Item 8. Financial Statements and Supplementary Data
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of Olin Corporation is responsible for establishing and maintaining adequate internal control over financial reporting. Olin’s internal control system was designed to provide reasonable assurance to the company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation, and may not prevent or detect all misstatements.
The management of Olin Corporation has assessed the effectiveness of the company’s internal control over financial reporting as of December 31, 2025. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013) to guide our analysis and assessment. Based on our assessment as of December 31, 2025, the company’s internal control over financial reporting was effective based on those criteria.
Our independent registered public accountants, KPMG LLP, have audited and issued a report on our internal control over financial reporting, which appears in this Form 10-K.
/s/ Kenneth Lane
Kenneth Lane
President and Chief Executive Officer
/s/ Todd A. Slater
Todd A. Slater
Senior Vice President and Chief Financial Officer
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
Olin Corporation:
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, 2025 and 2024, 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, 2025, 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, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025 based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control Over Financial Reporting . Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Evaluation of Environmental Obligations
As discussed in notes 2 and 20 to the consolidated financial statements, the Company has recorded liabilities for future environmental expenditures of $156.3 million as of December 31, 2025. The Company accrues a liability for environmental matters when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based upon current law and existing technologies. The liability is adjusted periodically as assessment and remediation efforts progress or as additional technical or legal information becomes available.
We identified the evaluation of environmental liabilities as a critical audit matter. This required challenging auditor judgment due to the nature of the estimate and assumptions, including judgments in determining required remediation activities designed to consider future events and uncertainties and the time period over which remediation activities will occur.
The following are the primary procedures that we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process to estimate environmental obligations, including controls related to the monitoring of the liability as compared to remedial activities required by regulatory authorities. We involved an environmental professional with specialized skills and knowledge who assisted in evaluating the Company’s planned remediation activities for certain sites, the time period over which remediation will occur, and changes in the liability and assumptions from those used in the prior period, including comparing the Company’s planned remediation activities to those communicated to regulatory authorities and to those commonly observed in conducting remediation.
/s/ KPMG LLP
We have served as the Company’s auditor since 1954.
St. Louis, Missouri
February 20, 2026
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OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Consolidated Balance Sheets
($ in millions, except per share data)
December 31,
Assets 2025 2024
Current assets:
Cash and cash equivalents $ 167.6 $ 175.6
Receivables, net 844.5 1,007.8
Income taxes receivable 66.6 11.5
Inventories, net 784.5 823.5
Other current assets 107.9 61.4
Total current assets 1,971.1 2,079.8
Property, plant and equipment, net 2,196.9 2,328.4
Operating lease assets, net 298.6 302.2
Deferred income taxes 47.2 53.4
Other assets 1,210.0 1,185.1
Intangible assets, net 174.4 206.6
Goodwill 1,427.6 1,423.6
Total assets $ 7,325.8 $ 7,579.1
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt $ 109.7 $ 129.0
Accounts payable 806.1 861.6
Income taxes payable 23.9 141.3
Current operating lease liabilities 59.7 64.8
Accrued liabilities 630.1 435.5
Total current liabilities 1,629.5 1,632.2
Long-term debt 2,717.6 2,713.2
Operating lease liabilities 252.5 243.2
Accrued pension liability 200.9 197.7
Deferred income taxes 317.6 430.5
Other liabilities 337.1 306.9
Total liabilities 5,455.2 5,523.7
Commitments and contingencies
Shareholders’ equity:
Common stock, $1.00 par value per share:
Authorized, 240.0 shares; issued and outstanding, 113.6 and 115.7 shares
113.6 115.7
Accumulated other comprehensive loss ( 414.5 ) ( 450.1 )
Retained earnings 2,139.8 2,357.5
Olin Corporation’s shareholders’ equity 1,838.9 2,023.1
Noncontrolling interests 31.7 32.3
Total equity 1,870.6 2,055.4
Total liabilities and equity $ 7,325.8 $ 7,579.1
The accompanying notes to consolidated financial statements are an integral part of the consolidated financial statements.
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OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Operations
($ in millions, except per share data)
Years Ended December 31,
2025 2024 2023
Sales $ 6,780.8 $ 6,540.1 $ 6,833.0
Operating expenses:
Cost of goods sold 6,279.3 5,802.6 5,667.5
Selling and administrative 463.3 408.5 406.7
Restructuring charges 33.4 33.3 89.6
Other operating income 0.5 0.8 42.9
Operating income 5.3 296.5 712.1
Losses of non-consolidated affiliates ( 3.1 ) — —
Interest expense ( 188.3 ) ( 184.5 ) ( 181.1 )
Interest income 4.4 3.7 4.3
Non-operating pension income 20.6 26.0 24.0
Income (loss) before taxes ( 161.1 ) 141.7 559.3
Income tax (benefit) provision ( 60.0 ) 36.7 107.3
Net (loss) income ( 101.1 ) 105.0 452.0
Net loss attributable to noncontrolling interests ( 0.6 ) ( 3.6 ) ( 8.2 )
Net (loss) income attributable to Olin Corporation $ ( 100.5 ) $ 108.6 $ 460.2
Net (loss) income attributable to Olin Corporation per common share:
Basic $ ( 0.88 ) $ 0.92 $ 3.66
Diluted $ ( 0.88 ) $ 0.91 $ 3.57
Weighted-average common shares outstanding:
Basic 114.6 117.8 125.9
Diluted 114.6 119.5 128.8
The accompanying notes to consolidated financial statements are an integral part of the consolidated financial statements.
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OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Comprehensive Income
($ in millions)
Years Ended December 31,
2025 2024 2023
Net (loss) income $ ( 101.1 ) $ 105.0 $ 452.0
Other comprehensive income (loss), net of tax:
Foreign currency translation ( 6.3 ) ( 6.2 ) ( 1.1 )
Cash flow hedges ( 1.9 ) 26.2 14.1
Pension and postretirement benefits 43.8 26.2 ( 13.4 )
Total other comprehensive income (loss), net of tax 35.6 46.2 ( 0.4 )
Comprehensive (loss) income ( 65.5 ) 151.2 451.6
Comprehensive loss attributable to noncontrolling interests ( 0.6 ) ( 3.6 ) ( 8.2 )
Comprehensive (loss) income attributable to Olin Corporation $ ( 64.9 ) $ 154.8 $ 459.8
The accompanying notes to consolidated financial statements are an integral part of the consolidated financial statements.
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OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Shareholders’ Equity
($ in millions, except per share data)
Years Ended December 31,
2025 2024 2023
Common Stock
Balance at beginning of year $ 115.7 $ 120.2 $ 132.3
Common stock repurchased and retired ( 2.2 ) ( 5.9 ) ( 13.3 )
Common stock issued for:
Stock options exercised 0.1 0.9 1.0
Other transactions — 0.5 0.2
Balance at end of year 113.6 115.7 120.2
Additional Paid-In Capital
Balance at beginning of year — 24.8 682.7
Common stock repurchased and retired ( 22.7 ) ( 53.8 ) ( 698.0 )
Common stock issued for:
Stock options exercised 2.2 23.0 24.4
Other transactions 4.8 ( 3.4 ) 1.6
Stock-based compensation 15.7 9.4 14.1
Balance at end of year — — 24.8
Accumulated Other Comprehensive Loss
Balance at beginning of year ( 450.1 ) ( 496.3 ) ( 495.9 )
Other comprehensive income (loss), net of tax 35.6 46.2 ( 0.4 )
Balance at end of year ( 414.5 ) ( 450.1 ) ( 496.3 )
Retained Earnings
Balance at beginning of year 2,357.5 2,583.7 2,224.5
Net (loss) income ( 100.5 ) 108.6 460.2
Common stock dividends paid ( 91.6 ) ( 94.2 ) ( 101.0 )
Common stock repurchased and retired ( 25.6 ) ( 240.6 ) —
Balance at end of year 2,139.8 2,357.5 2,583.7
Olin Corporation’s Shareholders’ Equity 1,838.9 2,023.1 2,232.4
Noncontrolling Interests
Balance at beginning of year 32.3 35.9 —
Net loss attributable to noncontrolling interest ( 0.6 ) ( 3.6 ) ( 8.2 )
Contributions from noncontrolling interests — — 44.1
Balance at end of year 31.7 32.3 35.9
Total Equity $ 1,870.6 $ 2,055.4 $ 2,268.3
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.
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OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Cash Flows
($ in millions)
Years Ended December 31,
2025 2024 2023
Operating Activities
Net (loss) income $ ( 101.1 ) $ 105.0 $ 452.0
Adjustments to reconcile net (loss) income to net cash and cash equivalents provided by (used for) operating activities:
Depreciation and amortization 521.6 518.1 533.4
Losses of non-consolidated affiliates 3.1 — —
Gains on disposition of property, plant and equipment — — ( 27.0 )
Stock-based compensation 20.7 17.1 18.6
Write-off of equipment and facility included in restructuring charges 4.1 — 17.7
Deferred income taxes ( 113.3 ) ( 33.7 ) ( 55.6 )
Qualified pension plan contributions ( 0.7 ) ( 1.3 ) ( 1.1 )
Qualified pension plan income ( 18.1 ) ( 23.3 ) ( 21.0 )
Change in assets and liabilities:
Receivables 123.7 ( 119.4 ) 65.4
Income taxes receivable/payable ( 179.8 ) ( 1.6 ) 45.8
Inventories 80.0 25.9 94.4
Other current assets ( 8.8 ) 2.4 ( 3.1 )
Accounts payable and accrued liabilities 128.0 72.8 ( 133.9 )
Other assets ( 7.3 ) ( 28.4 ) ( 23.4 )
Other noncurrent liabilities 22.3 ( 35.1 ) 15.8
Other operating activities ( 0.2 ) 4.7 ( 3.7 )
Net operating activities 474.2 503.2 974.3
Investing Activities
Capital expenditures ( 226.3 ) ( 195.1 ) ( 236.0 )
Business acquired in purchase transaction, net of cash acquired ( 55.8 ) — ( 63.9 )
Payments under other long-term supply contracts ( 31.0 ) ( 58.6 ) ( 64.5 )
Proceeds from disposition of property, plant and equipment — — 28.8
Investments in non-consolidated affiliates ( 1.8 ) ( 23.0 ) —
Other investing activities ( 4.7 ) ( 7.0 ) ( 5.2 )
Net investing activities ( 319.6 ) ( 283.7 ) ( 340.8 )
Financing Activities
Long-term debt:
Borrowings 2,755.0 1,081.9 707.7
Repayments ( 2,766.2 ) ( 912.2 ) ( 621.8 )
Common stock repurchased and retired ( 50.5 ) ( 300.3 ) ( 711.3 )
Stock options exercised 2.3 23.9 25.4
Employee taxes paid for share-based payment arrangements — ( 10.5 ) —
Dividends paid ( 91.6 ) ( 94.2 ) ( 101.0 )
Debt issuance costs ( 12.0 ) ( 1.2 ) —
Contributions received from noncontrolling interests — — 44.1
Net financing activities ( 163.0 ) ( 212.6 ) ( 656.9 )
Effect of exchange rate changes on cash and cash equivalents 0.4 ( 1.6 ) ( 0.3 )
Net (decrease) increase in cash and cash equivalents ( 8.0 ) 5.3 ( 23.7 )
Cash and cash equivalents, beginning of year 175.6 170.3 194.0
Cash and cash equivalents, end of year $ 167.6 $ 175.6 $ 170.3
Cash paid for interest and income taxes:
Interest, net $ 177.9 $ 180.9 $ 176.8
Income taxes, net of refunds 167.1 105.7 111.7
The accompanying notes to consolidated financial statements are an integral part of the consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF BUSINESS
Olin Corporation (Olin, the Company, we or our) is a Virginia corporation, incorporated in 1892, having its principal executive offices in Clayton, MO. We are a leading vertically integrated global manufacturer and distributor of chemical products and a leading U.S. manufacturer of ammunition. Our operations are concentrated in three business segments: Chlor Alkali Products and Vinyls, Epoxy and Winchester. All of our business segments are capital-intensive manufacturing businesses. The Chlor Alkali Products and Vinyls segment manufactures and sells chlorine and caustic soda, ethylene dichloride (EDC) and vinyl chloride monomer (VCM), methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, hydrochloric acid, hydrogen, bleach products and potassium hydroxide. The Epoxy segment produces and sells a full range of epoxy materials and precursors, including aromatics (acetone and phenol), allyl chloride, epichlorohydrin, liquid epoxy resins, solid epoxy resins and formulated solutions 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, along with contracted U.S. military project revenue.
NOTE 2. ACCOUNTING POLICIES
The preparation of the consolidated financial statements requires estimates and assumptions that affect amounts reported and disclosed in the financial statements and related notes. Actual results could differ from those estimates.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in conformity with the accounting principles generally accepted in the United States.
Principles of Consolidation
The consolidated financial statements include the accounts of Olin and all majority-owned subsidiaries. Investments in affiliates where Olin does not exercise control are accounted for using the equity method of accounting. Accordingly, we include only our share of earnings or losses of these affiliates in consolidated net income (loss). See Note 9, “Other Assets,” for additional information related to our equity method investments.
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 Electrochemical Unit (ECU)-based derivatives, focused on globally traded caustic soda and EDC. Olin holds 51 % interest and exercises control in BWA, and the joint venture is included in our consolidated financial statements in our Chlor Alkali Products and Vinyls segment, with Mitsui’s 49 % interest in BWA classified as noncontrolling interest. On September 18, 2025, we announced a mutual decision with Mitsui to end our joint venture, BWA, by the end of 2025. This decision was made to evolve our EDC participation by emphasizing longer-term structural opportunities that enhance value and optionality. All intercompany accounts and transactions are eliminated in consolidation.
Revenue Recognition
We derive our revenues primarily from the manufacturing and delivery of goods to customers. Revenues are recognized on sales of goods at the time when control of those goods is transferred to our customers at an amount that reflects the consideration to which we expect to be entitled in exchange for those goods. We primarily sell our goods directly to customers, and to a lesser extent, through distributors. Payment terms are typically 30 to 90 days from date of invoice. Our contracts do not typically have a significant financing component. Right to payment is determined at the point in time in which control has transferred to the customer.
A performance obligation is a promise in a contract to transfer a distinct good to the customer. At contract inception, we assess the goods promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a good (or bundle of goods) that is distinct. A contract’s transaction price is based on the price stated in the contract and allocated to each distinct performance obligation and revenue is recognized when the performance obligation is satisfied. Substantially all of our contracts have a single distinct performance obligation or multiple performance obligations which are distinct and represent individual promises within the contract. 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, 2025, 2024 and 2023, revenue recognized over time represented $ 344.7 million, $ 206.5 million and $ 104.8 million, respectively.
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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. Shipping and handling fees billed to customers are included in revenue and are considered activities to fulfill the promise to transfer the good. Allowances for estimated returns, discounts and rebates are considered variable consideration, which may be constrained, and are estimated and recognized when sales are recorded. The estimates are based on various market data, historical trends and information from customers. Actual returns, discounts and rebates have not been materially different from estimates. For all contracts that have a duration of one year or less at contract inception, we do not adjust the promised amount of consideration for the effects of a significant financing component.
Substantially all of our revenue is derived from contracts with an original expected length of time of one year or less and for which we recognize revenue for the amount in which we have the right to invoice at the point in time in which control has transferred to the customer. However, a portion of our revenue is derived from long-term contracts which have contract periods that vary between one to multi-year. 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. Certain contracts include variable volumes and/or variable pricing with pricing provisions tied to commodity, consumer price or other indices. The transaction price allocated to the remaining performance obligations related to our contracts was excluded from the disclosure of our remaining performance obligations based on the following practical expedients that we elected to apply: (i) contracts with index-based pricing or variable volume attributes in which such variable consideration is allocated entirely to a wholly unsatisfied performance obligation; and (ii) contracts with an original expected duration of one year or less.
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 $ 38.6 million and $ 23.2 million as of December 31, 2025 and 2024, respectively, and are included as a component of accrued liabilities and other liabilities in our consolidated balance sheets. Contract assets were $ 61.4 million and $ 26.7 million as of December 31, 2025 and 2024, respectively, and are included as a component of other current assets and other assets in our consolidated balance sheets. As of December 31, 2025, substantially all our contract liabilities and $ 20.9 million of our contact 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 administrative expenses include personnel costs associated with sales, marketing and administrative, research and development, legal and legal-related costs, stock-based compensation, including mark-to-market adjustments, consulting and professional services fees, advertising expenses, depreciation expense related to these activities, foreign currency translation and other similar costs.
Acquisition-related Costs
Acquisition-related costs include advisory, legal, accounting and other professional fees incurred in connection with the purchase and integration of our acquisitions. Acquisition-related costs also may include costs which arise as a result of acquisitions, including contractual change in control provisions, contract termination costs, compensation payments related to the acquisition or pension and other postretirement benefit plan settlements.
Other Operating Income (Expense)
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, 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 Income (Expense)
Other income (expense) consists of non-operating income and expense items which are not related to our primary business activities.
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Foreign Currency Translation
Our worldwide operations utilize the U.S. 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 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. Assets and liabilities denominated in other than the local currency are remeasured into the local currency prior to translation into USD and the resultant exchange gains or losses are included in income in the period in which they occur. Income and expenses are translated into USD using an approximation of the average rate prevailing during the period. We change the functional currency of our separate and distinct foreign entities only when significant changes in economic facts and circumstances indicate clearly that the functional currency has changed.
Cash and 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
We classify our marketable securities as available-for-sale, which are reported at fair market value with unrealized gains and losses included in accumulated other comprehensive loss, net of applicable taxes. The fair value of marketable securities is determined by quoted market prices. Realized gains and losses on sales of investments, as determined on the specific identification method, and declines in value of securities judged to be other-than-temporary are included in other income (expense) in the consolidated statements of operations. Interest and dividends on all securities are included in interest income and other income (expense), respectively. As of December 31, 2025 and 2024, no short-term investments were recorded on our consolidated balance sheets.
Accounts Receivable and Credit Risk
We evaluate the collectability of financial instruments based on our current estimate of credit losses expected to be incurred over the life of the financial instrument. The only significant financial instrument which creates exposure to credit losses are customer accounts receivables. Credit is extended based upon the evaluation of a customer’s financial condition and, generally, collateral is not required. We measure credit losses on uncollected accounts receivable through an allowance for doubtful accounts receivable which is based on a combination of factors including both historical collection experience and reasonable estimates that affect the expected collectability of the receivable. These factors include historical bad debt experience, industry conditions of the customer or group of customers, geographical region, credit ratings and general market conditions. We group receivables together for purposes of estimating credit losses when customers have similar risk characteristics; otherwise, the estimation is performed on the individual receivable. Our accounts receivables are predominantly derived from sales denominated in USD or the Euro.
This estimate is periodically adjusted when we become aware of a specific customer’s inability to meet its financial obligations (e.g., bankruptcy filing) or as a result of changes in the overall aging of accounts receivable. While we have a large number of customers that operate in diverse businesses and are geographically dispersed, a general economic downturn in any of the industry segments in which we operate could result in higher-than-expected defaults, and, therefore, the need to revise estimates for the allowance for doubtful accounts could occur.
Our consolidated balance sheets included an allowance for doubtful accounts receivables of $ 12.2 million and $ 11.8 million and other receivables of $ 82.4 million and $ 94.6 million at December 31, 2025 and 2024, respectively, which were included in receivables, net. Other receivables primarily relate to indirect taxes in foreign jurisdictions.
Inventories
Inventories are valued at the lower of cost and net realizable value. For U.S. inventories, inventory costs are determined principally by the last-in, first-out (LIFO) method of inventory accounting while for international inventories, inventory costs are determined principally by the first-in, first-out (FIFO) method of inventory accounting. Costs for other inventories have been determined principally by the average-cost method (primarily operating supplies, spare parts and maintenance parts). Elements of costs in inventories include raw materials, direct labor and manufacturing overhead. See Note 7 “Inventories” for additional information.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets. Interest costs incurred to finance expenditures for major long-term construction projects are capitalized as part of the historical cost and included in property, plant and equipment and are depreciated over the useful lives
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of the related assets. Leasehold improvements are amortized over the term of the lease or the estimated useful life of the improvement, whichever is shorter. Start-up costs are expensed as incurred. Expenditures for maintenance and repairs are charged to expense when incurred while the costs of significant improvements, which extend the useful life of the underlying asset, are capitalized.
Property, plant and equipment are reviewed for impairment when conditions indicate that the carrying values of the asset group may not be recoverable. Such impairment conditions include an extended period of idleness or a plan of disposal. If such impairment indicators are present or other factors exist that indicate that the carrying amount of an asset group may not be recoverable, we determine whether impairment has occurred through the use of an undiscounted cash flow analysis at the lowest level for which identifiable cash flows exist. For our Chlor Alkali Products and Vinyls, Epoxy and Winchester segments, the lowest level for which identifiable cash flows exist is the operating facility level or an appropriate grouping of operating facilities level, which represents the asset group. The amount of impairment loss, if any, is measured by the difference between the net book value of the assets and the estimated fair value of the related asset group. See Note 8, “Property, Plant and Equipment,” for additional information.
Leases
We determine if an arrangement is a lease at inception of the contract. Operating lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at commencement date based on the present value of fixed lease payments over the lease term. Our lease commitments are primarily for railcars, but also include logistics, manufacturing, storage, real estate and information technology assets. Leases with an initial term of 12 months or less are not recorded on the balance sheet; instead, we recognize lease expense for these leases on a straight-line basis over the lease term. We do not account for lease components (e.g., fixed payments to use the underlying lease asset) separately from the non-lease components (e.g., fixed payments for common-area maintenance costs and other items that transfer a good or service). Some of our leases include variable lease payments, which primarily result from changes in consumer price and other market-based indices, which are generally updated annually, and maintenance and usage charges. These variable payments are excluded from the calculation of our lease assets and liabilities.
Most leases include one or more options to renew, with renewal terms that can extend the lease term from one-to-many years. The exercise of lease renewal options is typically at our sole discretion. Certain leases also include options to purchase the leased asset. We do not include options to renew or purchase leased assets in the measurement of lease liabilities unless those options are highly certain of exercise. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. We have operating leases with terms that require us to guarantee a portion of the residual value of the leased assets upon termination of the lease as well as other guarantees. These residual value guarantees consist primarily of leases for railcars. Residual value guarantee payments that become probable and estimable are accrued as part of the lease liability and recognized over the remaining life of the applicable lease. Our current expectation is that the likelihood of material residual guarantee payments is remote. We utilize the interest rate implicit in the lease to determine the lease liability when the interest rate can be determined. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. We estimate the incremental borrowing rate based on the geographic region for which we would borrow, on a secured basis of the lease asset, at an amount equal to the lease payments over a similar time period as the lease term. We have no additional restrictions or covenants imposed by our lease contracts. See Note 21, “Leases,” for additional information.
Asset Retirement Obligations
We record the fair value of an asset retirement obligation associated with the retirement of a tangible long-lived asset as a liability in the period incurred. The liability is measured at discounted fair value and is adjusted to its present value in subsequent periods as accretion expense is recorded. The corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s useful life. Asset retirement obligations are reviewed annually in the fourth quarter and/or when circumstances or other events indicate that changes underlying retirement assumptions may have occurred.
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The activities of our asset retirement obligations were as follows:
December 31,
2025 2024
Asset Retirement Obligation Activity ($ in millions)
Beginning balance $ 92.0 $ 72.8
Accretion 5.4 5.0
Spending ( 9.0 ) ( 5.4 )
Adjustments 14.4 19.6
Ending balance $ 102.8 $ 92.0
At December 31, 2025 and 2024, our consolidated balance sheets included an asset retirement obligation of $ 87.1 million and $ 79.2 million, respectively, which were classified as other noncurrent liabilities.
In 2025 and 2024, we had net adjustments that increased the asset retirement obligation by $ 14.4 million and $ 19.6 million, respectively, which were primarily comprised of increases in estimated costs for certain assets.
Comprehensive Income (Loss)
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 gains (losses) and 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
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. 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: a significant adverse change in the business climate; a significant adverse legal judgment; adverse cash flow trends; an adverse action or assessment by a government agency; unanticipated competition; sustained decline in our stock price; and a significant restructuring charge within a reporting unit. We define reporting units at the business segment level or one level below the business segment level. For purposes of testing goodwill for impairment, goodwill has been allocated to our reporting units to the extent it relates to each reporting unit.
During the fourth quarter of 2025, we performed our qualitative assessment of goodwill. Based upon our qualitative impairment assessment, it was more likely than not that the fair value of each of our reporting units was greater than its carrying amount as of December 31, 2025. No impairment charges on goodwill were recorded for 2025, 2024 or 2023.
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. Management judgment is required in developing the assumptions for the discounted cash flow model. We also corroborate our discounted cash flow analysis by evaluating a market-based approach that considers earnings before interest, taxes, depreciation and amortization (EBITDA) multiples from a representative sample of comparable public companies. As a further indicator that each reporting unit has been valued appropriately using a discounted cash flow model, the aggregate fair value of all reporting units is reconciled to the total market value of Olin. 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.
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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. 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.
Intangible Assets
In conjunction with our acquisitions, we have obtained access to the customer contracts and relationships, trade names, acquired technology and other intellectual property of the acquired companies. These relationships are expected to provide economic benefit for future periods. Amortization expense is recognized on a straight-line basis over the estimated lives of the related assets. The amortization period of customer contracts and relationships, trade names, acquired technology and other intellectual property represents our best estimate of the expected usage or consumption of the economic benefits of the acquired assets, which is based on the company’s historical experience.
Intangible assets with finite lives are reviewed for impairment when conditions indicate that the carrying values of the assets may not be recoverable. Circumstances that are considered as part of the qualitative assessment and could trigger a quantitative impairment test include, but are not limited to: a significant adverse change in the business climate; a significant adverse legal judgment including asset specific factors; adverse cash flow trends; an adverse action or assessment by a government agency; unanticipated competition; sustained decline in our stock price; and a significant restructuring charge within a reporting unit.
During the fourth quarter of 2025, we performed our qualitative assessment of our intangible assets. 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, 2025. No impairment on our intangible assets was recorded in 2025, 2024 or 2023.
See Note 10, “Goodwill and Intangible Assets,” for additional information.
Environmental Liabilities and Expenditures
Accruals (charges to income) for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based upon current law and existing technologies. These amounts, which are not discounted and are exclusive of claims against third parties, are adjusted periodically as assessment and remediation efforts progress or additional technical or legal information becomes available. Environmental costs are capitalized if the costs increase the value of the property and/or mitigate or prevent contamination from future operations. See Note 20, “Environmental,” for additional information.
Income Taxes
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. See Note 14, “Income Taxes,” for additional information.
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Derivative Financial Instruments
We are exposed to market risk in the normal course of our business operations due to our purchases of certain commodities, our ongoing investing and financing activities and our operations that use foreign currencies. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. We have established policies and procedures governing our management of market risks and the use of financial instruments to manage exposure to such risks. We use hedge accounting treatment for a significant amount of our business transactions whose risks are covered using derivative instruments. The hedge accounting treatment provides for the deferral of gains or losses on derivative instruments until such time as the related transactions occur. See Note 23, “Derivative Financial Instruments,” for additional information.
Fair Value
Fair value is defined as the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties or the amount that would be paid to transfer a liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity.
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, defined by ASC 820 “Fair Value Measurement” (ASC 820), and directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:
Level 1 — Inputs were unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2 — Inputs (other than quoted prices included in Level 1) were either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.
Level 3 — Inputs reflected management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration was given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
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, 2025 and 2024, the fair value measurements of debt were $ 2,834.3 million and $ 2,779.0 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, 2025 and 2024.
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.” 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. 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; therefore, actuarial gains and losses are amortized based upon the remaining life expectancy of the inactive plan participants. For both the years ended December 31, 2025 and 2024, the average remaining life expectancy of the inactive participants in the domestic defined benefit pension plan was 16 years.
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One of the key assumptions for the net periodic pension calculation is the expected long-term rate of return on plan assets, used to determine the “market-related value of assets.” The “market-related value of assets” recognizes differences between the plan’s actual return and expected return over a five-year period. The required use of an expected long-term rate of return on the market-related value of plan assets may result in recognized pension income that is greater or less than the actual returns of those plan assets in any given year. Over time, however, the expected long-term returns are designed to approximate the actual long-term returns and, therefore, result in a pattern of income and expense recognition that more closely matches the pattern of the services provided by the employees. As differences between actual and expected returns are recognized over five years, they subsequently generate gains and losses that are subject to amortization over the average remaining life expectancy of the inactive plan participants, as described in the preceding paragraph.
We use long-term historical actual return information, the mix of investments that comprise plan assets, and future estimates of long-term investment returns and inflation by reference to external sources to develop the expected long-term rate of return on plan assets as of December 31.
The discount rate assumptions used for pension and non-pension postretirement benefit plan accounting reflect the rates available on high-quality fixed-income debt instruments on December 31 of each year. The rate of compensation increase is based upon our long-term plans for such increases. For retiree medical plan accounting, we review external data and our own historical trends for healthcare costs to determine the healthcare cost trend rates.
For our defined benefit pension and other postretirement benefit plans, we measure service and interest costs by applying the specific spot rates along the yield curve to the plans’ estimated cash flows. We believe this approach provides a more precise measurement of service and interest costs by aligning the timing of the plans’ liability cash flows to the corresponding spot rates on the yield curve.
Stock-Based Compensation
We measure the cost of employee services received in exchange for an award of equity instruments, such as stock options, performance shares and restricted stock, based on the grant-date fair value of the award. This cost is recognized over the period during which an employee is required to provide service in exchange for the award, the requisite service period (usually the vesting period). An initial measurement is made of the cost of employee services received in exchange for an award of liability instruments based on its current fair value and the value of that award is subsequently remeasured at each reporting date through the settlement date. Changes in fair value of liability awards during the requisite service period are recognized as compensation cost over that period. See Note 17, “Stock-based Compensation,” for additional information. There were no significant capitalized stock-based compensation costs during 2025 or 2024.
Share Repurchases
Under our share repurchase programs, we may pursue various share repurchase strategies, which include open market transactions or through privately negotiated transactions, including under an accelerated share repurchase (ASR) agreement, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. Under an ASR agreement, which is typically with a third-party financial institution to repurchase shares of Olin’s common stock, Olin pays a specified amount to the financial institution and receives an initial delivery of shares. This initial delivery of shares represents the minimum number of shares that Olin may receive under the agreement. Upon settlement of the ASR agreement, the financial institution delivers additional shares, with the final number of shares delivered determined with reference to the volume weighted-average price of Olin’s common stock over the term of the agreement, less an agreed-upon discount.
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. As we repurchase our common shares, we reduce common stock for the $1 par value of the shares repurchased, with the excess purchase price over par value recorded as a reduction of additional paid-in capital. If additional paid-in capital is reduced to zero, we record the remainder of the excess purchase price over par value as a reduction of retained earnings.
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.
NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS
In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):
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Disaggregation of Income Statement Expenses , which expands the disclosure requirements in the notes to the financial statements on certain costs and expenses on an interim and annual basis. The new requirements are effective for the Company’s annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with the option to early adopt at any time before the effective date. ASU 2024-03 requires adoption on a prospective basis, with the option for retrospective application. While the ASU implements further disclosure requirements, it does not change how an entity calculates and/or records its expenses, and it will have no impact on the Company’s consolidated financial statements. We are currently evaluating the impact of the standard on our disclosures.
In December 2023, the FASB issued 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 adopted the new standard during 2025, retrospectively, which did not have a material impact on our consolidated financials. Upon adoption, we have enhanced our income tax disclosures. See Note 14 “Income Taxes,” for additional information.
NOTE 4. ACQUISITIONS
On April 18, 2025, Olin acquired AMMO, Inc.’s small caliber ammunition manufacturing assets for total consideration of $ 55.8 million. The acquisition, which includes AMMO Inc.’s brass shellcase capabilities and its 185,000 square foot production facility located in Manitowoc, WI, is included in Olin’s Winchester segment. The acquisition was financed with cash on hand. We recorded the aggregate excess purchase price over the fair value of identifiable tangible assets acquired and liabilities assumed, which included a final allocation of $ 4.1 million of goodwill allocated to our Winchester segment. The total assets acquired, excluding goodwill, and liabilities assumed amounted to $ 62.2 million and $ 6.4 million respectively. The acquisition is not material and therefore supplemental pro forma financial information is not provided.
On October 1, 2023, Olin acquired the assets of White Flyer Targets, LLC (White Flyer) from Reagent Diversified Holdings, Inc. for $ 63.5 million. 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 aggregate excess purchase price over identifiable net tangible and intangible assets acquired and liabilities assumed, which included final allocation of $ 2.4 million of goodwill allocated to our Winchester segment and $ 4.5 million of intangible assets subject to amortization. The final total assets acquired, excluding goodwill and intangibles, and liabilities assumed amounted to $ 66.6 million and $ 10.0 million, respectively. The acquisition is not material, and therefore, supplemental pro forma financial information is not provided.
NOTE 5. RESTRUCTURING CHARGES
As a result of weak epoxy resin demand and higher costs within the Latin American region, during the three months ended December 31, 2025, the Company made the decision to close our liquid epoxy resin manufacturing facility in Guarujá, Brazil and recorded restructuring charges of $ 9.6 million, including a $ 4.1 million non-cash asset impairment charge. The closure is expected to occur during the first quarter 2026. We expect to incur additional restructuring charges of approximately $ 15 million through 2027 related to this actions.
Prior restructuring and optimization efforts, which have been previously announced and which we continue to execute on, include:
• closure of Chlorine 3 manufacturing facility in Freeport, TX announced on December 11, 2024;
• reduction of epoxy resin capacity at Freeport, TX facility, ceasing of remaining operations at Gumi, South Korea facility and reduction of sales and support staffing across Asia all announced on June 20, 2023;
• closure of cumene facility in Terneuzen, Netherlands and ceasing of solid epoxy resin production at Gumi, South Korea announced on March 21, 2023;
• closure of one of our bisphenol production lines at Stade, Germany site announced in 2022;
• closure of diaphragm-grade chlor alkali capacity of 400,000 tons at McIntosh, AL facility announced in 2021;
• closure of trichloroethylene and anhydrous hydrogen chloride liquefaction facilities in Freeport, TX announced January 18, 2021; and
• closure of chlor alkali plant with capacity of 230,000 tons and vinylidene chlorine production facility, both in Freeport, TX announced on December 11, 2019.
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Pretax restructuring charges related to these actions include facility exit costs, lease and other contract termination costs, employee severance and related benefits costs and the write-off of equipment and facilities. The following table summarizes the 2025, 2024 and 2023 restructuring activity by component and the remaining balances in accrued restructuring costs as of December 31, 2025, 2024 and 2023:
Employee Severance and Related Benefit Costs Lease and Other Contract Termination Costs Facility Exit Costs Write-off of Equipment and Facility Total
Changes in Reserve ($ in millions)
Balance at January 1, 2023 $ 9.4 $ 4.2 $ — $ — $ 13.6
Restructuring charges 8.4 29.1 34.4 17.7 89.6
Amounts utilized ( 7.0 ) ( 16.6 ) ( 34.4 ) ( 17.7 ) ( 75.7 )
Balance at December 31, 2023 10.8 16.7 — — 27.5
Restructuring charges 1.9 4.2 27.2 — 33.3
Amounts utilized ( 9.6 ) ( 15.7 ) ( 27.2 ) — ( 52.5 )
Balance at December 31, 2024 3.1 5.2 — — 8.3
Restructuring charges 14.7 4.4 10.2 4.1 33.4
Amounts utilized ( 6.0 ) ( 2.9 ) ( 10.2 ) ( 4.1 ) ( 23.2 )
Balance at December 31, 2025 $ 11.8 $ 6.7 $ — $ — $ 18.5
The following table summarizes the cumulative restructuring charges for each segment related to the restructuring and optimization efforts summarized above, by major component, through December 31, 2025:
Chlor Alkali Products and Vinyls Epoxy Other Total
Cumulative Restructuring Charges ($ in millions)
Write-off of equipment and facility $ 61.6 $ 22.4 $ — $ 84.0
Employee severance and related benefit costs 8.6 20.5 3.1 32.2
Facility exit costs 61.0 37.7 — 98.7
Lease and other contract termination costs 6.9 38.1 — 45.0
Total cumulative restructuring charges $ 138.1 $ 118.7 $ 3.1 $ 259.9
As of December 31, 2025, we have incurred cumulative restructuring-related cash expenditures of $ 157.3 million and non-cash charges of $ 84.1 million related to our restructuring actions. The remaining accrued restructuring liability of $ 18.5 million is expected to be paid out through 2030. We expect to incur additional restructuring charges through 2030 of approximately $ 70.0 million related to these actions.
NOTE 6. EARNINGS PER SHARE
Basic and diluted net (loss) income attributable to Olin Corporation per share are computed by dividing net (loss) income attributable to Olin Corporation by the weighted-average number of common shares outstanding. Diluted net (loss) income attributable to Olin Corporation per share reflects the dilutive effect of stock-based compensation.
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Years Ended December 31,
2025 2024 2023
Computation of Earnings (Loss) per Share (In millions, except per share data)
Net (loss) income attributable to Olin Corporation ( 100.5 ) 108.6 460.2
Weighted-average common shares - basic 114.6 117.8 125.9
Dilutive effect of stock-based compensation — 1.7 2.9
Weighted-average common shares - diluted 114.6 119.5 128.8
Earnings (loss) per common share attributable to Olin Corporation:
Basic $ ( 0.88 ) $ 0.92 $ 3.66
Diluted $ ( 0.88 ) $ 0.91 $ 3.57
The computation of dilutive shares does not include 3.5 million, 1.9 million and 1.2 million shares in 2025, 2024 and 2023, respectively, as their effect would have been anti-dilutive.
NOTE 7. INVENTORIES
Inventories consisted of the following:
December 31,
2025 2024
Inventories ($ in millions)
Supplies $ 156.2 $ 149.3
Raw materials 204.7 185.2
Work in process 178.1 173.1
Finished goods 413.9 467.3
Inventories excluding LIFO reserve 952.9 974.9
LIFO reserve ( 168.4 ) ( 151.4 )
Inventories, net $ 784.5 $ 823.5
Inventories valued using the LIFO method comprised 63 % and 61 % of the total inventories at December 31, 2025 and 2024, respectively. The replacement cost of our inventories would have been approximately $ 168.4 million and $ 151.4 million higher than that reported at December 31, 2025 and 2024, respectively.
NOTE 8. PROPERTY, PLANT AND EQUIPMENT
December 31,
Useful Lives 2025 2024
Property Plant and Equipment ($ in millions)
Land and improvements to land 10-20 Years (1)
$ 294.0 $ 287.2
Buildings and building equipment 10-30 Years 464.7 440.8
Machinery and equipment 3-20 Years 6,732.5 6,626.7
Leasehold improvements 3-11 Years 3.4 8.6
Construction in progress 211.0 154.3
Property, plant and equipment 7,705.6 7,517.6
Accumulated depreciation ( 5,508.7 ) ( 5,189.2 )
Property, plant and equipment, net $ 2,196.9 $ 2,328.4
(1) Useful life is exclusive to land improvements.
The weighted-average useful life of machinery and equipment at December 31, 2025, was 11 years. Depreciation expense was $ 393.3 million, $ 405.8 million and $ 421.8 million for 2025, 2024 and 2023, respectively. Interest capitalized was $ 1.1 million, $ 1.7 million and $ 2.8 million for 2025, 2024 and 2023, respectively.
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The consolidated statements of cash flows for the years ended December 31, 2025, 2024 and 2023, included an increase (decrease) of $ 16.9 million, $( 10.5 ) million and $ 5.3 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, 2025, 2024 and 2023.
NOTE 9. OTHER ASSETS
Included in other assets were the following:
December 31,
2025 2024
Other Assets ($ in millions)
Supply contracts $ 996.0 $ 1,047.3
Pension assets 106.8 43.3
Investments in non-consolidated affiliates 21.3 23.0
Other 85.9 71.5
Other assets $ 1,210.0 $ 1,185.1
For the year ended December 31, 2025, payments of $ 31.0 million were made under other long-term supply contracts for our Stade, Germany site. For the year ended December 31, 2024, payments of $ 58.6 million were made under other long-term supply contracts for energy modernization projects in the U.S. Gulf Coast. The weighted-average useful life of long-term supply contracts at December 31, 2025, was 19 years.
For the years ended December 31, 2025, 2024 and 2023, amortization expense of $ 83.6 million, $ 73.2 million and $ 71.2 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. The long-term supply contracts are monitored for impairment each reporting period.
Estimated amortization expense relating to long-term supply contracts for the next five-years is as follows:
Estimated Amortization Expense - Long-term Supply Contracts ($ in millions)
2026 $ 85.4
2027 83.5
2028 80.2
2029 78.4
2030 75.3
Investments in Non-consolidated Affiliates
Olin Corporation and Plug Power, Inc. have a joint venture named Hidrogenii, LLC (Hidrogenii), a strategic partnership that aims to leverage the strengths of both companies to advance hydrogen production and utilization. The joint venture began with the construction of a 15-ton-per-day hydrogen liquefaction plant in St. Gabriel, LA, which commenced operations in the second quarter 2025. Hidrogenii is owned 50 % by Plug Power LA JV, LLC, a wholly owned subsidiary of Plug Power, Inc. and 50 % by Niloco Hydrogen Holdings LLC, a wholly owned subsidiary of Olin Corporation. The investments in, and the operating results of, 50%-or-less-owned entities not controlled by Olin are included in the consolidated financial statements using the equity method basis of accounting and classified as non-consolidated affiliates.
The following table summarizes our investments in non-consolidated affiliates:
December 31,
2025 2024
Investments in Non-consolidated Affiliates ($ in millions)
Balance at beginning of year $ 23.0 $ —
Capital contributions 1.8 23.0
Losses of non-consolidated affiliates (1)
( 3.5 ) —
Balance at end of year $ 21.3 $ 23.0
(1) Excludes the impact of $ 0.4 million pretax income for the year ended December 31, 2025, for Olin’s portion of the $ 22.0 million investment tax credit, which is the basis difference between our equity ownership of Hidrogenii and Olin’s investment, and will be recognized over the useful life of the underlying operational assets.
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NOTE 10. GOODWILL AND INTANGIBLE ASSETS
Changes in the carrying value of goodwill were as follows:
Chlor Alkali Products and Vinyls Epoxy Winchester Total
Goodwill ($ in millions)
Balance at January 1, 2024 (1)
$ 1,276.1 $ 145.2 $ 2.7 $ 1,424.0
Acquisition activity — — ( 0.3 ) ( 0.3 )
Foreign currency translation adjustment 0.3 ( 0.4 ) — ( 0.1 )
Balance at December 31, 2024 (1)
1,276.4 144.8 2.4 1,423.6
Acquisition activity — — 4.1 4.1
Foreign currency translation adjustment ( 0.1 ) — — ( 0.1 )
Balance at December 31, 2025 (1)
$ 1,276.3 $ 144.8 $ 6.5 $ 1,427.6
(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:
December 31,
2025 2024
Useful Lives Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net
Intangible Assets ($ in millions)
Customers, customer contracts and relationships 15 Years $ 524.4 $ ( 358.4 ) $ 166.0 $ 666.7 $ ( 469.2 ) $ 197.5
Trade names 7 Years 3.5 ( 1.2 ) 2.3 3.5 ( 0.6 ) 2.9
Acquired technology 4-5 Years 11.3 ( 9.4 ) 1.9 93.7 ( 91.7 ) 2.0
Other 10 Years 4.9 ( 0.7 ) 4.2 4.9 ( 0.7 ) 4.2
Total intangible assets $ 544.1 $ ( 369.7 ) $ 174.4 $ 768.8 $ ( 562.2 ) $ 206.6
Amortization expense relating to intangible assets was $ 37.3 million, $ 37.6 million and $ 37.0 million in 2025, 2024 and 2023, respectively.
Estimated amortization expense relating to intangible assets for the subsequent five-years is as follows:
Estimated Amortization Expense - Intangible Assets ($ in millions)
2026 $ 35.8
2027 35.7
2028 35.5
2029 35.5
2030 26.7
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NOTE 11. DEBT
December 31,
2025 2024
Financing Obligations ($ in millions)
Fixed-rate Financing
9.50 % senior notes, due 2025 (2025 Notes)
$ — $ 108.6
5.125 % senior notes, due 2027 (2027 Notes)
— 500.0
5.625 % senior notes, due 2029
669.3 669.3
5.00 % senior notes, due 2030
515.3 515.3
6.625 % senior notes, due 2033 (2033 Notes)
600.0 —
Variable-rate Financing
Term Loan Facilities ( 5.438 % and 6.057 % at December 31, 2025 and 2024, respectively)
637.8 332.5
Revolving Credit Facilities 5.438 % and 6.057 % at December 31, 2025 and 2024, respectively)
— 170.0
Receivables Financing Agreements 340.0 475.0
Recovery zone bonds ( 4.938 % and 5.557 % at December 31, 2025 and 2024, respectively)
83.0 83.0
Industrial development and environmental improvement obligations ( 5.00 % at December 31, 2024)
— 2.9
Other:
Deferred debt issuance costs ( 18.1 ) ( 14.3 )
Unamortized bond original issue discount — ( 0.1 )
Total debt 2,827.3 2,842.2
Amounts due within one year 109.7 129.0
Total long-term debt $ 2,717.6 $ 2,713.2
Senior Notes and Senior Credit Facilities
On March 14, 2025, Olin issued $ 600.0 million aggregate principal amount of 6.625 % senior notes due April 1, 2033 (2033 Notes), in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended. Interest on the 2033 Notes is paid semi-annually and began on October 1, 2025.
On March 14, 2025, Olin entered into a $ 1,850.0 million senior credit facility (2025 Senior Credit Facility), which increased the borrowing limit of our then-existing $ 1,550.0 million senior credit facility (2022 Senior Credit Facility) by $ 300.0 million and extended the maturity date from October 11, 2027 to March 14, 2030. The 2025 Senior Credit Facility includes a term loan facility with aggregate commitments of $ 650.0 million (2025 Term Loan Facility) and a revolving credit facility with aggregate commitments of $ 1,200.0 million (2025 Revolving Credit Facility).
The 2025 Term Loan Facility replaced Olin’s then-existing $ 350.0 million term loan facility (2022 Term Loan Facility, and collectively with the 2025 Term Loan Facility, the Term Loan Facilities). The 2025 Term Loan Facility requires principal amortization payments that began on June 30, 2025 at a rate of 0.625 % per quarter through March 31, 2027, increasing to 1.250 % per quarter thereafter, until maturity, and was fully drawn on the closing date.
The 2025 Revolving Credit Facility replaced Olin’s then-existing $ 1,200.0 million revolving credit facility (2022 Revolving Credit Facility, and collectively with the 2025 Revolving Credit Facility, the Revolving Credit Facilities). The 2025 Revolving Credit Facility includes a $ 100.0 million letter of credit subfacility.
Proceeds from the 2033 Notes, together with borrowings under the 2025 Senior Credit Facility, were used to redeem the $ 108.6 million 2025 Notes, redeem the $ 500.0 million 2027 Notes, refinance the then-existing 2022 Senior Credit Facility, comprised of $ 505.0 million of borrowings under the 2022 Revolving Credit Facility and $ 332.5 million of borrowings under the 2022 Term Loan Facility, and pay related fees and expenses.
During the second quarter of 2024, we utilized our 2022 Revolving Credit Facility to repay $ 50.0 million of Go Zone and $ 20.0 million of Recovery Zone tax-exempt variable-rate bonds.
We were in compliance with all covenants and restrictions under all our outstanding debt agreements as of December 31, 2025, and no event of default had occurred under any of our outstanding debt agreements that would permit the acceleration of the debt if not cured. In the future, our ability to generate sufficient operating cash flows, among other factors, will determine the amounts available to be borrowed under these facilities. As of December 31, 2025, as a result of our restrictive covenant related to the leverage ratio, the maximum additional borrowings available to us were $ 825.3 million. This limitation would
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restrict our ability to borrow the maximum amounts available under the 2025 Revolving Credit Facility and the 2024 Receivables Financing Agreement. As of December 31, 2025, there were no other covenants or restrictions that would have limited our ability to borrow.
Subsequent Event
On February 19, 2026, we executed an amendment to the 2025 Senior Credit Facility (Senior Secured Credit Facility) which, among other things, modified the financial covenants to be less restrictive and incorporated guarantees and collateral by certain of our domestic subsidiaries. The Senior Secured Credit Facility maintained the 2025 Term Loan Facility, as amended (Secured Term Loan Facility), and the 2025 Revolving Credit Facility, as amended (Senior Secured Revolving Credit Facility). The amendment required all remaining principal amortization payments under the Secured Term Loan Facility to be satisfied. Borrowings under the Senior Secured Revolving Credit Facility were used to satisfy the $ 109.7 million remaining principal amortization payments under the Secured Term Loan Facility. The maturity date for the Senior Secured Credit Facility remained March 14, 2030.
The amendment requires that the obligations under the Senior Secured Credit Facility be guaranteed by certain of our domestic subsidiaries. The obligations under the Senior Secured Credit Facility are also secured by liens on substantially all of Olin’s and the subsidiary guarantors’ personal property (Collateral), other than certain principal properties and capital stock of subsidiaries, and subject to certain other exceptions. The amendment provides that substantially all guarantees under the Senior Secured Credit Facility and liens on Collateral be released automatically upon notice by Olin, or after September 30, 2027, upon which time all covenant reliefs expire.
Under the Senior Secured Credit Facility, we may select various floating rate borrowing options. The actual interest rate paid on borrowings under the Senior Secured Credit Facility is based on a pricing grid which is dependent upon the net leverage ratio as calculated under the terms of the applicable facility for the prior fiscal quarter. The Senior Secured Credit Facility includes various customary restrictive covenants, including restrictions related to the ratio of secured debt to earnings before interest expense, taxes, depreciation and amortization (net leverage ratio) and the ratio of earnings before interest expense, taxes, depreciation and amortization to interest expense (coverage ratio). The calculation of secured debt in our net leverage ratio excludes borrowings under the 2024 Receivables Financing Agreement, up to a maximum of $ 425.0 million.
We were in compliance with all covenants and restrictions under all our outstanding credit agreements as of the date of the amendment, and no event of default had occurred that would permit the lenders under our outstanding credit agreements to accelerate the debt if not cured. In the future, our ability to generate sufficient operating cash flows, among other factors, will determine the amounts available to be borrowed under these facilities. As a result of our restrictive covenant related to the net leverage ratio, the maximum additional borrowings available to us could be limited in the future. The limitation, if an amendment or waiver from our lenders is not obtained, could restrict our ability to borrow the maximum amounts available under the Senior Secured Revolving Credit Facility and the 2024 Receivables Financing Agreement. Upon execution of the Senior Secured Credit Facility, there were no covenants or other restrictions that limited our ability to borrow.
Receivables Financing Agreements
On November 20, 2024, we entered into a $ 500.0 million receivables financing agreement (2024 Receivables Financing Agreement), which increased the borrowing limit of our then-existing $ 425.0 million receivables financing agreement (2022 Receivables Financing Agreement) by $ 75.0 million and extended the maturity date from October 14, 2025 to November 19, 2027 (collectively, the “Receivables Financing Agreements”).
Under the Receivables Financing Agreements, our eligible trade receivables are used for collateralized borrowings and continue to be serviced by us. In addition, the Receivables Financing Agreements incorporate the net leverage ratio covenant that is contained in the 2025 Senior Credit Facility. On February 19, 2026, the 2024 Receivables Financing Agreement incorporated the net leverage ratio covenant relief that is contained in the Senior Secured Credit Facility. As of December 31, 2025 and 2024, we had $ 340.0 million and $ 475.0 million, respectively, drawn under the 2024 Receivables Financing Agreement. As of December 31, 2025, $ 588.8 million of our trade receivables were pledged as collateral and we had $ 105.5 million of additional borrowing capacity under the 2024 Receivables Financing Agreement, subject to the maximum additional borrowing total noted above and limited by our borrowing base.
As part of the 2024 Receivables Financing Agreement, we terminated our then-existing trade accounts receivable factoring arrangements (AR Facilities), under which certain of our domestic and international subsidiaries could sell their accounts receivable. These receivables had qualified for sales treatment under ASC 860 “Transfers and Servicing” and, accordingly, the proceeds were included in net cash provided by operating activities in the consolidated statements of cash flows.
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The following table summarizes the AR Facilities activity:
December 31,
2024
AR Facilities
Beginning balance $ 63.3
Gross receivables sold 552.1
Payments received from customers on sold accounts ( 615.4 )
Ending balance $ —
The factoring discount paid under the AR Facilities was recorded as interest expense on the consolidated statements of operations. The factoring discount for the years ended December 31, 2024 and 2023, was $ 3.0 million and $ 4.7 million, respectively. The agreements were without recourse.
Other Financing
Interest expense for the year ended December 31, 2025, included $ 3.3 million for the write-off of unamortized deferred debt issuance costs and costs associated with our first quarter financing transactions, including the 2025 Senior Credit Facility, early redemption of the 2025 Notes and the 2027 Notes, and issuance of the 2033 Notes.
For the year ended December 31, 2025, we paid debt issuance costs of $ 12.0 million associated with the 2033 Notes and the 2025 Senior Credit Facility.
Financing Cash Flows
During 2025 and 2024, activity of our outstanding debt included:
December 31,
2025 2024
Long-term Debt Borrowings (Repayments) ($ in millions)
Borrowings
Term Loan Facilities $ 650.0 $ —
Revolving Credit Facilities 790.0 490.0
Receivables Financing Agreements 715.0 591.9
2033 Notes 600.0 —
Total borrowings 2,755.0 1,081.9
Repayments
Go zone bonds, due 2024 — ( 50.0 )
Recovery zone bonds, due 2024 — ( 20.0 )
Term Loan Facilities ( 344.7 ) ( 8.8 )
Revolving Credit Facilities ( 960.0 ) ( 388.0 )
Receivables Financing Agreements ( 850.0 ) ( 445.4 )
Industrial development and environmental improvement obligations ( 2.9 ) —
2025 Notes ( 108.6 ) —
2027 Notes ( 500.0 ) —
Total repayments ( 2,766.2 ) ( 912.2 )
Long-term debt (repayments) borrowings, net $ ( 11.2 ) $ 169.7
At December 31, 2025, we had $ 161.4 million in letters of credit outstanding, of which $ 0.4 million were issued under our 2025 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.
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Annual maturities of long-term debt are as follows:
Expected Annual Maturities (1)
($ in millions)
2026 $ 109.7
2027 340.0
2028 —
2029 669.3
2030 1,043.4
Thereafter 683.0
Total $ 2,845.4
(1) Excludes unamortized debt issuance costs of $ 18.1 million at December 31, 2025. All debt obligations are assumed to be held until maturity.
NOTE 12. PENSION PLANS
We sponsor domestic and foreign defined benefit pension plans for eligible employees and retirees. Most of our domestic employees participate in defined contribution plans. 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 foreign subsidiaries maintain pension and other benefit plans, which are consistent with local statutory practices.
Our domestic qualified defined benefit pension plan provides that if, within three years following a change of control of Olin, any corporate action is taken or filing made in contemplation of, among other things, a plan termination or merger or other transfer of assets or liabilities of the plan, and such termination, merger or transfer thereafter takes place, plan benefits would automatically be increased for affected participants (and retired participants) to absorb any plan surplus (subject to applicable collective bargaining requirements).
Based on our plan assumptions and estimates, we will not be required to make any cash contributions to the domestic qualified defined benefit pension plan at least through 2026.
We have international qualified defined benefit pension plans to which we made cash contributions of $ 0.7 million, $ 1.3 million and $ 1.0 million in 2025, 2024 and 2023, respectively, and we anticipate less than $ 5 million of cash contributions to international qualified defined benefit pension plans in 2026.
Pension Obligations and Funded Status
Changes in the benefit obligation and plan assets were as follows:
December 31, 2025 December 31, 2024
U.S. Foreign Total U.S. Foreign Total
Change in Benefit Obligation ($ in millions)
Benefit obligation - beginning of year $ 1,759.8 $ 257.1 $ 2,016.9 $ 1,871.1 $ 277.1 $ 2,148.2
Service cost 0.2 4.5 4.7 0.2 5.1 5.3
Interest cost 90.4 8.8 99.2 92.7 8.7 101.4
Actuarial loss (gain) 50.8 ( 26.8 ) 24.0 ( 63.9 ) ( 9.6 ) ( 73.5 )
Benefits paid ( 141.5 ) ( 6.8 ) ( 148.3 ) ( 140.3 ) ( 7.7 ) ( 148.0 )
Plan participant’s contributions — 0.6 0.6 — 0.6 0.6
Foreign currency translation adjustments — 31.0 31.0 — ( 17.1 ) ( 17.1 )
Benefit obligation - end of year $ 1,759.7 $ 268.4 $ 2,028.1 $ 1,759.8 $ 257.1 $ 2,016.9
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December 31, 2025 December 31, 2024
U.S. Foreign Total U.S. Foreign Total
Change in Plan Assets ($ in millions)
Fair value of plan assets - beginning of year $ 1,799.1 $ 58.4 $ 1,857.5 $ 1,857.2 $ 60.8 $ 1,918.0
Actual return on plans’ assets 204.7 3.2 207.9 81.4 3.3 84.7
Employer contributions 0.4 0.7 1.1 0.9 1.3 2.2
Benefits paid ( 141.5 ) ( 2.4 ) ( 143.9 ) ( 140.4 ) ( 4.1 ) ( 144.5 )
Foreign currency translation adjustments — 4.3 4.3 — ( 2.9 ) ( 2.9 )
Fair value of plan assets - end of year $ 1,862.7 $ 64.2 $ 1,926.9 $ 1,799.1 $ 58.4 $ 1,857.5
December 31, 2025 December 31, 2024
U.S. Foreign Total U.S. Foreign Total
Funded Status ($ in millions)
Qualified plans $ 104.4 $ ( 202.3 ) $ ( 97.9 ) $ 40.9 $ ( 196.8 ) $ ( 155.9 )
Non-qualified plans ( 1.4 ) ( 1.9 ) ( 3.3 ) ( 1.6 ) ( 1.9 ) ( 3.5 )
Total funded status $ 103.0 $ ( 204.2 ) $ ( 101.2 ) $ 39.3 $ ( 198.7 ) $ ( 159.4 )
We recorded a $ 43.9 million after-tax benefit ($ 57.4 million pretax) to shareholders’ equity as of December 31, 2025, for our pension plans. This benefit primarily reflected a favorable performance on plan assets and a 60 -basis point increase in the international defined benefit pension plans’ discount rate, partially offset by a 30 -basis point decrease in the domestic pension plans’ discount rate during 2025. In 2024, we recorded a $ 16.5 million after-tax benefit ($ 22.9 million pretax) to shareholders’ equity as of December 31, 2024, for our pension plans. This benefit primarily reflected a 50 -basis point increase in the domestic pension plans’ discount rate and a 20 -basis point increase in the international defined benefit pension plans’ discount rate, partially offset by an unfavorable performance on plan assets during 2024.
The $ 24.0 million actuarial loss for 2025 was primarily due to a 30 -basis point decrease in the domestic pension plans’ discount rate, partially offset by a 60 -basis point increase in the international defined benefit pension plans’ discount rate. The $ 73.5 million actuarial gain for 2024 was primarily due to a 50 -basis point increase in the domestic pension plans’ discount rate and a 20 -basis point increase in the international defined benefit pension plans’ discount rate.
Amounts recognized in the consolidated balance sheets consisted of:
December 31, 2025 December 31, 2024
U.S. Foreign Total U.S. Foreign Total
($ in millions)
Prepaid benefit cost in noncurrent assets $ 104.4 $ 2.4 $ 106.8 $ 40.9 $ 2.4 $ 43.3
Accrued benefit in current liabilities ( 0.2 ) ( 6.9 ) ( 7.1 ) ( 0.2 ) ( 5.1 ) ( 5.3 )
Accrued benefit in noncurrent liabilities ( 1.2 ) ( 199.7 ) ( 200.9 ) ( 1.4 ) ( 196.0 ) ( 197.4 )
Accumulated other comprehensive loss (income) 503.5 ( 42.1 ) 461.4 539.5 ( 15.3 ) 524.2
Net balance sheet impact $ 606.5 $ ( 246.3 ) $ 360.2 $ 578.8 $ ( 214.0 ) $ 364.8
At December 31, 2025 and 2024, the benefit obligation of non-qualified pension plans was $ 3.3 million and $ 3.5 million, respectively, and was included in the above pension benefit obligation. There were no plan assets for these non-qualified pension plans.
At December 31, 2025, future benefit payments for qualified and non-qualified plans were as follows:
Non-qualified Plans Qualified Plans
Expected Benefit Payments ($ in millions)
2026 $ 0.5 $ 154.4
2027 0.4 147.9
2028 0.3 141.6
2029 0.6 135.9
2030 0.2 129.1
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December 31,
2025 2024
($ in millions)
Projected benefit obligation $ 2,028.1 $ 2,016.9
Accumulated benefit obligation 2,008.6 1,990.4
Fair value of plans’ assets 1,926.9 1,857.5
Years Ended December 31,
2025 2024 2023
Components of Net Periodic Benefit Income ($ in millions)
Service cost $ 4.7 $ 5.2 $ 5.7
Interest cost 99.2 101.4 105.4
Expected return on plans’ assets ( 127.7 ) ( 135.0 ) ( 131.4 )
Amortization of prior service cost ( 0.7 ) ( 1.0 ) ( 0.4 )
Recognized actuarial loss 6.7 7.0 —
Net periodic benefit income $ ( 17.8 ) $ ( 22.4 ) $ ( 20.7 )
Years Ended December 31,
2025 2024 2023
Included in Pretax Other Comprehensive Income (Loss) ($ in millions)
Liability adjustment $ ( 57.4 ) $ ( 22.9 ) $ 16.4
Amortization of prior service costs and actuarial losses ( 5.4 ) ( 6.0 ) 0.4
The service cost component of net periodic benefit income related to the employees of the operating segments are allocated to the operating segments based on their respective estimated census data.
Pension Plan Assumptions
Certain actuarial assumptions, such as discount rate and long-term rate of return on plan assets, have a significant effect on the amounts reported for net periodic benefit cost and accrued benefit obligation amounts. We use a measurement date of December 31 for our pension plans.
U.S. Pension Benefits Foreign Pension Benefits
Weighted-average Assumptions 2025 2024 2023 2025 2024 2023
Discount rate—periodic benefit cost 5.70 % (1)
5.20 % 5.50 % 3.40 % 3.20 % 3.70 %
Expected return on plans’ assets 6.50 % 6.75 % 6.75 % 4.20 % 4.30 % 4.40 %
Rate of compensation increase 3.00 % 3.00 % 3.00 % 3.10 % 3.20 % 3.40 %
Discount rate—benefit obligation 5.40 % 5.70 % 5.20 % 4.00 % 3.40 % 3.20 %
(1) The discount rate—periodic benefit cost for our domestic qualified pension plan is comprised of the discount rate used to determine interest costs of 5.3 % and the discount rate used to determine service costs of 5.7 %.
The discount rate is based on a hypothetical yield curve represented by a series of annualized individual zero-coupon bond spot rates for maturities ranging from one-half to thirty years. The bonds used in the yield curve must have a rating of AA or better per Standard & Poor’s, be non-callable, and have at least $ 250 million par outstanding. The yield curve is then applied to the projected benefit payments from the plan. 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.
The long-term expected rate of return on plan assets represents an estimate of the long-term rate of returns on the investment portfolio consisting of equities, fixed income and alternative investments. 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 historical rates of return on plan assets have been 2.7 % for the last 5 years, 7.5 % for the last 10 years and 7.7 % for the last 15 years. The following rates of return by asset class were considered in setting the long-term rate of return assumption:
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Asset Class Rate of Return
U.S. equities 7 % to 11 %
Non-U.S. equities 8 % to 12 %
Fixed income/cash 3 % to 7 %
Alternative investments 5 % to 15 %
Plan Assets
Our pension plan asset allocations at December 31, 2025 and 2024 by asset class were as follows:
Percentage of Plan Assets
Asset Class 2025 2024
U.S. equities 1 % 3 %
Non-U.S. equities 2 % 4 %
Fixed income/cash 50 % 44 %
Alternative investments 47 % 49 %
The Alternative Investments asset class includes hedge funds, real estate and private equity investments. The Alternative Investments class is intended to help diversify risk and increase returns by utilizing a broader group of assets.
A master trust was established by our pension plan to accumulate funds required to meet benefit payments of our plan and is administered solely in the interest of our plan’s participants and their beneficiaries. The master trust’s investment horizon is long term. Its assets are managed by professional investment managers or invested in professionally managed investment vehicles.
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.
As of December 31, 2025, the following target allocation and ranges have been set for each asset class:
Asset Class Target Allocation Target Range
U.S. equities (1)
9 % 0%-19%
Non-U.S. equities (1)
6 % 0%-26%
Fixed income/cash (1)
82 % 27%-93%
Alternative investments 3 % 0%-38%
(1) The target allocation for these asset classes includes alternative investments, primarily hedge funds, based on the underlying investments in each hedge fund.
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Determining which hierarchical level an asset or liability falls within requires significant judgment. The following table summarizes our domestic and foreign defined benefit pension plans assets measured at fair value as of December 31, 2025:
Asset Class Investments Measured at Net Asset Value Quoted Prices in Active Markets for Identical Assets
(Level 1) Significant Other Observable Inputs
(Level 2) Significant Unobservable Inputs
(Level 3) Total
Equity Securities ($ in millions)
U.S. equities $ 0.5 $ 20.6 $ — $ — $ 21.1
Non-U.S. equities 40.8 0.1 — — 40.9
Fixed Income/Cash
Cash — 140.0 — — 140.0
Government treasuries — — 350.4 — 350.4
Corporate debt instruments 284.4 — 0.5 — 284.9
Asset-backed securities 163.2 — 18.9 — 182.1
Alternative Investments
Hedge fund of funds 635.4 — — — 635.4
Real estate funds 55.2 — — — 55.2
Private equity funds 216.9 — — — 216.9
Total assets $ 1,396.4 $ 160.7 $ 369.8 $ — $ 1,926.9
The following table summarizes our domestic and foreign defined benefit pension plans assets measured at fair value as of December 31, 2024:
Asset Class Investments Measured at Net Asset Value Quoted Prices in Active Markets for Identical Assets
(Level 1) Significant Other Observable Inputs
(Level 2) Significant Unobservable Inputs
(Level 3) Total
Equity Securities ($ in millions)
U.S. equities $ 12.3 $ 36.9 $ — $ — $ 49.2
Non-U.S. equities 70.6 0.1 0.1 — 70.8
Fixed Income/Cash
Cash — 59.3 — — 59.3
Government treasuries — — 267.6 — 267.6
Corporate debt instruments 291.9 — 0.5 — 292.4
Asset-backed securities 191.8 — 14.9 — 206.7
Alternative Investments
Hedge fund of funds 632.0 — — — 632.0
Real estate funds 21.1 — — — 21.1
Private equity funds 258.4 — — — 258.4
Total assets $ 1,478.1 $ 96.3 $ 283.1 $ — $ 1,857.5
U.S. equities —This class included actively and passively managed equity investments in common stock and commingled funds comprised primarily of large-capitalization stocks with value, core and growth strategies.
Non-U.S. equities —This class included actively managed equity investments in commingled funds comprised primarily of international large-capitalization stocks from both developed and emerging markets.
Fixed income and cash— This class included commingled funds comprised of debt instruments issued by the U.S. and Canadian Treasuries, U.S. Agencies, corporate debt instruments, asset- and mortgage-backed securities and cash.
Hedge fund of funds— This class included a hedge fund which invests in the following types of hedge funds:
Event driven hedge funds— This class included hedge funds that invest in securities to capture excess returns that are driven by market or specific company events including activist investment philosophies and the arbitrage of equity and private and public debt securities.
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Market neutral hedge funds —This class included investments in U.S. and international equities and fixed income securities while maintaining a market neutral position in those markets.
Other hedge funds —This class primarily included long-short equity strategies and a global macro fund which invested in fixed income, equity, currency, commodity and related derivative markets.
Real estate funds —This class included several funds that invest primarily in U.S. commercial real estate.
Private equity funds —This class included several private equity funds that invest primarily in infrastructure and U.S. power generation and transmission assets.
U.S. equities and non-U.S. equities are primarily valued at the net asset value provided by the independent administrator or custodian of the commingled fund. The net asset value is based on the value of the underlying equities, which are traded on an active market. U.S. equities are also valued at the closing price reported in an active market on which the individual securities are traded. A portion of our fixed income investments are valued at the net asset value provided by the independent administrator or custodian of the fund. 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. 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.
NOTE 13. POSTRETIREMENT BENEFITS
We provide certain postretirement healthcare (medical) and life insurance benefits for eligible active and retired domestic employees. The healthcare plans are contributory with participants’ contributions adjusted annually based on medical rates of inflation and plan experience. We use a measurement date of December 31 for our postretirement plans.
Other Postretirement Benefits Obligations and Funded Status
Changes in the benefit obligation were as follows:
December 31, 2025 December 31, 2024
U.S. Foreign Total U.S. Foreign Total
Change in Benefit Obligation ($ in millions)
Benefit obligation - beginning of year $ 20.1 $ 6.6 $ 26.7 $ 28.2 $ 7.0 $ 35.2
Service cost 0.5 0.1 0.6 0.4 0.1 0.5
Interest cost 1.5 0.2 1.7 1.1 0.3 1.4
Actuarial loss (gain) 5.5 ( 0.2 ) 5.3 ( 5.0 ) ( 1.8 ) ( 6.8 )
Benefits paid ( 3.6 ) ( 0.3 ) ( 3.9 ) ( 4.6 ) ( 0.3 ) ( 4.9 )
Foreign currency translation adjustments — 0.1 0.1 — 1.3 1.3
Benefit obligation - end of year $ 24.0 $ 6.5 $ 30.5 $ 20.1 $ 6.6 $ 26.7
December 31, 2025 December 31, 2024
U.S. Foreign Total U.S. Foreign Total
($ in millions)
Funded status $ ( 24.0 ) $ ( 6.5 ) $ ( 30.5 ) $ ( 20.1 ) $ ( 6.6 ) $ ( 26.7 )
We recorded a $ 4.0 million after-tax loss ($ 5.3 million pretax) to shareholders’ equity as of December 31, 2025, for our other postretirement plans, primarily as a result of a change in discount rate. In 2024, we recorded an after-tax benefit of $ 5.2 million ($ 6.8 million pretax) to shareholders’ equity as of December 31, 2024, for our other postretirement plans, primarily as a result of a change in discount rate.
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Amounts recognized in the consolidated balance sheets consisted of:
December 31, 2025 December 31, 2024
U.S. Foreign Total U.S. Foreign Total
($ in millions)
Accrued benefit in current liabilities $ ( 2.0 ) $ ( 0.3 ) $ ( 2.3 ) $ ( 2.0 ) $ ( 0.3 ) $ ( 2.3 )
Accrued benefit in noncurrent liabilities ( 22.0 ) ( 6.2 ) ( 28.2 ) ( 18.1 ) ( 6.3 ) ( 24.4 )
Accumulated other comprehensive loss (income) 9.6 ( 3.4 ) 6.2 4.6 ( 3.5 ) 1.1
Net balance sheet impact $ ( 14.4 ) $ ( 9.9 ) $ ( 24.3 ) $ ( 15.5 ) $ ( 10.1 ) $ ( 25.6 )
Years Ended December 31,
2025 2024 2023
Components of Net Periodic Benefit Cost ($ in millions)
Service cost $ 0.6 $ 0.5 $ 0.7
Interest cost 1.7 1.4 1.8
Amortization of prior service cost ( 0.1 ) ( 0.3 ) 0.1
Recognized actuarial loss 0.3 0.5 0.5
Net periodic benefit cost $ 2.5 $ 2.1 $ 3.1
Years Ended December 31,
2025 2024 2023
Included in Pretax Other Comprehensive Income (Loss) ($ in millions)
Liability adjustment $ 5.3 $ ( 6.8 ) $ 1.7
Amortization of prior service costs and actuarial losses ( 0.2 ) ( 0.2 ) ( 0.6 )
The service cost component of net periodic postretirement benefit cost related to the employees of the operating segments are allocated to the operating segments based on their respective estimated census data.
Other Postretirement Benefits Plan Assumptions
Certain actuarial assumptions, such as discount rate, have a significant effect on the amounts reported for net periodic benefit cost and accrued benefit obligation amounts.
December 31,
Weighted-Average Assumptions 2025 2024 2023
Discount rate—periodic benefit cost 5.6 % 5.2 % 5.5 %
Discount rate—benefit obligation 5.3 % 5.6 % 5.2 %
The discount rate is based on a hypothetical yield curve represented by a series of annualized individual zero-coupon bond spot rates for maturities ranging from one-half to thirty years. The bonds used in the yield curve must have a rating of AA or better per Standard & Poor’s, be non-callable, and have at least $ 250 million par outstanding. The yield curve is then applied to the projected benefit payments from the plan. 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 postretirement benefit obligation. The assumed healthcare cost trend rates for pre-65 retirees were as follows:
December 31,
2025 2024
Healthcare cost trend rate assumed for next year 8.3 % 7.0 %
Rate that the cost trend rate gradually declines to 4.5 % 4.5 %
Year that the rate reaches the ultimate rate 2040 2034
For post-65 retirees, we provide a fixed dollar benefit, which is not subject to escalation.
We expect to make payments of approximately $ 3 million for each of the next five years under the provisions of our other postretirement benefit plans.
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NOTE 14. INCOME TAXES
Years Ended December 31,
2025 2024 2023
Components of Income (Loss) Before Taxes ($ in millions)
U.S. $ ( 285.8 ) $ ( 59.9 ) $ 456.7
Foreign 124.7 201.6 102.6
Income (loss) before taxes $ ( 161.1 ) $ 141.7 $ 559.3
Components of Income Tax (Benefit) Provision
Current:
Federal $ 3.8 $ 46.4 $ 96.2
State 0.4 7.3 19.4
Foreign 27.5 22.8 48.0
Total current 31.7 76.5 163.6
Deferred:
Federal ( 72.6 ) ( 55.1 ) ( 25.3 )
State ( 11.0 ) ( 8.0 ) ( 7.9 )
Foreign ( 8.1 ) 23.3 ( 23.1 )
Total deferred ( 91.7 ) ( 39.8 ) ( 56.3 )
Income tax (benefit) provision $ ( 60.0 ) $ 36.7 $ 107.3
We account for non-refundable tax credits in accordance with ASC 740, Income Taxes, recognizing a decrease to our income tax expense. Refundable tax credits are accounted for outside the scope of ASC 740, and treated, by analogy, as government grants, using International Accounting Standards (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance, recognizing such grants when the Company has probable assurance that it will comply with the grant’s conditions and that the grant will be received.
In August 2022, the Inflation Reduction Act (IRA) was enacted and provides various beneficial credits for energy efficient related manufacturing, transportation and fuels, hydrogen/carbon recapture and renewable energy. During 2025, Olin realized $ 22.0 million of investment tax credits related to the IRA via our Hidrogenii joint venture interest and recorded a tax benefit of $ 2.6 million. In 2025, we determined that we qualified for the clean hydrogen production tax credit under Section 45V as part of the IRA. As a result, we recorded a $ 34.5 million reduction to costs of goods sold primarily related to Section 45V. We expect to continue to qualify for Section 45V through 2032.
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the U.S. This act introduces significant changes to tax law and other areas affecting company operations, including items such as extensions of Tax Cuts and Jobs Act provisions, changes to business interest deductions, modifications to depreciation deductions and impacts on energy tax credits. Due to a decrease in taxable income from changes to depreciation methods, business interest deductions and research and development, we recorded a $ 2.5 million tax expense in the third quarter of 2025 associated with the valuation allowance on foreign tax credits which are no longer expected to be utilized before their expiration date.
The following table accounts for the difference between the actual tax provision and the amounts obtained by applying the statutory U.S. federal income tax rate to the income (loss) before taxes.
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Years Ended December 31,
2025 2024 2023
Effective Tax Rate Reconciliation (Percent) Amount Percent Amount Percent Amount Percent
($ in millions)
US Federal Statutory Income Tax Rate ( 33.8 ) 21.0 % 29.8 21.0 % 117.5 21.0 %
Domestic Federal
Tax credits
IRA credits ( 10.2 ) 6.3 — — — —
Purchase discount on tax credits — — ( 2.7 ) ( 1.9 ) — —
Research credits ( 0.1 ) 0.1 — — ( 2.1 ) ( 0.4 )
Nontaxable or nondeductible items
IRA credits associated with clean hydrogen production ( 11.9 ) 7.4 — — — —
Salt depletion ( 8.7 ) 5.4 ( 9.3 ) ( 6.6 ) ( 9.0 ) ( 1.6 )
Share based payments 0.1 ( 0.1 ) ( 2.7 ) ( 1.9 ) ( 5.5 ) ( 1.0 )
Nontaxable or nondeductible exchange rate results ( 9.5 ) 5.9 4.8 3.4 ( 2.5 ) ( 0.4 )
Prior year taxes 5.0 ( 3.1 ) 0.6 0.4 ( 16.3 ) ( 2.9 )
Non-deductible intercompany transactions 1.7 ( 1.1 ) — — — —
Other reconciling items 0.8 ( 0.5 ) 1.2 0.8 2.3 0.4
Cross-border tax laws
Subpart F (1)
3.2 ( 2.0 ) 3.4 2.4 7.0 1.3
Global intangible low-taxed income (GILTI) (1)
1.8 ( 1.1 ) — — — —
US taxation on foreign branches ( 4.7 ) 2.9 ( 13.1 ) ( 9.2 ) ( 6.4 ) ( 1.1 )
Withholding tax on unremitted earnings 4.4 ( 2.7 ) 1.0 0.7 5.8 1.0
Changes in valuation allowances 13.7 ( 8.5 ) 14.4 10.2 6.0 1.1
Domestic state and local income taxes, net of federal effect (2)
( 11.3 ) 7.0 ( 2.3 ) ( 1.6 ) 11.5 2.1
Foreign Tax Effects
Canada
Statutory income tax rate differential ( 4.7 ) 2.9 ( 5.6 ) ( 4.0 ) ( 7.1 ) ( 1.3 )
Provincial tax 8.8 ( 5.5 ) 10.5 7.4 13.1 2.3
Nontaxable or nondeductible exchange rate results ( 0.4 ) 0.2 3.6 2.5 ( 0.5 ) ( 0.1 )
Tax credits ( 0.7 ) 0.4 ( 2.9 ) ( 2.0 ) ( 1.2 ) ( 0.2 )
Other ( 0.5 ) 0.3 1.0 0.7 ( 2.1 ) ( 0.4 )
Germany
Statutory income tax rate differential 0.4 ( 0.2 ) ( 0.8 ) ( 0.6 ) ( 1.2 ) ( 0.2 )
Trade tax ( 1.1 ) 0.7 2.1 1.5 3.1 0.6
Tax audit settlement — — 2.4 1.7 — —
Statutory tax rate change 7.0 ( 4.3 ) — — — —
Other ( 1.9 ) 1.2 0.5 0.4 2.1 0.4
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Years Ended December 31,
2025 2024 2023
Effective Tax Rate Reconciliation (Percent) Amount Percent Amount Percent Amount Percent
($ in millions)
Brazil
Statutory income tax rate differential ( 1.1 ) 0.7 ( 3.9 ) ( 2.8 ) ( 6.6 ) ( 1.2 )
Non-deductible exchange rate results ( 1.1 ) 0.7 5.8 4.1 ( 2.2 ) ( 0.4 )
Valuation allowances 3.9 ( 2.4 ) 23.9 16.9 — —
Other ( 1.1 ) 0.7 ( 1.3 ) ( 0.9 ) 1.7 0.3
Switzerland
Statutory income tax rate differential ( 10.0 ) 6.2 ( 8.2 ) ( 5.8 ) ( 6.9 ) ( 1.2 )
Cantonal tax 2.7 ( 1.7 ) 0.4 0.3 ( 0.2 ) —
Top-up tax 2.4 ( 1.5 ) 1.9 1.3 — —
Other 0.4 ( 0.2 ) 0.2 0.1 0.9 0.2
Cyprus
Statutory income tax rate differential — — 1.0 0.7 ( 2.1 ) ( 0.4 )
Non-deductible intercompany transactions — — 4.3 3.0 — —
Non-taxable interest — — ( 2.1 ) ( 1.5 ) ( 2.0 ) ( 0.4 )
Other 0.4 ( 0.2 ) ( 0.1 ) ( 0.1 ) ( 0.6 ) ( 0.1 )
Malta
Statutory income tax rate differential ( 3.0 ) 1.9 — — — —
Netherlands
Statutory income tax rate differential ( 3.0 ) 1.9 1.3 0.9 ( 1.0 ) ( 0.2 )
Withholding tax on unremitted earnings ( 0.4 ) 0.2 0.9 0.6 ( 1.0 ) ( 0.2 )
Other 1.7 ( 1.1 ) 0.3 0.2 2.9 0.5
China
Statutory income tax rate differential 0.4 ( 0.2 ) 1.0 0.7 ( 0.8 ) ( 0.1 )
Non-taxable intercompany transactions — — ( 7.0 ) ( 4.9 ) — —
Valuation allowances ( 2.6 ) 1.6 0.9 0.6 5.5 1.0
Other 0.2 ( 0.1 ) — — ( 0.4 ) ( 0.1 )
Hong Kong
Statutory income tax rate differential ( 0.1 ) 0.1 0.2 0.1 0.2 —
Valuation allowances ( 0.4 ) 0.2 1.6 1.1 — —
Other — — ( 0.1 ) ( 0.1 ) 0.1 —
Korea
Statutory income tax rate differential ( 0.2 ) 0.1 ( 0.1 ) ( 0.1 ) 0.2 —
Non-taxable intercompany transactions ( 1.6 ) 1.0 ( 1.2 ) ( 0.7 ) — —
Valuation allowances — — 0.2 0.2 1.6 0.3
Other 0.3 ( 0.2 ) — — 0.1 —
Other foreign jurisdictions ( 0.5 ) 0.2 5.4 3.9 5.1 0.9
Worldwide changes in unrecognized tax benefits (3)
5.3 ( 3.3 ) ( 24.5 ) ( 17.2 ) ( 1.7 ) ( 0.3 )
Effective tax rate $ ( 60.0 ) 37.2 % $ 36.7 25.9 % $ 107.3 19.2 %
(1) We have presented GILTI and Subpart F net of their respective credits.
(2) For the years ended December 31, 2025, 2024, and 2023 at least 50% of state income tax expense or benefit related to California, Illinois, Louisiana and Missouri.
(3) We elected to reflect the changes in unrecognized tax benefits on an aggregate basis for all jurisdictions worldwide.
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The tax benefit for 2025 was $ 60.0 million, resulting in a tax rate of 37.2 %. The effective tax rate was higher than the 21.0 % U.S. federal statutory rate, primarily due to state income tax, non-taxable exchange rate results, U.S. federal tax credits and favorable permanent salt depletion deductions, partially offset by foreign income inclusions, changes in tax contingencies and remeasurement of deferred taxes due to a decrease in tax rates in a foreign jurisdiction.
Tax expense for 2024 was $ 36.7 million, resulting in a tax rate of 25.9 %. The effective tax rate was higher than the 21.0 % U.S. federal statutory rate, primarily due to state income tax, foreign income inclusions, non-deductible exchange rate results, expenses from prior year tax positions and from a net increase in the valuation allowance related to deferred tax assets in foreign jurisdictions, partially offset by favorable permanent salt depletion deductions, benefits associated with stock-based compensation, U.S. federal tax credits purchased at a discount, changes in tax contingencies and remeasurement of deferred taxes due to a decrease in our state effective tax rates.
Tax expense for 2023 was $ 107.3 million, resulting in a tax rate of 19.2 %. The effective tax rate was lower than the 21.0 % U.S. federal statutory rate primarily due to a favorable foreign rate differential, favorable permanent salt depletion deductions, 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, partially offset by state income tax, an increase in the valuation allowance related to losses in foreign jurisdictions and foreign income inclusions.
Years Ended December 31,
Income Taxes Paid (Refunded) 2025 2024 2023
Amount Percent Amount Percent Amount Percent
($ in millions)
US Federal $ 29.1 17.4 % $ 57.0 53.9 % $ 35.6 31.9 %
US State and Local
Illinois ( 0.7 ) ( 0.4 ) % — — % ( 8.9 ) ( 8.0 ) %
Other 0.1 0.1 % 11.3 10.7 % 9.4 8.4 %
Total state and local ( 0.6 ) ( 0.3 ) % 11.3 10.7 % 0.5 0.4 %
Foreign
Canada
Federal 23.4 14.0 % 19.6 18.5 % 28.5 25.5 %
Provincial tax 9.6 5.7 % 8.5 8.0 % 15.8 14.1 %
Germany
Federal 52.5 31.4 % — — % — — %
Trade tax 36.0 21.5 % 1.8 1.7 % ( 0.2 ) ( 0.2 ) %
Brazil 0.7 0.4 % — — % 26.3 23.5 %
Switzerland
Federal 9.2 5.5 % 2.7 2.6 % 0.4 0.4 %
Cantonal tax 1.7 1.0 % 0.4 0.4 % 0.1 0.1 %
Other 5.5 3.4 % 4.4 4.2 % 4.7 4.3 %
Total foreign 138.6 82.9 % 37.4 35.4 % 75.6 67.7 %
Total taxes paid $ 167.1 100.0 % $ 105.7 100.0 % $ 111.7 100.0 %
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December 31,
2025 2024
Components of Deferred Tax Assets and Liabilities ($ in millions)
Deferred Tax Assets
Pension and postretirement benefits $ 1.7 $ 24.7
Environmental reserves 38.8 39.3
Asset retirement obligations 26.3 19.3
Accrued liabilities 68.0 33.9
Lease liabilities 76.8 76.5
Tax credits 112.0 62.0
Net operating losses (NOL) 60.0 57.5
Interest deduction limitation 29.3 22.8
Other miscellaneous items 1.0 —
Total deferred tax assets 413.9 336.0
Valuation allowance ( 126.1 ) ( 118.9 )
Net deferred tax assets 287.8 217.1
Deferred Tax Liabilities
Property, plant and equipment 345.4 387.7
Right-of-use lease assets 73.5 75.1
Intangible amortization 111.8 92.4
Inventory and prepaids 4.7 8.3
Taxes on unremitted earnings 22.8 18.7
Other miscellaneous items — 12.0
Total deferred tax liabilities 558.2 594.2
Net deferred income tax liability $ ( 270.4 ) $ ( 377.1 )
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. Although realization is not assured, we believe that it is more likely than not that the net deferred tax assets will be realized.
At December 31, 2025, we had deferred state tax assets of $ 16.0 million relating to state NOLs, which will expire in years 2030 through 2043, if not utilized.
At December 31, 2025, we had deferred state tax assets of $ 22.8 million relating to state tax credits, which will expire in years 2026 through 2040, if not utilized.
At December 31, 2025, we had foreign tax credits of $ 62.5 million, that will expire in years 2027 through 2035, if not utilized.
At December 31, 2025, we had NOLs of approximately $ 153.6 million (representing $ 44.0 million of deferred tax assets) in various foreign jurisdictions. Of these, $ 45.1 million (representing $ 11.5 million of deferred tax assets) expire in various years from 2026 to 2032. The remaining $ 108.5 million (representing $ 32.5 million of deferred tax assets) do not expire.
As of December 31, 2025, we had recorded a valuation allowance of $ 126.1 million, compared to $ 118.9 million as of December 31, 2024, and $ 99.5 million as of December 31, 2023. The increase of $ 7.2 million in 2025 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. If these estimates and related assumptions change in the future, we may be required to reduce the value of the deferred tax assets resulting in additional tax expense.
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The activity of our deferred income tax valuation allowance was as follows:
December 31,
2025 2024
Deferred Income Tax Valuation Allowance ($ in millions)
Beginning balance $ 118.9 $ 99.5
Increases to valuation allowances 10.1 39.1
Decreases to valuation allowances ( 7.2 ) ( 17.1 )
Foreign currency translation adjustments 4.3 ( 2.6 )
Ending balance $ 126.1 $ 118.9
As of December 31, 2025, we had $ 24.0 million of gross unrecognized tax benefits, which would have a net $ 24.0 million impact on the effective tax rate, if recognized. The changes in amounts of unrecognized tax benefits were as follows:
December 31,
2025 2024
Unrecognized Tax Benefits ($ in millions)
Beginning balance $ 21.1 $ 50.3
Increase for current year tax positions 1.2 1.0
Increase for prior year tax positions 11.7 6.6
Decrease for prior year tax positions ( 0.8 ) ( 34.0 )
Reduction due to lapse in statute limitations ( 7.2 ) —
Settlements with tax authorities ( 2.0 ) ( 1.0 )
Foreign currency translation adjustments — ( 1.8 )
Ending balance $ 24.0 $ 21.1
We recognize interest and penalty expense related to unrecognized tax positions as a component of the income tax provision. As of December 31, 2025 and 2024, interest and penalties accrued were $ 3.2 million and $ 3.2 million, respectively. For 2024 and 2023, we recorded expense related to interest and penalties of $ 1.2 million and $ 0.7 million, respectively.
We operate globally and file income tax returns in numerous jurisdictions. Our tax returns are subject to examination by various federal, state and local tax authorities. Additionally, examinations are ongoing in various states and foreign jurisdictions. We believe we have adequately provided for all tax positions; however, amounts asserted by taxing authorities could be greater than our accrued position.
For our primary tax jurisdictions, the tax years that remain subject to examination are as follows:
Tax Years
U.S. federal income tax 2022 - 2024
U.S. state income tax 2015 - 2024
Canadian federal income tax 2018 - 2024
Brazil 2019 - 2024
Germany 2022 - 2024
China 2015 - 2024
The Netherlands 2020 - 2024
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NOTE 15. ACCRUED LIABILITIES
Included in accrued liabilities were the following:
December 31,
2025 2024
Accrued Liabilities ($ in millions)
Accrued compensation and payroll taxes 90.2 56.8
Non-income tax-related accruals 53.6 51.2
Accrued interest 36.8 35.3
Legal and professional costs 33.7 38.5
Accrued employee benefits 59.8 37.9
Contract liabilities (current portion only) 38.6 23.2
Customer related obligations 186.0 106.3
Environmental (current portion only) 30.0 30.0
Asset retirement obligation (current portion only) 15.7 12.8
Restructuring reserves (current portion only) 15.6 8.3
Derivative contracts 16.6 3.3
Other 53.5 31.9
Accrued liabilities $ 630.1 $ 435.5
As of December 31, 2025, customer related obligations of $ 186.0 million included $ 75.0 million associated with the Shintech litigation matter discussed in Note 22, “Commitments and Contingencies,” in addition to previously recorded accruals for a VCM pricing dispute with Shintech Incorporated (Shintech), all of which are expected to be paid in the first half of 2026.
NOTE 16. DEFINED CONTRIBUTION PLAN
The Company sponsors a defined contribution plan for qualifying domestic employees (Employee Retirement Savings Plan) and a supplemental executive retirement plan as follows:
Employee Retirement Savings Plan
We sponsor a defined contribution plan for qualifying domestic employees, for which the Company contributes between 5.0 % and 7.5 % of the employees’ eligible compensation into a retirement account (Company Contribution). Employees generally vest in the value of the Company Contribution according to a schedule based on service.
We also match a percentage of our employees’ contributions (Company Match), which are invested in the same investment allocation as the employees’ contributions. Employees immediately vest in the Company Match.
Our contributions to the defined contribution plan for 2025, 2024 and 2023, were as follows:
Years Ended December 31,
2025 2024 2023
Employee Retirement Savings Plan ($ in millions)
Company Contribution $ 39.8 $ 37.6 $ 36.8
Company Match 16.9 14.6 14.5
Total contributions $ 56.7 $ 52.2 $ 51.3
Supplemental Executive Retirement Plan
During 2024, we elected to fund the Company’s non-qualified supplemental executive retirement plan obligations through a rabbi trust in the amount of $ 7.0 million, which was included within other investing activities on the consolidated statements of cash flows. The rabbi trust is subject to creditor claims in the event of insolvency by Olin, but the assets held in the rabbi trust are not available for general corporate purposes. Amounts in the rabbi trust are invested in mutual funds, consistent with the investment choices selected by participants in their plan accounts, which are designated as trading securities and carried at fair value as Level 1 investments within other assets on the consolidated balance sheets with the corresponding plan obligations included as other liabilities. The Company’s liabilities related to the supplemental executive retirement plan were $ 5.2 million and $ 6.9 million at December 31, 2025 and 2024, respectively.
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NOTE 17. STOCK-BASED COMPENSATION
Stock-based compensation granted includes stock options, performance share awards, restricted stock awards and deferred directors’ compensation. Stock-based compensation expense was as follows:
Years Ended December 31,
2025 2024 2023
Stock Compensation Expense ($ in millions)
Stock-based compensation $ 24.8 $ 20.0 $ 26.7
Mark-to-market adjustments ( 5.1 ) ( 10.7 ) 1.1
Total expense $ 19.7 $ 9.3 $ 27.8
Under the stock option and long-term incentive plans, options may be granted to purchase shares of our common stock at an exercise price not less than fair market value at the date of grant and are exercisable for a period not exceeding ten years from that date. Stock options, restricted stock and performance shares typically vest over three years . We issue shares to settle stock options, restricted stock and other share-based performance awards. In 2025, long-term incentive awards included performance share awards and restricted stock. In 2024 and 2023, long-term incentive awards included stock options, performance share awards and restricted stock. The stock option exercise price was set at the fair market value of common stock on the date of the grant.
Performance Shares
Performance share awards are denominated in shares of our stock and are paid half in cash and half in stock. Payouts for performance share awards are based on two criteria: (1) 50 % of the award is based on Olin’s total shareholder returns (TSR) over the applicable three -year performance cycle in relation to the TSR over the same period among a portfolio of public companies which are selected in concert with outside compensation consultants and (2) 50 % of the award is based on Olin’s net income over the applicable three -year performance cycle in relation to the net income goal for such period as set by the Compensation Committee of Olin’s Board of Directors. The expense associated with performance shares is recorded based on our estimate of our performance relative to the respective target. If an employee leaves the Company before the end of the performance cycle, the performance shares may be prorated based on the number of months of the performance cycle worked and are settled in cash instead of half in cash and half in stock when the three -year performance cycle is completed.
The fair value of each performance share award based on net income was estimated on the date of grant, using the current stock price. 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 Assumptions - Performance Shares 2025 2024 2023
Risk-free interest rate 4.27 % 4.53 % 4.46 %
Expected volatility of Olin common stock 37 % 41 % 52 %
Expected average volatility of peer companies 35 % 37 % 42 %
Average correlation coefficient of peer companies 0.45 0.40 0.51
Expected life (years) 3.0 3.0 3.0
Grant date fair value (TSR-based award) $ 27.46 $ 72.80 $ 86.98
Grant date fair value (net income-based award) $ 27.62 $ 54.07 $ 60.55
Performance share awards granted 573,480 180,714 161,474
The risk-free interest rate was based on zero coupon U.S. Treasury securities rates for the expected life of the performance share awards. The expected volatility of Olin common stock and peer companies was based on historical stock price movements, as we believe that historical experience is the best available indicator of the expected volatility. The average correlation coefficient of peer companies was determined based on historical trends of Olin’s common stock price compared to the peer companies. Expected life of the performance share award grant was based on historical exercise and cancellation patterns, as we believe that historical experience is the best estimate of future exercise patterns.
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Performance share transactions were as follows:
To Settle in Cash To Settle in Shares
Performance Share Transactions Shares Weighted-Average Fair Value per Share Shares Weighted-Average Fair Value per Share
Outstanding at January 1, 2025 144,976 $ 33.54 180,216 $ 54.92
Granted 286,740 24.78 286,740 24.78
Adjustment for performance achievement (1)
( 136,884 ) 23.50 ( 89,668 ) 27.58
Paid/issued ( 57,381 ) 33.54 ( 17,628 ) 59.55
Converted from shares to cash 4,151 37.26 ( 4,151 ) 37.26
Canceled ( 16,334 ) 21.07 ( 33,272 ) 40.97
Outstanding at December 31, 2025 225,268 $ 21.07 322,237 $ 27.62
Total vested at December 31, 2025 88,469 $ 21.07 143,500 $ 42.16
(1) Reflects the number of shares achieved above or below target, based on actual performance throughout the performance period.
The summary of the status of our unvested performance shares to be settled in cash were as follows:
Unvested Performance Shares Shares Weighted-Average Fair Value per Share
Unvested at January 1, 2025 52,014 $ 33.54
Granted 286,740 24.78
Adjustment for performance achievement (1)
( 136,884 ) 23.50
Vested ( 48,737 ) 21.07
Canceled ( 16,334 ) 21.07
Unvested at December 31, 2025 136,799 $ 21.07
(1) Reflects the number of shares achieved above or below target, based on actual performance throughout the performance period.
At December 31, 2025, the liability recorded for performance shares to be settled in cash totaled $ 1.9 million. The total unrecognized compensation cost related to unvested performance shares at December 31, 2025, was $ 8.4 million and was expected to be recognized over a weighted-average period of 1.9 years.
Restricted Stock Units
During the years ended December 31, 2025 and 2024, we granted restricted stock units of 550,374 and 237,679 , respectively, at a weighted average grant date fair value per share of $ 26.10 and $ 55.50 , respectively. The fair value of each restricted stock unit was estimated on the date of grant using the current stock price. The awards typically vest ratably, on an annual basis, over three years, but not less than one year.
Stock Options
The fair value of each stock option granted, which typically vests ratably over three years , but not less than one year , was estimated on the date of grant, using the Black-Scholes option-pricing model with the following weighted-average assumptions:
Grant Date Assumptions - Stock Options (1)
2024 2023
Dividend yield 1.50 % 1.32 %
Risk-free interest rate 4.35 % 4.07 %
Expected volatility of Olin common stock 47 % 47 %
Expected life (years) 7.0 7.0
Weighted-average grant fair value (per option) $ 24.17 $ 28.74
Weighted-average exercise price $ 53.34 $ 60.43
Stock options granted 606,157 564,124
(1) During the year ended December 31, 2025, Olin granted no stock options.
Dividend yield was based on our current dividend yield as of the option grant date. Risk-free interest rate was based on zero coupon U.S. Treasury securities rates for the expected life of the options. Expected volatility was based on our historical stock price movements, as we believe that historical experience is the best available indicator of the expected volatility.
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Expected life of the option grant was based on historical exercise and cancellation patterns, as we believe that historical experience is the best estimate for future exercise patterns.
Stock option transactions were as follows:
Exercisable
Stock Option Transactions Shares Option Price Weighted-Average Option Price Options Weighted-Average Exercise Price
Outstanding at January 1, 2025 4,396,995 13.14-65.77 $ 36.42 3,399,041 $ 31.11
Exercised ( 100,080 ) 13.14-27.40 22.93
Canceled ( 370,741 ) 13.14-60.55 52.98
Outstanding at December 31, 2025 3,926,174 13.14-65.77 $ 35.20 3,468,697 $ 32.54
At December 31, 2025, the average exercise period for all outstanding and exercisable options was 48 months and 42 months, respectively. At December 31, 2025, the aggregate intrinsic value (the difference between the exercise price and market value) for outstanding options was $ 2.9 million, all of which were exercisable. The total intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023, was $ 0.5 million, $ 25.3 million and $ 29.7 million, respectively.
The total unrecognized compensation cost related to unvested stock options at December 31, 2025, was $ 5.5 million and was expected to be recognized over a weighted-average period of 1.3 years.
The following table provides certain information with respect to stock options exercisable at December 31, 2025:
Range of
Exercise Prices Options Exercisable Weighted-Average Exercise Price Options Outstanding Weighted-Average Exercise Price
Under $27.00 1,251,736 $ 21.02 1,251,736 $ 21.02
$27.00 - $45.00 1,418,038 30.81 1,421,371 30.83
Over $45.00 798,923 53.65 1,253,067 54.32
3,468,697 3,926,174
At December 31, 2025, common shares reserved for issuance and available for grant or purchase under the following plans consisted of:
Number of Shares
Incentive Plans Reserved for Issuance Available for Grant or Purchase (1)
2003 Long Term Incentive Plan 18,484 —
2006 Long Term Incentive Plan 4,332 —
2009 Long Term Incentive Plan 3,500 —
2014 Long Term Incentive Plan 164,578 —
2016 Long Term Incentive Plan 959,781 —
2018 Long Term Incentive Plan 6,753,707 3,961,547
2021 Long Term Incentive Plan 2,684,168 1,279,821
Total under stock option plans 10,588,550 5,241,368
(1) All available to be issued as stock options, but includes a sub-limit for all types of stock awards of 1,053,269 shares.
Director Plans
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. Non-employee directors annually receive stock grants as a portion of their director compensation. Of the shares reserved under the stock purchase plans at December 31, 2025, 318,011 shares were committed.
Number of Shares
Director Plans Reserved for Issuance Available for Grant or Purchase
1997 Stock Plan for Non-employee Directors 348,180 30,169
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NOTE 18. SHAREHOLDERS’ EQUITY
On December 11, 2024, our Board of Directors approved a share repurchase program with a $ 1.3 billion authorization (2024 Repurchase Authorization). The Board of Directors previously authorized share repurchases with a $ 2.0 billion authorization on July 28, 2022 (2022 Repurchase Authorization).
The 2024 Repurchase Authorization and 2022 Repurchase Authorization will terminate upon the purchase of $ 1.3 billion and $ 2.0 billion of common stock, respectively.
For the years ended December 31, 2025, 2024 and 2023, 2.2 million, 5.9 million and 13.3 million shares, respectively, of common stock were repurchased and retired at a total value of $ 50.5 million, $ 300.3 million and $ 711.3 million, respectively. As of December 31, 2025, a cumulative total of 27.4 million shares have been repurchased and retired at a total value of $ 1,351.1 million under the 2022 Repurchase Authorization program, and $ 648.9 million of common stock remained authorized to be repurchased under the 2022 Repurchase Authorization program. As of December 31, 2024, there have been no repurchases under the 2024 Repurchase Authorization program and $ 1.3 billion remained available.
We issued 0.1 million, 0.9 million and 1.0 million shares representing stock options exercised for the years ended December 31, 2025, 2024 and 2023, respectively, with a total value of $ 2.3 million, $ 23.9 million and $ 25.4 million, respectively.
We have registered an undetermined number of securities with the SEC, so that, from time-to-time, we may issue debt securities, preferred stock and/or common stock and associated warrants in the public market under that registration statement.
The following table represents the activity included in accumulated other comprehensive loss:
Foreign Currency Translation Cash Flow Hedges Pension and Postretirement Benefits Total
Accumulated Other Comprehensive Loss ($ in millions)
Balance at January 1, 2023 $ ( 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 )
Unrealized (losses) gains ( 6.2 ) 4.3 29.7 27.8
Reclassification adjustments of losses into income — 30.6 6.2 36.8
Tax provision — ( 8.7 ) ( 9.7 ) ( 18.4 )
Net change ( 6.2 ) 26.2 26.2 46.2
Balance at December 31, 2024 ( 45.9 ) 7.8 ( 412.0 ) ( 450.1 )
Unrealized (losses) gains ( 6.3 ) 14.2 52.1 60.0
Reclassification adjustments of (gains) losses into income — ( 16.6 ) 5.6 ( 11.0 )
Tax benefit (provision) — 0.5 ( 13.9 ) ( 13.4 )
Net change ( 6.3 ) ( 1.9 ) 43.8 35.6
Balance at December 31, 2025 $ ( 52.2 ) $ 5.9 $ ( 368.2 ) $ ( 414.5 )
Cost of goods sold included reclassification adjustments for realized gains and losses on derivative contracts from accumulated other comprehensive loss.
Non-operating pension income included the amortization of prior service costs and actuarial gains (losses) from accumulated other comprehensive loss.
NOTE 19. SEGMENT INFORMATION
The chief operating decision maker (CODM) is the individual, or group of individuals, who assess financial performance and determines resource allocation. Management has identified our Chief Executive Officer (CEO) as the CODM. In arriving at this conclusion, we considered that the individual who receives the relevant financial information, which is primarily provided in the form of segment operations reviews, is ultimately our CEO. Further, our CEO assesses the reasonableness of resource
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allocation, primarily in the form of capital allocation and budgetary analysis, and reviews segment results and resource allocation summaries prepared by segment management, consistent with their view of the business as a whole.
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, and includes the results of non-consolidated affiliates in segment results consistent with management’s monitoring of the operating segments. We have three operating segments: Chlor Alkali Products and Vinyls, Epoxy and Winchester. The three operating segments reflect the organization used by our management for purposes of allocating resources and assessing performance, and represents our reportable segments. Chlorine and caustic soda used in our Epoxy segment is transferred at cost from the Chlor Alkali Products and Vinyls segment.
Cost of goods sold at Corporate is primarily attributed to environmental expense. Other segment items for each reportable segment includes selling, general and administrative expenses and earnings (losses) from non-consolidated affiliates. Segment assets include only those assets which are directly identifiable to an operating segment. Assets in the corporate/other segment primarily include cash and cash equivalents, deferred taxes and other assets. Sales are attributed to geographic areas based on the customer location.
Year Ended December 31, 2025
Chlor Alkali Products and Vinyls Epoxy Winchester Corp/Other Totals
Segment Detail ($ in millions)
Sales $ 3,684.4 $ 1,371.8 $ 1,724.6 $ — $ 6,780.8
Cost of goods sold 3,265.0 1,415.5 1,571.2 27.6 6,279.3
Gross margin 419.4 ( 43.7 ) 153.4 ( 27.6 ) 501.5
Other segment items ( 238.3 ) ( 59.8 ) ( 85.7 ) ( 82.6 ) ( 466.4 )
Restructuring charges — — — ( 33.4 ) ( 33.4 )
Other operating income — — — 0.5 0.5
Interest expense — — — ( 188.3 ) ( 188.3 )
Interest income — — — 4.4 4.4
Non-operating pension income — — — 20.6 20.6
Income (loss) before taxes $ 181.1 $ ( 103.5 ) $ 67.7 $ ( 306.4 ) $ ( 161.1 )
Other Items
Depreciation and amortization expense $ 423.6 $ 51.7 $ 34.2 $ 12.1 $ 521.6
Capital spending 159.7 19.9 39.8 6.9 226.3
Assets 5,092.4 855.1 849.4 528.9 7,325.8
Segment Sales by Geography
United States $ 2,529.1 $ 559.8 $ 1,497.0 $ — $ 4,585.9
Europe 160.0 391.5 95.9 — 647.4
Other foreign 995.3 420.5 131.7 — 1,547.5
Total sales $ 3,684.4 $ 1,371.8 $ 1,724.6 $ — $ 6,780.8
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Year Ended December 31, 2024
Chlor Alkali Products and Vinyls Epoxy Winchester Corp/Other Totals
Segment Detail ($ in millions)
Sales $ 3,630.2 $ 1,226.3 $ 1,683.6 $ — $ 6,540.1
Cost of goods sold 3,154.5 1,256.2 1,356.7 35.2 5,802.6
Gross margin 475.7 ( 29.9 ) 326.9 ( 35.2 ) 737.5
Other segment items ( 179.3 ) ( 55.1 ) ( 89.0 ) ( 85.1 ) ( 408.5 )
Restructuring charges — — — ( 33.3 ) ( 33.3 )
Other operating income — — — 0.8 0.8
Interest expense — — — ( 184.5 ) ( 184.5 )
Interest income — — — 3.7 3.7
Non-operating pension income — — — 26.0 26.0
Income (loss) before taxes
$ 296.4 $ ( 85.0 ) $ 237.9 $ ( 307.6 ) $ 141.7
Other Items
Depreciation and amortization expense $ 424.6 $ 53.7 $ 33.8 $ 6.0 $ 518.1
Capital spending 140.4 21.7 31.3 1.7 195.1
Assets 5,346.8 960.5 744.6 527.2 7,579.1
Segment Sales by Geography
United States $ 2,561.4 $ 606.8 $ 1,489.2 $ — $ 4,657.4
Europe 184.1 312.5 95.7 — 592.3
Other foreign 884.7 307.0 98.7 — 1,290.4
Total sales $ 3,630.2 $ 1,226.3 $ 1,683.6 $ — $ 6,540.1
Year Ended December 31, 2023
Chlor Alkali Products and Vinyls Epoxy Winchester Corp/Other Totals
Segment Detail ($ in millions)
Sales $ 3,995.1 $ 1,329.2 $ 1,508.7 $ — $ 6,833.0
Cost of goods sold 3,175.3 1,304.0 1,160.5 27.7 5,667.5
Gross margin 819.8 25.2 348.2 ( 27.7 ) 1,165.5
Other segment items ( 155.6 ) ( 56.2 ) ( 92.6 ) ( 102.3 ) ( 406.7 )
Restructuring charges — — — ( 89.6 ) ( 89.6 )
Other operating income — — — 42.9 42.9
Interest expense — — — ( 181.1 ) ( 181.1 )
Interest income — — — 4.3 4.3
Non-operating pension income — — — 24.0 24.0
Income (loss) before taxes
$ 664.2 $ ( 31.0 ) $ 255.6 $ ( 329.5 ) $ 559.3
Other Items
Depreciation and amortization expense $ 440.7 $ 57.4 $ 27.2 $ 8.1 $ 533.4
Capital spending 161.1 15.2 33.3 26.4 236.0
Assets 5,650.2 979.3 683.6 400.1 7,713.2
Segment Sales by Geography
United States $ 2,700.0 $ 562.8 $ 1,336.6 $ — $ 4,599.4
Europe 207.9 338.5 57.3 — 603.7
Other foreign 1,087.2 427.9 114.8 — 1,629.9
Total sales $ 3,995.1 $ 1,329.2 $ 1,508.7 $ — $ 6,833.0
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Property, plant and equipment is attributed to geographic areas based on the asset location:
December 31,
2025 2024
Property, Plant and Equipment by Geography ($ in millions)
United States $ 1,992.2 $ 2,132.8
Foreign 204.7 195.6
Total property, plant and equipment $ 2,196.9 $ 2,328.4
Years Ended December 31,
2025 2024 2023
Segment Sales by Product Line ($ in millions)
Chlor Alkali Products and Vinyls
Caustic soda $ 1,632.3 $ 1,526.9 $ 1,790.0
Chlorine, chlorine derivatives and other products 2,052.1 2,103.3 2,205.1
Total Chlor Alkali Products and Vinyls 3,684.4 3,630.2 3,995.1
Epoxy
Aromatics and allylics 564.7 512.2 525.1
Epoxy resins and formulated solutions 807.1 714.1 804.1
Total Epoxy 1,371.8 1,226.3 1,329.2
Winchester
Commercial 636.4 836.6 806.5
Military and law enforcement (1)
1,088.2 847.0 702.2
Total Winchester 1,724.6 1,683.6 1,508.7
Total sales $ 6,780.8 $ 6,540.1 $ 6,833.0
(1) For the years ended December 31, 2025, 2024 and 2023, revenue recognized over time represented $ 344.7 million, $ 206.5 million and $ 104.8 million respectively, associated with governmental contracts within our Winchester business.
NOTE 20. ENVIRONMENTAL
As is common in our industry, we are subject to environmental laws and regulations related to the use, storage, handling, generation, transportation, emission, discharge, disposal and remediation of, and exposure to, hazardous and non-hazardous substances and wastes in all of the countries in which we do business.
The establishment and implementation of national, state or provincial and local standards to regulate air, water and land quality affect substantially all of our manufacturing locations around the world. Laws providing for regulation of the manufacture, transportation, use and disposal of hazardous and toxic substances, and remediation of contaminated sites, have imposed additional regulatory requirements on industry, particularly the chemicals industry. In addition, implementation of environmental laws has required and will continue to require new capital expenditures and will increase plant operating costs. We employ waste minimization and pollution prevention programs at our manufacturing sites.
We are party to various government and private environmental actions associated with past manufacturing facilities and former waste disposal sites. Associated costs of investigatory and remedial activities are provided for in accordance with generally accepted accounting principles governing probability and the ability to reasonably estimate future costs. Our ability to estimate future costs depends on whether our investigatory and remedial activities are in preliminary or advanced stages. With respect to unasserted claims, we accrue liabilities for costs that, in our experience, we expect to incur to protect our interests against those unasserted claims. Our accrued liabilities for unasserted claims amounted to $ 11.4 million at December 31, 2025. With respect to asserted claims, we accrue liabilities based on remedial investigation, feasibility study, remedial action and operation, maintenance and monitoring (OM&M) expenses that, in our experience, we expect to incur in connection with the asserted claims. Required site OM&M expenses are estimated and accrued in their entirety for required periods not exceeding 30 years, which reasonably approximates the typical duration of long-term site OM&M.
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Our liabilities for future environmental expenditures were as follows:
December 31,
2025 2024
Environmental Liabilities ($ in millions)
Beginning balance $ 156.5 $ 153.6
Charges to income 25.5 30.2
Remedial and investigatory spending ( 25.7 ) ( 27.3 )
Ending balance $ 156.3 $ 156.5
At December 31, 2025 and 2024, our consolidated balance sheets included environmental liabilities of $ 126.3 million and $ 126.5 million, respectively, 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. These liabilities are reassessed periodically to determine if environmental circumstances have changed and/or remediation efforts and our estimate of related costs have changed. As a result of these reassessments, future charges to income may be made for additional liabilities. Of the $ 156.3 million included on our consolidated balance sheet at December 31, 2025, for future environmental expenditures, we currently expect to utilize $ 89.1 million of the reserve for future environmental expenditures over the next 5 years, $ 34.5 million for expenditures 6 to 10 years in the future, and $ 32.7 million for expenditures beyond 10 years in the future.
Our total estimated environmental liability at December 31, 2025, was attributable to 58 sites, 14 of which were United States Environmental Protection Agency National Priority List sites. Nine sites accounted for 80 % of our environmental liability and, of the remaining 49 sites, no one site accounted for more than 3 % of our environmental liability. At seven of the nine sites, part of the site is in the long-term OM&M stage. At seven of the nine sites, a remedial action plan is being developed for part of the site. At seven 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. None of the nine largest sites represents more than 25 % of the liabilities reserved on our consolidated balance sheet at December 31, 2025, for future environmental expenditures.
Environmental provisions charged to income, which are included in cost of goods sold, were as follows:
Years Ended December 31,
2025 2024 2023
Environmental Expense ($ in millions)
Provisions charged to income $ 25.5 $ 30.2 $ 30.1
Insurance recoveries (1)
( 1.0 ) — ( 6.4 )
Environmental expense $ 24.5 $ 30.2 $ 23.7
(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.
Annual environmental-related cash outlays for site investigation and remediation are expected to range between approximately $ 25 million to $ 35 million over the next several years, which are expected to be charged against reserves recorded on our consolidated balance sheet. While we do not anticipate a material increase in the projected annual level of our environmental-related cash outlays for site investigation and remediation, there is always the possibility that such an increase may occur in the future in view of the uncertainties associated with environmental exposures. Environmental exposures are difficult to assess for numerous reasons, including the identification of new sites, developments at sites resulting from investigatory studies, advances in technology, changes in environmental laws and regulations and their application, changes in regulatory authorities, the scarcity of reliable data pertaining to identified sites, the difficulty in assessing the involvement and financial capability of other Potentially Responsible Parties (PRPs), our ability to obtain contributions from other parties and the lengthy time periods over which site remediation occurs. It is possible that some of these matters (the outcomes of which are subject to various uncertainties) may be resolved unfavorably to us, which could materially adversely affect our financial position, cash flows, or results of operations. At December 31, 2025, we estimate that it is reasonably possible that we may have additional contingent environmental liabilities of $ 100 million in addition to the amounts for which we have already recorded as a reserve.
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NOTE 21. LEASES
Our lease commitments are primarily for railcars, but also include logistics, manufacturing, storage, real estate and information technology assets. Our leases have remaining lease terms of up to 89 years ( 12 years excluding land leases), some of which may include options to extend the leases for up to five years , and some of which may include options to terminate the leases within one year .
The amounts for leases included in our consolidated balance sheets include:
December 31,
2025 2024
Balance Sheet Location: ($ in millions)
Lease Assets
Total lease assets Operating lease assets, net $ 298.6 $ 302.2
Lease Liabilities
Current
Current Current operating lease liabilities $ 59.7 $ 64.8
Long-term Operating lease liabilities 252.5 243.2
Total lease liabilities $ 312.2 $ 308.0
The components of lease expense are recorded to cost of goods sold and selling and administrative expenses in the consolidated statements of operations, excluding interest on finance lease liabilities which is recorded to interest expense. The components of lease expense were as follows:
Years Ended December 31,
2025 2024 2023
Lease Expense ($ in millions)
Operating lease expense $ 81.3 $ 83.5 $ 88.4
Variable and short-term lease expense 36.9 29.6 24.6
Finance lease expense:
Depreciation of leased assets — — 0.5
Total lease expense $ 118.2 $ 113.1 $ 113.5
Future maturities of operating lease liabilities as of December 31, 2025, are summarized below:
Operating Leases
Future Lease Maturities ($ in millions)
2026 $ 72.3
2027 61.0
2028 52.7
2029 45.5
2030 34.1
Thereafter 120.7
Total lease payments 386.3
Less: Imputed interest (1)
( 74.1 )
Present value of lease liabilities $ 312.2
(1) Calculated using the discount rate for each lease.
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Other information related to leases was as follows:
Years Ended December 31,
2025 2024 2023
Supplemental Cash Flows Information ($ in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 81.3 $ 84.2 $ 88.8
Financing cash flows from finance leases — — 1.9
Non-cash increase in lease assets and lease liabilities:
Operating leases $ 79.2 $ 33.7 $ 71.1
December 31,
2025 2024
Weighted-Average Remaining Lease Term - Operating leases 8.9 years 8.8 years
Weighted-Average Discount Rate - Operating leases 4.7 % 4.2 %
As of December 31, 2025, we have additional operating leases that have not yet commenced of approximately $ 131.8 million. which are expected to commence during 2026 and 2027 with lease terms between 5 years and 12 years.
NOTE 22. COMMITMENTS AND CONTINGENCIES
The following table summarizes our contractual commitments under purchase contracts as of December 31, 2025:
Purchase Commitments
Future Contractual Purchase Commitments ($ in millions)
2026 $ 726.8
2027 670.6
2028 517.2
2029 516.2
2030 504.1
Thereafter 2,631.1
Total purchase commitments $ 5,566.0
The above purchase commitments include raw materials, capital expenditures, long-term energy supply contracts and utility purchasing commitments utilized in our normal course of business for our projected needs.
Legal Matters
In April 2023, Shintech filed a lawsuit against Olin Corporation and its wholly owned subsidiary, Blue Cube Operations LLC, in the U.S. District Court for the Southern District of Texas. Shintech alleged that Olin breached a long‑term VCM supply agreement relating to deliveries to Shintech’s polyvinyl chloride (PVC) facility in Freeport, TX, following a pricing dispute, a 2023 maintenance turnaround at Olin’s Freeport, TX VCM facility, and Olin’s declaration of force majeure at Olin’s Freeport, TX VCM facility. Olin supplies VCM to Shintech under a long-term supply contract. Shintech sought injunctive relief compelling performance under the supply agreement, specific performance of Olin’s alleged contractual obligations, and recovery of monetary damages.
After nearly three years of litigation, on February 10, 2026, the jury returned a verdict in favor of Shintech on its breach‑of‑contract claims. As a result of this verdict, the Company obtained new information related to this litigation loss contingency and recorded a pretax charge of $ 75.0 million in the fourth quarter 2025, which is included in our December 31, 2025 consolidated balance sheet under customer related obligations within Note 15, “Accrued Liabilities.” During the first half of 2026, we expect to pay approximately $ 185 million to Shintech associated with the litigation matter, and previously recorded accruals for a VCM pricing dispute with Shintech.
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We, and our subsidiaries, are defendants in various other legal actions (including proceedings based on alleged exposures to asbestos) incidental to our past and current business activities. As of December 31, 2025 and 2024, our consolidated balance sheets included accrued liabilities for these other legal actions of $ 20.1 million and $ 19.7 million, respectively, which are included under legal and professional costs within Note 15, “Accrued Liabilities.” These liabilities do not include costs associated with legal representation. Based on our analysis, and considering the inherent uncertainties associated with litigation, we do not believe that it is reasonably possible that these legal actions will materially adversely affect our financial position, cash flows or results of operations.
During the ordinary course of our business, contingencies arise resulting from an existing condition, situation or set of circumstances involving an uncertainty as to the realization of a possible gain contingency. In certain instances, such as environmental projects, we are responsible for managing the cleanup and remediation of an environmental site. There exists the possibility of recovering a portion of these costs from other parties. We account for gain contingencies in accordance with the provisions of ASC 450 “Contingencies” and, therefore, do not record gain contingencies and recognize income until it is earned and realizable.
NOTE 23. DERIVATIVE FINANCIAL INSTRUMENTS
We are exposed to market risk in the normal course of our business operations due to our purchases of certain commodities, our ongoing investing and financing activities and our operations that use foreign currencies. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. We have established policies and procedures governing our management of market risks and the use of financial instruments to manage exposure to such risks. ASC 815 “Derivatives and Hedging” (ASC 815) requires an entity to recognize all derivatives as either assets or liabilities in the consolidated balance sheets and measure those instruments at fair value. In accordance with ASC 815, we designate derivative contracts as cash flow hedges of forecasted purchases of commodities and forecasted interest payments related to variable-rate borrowings and designate certain interest rate swaps as fair value hedges of fixed-rate borrowings. We do not enter into any derivative instruments for trading or speculative purposes.
Energy costs, including electricity and natural gas, and certain raw materials used in our production processes are subject to price volatility. Depending on market conditions, we may enter into futures contracts, forward contracts, commodity swaps and put and call option contracts in order to reduce the impact of commodity price fluctuations. 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. 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. All of the currency derivatives expire within one year and are for U.S. dollar (USD) equivalents. The counterparties to the forward contracts are large financial institutions; however, the risk of loss to us in the event of nonperformance by a counterparty could be significant to our financial position, cash flows, or results of operations.
We had the following notional amounts of outstanding forward contracts to buy and sell foreign currency:
December 31,
2025 2024
Notional Value - Foreign Currency ($ in millions)
Buy $ — $ —
Sell 134.0 133.7
Cash Flow Hedges
For derivative instruments that are designated and qualify as a cash flow hedge, the change in fair value of the derivative is recognized as a component of other comprehensive income (loss) until the hedged item is recognized in earnings.
We had the following notional amounts of outstanding commodity contracts that were entered into to hedge forecasted purchases:
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December 31,
2025 2024
Notional Value - Commodity ($ in millions)
Natural gas $ 93.9 $ 57.4
Ethane 34.7 22.6
Metals 90.0 124.5
Total notional $ 218.6 $ 204.5
As of December 31, 2025, 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, 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. At December 31, 2025, we had open derivative contract positions through 2028. If all open futures contracts had been settled on December 31, 2025, we would have recognized a pretax gain of $ 7.8 million.
If commodity prices were to remain at December 31, 2025 levels, approximately $ 3.5 million of deferred gains, net of tax, would be reclassified into earnings during the next twelve months. The actual effect on earnings will be dependent on actual commodity prices when the forecasted transactions occur.
Fair Value Hedges
We use interest rate swaps as a means of managing interest expense and floating interest rate exposure to optimal levels. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. 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. There were no outstanding interest rate swaps at December 31, 2025 and 2024.
Financial Statement Impacts
We present our derivative assets and liabilities in our consolidated balance sheets on a net basis whenever we have a legally enforceable master netting agreement with the counterparty to our derivative contracts. We use these agreements to manage and substantially reduce our potential counterparty credit risk.
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The following table summarizes the location and fair value of the derivative instruments on our consolidated balance sheets:
December 31,
2025 2024
Balance Sheet Location ($ in millions)
Current Assets
Commodity contracts Other current assets $ 20.5 $ 11.9
Foreign currency contracts Other current assets — 2.6
Noncurrent Assets
Commodity contracts Other assets 3.3 2.0
Total derivative assets (1)
$ 23.8 $ 16.5
Current Liabilities
Commodity contracts Accrued liabilities $ 16.0 $ 3.3
Foreign currency contracts Accrued liabilities 0.6 —
Noncurrent Liabilities
Commodity contracts Other liabilities — 0.4
Total derivative liabilities (1)
$ 16.6 $ 3.7
(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) for the
Years Ended December 31,
2025 2024 2023
Location of Gain (Loss) ($ in millions)
Cash Flow Hedges
Commodity contracts Other comprehensive (loss) income $ 14.2 $ 4.3 $ ( 53.6 )
Commodity contracts Cost of goods sold 16.6 ( 30.6 ) ( 72.5 )
Not Designated as Hedging Instruments
Commodity contracts Cost of goods sold — — ( 0.6 )
Foreign exchange contracts Selling and administrative ( 16.8 ) 17.0 ( 15.1 )
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
By using derivative instruments, we are exposed to credit and market risk. If a counterparty fails to fulfill its performance obligations under a derivative contract, our credit risk will equal the fair value gain in a derivative. Generally, when the fair value of a derivative contract is positive, this indicates that the counterparty owes us, thus creating a repayment risk for us. 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 monitor our positions and the credit ratings of our counterparties, and we do not anticipate non-performance by the counterparties.
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Based on the agreements with our various counterparties, cash collateral is required to be provided when the net fair value of the derivatives, with the counterparty, exceeds a specific threshold. If the threshold is exceeded, cash is either provided by the counterparty to us if the value of the derivatives is our asset, or cash is provided by us to the counterparty if the value of the derivatives is our liability. As of December 31, 2025 and 2024, this threshold was not exceeded. In all instances where we are party to a master netting agreement, we offset the receivable or payable recognized upon payment of cash collateral against the fair value amounts recognized for derivative instruments that have also been offset under such master netting agreements.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.