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Item 2. Management’s Discussion and Analysis

2023-10-27 compared with 2023-07-28 · 166 added, 148 removed, 190 unchanged (62% of the section changed)

9 unchanged sentences

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.

The Winchester segment produces and sells sporting ammunition, reloading components, small caliber military ammunition and components, industrial cartridges and clay targets.

Executive Summary

2023 Overview

Net income for the three and six months ended June 30, 2023 was $146.9 million and $303.2 million, respectively, compared to $422.1 million and $815.1 million, respectively, for the comparable prior year periods in 2022.

Net income for the three and nine months ended September 30, 2023 was $104.1 million and $407.3 million, respectively, compared to $315.2 million and $1,130.3 million, respectively, for the comparable prior year periods.

The decrease in net income from the prior year periods was primarily due to lower operating results across all of our business segments.

Net income for both the three and six months ended June 30, 2023 also reflects a gain of $27.0 million for the sale of our domestic private trucking fleet and operations for cash proceeds of $28.5 million.

Net income for the nine months ended September 30, 2023 also reflects a gain of $27.0 million for the sale of our domestic private trucking fleet and operations for cash proceeds of $28.5 million.

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.

BWA is an independent global trader of Electrochemical Unit (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.

All intercompany accounts and transactions are eliminated in consolidation.

Chlor Alkali Products and Vinyls reported segment income of $180.1 million and $426.0 million for the three and six months ended June 30, 2023, respectively.

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

The Chlor Alkali Products and Vinyls second quarter 2023 segment results were also negatively impacted by $78.9 million for the maintenance turnaround and subsequent operating issues with the vinyl chloride monomer plant at the Freeport, TX facility resulting in higher costs and reduced profit from lost sales.

Epoxy reported segment loss of $0.5 million for the three months ended June 30, 2023 and segment income of $20.9 million for the six months ended June 30, 2023.

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

Chlor Alkali Products and Vinyls reported segment income of $172.3 million and $598.3 million for the three and nine months ended September 30, 2023, respectively.

Chlor Alkali Products and Vinyls segment results for third quarter 2023 were lower than in the comparable prior year period primarily due to lower volumes and lower pricing, primarily caustic soda, partially offset by lower raw material and operating costs.

Chlor Alkali Products and Vinyls segment results for the nine months ended September 30, 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 and lower raw material and operating costs.

The Chlor Alkali Products and Vinyls segment results for the three and nine months ended September 30, 2023 were also negatively impacted by higher costs and reduced profit from lost sales of $25.3 million and $104.2 million, respectively, associated with operating issues, related to the second quarter’s maintenance turnaround at our vinyl chloride monomer plant at the Freeport, TX facility.

The vinyl chloride monomer plant resumed normal operations in the latter half of the third quarter.

Epoxy reported segment losses of $28.8 million and $7.9 million for the three and nine months ended September 30, 2023, respectively.

Epoxy segment results were lower than in the comparable prior year periods primarily due to lower volumes and lower product pricing.

Epoxy segment results in 2023 have been impacted by record exports out of Asia into the European and North American markets, negatively impacting pricing and volumes.

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

Winchester reported segment income of $64.7 million and $125.7 million for the three and six months ended June 30, 2023, respectively.

Winchester segment results were lower than in the comparable prior year periods primarily due to lower commercial volumes and pricing, and higher commodity and operating costs, partially offset by higher domestic and international military sales.

Winchester reported segment income of $64.5 million and $190.2 million for the three and nine months ended September 30, 2023, respectively.

Winchester segment results were lower than in the comparable prior year periods primarily due to lower commercial volumes and pricing, partially offset by higher domestic and international military sales.

Liquidity and Share Repurchases

During the six months ended June 30, 2023, we repurchased and retired 7.1 million shares of common stock at a total value of $393.0 million.

As of June 30, 2023, we had $1,312.2 million of remaining authorized common stock to be purchased under our 2022 Repurchase Authorization Program.

During the six months ended June 30, 2023, we had net borrowings of $143.7 million with $215.0 million borrowed under our Senior Revolving Credit Facility and repayments of $65.2 million under our Receivables Financing Agreement.

The net borrowings were used to fund our normal seasonal working capital growth.

During the nine months ended September 30, 2023, we repurchased and retired 10.8 million shares of common stock at a total value of $595.1 million.

As of September 30, 2023, we had $1,112.1 million of remaining authorized common stock to be purchased under our 2022 Repurchase Authorization Program.

During the nine months ended September 30, 2023, we had net borrowings of $206.6 million with $165.0 million borrowed under our Senior Revolving Credit Facility and $50.0 million under our Receivables Financing Agreement.

Subsequent Event

On October 1, 2023, Olin acquired the assets of White Flyer Targets, LLC (“White Flyer”) from Reagent Diversified Holdings, Inc.

for $63.7 million, subject to normal post-closing adjustments.

The acquisition was financed with cash on hand.

White Flyer designs, manufactures and sells recreational trap, skeet, international and sporting clay targets and will be included in Olin’s existing Winchester segment.

Consolidated Results of Operations

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

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

2023 2022 2023 2022

5 unchanged sentences

Restructuring charges 11.9 7.6 92.0 14.3

Other operating income 27.0 3.3 27.5 3.3

Other operating (expense) income

(0.3) 13.0 27.2 16.3

Operating income 166.0 393.5 613.1 1,505.4

5 unchanged sentences

Net income $ 104.5 $ 315.2 $ 403.2 $ 1,130.3

Net loss attributable to noncontrolling interests (2.2) — (4.5) —

Net income (loss) attributable to noncontrolling interests

0.4 — (4.1) —

Net income attributable to Olin Corporation $ 104.1 $ 315.2 $ 407.3 $ 1,130.3

2 unchanged sentences

Diluted $ 0.82 $ 2.18 $ 3.12 $ 7.44

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

Sales for the three months ended June 30, 2023 were $1,702.7 million compared to $2,616.1 million in the same period last year, a decrease of $913.4 million, or 35%.

Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022

Sales for the three months ended September 30, 2023 were $1,671.4 million compared to $2,321.7 million in the same period last year, a decrease of $650.3 million, or 28%.

Epoxy sales decreased by $322.5 million, primarily due to lower volumes, including the closure of our cumene facility and one of our bisphenol (BisA) production lines, and lower product pricing.

Chlor Alkali Products and Vinyls sales decreased by $401.2 million primarily due to lower volumes, partially offset by products sold by BWA and higher prices across all products except vinyls intermediates.

Chlor Alkali Products and Vinyls sales decreased by $293.9 million primarily due to lower volumes, partially offset by products sold by BWA, lower pricing and a less favorable mix.

Winchester sales decreased by $33.9 million, primarily due to lower commercial sales volumes, partially offset by higher domestic and international military sales.

Gross margin decreased $354.6 million for the three months ended June 30, 2023 compared to the prior year.

Chlor Alkali Products and Vinyls gross margin decreased by $157.3 million primarily due to lower volumes.

Epoxy gross margin decreased by $139.9 million primarily due to lower volumes and lower product pricing.

Gross margin decreased $211.7 million for the three months ended September 30, 2023 compared to the prior year.

Epoxy gross margin decreased by $111.4 million primarily due to lower pricing.

Chlor Alkali Products and Vinyls gross margin decreased by $74.9 million primarily due to lower volumes and lower pricing.

Winchester gross margin decreased by $26.0 million primarily due to lower commercial volumes.

Gross margin as a percentage of sales decreased to 16% in 2023 from 21% in 2022.

Selling and administration expenses for the three months ended June 30, 2023 were $101.2 million, an increase of $2.2 million from the prior year.

The increase was primarily due to higher stock-based compensation expense of $2.7 million, which includes mark-to-market adjustments.

Selling and administration expenses for the three months ended September 30, 2023 were $90.9 million, a decrease of $1.8 million from the prior year.

The decrease was primarily due to lower legal-related costs of $6.2 million and lower variable incentive compensation expense of $3.8 million, which includes mark-to-market adjustments on stock-based compensation expense, partially offset by higher costs associated with BWA of $5.7 million.

Selling and administration expenses as a percentage of sales increased to 5% in 2023 from 4% in 2022.

Restructuring charges for the three months ended June 30, 2023 and 2022 were $19.2 million and $3.6 million, respectively.

The increase in charges was primarily due to our actions to configure our global Epoxy asset footprint to optimize the most productive and cost effective assets to support our strategic operating model, which resulted in pretax restructuring charges of $13.3 million.

Other operating income for the three months ended June 30, 2023 included a gain of $27.0 million for the sale of our domestic private trucking fleet and operations.

Interest expense increased by $10.8 million for the three months ended June 30, 2023 from the prior year primarily due to higher average interest rates.

Restructuring charges for the three months ended September 30, 2023 and 2022 were $11.9 million and $7.6 million, respectively.

The increase in charges was primarily due to our actions to reconfigure our global Epoxy asset footprint to optimize the most productive and cost effective assets to support our strategic operating model, which resulted in restructuring charges of $8.6 million in the third quarter 2023.

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

Interest expense increased by $10.2 million for the three months ended September 30, 2023 from the prior year primarily due to higher average interest rates.

Non-operating pension income includes all components of pension and other postretirement income (costs) other than service costs.

Non-operating pension income was lower for the three months ended June 30, 2023 primarily due to an increase in the discount rate used to determine interest costs, partially offset by lower actuarial losses recognized to income.

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.

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.

federal statutory rate primarily due to state 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 June 30, 2022 included a benefit associated with prior year tax positions and stock-based compensation, resulting in a net $8.5 million tax benefit.

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

Non-operating pension income was lower for the three months ended September 30, 2023 primarily due to an increase in the discount rate used to determine interest costs, partially offset by lower actuarial losses recognized to income.

The effective tax rate for the three months ended September 30, 2023 included a net $7.2 million tax benefit, primarily associated with stock-based compensation and prior year tax positions, partially offset by an expense from a change in tax contingencies.

After giving consideration to these items, the effective tax rate for the three months ended September 30, 2023 of 23.2% was higher than the 21.0% U.S.

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 and foreign income taxes.

The effective tax rate for the three months ended September 30, 2022 included a net $36.6 million 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 21.0% 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.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

Sales for the six months ended June 30, 2023 were $3,547.0 million compared to $5,077.5 million in the same period last year, a decrease of $1,530.5 million, or 30%.

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

Sales for the nine months ended September 30, 2023 were $5,218.4 million compared to $7,399.2 million in the same period last year, a decrease of $2,180.8 million, or 29%.

Epoxy sales decreased by $1,190.2 million, primarily due to lower volumes, including the closure of our cumene facility and one of our BisA production lines, and lower product pricing.

Chlor Alkali Products and Vinyls sales decreased by $529.3 million primarily due to lower volumes, partially offset by products sold by BWA and higher prices across all products except vinyls intermediates.

Chlor Alkali Products and Vinyls sales decreased by $823.2 million primarily due to lower volumes, partially offset by products sold by BWA and higher pricing across all products except vinyls intermediates.

Winchester sales decreased by $167.4 million, primarily due to lower commercial sales volumes, partially offset by higher domestic and international military sales.

Gross margin decreased $605.9 million for the six months ended June 30, 2023 compared to the prior year.

Gross margin decreased $817.6 million for the nine months ended September 30, 2023 compared to the prior year.

Epoxy gross margin decreased by $371.7 million primarily due to lower volumes and lower product pricing.

Chlor Alkali Products and Vinyls gross margin decreased by $232.5 million primarily due to lower volumes, partially offset by higher prices across all products except vinyls intermediates.

Chlor Alkali Products and Vinyls gross margin decreased by $307.4 million primarily due to lower volumes.

Winchester gross margin decreased by $137.1 million primarily due to lower commercial volumes.

Gross margin as a percentage of sales decreased to 19% in 2023 from 24% in 2022.

Selling and administration expenses for the six months ended June 30, 2023 were $213.0 million, an increase of $9.7 million from the prior year.

The increase was primarily due to higher stock-based compensation expense of $7.0 million, which includes mark-to-market adjustments.

Selling and administration expenses for the nine months ended September 30, 2023 were $303.9 million, an increase of $7.9 million from the prior year.

The increase was primarily due to higher costs associated with BWA of $16.6 million and higher consulting costs of $3.0 million, partially offset by lower legal-related costs of $9.4 million and lower variable incentive compensation expense of $4.4 million, which includes mark-to-market adjustments on stock-based compensation expense.

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

Restructuring charges for the six months ended June 30, 2023 and 2022 were $80.1 million and $6.7 million, respectively.

Other operating income for the six months ended June 30, 2023 included a gain of $27.0 million for the sale of our domestic private trucking fleet and operations.

Interest expense increased by $20.3 million for the six months ended June 30, 2023 from the prior year primarily due to higher average interest rates.

Restructuring charges for the nine months ended September 30, 2023 and 2022 were $92.0 million and $14.3 million, respectively.

Other operating (expense) income for the nine months ended September 30, 2023 included a gain of $27.0 million for the sale of our domestic private trucking fleet and operations.

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

Interest expense increased by $30.5 million for the nine months ended September 30, 2023 from the prior year primarily due to higher average interest rates.

Non-operating pension income includes all components of pension and other postretirement income (costs) other than service costs.

Non-operating pension income was lower for the six months ended June 30, 2023 primarily due to an increase in the discount rate used to determine interest costs, partially offset by lower actuarial losses recognized to income.

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.

After giving consideration to these items, the effective tax rate for the six months ended June 30, 2023 of 24.5% was higher than

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

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

Non-operating pension income was lower for the nine months ended September 30, 2023 primarily due to an increase in the discount rate used to determine interest costs, partially offset by lower actuarial losses recognized to income.

The effective tax rate for the nine months ended September 30, 2023 included a net $24.4 million tax benefit, primarily associated with stock-based compensation and prior year tax positions, partially offset by an expense from a change in tax contingencies.

After giving consideration to these items, the effective tax rate for the nine months ended September 30, 2023 of 24.1% was higher than the 21.0% U.S.

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 21.0% 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.

6 unchanged sentences

BWA is consolidated in our Chlor Alkali Products and Vinyls segment.

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

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

2023 2022 2023 2022

12 unchanged sentences

Restructuring charges (11.9) (7.6) (92.0) (14.3)

Other operating income 27.0 3.3 27.5 3.3

Other operating (expense) income (1)

(0.3) 13.0 27.2 16.3

Interest expense (46.2) (36.0) (133.9) (103.4)

2 unchanged sentences

Income before taxes $ 126.7 $ 367.9 $ 499.4 $ 1,432.2

(1) Other operating (expense) income for the nine months ended September 30, 2023 included a gain of $27.0 million for the sale of our domestic private trucking fleet and operations.

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

Chlor Alkali Products and Vinyls

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

Chlor Alkali Products and Vinyls sales for the three months ended June 30, 2023 were $1,002.3 million compared to $1,403.5 million for the same period in 2022, a decrease of $401.2 million, or 29%.

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

Chlor Alkali Products and Vinyls segment income was $180.1 million for the three months ended June 30, 2023 compared to $346.5 million for the same period in 2022.

The decrease in segment results of $166.4 million was due to lower volumes across all products ($276.3 million), partially offset by lower raw material and operating costs ($65.7 million), higher prices across all products except vinyls intermediates ($28.3 million) and lower costs associated with product purchased from other parties ($15.9 million).

Chlor Alkali Products and Vinyls second quarter 2023 segment results were negatively impacted by the maintenance turnaround and subsequent operating issues with the vinyl chloride monomer plant at the Freeport, TX facility, resulting in higher costs and reduced profit from lost sales.

Chlor Alkali Products and Vinyls segment results included depreciation and amortization expense of $113.3 million and $120.4 million for the three months ended June 30, 2023 and 2022, respectively.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

Chlor Alkali Products and Vinyls sales for the six months ended June 30, 2023 were $2,119.4 million compared to $2,648.7 million for the same period in 2022, a decrease of $529.3 million, or 20%.

Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022

Chlor Alkali Products and Vinyls sales for the three months ended September 30, 2023 were $969.6 million compared to $1,263.5 million for the same period in 2022, a decrease of $293.9 million, or 23%.

The sales decrease was primarily due to lower volumes, partially offset by products sold by BWA, lower pricing and a less favorable mix.

The lower pricing was primarily due to lower caustic soda pricing.

Chlor Alkali Products and Vinyls segment income was $172.3 million for the three months ended September 30, 2023 compared to $253.9 million for the same period in 2022.

The decrease in segment results of $81.6 million was due to lower volumes across all products ($199.6 million) and lower pricing ($84.0 million), primarily caustic soda.

These decreases were partially offset by lower raw material and operating costs ($149.5 million), primarily lower natural gas and electrical power costs, and lower costs associated with product purchased from other parties ($52.5 million).

The Chlor Alkali Products and Vinyls segment results were also negatively impacted by higher costs and reduced profit from lost sales associated with operating issues, related to the second quarter’s maintenance turnaround at our vinyl chloride monomer plant at the Freeport, TX facility.

Chlor Alkali Products and Vinyls segment results included depreciation and amortization expense of $107.6 million and $121.1 million for the three months ended September 30, 2023 and 2022, respectively.

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

Chlor Alkali Products and Vinyls sales for the nine months ended September 30, 2023 were $3,089.0 million compared to $3,912.2 million for the same period in 2022, a decrease of $823.2 million, or 21%.

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

Chlor Alkali Products and Vinyls segment income was $426.0 million for the six months ended June 30, 2023 compared to $675.1 million for the same period in 2022.

The decrease in segment results of $249.1 million was due to lower volumes across all products ($457.8 million) and increased costs associated with product purchased from other parties ($16.2 million), partially offset by higher prices across all products except vinyls intermediates ($151.3 million) and lower raw material and operating costs ($73.6 million).

Chlor Alkali Products and Vinyls segment results included depreciation and amortization expense of $227.7 million and $243.5 million for the six months ended June 30, 2023 and 2022, respectively.

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

Epoxy sales for the three months ended June 30, 2023 were $333.8 million compared to $772.7 million for the same period in 2022, a decrease of $438.9 million, or 57%.

The sales decrease was primarily due to the closure of our cumene facility and one of our BisA production lines ($206.9 million), lower volumes ($118.7 million), lower product prices ($110.8 million) and an unfavorable effect of foreign currency translation ($2.5 million).

Epoxy segment loss was $0.5 million for the three months ended June 30, 2023 compared to segment income of $139.9 million for the same period in 2022.

The decrease in segment results of $140.4 million was primarily due to lower product prices ($110.8 million) and lower volumes ($75.6 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 ($46.0 million).

Chlor Alkali Products and Vinyls segment income was $598.3 million for the nine months ended September 30, 2023 compared to $929.0 million for the same period in 2022.

The decrease in segment results of $330.7 million was due to lower volumes across all products ($657.4 million), partially offset by lower raw material and operating costs ($223.1 million), higher prices ($67.3 million) and lower costs associated with product purchased from other parties ($36.3 million).

Chlor Alkali Products and Vinyls segment results included depreciation and amortization expense of $335.3 million and $364.6 million for the nine months ended September 30, 2023 and 2022, respectively.

Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022

Epoxy sales for the three months ended September 30, 2023 were $321.6 million compared to $644.1 million for the same period in 2022, a decrease of $322.5 million, or 50%.

The sales decrease was primarily due to the closure of our cumene facility and one of our BisA production lines ($163.8 million), lower product prices ($150.5 million) and lower volumes ($12.0 million), partially offset by a favorable effect of foreign currency translation ($3.8 million).

Epoxy segment loss was $28.8 million for the three months ended September 30, 2023 compared to segment income of $80.1 million for the same period in 2022.

The decrease in segment results of $108.9 million was primarily due to lower product prices ($150.5 million), partially offset by lower raw material and operating costs ($30.4 million), primarily decreased natural gas and electrical costs, and improved product mix ($11.2 million), which offset lower volumes as a result of the closure of our cumene facility and one of our BisA production lines.

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 $15.2 million and $20.4 million for the three months ended June 30, 2023 and 2022, respectively.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

Epoxy sales for the six months ended June 30, 2023 were $694.5 million compared to $1,562.2 million for the same period in 2022, a decrease of $867.7 million, or 56%.

Epoxy segment results included depreciation and amortization expense of $14.7 million and $20.1 million for the three months ended September 30, 2023 and 2022, respectively.

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

Epoxy sales for the nine months ended September 30, 2023 were $1,016.1 million compared to $2,206.3 million for the same period in 2022, a decrease of $1,190.2 million, or 54%.

The sales decrease was primarily due to the closure of our cumene facility and one of our BisA production lines ($555.4 million), lower volumes ($324.7 million), lower product prices ($303.9 million) and an unfavorable effect of foreign currency translation ($6.2 million).

Epoxy segment income was $20.9 million for the six months ended June 30, 2023 compared to $277.9 million for the same period in 2022.

The decrease in segment results of $257.0 million was primarily due to lower volumes ($193.1 million) and lower product prices ($153.4 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 ($89.5 million).

Epoxy segment loss was $7.9 million for the nine months ended September 30, 2023 compared to segment income of $358.0 million for the same period in 2022.

The decrease in segment results of $365.9 million was primarily due to lower product prices ($303.9 million) and lower volumes ($181.9 million), which were both impacted by record exports out of Asia into the European and North American markets, partially offset by lower raw material and operating costs ($119.9 million).

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

Epoxy segment results included depreciation and amortization expense of $29.7 million and $40.8 million for the six months ended June 30, 2023 and 2022, respectively.

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

Winchester sales were $366.6 million for the three months ended June 30, 2023 compared to $439.9 million for the same period in 2022, a decrease of $73.3 million, or 17%.

The decrease was due to lower ammunition sales to commercial customers ($121.2 million), partially offset by higher sales to domestic and international military customers ($46.9 million) and law enforcement agencies ($1.0 million).

Commercial ammunition sales were primarily impacted by lower volumes.

Winchester segment income was $64.7 million for the three months ended June 30, 2023 compared to $119.3 million for the same period in 2022, a decrease of $54.6 million.

The decrease in segment results was due to lower volumes ($43.8 million), lower product pricing ($7.7 million) and higher commodity and operating costs ($3.1 million).

Winchester segment income included depreciation and amortization expense of $6.3 million and $5.9 million for the three months ended June 30, 2023 and 2022, respectively.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

Winchester sales were $733.1 million for the six months ended June 30, 2023 compared to $866.6 million for the same period in 2022, a decrease of $133.5 million, or 15%.

Epoxy segment results included depreciation and amortization expense of $44.4 million and $60.9 million for the nine months ended September 30, 2023 and 2022, respectively.

Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022

Winchester sales were $380.2 million for the three months ended September 30, 2023 compared to $414.1 million for the same period in 2022, a decrease of $33.9 million, or 8%.

The decrease was due to lower ammunition sales to commercial customers ($90.3 million) and law enforcement agencies ($5.2 million), partially offset by higher sales to domestic and international military customers ($61.6 million).

Commercial ammunition sales were impacted by lower volumes and pricing.

Winchester segment income was $64.5 million for the three months ended September 30, 2023 compared to $89.0 million for the same period in 2022, a decrease of $24.5 million.

The decrease in segment results was due to lower product pricing ($18.9 million) and lower volumes and mix ($15.6 million), partially offset by lower commodity and operating costs ($10.0 million).

Winchester segment income included depreciation and amortization expense of $6.6 million and $6.1 million for the three months ended September 30, 2023 and 2022, respectively.

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

Winchester sales were $1,113.3 million for the nine months ended September 30, 2023 compared to $1,280.7 million for the same period in 2022, a decrease of $167.4 million, or 13%.

The decrease was due to lower ammunition sales to commercial customers ($325.2 million), partially offset by higher sales to domestic and international military customers ($154.4 million) and law enforcement agencies ($3.4 million).

Commercial ammunition sales were primarily impacted by lower volumes.

Winchester segment income was $125.7 million for the six months ended June 30, 2023 compared to $238.2 million for the same period in 2022, a decrease of $112.5 million.

The decrease in segment results was due to lower volumes ($89.7 million), higher commodity and operating costs ($14.1 million) and lower product pricing ($8.7 million).

Winchester segment income included depreciation and amortization expense of $12.5 million and $12.1 million for the six months ended June 30, 2023 and 2022, respectively.

Winchester segment income was $190.2 million for the nine months ended September 30, 2023 compared to $327.2 million for the same period in 2022, a decrease of $137.0 million.

The decrease in segment results was due to lower volumes and mix ($105.3 million), lower product pricing ($27.6 million) and higher commodity and operating costs ($4.1 million).

Winchester segment income included depreciation and amortization expense of $19.1 million and $18.2 million for the nine months ended September 30, 2023 and 2022, respectively.

Corporate/Other

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

For the three months ended June 30, 2023, charges to income for environmental investigatory and remedial activities were $13.0 million compared to $5.0 million for the three months ended June 30, 2022.

Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022

For the three months ended September 30, 2023, charges to income for environmental investigatory and remedial activities were $6.9 million compared to $7.4 million for the three months ended September 30, 2022.

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 June 30, 2023, other corporate and unallocated costs were $22.4 million compared to $35.0 million for the three months ended June 30, 2022, a decrease of $12.6 million.

The decrease was primarily due to lower variable incentive compensation costs ($6.4 million), which includes mark-to-market adjustments on stock-based compensation expense, and lower legal and legal-related settlement expenses ($4.5 million).

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

For the six months ended June 30, 2023, charges to income for environmental investigatory and remedial activities were $16.2 million compared to $10.6 million for the six months ended June 30, 2022.

For the three months ended September 30, 2023, other corporate and unallocated costs were $22.9 million compared to $27.5 million for the three months ended September 30, 2022, a decrease of $4.6 million.

The decrease was primarily due to lower legal and legal-related settlement expenses ($6.1 million).

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

For the nine months ended September 30, 2023, charges to income for environmental investigatory and remedial activities were $23.1 million compared to $18.0 million for the nine months ended September 30, 2022.

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

For the six months ended June 30, 2023, other corporate and unallocated costs were $56.7 million compared to $65.3 million for the six months ended June 30, 2022, a decrease of $8.6 million.

For the nine months ended September 30, 2023, other corporate and unallocated costs were $79.6 million compared to $92.8 million for the nine months ended September 30, 2022, a decrease of $13.2 million.

The decrease was primarily due to lower legal and legal-related settlement expenses ($11.6 million) and lower variable incentive compensation costs ($2.6 million), which includes mark-to-market adjustments on stock-based compensation expense.

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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 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 termination costs and facility exit costs related to these actions.

For the three and nine months ended September 30, 2023, we recorded restructuring charges of $8.6 million and $79.7 million, respectively, for the write-off of equipment and facility costs, employee severance and related benefit costs, contract termination costs and facility exit costs related to these actions.

We expect to incur additional restructuring charges through 2026 of approximately $45 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 continue to be negatively impacted during the third quarter 2023 by the operating issues with the vinyl chloride monomer plant at the Freeport, TX facility.

We also expect Chlor Alkali Products and Vinyls to experience declining caustic soda market conditions and continued vinyls intermediates demand weakness in the third quarter 2023.

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 third quarter 2023 operating results from our Chemical businesses to be lower than second quarter 2023 levels.

We expect our Winchester business third quarter 2023 results to increase sequentially from second quarter 2023 levels as we anticipate international and domestic military growth.

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

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

We expect fourth quarter 2023 operating results to decline sequentially from third quarter 2023.

We believe the challenging global conditions for our Chlor Alkali Products and Vinyls business are approaching a favorable inflection point and we plan to reduce our operating rates in the fourth quarter;

thereby, reducing our market participation and accelerating the favorable inflection point.

As a result, we expect our Chlor Alkali Products and Vinyls business results to decline in the fourth quarter.

We expect our Epoxy business to continue to be challenged by European and North American demand weakness, aggravated by elevated Asian exports.

We expect our Winchester business fourth quarter 2023 results to be similar to third quarter 2023.

Other Corporate and Unallocated costs in 2023 are expected to be lower than 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.

We expect non-operating pension income in 2023 to be in the $23 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.

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In 2023, we currently expect our capital spending to be in the $225 million to $250 million range and we expect to make payments under other long-term supply contracts in the $75 million to $100 million range for energy modernization on the U.S.

We expect 2023 depreciation and amortization expense to be in the $525 million to $550 million range.

We currently believe the 2023 effective tax rates will be in the 25% range and our cash tax rate to be in the 35% to 40% range as a result of previously deferred international tax payments expected to be made in 2023.

We expect 2023 depreciation and amortization expense to be in the $535 million range.

We currently believe the 2023 effective tax rate will be in the 24% range and our cash tax rate to be in the 25% to 30% range.

Environmental Matters

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 were $16.2 million and $10.6 million for the six months ended June 30, 2023 and 2022, respectively.

Environmental provisions charged to income, which are included in costs of goods sold, were $6.9 million and $7.4 million for the three months ended September 30, 2023 and 2022, respectively, and were $23.1 million and $18.0 million for the nine months ended September 30, 2023 and 2022, respectively.

Our liabilities for future environmental expenditures were as follows:

September 30,

($ in millions)

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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 $8.9 million at June 30, 2023.

Our accrued liabilities for unasserted claims amounted to $8.9 million at September 30, 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.

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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 $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.

The condensed balance sheets included reserves for future environmental expenditures to investigate and remediate known sites amounting to $153.5 million, $146.6 million and $149.3 million at September 30, 2023, December 31, 2022 and September 30, 2022, respectively, of which $128.5 million, $121.6 million and $124.3 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.

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Cash Flow Data

Six Months Ended June 30,

Nine Months Ended September 30,

Provided By (Used For) ($ in millions)

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Payments under other long-term supply contracts (46.2) —

Proceeds from disposition of property, plant and equipment 28.8 —

Net investing activities (194.0) (153.5)

Long-term debt borrowings (repayments), net 206.6 (200.9)

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Stock options exercised 22.3 21.3

Dividends paid (76.6) (89.4)

Contributions received from noncontrolling interests 44.1 —

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Operating Activities

For the six months ended June 30, 2023, cash provided by operating activities decreased by $616.2 million from the six months ended June 30, 2022, primarily due to a decrease in operating results and an increase in working capital compared with the prior year.

For the six months ended June 30, 2023, working capital increased $213.7 million compared to an increase of $183.6 million for the six months ended June 30, 2022.

The working capital increase reflects normal seasonal working capital growth and incremental working capital associated with BWA.

For the nine months ended September 30, 2023, cash provided by operating activities decreased by $952.0 million from the nine months ended September 30, 2022, primarily due to a decrease in operating results and an increase in working capital compared with the prior year.

For the nine months ended September 30, 2023, working capital increased $172.6 million compared to an increase of $15.7 million for the nine months ended September 30, 2022.

A portion of the working capital increase reflects incremental working capital associated with BWA of approximately $65 million.

Inventories increased by $43.4 million from December 31, 2022.

Accounts payable and accrued liabilities decreased $141.1 million primarily as a result of timing of payments during the first half of 2023.

Accounts payable and accrued liabilities decreased $222.7 million from December 31, 2022, primarily as a result of lower raw material and operating costs.

Investing Activities

Capital spending of $128.8 million for the six months ended June 30, 2023 compared to $103.9 million for the corresponding period in 2022.

Capital spending was $173.0 million for the nine months ended September 30, 2023 compared to $168.4 million for the corresponding period in 2022.

For the total year 2023, we currently expect our capital spending to be in the $225 million to $250 million range.

We expect 2023 depreciation and amortization expense to be in the $525 million to $550 million range.

For the six months ended June 30, 2023, payments under other long-term supply contracts was $29.6 million for energy modernization on the U.S.

We expect 2023 depreciation and amortization expense to be in the $535 million range.

For the nine months ended September 30, 2023, payments under other long-term supply contracts was $46.2 million for energy modernization on the U.S.

Gulf Coast and we expect to make payments for the total year 2023 in the $75 million to $100 million range.

For the six months ended June 30, 2023, we received $28.5 million of cash proceeds for the sale of our domestic private trucking fleet and operations.

For the nine months ended September 30, 2023, we received $28.5 million of cash proceeds for the sale of our domestic private trucking fleet and operations.

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

Financing Activities

For the six months ended June 30, 2023, we had long-term debt borrowings, net of long-term debt repayments of $143.7 million.

For the six months ended June 30, 2022, we had long-term debt repayments, net of long-term debt borrowings of $0.5 million.

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.

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.

For the six months ended June 30, 2023, we received $44.1 million of cash contributions from noncontrolling interests for BWA.

The percent of total debt to total capitalization increased to 52.5% as of June 30, 2023 from 50.4% as of December 31, 2022, primarily as a result of a higher 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 and second quarters of 2023 and 2022, we paid a quarterly dividend of $0.20 per share.

Dividends paid for the six months ended June 30, 2023 and 2022, were $51.8 million and $60.9 million, respectively.

On July 27, 2023, our Board of Directors declared a dividend of $0.20 per share on our common stock, payable on September 8, 2023 to shareholders of record on August 10, 2023.

For the nine months ended September 30, 2023, we had long-term debt borrowings, net of long-term debt repayments of $206.6 million.

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

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.

For the nine months ended September 30, 2023 and 2022, 10.8 million and 20.8 million shares, respectively, of common stock were repurchased and retired at a total value of $595.1 million and $1,100.6 million, respectively.

We issued 0.8 million and 0.9 million shares representing stock options exercised for the nine months ended September 30, 2023 and 2022, respectively, with a total value of $22.3 million and $21.3 million, respectively.

For the nine months ended September 30, 2023, we received $44.1 million of cash contributions from noncontrolling interests for BWA.

The percent of total debt to total capitalization increased to 54.1% as of September 30, 2023 from 50.4% as of December 31, 2022, primarily as a result of a higher 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 2023 and 2022, we paid a quarterly dividend of $0.20 per share.

Dividends paid for the nine months ended September 30, 2023 and 2022, were $76.6 million and $89.4 million, respectively.

On October 26, 2023, our Board of Directors declared a dividend of $0.20 per share on our common stock, payable on December 8, 2023 to shareholders of record on November 9, 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.

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

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.

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.

At September 30, 2023, we had $1,034.6 million available under our $1,200.0 million Senior Revolving Credit Facility because we had $165.0 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 September 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.

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.

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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 June 30, 2023, there were no covenants or other restrictions that limited our ability to borrow.

The overall decrease in cash for the six months ended June 30, 2023 primarily reflects our share repurchases, capital spending, and dividends paid, partially offset by our debt borrowings, operating results and contributions from noncontrolling interests.

As of September 30, 2023, there were no covenants or other restrictions that limited our ability to borrow.

The overall decrease in cash for the nine months ended September 30, 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.

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

For the six months ended June 30, 2023, 7.1 million shares of common stock have been repurchased and retired at a total value of $393.0 million.

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.

For the nine months ended September 30, 2023, 10.8 million shares of common stock have been repurchased and retired at a total value of $595.1 million.

As of September 30, 2023, 16.7 million shares of common stock have been repurchased and retired at a total value of $887.9 million under the 2022 Repurchase Authorization program, and $1,112.1 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.

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

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.

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.

As of September 30, 2023, December 31, 2022 and September 30, 2022, we had $350.0 million, $300.0 million and $300.0 million, respectively, drawn under the agreement.

As of September 30, 2023, $489.4 million of our trade receivables were pledged as collateral and we had $7.2 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 $175.5 million and certain of our foreign subsidiaries may sell their accounts receivable up to a maximum of €22.0 million.

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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 six months ended June 30, 2023 and 2022 totaled $532.6 million and $477.2 million, respectively.

The gross amount of receivables sold for the nine months ended September 30, 2023 and 2022 totaled $749.5 million and $769.3 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 $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.

The agreements are without recourse and therefore no recourse liability has been recorded as of June 30, 2023, December 31, 2022 and June 30, 2022.

As of June 30, 2023, December 31, 2022 and June 30, 2022, $77.2 million, $111.8 million and $109.9 million, respectively, of receivables qualifying for sales treatment were outstanding and will continue to be serviced by us.

At June 30, 2023, we had total letters of credit of $79.0 million outstanding, of which $0.4 million were issued under our Senior Revolving Credit Facility.

The factoring discount was $1.3 million and $0.9 million for the three months ended September 30, 2023 and 2022, respectively, and $3.8 million and $1.8 million for the nine months ended September 30, 2023 and 2022, respectively.

The agreements are without recourse and therefore no recourse liability has been recorded as of September 30, 2023, December 31, 2022 and September 30, 2022.

As of September 30, 2023, December 31, 2022 and September 30, 2022, $72.7 million, $111.8 million and $91.3 million, respectively, of receivables qualifying for sales treatment were outstanding and will continue to be serviced by us.

At September 30, 2023, we had total letters of credit of $78.8 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 June 30, 2023, we had long-term borrowings, including the current installment and finance lease obligations, of $2,726.3 million, of which $951.3 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 $18.5 million as of June 30, 2023.

As of September 30, 2023, we had long-term borrowings, including the current installment and finance lease obligations, of $2,790.1 million, of which $1,014.3 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 $17.6 million as of September 30, 2023.

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

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

The following table summarizes our credit ratings as of June 30, 2023:

The following table summarizes our credit ratings as of September 30, 2023:

Credit Ratings Long-term Rating Outlook

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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