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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2024-02-22 compared with 2023-02-23 · 396 added, 430 removed, 1256 unchanged (40% of the section changed)

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For all derivative positions, we evaluated the effects of a 10% shift in exchange rates between those currencies and the USD, holding all other assumptions constant.

Unfavorable currency movements of 10% would negatively affect the fair values of the derivatives held to hedge currency exposures by $38.6 million.

Unfavorable currency movements of 10% would negatively affect the fair values of the derivatives held to hedge currency exposures by $16.1 million ($38.6 million at December 31, 2022).

These unfavorable changes would generally have been offset by favorable changes in the values of the underlying exposures.

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The statements contained in this report that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties.

We have used the words “anticipate,” “intend,” “may,” “expect,” “believe,” “outlook,” “should,” “plan,” “project,” “estimate,” “forecast,” “optimistic,” “target,” and variations of such words and similar expressions in this annual report to identify such forward-looking statements.

These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control.

We have used the words “anticipate,” “intend,” “may,” “expect,” “believe,” “should,” “plan,” “outlook,” “project,” “estimate,” “forecast,” “optimistic,” “target,” and variations of such words and similar expressions in this annual report to identify such forward-looking statements.

These forward-looking statements include, but are not limited to, statements regarding the Company’s intent to repurchase, from time to time, the Company’s common stock.

These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions, which are difficult to predict and many of which are beyond our control.

Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements.

We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.

The payment of cash dividends is subject to the discretion of our board of directors and will be determined in light of then-current conditions, including our earnings, our operations, our

financial conditions, our capital requirements and other factors deemed relevant by our board of directors.

The payment of cash dividends is subject to the discretion of our Board of Directors and will be determined in light of then-current conditions, including our earnings, our operations, our financial conditions, our capital requirements and other factors deemed relevant by our Board of Directors.

In the future, our Board of Directors may change our dividend policy, including the frequency or amount of any dividend, in light of then-existing conditions.

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/s/ Scott Sutton

Chairman, President and Chief Executive Officer

President and Chief Executive Officer

Senior Vice President and Chief Financial Officer

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Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Olin Corporation and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements).

We have audited the accompanying consolidated balance sheets of Olin Corporation and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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The liability is adjusted periodically as assessment and remediation efforts progress or as additional technical or legal information becomes available.

We identified the evaluation of the environmental liabilities as a critical audit matter.

We identified the evaluation of environmental liabilities as a critical audit matter.

This required challenging auditor judgment due to the nature of the estimate and assumptions, including judgments in determining required remediation activities designed to consider future events and uncertainties and the time period over which remediation activities will occur.

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February 22, 2024

OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Consolidated Balance Sheets

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Retained earnings 2,583.7 2,224.5

Total shareholders’ equity 2,543.6 2,652.2

Total liabilities and shareholders’ equity $ 8,044.2 $ 8,517.7

Olin Corporation’s shareholders’ equity 2,232.4 2,543.6

Noncontrolling interests 35.9 —

Total equity 2,268.3 2,543.6

Total liabilities and equity $ 7,713.2 $ 8,044.2

The accompanying notes to consolidated financial statements are an integral part of the consolidated financial statements.

OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Operations

Years ended December 31

(In millions, except per share data)

Year Ended December 31,

2023 2022 2021

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Cost of goods sold 5,667.5 7,194.3 6,616.4

Selling and administration 393.9 416.9 422.0

Selling and administrative 406.7 393.9 416.9

Restructuring charges 89.6 25.3 27.9

Goodwill impairment — — 699.8

Other operating income 42.9 16.3 1.4

Operating income (loss) 1,779.0 1,850.8 ( 746.7 )

Operating income 712.1 1,779.0 1,850.8

Interest expense 181.1 143.9 348.0

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Non-operating pension income 24.0 38.7 35.7

Income (loss) before taxes 1,676.0 1,538.7 ( 1,020.0 )

Income tax provision (benefit) 349.1 242.0 ( 50.1 )

Net income (loss) $ 1,326.9 $ 1,296.7 $ ( 969.9 )

Net income (loss) per common share:

Income before taxes 559.3 1,676.0 1,538.7

Income tax provision 107.3 349.1 242.0

Net income 452.0 1,326.9 1,296.7

Net loss attributable to noncontrolling interests ( 8.2 ) — —

Net income attributable to Olin Corporation $ 460.2 $ 1,326.9 $ 1,296.7

Net income attributable to Olin Corporation per common share:

Basic $ 3.66 $ 9.16 $ 8.15

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The accompanying notes to consolidated financial statements are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Years ended December 31

OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(In millions)

Year Ended December 31,

2023 2022 2021

Net income (loss) $ 1,326.9 $ 1,296.7 $ ( 969.9 )

Net income $ 452.0 $ 1,326.9 $ 1,296.7

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustments ( 27.7 ) ( 30.3 ) 27.8

Unrealized (losses) gains on derivative contracts, net ( 55.3 ) 1.4 35.0

Pension and postretirement liability adjustments, net 46.8 188.5 14.8

Amortization of prior service costs and actuarial losses, net 28.3 42.3 35.9

Foreign currency translation ( 1.1 ) ( 27.7 ) ( 30.3 )

Cash flow hedges 14.1 ( 55.3 ) 1.4

Pension and postretirement benefits ( 13.4 ) 75.1 230.8

Total other comprehensive (loss) income, net of tax ( 0.4 ) ( 7.9 ) 201.9

Comprehensive income (loss) $ 1,319.0 $ 1,498.6 $ ( 856.4 )

Comprehensive income 451.6 1,319.0 1,498.6

Comprehensive loss attributable to noncontrolling interests ( 8.2 ) — —

Comprehensive income attributable to Olin Corporation $ 459.8 $ 1,319.0 $ 1,498.6

The accompanying notes to consolidated financial statements are an integral part of the consolidated financial statements.

OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity

Years ended December 31

(In millions, except per share data)

Year Ended December 31,

2023 2022 2021

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Balance at end of year ( 496.3 ) ( 495.9 ) ( 488.0 )

Retained Earnings (Accumulated Deficit)

Retained Earnings

Balance at beginning of year 2,224.5 1,013.8 ( 155.1 )

Net income (loss) 1,326.9 1,296.7 ( 969.9 )

Net income 460.2 1,326.9 1,296.7

Common stock dividends paid ( 101.0 ) ( 116.2 ) ( 127.8 )

Balance at end of year 2,583.7 2,224.5 1,013.8

Total Shareholders’ Equity $ 2,543.6 $ 2,652.2 $ 1,450.8

Olin Corporation’s Shareholders’ Equity 2,232.4 2,543.6 2,652.2

Noncontrolling Interests

Balance at beginning of year — — —

Net loss ( 8.2 ) — —

Contributions from noncontrolling interests 44.1 — —

Balance at end of year 35.9 — —

Total Equity $ 2,268.3 $ 2,543.6 $ 2,652.2

Dividends declared per share of common stock $ 0.80 $ 0.80 $ 0.80

The accompanying notes to consolidated financial statements are an integral part of the consolidated financial statements.

OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended December 31

(In millions)

Years Ended December 31,

2023 2022 2021

Operating Activities

Net income (loss) $ 1,326.9 $ 1,296.7 $ ( 969.9 )

Adjustments to reconcile net income (loss) to net cash and cash equivalents provided by (used for) operating activities:

Goodwill impairment — — 699.8

Net income $ 452.0 $ 1,326.9 $ 1,296.7

Adjustments to reconcile net income to net cash and cash equivalents provided by (used for) operating activities:

Depreciation and amortization 533.4 598.8 582.5

Gains on disposition of property, plant and equipment ( 27.0 ) ( 13.0 ) ( 1.4 )

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Loss on debt extinguishment — — 152.2

Depreciation and amortization 598.8 582.5 568.4

Write-off of equipment and facility included in restructuring charges 17.7 — —

Deferred income taxes ( 55.6 ) ( 32.4 ) ( 42.7 )

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Capital expenditures ( 236.0 ) ( 236.9 ) ( 200.6 )

Payments under ethylene long-term supply contracts — — ( 461.0 )

Business acquired in purchase transaction, net of cash acquired ( 63.9 ) — —

Payments under other long-term supply contracts ( 64.5 ) ( 37.7 ) —

Proceeds from disposition of property, plant and equipment 28.8 14.9 3.2

Other investing activities ( 5.2 ) — —

Net investing activities ( 340.8 ) ( 259.7 ) ( 197.4 )

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Debt issuance costs — ( 4.4 ) ( 3.9 )

Contributions received from noncontrolling interests 44.1 — —

Net financing activities ( 656.9 ) ( 1,646.7 ) ( 1,552.0 )

Effect of exchange rate changes on cash and cash equivalents ( 0.3 ) ( 2.0 ) ( 0.8 )

Net increase (decrease) in cash and cash equivalents 13.5 ( 9.2 ) ( 31.2 )

Net (decrease) increase in cash and cash equivalents ( 23.7 ) 13.5 ( 9.2 )

Cash and cash equivalents, beginning of year 194.0 180.5 189.7

Cash and cash equivalents, end of year $ 170.3 $ 194.0 $ 180.5

Cash paid (received) for interest and income taxes:

Cash paid for interest and income taxes:

Interest, net $ 176.8 $ 141.7 $ 345.2

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

The Epoxy segment produces and sells a full range of epoxy materials and precursors, including aromatics (acetone, bisphenol, cumene and phenol), allyl chloride, epichlorohydrin, liquid epoxy resins, solid epoxy resins and systems and growth products such as converted epoxy resins and additives.

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

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, industrial cartridges, and clay targets.

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

(Mitsui), began operations.

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 financial statements in our Chlor Alkali Products and Vinyls segment, with Mitsui’s 49 % interest in BWA classified as noncontrolling interest.

All intercompany accounts and transactions are eliminated in consolidation.

ACCOUNTING POLICIES

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The consolidated financial statements include the accounts of Olin and all majority-owned subsidiaries.

Investment in our affiliates are accounted for on the equity method.

Investments in our affiliates are accounted for using the equity method.

Accordingly, we include only our share of earnings or losses of these affiliates in consolidated net income (loss).

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Substantially all of our performance obligations are satisfied at a single point in time, when control is transferred, which is generally upon shipment or delivery as stated in the contract terms.

In some instances, primarily related to governmental contracts within our Winchester business, we recognize revenue over-time as control of the promised goods or services is being transferred to the customer using the cost-to-cost method of accounting.

We believe this is an appropriate measure of progress toward satisfaction of performance obligations as this measure most accurately depicts the progress of our work and transfer of control to our customers.

For the years ended December 31, 2023, 2022 and 2021, revenue recognized over time represented $ 104.8 million, $ 57.8 million and $ 22.8 million, respectively.

All taxes assessed by governmental authorities that are both imposed on and concurrent with our revenue-producing transactions and collected from our customers are excluded from the measurement of the transaction price.

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Certain of these contracts represent contracts with minimum purchase obligations, which can be substantially different than the actual revenue recognized.

Such contracts consist of varying types of products across our

chemical businesses.

Such contracts consist of varying types of products across our chemical businesses.

Certain contracts include variable volumes and/or variable pricing with pricing provisions tied to commodity, consumer price or other indices.

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and (ii) contracts with an original expected duration of one year or less.

Cost of Goods Sold and Selling and Administration Expenses

The timing of our customer billings does not always match the timing of our revenue recognition.

When the Company is entitled to bill a customer in advance of the recognition of revenue, a contract liability is recognized.

When the Company is not entitled to bill a customer until a period after the related recognition of revenue, a contract asset is recognized.

Contract liabilities were $ 34.8 million and $ 43.4 million as of December 31, 2023 and 2022, respectively, and are included as a component of accrued liabilities and other liabilities in our consolidated balance sheets.

Contract assets were $ 20.1 million and $ 16.2 million as of December 31, 2023 and 2022, respectively, and are included as a component of other current assets and other assets in our consolidated balance sheets.

Substantially all our contract liabilities, net of contract assets, are expected to be realized within one year, when the related performance obligations are satisfied.

Cost of Goods Sold and Selling and Administrative Expenses

Cost of goods sold includes the costs of inventory sold, related purchasing, distribution and warehousing costs, costs incurred for shipping and handling, depreciation and amortization expense related to these activities and environmental remediation costs and recoveries.

Selling and administration expenses include personnel costs associated with sales, marketing and administration, research and development, legal and legal-related costs, consulting and professional services fees, advertising expenses, depreciation expense related to these activities, foreign currency translation and other similar costs.

Selling and administrative expenses include personnel costs associated with sales, marketing and administrative, research and development, legal and legal-related costs, consulting and professional services fees, advertising expenses, depreciation expense related to these activities, foreign currency translation and other similar costs.

Acquisition-related Costs

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Other operating income (expense) consists of miscellaneous operating income items, which are related to our business activities, and gains (losses) on disposition of property, plant and equipment.

Other operating income for the year ended December 31, 2022 included $ 13.0 million of gains for the sale of two former manufacturing facilities.

Other operating income for the year ended December 31, 2021 included an $ 1.4 million gain on the sale of a terminal facility.

Other operating income for the year ended December 31, 2023, included a gain of $ 27.0 million from the sale of our domestic private trucking fleet and operations and a gain of $ 15.6 million for insurance recoveries associated with a second quarter 2022 business interruption at our Plaquemine, LA, Chlor Alkali Products and Vinyls facility.

Other operating income for the year ended December 31, 2022, included $ 13.0 million of gains from the sale of two former manufacturing facilities.

Other operating income for the year ended December 31, 2021, included a $ 1.4 million gain from the sale of a terminal facility.

Other Income (Expense)

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dollar (USD) or local currency as the functional currency, where applicable.

For foreign entities where the USD is the functional currency, gains and losses resulting from balance sheet remeasurement are included in selling and administration.

For foreign entities where the USD is the functional currency, gains and losses resulting from balance sheet remeasurement are included in selling and administrative.

For foreign entities where the local currency is the functional currency, assets and liabilities denominated in local currencies are translated into USD at end-of-period exchange rates and the resultant translation adjustments are included in accumulated other comprehensive loss.

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Cash and Cash Equivalents

All highly liquid investments, with a maturity of three months or less at the date of purchase, are considered to be cash equivalents.

All highly liquid investments, with a maturity of three months or less at the date of purchase, are considered cash equivalents.

Short-Term Investments

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Interest and dividends on all securities are included in interest income and other income (expense), respectively.

As of December 31, 2022 and 2021, we had no short-term investments recorded on our consolidated balance sheets.

As of December 31, 2023 and 2022, no short-term investments were recorded on our consolidated balance sheets.

Allowance for Doubtful Accounts Receivable

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The activities of our asset retirement obligations were as follows:

($ in millions)

Asset Retirement Obligation Activity ($ in millions)

Beginning balance $ 66.3 $ 70.2

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Accumulated other comprehensive loss consists of foreign currency translation adjustments, pension and postretirement liability adjustments, pension and postretirement amortization of prior service costs and actuarial losses and net unrealized gains (losses) on derivative contracts.

Purchase Accounting

In accordance with Accounting Standards Codification (ASC) 805, “Business Combinations,” we record the fair value of purchase consideration for the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date.

The excess of purchase price over the aggregate fair value is recorded as goodwill.

Intangible assets are valued using the relief from royalty and multi-period excess earnings methodologies, considered Level 3 measurements.

Key assumptions in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customers, useful lives, royalty rates, and discount rates.

Our fair value estimates are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, may differ from actual results.

Changes in the estimated fair values of net assets recorded for acquisitions before the finalization of more detailed analysis, but not over one year from the acquisition date, will adjust the purchase price allocatable to goodwill.

Any adjustments after the one-year measurement period are recorded in earnings.

Goodwill is not amortized, but is reviewed for impairment annually in the fourth quarter and/or when circumstances or other events indicate that impairment may have occurred.

Accounting Standards Codification (ASC) 350 “Intangibles—Goodwill and Other” (ASC 350) permits entities to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the goodwill impairment test.

ASC 350 “Intangibles—Goodwill and Other” permits entities to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the goodwill impairment test.

Circumstances that are considered as part of the qualitative assessment and could trigger a quantitative impairment test include, but are not limited to:

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It is our practice, at a minimum, to perform a quantitative goodwill impairment test in the fourth quarter every three years.

In the fourth quarter of 2023, we performed our triennial quantitative goodwill impairment test for our reporting units.

We use a discounted cash flow approach to develop the estimated fair value of a reporting unit when a quantitative test is performed.

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An impairment would be recorded if the carrying amount of a reporting unit exceeded the estimated fair value.

Based on the aforementioned analysis, the estimated fair value of our reporting units substantially exceeded the carrying value of the reporting units.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors.

The discount rate, profitability assumptions and terminal growth rate of our reporting units and the cyclical nature of the chlor alkali industry were the material assumptions utilized in the discounted cash flow model used to estimate the fair value of each reporting unit.

The discount rate reflects a weighted-average cost of capital, which is calculated based on observable market data.

Some of this data (such as the risk free or treasury rate and the pretax cost of debt) are based on the market data at a point in time.

Other data (such as the equity risk premium) are based upon market data over time for a peer group of companies in the chemical manufacturing or distribution industries with a market capitalization premium added, as applicable.

The discounted cash flow analysis requires estimates, assumptions and judgments about future events.

Our analysis uses our internally generated long-range plan.

Our discounted cash flow analysis uses the assumptions in our long-range plan about terminal growth rates, forecasted capital expenditures and changes in future working capital requirements to determine the implied fair value of each reporting unit.

The long-range plan reflects management judgment, supplemented by independent chemical industry analyses which provide multi-year industry operating and pricing forecasts.

We believe the assumptions used in our goodwill impairment analysis are appropriate and result in reasonable estimates of the implied fair value of each reporting unit.

However, given the economic environment and the uncertainties regarding the impact on our business, there can be no assurance that our estimates and assumptions, made for purposes of our goodwill impairment testing, will prove to be an accurate prediction of the future.

In order to evaluate the sensitivity of the fair value calculation on the goodwill impairment test, we applied a hypothetical 10% decrease to the fair value of each reporting unit.

We also applied a hypothetical decrease of 100-basis points in our terminal growth rate or an increase of 100-basis points in our weighted-average cost of capital to test the fair value calculation.

In all cases, the estimated fair value of our reporting units derived in these sensitivity calculations exceeded the carrying value in excess of 10%.

If our assumptions regarding future performance are not achieved, we may be required to record goodwill impairment charges in future periods.

It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such charge would be material.

See Note 11 “Goodwill and Intangible Assets” for additional information.

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Deferred taxes are provided for differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

A valuation allowance is provided to

offset deferred tax assets if, based on the available evidence, it is more likely than not that some or all of the value of the deferred tax assets will not be realized.

A valuation allowance is provided to offset deferred tax assets if, based on the available evidence, it is more likely than not that some or all of the value of the deferred tax assets will not be realized.

See Note 15 “Income Taxes” for additional information.

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Consideration was given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

See Note 24 “Fair Value Measurements” for additional information.

The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximated fair values due to the short-term maturities of these instruments.

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

As of December 31, 2023 and 2022, the fair value measurements of debt were $ 2,626.2 million and $ 2,517.7 million, respectively.

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

There were no assets measured at fair value on a nonrecurring basis as of December 31, 2023 and 2022.

Retirement-Related Benefits

We account for our defined benefit pension plans and non-pension postretirement benefit plans using actuarial models required by ASC 715 “Compensation—Retirement Benefits” (ASC 715).

We account for our defined benefit pension plans and non-pension postretirement benefit plans using actuarial models required by ASC 715 “Compensation—Retirement Benefits”.

These models use an attribution approach that generally spreads the financial impact of changes to the plan and actuarial assumptions over the average remaining service lives of the employees in the plan.

Changes in liability due to changes in actuarial assumptions such as discount rate, rate of compensation increases and mortality, as well as annual deviations between what was assumed and what was experienced by the plan are treated as actuarial gains or losses.

earned under the pension or non-pension postretirement benefits plans should follow the same relatively smooth pattern.

The principle underlying the required attribution approach is that employees render service over their average remaining service lives on a relatively smooth basis and, therefore, the accounting for benefits earned under the pension or non-pension postretirement benefits plans should follow the same relatively smooth pattern.

Substantially all domestic defined benefit pension plan participants are no longer accruing benefits;

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The transactions are accounted for as liability or equity transactions and also as share retirements, similar to our other share repurchase activity, when the shares are received, at which time there is an immediate reduction in the weighted-average common shares calculation for basic and diluted earnings per share.

The Inflation Reduction Act (IRA) was enacted in the United States on August 16, 2022.

The IRA imposes a 1% excise tax on the fair market value of stock repurchases made by covered corporations after December 31, 2022.

The total taxable value of shares repurchased is reduced by the fair market value of any newly issued shares during the taxable year.

As a result, we record a tax liability as a cost associated with our share repurchases.

RECENT ACCOUNTING PRONOUNCEMENTS

We do not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying consolidated financial statements.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The amendments are effective for the Company’s annual periods beginning after December 15, 2024, with the option to early adopt at any time before the effective date.

ASU 2023-09 allows for adoption on a prospective or retrospective basis.

We are currently evaluating the impact of the standard on our consolidated financial statements and disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures .

ASU 2023-07 will improve reportable segment disclosure requirements, primarily through enhanced segment expense disclosures on an interim and annual basis.

The update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with the option to early adopt at any time before the effective date.

ASU 2023-07 requires adoption on a retrospective basis.

We are currently evaluating the impact of the standard on our consolidated financial statements and disclosures.

In July 2023, the SEC adopted the final rule under SEC Release No.

33-11216, Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure , requiring disclosure of material cybersecurity incidents on Form 8-K and periodic disclosure of a registrant’s cybersecurity risk management, strategy and governance in annual reports.

We adopted the Regulation S-K Item 6 disclosure requirements during the fourth quarter of 2023 and the Form 8-K incident disclosure requirements went into effect for us on December 18, 2023.

The adoption of this final rule did not have a material impact on our consolidated financial statements and the additional disclosure requirements were included within Item 1C.

Cybersecurity .

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

for $ 63.9 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 has been included in Olin’s Winchester segment.

We recorded the preliminary aggregate excess purchase price over identifiable net tangible and intangible assets acquired and liabilities assumed, which included a preliminary allocation of $ 2.7 million of goodwill allocated to our Winchester segment and $ 4.5 million of intangible assets subject to amortization.

The preliminary total assets acquired, excluding goodwill and intangibles, and liabilities assumed amounted to $ 66.9 million and $ 10.2 million, respectively.

The acquisition is not material, and therefore, supplemental pro forma financial information is not provided.

RESTRUCTURING CHARGES

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.

We committed to and completed a plan during the fourth quarter of 2022 to close down one of our bisphenol (BisA) production lines at our Stade, Germany site (collectively, Stade Plan).

For the year ended December 31, 2022, we recorded pretax restructuring charges of $ 8.0 million for employee severance and related benefit costs and the write-off of equipment and facility costs related to this action.

We expect to incur additional restructuring charges through 2024 of approximately $ 10 million related to this action.

As part of this review, we announced operational cessations in the fourth quarter of 2022 and the first half of 2023 (collectively, Epoxy Optimization Plan).

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.

These actions were 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.

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.

For the year ended December 31, 2023 and 2022, we recorded pretax restructuring charges of $ 73.4 million and $ 8.0 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 2025 of approximately $ 25 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).

The closure was completed during the third quarter of 2022.

For the years ended December 31, 2023, 2022 and 2021, we recorded pretax restructuring charges of $ 4.7 million, $ 8.3 million and $ 5.6 million, respectively, for write-off of equipment and facility costs, lease and other contract termination costs and for facility exit costs related to this action.

We expect to incur additional restructuring charges through 2027 of approximately $ 20 million related to these actions.

Olin committed to a productivity initiative to align the organization with our strategic operating model and improve efficiencies (collectively, Productivity Plan).

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We do not expect to incur additional restructuring charges related to these actions.

On March 15, 2021, we announced that we had made the decision to permanently close approximately 50 % of our diaphragm-grade chlor alkali capacity, representing 200,000 tons, at our McIntosh, AL facility.

The closure was completed in the first quarter of 2021.

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

The closure was completed during third quarter of 2022.

For the years ended December 31, 2022 and 2021, we recorded pretax restructuring charges of $ 8.3 million and $ 5.6 million, respectively, for write-off of equipment and facility costs, lease and other contract termination costs and for facility exit costs related to this action.

We expect to incur additional restructuring charges through 2027 of approximately $ 30 million related to these actions.

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

For the years ended December 31, 2022 and 2021, we recorded pretax restructuring charges of $ 2.6 million and $ 6.5 million, respectively, for facility exit costs related to these actions.

For the years ended December 31, 2023, 2022 and 2021, we recorded pretax restructuring charges of $ 4.0 million, $ 2.6 million and $ 6.5 million, respectively, for facility exit costs related to these actions.

We expect to incur additional restructuring charges through 2025 of approximately $ 10 million related to these actions.

On December 11, 2019, we announced that we had made the decision to permanently close a chlor alkali plant with a capacity of 230,000 tons and our VDC production facility, both in Freeport, TX (collectively, Freeport 2019 Plan).

On December 11, 2019, we announced that we had made the decision to permanently close a chlor alkali plant with a capacity of 230,000 tons and our vinylidene chloride (VDC) production facility, both in Freeport, TX (collectively, Freeport 2019 Plan).

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

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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).

Associated with this action, we have permanently closed our Henderson, NV chlor alkali plant with 153,000 tons of capacity and have reconfigured the site to manufacture bleach and distribute caustic soda and hydrochloric acid.

Also, the capacity of our Niagara Falls, NY chlor alkali plant has been reduced from 300,000 tons to 240,000 tons and the chlor alkali capacity at our Freeport, TX facility was reduced by 220,000 tons.

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

For the years ended December 31, 2022, 2021 and 2020, we recorded pretax restructuring charges of $ 0.4 million, $ 1.6 million and $ 5.2 million, respectively, for the lease and other contract termination costs and facility exit costs related to these actions.

For the years ended December 31, 2022 and 2021, we recorded pretax restructuring charges of $ 0.4 million and $ 1.6 million, respectively, for the lease and other contract termination costs and facility exit costs related to these actions.

We do not expect to incur additional restructuring charges related to these capacity reductions.

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Chlor Alkali Products and Vinyls Epoxy Corporate/Other Total

McIntosh Plan Freeport 2021 Plan Freeport 2019 Plan Chlor Alkali 2016 Plan Stade

Plan Productivity Plan

McIntosh Plan Freeport 2021 Plan Freeport 2019 Plan Chlor Alkali 2016 Plan Epoxy Optimization Plan Productivity Plan

($ in millions)

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2023 2022 2021

Computation of Net Income (Loss) per Share (In millions, except per share data)

Net income (loss) $ 1,326.9 $ 1,296.7 $ ( 969.9 )

Computation of Net Income per Share (In millions, except per share data)

Net income $ 452.0 $ 1,326.9 $ 1,296.7

Net loss attributable to noncontrolling interests ( 8.2 ) — —

Net income attributable to Olin Corporation 460.2 1,326.9 1,296.7

Basic shares 125.9 144.9 159.1

Basic net income (loss) per share $ 9.16 $ 8.15 $ ( 6.14 )

Basic net income attributable to Olin Corporation per share $ 3.66 $ 9.16 $ 8.15

Diluted shares:

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Diluted shares 128.8 148.5 163.0

Diluted net income (loss) per share $ 8.94 $ 7.96 $ ( 6.14 )

Diluted net income attributable to Olin Corporation per share $ 3.57 $ 8.94 $ 7.96

The computation of dilutive shares from stock-based compensation does not include 1.2 million, 0.8 million and 0.1 million shares in 2023, 2022 and 2021, respectively, as their effect would have been anti-dilutive.

ACCOUNTS RECEIVABLES

On October 11, 2022, we amended our existing $ 300.0 million Receivables Financing Agreement which increased the facility limit to $ 425.0 million and extended the maturity to October 14, 2025 (Receivables Financing Agreement).

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

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

In addition, the Receivables Financing Agreement incorporates the net leverage ratio covenant that is contained in the $ 1,550.0 million Senior Credit Facility.

As of both December 31, 2022 and 2021, we had $ 300.0 million drawn under the agreement.

As of December 31, 2022, $ 654.0 million of our trade receivables were pledged as collateral and we had $ 125.0 million of additional borrowing capacity under the Receivables Financing Agreement.

As of December 31, 2023 and 2022, we had $ 328.5 million and $ 300.0 million drawn under the agreement.

As of December 31, 2023, $ 456.6 million of our trade receivables were pledged as collateral and we had $ 33.3 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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The following table summarizes the AR Facilities activity:

($ in millions)

AR Facilities ($ in millions)

Beginning balance $ 111.8 $ 83.3

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

The factoring discount for the years ended December 31, 2022, 2021 and 2020 was $ 3.1 million, $ 1.1 million and $ 1.5 million, respectively.

The factoring discount for the years ended December 31, 2023 and 2022 was $ 4.7 million and $ 3.1 million, respectively.

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

Our consolidated balance sheets included an allowance for doubtful accounts receivables of $ 12.6 million, $ 12.3 million and $ 12.3 million and other receivables of $ 71.6 million, $ 65.3 million and $ 62.4 million at December 31, 2022, 2021 and 2020, respectively, which were included in receivables, net.

($ in millions)

Our consolidated balance sheets included an allowance for doubtful accounts receivables of $ 13.1 million and $ 12.6 million and other receivables of $ 85.3 million and $ 71.6 million at December 31, 2023 and 2022, respectively, which were included in receivables, net.

Inventories ($ in millions)

Supplies $ 160.3 $ 137.6

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Useful Lives 2023 2022

($ in millions)

Property Plant and Equipment ($ in millions)

Land and improvements to land 10-20 Years (1)

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Property, plant and equipment, net $ 2,519.6 $ 2,674.1

(1) Useful life is exclusively related to improvements to land as land is not depreciated.

(1) Useful life is exclusive to land improvements.

The weighted-average useful life of machinery and equipment at December 31, 2023, was 11 years.

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Interest capitalized was $ 2.8 million, $ 3.1 million and $ 3.2 million for 2023, 2022 and 2021, respectively.

The consolidated statements of cash flows for the years ended December 31, 2022, 2021 and 2020, included a (decrease) increase of $( 4.2 ) million, $ 6.4 million and $ 31.0 million, respectively, to capital expenditures, with the corresponding change to accounts payable and accrued liabilities, related to purchases of property, plant and equipment included in accounts payable and accrued liabilities at December 31, 2022, 2021 and 2020.

The consolidated statements of cash flows for the years ended December 31, 2023, 2022 and 2021, included an increase (decrease) of $ 5.3 million, $( 4.2 ) million and $ 6.4 million, respectively, to capital expenditures, with the corresponding change to accounts payable and accrued liabilities, related to purchases of property, plant and equipment included in accounts payable and accrued liabilities at December 31, 2023, 2022 and 2021.

Included in other assets were the following:

($ in millions)

Other Assets ($ in millions)

Supply contracts $ 1,061.8 $ 1,048.0

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Other assets $ 1,118.5 $ 1,102.5

We have entered into various arrangements for the long-term supply of ethylene and electricity.

A payment of $ 461.0 million was made during 2020 associated with a previously executed option to reserve additional ethylene at producer economics.

The original liability was discounted and recorded at present value as of March 31, 2017.

For the year ended December 31, 2020, $ 4.0 million of interest expense was recorded for accretion of the 2020 payment liability discount.

During the year ended December 31, 2020, a payment of $ 75.8 million was made associated with the resolution of a dispute over the allocation to Olin of certain capital costs incurred at our Plaquemine, LA site.

For the year ended December 31, 2023 and 2022, payments of $ 64.5 million and $ 37.7 million, respectively, were made under other long-term supply contracts for energy modernization projects on the U.S.

The weighted-average useful life of long-term supply contracts at December 31, 2023, was 20 years.

For the years ended December 31, 2023, 2022 and 2021, amortization expense of $ 71.2 million, $ 70.4 million and $ 69.4 million, respectively, was recognized within cost of goods sold related to our supply contracts and is reflected in depreciation and amortization on the consolidated statements of cash flows.

We estimate that amortization expense will be approximately $ 70 million in 2023 and 2024 and $ 75 million in 2025, 2026 and 2027 related to our long-term supply contracts.

We estimate that amortization expense will be approximately $ 71.4 million in 2024, 2025 and 2026, $ 69.8 million in 2027 and $ 66.5 million in 2028 related to our long-term supply contracts.

The long-term supply contracts are monitored for impairment each reporting period.

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Changes in the carrying value of goodwill were as follows:

Chlor Alkali Products and Vinyls Epoxy Total

($ in millions)

Chlor Alkali Products and Vinyls Epoxy Winchester Total

Goodwill ($ in millions)

Balance at January 1, 2022 (1)

$ 1,275.6 $ 145.0 $ — $ 1,420.6

Foreign currency translation adjustment 0.2 0.1 — 0.3

Balance at December 31, 2022 (1)

1,275.8 145.1 — 1,420.9

Goodwill acquired during the year — — 2.7 2.7

Foreign currency translation adjustment 0.3 0.1 — 0.4

Balance at December 31, 2023 (1)

During the fourth quarter of 2022, we performed our qualitative assessment of goodwill.

Based upon our qualitative assessment, it was more likely than not that the fair value of our reporting units were greater than their carrying amounts as of December 31, 2022.

No impairment charges were recorded for 2022 or 2021.

During the first quarter of 2020, our market capitalization declined significantly compared to the fourth quarter of 2019.

Over the same period, the equity value of our peer group companies and the overall U.S.

stock market also declined significantly amid market volatility.

These declines were driven by the uncertainty surrounding the outbreak of the 2019 Novel Coronavirus (COVID-19) global pandemic and other macroeconomic events impacting the various industries in which Olin and our peers participate.

Additionally, the various governmental, business and consumer responses to the pandemic were expected to have a negative impact on the near-term demand for several of the products produced by our Chlor Alkali Products and Vinyls and Epoxy businesses.

The full extent and duration of the impact of COVID-19 on our operations and financial performance was unknown at the time.

As a result of these events, we identified triggering events associated with a significant overall decrease in our stock price, a significant adverse change in the business climate and a significant reduction in near-term cash flow projections and performed a quantitative goodwill impairment test during the first quarter of 2020.

We used a discounted cash flow approach to develop the estimated fair value of our reporting units.

Based on the aforementioned analysis, the estimated fair value of our reporting units exceeded the carrying value of the reporting units and no impairment charges were recorded.

Throughout the second and third quarters of 2020, the spread of the COVID-19 pandemic and the associated response had caused significant disruptions in the U.S.

and global economies, resulting in the disruption of the supply and demand fundamentals of our Chemicals businesses.

The various governmental, business and consumer responses to the pandemic continued to negatively impact the demand for several of the products produced by our Chlor Alkali Products and Vinyls and Epoxy businesses resulting in lower volumes and pricing during 2020 compared to 2019.

Due to these factors, the triggering events identified in the first quarter associated with a significant adverse change in the business climate and a significant adverse reduction in near-term cash flow projections had persisted during 2020.

Throughout the second and third quarters of 2020, the equity value of our peer group companies and the overall U.S.

stock market improved significantly while Olin’s stock price remained low.

During the three months ended September 30, 2020, we identified a triggering event associated with a sustained significant overall decrease in our stock price.

As a result, we performed an updated quantitative goodwill

impairment test during the third quarter of 2020.

We used a discounted cash flow approach to develop the estimated fair value of our reporting units.

The fair value determinations required considerable judgment and were sensitive to changes in underlying assumptions, estimates and market factors.

The discount rate, profitability assumptions and terminal growth rate of our reporting units and the supply and demand fundamentals of the chlor alkali industry were the material assumptions utilized in the discounted cash flow model used to estimate the fair value of each reporting unit.

The discount rate reflected a weighted-average cost of capital, which was calculated, in part based on observable market data.

Some of this data (such as the risk free or treasury rate and the pretax cost of debt) were based on the market data at a point in time.

Other data (such as the equity risk premium) were based upon market data over time for a peer group of companies in the chemical manufacturing or distribution industries with a market capitalization premium added, as applicable.

Also factoring into the discount rate was a market participant’s perceived risk (such as the company specific risk premium) in the valuation implied by the sustained reduction in our stock price.

The discounted cash flow analysis required estimates, assumptions and judgments about future events.

Our analysis used our internally generated long-range plan.

Specifically, the assumptions in our long-range plan about terminal growth rates, forecasted capital expenditures and changes in future working capital requirements were used to determine the implied fair value of each reporting unit.

The long-range plan reflected management judgment, supplemented by independent chemical industry analyses which provided multi-year industry operating and pricing forecasts.

As a further indicator that each reporting unit had been valued appropriately using a discounted cash flow model, the aggregate fair value of all reporting units was reconciled to the total market value of Olin.

Due to the sustained decline in our stock price, the decrease in the value of our reporting units reflected a market participant’s perceived risk in the valuation implied by the sustained reduction in our stock price.

As a result of this assessment, the carrying values of our Chlor Alkali Products and Vinyls and Epoxy reporting units exceeded the fair values which resulted in pre-tax goodwill impairment charges of $ 557.6 million and $ 142.2 million, respectively, for the year ended December 31, 2020.

The goodwill impairment charge was calculated as the amount that the carrying value of the reporting unit, including any goodwill, exceeded its fair value and therefore the carrying value of our reporting units equaled their fair value upon completion of the goodwill impairment test.

We believe the assumptions used in our goodwill impairment analysis were appropriate and resulted in reasonable estimates of the implied fair value of each reporting unit.

However, given the economic environment at the time and the uncertainties regarding the impact on our business, there can be no assurance that our estimates and assumptions, made for purposes of our goodwill impairment testing, will prove to be an accurate prediction of the future.

If our assumptions regarding future performance are not achieved, or if our stock price experiences further sustained declines, we may be required to record additional goodwill impairment charges in future periods.

It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such charge would be material.

$ 1,276.1 $ 145.2 $ 2.7 $ 1,424.0

(1) Includes cumulative goodwill impairment of $ 557.6 million and $ 142.2 million in Chlor Alkali Products and Vinyls and Epoxy, respectively.

Intangible assets consisted of the following:

Useful Lives Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net

($ in millions)

Intangible Assets ($ in millions)

Customers, customer contracts and relationships 10-15 Years $ 671.7 $ ( 437.5 ) $ 234.2 $ 669.1 $ ( 401.2 ) $ 267.9

Trade names 7 Years 3.6 ( 0.2 ) 3.4 — — —

Acquired technology 4-7 Years 94.4 ( 90.4 ) 4.0 93.1 ( 88.3 ) 4.8

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Amortization expense relating to intangible assets was $ 37.0 million, $ 55.3 million and $ 63.1 million in 2023, 2022 and 2021, respectively.

We estimate that amortization expense will be approximately $ 37 million in both 2023 and 2024, approximately $ 36 million in 2025 and approximately $ 35 million in both 2026 and 2027.

Estimated amortization expense relating to intangible assets for the subsequent five-year periods are as follows:

Estimated Amortization Expense ($ in millions)

During the fourth quarter of 2023, we performed our qualitative assessment of our intangible assets.

Based upon our qualitative impairment assessment, it is more likely than not that the fair value of our intangible assets are greater than the carrying amount as of December 31, 2022.

No impairment of our intangible assets were recorded in 2022, 2021 or 2020.

Notes payable:

($ in millions)

Variable-rate Senior Term Loans, due 2027 (5.923% and 1.604% at December 31, 2022 and 2021, respectively) $ 350.0 $ 350.0

Based on our qualitative impairment assessment, it is more likely than not that the fair value of our intangible assets is greater than the carrying amount as of December 31, 2023.

No impairment on our intangible assets was recorded in 2023, 2022 or 2021.

Financing Obligations ($ in millions)

Variable-rate Term Loan Facility, due 2027 (6.955% and 5.923% at December 31, 2023 and 2022, respectively) $ 341.3 $ 350.0

Variable-rate Senior Revolving Credit Facility, due 2027 (6.955% at December 31, 2023) 68.0 —

Variable-rate Recovery Zone bonds, due 2024-2035 (6.420% and 5.198% at December 31, 2023 and 2022, respectively)

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5.00% senior notes, due 2030 515.3 515.3

Receivables Financing Agreement (See Note 7) 328.5 300.0

Finance lease obligations — 1.9

Total notes payable 2,601.0 2,802.1

Deferred debt issuance costs ( 16.6 ) ( 20.1 )

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

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

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

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

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

At December 31, 2022, we had $ 1,199.6 million available under our $ 1,200.0 million Senior Revolving Credit Facility because we had issued $ 0.4 million of letters of credit.

On February 24, 2021, we entered into a $ 1,615.0 million senior secured credit facility (2021 Senior Credit Facility) that amended our existing $ 1,300.0 million senior secured credit facility.

On July 28, 2021, the liens on the collateral provided under the 2021 Senior Credit Facility were released based on the achievement of a net leverage ratio below 3.50 for the prior two consecutive fiscal quarters.

The 2021 Senior Credit Facility included a senior delayed-draw term loan facility with aggregate commitments of $ 315.0 million (2021 Delayed Draw Term Loan), a senior term loan facility with aggregate commitments of $ 500.0 million (2020 Term Loan and together with the 2021 Delayed Draw Term Loan, the 2021 Senior Term Loans) and a senior revolving credit facility with aggregate commitments in an amount equal to $ 800.0 million (2021 Senior Revolving Credit Facility).

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

The amendment modified the pricing grid for the 2021 Senior Credit Facility by reducing applicable interest rates on the borrowings under the facility.

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

During the year ended December 31, 2021, we repaid $ 465.0 million of the 2021 Senior Term Loans.

At December 31, 2023, we had $ 1,131.6 million available under our $ 1,200.0 million Senior Revolving Credit Facility because we had $ 68.0 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 December 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.

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During 2023 and 2022, activity of our outstanding debt included:

December 31, 2022 Year Ended

December 31, 2021

Long-term Debt Borrowings (Repayments) Long-term Debt Borrowings (Repayments) Loss on Debt Extinguishment (1)

Debt Instrument ($ in millions)

Long-term Debt Borrowings (Repayments) for the Year Ended December 31,

Debt Instruments ($ in millions)

Senior Revolving Credit Facility $ 375.0 $ 320.0

Senior Term Loans — 315.0

Receivables Financing Agreement 332.7 95.0

Total borrowings 707.7 415.0

10.00% senior notes, due 2025 (Blue Cube 2025 Notes) $ — $ ( 500.0 ) $ 30.9

5.50% senior notes, due 2022 (2022 Notes) — ( 200.0 )

9.75% senior notes, due 2023 (2023 Notes) — ( 120.0 ) 3.7

5.625% senior notes, due 2029 (2029 Notes) — ( 80.7 ) 9.0

5.00% senior notes, due 2030 (2030 Notes) — ( 34.7 ) 2.8

5.50% senior notes, due 2022 (2022 Notes) ( 200.0 ) — — —

Senior Revolving Credit Facility ( 307.0 ) ( 320.0 )

Senior Term Loans — ( 465.0 ) 2.0

Term Loan Facility ( 8.7 ) —

Receivables Financing Agreement ( 304.2 ) ( 95.0 )

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Total repayments ( 621.8 ) ( 616.1 )

Long-term debt repayments, net $ ( 201.1 ) $ ( 1,103.1 )

(1) Loss on debt extinguishment is included as interest expense in the consolidated statements of operations.

Long-term debt borrowings (repayments), net $ 85.9 $ ( 201.1 )

We incurred a loss on debt extinguishment of $ 152.2 million during the year ended December 31, 2021, which is included as interest expense in the consolidated statements of operations.

The loss includes the payment of bond redemption premiums of $ 137.7 million for the year ended December 31, 2021, as well as the write-off of deferred debt issuance costs, write-off of bond original issue discount and recognition of deferred fair value interest rate swap losses of $ 14.5 million for the year ended December 31, 2021, associated with the optional prepayment of existing debt.

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During the year ended December 31, 2022, Olin redeemed the full aggregate principal amount $ 200.0 million of the outstanding 2022 Notes which became due utilizing cash on hand.

In the fourth quarter of 2021, we completed a cash tender offer to purchase a principal amount of $ 391.4 million of the outstanding 2025 Notes.

This action resulted in total redemption premiums of $ 99.4 million.

The 2025 Notes were redeemed by drawing $ 150.0 million of the Receivables Financing Agreement along with utilizing cash on hand.

During the year ended December 31, 2021, we repurchased, through open market transactions, a principal amount of $ 80.7 million of the outstanding aggregate principal amount of the 2029 Notes and $ 34.7 million of the outstanding aggregate principal amount of the 2030 Notes.

These actions resulted in total redemption premiums of $ 10.4 million.

On March 31, 2021, Olin redeemed $ 315.0 million of the outstanding Blue Cube 2025 Notes and on May 14, 2021, Olin redeemed the remaining $ 185.0 million of the outstanding Blue Cube 2025 Notes.

The Blue Cube 2025 Notes were redeemed at 105.00 % of the principal amount of the Blue Cube 2025 Notes, resulting in a redemption premium of $ 25.0 million.

The Blue Cube 2025 Notes were redeemed by drawing $ 315.0 million of the 2021 Delayed Draw Term Loan along with utilizing cash on hand.

On January 15, 2021, Olin redeemed the remaining $ 120.0 million of the outstanding 2023 Notes.

The 2023 Notes were redeemed at 102.438 % of the principal amount of the 2023 Notes, resulting in a redemption premium of $ 2.9 million.

The remaining 2023 Notes were redeemed by utilizing $ 122.9 million of cash on hand.

For the years ended December 31, 2021 and 2020, we recognized interest expense of $ 14.5 million and $ 5.8 million, respectively, for the write-off of deferred debt issuance costs, write-off of bond original issue discount and recognition of deferred fair value interest rate swap losses.

For the years ended December 31, 2022, 2021 and 2020, we paid debt issuance costs of $ 4.4 million, $ 3.9 million and $ 10.3 million, respectively, related to financing transactions.

At December 31, 2022, we had total letters of credit of $ 89.8 million outstanding, of which $ 0.4 million were issued under our Senior Revolving Credit Facility.

The letters of credit are 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.

Annual maturities of long-term debt, including finance lease obligations, are $ 9.7 million in 2023, $ 79.5 million in 2024, $ 429.2 million in 2025, $ 100.5 million in 2026, $ 797.5 million in 2027 and a total of $ 1,184.6 million thereafter.

For the years ended December 31, 2022 and 2021, we paid debt issuance costs of $ 4.4 million and $ 3.9 million, respectively, related to financing transactions.

At December 31, 2023, we had $ 120.7 million in letters of credit outstanding, of which $ 0.4 million were issued under our Senior Revolving Credit Facility.

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

Annual maturities of long-term debt are as follows:

Expected Annual Maturities ($ in millions)

Thereafter 1,267.6

Total $ 2,686.9

PENSION PLANS

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However, a portion of our bargaining hourly employees continue to participate in our domestic qualified defined benefit pension plans under a flat-benefit formula.

Our funding policy for the qualified defined benefit pension plans is consistent with the requirements of federal laws and regulations.

Our funding policy for the

qualified defined benefit pension plans is consistent with the requirements of federal laws and regulations.

Our foreign subsidiaries maintain pension and other benefit plans, which are consistent with local statutory practices.

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Change in Benefit Obligation ($ in millions)

Benefit obligation at beginning of year $ 2,506.0 $ 382.3 $ 2,888.3 $ 2,758.9 $ 446.4 $ 3,205.3

Benefit obligation - beginning of year

$ 1,868.4 $ 251.1 $ 2,119.5 $ 2,506.0 $ 382.3 $ 2,888.3

Service cost 0.3 5.4 5.7 0.5 7.9 8.4

Interest cost 96.3 9.1 105.4 57.3 4.1 61.4

Actuarial gain ( 556.1 ) ( 113.7 ) ( 669.8 ) ( 163.7 ) ( 41.7 ) ( 205.4 )

Actuarial loss (gain) 47.1 14.9 62.0 ( 556.1 ) ( 113.7 ) ( 669.8 )

Benefits paid ( 141.0 ) ( 5.9 ) ( 146.9 ) ( 139.3 ) ( 6.1 ) ( 145.4 )

Plan participant’s contributions — 0.2 0.2 — 0.3 0.3

Plan amendments — — — — ( 0.7 ) ( 0.7 )

Settlements — ( 7.5 ) ( 7.5 ) — — —

Foreign currency translation adjustments — 9.8 9.8 — ( 23.7 ) ( 23.7 )

Benefit obligation at end of year $ 1,868.4 $ 251.1 $ 2,119.5 $ 2,506.0 $ 382.3 $ 2,888.3

Benefit obligation - end of year

$ 1,871.1 $ 277.1 $ 2,148.2 $ 1,868.4 $ 251.1 $ 2,119.5

December 31, 2023 December 31, 2022

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Change in Plan Assets ($ in millions)

Fair value of plans’ assets at beginning of year $ 2,429.6 $ 76.1 $ 2,505.7 $ 2,383.8 $ 85.3 $ 2,469.1

Fair value of plan assets - beginning of year $ 1,824.9 $ 63.3 $ 1,888.2 $ 2,429.6 $ 76.1 $ 2,505.7

Actual return on plans’ assets

173.1 4.0 177.1 ( 465.6 ) ( 7.6 ) ( 473.2 )

Employer contributions 0.2 1.0 1.2 0.2 1.4 1.6

Benefits paid ( 141.0 ) ( 2.8 ) ( 143.8 ) ( 139.3 ) ( 3.1 ) ( 142.4 )

Settlements — ( 7.1 ) ( 7.1 ) — — —

Foreign currency translation adjustments — 2.4 2.4 — ( 3.5 ) ( 3.5 )

Fair value of plans’ assets at end of year $ 1,824.9 $ 63.3 $ 1,888.2 $ 2,429.6 $ 76.1 $ 2,505.7

Fair value of plan assets - end of year $ 1,857.2 $ 60.8 $ 1,918.0 $ 1,824.9 $ 63.3 $ 1,888.2

December 31, 2023 December 31, 2022

5 unchanged sentences

Total funded status $ ( 13.9 ) $ ( 216.3 ) $ ( 230.2 ) $ ( 43.5 ) $ ( 187.8 ) $ ( 231.3 )

We recorded a $ 37.2 million after-tax benefit ($ 59.9 million pretax) to shareholders’ equity as of December 31, 2022 for our pension plans.

This benefit primarily reflected a 260 -basis point increase in the domestic pension plans’ discount rate and a 230 -basis point increase in the international defined benefit pension plans’ discount rate, partially offset by unfavorable performance on plan assets during 2022.

We recorded a $ 11.9 million after-tax charge ($ 16.4 million pretax) to shareholders’ equity as of December 31, 2023, for our pension plans.

This charge primarily reflected a 30 -basis point decrease in the domestic pension plans’ discount rate and a 50 -basis point decrease in the international defined benefit pension plans’ discount rate, partially offset by a favorable performance on plan assets during 2023.

In 2022, we recorded a $ 37.2 million after-tax benefit ($ 59.9 million pretax) to shareholders’ equity as of December 31, 2022, for our pension plans.

This benefit primarily reflected a 50 -basis point decrease in the domestic pension plans’ discount rate and favorable performance on plan assets during 2021.

This benefit primarily reflected a 260 -basis point increase

in the domestic pension plans’ discount rate and a 230 -basis point increase in the international defined benefit pension plans’ discount rate, partially offset by unfavorable performance on plan assets during 2022.

The $ 62.0 million actuarial loss for 2023 was primarily due to a 30 -basis point decrease in the domestic pension plans’ discount rate and a 50 -basis point decrease in the international defined benefit pension plans’ discount rate.

The $ 669.8 million actuarial gain for 2022 was primarily due to a 260 -basis point increase in the domestic pension plans’ discount rate and a 230 -basis point increase in the international defined benefit pension plans’ discount rate.

The $ 205.4 million actuarial loss for 2021 was primarily due to an 50 -basis point increase in the domestic pension plans’ discount rate.

Amounts recognized in the consolidated balance sheets consisted of:

10 unchanged sentences

There were no plan assets for these non-qualified pension plans.

Benefit payments for the non-qualified pension plans are expected to be as follows:

2023—$ 0.7 million;

2024—$ 0.3 million;

2025—$ 0.3 million;

2026—$ 0.4 million;

and 2027—$ 1.0 million.

Benefit payments for the qualified plans are projected to be as follows:

2023—$ 149.3 million;

2024—$ 141.5 million;

2025—$ 136.2 million;

2026—$ 130.5 million;

and 2027—$ 125.2 million.

At December 31, 2023, future benefit payments for qualified and non-qualified plans were as follows:

Non-qualified Plans Qualified Plans

Expected Benefit Payments ($ in millions)

2024 $ 0.6 $ 152.2

2025 0.4 143.6

2026 0.4 137.8

2027 0.3 132.3

2028 0.2 126.0

($ in millions)

2 unchanged sentences

Fair value of plans’ assets

1,918.0 1,888.2

Years Ended December 31,

4 unchanged sentences

Expected return on plans’ assets

( 131.4 ) ( 136.7 ) ( 142.3 )

Amortization of prior service cost ( 0.4 ) ( 0.7 ) ( 0.6 )

1 unchanged sentence

Net periodic benefit income $ ( 20.7 ) $ ( 33.0 ) $ ( 27.5 )

Included in Other Comprehensive Income (Loss) (Pretax)

Years Ended December 31,

2023 2022 2021

Included in Pretax Other Comprehensive Income (Loss) ($ in millions)

Liability adjustment $ 16.4 $ ( 59.9 ) $ ( 245.9 )

7 unchanged sentences

Discount rate—periodic benefit cost 5.50 % (1)

Expected return on assets 6.75 % 7.25 % 7.75 % 3.8 % 4.2 % 4.4 %

2.90 % 2.40 % 3.70 % 1.40 % 0.80 %

Expected return on plans’ assets

6.75 % 6.75 % 7.25 % 4.40 % 3.80 % 4.20 %

Rate of compensation increase 3.00 % 3.00 % 3.00 % 3.40 % 3.00 % 3.00 %

7 unchanged sentences

We use long-term historical actual return information, the allocation mix of investments that comprise plan assets and forecast estimates of long-term investment returns, including inflation rates, by reference to external sources.

The historic rates of return on plan assets have been 3.5 % for the last 5 years, 5.7 % for the last 10 years and 7.0 % for the last 15 years.

The historical rates of return on plan assets have been 6.7 % for the last 5 years, 6.7 % for the last 10 years and 7.8 % for the last 15 years.

The following rates of return by asset class were considered in setting the long-term rate of return assumption:

Asset Class Rate of Return

equities 7 % to 11 %

9 unchanged sentences

Alternative investments 43 % 47 %

Total 100 % 100 %

The Alternative Investments asset class includes hedge funds, real estate and private equity investments.

4 unchanged sentences

Our pension plan maintains a portfolio of assets designed to achieve an appropriate risk adjusted return.

The portfolio of assets is also structured to manage risk by diversifying assets across asset classes whose return patterns are not highly

correlated, investing in passively and actively managed strategies and in value and growth styles, and by periodic rebalancing of asset classes, strategies and investment styles to objectively set targets.

The portfolio of assets is also structured to manage risk by diversifying assets across asset classes whose return patterns are not highly correlated, investing in passively and actively managed strategies and in value and growth styles, and by periodic rebalancing of asset classes, strategies and investment styles to objectively set targets.

As of December 31, 2023, the following target allocation and ranges have been set for each asset class:

2 unchanged sentences

Alternative investments — % 0-30

(1) The target allocation for these asset classes include alternative investments, primarily hedge funds, based on the underlying investments in each hedge fund.

(1) The target allocation for these asset classes includes alternative investments, primarily hedge funds, based on the underlying investments in each hedge fund.

Determining which hierarchical level an asset or liability falls within requires significant judgment.

The following table summarizes our domestic and foreign defined benefit pension plan assets measured at fair value as of December 31, 2022:

The following table summarizes our domestic and foreign defined benefit pension plans assets measured at fair value as of December 31, 2023:

Asset Class Investments Measured at Net Asset Value Quoted Prices in Active Markets for Identical Assets

15 unchanged sentences

Total assets $ 1,392.9 $ 264.4 $ 260.7 $ — $ 1,918.0

The following table summarizes our domestic and foreign defined benefit pension plan assets measured at fair value as of December 31, 2021:

The following table summarizes our domestic and foreign defined benefit pension plans assets measured at fair value as of December 31, 2022:

Asset Class Investments Measured at Net Asset Value Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

(Level 3) Total

Equity securities ($ in millions)

Equity Securities

($ in millions)

equities $ 19.2 $ 54.4 $ — $ — $ 73.6

30 unchanged sentences

The net asset value is based on the underlying assets, which are valued using inputs such as the closing price reported, if traded on an active market, values derived from comparable securities of issuers with similar credit ratings, or under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for risks that may not be observable such as certain credit and liquidity risks.

investments are valued at the net asset value as determined by the independent administrator or custodian of the fund.

Alternative investments are valued at the net asset value as determined by the independent administrator or custodian of the fund.

The net asset value is based on the underlying investments, which are valued using inputs such as quoted market prices of identical instruments, discounted future cash flows, independent appraisals and market-based comparable data.

