims amounted to $9.3 million at September 30, 2022.

Our accrued liabilities for unasserted claims amounted to $8.9 million at March 31, 2023.

With respect to asserted claims, we accrue liabilities based on remedial investigation, feasibility study, remedial action and operation, maintenance and monitoring (OM&M) expenses that, in our experience, we expect to incur in connection with the asserted claims.

1 unchanged sentence

Charges to income for investigatory and remedial efforts may be material to our operating results in 2023.

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

The condensed balance sheets included reserves for future environmental expenditures to investigate and remediate known sites amounting to $146.7 million, $146.6 million and $149.5 million at March 31, 2023, December 31, 2022 and March 31, 2022, respectively, of which $121.7 million, $121.6 million and $124.5 million, respectively, were classified as other noncurrent liabilities.

These amounts do not take into account any discounting of future expenditures or any consideration of insurance recoveries or advances in technology.

7 unchanged sentences

Cash Flow Data

Nine Months Ended September 30,

Three Months Ended March 31,

Provided By (Used For) ($ in millions)

1 unchanged sentence

Capital expenditures (61.4) (47.3)

Net investing activities (153.5) (135.8)

Long-term debt repayments, net (200.9) (851.1)

Debt early redemption premiums — (37.7)

Payments under other long-term supply contracts (9.3) —

Long-term debt borrowings (repayments), net 192.6 (0.2)

Common stock repurchased and retired (206.1) (263.2)

Stock options exercised 11.2 5.2

Contributions received from noncontrolling interests 44.1 —

Net financing activities 15.6 (289.0)

Operating Activities

For the nine months ended September 30, 2022, cash provided by operating activities increased by $258.0 million from the nine months ended September 30, 2021, primarily due to a decrease in working capital compared with the prior year.

For the nine months ended September 30, 2022, working capital increased $15.7 million compared to an increase of $212.3 million for the nine months ended September 30, 2021.

Inventories increased by $102.9 million from December 31, 2021 primarily as a result of increased raw material costs.

Income taxes payable, net of income taxes receivable, increased by $75.5 million from December 21, 2021 primarily due to timing of tax payments.

For the three months ended March 31, 2023, cash provided by operating activities decreased by $316.0 million from the three months ended March 31, 2022, primarily due to a decrease in operating results and an increase in working capital compared with the prior year.

For the three months ended March 31, 2023, working capital increased $244.4 million compared to an increase of $195.5 million for the three months ended March 31, 2022.

The working capital increase during the first quarter reflects inventory built in advance of a planned maintenance turnaround and normal seasonal working capital growth.

Inventories increased by $146.0 million from December 31, 2022.

Accounts payable and accrued liabilities decreased $66.1 million primarily as a result of timing of payments during the first quarter of 2023.

Investing Activities

Capital spending of $168.4 million for the nine months ended September 30, 2022 was $32.6 million higher than the corresponding period in 2021.

Capital spending of $61.4 million for the three months ended March 31, 2023 compared to $47.3 million for the corresponding period in 2022.

For the total year 2023, we currently expect our capital spending to be in the $200 million to $250 million range.

We expect 2022 depreciation and amortization expense to be in the $600 million range.

For the nine months ended September 30, 2022, we received proceeds of $14.9 million for the sale of two former manufacturing facilities.

We expect 2023 depreciation and amortization expense to be in the $550 million to $575 million range.

For the three months ended March 31, 2023, payments under other long-term supply contracts was $9.3 million for energy modernization on the U.S.

Gulf Coast and we expect to make payments for the total year 2023 in the $50 million to $100 million range.

Financing Activities

For the nine months ended September 30, 2022 and 2021, we had long-term debt repayments, net of long-term debt borrowings of $200.9 million and $851.1 million, respectively.

During the nine months ended September 30, 2022, we repaid $200.0 million of the outstanding 5.50% senior notes (2022 Notes) which became due utilizing cash on hand.

During the nine months ended September 30, 2021, we repaid $465.0 million of the the senior term loans under the 2021 Senior Credit Facility.

During the nine months ended September 30, 2021, we repurchased, through open market transactions, a principal amount of $79.0 million of the outstanding aggregate principal amount of 5.625% senior notes due August 1, 2029 (2029 Notes) and $26.0 million of the outstanding aggregate principal amount of 5.00% senior notes due February 1, 2030 (2030 Notes).

These actions resulted in a total redemption premium of $6.6 million and $9.7 million for the three and nine months ended September 30, 2021, respectively.

On March 31, 2021, Olin redeemed $315.0 million of the outstanding 10.00% senior notes due October 15, 2025 (2025 Notes) and on May 14, 2021, Olin redeemed the remaining $185.0 million of the outstanding 2025 Notes.

The 2025 Notes were redeemed at 105.0% of the principal amount of the 2025 Notes, resulting in a redemption premium of $25.0 million.

The 2025 Notes were redeemed by drawing $315.0 million of the term loans under the 2021 Senior Credit Facility along with utilizing cash on hand.

On January 15, 2021, Olin redeemed the remaining $120.0 million of the 9.75% senior notes due 2023 (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 cash on hand.

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

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

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

The percent of total debt to total capitalization decreased to 50.3% as of September 30, 2022 from 51.2% as of December 31, 2021 as a result of a lower level of debt outstanding, partially offset by lower shareholders’ equity, primarily due to common stock repurchases partially offset by our operating results.

In the first three quarters of 2022 and 2021, we paid a quarterly dividend of $0.20 per share.

Dividends paid for the nine months ended September 30, 2022 and 2021, were $89.4 million and $95.8 million, respectively.

On October 26, 2022, our Board of Directors declared a dividend of $0.20 per share on our common stock, payable on December 9, 2022 to shareholders of record on November 10, 2022.

For the three months ended March 31, 2023, we had long-term debt borrowings, net of long-term debt repayments of $192.6 million.

For the three months ended March 31, 2022, we had long-term debt repayments, net of long-term debt borrowings of $0.2 million.

For the three months ended March 31, 2023 and 2022, 3.6 million and 5.2 million shares, respectively, of common stock were repurchased and retired at a total value of $206.1 million and $263.2 million, respectively.

We issued 0.4 million and 0.2 million shares representing stock options exercised for the three months ended March 31, 2023 and 2022, respectively, with a total value of $11.2 million and $5.2 million, respectively.

For the three months ended March 31, 2023, we received $44.1 million of cash contributions from noncontrolling interests for BWA.

The percent of total debt to total capitalization increased to 52.3% as of March 31, 2023 from 50.4% as of December 31, 2022 as a result of a higher level of debt outstanding.

In the first quarter of 2023 and 2022, we paid a quarterly dividend of $0.20 per share.

Dividends paid for the three months ended March 31, 2023 and 2022, were $26.2 million and $30.8 million, respectively.

On April 27, 2023, our Board of Directors declared a dividend of $0.20 per share on our common stock, payable on June 9, 2023 to shareholders of record on May 11, 2023.

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 condition, our capital requirements and other factors deemed relevant by our Board of Directors.

1 unchanged sentence

Liquidity and Other Financing Arrangements

Our principal sources of liquidity are from cash and cash equivalents, cash flow from operations and borrowings under our Senior Revolving Credit Facility, Amended Receivables Financing Agreement and AR Facilities.

Our principal sources of liquidity are from cash and cash equivalents, cash flow from operations and borrowings under our Senior Revolving Credit Facility, Receivables Financing Agreement and AR Facilities.

Additionally, we believe that we have access to the high-yield debt and equity markets.

As of September 30, 2022, we maintained an existing senior credit facility (2021 Senior Credit Facility) which included outstanding senior term loans of $350.0 million and a senior revolving credit facility with aggregate commitments in an amount equal to $800.0 million (2021 Senior Revolving Credit Facility).

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

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

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

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

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

commitments of $1,200.0 million (Senior Revolving Credit Facility).

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

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

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

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

At March 31, 2023, we had $1,059.6 million available under our $1,200.0 million Senior Revolving Credit Facility because we had $140.0 million borrowed under the facility and issued $0.4 million of letters of credit.

We were in compliance with all covenants and restrictions under all our outstanding credit agreements as of March 31, 2023, and no event of default had occurred that would permit the lenders under our outstanding credit agreements to accelerate the debt if not cured.

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

1 unchanged sentence

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

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

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

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

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

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

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

The overall decrease in cash for the nine months ended September 30, 2022 primarily reflects our share repurchases, debt repayments, capital spending, and dividends paid, partially offset by our operating results.

We believe, based on current and projected levels of cash flow from our operations, together with our cash and cash equivalents on hand and the availability to borrow under our Senior Revolving Credit Facility, Amended Receivables Financing Agreement and AR Facilities, we have sufficient liquidity to meet our short-term and long-term needs to make required payments of interest on our debt, fund our operating needs, working capital and our capital expenditure requirements.

As of March 31, 2023, there were no covenants or other restrictions that limited our ability to borrow.

The overall decrease in cash for the three months ended March 31, 2023 primarily reflects our share repurchases, capital spending, and dividends paid, partially offset by our debt borrowings, operating results and contributions from noncontrolling interests.

We believe, based on current and projected levels of cash flow from our operations, together with our cash and cash equivalents on hand and the availability to borrow under our Senior Revolving Credit Facility, Receivables Financing Agreement and AR Facilities, we have sufficient liquidity to meet our short-term and long-term needs to make required payments of interest on our debt, fund our operating needs, working capital and our capital expenditure requirements, and comply with the financial ratios in our debt agreements.

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.

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

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

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

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

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

For the nine months ended September 30, 2022, 20.8 million shares of common stock have been repurchased and retired at a total value of $1,100.6 million.

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

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

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

For the three months ended March 31, 2023, 3.6 million shares of common stock have been repurchased and retired at a total value of $206.1 million.

As of March 31, 2023, 9.6 million shares of common stock have been repurchased and retired at a total value of $502.8 million under the 2022 Repurchase Authorization program, and $1,497.2 million of common stock remained authorized to be repurchased under the program.

We maintain a $425.0 million Receivables Financing Agreement (Receivables Financing Agreement) that is scheduled to mature on October 14, 2025 .

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 incorporated the net leverage ratio covenant that is contained in the 2021 Senior Credit Facility.

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

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

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

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

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

As of March 31, 2023, December 31, 2022 and March 31, 2022, we had $355.0 million, $300.0 million and $300.0 million, respectively, drawn under the agreement.

As of March 31, 2023, $569.0 million of our trade receivables were pledged as collateral and we had $70.0 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.

1 unchanged sentence

These receivables qualify for sales treatment under ASC 860 and, accordingly, the proceeds are included in net cash provided by operating activities in the condensed statements of cash flows.

The gross amount of receivables sold for the three months ended September 30, 2022 and 2021 totaled $769.3 million and $687.5 million, respectively.

The gross amount of receivables sold for the three months ended March 31, 2023 and 2022 totaled $252.3 million and $281.4 million, respectively.

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

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

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

As of September 30, 2022, December 31, 2021 and September 30, 2021, $91.3 million, $83.3 million and $90.7 million, respectively, of receivables qualifying for sales treatment were outstanding and will continue to be serviced by us.

At September 30, 2022, we had total letters of credit of $80.1 million outstanding, of which $0.4 million were issued under our Senior Revolving Credit Facility.

The factoring discount was $1.2 million and $0.5 million for the three months ended March 31, 2023 and 2022, respectively.

The agreements are without recourse and therefore no recourse liability has been recorded as of March 31, 2023, December 31, 2022 and March 31, 2022.

As of March 31, 2023, December 31, 2022 and March 31, 2022, $77.1 million, $111.8 million and $97.9 million, respectively, of receivables qualifying for sales treatment were outstanding and will continue to be serviced by us.

At March 31, 2023, we had total letters of credit of $76.9 million outstanding, of which $0.4 million were issued under our Senior Revolving Credit Facility.

The letters of credit were used to support certain long-term debt, certain workers compensation insurance policies, certain plant closure and post-closure obligations, certain international payment obligations and certain international pension funding requirements.

Our current debt structure is used to fund our business operations.

As of September 30, 2022, we had long-term borrowings, including the current installment and finance lease obligations, of $2,581.4 million, of which $805.9 million were at variable rates.

Included within long-term borrowings on the condensed balance sheets were deferred debt issuance costs and unamortized bond original issue discount of $19.9 million as of September 30, 2022.

Commitments from banks under our Senior Revolving Credit Facility, Amended Receivables Financing Agreement and AR Facilities are additional sources of liquidity.

As of March 31, 2023, we had long-term borrowings, including the current installment and finance lease obligations, of $2,774.2 million, of which $998.7 million were at variable rates.

Included within long-term borrowings on the condensed balance sheets were deferred debt issuance costs and unamortized bond original issue discount of $19.4 million as of March 31, 2023.

Commitments from banks under our Senior Revolving Credit Facility, Receivables Financing Agreement and AR Facilities are additional sources of liquidity.

Credit Ratings

We receive ratings from three independent credit rating agencies:

Fitch Ratings (Fitch), Moody's Investor Service (Moody's) and Standard & Poor's (S&P).

The following table summarizes our credit ratings as of January 31, 2023:

Credit Ratings Long-term Rating Outlook

Fitch Ratings BBB- Stable

Moody’s Investors Service Ba1 Stable

Standard & Poor’s BB+ Positive

On January 12, 2023, Fitch assigned a first-time inaugural rating of BBB- and a stable outlook.

On June 10, 2022, Moody's upgraded Olin to Ba1 from Ba2, and changed its outlook from Positive to Stable.

On April 4, 2023, S&P affirmed Olin’s BB+ rating and positive outlook.

Contractual Obligations

6 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis