3 unchanged sentences
(In millions, except per share data)
−Removed: March 31, 2023 December 31, 2022 March 31, 2022
+Added: June 30, 2023 December 31, 2022 June 30, 2022
Current assets:
42 unchanged sentences
(In millions, except per share data)
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
Sales $ 1,702.7 $ 2,616.1 $ 3,547.0 $ 5,077.5
23 unchanged sentences
(In millions)
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
Net income $ 144.7 $ 422.1 $ 298.7 $ 815.1
−Removed: Other comprehensive income, net of tax:
+Added: Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments ( 8.5 ) ( 26.0 ) ( 3.0 ) ( 36.5 )
−Removed: Unrealized gains on derivative contracts, net 7.4 30.7
+Added: Unrealized losses (gains) on derivative contracts, net 7.4 ( 55.0 ) 14.8 ( 24.3 )
Amortization of prior service costs and actuarial losses, net 0.4 6.7 0.7 13.3
−Removed: Total other comprehensive income, net of tax 13.2 26.8
+Added: Total other comprehensive (loss) income, net of tax ( 0.7 ) ( 74.3 ) 12.5 ( 47.5 )
Comprehensive income 144.0 347.8 311.2 767.6
5 unchanged sentences
(In millions, except per share data)
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
Balance at beginning of period $ 129.3 $ 151.8 $ 132.3 $ 156.8
14 unchanged sentences
Balance at beginning of period $ ( 482.7 ) $ ( 461.2 ) $ ( 495.9 ) $ ( 488.0 )
−Removed: Other comprehensive income 13.2 26.8
+Added: Other comprehensive (loss) income ( 0.7 ) ( 74.3 ) 12.5 ( 47.5 )
Balance at end of period $ ( 483.4 ) $ ( 535.5 ) $ ( 483.4 ) $ ( 535.5 )
16 unchanged sentences
(In millions)
−Removed: Three Months Ended March 31,
+Added: Six Months Ended June 30,
Operating Activities
1 unchanged sentence
Adjustments to reconcile net income to net cash and cash equivalents provided by (used for) operating activities:
+Added: Gains on disposition of property, plant and equipment ( 27.0 ) —
Stock-based compensation 8.4 6.3
16 unchanged sentences
Payments under other long-term supply contracts ( 29.6 ) —
+Added: Proceeds from disposition of property, plant and equipment 28.8 —
Other investing activities ( 1.0 ) —
33 unchanged sentences
(Mitsui), began operations after receiving all necessary regulatory approvals.
−Removed: BWA is an independent global trader of ECU-based derivatives, focused on globally traded caustic soda and ethylene dichloride (EDC).
+Added: BWA is an independent global trader of ECU-based derivatives, focused on globally traded caustic soda and ethylene dichloride.
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.
10 unchanged sentences
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.
−Removed: As part of this review we announced operational cessations in the fourth quarter of 2022 and the first quarter of 2023 (collectively, Epoxy Optimization Plan).
+Added: As part of this review we announced operational cessations in the fourth quarter of 2022 and the first and second quarters of 2023 (collectively, Epoxy Optimization Plan).
+Added: The foregoing actions will complete the rightsizing plan of our Epoxy business.
+Added: On June 20, 2023, we announced we had made the decision to cease all remaining operations at our Gumi, South Korea facility, reduce epoxy resin capacity at our Freeport, TX facility, and reduce our sales and support staffing across Asia.
+Added: These actions are expected to be substantially completed by December 31, 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.
−Removed: During the fourth quarter of 2022, we committed to and completed a plan to close down one of our bisphenol (BisA) production lines at our Stade, Germany site.
−Removed: 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.
−Removed: 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.
+Added: During the fourth quarter of 2022, we committed to and completed a plan to close down one of our bisphenol production lines at our Stade, Germany site.
+Added: For the three and six months ended June 30, 2023, we recorded pretax restructuring charges of $ 13.3 million and $ 71.1 million, respectively, for the write-off of equipment and facility costs, employee severance and related benefit costs, contract
+Added: termination costs and facility exit costs related to these actions.
We expect to incur additional restructuring charges through 2026 of approximately $ 50 million related to these actions.
During 2021, we announced that we had made the decision to permanently close our diaphragm-grade chlor alkali capacity, representing 400,000 tons, at our McIntosh, AL facility (McIntosh Plan).
−Removed: The closure was completed during third
−Removed: quarter of 2022.
−Removed: For the three months ended March 31, 2023 and 2022, we recorded pretax restructuring charges of $ 1.4 million and $ 0.9 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.
+Added: The closure was completed during third quarter of 2022.
+Added: For the three months ended June 30, 2023 and 2022, we recorded pretax restructuring charges of $ 2.5 million and $ 0.7 million, respectively, for lease and other contract termination costs and for facility exit costs related to this action.
+Added: For the six months ended June 30, 2023 and 2022, we recorded pretax restructuring charges of $ 3.9 million and $ 1.6 million, respectively, for 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 three months ended March 31, 2023 and 2022, we recorded pretax restructuring charges of $ 0.7 million and $ 0.3 million, respectively, for facility exit costs related to these actions.
+Added: For the three months ended June 30, 2023 and 2022, we recorded pretax restructuring charges of $ 1.4 million and $ 1.2 million, respectively, for facility exit costs related to these actions.
+Added: For the six months ended June 30, 2023 and 2022, we recorded pretax restructuring charges of $ 2.1 million and $ 1.5 million, respectively, for facility exit costs related to these actions.
We expect to incur additional restructuring charges through 2025 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 three months ended March 31, 2023 and 2022, we recorded pretax restructuring charges of $ 1.0 million and $ 1.7 million, respectively, for facility exit costs related to these actions.
+Added: For the three months ended June 30, 2023 and 2022, we recorded pretax restructuring charges of $ 2.0 million and $ 1.5 million, respectively, for facility exit costs related to these actions.
+Added: For the six months ended June 30, 2023 and 2022, we recorded pretax restructuring charges of $ 3.0 million and $ 3.2 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.
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).
−Removed: For the three months ended March 31, 2022, we recorded pretax restructuring charges of $ 0.2 million for facility exit costs and lease and other contract termination costs related to these actions.
+Added: For the three and six months ended June 30, 2022, we recorded pretax restructuring charges of $ 0.2 million and $ 0.4 million, respectively, for facility exit costs and lease and other contract termination costs related to these actions.
We do no t expect to incur additional restructuring charges related to these capacity reductions.
−Removed: The following table summarizes the 2023 and 2022 activities by major component of these restructuring actions and the remaining balances of accrued restructuring costs as of March 31, 2023 and 2022:
+Added: The following table summarizes the 2023 and 2022 activities by major component of these restructuring actions and the remaining balances of accrued restructuring costs as of June 30, 2023 and 2022:
Employee severance and related benefit costs Lease and other contract termination costs Facility exit costs Write-off of equipment and facility Total
2 unchanged sentences
Restructuring charges:
+Added: First quarter — 0.1 2.6 0.4 3.1
+Added: Second quarter — 0.2 3.1 0.3 3.6
Amounts utilized ( 3.7 ) ( 1.0 ) ( 5.7 ) ( 0.7 ) ( 11.1 )
−Removed: Balance at March 31, 2022 $ 4.9 $ 5.3 $ — $ — $ 10.2
+Added: Balance at June 30, 2022 $ 3.2 $ 4.7 $ — $ — $ 7.9
Balance at January 1, 2023 $ 9.4 $ 4.2 $ — $ — $ 13.6
Restructuring charges:
+Added: First quarter — 39.7 8.4 12.8 60.9
+Added: Second quarter 3.3 1.7 9.3 4.9 19.2
Amounts utilized ( 1.4 ) ( 7.2 ) ( 17.7 ) ( 17.7 ) ( 44.0 )
−Removed: Balance at March 31, 2023 $ 8.7 $ 40.4 $ — $ — $ 49.1
−Removed: The following table summarizes the cumulative restructuring charges of these restructuring actions by major component through March 31, 2023:
+Added: Balance at June 30, 2023 $ 11.3 $ 38.4 $ — $ — $ 49.7
+Added: The following table summarizes the cumulative restructuring charges of these restructuring actions by major component through June 30, 2023:
Chlor Alkali Products and Vinyls Epoxy Corporate/other Total
7 unchanged sentences
Total cumulative restructuring charges $ 17.8 $ 11.2 $ 75.6 $ 182.7 $ 79.1 $ 10.3 $ 376.7
−Removed: As of March 31, 2023, we have incurred cash expenditures of $ 155.3 million and non-cash charges of $ 153.1 million related to these restructuring actions.
+Added: As of June 30, 2023, we have incurred cash expenditures of $ 169.0 million and non-cash charges of $ 158.0 million related to these restructuring actions.
The remaining balance of $ 49.7 million is expected to be paid out through 2028.
+Added: EARNINGS PER SHARE
+Added: Basic and diluted net income attributable to Olin Corporation per share are computed by dividing net income attributable to Olin Corporation by the weighted-average number of common shares outstanding.
+Added: Diluted net income attributable to Olin Corporation per share reflects the dilutive effect of stock-based compensation.
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
+Added: Computation of Net Income per Share (In millions, except per share data)
+Added: Net income $ 144.7 $ 422.1 $ 298.7 $ 815.1
+Added: Net loss attributable to noncontrolling interests ( 2.2 ) — ( 4.5 ) —
+Added: Net income attributable to Olin Corporation $ 146.9 $ 422.1 $ 303.2 $ 815.1
+Added: Basic shares 127.4 149.2 129.2 151.9
+Added: Basic net income attributable to Olin Corporation per share $ 1.15 $ 2.83 $ 2.35 $ 5.37
+Added: Diluted shares:
+Added: Basic shares 127.4 149.2 129.2 151.9
+Added: Stock-based compensation 3.0 3.6 3.2 3.7
+Added: Diluted shares 130.4 152.8 132.4 155.6
+Added: Diluted net income attributable to Olin Corporation per share $ 1.13 $ 2.76 $ 2.29 $ 5.24
+Added: The computation of dilutive shares does not include 1.3 million shares for both the three and six months ended June 30, 2023 and 0.8 million shares for both the three and six months ended June 30, 2022, as their effect would have been anti-dilutive.
ACCOUNTS RECEIVABLES
2 unchanged sentences
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 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.
−Removed: 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.
+Added: As of June 30, 2023, December 31, 2022 and June 30, 2022, we had $ 234.8 million, $ 300.0 million and $ 300.0 million, respectively, drawn under the agreement.
+Added: As of June 30, 2023, $ 478.6 million of our trade receivables were pledged as collateral and we had $ 120.0 million of additional borrowing capacity under the Receivables Financing Agreement, which was limited by our borrowing base.
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.
8 unchanged sentences
The factoring discount paid under the AR Facilities is recorded as interest expense on the condensed statements of operations.
−Removed: The factoring discount was $ 1.2 million and $ 0.5 million for the three months ended March 31, 2023 and 2022, respectively.
−Removed: The agreements are without recourse and therefore no recourse liability had been recorded as of March 31, 2023, December 31, 2022 or March 31, 2022.
−Removed: Our condensed balance sheets included an allowance for doubtful accounts receivables of $ 13.1 million, $ 12.6 million and $ 15.2 million and other receivables of $ 67.7 million, $ 71.6 million and $ 65.6 million at March 31, 2023, December 31, 2022 and March 31, 2022, respectively, which were included in receivables, net.
+Added: The factoring discount was $ 1.3 million and $ 0.4 million for the three months ended June 30, 2023 and 2022, respectively, and $ 2.5 million and $ 0.9 million for the six months ended June 30, 2023 and 2022, respectively.
+Added: The agreements are without recourse and therefore no recourse liability had been recorded as of June 30, 2023, December 31, 2022 or June 30, 2022.
+Added: Our condensed balance sheets included an allowance for doubtful accounts receivables of $ 13.0 million, $ 12.6 million and $ 15.0 million and other receivables of $ 81.7 million, $ 71.6 million and $ 50.3 million at June 30, 2023, December 31, 2022 and June 30, 2022, respectively, which were included in receivables, net.
Inventories consisted of the following:
−Removed: March 31, 2023 December 31,
−Removed: 2022 March 31, 2022
+Added: June 30, 2023 December 31,
+Added: 2022 June 30, 2022
($ in millions)
7 unchanged sentences
Inventories under the LIFO method are based on annual estimates of quantities and costs as of year-end;
−Removed: therefore, the condensed financial statements at March 31, 2023 reflect certain estimates relating to inventory quantities and costs at December 31, 2023.
−Removed: The replacement cost of our inventories would have been approximately $ 176.8 million, $ 155.8 million and $ 144.1 million higher than reported at March 31, 2023, December 31, 2022 and March 31, 2022, respectively.
+Added: therefore, the condensed financial statements at June 30, 2023 reflect certain estimates relating to inventory quantities and costs at December 31, 2023.
+Added: The replacement cost of our inventories would have been approximately $ 173.8 million, $ 155.8 million and $ 166.0 million higher than reported at June 30, 2023, December 31, 2022 and June 30, 2022, respectively.
Included in other assets were the following:
−Removed: March 31, 2023 December 31, 2022 March 31, 2022
+Added: June 30, 2023 December 31, 2022 June 30, 2022
($ in millions)
2 unchanged sentences
Other assets $ 1,108.6 $ 1,102.5 $ 1,090.0
−Removed: Amortization expense of $ 17.6 million for both the three months ended March 31, 2023 and 2022, respectively, was recognized within cost of goods sold related to our long-term supply contracts and is reflected in depreciation and amortization on the condensed statements of cash flows.
+Added: Amortization expense of $ 17.8 million and $ 17.6 million for the three months ended June 30, 2023 and 2022, respectively, and amortization expense of $ 35.6 million and $ 35.2 million for the six months ended June 30, 2023 and 2022, respectively, was recognized within cost of goods sold related to our long-term supply contracts and is reflected in depreciation and amortization on the condensed statements of cash flows.
GOODWILL AND INTANGIBLE ASSETS
4 unchanged sentences
Foreign currency translation adjustment 0.3 — 0.3
−Removed: Balance at March 31, 2022 $ 1,275.7 $ 145.0 $ 1,420.7
+Added: Balance at June 30, 2022 $ 1,275.9 $ 145.0 $ 1,420.9
Balance at January 1, 2023 $ 1,275.8 $ 145.1 $ 1,420.9
Foreign currency translation adjustment — — —
−Removed: Balance at March 31, 2023 $ 1,275.8 $ 145.1 $ 1,420.9
+Added: Balance at June 30, 2023 $ 1,275.8 $ 145.1 $ 1,420.9
Intangible assets consisted of the following:
−Removed: March 31, 2023 December 31, 2022 March 31, 2022
+Added: June 30, 2023 December 31, 2022 June 30, 2022
Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net
4 unchanged sentences
Total intangible assets $ 765.5 $ ( 509.6 ) $ 255.9 $ 764.0 $ ( 490.2 ) $ 273.8 $ 761.9 $ ( 465.7 ) $ 296.2
−Removed: EARNINGS PER SHARE
−Removed: Basic and diluted net income attributable to Olin Corporation per share are computed by dividing net income attributable to Olin Corporation by the weighted-average number of common shares outstanding.
−Removed: Diluted net income attributable to Olin Corporation per share reflects the dilutive effect of stock-based compensation.
−Removed: Three Months Ended March 31,
−Removed: Computation of Net Income per Share (In millions, except per share data)
−Removed: Net income $ 154.0 $ 393.0
−Removed: Net loss attributable to noncontrolling interests ( 2.3 ) —
−Removed: Net income attributable to Olin Corporation $ 156.3 $ 393.0
−Removed: Basic shares 131.0 154.7
−Removed: Basic net income attributable to Olin Corporation per share $ 1.19 $ 2.54
−Removed: Diluted shares:
−Removed: Basic shares 131.0 154.7
+Added: Long-term Debt Borrowings (Repayments)
+Added: for the Six Months Ended
+Added: June 30, 2023 June 30, 2022
+Added: Debt Instruments ($ in millions)
+Added: Senior Revolving Credit Facility 215.0 70.0
+Added: Receivables Financing Agreement 200.0 45.0
+Added: Total borrowings $ 415.0 $ 115.0
+Added: Senior Term Loan ( 4.4 ) —
+Added: Senior Revolving Credit Facility — ( 70.0 )
+Added: Receivables Financing Agreement ( 265.2 ) ( 45.0 )
+Added: Finance leases ( 1.7 ) ( 0.5 )
+Added: Total repayments $ ( 271.3 ) $ ( 115.5 )
+Added: Long-term debt borrowings (repayments), net $ 143.7 $ ( 0.5 )
+Added: Senior Credit Facility
+Added: 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), which included outstanding term loans of $ 350.0 million and a senior revolving credit facility with aggregate commitments in an amount equal to $ 800.0 million.
+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 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.
+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 June 30, 2023, we had $ 984.6 million available under our $ 1,200.0 million Senior Revolving Credit Facility because we had $ 215.0 million borrowed under the facility and issued $ 0.4 million of letters of credit.
+Added: We were in compliance with all covenants and restrictions under all our outstanding credit agreements as of June 30, 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.
+Added: 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.
+Added: As a result of our restrictive covenant related to the net leverage ratio, the maximum additional borrowings available to us could be limited in the future.
+Added: 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.
+Added: As of June 30, 2023, there were no covenants or other restrictions that limited our ability to borrow.
+Added: PENSION PLANS AND RETIREMENT BENEFITS
+Added: We sponsor domestic and foreign defined benefit pension plans for eligible employees and retirees.
+Added: Most of our domestic employees participate in defined contribution plans.
+Added: However, a portion of our bargaining hourly employees continue to participate in our domestic qualified defined benefit pension plans under a flat-benefit formula.
+Added: Our funding policy for the qualified defined benefit pension plans is consistent with the requirements of federal laws and regulations.
+Added: Our foreign subsidiaries maintain pension and other benefit plans, which are consistent with local statutory practices.
+Added: 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
+Added: automatically be increased for affected participants (and retired participants) to absorb any plan surplus (subject to applicable collective bargaining requirements).
+Added: We also provide certain postretirement healthcare (medical) and life insurance benefits for eligible active and retired domestic employees.
+Added: The healthcare plans are contributory with participants’ contributions adjusted annually based on medical rates of inflation and plan experience.
+Added: Pension Benefits Other Postretirement Benefits
+Added: Three Months Ended June 30, Three Months Ended June 30,
+Added: 2023 2022 2023 2022
+Added: Components of Net Periodic Benefit (Income) Cost ($ in millions)
+Added: Service cost $ 1.4 $ 2.2 $ 0.2 $ 0.3
+Added: Interest cost 26.4 15.5 0.4 0.3
+Added: Expected return on plans’ assets ( 32.7 ) ( 34.3 ) — —
+Added: Amortization of prior service cost ( 0.1 ) ( 0.2 ) 0.1 0.1
+Added: Recognized actuarial loss 0.3 8.6 0.2 0.5
+Added: Net periodic benefit (income) cost $ ( 4.7 ) $ ( 8.2 ) $ 0.9 $ 1.2
+Added: Pension Benefits Other Postretirement Benefits
+Added: Six Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
+Added: Components of Net Periodic Benefit (Income) Cost ($ in millions)
+Added: Service cost $ 2.8 $ 4.5 $ 0.4 $ 0.6
+Added: Interest cost 52.7 30.9 0.9 0.6
+Added: Expected return on plans’ assets ( 65.6 ) ( 68.5 ) — —
+Added: Amortization of prior service cost ( 0.2 ) ( 0.4 ) 0.1 0.1
+Added: Recognized actuarial loss 0.6 17.2 0.4 1.0
+Added: Net periodic benefit (income) cost $ ( 9.7 ) $ ( 16.3 ) $ 1.8 $ 2.3
+Added: We made cash contributions to our international qualified defined benefit pension plans of $ 1.5 million and $ 0.8 million for the six months ended June 30, 2023 and 2022, respectively.
+Added: The effective tax rate for the three months ended June 30, 2023 included a benefit associated with stock-based compensation, 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 $ 12.0 million tax benefit.
+Added: After giving consideration to these items, the effective tax rate for the three months ended June 30, 2023 of 25.4 % was higher than the 21 % U.S.
+Added: federal statutory rate primarily due to state income tax and an increase in the valuation allowance related to losses in foreign jurisdictions, partially offset by favorable permanent salt depletion deductions.
+Added: The effective tax rate for the three months ended June 30, 2022 included a benefit associated with prior year tax positions and stock-based compensation, resulting in a net $ 8.5 million tax benefit.
+Added: After giving consideration to these items, the effective tax rate for the three months ended June 30, 2022 of 23.5 % was higher than the 21 % U.S.
+Added: federal statutory rate primarily due to state and foreign income taxes, partially offset by foreign income exclusions and favorable permanent salt depletion deductions.
+Added: The effective tax rate for the six months ended June 30, 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 $ 17.2 million tax benefit.
+Added: giving consideration to these items, the effective tax rate for the six months ended June 30, 2023 of 24.5 % was higher than the 21 % U.S.
+Added: federal statutory rate primarily due to state income tax and an increase in the valuation allowance related to losses in foreign jurisdictions, partially offset by favorable permanent salt depletion deductions.
+Added: The effective tax rate for the six months ended June 30, 2022 included a benefit associated with prior year tax positions and stock-based compensation, resulting in a net $ 10.8 million tax benefit.
+Added: After giving consideration to these items, the effective tax rate for the six months ended June 30, 2022 of 24.4 % was higher than the 21 % U.S.
+Added: federal statutory rate primarily due to state and foreign income taxes, partially offset by foreign income exclusions and favorable permanent salt depletion deductions.
+Added: As of June 30, 2023, we had $ 58.7 million of gross unrecognized tax benefits, which would have a net $ 56.8 million impact on the effective tax rate, if recognized.
+Added: As of June 30, 2022, we had $ 46.0 million of gross unrecognized tax benefits, of which $ 45.4 million would have impacted the effective tax rate, if recognized.
+Added: The amounts of unrecognized tax benefits were as follows:
+Added: ($ in millions)
+Added: Balance at beginning of year $ 51.6 $ 43.4
+Added: Increases for prior year tax positions 1.3 0.3
+Added: Decreases for prior year tax positions ( 0.3 ) ( 0.7 )
+Added: Increases for current year tax positions 5.4 5.3
+Added: Foreign currency translation adjustments 0.7 ( 2.3 )
+Added: Balance at end of period $ 58.7 $ 46.0
+Added: As of June 30, 2023, we believe it is reasonably possible that our total amount of unrecognized tax benefits will decrease by approximately $ 38.1 million over the next twelve months.
+Added: The anticipated reduction primarily relates to settlements with taxing authorities and the expiration of federal, state and foreign statutes of limitation.
+Added: We operate globally and file income tax returns in numerous jurisdictions.
+Added: Our tax returns are subject to examination by various federal, state and local tax authorities.
+Added: Additionally, examinations are ongoing in various states and foreign jurisdictions.
+Added: We believe we have adequately provided for all tax positions;
+Added: however, amounts asserted by taxing authorities could be greater than our accrued position.
+Added: For our primary tax jurisdictions, the tax years that remain subject to examination are as follows:
+Added: federal income tax 2018 - 2022
+Added: state income tax 2012 - 2022
+Added: Canadian federal income tax 2016 - 2022
+Added: Brazil 2016 - 2022
+Added: Germany 2015 - 2022
+Added: China 2014 - 2022
+Added: The Netherlands 2016 - 2022
+Added: CONTRIBUTING EMPLOYEE OWNERSHIP PLAN
+Added: The Contributing Employee Ownership Plan (CEOP) is a defined contribution plan available to essentially all domestic employees.
+Added: We provide a contribution to an individual retirement contribution account maintained with the CEOP equal to an amount of between 5.0 % and 7.5 % of the employee’s eligible compensation.
+Added: The defined contribution plan expense for the three months ended June 30, 2023 and 2022 was $ 8.6 million and $ 8.8 million, respectively, and for the six months ended June 30, 2023 and 2022 was $ 20.3 million and $ 19.4 million, respectively.
+Added: Company matching contributions are invested in the same investment allocation as the employee’s contribution.
+Added: Our matching contributions for eligible employees for the three months ended June 30, 2023 and 2022 was $ 3.7 million and $ 3.6 million, respectively, and for the six months ended June 30, 2023 and 2022 was $ 7.4 million and $ 6.7 million, respectively.
STOCK-BASED COMPENSATION
−Removed: Diluted shares 134.4 158.6
−Removed: Diluted net income attributable to Olin Corporation per share $ 1.16 $ 2.48
−Removed: The computation of dilutive shares does not include 1.4 million and 0.8 million shares for the three months ended March 31, 2023 and 2022, respectively, as their effect would have been anti-dilutive.
−Removed: ENVIRONMENTAL
−Removed: We are party to various government and private environmental actions associated with past manufacturing facilities and former waste disposal sites.
−Removed: 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.
−Removed: 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.
−Removed: Environmental exposures are difficult to assess for numerous reasons, including the identification of new sites, developments at sites resulting from investigatory studies, advances in technology, changes in environmental laws and regulations and their application, changes in regulatory authorities, the scarcity of reliable data pertaining to identified sites, the difficulty in assessing the involvement and financial capability of other Potentially Responsible Parties (PRPs), our ability to obtain contributions from other parties and the lengthy time periods over which site remediation occurs.
−Removed: It is possible that some of these matters (the outcomes of which are subject to various uncertainties) may be resolved unfavorably to us, which could materially adversely affect our financial position or results of operations.
−Removed: COMMITMENTS AND CONTINGENCIES
−Removed: 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.
−Removed: District Court for the Western District of New York.
−Removed: Those cases were consolidated on May 22, 2019;
−Removed: 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.
−Removed: 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.
−Removed: 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.
−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: indirectly from distributors at any time on or after October 1, 2015.
−Removed: Those cases were consolidated and a consolidated, amended complaint in the “Indirect Purchaser” lawsuit was filed on August 23, 2021.
−Removed: 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.
−Removed: 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.
−Removed: Plaintiffs seek damages and injunctive relief.
−Removed: Steel Chemical, Olin Canada ULC, 3229897 Nova Scotia Co.
−Removed: (wholly owned subsidiaries of Olin) and other alleged caustic soda producers were named as defendants in a proposed class action civil lawsuit filed on October 7, 2020 in the Quebec Superior Court (Province of Quebec) on behalf of the respective named plaintiff and a putative class comprised of all Canadian persons and entities who, between October 1, 2015 and the date of the eventual class action certification, directly or indirectly purchased caustic soda or products containing caustic soda, produced by one or more of the defendants.
−Removed: Steel Chemical, Olin Canada ULC, 3229897 Nova Scotia Co.
−Removed: and other alleged caustic soda producers were also named as defendants in a proposed class action civil lawsuit filed November 13, 2020 in the Federal Court of Canada on behalf of the respective named plaintiff and a putative class comprised of all legal persons in Canada who, at any time on or after October 1, 2015 to the present, directly or indirectly purchased caustic soda.
−Removed: The other defendants named in the two Canadian lawsuits are Occidental Petroleum Corporation, Occidental Chemical Corporation, Oxy Canada Sales, Inc., Westlake Chemical Corporation, Axiall Canada, Inc., 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 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 damages, including punitive damages.
−Removed: We believe we have meritorious legal positions and will continue to represent our interests vigorously in the above matters.
−Removed: 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.
−Removed: 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: As of March 31, 2023, December 31, 2022 and March 31, 2022, our condensed balance sheets included accrued liabilities for these other legal actions of $ 14.1 million, $ 14.4 million and $ 13.5 million, respectively.
−Removed: These liabilities do not include costs associated with legal representation.
−Removed: 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.
−Removed: 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 cleanup and remediation of an environmental site.
−Removed: There exists the possibility of recovering a portion of these costs from other parties.
−Removed: We account for gain contingencies in accordance with the provisions of ASC 450 “Contingencies” and, therefore, do not record gain contingencies and recognize income until it is earned and realizable.
+Added: Stock-based compensation granted includes stock options, performance stock awards, restricted stock awards and deferred directors’ compensation.
+Added: Stock-based compensation expense (benefit) was as follows:
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
+Added: ($ in millions)
+Added: Stock-based compensation $ 8.3 $ 9.6 $ 12.8 $ 14.2
+Added: Mark-to-market adjustments ( 1.6 ) ( 5.6 ) ( 0.1 ) ( 8.5 )
+Added: Total expense $ 6.7 $ 4.0 $ 12.7 $ 5.7
+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 weighted-average assumptions:
+Added: Grant date 2023 2022
+Added: Dividend yield 1.32 % 1.60 %
+Added: Risk-free interest rate 4.07 % 1.93 %
+Added: Expected volatility of Olin common stock 47 % 48 %
+Added: Expected life (years) 7.0 7.0
+Added: Weighted-average grant fair value (per option) $ 28.74 $ 21.18
+Added: Weighted-average exercise price $ 60.55 $ 49.71
+Added: Options granted 562,124 737,100
+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.
+Added: Performance share awards are denominated in shares of our stock and are paid half in cash and half in stock.
+Added: Payouts for performance share awards are based on two criteria:
+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.
+Added: The expense associated with performance shares is recorded based on our estimate of our performance relative to the respective target.
+Added: If an employee leaves the company before the end of the performance cycle, the performance shares may be prorated based on the number of months of the performance cycle worked and are settled in cash instead of half in cash and half in stock when the three-year performance cycle is completed.
+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 2023 2022
+Added: Risk-free interest rate 4.46 % 1.74 %
+Added: Expected volatility of Olin common stock 52 % 59 %
+Added: Expected average volatility of peer companies 42 % 47 %
+Added: Average correlation coefficient of peer companies 0.51 0.51
+Added: Expected life (years) 3.0 3.0
+Added: Grant date fair value (TSR based award) $ 86.98 $ 64.13
+Added: Grant date fair value (net income based award) $ 60.55 $ 49.71
+Added: Awards granted 161,474 184,000
+Added: Risk-free interest rate was based on zero coupon U.S.
+Added: Treasury securities rates for the expected life of the performance stock 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.
SHAREHOLDERS’ EQUITY
1 unchanged sentence
This program will terminate upon the purchase of $ 2.0 billion of common stock.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: For the six months ended June 30, 2023 and 2022, 7.1 million and 12.6 million shares, respectively, of common stock were repurchased and retired at a total value of $ 393.0 million and $ 689.7 million, respectively.
+Added: As of June 30, 2023, 13.0 million shares of common stock have been repurchased and retired at a total value of $ 687.8 million under the 2022 Repurchase Authorization program, and $ 1,312.2 million of common stock remained authorized to be repurchased under the program.
+Added: We issued 0.4 million and 0.9 million shares representing stock options exercised for the six months ended June 30, 2023 and 2022, respectively, with a total value of $ 11.9 million and $ 20.9 million, respectively.
The following table represents the activity included in accumulated other comprehensive loss:
3 unchanged sentences
Unrealized (losses) gains:
+Added: First quarter ( 10.5 ) 52.8 — 42.3
+Added: Second quarter ( 26.0 ) ( 36.4 ) — ( 62.4 )
Reclassification adjustments of (gains) losses into income:
−Removed: Tax provision — ( 9.7 ) ( 2.3 ) ( 12.0 )
+Added: First quarter — ( 12.4 ) 8.9 ( 3.5 )
+Added: Second quarter — ( 36.1 ) 9.0 ( 27.1 )
+Added: Tax (provision) benefit:
+Added: First quarter — ( 9.7 ) ( 2.3 ) ( 12.0 )
+Added: Second quarter — 17.5 ( 2.3 ) 15.2
Net change ( 36.5 ) ( 24.3 ) 13.3 ( 47.5 )
−Removed: Balance at March 31, 2022 $ ( 21.4 ) $ 53.5 $ ( 493.3 ) $ ( 461.2 )
+Added: Balance at June 30, 2022 $ ( 47.4 ) $ ( 1.5 ) $ ( 486.6 ) $ ( 535.5 )
Balance at January 1, 2023 $ ( 38.6 ) $ ( 32.5 ) $ ( 424.8 ) $ ( 495.9 )
Unrealized gains (losses):
+Added: First quarter 5.5 ( 20.8 ) — ( 15.3 )
+Added: Second quarter ( 8.5 ) ( 10.7 ) — ( 19.2 )
Reclassification adjustments of losses into income:
+Added: First quarter — 30.7 0.4 31.1
+Added: Second quarter — 20.5 0.5 21.0
Tax provision:
+Added: First quarter — ( 2.5 ) ( 0.1 ) ( 2.6 )
+Added: Second quarter — ( 2.4 ) ( 0.1 ) ( 2.5 )
Net change ( 3.0 ) 14.8 0.7 12.5
−Removed: Balance at March 31, 2023 $ ( 33.1 ) $ ( 25.1 ) $ ( 424.5 ) $ ( 482.7 )
+Added: Balance at June 30, 2023 $ ( 41.6 ) $ ( 17.7 ) $ ( 424.1 ) $ ( 483.4 )
Net income and cost of goods sold included reclassification adjustments for realized gains and losses on derivative contracts from accumulated other comprehensive loss.
6 unchanged sentences
Chlorine and caustic soda used in our Epoxy segment is transferred at cost from the Chlor Alkali Products and Vinyls segment.
+Added: BWA is consolidated in our Chlor Alkali Products and Vinyls segment.
Sales are attributed to geographic areas based on customer location.
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
($ in millions)
3 unchanged sentences
Total sales $ 1,702.7 $ 2,616.1 $ 3,547.0 $ 5,077.5
−Removed: Income before taxes:
+Added: Income (loss) before taxes:
Chlor Alkali Products and Vinyls $ 180.1 $ 346.5 $ 426.0 $ 675.1
10 unchanged sentences
Income before taxes $ 177.9 $ 540.7 $ 372.7 $ 1,064.3
−Removed: Three Months Ended March 31,
+Added: Other operating income for both the three and six months ended June 30, 2023 included a gain of $ 27.0 million for the sale of our domestic private trucking fleet and operations.
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
Sales by geography:
17 unchanged sentences
Total sales $ 1,702.7 $ 2,616.1 $ 3,547.0 $ 5,077.5
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
Sales by product line:
11 unchanged sentences
Total sales $ 1,702.7 $ 2,616.1 $ 3,547.0 $ 5,077.5
−Removed: STOCK-BASED COMPENSATION
−Removed: Stock-based compensation granted includes stock options, performance stock awards, restricted stock awards and deferred directors’ compensation.
−Removed: Stock-based compensation expense (benefit) was as follows:
−Removed: Three Months Ended March 31,
−Removed: ($ in millions)
−Removed: Stock-based compensation $ 4.5 $ 4.7
−Removed: Mark-to-market adjustments 1.5 ( 2.9 )
−Removed: Total expense $ 6.0 $ 1.8
−Removed: 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 weighted-average assumptions:
−Removed: Grant date 2023 2022
−Removed: Dividend yield 1.32 % 1.60 %
−Removed: Risk-free interest rate 4.07 % 1.93 %
−Removed: Expected volatility of Olin common stock 47 % 48 %
−Removed: Expected life (years) 7.0 7.0
−Removed: Weighted-average grant fair value (per option) $ 28.74 $ 21.18
−Removed: Weighted-average exercise price $ 60.55 $ 49.71
−Removed: Options granted 562,124 729,600
−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: If an employee leaves the company before the end of the performance cycle, the performance shares may be prorated based on the number of months of the performance cycle worked and are settled in cash instead of half in cash and half in stock when the three-year performance cycle is completed.
−Removed: The fair value of each performance share award based on net income was estimated on the date of grant, using the current stock price.
−Removed: 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:
−Removed: Grant date 2023 2022
−Removed: Risk-free interest rate 4.46 % 1.74 %
−Removed: Expected volatility of Olin common stock 52 % 59 %
−Removed: Expected average volatility of peer companies 42 % 47 %
−Removed: Average correlation coefficient of peer companies 0.51 0.51
−Removed: Expected life (years) 3.0 3.0
−Removed: Grant date fair value (TSR based award) $ 86.98 $ 64.13
−Removed: Grant date fair value (net income based award) $ 60.55 $ 49.71
−Removed: Awards granted 161,474 184,000
−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 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.
−Removed: Long-term Debt Borrowings (Repayments)
−Removed: Three Months Ended March 31, 2023 Three Months Ended March 31, 2022
−Removed: Debt Instrument ($ in millions)
−Removed: Senior Revolving Credit Facility 140.0 —
−Removed: Receivables Financing Agreement 150.0 65.0
−Removed: Total borrowings $ 290.0 $ 65.0
−Removed: Senior Term Loan ( 2.2 ) —
−Removed: Receivables Financing Agreement ( 95.0 ) ( 65.0 )
−Removed: Finance leases ( 0.2 ) ( 0.2 )
−Removed: Total repayments $ ( 97.4 ) $ ( 65.2 )
−Removed: Long-term debt borrowings (repayments), net $ 192.6 $ ( 0.2 )
−Removed: Senior Credit Facility
−Removed: 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), which included outstanding term loans of $ 350.0 million and a senior revolving credit facility with aggregate commitments in an amount equal to $ 800.0 million.
−Removed: 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).
−Removed: 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.
−Removed: 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.
−Removed: The maturity date for the Senior Credit Facility is October 11, 2027.
−Removed: The Senior Revolving Credit Facility includes a $ 100.0 million letter of credit subfacility.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: As a result of our restrictive covenant related to the net leverage ratio, the maximum additional borrowings available to us could be limited in the future.
−Removed: 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.
−Removed: As of March 31, 2023, there were no covenants or other restrictions that limited our ability to borrow.
−Removed: CONTRIBUTING EMPLOYEE OWNERSHIP PLAN
−Removed: The Contributing Employee Ownership Plan (CEOP) is a defined contribution plan available to essentially all domestic employees.
−Removed: We provide a contribution to an individual retirement contribution account maintained with the CEOP equal to an amount of between 5.0 % and 7.5 % of the employee’s eligible compensation.
−Removed: The defined contribution plan expense for the three months ended March 31, 2023 and 2022 was $ 11.6 million and $ 10.6 million, respectively.
−Removed: Company matching contributions are invested in the same investment allocation as the employee’s contribution.
−Removed: Our matching contributions for eligible employees for the three months ended March 31, 2023 and 2022 were $ 3.7 million and $ 3.1 million, respectively.
−Removed: PENSION PLANS AND RETIREMENT BENEFITS
−Removed: We sponsor domestic and foreign defined benefit pension plans for eligible employees and retirees.
−Removed: Most of our domestic employees participate in defined contribution plans.
−Removed: However, a portion of our bargaining hourly employees continue to participate in our domestic qualified defined benefit pension plans under a flat-benefit formula.
−Removed: Our funding policy for the qualified defined benefit pension plans is consistent with the requirements of federal laws and regulations.
−Removed: Our foreign subsidiaries maintain pension and other benefit plans, which are consistent with local statutory practices.
−Removed: 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: We also provide certain postretirement healthcare (medical) and life insurance benefits for eligible active and retired domestic employees.
−Removed: The healthcare plans are contributory with participants’ contributions adjusted annually based on medical rates of inflation and plan experience.
−Removed: Pension Benefits Other Postretirement Benefits
−Removed: Three Months Ended March 31, Three Months Ended March 31,
−Removed: 2023 2022 2023 2022
−Removed: Components of Net Periodic Benefit (Income) Cost ($ in millions)
−Removed: Service cost $ 1.4 $ 2.3 $ 0.2 $ 0.3
−Removed: Interest cost 26.3 15.4 0.5 0.3
−Removed: Expected return on plans’ assets ( 32.9 ) ( 34.2 ) — —
−Removed: Amortization of prior service cost ( 0.1 ) ( 0.2 ) — —
−Removed: Recognized actuarial loss 0.3 8.6 0.2 0.5
−Removed: Net periodic benefit (income) cost $ ( 5.0 ) $ ( 8.1 ) $ 0.9 $ 1.1
−Removed: We made cash contributions to our international qualified defined benefit pension plans of $ 0.8 million and $ 0.4 million for the three months ended March 31, 2023 and 2022, respectively.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: After giving consideration to these items, the effective
−Removed: tax rate for the three months ended March 31, 2022 of 25.4 % was higher than the 21 % U.S.
−Removed: federal statutory rate primarily due to state and foreign income taxes, partially offset by foreign income exclusions and a favorable permanent salt depletion deductions.
−Removed: As of March 31, 2023, we had $ 54.8 million of gross unrecognized tax benefits, which would have a net $ 53.2 million impact on the effective tax rate, if recognized.
−Removed: As of March 31, 2022, we had $ 45.1 million of gross unrecognized tax benefits, of which $ 44.6 million would have impacted the effective tax rate, if recognized.
−Removed: The amounts of unrecognized tax benefits were as follows:
−Removed: ($ in millions)
−Removed: Balance at beginning of year $ 51.6 $ 43.4
−Removed: Decreases for prior year tax positions — ( 0.7 )
−Removed: Increases for current year tax positions 2.8 3.1
−Removed: Foreign currency translation adjustments 0.4 ( 0.7 )
−Removed: Balance at end of period $ 54.8 $ 45.1
−Removed: As of March 31, 2023, we believe it is reasonably possible that our total amount of unrecognized tax benefits will decrease by approximately $ 18.6 million over the next twelve months.
−Removed: The anticipated reduction primarily relates to settlements with taxing authorities and the expiration of federal, state and foreign statutes of limitation.
−Removed: We operate globally and file income tax returns in numerous jurisdictions.
−Removed: Our tax returns are subject to examination by various federal, state and local tax authorities.
−Removed: Additionally, examinations are ongoing in various states and foreign jurisdictions.
−Removed: We believe we have adequately provided for all tax positions;
−Removed: however, amounts asserted by taxing authorities could be greater than our accrued position.
−Removed: For our primary tax jurisdictions, the tax years that remain subject to examination are as follows:
−Removed: federal income tax 2018 - 2022
−Removed: state income tax 2012 - 2022
−Removed: Canadian federal income tax 2016 - 2022
−Removed: Brazil 2016 - 2022
−Removed: Germany 2015 - 2022
−Removed: China 2014 - 2022
−Removed: The Netherlands 2016 - 2022
+Added: ENVIRONMENTAL
+Added: We are party to various government and private environmental actions associated with past manufacturing facilities and former waste disposal sites.
+Added: The condensed balance sheets included reserves for future environmental expenditures to investigate and remediate known sites amounting to $ 151.8 million, $ 146.6 million and $ 148.9 million at June 30, 2023, December 31, 2022 and June 30, 2022, respectively, of which $ 126.8 million, $ 121.6 million and $ 123.9 million, respectively, were classified as other noncurrent liabilities.
+Added: Environmental provisions charged to income, which are included in costs of goods sold, were $ 13.0 million and $ 5.0 million for the three months ended June 30, 2023 and 2022, respectively, and $ 16.2 million and $ 10.6 million for the six months ended June 30, 2023 and 2022, respectively.
+Added: Environmental exposures are difficult to assess for numerous reasons, including the identification of new sites, developments at sites resulting from investigatory studies, advances in technology, changes in environmental laws and regulations and their application, changes in regulatory authorities, the scarcity of reliable data pertaining to identified sites, the difficulty in assessing the involvement and financial capability of other Potentially Responsible Parties (PRPs), our ability to obtain contributions from other parties and the lengthy time periods over which site remediation occurs.
+Added: It is possible that some of these matters (the outcomes of which are subject to various uncertainties) may be resolved unfavorably to us, which could materially adversely affect our financial position or results of operations.
+Added: COMMITMENTS AND CONTINGENCIES
+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.
+Added: 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.
+Added: 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.
+Added: indirectly from distributors at any time on or after October 1, 2015.
+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.
+Added: Steel Chemical, Olin Canada ULC, 3229897 Nova Scotia Co.
+Added: (wholly owned subsidiaries of Olin) and other alleged caustic soda producers were named as defendants in a proposed class action civil lawsuit filed on October 7, 2020 in the Quebec Superior Court (Province of Quebec) on behalf of the respective named plaintiff and a putative class comprised of all Canadian persons and entities who, between October 1, 2015 and the date of the eventual class action certification, directly or indirectly purchased caustic soda or products containing caustic soda, produced by one or more of the defendants.
+Added: Steel Chemical, Olin Canada ULC, 3229897 Nova Scotia Co.
+Added: and other alleged caustic soda producers were also named as defendants in a proposed class action civil lawsuit filed November 13, 2020 in the Federal Court of Canada on behalf of the respective named plaintiff and a putative class comprised of all legal persons in Canada who, at any time on or after October 1, 2015 to the present, directly or indirectly purchased caustic soda.
+Added: The other defendants named in the two Canadian lawsuits are Occidental Petroleum Corporation, Occidental Chemical Corporation, Oxy Canada Sales, Inc., Westlake Chemical Corporation, Axiall Canada, Inc., Shin-Etsu Chemical Co., Ltd., Shintech Incorporated, Formosa Plastics Corporation, and Formosa Plastics Corporation, U.S.A.
+Added: 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.
+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.
+Added: 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.
+Added: 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.
+Added: As of June 30, 2023, December 31, 2022 and June 30, 2022, our condensed balance sheets included accrued liabilities for these other legal actions of $ 15.9 million, $ 14.4 million and $ 14.5 million, respectively.
+Added: These liabilities do not include costs associated with legal representation.
+Added: 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.
+Added: 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.
+Added: In certain instances, such as environmental projects, we are responsible for managing the cleanup and remediation of an environmental site.
+Added: There exists the possibility of recovering a portion of these costs from other parties.
+Added: We account for gain contingencies in accordance with the provisions of ASC 450 “Contingencies” and, therefore, do not record gain contingencies and recognize income until it is earned and realizable.
DERIVATIVE FINANCIAL INSTRUMENTS
10 unchanged sentences
We enter into forward sales and purchase contracts to manage currency risk to offset our net exposures, by currency, related to the foreign currency denominated monetary assets and liabilities of our operations.
−Removed: At March 31, 2023, we had outstanding forward contracts to buy foreign currency with a notional value of $ 352.5 million and to sell foreign currency with a notional value of $ 147.6 million.
+Added: At June 30, 2023, we had outstanding forward contracts to buy foreign currency with a notional value of $ 10.9 million and to sell foreign currency with a notional value of $ 126.1 million.
All of the currency derivatives expire within one year and are for U.S.
3 unchanged sentences
At December 31, 2022, we had outstanding forward contracts to buy foreign currency with a notional value of $ 275.8 million and to sell foreign currency with a notional value of $ 110.7 million.
−Removed: At March 31, 2022, we had outstanding forward contracts to buy foreign currency with a notional value of $ 259.2 million and to sell foreign currency with a notional value of $ 120.6 million.
+Added: At June 30, 2022, we had outstanding forward contracts to buy foreign currency with a notional value of $ 235.5 million and to sell foreign currency with a notional value of $ 81.0 million.
Cash Flow Hedges
1 unchanged sentence
We had the following notional amounts of outstanding commodity contracts that were entered into to hedge forecasted purchases:
−Removed: March 31, 2023 December 31, 2022 March 31, 2022
+Added: June 30, 2023 December 31, 2022 June 30, 2022
($ in millions)
3 unchanged sentences
Total notional $ 244.1 $ 261.2 $ 308.6
−Removed: As of March 31, 2023, the counterparties to these commodity contracts were Wells Fargo Bank, N.A., Citibank, N.A., JPMorgan Chase Bank, National Association and Bank of America Corporation, all of which are major financial institutions.
+Added: As of June 30, 2023, the counterparties to these commodity contracts were Wells Fargo Bank, N.A., Citibank, N.A., JPMorgan Chase Bank, National Association and Bank of America Corporation, all of which are major financial institutions.
We use cash flow hedges for certain raw material and energy costs such as copper, zinc, lead, ethane, electricity and natural gas to provide a measure of stability in managing our exposure to price fluctuations associated with forecasted purchases of raw materials and energy used in our manufacturing process.
−Removed: At March 31, 2023, we had open derivative contract positions through 2028.
−Removed: If all open futures contracts had been settled on March 31, 2023, we would have recognized a pretax loss of $ 33.6 million.
−Removed: If commodity prices were to remain at March 31, 2023 levels, approximately $ 23.2 million of deferred losses, net of tax, would be reclassified into earnings during the next twelve months.
+Added: At June 30, 2023, we had open derivative contract positions through 2028.
+Added: If all open futures contracts had been settled on June 30, 2023, we would have recognized a pretax loss of $ 23.8 million.
+Added: If commodity prices were to remain at June 30, 2023 levels, approximately $ 16.7 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.
8 unchanged sentences
The table disaggregates our net derivative assets and liabilities into gross components on a contract-by-contract basis before giving effect to master netting arrangements:
−Removed: March 31, 2023 December 31, 2022 March 31, 2022
+Added: June 30, 2023 December 31, 2022 June 30, 2022
($ in millions)
32 unchanged sentences
Amount of Gain (Loss)
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30, Six Months Ended June 30,
Location of Gain (Loss) 2023 2022 2023 2022
16 unchanged sentences
If the threshold is exceeded, cash is either provided by the counterparty to us if the value of the derivatives is our asset, or cash is provided by us to the counterparty if the value of the derivatives is our liability.
−Removed: As of March 31, 2023, December 31, 2022 and March 31, 2022, this threshold was not exceeded.
+Added: As of June 30, 2023, December 31, 2022 and June 30, 2022, this threshold was not exceeded.
In all instances where we are party to a master netting agreement, we offset the receivable or payable recognized upon payment of cash collateral against the fair value amounts recognized for derivative instruments that have also been offset under such master netting agreements.
16 unchanged sentences
Fair Value Measurements
−Removed: Balance at March 31, 2023 Level 1 Level 2 Level 3 Total
+Added: Balance at June 30, 2023 Level 1 Level 2 Level 3 Total
Assets ($ in millions)
12 unchanged sentences
Total Liabilities $ — $ 49.9 $ — $ 49.9
−Removed: Balance at March 31, 2022
+Added: Balance at June 30, 2022
Commodity contracts $ — $ 31.2 $ — $ 31.2
13 unchanged sentences
Since our long-term debt instruments may not be actively traded, the inputs used to measure the fair value of our long-term debt are based on current market rates for debt of similar risk and maturities and is classified as Level 2 in the fair value measurement hierarchy.
−Removed: As of March 31, 2023, December 31, 2022 and March 31, 2022, the fair value measurements of debt were $ 2,627.5 million, $ 2,517.7 million and $ 2,807.2 million, respectively.
+Added: As of June 30, 2023, December 31, 2022 and June 30, 2022, the fair value measurements of debt were $ 2,661.1 million, $ 2,517.7 million and $ 2,635.3 million, respectively.
Nonrecurring Fair Value Measurements
In addition to assets and liabilities that are recorded at fair value on a recurring basis, we record assets and liabilities at fair value on a nonrecurring basis as required by ASC 820.
−Removed: There were no assets or liabilities measured at fair value on a nonrecurring basis as of March 31, 2023, December 31, 2022 and March 31, 2022.
+Added: There were no assets or liabilities measured at fair value on a nonrecurring basis as of June 30, 2023, December 31, 2022 and June 30, 2022.
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.