9 unchanged sentences

Change in Benefit Obligation ($ in millions)

Benefit obligation at beginning of year $ 39.3 $ 11.2 $ 50.5 $ 44.2 $ 11.9 $ 56.1

Benefit obligation - beginning of year

$ 28.5 $ 6.4 $ 34.9 $ 39.3 $ 11.2 $ 50.5

Service cost 0.6 0.1 0.7 0.8 0.3 1.1

Interest cost 1.4 0.4 1.8 0.8 0.3 1.1

Actuarial gain ( 8.0 ) ( 4.2 ) ( 12.2 ) ( 2.7 ) ( 1.1 ) ( 3.8 )

Actuarial loss (gain) 1.5 0.2 1.7 ( 8.0 ) ( 4.2 ) ( 12.2 )

Benefits paid ( 3.8 ) ( 0.3 ) ( 4.1 ) ( 4.4 ) ( 0.4 ) ( 4.8 )

Foreign currency translation adjustments — 0.2 0.2 — ( 0.8 ) ( 0.8 )

Benefit obligation at end of year $ 28.5 $ 6.4 $ 34.9 $ 39.3 $ 11.2 $ 50.5

Benefit obligation - end of year

$ 28.2 $ 7.0 $ 35.2 $ 28.5 $ 6.4 $ 34.9

December 31, 2023 December 31, 2022

3 unchanged sentences

Funded status $ ( 28.2 ) $ ( 7.0 ) $ ( 35.2 ) $ ( 28.5 ) $ ( 6.4 ) $ ( 34.9 )

We recorded a $ 9.6 million after-tax benefit ($ 12.2 million pretax) to shareholders’ equity as of December 31, 2022 for our other postretirement plans.

We recorded a $ 1.3 million after-tax charge ($ 1.7 million pretax) to shareholders’ equity as of December 31, 2023, for our other postretirement plans.

In 2022, we recorded an after-tax benefit of $ 9.6 million ($ 12.2 million pretax) to shareholders’ equity as of December 31, 2022, for our other postretirement plans.

16 unchanged sentences

Net periodic benefit cost $ 3.1 $ 3.8 $ 4.5

Included in Other Comprehensive Income (Loss) (Pretax)

Years Ended December 31,

2023 2022 2021

Included in Pretax Other Comprehensive Income (Loss) ($ in millions)

Liability adjustment $ 1.7 $ ( 12.2 ) $ ( 3.8 )

10 unchanged sentences

Based on these bonds and the projected benefit payment streams, the single rate that produces the same yield as the matching bond portfolio is used as the discount rate.

We review external data and our own internal trends for healthcare costs to determine the healthcare cost for the post retirement benefit obligation.

We review external data and our own internal trends for healthcare costs to determine the healthcare cost for the postretirement benefit obligation.

The assumed healthcare cost trend rates for pre-65 retirees were as follows:

7 unchanged sentences

Components of Income (Loss) Before Taxes ($ in millions)

Domestic $ 1,231.2 $ 977.3 $ ( 1,025.2 )

$ 456.7 $ 1,231.2 $ 977.3

Foreign 102.6 444.8 561.4

Income (loss) before taxes $ 1,676.0 $ 1,538.7 $ ( 1,020.0 )

Income before taxes $ 559.3 $ 1,676.0 $ 1,538.7

Components of Income Tax Provision (Benefit)

Current provision (benefit):

Federal $ 96.2 $ 225.0 $ 139.6

1 unchanged sentence

Foreign 48.0 121.7 131.3

377.8 295.4 ( 29.9 )

Deferred (benefit) provision:

Total current 163.6 377.8 295.4

Federal ( 25.3 ) ( 32.1 ) 39.1

1 unchanged sentence

Foreign ( 23.1 ) 7.7 ( 98.7 )

( 28.7 ) ( 53.4 ) ( 20.2 )

Income tax provision (benefit) $ 349.1 $ 242.0 $ ( 50.1 )

Total deferred ( 56.3 ) ( 28.7 ) ( 53.4 )

Income tax provision $ 107.3 $ 349.1 $ 242.0

The following table accounts for the difference between the actual tax provision and the amounts obtained by applying the statutory U.S.

15 unchanged sentences

Legal entity liquidation ( 0.5 ) ( 2.0 ) —

Goodwill impairment charge — — ( 13.3 )

Other, net 0.6 0.2 0.2

Effective tax rate 19.2 % 20.8 % 15.7 %

The effective tax rate for 2022 included a benefit associated with a legal entity liquidation, a benefit associated with prior year tax positions, a benefit associated with stock-based compensation, a benefit from remeasurement of deferred taxes due to a decrease in our state effective tax rates, an expense associated with a net increase in the valuation allowance related to state tax credits and an expense from a change in tax contingencies.

The effective tax rate for 2023 included benefits associated with a legal entity liquidation, prior year tax positions, stock-based compensation, remeasurement of deferred taxes due to a decrease in our state effective tax rates and foreign rate changes, and from a change in tax contingencies, and an expense from a net increase in the valuation allowance related to deferred tax assets in foreign jurisdictions.

These factors resulted in a net $ 29.4 million tax benefit.

After giving consideration to these items, the effective tax rate for 2022 of 24.4 % was higher than the 21.0 % U.S.

Excluding these items, the effective tax rate for 2023 of 24.4 % was higher than the 21.0 % U.S.

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

The effective tax rate for 2022 included benefits associated with a legal entity liquidation, prior year tax positions, stock-based compensation, and remeasurement of deferred taxes due to a decrease in our state effective tax rates, and expenses associated with a net increase in the valuation allowance related to state tax credits and a change in tax contingencies.

These factors resulted in a net $ 60.2 million tax benefit.

Excluding these items, the effective tax rate for 2022 of 24.4 % was higher than the 21.0 % U.S.

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

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

The effective tax rate for 2021 included benefits from a net decrease in the valuation allowance related to deferred tax assets in foreign jurisdictions, domestic tax credits, prior year tax positions, stock-based compensation, and expenses from remeasurement of deferred taxes due to an increase in our state effective tax rates and a change in tax contingencies.

These factors resulted in a net $ 103.6 million tax benefit.

After giving consideration to these items, the effective tax rate for 2021 of 22.5 % was higher than the 21.0 % U.S.

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

The effective tax rate for 2020 included expenses associated with a net increase in the valuation allowance related to foreign and domestic tax credits and deferred tax assets in foreign jurisdictions, a remeasurement of deferred taxes due to an increase in our state effective tax rates and a change in tax contingencies, and stock-based compensation, partially offset by a benefit associated with prior year tax positions.

These factors resulted in a net $ 27.9 million tax expense.

For 2020, a tax benefit of $ 10.8 million was recognized associated with the $ 699.8 million goodwill impairment charge.

After giving consideration to these items, including the goodwill impairment charge on Olin’s loss before taxes, the effective tax rate for 2020 of 21.0 % was equal to the 21.0 % U.S.

federal statutory rate as foreign income taxes, foreign income inclusions and a net increase in the valuation allowance related to losses in foreign jurisdictions were offset by state taxes and favorable permanent salt depletion deductions.

Components of Deferred Tax Assets and Liabilities 2022 2021

Excluding these items, the effective tax rate for 2021 of 22.5 % was higher than the 21.0 % U.S.

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

Components of Deferred Tax Assets and Liabilities ($ in millions)

Deferred Tax Assets

($ in millions)

Pension and postretirement benefits $ 42.4 $ 42.9

4 unchanged sentences

Tax credits 47.3 37.4

Net operating losses 23.2 22.6

Capital loss carryforward 0.2 0.5

Net operating losses (NOL)

Other miscellaneous items 3.0 2.7

7 unchanged sentences

Inventory and prepaids 5.5 12.1

Partnerships 2.4 87.0

Taxes on unremitted earnings 16.8 12.0

1 unchanged sentence

Total deferred tax liabilities 625.2 666.7

Net deferred tax liability $ ( 446.8 ) $ ( 459.6 )

Net deferred income tax liability $ ( 388.8 ) $ ( 446.8 )

Realization of the net deferred tax assets, irrespective of indefinite-lived deferred tax liabilities, is dependent on future reversals of existing taxable temporary differences and adequate future taxable income, exclusive of reversing temporary differences and carryforwards.

7 unchanged sentences

As of December 31, 2023, we had recorded a valuation allowance of $ 99.5 million, compared to $ 76.4 million as of December 31, 2022, and $ 70.1 million as of December 31, 2021.

The decrease of $169.5 million in 2021 is primarily due to a release of the $ 156.9 million valuation allowance related to deferred tax assets of our German operations, of which $ 103.8 million was released in the second quarter of 2021.

As a result of significant taxable income during the first six months of 2021, our German operations reported cumulative income before tax (adjusted for permanent items) over the previous twelve quarters.

Additionally, we projected taxable income in our German operations for the remainder of 2021 and we expected that net operating loss carryovers and other deductible amounts in Germany would ultimately be realizable against future income.

We concluded, based upon the preponderance of positive evidence over negative evidence and the anticipated ability to use the deferred tax assets, that it was more likely than not that the deferred tax assets in Germany would be realizable due to U.S.

GAAP forecasted income.

If there are unfavorable changes to actual operating results or to projections of future income, we may determine that it is more likely than not such deferred tax assets may not be realizable.

All German net operating loss carryovers were realized in 2021.

The increase of $ 23.1 million in 2023 is primarily due to increases in valuation allowances on foreign tax credits and foreign NOLs.

We continue to have net deferred tax assets in several jurisdictions which we expect to realize, assuming sufficient taxable income can be generated to utilize these deferred tax benefits, which is based on certain estimates and assumptions.

1 unchanged sentence

The activity of our deferred income tax valuation allowance was as follows:

($ in millions)

Deferred Income Tax Valuation Allowance ($ in millions)

Beginning balance $ 76.4 $ 70.1

7 unchanged sentences

The amounts of unrecognized tax benefits were as follows:

($ in millions)

Unrecognized Tax Benefits ($ in millions)

Beginning balance $ 51.6 $ 43.4

7 unchanged sentences

As of December 31, 2023 and 2022, interest and penalties accrued were $ 1.9 million and $ 1.2 million, respectively.

For 2022, 2021 and 2020, we recorded expense (benefit) related to interest and penalties of $ 0.7 million, $ 0.5 million and $( 0.1 ) million, respectively.

For 2023, 2022 and 2021, we recorded expense related to interest and penalties of $ 0.7 million, $ 0.7 million and $ 0.5 million, respectively.

As of December 31, 2023, we believe it is reasonably possible that our total amount of unrecognized tax benefits will decrease by approximately $ 36.9 million over the next twelve months.

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

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

We operate globally and file income tax returns in numerous jurisdictions.

13 unchanged sentences

Included in accrued liabilities were the following:

($ in millions)

Accrued Liabilities ($ in millions)

Accrued compensation and payroll taxes $ 72.0 $ 111.9

Tax-related accruals 51.4 58.0

Non-income tax-related accruals 52.5 51.4

Accrued interest 35.8 35.6

1 unchanged sentence

Accrued employee benefits 63.5 64.6

Manufacturing related accruals 47.1 52.8

Contract liabilities (current portion only)

Environmental (current portion only) 32.0 25.0

6 unchanged sentences

The Contributing Employee Ownership Plan (CEOP) is a defined contribution plan available to essentially all domestic employees.

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

The defined contribution plan expense was $ 37.4 million, $ 35.4 million and $ 30.6 million for 2022, 2021 and 2020, respectively.

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

Our matching contributions for eligible employees amounted to $ 14.4 million, $ 14.2 million and $ 3.7 million in 2022, 2021 and 2020, respectively.

Effective January 1, 2020, we suspended the match on all salaried and non-bargaining hourly employees’ contributions, and moved to a discretionary contribution model with contributions contingent upon company-wide financial performance.

For the year ended December 31, 2020, we did not make a discretionary matching contribution.

Effective January 1, 2021, we reinstated the match on all salaried and non-bargaining hourly employees’ contributions, which provides for a maximum 3 % matching contribution based on the level of participant contributions.

Employees generally become vested in the value of the contributions we make to the CEOP according to a schedule based on service.

After 2 years of service, participants are 25 % vested.

They vest in increments of 25 % for each additional year and after 5 years of service, they are 100 % vested in the value of the contributions that we have made to their accounts.

Effective in February 2023, employees will immediately vest in matching contributions.

Additionally, after 2 years of service, participants will be 50 % vested and after 3 years of service, participants will be 100 % vested in the value of the Company matching contributions made to the CEOP.

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

Employees generally vest in the value of the Company Contribution according to a schedule based on service.

Prior to February 2023, participants vested 25 % after 2 years of service, and 25 % each year thereafter, through year 5 of service.

After February 2023, participants vest 50 % after 2 years of service and 100 % after 3 years of service.

We also match a percentage of our employee’s CEOP contributions (Company Match), which are invested in the same investment allocation as the employee’s contribution.

Prior to February 2023, participants vested 25 % after 2 years of service, and 25 % each year thereafter, through year 5 of service.

After February 2023, employees immediately vest in matching contributions.

Our contributions to the CEOP for 2023, 2022 and 2021, were as follows:

Years ended December 31,

2023 2022 2021

($ in millions)

Company contribution $ 36.8 $ 37.4 $ 35.4

Company match 14.5 14.4 14.2

STOCK-BASED COMPENSATION

5 unchanged sentences

2023 2022 2021

($ in millions)

Stock Compensation Expense ($ in millions)

Stock-based compensation $ 26.7 $ 25.6 $ 28.4

7 unchanged sentences

The fair value of each stock option granted, which typically vests ratably over three years , but not less than one year , was estimated on the date of grant, using the Black-Scholes option-pricing model with the following assumptions:

Grant date 2022 2021 2020

Grant Date Assumptions 2023 2022 2021

Dividend yield 1.32 % 1.60 % 2.76 %

11 unchanged sentences

Stock option transactions were as follows:

Shares Option Price Weighted-Average Option Price Options Weighted-Average Exercise Price

Stock Option Transactions Shares Option Price Weighted-Average Option Price Options Weighted-Average Exercise Price

Outstanding at January 1, 2023 5,438,720 13.14-65.77 $ 29.36 3,740,936 $ 26.50

15 unchanged sentences

Number of Shares

Stock Option Plans Reserved for Issuance Available for Grant or Purchase (1)

2000 long term incentive plan 6,000 —

Incentive Plans Reserved for Issuance Available for Grant or Purchase (1)

2003 Long Term Incentive Plan 29,834 —

6 unchanged sentences

Total under stock option plans 12,370,035 6,347,670

(1) All available to be issued as stock options, but includes a sub-limit for all types of stock awards of 2,595,246 shares.

Number of Shares

Stock Purchase Plans Reserved for Issuance Available for Grant or Purchase

Director Plans Reserved for Issuance Available for Grant or Purchase

1997 Stock Plan for Non-employee Directors 368,778 106,697

(1) All available to be issued as stock options, but includes a sub-limit for all types of stock awards of 2,767,130 shares.

Under the stock purchase plans, our non-employee directors may defer certain elements of their compensation into shares of our common stock based on fair market value of the shares at the time of deferral.

9 unchanged sentences

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:

Grant date 2022 2021

Grant Date Assumptions 2023 2022 2021

Risk-free interest rate 4.46 % 1.74 % 0.23 %

13 unchanged sentences

To Settle in Cash To Settle in Shares

Shares Weighted-Average Fair Value per Share Shares Weighted-Average Fair Value per Share

Performance Share Transactions Shares Weighted-Average Fair Value per Share Shares Weighted-Average Fair Value per Share

Outstanding at January 1, 2023 675,016 $ 52.90 388,808 $ 29.94

6 unchanged sentences

The summary of the status of our unvested performance shares to be settled in cash were as follows:

Shares Weighted-Average Fair Value per Share

Unvested Performance Shares Shares Weighted-Average Fair Value per Share

Unvested at January 1, 2023 125,750 $ 52.90

12 unchanged sentences

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

For the years ended December 31, 2022 and 2021, 25.7 million and 4.7 million shares, respectively, of common stock have been repurchased and retired at a total value of $ 1,350.7 million and $ 251.9 million, respectively.

As of December 31, 2022, a cumulative total of 5.9 million shares were repurchased and retired at a cost of $ 298.5 million and $ 1,701.5 million of common stock remained authorized to be repurchased under the 2022 Repurchase Authorization program.

For the years ended December 31, 2023, 2022 and 2021, 13.3 million, 25.7 million and 4.7 million shares, respectively, of common stock have been repurchased and retired at a total value of $ 711.3 million, $ 1,350.7 million and $ 251.9 million, respectively.

As of December 31, 2023, a cumulative total of 19.2 million shares were repurchased and retired at a total value of $ 1,003.0 million and $ 997.0 million of common stock remained authorized to be repurchased under the 2022 Repurchase Authorization program.

During 2023, 2022 and 2021, we issued 1.0 million, 1.1 million and 3.4 million shares, respectively, with a total value of $ 25.4 million, $ 25.7 million and $ 72.4 million, respectively, representing stock options exercised.

1 unchanged sentence

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

Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Derivative Contracts (net of taxes) Pension and Other Postretirement Benefits (net of taxes) Accumulated Other Comprehensive Loss

($ in millions)

Foreign Currency Translation

Cash Flow Hedges Pension and Postretirement Benefits Total

Accumulated Other Comprehensive Loss ($ in millions)

Balance at January 1, 2021 $ 19.4 $ 21.4 $ ( 730.7 ) $ ( 689.9 )

Unrealized losses 27.8 31.1 26.6 85.5

Reclassification adjustments of losses into income — 14.9 46.3 61.2

Tax provision — ( 11.0 ) ( 22.2 ) ( 33.2 )

Net change 27.8 35.0 50.7 113.5

Balance at December 31, 2020 19.4 21.4 ( 730.7 ) ( 689.9 )

Unrealized gains ( 30.3 ) 182.0 249.7 401.4

Unrealized (losses) gains ( 30.3 ) 182.0 249.7 401.4

Reclassification adjustments of (gains) losses into income — ( 180.1 ) 54.3 ( 125.8 )

7 unchanged sentences

Balance at December 31, 2022 ( 38.6 ) ( 32.5 ) ( 424.8 ) ( 495.9 )

Unrealized losses ( 1.1 ) ( 53.6 ) ( 18.1 ) ( 72.8 )

Reclassification adjustments of losses into income — 72.5 0.2 72.7

Tax (provision) benefit — ( 4.8 ) 4.5 ( 0.3 )

Net change ( 1.1 ) 14.1 ( 13.4 ) ( 0.4 )

Balance at December 31, 2023 $ ( 39.7 ) $ ( 18.4 ) $ ( 438.2 ) $ ( 496.3 )

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

1 unchanged sentence

SEGMENT INFORMATION

We define segment results as income (loss) before interest expense, interest income, goodwill impairment charges, other operating income (expense), non-operating pension income, other income and income taxes, and includes the operating results of non-consolidated affiliates.

Consistent with the guidance in ASC 280 “Segment Reporting,” we have determined it is appropriate to include the operating results of non-consolidated affiliates in the relevant segment financial results.

We define segment results as income (loss) before interest expense, interest income, other operating income (expense), non-operating pension income, other income and income taxes.

We have three operating segments:

2 unchanged sentences

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

Sales are attributed to geographic areas based on customer location.

Years ended December 31,

2023 2022 2021

($ in millions)

Segment Detail ($ in millions)

Chlor Alkali Products and Vinyls $ 3,995.1 $ 5,085.0 $ 4,140.8

2 unchanged sentences

Total sales $ 6,833.0 $ 9,376.2 $ 8,910.6

Income (loss) before taxes:

Income before Taxes

Chlor Alkali Products and Vinyls $ 664.2 $ 1,181.3 $ 997.8

5 unchanged sentences

Restructuring charges ( 89.6 ) ( 25.3 ) ( 27.9 )

Goodwill impairment — — ( 699.8 )

Other operating income 42.9 16.3 1.4

2 unchanged sentences

Non-operating pension income 24.0 38.7 35.7

Income (loss) before taxes $ 1,676.0 $ 1,538.7 $ ( 1,020.0 )

Income before taxes $ 559.3 $ 1,676.0 $ 1,538.7

Depreciation and Amortization Expense

12 unchanged sentences

Assets of the corporate/other segment include primarily such items as cash and cash equivalents, deferred taxes and other assets.

($ in millions)

Assets by Segment ($ in millions)

Chlor Alkali Products and Vinyls $ 5,650.2 $ 5,782.2

3 unchanged sentences

Total assets $ 7,713.2 $ 8,044.2

Property, plant and equipment is attributed to geographic areas based on asset location and sales are attributed to geographic areas based on customer location.

Property, plant and equipment:

($ in millions)

Property, plant and equipment is attributed to geographic areas based on the asset location, and sales are attributed to geographic areas based on the customer location.

Property, Plant and Equipment by Geography ($ in millions)

United States $ 2,302.7 $ 2,434.4

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2023 2022 2021

Sales by geography:

($ in millions)

Sales by Geography ($ in millions)

Chlor Alkali Products and Vinyls

17 unchanged sentences

2023 2022 2021

Sales by product line:

($ in millions)

Sales by Product Line ($ in millions)

Chlor Alkali Products and Vinyls

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Our liabilities for future environmental expenditures were as follows:

Environmental Liabilities

($ in millions)

2 unchanged sentences

Remedial and investigatory spending ( 25.9 ) ( 24.6 )

Foreign currency translation adjustments ( 0.3 ) 0.3

Other 2.8 ( 0.3 )

Ending balance $ 153.6 $ 146.6

At December 31, 2022 and 2021, our consolidated balance sheets included environmental liabilities of $ 121.6 million and $ 122.3 million, respectively, which were classified as other noncurrent liabilities.

At both December 31, 2023 and 2022, our consolidated balance sheets included environmental liabilities of $ 121.6 million, which were classified as other noncurrent liabilities.

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

6 unchanged sentences

At seven of the nine sites, a remedial action plan is being developed for part of the site.

At five of the nine sites, a remedial design is being developed at part of the site and at four of the nine sites, part of the site is subject to a remedial investigation.

At six of the nine sites, a remedial design is being developed at part of the site and at four of the nine sites, part of the site is subject to a remedial investigation.

All nine sites are either associated with past manufacturing operations or former waste disposal sites.

3 unchanged sentences

2023 2022 2021

($ in millions)

Environmental Expense ($ in millions)

Provisions charged to income $ 30.1 $ 24.2 $ 16.2

Insurance recoveries for costs incurred and expensed ( 1.0 ) ( 2.2 ) —

Insurance recoveries (1)

( 6.4 ) ( 1.0 ) ( 2.2 )

Environmental expense $ 23.7 $ 23.2 $ 14.0

Environmental expense for the years ended December 31, 2022 and 2021 included $ 1.0 million and $ 2.2 million, respectively, of insurance recoveries for environmental costs incurred and expensed in prior periods.

(1) Insurance recoveries for costs incurred and expensed in prior periods.

These charges relate primarily to remedial and investigatory activities associated with past manufacturing operations and former waste disposal sites and may be material to operating results in future years.

7 unchanged sentences

The amounts for leases included in our consolidated balance sheets include:

Lease assets:

Balance Sheet Location:

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Operating Operating lease assets, net $ 344.7 $ 356.0

Finance Property, plant and equipment, less accumulated depreciation (1)

Finance Property, plant and equipment, net (1)

Total lease assets $ 344.7 $ 358.4

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Total lease liabilities $ 352.4 $ 366.2

(1) As of December 31, 2022 and 2021, assets recorded under finance leases were $ 7.6 million for both years and accumulated depreciation associated with finance leases was $ 5.2 million and $ 4.3 million, respectively.

The components of lease expense are recorded to cost of goods sold and selling and administration expenses in the consolidated statement of operations, excluding interest on finance lease liabilities which is recorded to interest expense.

(1) As of December 31, 2022, assets recorded under finance leases were $ 7.6 million and accumulated depreciation associated with finance leases was $ 5.2 million.

The components of lease expense are recorded to cost of goods sold and selling and administrative expenses in the consolidated statement of operations, excluding interest on finance lease liabilities which is recorded to interest expense.

The components of lease expense were as follows:

1 unchanged sentence

2023 2022 2021

Lease expense:

($ in millions)

Operating $ 93.4 $ 97.1 $ 96.0

Other operating lease expense (1)

32.5 28.7 24.3

Lease Expense ($ in millions)

Operating lease expense $ 88.4 $ 93.4 $ 97.1

Variable and short-term lease expense 24.6 32.5 28.7

Finance lease expense:

Depreciation of leased assets 0.5 1.0 1.1

1 unchanged sentence

Total lease expense $ 113.5 $ 127.0 $ 127.0

(1) Includes costs associated with short-term leases and variable lease expenses.

The maturities of lease liabilities were as follows:

December 31, 2022

Operating leases Finance leases Total

($ in millions)

2023 $ 81.8 $ 1.0 $ 82.8

2024 68.1 0.8 68.9

2025 58.4 0.2 58.6

2026 45.4 — 45.4

2027 35.3 — 35.3

Future maturities of operating lease liabilities as of December 31, 2023, are summarized below:

Operating Leases

Future Lease Maturities ($ in millions)

Thereafter 132.6

1 unchanged sentence

Imputed interest (1)

( 63.0 ) ( 0.1 ) ( 63.1 )

Present value of lease liabilities $ 352.4

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2023 2022 2021

Supplemental cash flows information:

($ in millions)

Supplemental Cash Flows Information ($ in millions)

Cash paid for amounts included in the measurement of lease liabilities:

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Weighted-Average Remaining Lease Term

2022 2021 2020

Operating leases 9.1 years 9.3 years 9.5 years

Finance leases 1.6 years 2.4 years 3.1 years

Operating leases 8.9 years 9.1 years

Finance leases — 1.6 years

Weighted-Average Discount Rate

5 unchanged sentences

Purchase Commitments

($ in millions)

2023 $ 1,044.7

Future Contractual Purchase Commitments ($ in millions)

Thereafter 2,842.5

Total commitments $ 6,661.6

Total purchase commitments $ 5,091.2

The above purchase commitments include raw material, capital expenditure, long-term energy supply contracts and utility purchasing commitments utilized in our normal course of business for our projected needs.

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Those cases were consolidated and a consolidated, amended complaint in the “Indirect Purchaser” lawsuit was filed on August 23, 2021.

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.

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.

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.

Plaintiffs seek damages and injunctive relief.

Westlake Chemical Corporation, Shin-Etsu Chemical Co., Ltd., and Formosa Plastics Corporation, U.S.A.

all entered settlement agreements in the Direct Purchaser lawsuit, and Shin-Etsu Chemical Co., Ltd also entered a settlement agreement in the Indirect Purchaser lawsuit.

All of the settlements are pending court approval.

On December 28, 2023, the court denied the plaintiffs’ motion for class certification in the Direct Purchaser lawsuit, and the plaintiffs are seeking an interlocutory appeal of the court’s ruling.

Steel Chemical, Olin Canada ULC, 3229897 Nova Scotia Co.

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The majority of our commodity derivatives expire within one year.

We actively manage currency exposures that are associated with net monetary asset positions, currency purchases and sales commitments denominated in foreign currencies and foreign currency denominated assets and liabilities created in the normal course of business.

normal course of business.

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

At 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.

All of the currency derivatives expire within one year and are for USD equivalents.

1 unchanged sentence

however, the risk of loss to us in the event of nonperformance by a counterparty could impact our financial position or results of operations.

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

We had the following notional amounts of outstanding forward contracts to buy and sell foreign currency:

Notional Value - Foreign Currency ($ in millions)

Buy $ 21.0 $ 275.8

Sell 140.2 110.7

Cash Flow Hedges

1 unchanged sentence

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

($ in millions)

Notional Value - Commodity ($ in millions)

Natural gas $ 63.2 $ 107.6

2 unchanged sentences

Total notional $ 191.0 $ 261.2

As of December 31, 2022, the counterparties to these commodity contracts were Wells Fargo Bank, N.A., Citibank, N.A., JPMorgan Chase Bank, National Association, and Bank of America Corporation, all of which are major financial institutions.

As of December 31, 2023, the counterparties to these commodity contracts were Wells Fargo Bank, N.A., Citibank, N.A., JPMorgan Chase Bank, National Association, Toronto Dominion Bank 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.

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We include the gain or loss on the hedged items (fixed-rate borrowings) in the same line item, interest expense, as the offsetting loss or gain on the related interest rate swaps.

In August 2019, we terminated the interest rate swaps designated as fair value hedges which resulted in a loss of $2.3 million that was deferred as an offset to the carrying value of the related debt and was subsequently recognized to interest expense.

There were no outstanding interest rate swaps at December 31, 2023 and 2022.

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

For the years ended December 31, 2021 and 2020, $ 1.8 million and $ 0.4 million, respectively, of expense was recorded to interest expense on the accompanying consolidated statements of operations related to these swap agreements.

For the year ended December 31, 2021, $ 1.8 million was recorded to interest expense on the accompanying consolidated statements of operations related to these swap agreements.

Financial Statement Impacts

2 unchanged sentences

The following table summarizes the location and fair value of the derivative instruments on our consolidated balance sheets:

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:

Asset Derivatives:

($ in millions)

Other current assets

Derivatives designated as hedging instruments:

Commodity contracts - gains $ 2.4 $ 31.8

Commodity contracts - losses ( 0.9 ) ( 6.2 )

Derivatives not designated as hedging instruments:

Foreign exchange contracts - gains 0.3 2.0

Foreign exchange contracts - losses — ( 0.8 )

Total other current assets 1.8 26.8

Derivatives designated as hedging instruments:

Commodity contracts - gains 4.0 7.9

Total other assets 4.0 7.9

Total Asset Derivatives (1)

Liability Derivatives:

Accrued liabilities

Derivatives designated as hedging instruments:

Commodity contracts - losses $ 43.3 $ 3.6

Commodity contracts - gains ( 1.7 ) ( 0.7 )

Derivatives not designated as hedging instruments:

Foreign exchange contracts - losses 1.7 0.7

Foreign exchange contracts - gains ( 0.8 ) ( 0.1 )

Total accrued liabilities 42.5 3.5

Other liabilities

Derivatives designated as hedging instruments:

Commodity contract - losses 8.0 0.3

Commodity contract - gains ( 0.6 ) —

Total other liabilities 7.4 0.3

Total Liability Derivatives (1)

Balance Sheet Location ($ in millions)

Current Assets

Commodity contracts Other current assets $ 2.1 $ 1.5

Foreign currency contracts Other current assets — 0.3

Noncurrent Assets

Commodity contracts Other assets 3.2 4.0

Total derivative assets (1)

Current Liabilities

Commodity contracts Accrued liabilities $ 29.4 $ 41.6

Foreign currency contracts Accrued liabilities 2.5 0.9

Noncurrent Liabilities

Commodity contracts Other liabilities 0.5 7.4

Total derivative liabilities (1)

$ 32.4 $ 49.9

(1) Does not include the impact of cash collateral received from or provided to counterparties.

The following table summarizes the effects of derivative instruments on our consolidated statements of operations:

Amount of Gain (Loss)

Amount of Gain (Loss) for the

Years Ended December 31,

Location of Gain (Loss) 2022 2021 2020

Derivatives – Cash Flow Hedges ($ in millions)

Recognized in other comprehensive (loss) income:

Commodity contracts ——— $ ( 15.6 ) $ 182.0 $ 31.1

Reclassified from accumulated other comprehensive loss into income:

2023 2022 2021

Location of Gain (Loss) ($ in millions)

Cash Flow Hedges

Commodity contracts Other comprehensive (loss) income $ ( 53.6 ) $ ( 15.6 ) $ 182.0

Commodity contracts Cost of goods sold ( 72.5 ) 58.2 180.1

Derivatives – Fair Value Hedges

Fair Value Hedges

Interest rate contracts Interest expense — — ( 1.8 )

Derivatives Not Designated as Hedging Instruments

Not Designated as Hedging Instruments

Commodity contracts Cost of goods sold ( 0.6 ) 0.5 —

Foreign exchange contracts Selling and administration $ ( 27.8 ) $ ( 22.0 ) $ 17.7

Foreign exchange contracts Selling and administrative ( 15.1 ) ( 27.8 ) ( 22.0 )

Fair Value Measurements

Commodity contract financial instruments were valued primarily based on prices and other relevant information observable in market transactions involving identical or comparable assets or liabilities including both forward and spot prices for commodities.

All commodity financial instruments were valued as a Level 2 under the fair value measurements hierarchy.

Foreign currency contract financial instruments were valued primarily based on relevant information observable in market transactions involving identical or comparable assets or liabilities including both forward and spot prices for currencies.

All foreign currency contract financial instruments were valued as a Level 2 under the fair value measurements hierarchy.

Credit Risk and Collateral

3 unchanged sentences

When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, assume no repayment risk.

We minimize the credit (or repayment) risk in derivative instruments by entering into transactions with high-quality counterparties.

We minimize the credit (or repayment) risk in derivative instruments by entering into transactions with high-quality

counterparties.

We monitor our positions and the credit ratings of our counterparties, and we do not anticipate non-performance by the counterparties.

3 unchanged sentences

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.

FAIR VALUE MEASUREMENTS

Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

Hierarchical levels are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities.

We are required to separately disclose assets and liabilities measured at fair value on a recurring basis, from those measured at fair value on a nonrecurring basis.

Nonfinancial assets measured at fair value on a nonrecurring basis are intangible assets and goodwill, which are reviewed for impairment annually in the fourth quarter and/or when circumstances or other events indicate that impairment may have occurred.

Determining which hierarchical level an asset or liability falls within requires significant judgment.

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

Balance at December 31, 2022 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

(Level 3) Total

Assets ($ in millions)

Commodity contracts $ — $ 5.5 $ — $ 5.5

Foreign exchange contracts — 0.3 — 0.3

Total Assets $ — $ 5.8 $ — $ 5.8

Commodity contracts $ — $ 49.0 $ — $ 49.0

Foreign exchange contracts — 0.9 — 0.9

Total Liabilities $ — $ 49.9 $ — $ 49.9

Balance at December 31, 2021

Commodity contracts $ — $ 33.5 $ — $ 33.5

Foreign exchange contracts — 1.2 — 1.2

Total Assets $ — $ 34.7 $ — $ 34.7

Commodity contracts $ — $ 3.2 $ — $ 3.2

Foreign exchange contracts — 0.6 — 0.6

Total Liabilities $ — $ 3.8 $ — $ 3.8

Commodity Contracts

We use commodity derivative contracts for certain raw materials 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.

Foreign Currency Contracts

We enter into forward sales and purchase contracts to manage currency risk resulting from purchase and sale commitments denominated in foreign currencies.

Financial Instruments

The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximated fair values due to the short-term maturities of these instruments.

As of December 31, 2022 and 2021, the fair value measurements of debt were $ 2,517.7 million and $ 2,921.0 million, respectively.

Nonrecurring Fair Value Measurements

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

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

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

1 unchanged sentence

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

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk