https://www.avient.com/sites/default/files/resources/Lockport_IATF%252016949%25202016_EXP%25205-2021.pdf
An electronic certificate can be authenticated online.
An electronic certificate can be authenticated online.
https://www.avient.com/sites/default/files/2021-07/avnt-q2-2021-earnings-release.pdf
Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Reconciliation to Condensed Consolidated Statements of Income $ EPS $ EPS Net income from continuing operations attributable to Avient shareholders $ 68.8 $ 0.74 $ 23.0 $ 0.25 Special items, after tax (Attachment 3) 11.7 0.13 2.6 0.03 Adjusted net income / EPS - excluding special items $ 80.5 $ 0.87 $ 25.6 $ 0.28 Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Reconciliation to Condensed Consolidated Statements of Income $ EPS $ EPS Net income from continuing operations attributable to Avient shareholders $ 148.1 $ 1.60 $ 56.1 $ 0.63 Special items, after tax (Attachment 3) 14.3 0.16 11.2 0.12 Adjusted net income / EPS - excluding special items $ 162.4 $ 1.76 $ 67.3 $ 0.75 7 Attachment 2 Avient Corporation Condensed Consolidated Statements of Income (Unaudited) (In millions, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Sales $ 1,235.2 $ 609.1 $ 2,397.5 $ 1,320.6 Cost of sales 946.5 459.4 1,806.4 999.4 Gross margin 288.7 149.7 591.1 321.2 Selling and administrative expense 180.6 111.7 362.6 230.4 Operating income 108.1 38.0 228.5 90.8 Interest expense, net (19.5) (16.2) (38.8) (25.6) Other income, net 1.2 9.5 2.7 11.1 Income from continuing operations before income taxes 89.8 31.3 192.4 76.3 Income taxes (20.4) (7.9) (43.3) (19.8) Net income from continuing operations 69.4 23.4 149.1 56.5 Loss from discontinued operations, net of income taxes — (0.2) — (0.5) Net income 69.4 23.2 149.1 56.0 Net income attributable to noncontrolling interests (0.6) (0.4) (1.0) (0.4) Net income attributable to Avient common shareholders $ 68.8 $ 22.8 $ 148.1 $ 55.6 Earnings per share attributable to Avient common shareholders - Basic: Continuing operations $ 0.75 $ 0.25 $ 1.62 $ 0.63 Discontinued operations — — — — Total $ 0.75 $ 0.25 $ 1.62 $ 0.63 Earnings per share attributable to Avient common shareholders - Diluted: Continuing operations $ 0.74 $ 0.25 $ 1.60 $ 0.63 Discontinued operations — — — (0.01) Total $ 0.74 $ 0.25 $ 1.60 $ 0.62 Cash dividends declared per share of common stock $ 0.2125 $ 0.2025 $ 0.4250 $ 0.4050 Weighted-average shares used to compute earnings per common share: Basic 91.3 91.4 91.3 88.8 Diluted 92.4 91.8 92.3 89.4 8 Attachment 3 Avient Corporation Summary of Special Items (Unaudited) (In millions, except per share data) Special items (1) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Cost of sales: Restructuring costs, including accelerated depreciation and amortization $ (1.5) $ (1.2) $ (3.3) $ (1.2) Environmental remediation costs (12.5) (3.1) (13.0) (3.5) Reimbursement of previously incurred environmental costs — 8.5 4.5 8.7 Acquisition related costs 1.4 — 1.4 — Impact on cost of sales (12.6) 4.2 (10.4) 4.0 Selling and administrative expense: Restructuring, legal and other (1.4) (3.5) (2.7) (5.3) Acquisition earn-out adjustments — — — (1.0) Acquisition related costs (0.2) (9.7) (3.5) (16.4) Impact on selling and administrative expense (1.6) (13.2) (6.2) (22.7) Impact on operating income (14.2) (9.0) (16.6) (18.7) Costs related to committed financing in interest expense, net — (0.5) — (0.5) Other income, net — 0.2 — 0.3 Pension settlement gain and mark-to-market adjustment — 6.9 — 6.9 Impact on income from continuing operations before income taxes (14.2) (2.4) (16.6) (12.0) Income tax benefit on above special items 3.4 0.7 4.3 2.7 Tax adjustments(2) (0.9) (0.9) (2.0) (1.9) Impact of special items on net income from continuing operations attributable to Avient Shareholders $ (11.7) $ (2.6) $ (14.3) $ (11.2) Diluted earnings per common share impact $ (0.13) $ (0.03) $ (0.16) $ (0.12) Weighted average shares used to compute adjusted earnings per share: Diluted 92.4 91.8 92.3 89.4 (1) Special items include charges related to specific strategic initiatives or financial restructuring such as: consolidation of operations; debt extinguishment costs; costs incurred directly in relation to acquisitions or divestitures; employee separation costs resulting from personnel reduction programs, plant realignment costs, executive separation agreements; asset impairments; settlement gains or losses and mark-to- market adjustments associated with actuarial gains and losses on pension and other post-retirement benefit plans; environmental remediation costs, fines, penalties and related insurance recoveries related to facilities no longer owned or closed in prior years; gains and losses on the divestiture of operating businesses, joint ventures and equity investments; gains and losses on facility or property sales or disposals; results of litigation, fines or penalties, where such litigation (or action relating to the fines or penalties) arose prior to the commencement of the performance period; one-time, non-recurring items; and the effect of changes in accounting principles or other such laws or provisions affecting reported results. (2) Tax adjustments include the net tax benefit/(expense) from one-time income tax items, the set-up or reversal of uncertain tax position reserves and deferred income tax valuation allowance adjustments. 9 Attachment 4 Avient Corporation Condensed Consolidated Balance Sheets (In millions) (Unaudited) June 30, 2021 December 31, 2020 ASSETS Current assets: Cash and cash equivalents $ 616.2 $ 649.5 Accounts receivable, net 705.2 516.6 Inventories, net 412.5 327.5 Other current assets 124.2 108.5 Total current assets 1,858.1 1,602.1 Property, net 680.1 694.9 Goodwill 1,281.7 1,308.1 Intangible assets, net 944.9 1,008.5 Operating lease assets, net 87.3 80.9 Other non-current assets 195.3 176.0 Total assets $ 5,047.4 $ 4,870.5 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term and current portion of long-term debt $ 18.8 $ 18.6 Accounts payable 574.6 471.7 Current operating lease obligations 24.9 25.1 Accrued expenses and other current liabilities 316.0 285.6 Total current liabilities 934.3 801.0 Non-current liabilities: Long-term debt 1,852.2 1,854.0 Pension and other post-retirement benefits 112.6 115.0 Non-current operating lease obligations 62.8 56.0 Other non-current liabilities 299.1 332.8 Total non-current liabilities 2,326.7 2,357.8 SHAREHOLDERS' EQUITY Avient shareholders’ equity 1,768.2 1,697.1 Noncontrolling interest 18.2 14.6 Total equity 1,786.4 1,711.7 Total liabilities and equity $ 5,047.4 $ 4,870.5 10 Attachment 5 Avient Corporation Condensed Consolidated Statements of Cash Flows (Unaudited) (In millions) Six Months Ended June 30, 2021 2020 Operating Activities Net income $ 149.1 $ 56.0 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 69.5 40.8 Accelerated depreciation and amortization 1.4 — Share-based compensation expense 5.6 5.7 Changes in assets and liabilities, net of the effect of acquisitions: (Increase) decrease in accounts receivable (196.1) 16.8 (Increase) decrease in inventories (88.1) 17.4 Increase (decrease) in accounts payable 108.4 (23.5) Decrease in pension and other post-retirement benefits (9.2) (12.7) Increase (decrease) in accrued expenses and other assets and liabilities, net 27.5 (3.5) Payment of post-acquisition date earnout liability — (21.0) Net cash provided by operating activities 68.1 76.0 Investing activities Capital expenditures (42.1) (21.3) Net proceeds from divestiture — 7.1 Net cash proceeds provided by other assets (2.0) 5.2 Net cash used by investing activities (44.1) (9.0) Financing activities Debt offering proceeds — 650.0 Purchase of common shares for treasury (4.2) (13.6) Cash dividends paid (38.8) (34.3) Repayment of long-term debt (4.4) (4.2) Payments of withholding tax on share awards (4.2) (1.6) Debt financing costs — (9.7) Equity offering proceeds, net of underwriting discount and issuance costs — 496.1 Payment of acquisition date earnout liability — (32.9) Net cash (used) provided by financing activities (51.6) 1,049.8 Effect of exchange rate changes on cash (5.7) (4.5) (Decrease) increase in cash and cash equivalents (33.3) 1,112.3 Cash and cash equivalents at beginning of year 649.5 864.7 Cash and cash equivalents at end of period $ 616.2 $ 1,977.0 11 Attachment 6 Avient Corporation Business Segment Operations (Unaudited) (In millions) Operating income and earnings before interest, taxes, depreciation and amortization (EBITDA) at the segment level does not include: special items as defined in Attachment 3; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker.
Three Months Ended June 30, Six Months Ended June 30, Reconciliation to Consolidated Statements of Income 2021 2020 2021 2020 Sales $ 1,235.2 $ 609.1 $ 2,397.5 $ 1,320.6 Gross margin - GAAP 288.7 149.7 591.1 321.2 Special items in gross margin (Attachment 3) 12.6 (4.2) 10.4 (4.0) Adjusted gross margin $ 301.3 $ 145.5 $ 601.5 $ 317.2 Adjusted gross margin as a percent of sales 24.4 % 23.9 % 25.1 % 24.0 % Operating income - GAAP 108.1 38.0 228.5 90.8 Special items in operating income (Attachment 3) 14.2 9.0 16.6 18.7 Adjusted operating income $ 122.3 $ 47.0 $ 245.1 $ 109.5 Adjusted operating income as a percent of sales 9.9 % 7.7 % 10.2 % 8.3 % The table below reconciles pre-special income tax expense and the pre-special effective tax rate to their most comparable US GAAP figures.
Three Months Ended June 30, 2021 2020 GAAP Results Special Items Adjusted Results GAAP Results Special Items Adjusted Results $ 89.8 $ 14.2 $ 104.0 $ 31.3 $ 2.4 $ 33.7 Income tax expense - GAAP (20.4) — (20.4) (7.9) — (7.9) Income tax impact of special items (Attachment 3) — (3.4) (3.4) — (0.7) (0.7) Tax adjustments (Attachment 3) — 0.9 0.9 — 0.9 0.9 Income tax (expense) benefit $ (20.4) $ (2.5) $ (22.9) $ (7.9) $ 0.2 $ (7.7) Effective Tax Rate(1) 22.7 % 22.0 % 25.1 % 22.5 % (1) Rates may not recalculate from figures presented herein due to rounding 13 Six Months Ended June 30, 2021 2020 GAAP Results Special Items Adjusted Results GAAP Results Special Items Adjusted Results $ 192.4 $ 16.6 $ 209.0 $ 76.3 $ 12.0 $ 88.3 Income tax expense - GAAP (43.3) — (43.3) (19.8) — (19.8) Income tax impact of special items (Attachment 3) — (4.3) (4.3) — (2.7) (2.7) Tax adjustments (Attachment 3) — 2.0 2.0 — 1.9 1.9 Income tax (expense) benefit $ (43.3) $ (2.3) $ (45.6) $ (19.8) $ (0.8) $ (20.6) Effective Tax Rate(1) 22.5 % 21.8 % 25.9 % 23.3 % (1) Rates may not recalculate from figures presented herein due to rounding The following pro forma adjustments are referenced by management to provide comparable business performance by incorporating the Clariant Masterbatch business in periods prior to the acquisition date (July 1, 2020).
https://www.avient.com/sites/default/files/2022-02/Q4 2021 Avient Earnings Release_0.pdf
Three Months Ended December 31, 2021 2020 Reconciliation to Condensed Consolidated Statements of Income $ EPS(1) $ EPS(1) Net income from continuing operations attributable to Avient shareholders $ 29.8 $ 0.32 $ 74.2 $ 0.81 Special items, after tax (Attachment 3) 24.0 0.26 (26.7) (0.29) Adjusted net income / EPS - excluding special items $ 53.8 $ 0.58 $ 47.5 $ 0.52 (1) Per share amounts may not recalculate from figures presented herein due to rounding Year Ended December 31, 2021 2020 Reconciliation to Condensed Consolidated Statements of Income $ EPS(1) $ EPS(1) Net income from continuing operations attributable to Avient shareholders $ 230.8 $ 2.51 $ 132.0 $ 1.46 Special items, after tax (Attachment 3) 50.0 0.54 24.8 0.27 Adjusted net income / EPS - excluding special items $ 280.8 3.05 $ 156.8 1.73 (1) Per share amounts may not recalculate from figures presented herein due to rounding 8 Attachment 2 Avient Corporation Condensed Consolidated Statements of Income (Unaudited) (In millions, except per share data) Three Months Ended December 31, Year Ended December 31, 2021 2020 2021 2020 Sales $ 1,201.5 $ 997.0 $ 4,818.8 $ 3,242.1 Cost of sales 948.4 744.1 3,719.2 2,457.8 Gross margin 253.1 252.9 1,099.6 784.3 Selling and administrative expense 179.1 187.9 718.4 595.0 Operating income 74.0 65.0 381.2 189.3 Interest expense, net (17.5) (19.3) (75.3) (74.6) Other (expense) income, net (5.4) 11.7 (1.3) 24.3 Income from continuing operations before income taxes 51.1 57.4 304.6 139.0 Income tax (expense) benefit (22.2) 17.3 (74.0) (5.2) Net income from continuing operations 28.9 74.7 230.6 133.8 Income (loss) from discontinued operations, net of income taxes — 0.1 — (0.4) Net income 28.9 74.8 230.6 133.4 Net loss (income) attributable to noncontrolling interests 0.9 (0.5) 0.2 (1.8) Net income attributable to Avient common shareholders $ 29.8 $ 74.3 $ 230.8 $ 131.6 Earnings per share attributable to Avient common shareholders - Basic: Continuing operations $ 0.33 $ 0.81 $ 2.53 $ 1.47 Discontinued operations — — — (0.01) Total $ 0.33 $ 0.81 $ 2.53 $ 1.46 Earnings per share attributable to Avient common shareholders - Diluted: Continuing operations $ 0.32 $ 0.81 $ 2.51 $ 1.46 Discontinued operations — — — (0.01) Total $ 0.32 $ 0.81 $ 2.51 $ 1.45 Cash dividends declared per share of common stock $ 0.2375 $ 0.2125 $ 0.8750 $ 0.8200 Weighted-average shares used to compute earnings per common share: Basic 91.5 91.4 91.4 90.1 Diluted 92.4 92.1 92.1 90.6 9 Attachment 3 Avient Corporation Summary of Special Items (Unaudited) (In millions, except per share data) Special items (1) Three Months Ended December 31, Year Ended December 31, 2021 2020 2021 2020 Cost of sales: Restructuring costs, including accelerated depreciation $ (6.0) $ (1.8) $ (14.6) $ (4.3) Environmental remediation costs (0.5) (1.1) (22.9) (20.4) Reimbursement of previously incurred environmental costs — — 4.5 8.7 Acquisition related costs 0.6 1.2 (0.6) (9.3) Impact on cost of sales (5.9) (1.7) (33.6) (25.3) Selling and administrative expense: Restructuring, legal and other (4.2) (13.0) (5.9) (22.5) Acquisition earn-out adjustments — 1.5 — (1.0) Acquisition related costs (1.1) (1.4) (8.3) (24.9) Impact on selling and administrative expense (5.3) (12.9) (14.2) (48.4) Impact on operating income (11.2) (14.6) (47.8) (73.7) Costs related to committed financing in interest expense, net — — — (10.1) Other income, net — 0.1 0.1 0.4 Pension settlement/curtailment and mark-to-market adjustment (loss) gain (9.4) 10.3 (9.4) 17.2 Impact on income from continuing operations before income taxes (20.6) (4.2) (57.1) (66.2) Income tax benefit (expense) on above special items 4.1 (1.3) 13.0 14.1 Tax adjustments(2) (7.5) 32.2 (5.9) 27.3 Impact of special items on net income from continuing operations attributable to Avient Shareholders $ (24.0) $ 26.7 $ (50.0) $ (24.8) Diluted earnings per common share impact of special items on net income from continuing operations attributable to Avient shareholders $ (0.26) $ 0.29 $ (0.54) $ (0.27) Weighted average shares used to compute adjusted earnings per share: Diluted 92.4 92.1 92.1 90.6 (1) Special items include charges related to specific strategic initiatives or financial restructuring such as: consolidation of operations; debt extinguishment costs; costs incurred directly in relation to acquisitions or divestitures; employee separation costs resulting from personnel reduction programs, plant realignment costs, executive separation agreements; asset impairments; settlement gains or losses and mark-to- market adjustments associated with actuarial gains and losses on pension and other post-retirement benefit plans; environmental remediation costs, fines, penalties and related insurance recoveries related to facilities no longer owned or closed in prior years; gains and losses on the divestiture of operating businesses, joint ventures and equity investments; gains and losses on facility or property sales or disposals; results of litigation, fines or penalties, where such litigation (or action relating to the fines or penalties) arose prior to the commencement of the performance period; one-time, non-recurring items; and the effect of changes in accounting principles or other such laws or provisions affecting reported results. (2) Tax adjustments include the net tax benefit/(expense) from one-time income tax items, adjustments to uncertain tax position reserves and deferred income tax valuation allowances. 10 Attachment 4 Avient Corporation Condensed Consolidated Balance Sheets (Unaudited) (In millions) Year Ended December 31, 2021 2020 ASSETS Current assets: Cash and cash equivalents $ 601.2 $ 649.5 Accounts receivable, net 642.3 516.6 Inventories, net 461.1 327.5 Other current assets 128.1 108.5 Total current assets 1,832.7 1,602.1 Property, net 676.1 694.9 Goodwill 1,286.4 1,308.1 Intangible assets, net 925.2 1,008.5 Operating lease assets, net 74.1 80.9 Other non-current assets 208.4 176.0 Total assets $ 5,002.9 $ 4,870.5 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term and current portion of long-term debt $ 8.6 $ 18.6 Accounts payable 553.9 471.7 Current operating lease obligations 24.2 25.1 Accrued expenses and other current liabilities 359.6 285.6 Total current liabilities 946.3 801.0 Non-current liabilities: Long-term debt 1,850.3 1,854.0 Pension and other post-retirement benefits 100.0 115.0 Deferred income taxes 100.6 140.0 Non-current operating lease obligations 50.1 56.0 Other non-current liabilities 165.1 192.8 Total non-current liabilities 2,266.1 2,357.8 SHAREHOLDERS' EQUITY Avient shareholders’ equity 1,774.7 1,697.1 Noncontrolling interest 15.8 14.6 Total equity 1,790.5 1,711.7 Total liabilities and equity $ 5,002.9 $ 4,870.5 11 Attachment 5 Avient Corporation Condensed Consolidated Statements of Cash Flows (Unaudited) (In millions) Year Ended December 31, 2021 2020 Operating activities Net income $ 230.6 $ 133.4 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 144.2 111.8 Accelerated depreciation 1.7 3.2 Share-based compensation expense 11.2 11.3 Changes in assets and liabilities, net of the effect of acquisitions: Increase in accounts receivable (143.1) (4.6) (Increase) decrease in inventories (139.5) 40.2 Increase in accounts payable 95.3 78.4 (Decrease) increase in pension and other post-retirement benefits (10.9) 30.7 Increase in post-acquisition earnout liabilities — 1.0 Increase (decrease) in accrued expenses and other assets and liabilities, net 44.3 (3.7) Taxes paid on gain on divestiture — (142.0) Payment of post-acquisition date earnout liability — (38.1) Net cash provided by operating activities 233.8 221.6 Investing activities Capital expenditures (100.6) (63.7) Business acquisitions, net of cash acquired (47.6) (1,380.2) Net proceeds from divestiture — 7.1 Other investing activities (2.0) 5.2 Net cash used by investing activities (150.2) (1,431.6) Financing activities Debt offering proceeds — 650.0 Purchase of common shares for treasury (4.2) (22.4) Cash dividends paid (77.7) (71.3) Repayment of long-term debt (18.5) (7.8) Payments on withholding tax on share awards (10.7) (2.3) Debt financing costs — (9.5) Equity offering proceeds, net of underwriting discount and issuance costs — 496.1 Payment of acquisition date earnout liability — (50.8) Other financing activities (3.5) — Net cash (used) provided by financing activities (114.6) 982.0 Effect of exchange rate changes on cash (17.3) 12.8 Decrease in cash and cash equivalents (48.3) (215.2) Cash and cash equivalents at beginning of year 649.5 864.7 Cash and cash equivalents at end of year $ 601.2 $ 649.5 12 Attachment 6 Avient Corporation Business Segment Operations (Unaudited) (In millions) Operating income at the segment level does not include: special items as defined in Attachment 3; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker.
Three Months Ended December 31, Year Ended December 31, Reconciliation to Consolidated Statements of Income 2021 2020 2021 2020 Sales $ 1,201.5 $ 997.0 $ 4,818.8 $ 3,242.1 Gross margin - GAAP 253.1 252.9 1,099.6 784.3 Special items in gross margin (Attachment 3) 5.9 1.7 33.6 25.3 Adjusted Gross margin $ 259.0 $ 254.6 $ 1,133.2 $ 809.6 Adjusted Gross margin as a percent of sales 21.6 % 25.5 % 23.5 % 25.0 % Operating income - GAAP 74.0 65.0 381.2 189.3 Special items in operating income (Attachment 3) 11.2 14.6 47.8 73.7 Adjusted Operating income $ 85.2 $ 79.6 $ 429.0 $ 263.0 Adjusted Operating income as a percent of sales 7.1 % 8.0 % 8.9 % 8.1 % The table below reconciles pre-special income tax expense and the pre-special effective tax rate to their most comparable US GAAP figures.
Three Months Ended December 31, 2021 2020 GAAP Results Special Items Adjusted Results GAAP Results Special Items Adjusted Results Income from continuing operations before income taxes $ 51.1 $ 20.6 $ 71.7 $ 57.4 $ 4.2 $ 61.6 Income tax (expense) benefit - GAAP (22.2) — (22.2) 17.3 — 17.3 Income tax impact of special items (Attachment 3) — (4.1) (4.1) — 1.3 1.3 Tax adjustments (Attachment 3) — 7.5 7.5 — (32.2) (32.2) Income tax (expense) benefit $ (22.2) $ 3.4 $ (18.8) $ 17.3 $ (30.9) $ (13.6) Effective Tax Rate(1) 43.4 % 26.0 % (30.1) % 22.1 % (1) Rates may not recalculate from figures presented herein due to rounding 14 Year Ended December 31, 2021 2020 GAAP Results Special Items Adjusted Results GAAP Results Special Items Adjusted Results Income from continuing operations before income taxes $304.6 $ 57.1 $ 361.7 $ 139.0 $ 66.2 $ 205.2 Income tax expense - GAAP (74.0) — (74.0) (5.2) — (5.2) Income tax impact of special items (Attachment 3) — (13.0) (13.0) — (14.1) (14.1) Tax adjustments (Attachment 3) — 5.9 5.9 — (27.3) (27.3) Income tax expense $ (74.0) $ (7.1) $ (81.1) $ (5.2) $ (41.4) $ (46.6) Effective Tax Rate(1) 24.3 % 22.4 % 3.7 % 22.7 % (1) Rates may not recalculate from figures presented herein due to rounding The following pro forma adjustments are referenced by management to provide comparable business performance by incorporating the Clariant Color business in periods prior to the acquisition date (July 1, 2020).
https://www.avient.com/sites/default/files/2021-10/avnt-q3-2021-news-release.pdf
Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Reconciliation to Condensed Consolidated Statements of Income $ EPS $ EPS Net income from continuing operations attributable to Avient shareholders $ 52.9 $ 0.57 $ 1.7 $ 0.02 Special items, after tax (Attachment 3) 11.7 0.13 40.3 0.44 Adjusted net income / EPS - excluding special items $ 64.6 $ 0.70 $ 42.0 $ 0.46 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Reconciliation to Condensed Consolidated Statements of Income $ EPS $ EPS Net income from continuing operations attributable to Avient shareholders $ 201.0 $ 2.18 $ 57.8 $ 0.64 Special items, after tax (Attachment 3) 26.0 0.28 51.5 0.57 Adjusted net income / EPS - excluding special items $ 227.0 $ 2.46 $ 109.3 $ 1.21 8 Attachment 2 Avient Corporation Condensed Consolidated Statements of Income (Unaudited) (In millions, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Sales $ 1,219.8 $ 924.5 $ 3,617.3 $ 2,245.1 Cost of sales 964.4 714.3 2,770.8 1,713.7 Gross margin 255.4 210.2 846.5 531.4 Selling and administrative expense 176.7 176.7 539.3 407.1 Operating income 78.7 33.5 307.2 124.3 Interest expense, net (19.0) (29.7) (57.8) (55.3) Other income, net 1.4 1.5 4.1 12.6 Income from continuing operations before income taxes 61.1 5.3 253.5 81.6 Income taxes (8.5) (2.7) (51.8) (22.5) Net income from continuing operations 52.6 2.6 201.7 59.1 Loss from discontinued operations, net of income taxes — — — (0.5) Net income 52.6 2.6 201.7 58.6 Net loss (income) attributable to noncontrolling interests 0.3 (0.9) (0.7) (1.3) Net income attributable to Avient common shareholders $ 52.9 $ 1.7 $ 201.0 $ 57.3 Earnings per share attributable to Avient common shareholders - Basic: Continuing operations $ 0.58 $ 0.02 $ 2.20 $ 0.64 Discontinued operations — — — — Total $ 0.58 $ 0.02 $ 2.20 $ 0.64 Earnings per share attributable to Avient common shareholders - Diluted: Continuing operations $ 0.57 $ 0.02 $ 2.18 $ 0.64 Discontinued operations — — — (0.01) Total $ 0.57 $ 0.02 $ 2.18 $ 0.63 Cash dividends declared per share of common stock $ 0.2125 $ 0.2025 $ 0.6375 $ 0.6075 Weighted-average shares used to compute earnings per common share: Basic 91.4 91.5 91.3 89.7 Diluted 92.2 91.9 92.1 90.7 9 Attachment 3 Avient Corporation Summary of Special Items (Unaudited) (In millions, except per share data) Special items (1) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Cost of sales: Restructuring costs, including accelerated depreciation and amortization $ (5.3) $ (1.3) $ (8.6) $ (2.5) Environmental remediation costs (9.4) (15.8) (22.4) (19.3) Reimbursement of previously incurred environmental costs — — 4.5 8.7 Acquisition related costs (2.6) (10.5) (1.2) (10.5) Impact on cost of sales (17.3) (27.6) (27.7) (23.6) Selling and administrative expense: Restructuring, legal and other — (4.2) (1.7) (9.5) Acquisition earn-out adjustments — (1.5) — (2.5) Acquisition related costs (2.7) (7.1) (7.2) (23.5) Impact on selling and administrative expense (2.7) (12.8) (8.9) (35.5) Impact on operating income (20.0) (40.4) (36.6) (59.1) Costs related to committed financing in interest expense, net — (9.6) — (10.1) Other income, net 0.1 — 0.1 0.3 Pension settlement gain and mark-to-market adjustment — — — 6.9 Impact on income from continuing operations before income taxes (19.9) (50.0) (36.5) (62.0) Income tax benefit on above special items 4.6 12.7 8.9 15.4 Tax adjustments(2) 3.6 (3.0) 1.6 (4.9) Impact of special items on net income from continuing operations attributable to Avient Shareholders $ (11.7) $ (40.3) $ (26.0) $ (51.5) Diluted earnings per common share impact $ (0.13) $ (0.44) $ (0.28) $ (0.57) Weighted average shares used to compute adjusted earnings per share: Diluted 92.2 91.9 92.1 90.7 (1) Special items include charges related to specific strategic initiatives or financial restructuring such as: consolidation of operations; debt extinguishment costs; costs incurred directly in relation to acquisitions or divestitures; employee separation costs resulting from personnel reduction programs, plant realignment costs, executive separation agreements; asset impairments; settlement gains or losses and mark-to- market adjustments associated with actuarial gains and losses on pension and other post-retirement benefit plans; environmental remediation costs, fines, penalties and related insurance recoveries related to facilities no longer owned or closed in prior years; gains and losses on the divestiture of operating businesses, joint ventures and equity investments; gains and losses on facility or property sales or disposals; results of litigation, fines or penalties, where such litigation (or action relating to the fines or penalties) arose prior to the commencement of the performance period; one-time, non-recurring items; and the effect of changes in accounting principles or other such laws or provisions affecting reported results. (2) Tax adjustments include the net tax benefit/(expense) from one-time income tax items, the set-up or reversal of uncertain tax position reserves and deferred income tax valuation allowance adjustments. 10 Attachment 4 Avient Corporation Condensed Consolidated Balance Sheets (In millions) (Unaudited) September 30, 2021 December 31, 2020 ASSETS Current assets: Cash and cash equivalents $ 545.2 $ 649.5 Accounts receivable, net 703.0 516.6 Inventories, net 477.2 327.5 Other current assets 123.5 108.5 Total current assets 1,848.9 1,602.1 Property, net 669.6 694.9 Goodwill 1,293.9 1,308.1 Intangible assets, net 948.4 1,008.5 Operating lease assets, net 81.6 80.9 Other non-current assets 168.6 176.0 Total assets $ 5,011.0 $ 4,870.5 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term and current portion of long-term debt $ 8.7 $ 18.6 Accounts payable 557.7 471.7 Current operating lease obligations 24.1 25.1 Accrued expenses and other current liabilities 371.3 285.6 Total current liabilities 961.8 801.0 Non-current liabilities: Long-term debt 1,851.0 1,854.0 Pension and other post-retirement benefits 111.0 115.0 Non-current operating lease obligations 57.7 56.0 Other non-current liabilities 244.1 332.8 Total non-current liabilities 2,263.8 2,357.8 SHAREHOLDERS' EQUITY Avient shareholders’ equity 1,768.8 1,697.1 Noncontrolling interest 16.6 14.6 Total equity 1,785.4 1,711.7 Total liabilities and equity $ 5,011.0 $ 4,870.5 11 Attachment 5 Avient Corporation Condensed Consolidated Statements of Cash Flows (Unaudited) (In millions) Nine Months Ended September 30, 2021 2020 Operating Activities Net income $ 201.7 $ 58.6 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 105.8 74.8 Accelerated depreciation and amortization 1.9 2.5 Share-based compensation expense 8.4 7.1 Changes in assets and liabilities, net of the effect of acquisitions: Increase in accounts receivable (199.7) (12.7) (Increase) decrease in inventories (156.2) 53.0 Increase in accounts payable 95.3 21.3 Decrease in pension and other post-retirement benefits (14.2) (14.4) Increase in post-acquisition earnout liabilities — 2.5 Increase in accrued expenses and other assets and liabilities, net 67.0 56.1 Taxes paid on gain on divestiture — (142.0) Payment of post-acquisition date earnout liability — (38.1) Net cash provided by operating activities 110.0 68.7 Investing activities Capital expenditures (62.7) (38.6) Business acquisitions, net of cash acquired (47.6) (1,342.7) Net proceeds from divestiture — 7.1 Other investing activities (2.0) 5.2 Net cash used by investing activities (112.3) (1,369.0) Financing activities Debt offering proceeds — 650.0 Purchase of common shares for treasury (4.2) (13.6) Cash dividends paid (58.2) (52.8) Repayment of long-term debt (16.5) (6.0) Payments of withholding tax on share awards (9.1) (1.9) Debt financing costs — (9.5) Equity offering proceeds, net of underwriting discount and issuance costs — 496.1 Payment of acquisition date earnout liability — (50.8) Other financing activities (3.5) — Net cash (used) provided by financing activities (91.5) 1,011.5 Effect of exchange rate changes on cash (10.5) 1.4 Decrease in cash and cash equivalents (104.3) (287.4) Cash and cash equivalents at beginning of year 649.5 864.7 Cash and cash equivalents at end of period $ 545.2 $ 577.3 12 Attachment 6 Avient Corporation Business Segment Operations (Unaudited) (In millions) Operating income and earnings before interest, taxes, depreciation and amortization (EBITDA) at the segment level does not include: special items as defined in Attachment 3; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker.
Three Months Ended September 30, Nine Months Ended September 30, Reconciliation to Consolidated Statements of Income 2021 2020 2021 2020 Sales $ 1,219.8 $ 924.5 $ 3,617.3 $ 2,245.1 Gross margin - GAAP 255.4 210.2 846.5 531.4 Special items in gross margin (Attachment 3) 17.3 27.6 27.7 23.6 Adjusted gross margin $ 272.7 $ 237.8 $ 874.2 $ 555.0 Adjusted gross margin as a percent of sales 22.4 % 25.7 % 24.2 % 24.7 % Operating income - GAAP 78.7 33.5 307.2 124.3 Special items in operating income (Attachment 3) 20.0 40.4 36.6 59.1 Adjusted operating income $ 98.7 $ 73.9 $ 343.8 $ 183.4 Adjusted operating income as a percent of sales 8.1 % 8.0 % 9.5 % 8.2 % The table below reconciles pre-special income tax expense and the pre-special effective tax rate to their most comparable US GAAP figures.
Three Months Ended September 30, 2021 2020 GAAP Results Special Items Adjusted Results GAAP Results Special Items Adjusted Results $ 61.1 $ 19.9 $ 81.0 $ 5.3 $ 50.0 $ 55.3 Income tax expense - GAAP (8.5) — (8.5) (2.7) — (2.7) Income tax impact of special items (Attachment 3) — (4.6) (4.6) — (12.7) (12.7) Tax adjustments (Attachment 3) — (3.6) (3.6) — 3.0 3.0 Income tax (expense) benefit $ (8.5) $ (8.2) $ (16.7) $ (2.7) $ (9.7) $ (12.4) Effective Tax Rate(1) 14.1 % 20.8 % 51.9 % 22.7 % (1) Rates may not recalculate from figures presented herein due to rounding 14 Nine Months Ended September 30, 2021 2020 GAAP Results Special Items Adjusted Results GAAP Results Special Items Adjusted Results $ 253.5 $ 36.5 $ 290.0 $ 81.6 $ 62.0 $ 143.6 Income tax expense - GAAP (51.8) — (51.8) (22.5) — (22.5) Income tax impact of special items (Attachment 3) — (8.9) (8.9) — (15.4) (15.4) Tax adjustments (Attachment 3) — (1.6) (1.6) — 4.9 4.9 Income tax (expense) benefit $ (51.8) $ (10.5) $ (62.3) $ (22.5) $ (10.5) $ (33.0) Effective Tax Rate(1) 20.5 % 21.5 % 27.6 % 23.0 % (1) Rates may not recalculate from figures presented herein due to rounding The following pro forma adjustments are referenced by management to provide comparable business performance by incorporating the Clariant Masterbatch business in periods prior to the acquisition date (July 1, 2020).
https://www.avient.com/sites/default/files/2024-12/2024 Avient Executive Bios_Avery Johnson.pdf
AVERY JOHNSON Vice President, Tax Avery Johnson is Vice President, Tax at Avient Corporation, an innovator of materials solutions that help customers succeed while enabling a sustainable world.
Johnson is responsible for Avient’s global tax strategy, processes and administration to support the operational and legal requirements of the company, while working collaboratively with Avient’s Corporate Finance and Treasury departments to ensure consistent communication on transactional and tax planning matters.
Johnson previously served as Director of Strategic Tax Planning, Leader of the Intellectual Property Program, and Director of Transfer Pricing at Illinois Tool Works Inc., a Fortune 200 global diversified, industrial manufacturer.
https://www.avient.com/sites/default/files/2022-04/Avient Q1 2022 Earnings Release.pdf
Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Reconciliation to Condensed Consolidated Statements of Income $ EPS $ EPS Net income attributable to Avient shareholders $ 84.2 $ 0.91 $ 79.3 $ 0.86 Special items, after tax (Attachment 3) 7.2 0.08 2.6 0.03 Adjusted net income / EPS - excluding special items $ 91.4 $ 0.99 $ 81.9 $ 0.89 6 Attachment 2 Avient Corporation Condensed Consolidated Statements of Income (Unaudited) (In millions, except per share data) Three Months Ended March 31, 2022 2021 Sales $ 1,293.8 $ 1,162.3 Cost of sales 1,000.1 859.9 Gross margin 293.7 302.4 Selling and administrative expense 165.1 182.0 Operating income 128.6 120.4 Interest expense, net (16.9) (19.3) Other (expense) income, net (0.6) 1.5 Income before income taxes 111.1 102.6 Income taxes (26.6) (22.9) Net income 84.5 79.7 Net income attributable to noncontrolling interests (0.3) (0.4) Net income attributable to Avient shareholders $ 84.2 $ 79.3 Earnings per share attributable to Avient common shareholders - Basic $ 0.92 $ 0.87 Earnings per share attributable to Avient common shareholders - Diluted $ 0.91 $ 0.86 Cash dividends declared per share of common stock $ 0.2375 $ 0.2125 Weighted-average shares used to compute earnings per common share: Basic 91.5 91.3 Diluted 92.3 92.2 7 Attachment 3 Avient Corporation Summary of Special Items (Unaudited) (In millions, except per share data) Special items (1) Three Months Ended March 31, 2022 2021 Cost of sales: Restructuring costs, including accelerated depreciation and amortization $ (4.4) $ (1.8) Environmental remediation costs (2.0) (0.5) Reimbursement of previously incurred environmental costs 0.6 4.5 Impact on cost of sales (5.8) 2.2 Selling and administrative expense: Restructuring, legal and other 0.9 (1.3) Acquisition related costs (2.9) (3.3) Impact on selling and administrative expense (2.0) (4.6) Impact on operating income (7.8) (2.4) Other income, net 0.1 — Impact on income before income taxes (7.7) (2.4) Income tax benefit on above special items 2.0 0.9 Tax adjustments(2) (1.5) (1.1) Impact of special items on net income attributable to Avient Shareholders $ (7.2) $ (2.6) Diluted earnings per common share impact $ (0.08) $ (0.03) Weighted average shares used to compute adjusted earnings per share: Diluted 92.3 92.2 (1) Special items include charges related to specific strategic initiatives or financial restructuring such as: consolidation of operations; debt extinguishment costs; costs incurred directly in relation to acquisitions or divestitures; employee separation costs resulting from personnel reduction programs, plant realignment costs, executive separation agreements; asset impairments; settlement gains or losses and mark-to- market adjustments associated with actuarial gains and losses on pension and other post-retirement benefit plans; environmental remediation costs, fines, penalties and related insurance recoveries related to facilities no longer owned or closed in prior years; gains and losses on the divestiture of operating businesses, joint ventures and equity investments; gains and losses on facility or property sales or disposals; results of litigation, fines or penalties, where such litigation (or action relating to the fines or penalties) arose prior to the commencement of the performance period; one-time, non-recurring items; and the effect of changes in accounting principles or other such laws or provisions affecting reported results. (2) Tax adjustments include the net tax benefit/(expense) from one-time income tax items, the set-up or reversal of uncertain tax position reserves and deferred income tax valuation allowance adjustments. 8 Attachment 4 Avient Corporation Condensed Consolidated Balance Sheets (In millions) (Unaudited) March 31, 2022 December 31, 2021 ASSETS Current assets: Cash and cash equivalents $ 562.6 $ 601.2 Accounts receivable, net 757.9 642.3 Inventories, net 475.4 461.1 Other current assets 131.0 122.4 Total current assets 1,926.9 1,827.0 Property, net 661.9 676.1 Goodwill 1,283.4 1,286.4 Intangible assets, net 904.1 925.2 Operating lease assets, net 67.1 74.1 Other non-current assets 200.3 208.4 Total assets $ 5,043.7 $ 4,997.2 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term and current portion of long-term debt $ 607.5 $ 8.6 Accounts payable 642.3 553.9 Current operating lease obligations 21.7 24.2 Accrued expenses and other current liabilities 284.8 353.9 Total current liabilities 1,556.3 940.6 Non-current liabilities: Long-term debt 1,250.2 1,850.3 Pension and other post-retirement benefits 98.5 100.0 Deferred income taxes 99.4 100.6 Non-current operating lease obligations 45.9 50.1 Other non-current liabilities 164.1 165.1 Total non-current liabilities 1,658.1 2,266.1 SHAREHOLDERS' EQUITY Avient shareholders’ equity 1,813.2 1,774.7 Noncontrolling interest 16.1 15.8 Total equity 1,829.3 1,790.5 Total liabilities and equity $ 5,043.7 $ 4,997.2 9 Attachment 5 Avient Corporation Condensed Consolidated Statements of Cash Flows (Unaudited) (In millions) Three Months Ended March 31, 2022 2021 Operating Activities Net income $ 84.5 $ 79.7 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 35.7 36.6 Accelerated depreciation and amortization 2.1 0.5 Share-based compensation expense 3.2 2.7 Changes in assets and liabilities, net of the effect of acquisitions: Increase in accounts receivable (118.8) (137.6) Increase in inventories (15.1) (35.1) Increase in accounts payable 90.5 67.3 Decrease in pension and other post-retirement benefits (4.0) (7.1) Decrease in accrued expenses and other assets and liabilities, net (59.2) (3.4) Net cash provided by operating activities 18.9 3.6 Investing activities Capital expenditures (13.3) (16.5) Other investing activities — (2.0) Net cash used by investing activities (13.3) (18.5) Financing activities Purchase of common shares for treasury (15.8) (4.2) Cash dividends paid (21.7) (19.5) Repayment of long-term debt (2.4) (2.3) Payments of withholding tax on share awards (3.9) (3.1) Net cash used by financing activities (43.8) (29.1) Effect of exchange rate changes on cash (0.4) (11.0) Decrease in cash and cash equivalents (38.6) (55.0) Cash and cash equivalents at beginning of year 601.2 649.5 Cash and cash equivalents at end of period $ 562.6 $ 594.5 10 Attachment 6 Avient Corporation Business Segment Operations (Unaudited) (In millions) Operating income and earnings before interest, taxes, depreciation and amortization (EBITDA) at the segment level does not include: special items as defined in Attachment 3; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker.
Three Months Ended March 31, Reconciliation to Consolidated Statements of Income 2022 2021 Sales $ 1,293.8 $ 1,162.3 Gross margin - GAAP 293.7 302.4 Special items in gross margin (Attachment 3) 5.8 (2.2) Adjusted gross margin $ 299.5 $ 300.2 Adjusted gross margin as a percent of sales 23.2 % 25.8 % Operating income - GAAP 128.6 120.4 Special items in operating income (Attachment 3) 7.8 2.4 Adjusted operating income $ 136.4 $ 122.8 Adjusted operating income as a percent of sales 10.5 % 10.6 % The table below reconciles pre-special income tax expense and the pre-special effective tax rate to their most comparable US GAAP figures.
Three Months Ended March 31, 2022 2021 GAAP Results Special Items Adjusted Results GAAP Results Special Items Adjusted Results $111.1 $ 7.7 $ 118.8 $102.6 $ 2.4 $ 105.0 Income tax expense - GAAP (26.6) — (26.6) (22.9) — (22.9) Income tax impact of special items (Attachment 3) — (2.0) (2.0) — (0.9) (0.9) Tax adjustments (Attachment 3) — 1.5 1.5 — 1.1 1.1 Income tax (expense) benefit $ (26.6) $ (0.5) $ (27.1) $ (22.9) $ 0.2 $ (22.7) Effective Tax Rate(1) 23.9 % 22.8 % 22.3 % 21.6 % (1) Rates may not recalculate from figures presented herein due to rounding 12 Reconciliation of EBITDA by Segment Three Months Ended March 31, 2022 2021 Operating income: Color, Additives and Inks $ 94.5 $ 88.8 Specialty Engineered Materials 39.7 34.2 Distribution 24.2 24.0 Corporate and eliminations (29.8) (26.6) Operating income $ 128.6 $ 120.4 Items below OI in Corporate: Other income, net $ (0.6) $ 1.5 Depreciation & amortization: Color, Additives and Inks $ 26.0 $ 27.4 Specialty Engineered Materials 7.8 7.8 Distribution 0.2 0.2 Corporate and eliminations 3.8 1.7 Depreciation & Amortization $ 37.8 $ 37.1 EBITDA: Color, Additives and Inks $ 120.5 $ 116.2 Specialty Engineered Materials 47.5 42.0 Distribution 24.4 24.2 Corporate and eliminations (26.0) (24.9) Other income, net (0.6) 1.5 EBITDA $ 165.8 $ 159.0 EBITDA as a % of Sales: Color, Additives and Inks 18.6 % 19.1 % Specialty Engineered Materials 19.4 % 19.4 % Distribution 5.6 % 6.7 % Three Months Ended March 31, Reconciliation to EBITDA and Adjusted EBITDA: 2022 2021 Net income from continuing operations – GAAP $ 84.5 $ 79.7 Income tax expense 26.6 22.9 Interest expense 16.9 19.3 Depreciation and amortization 37.8 37.1 EBITDA $ 165.8 $ 159.0 Special items, before tax 7.7 2.4 Depreciation and amortization included in special items (2.1) (0.5) Adjusted EBITDA $ 171.4 $ 160.9 NEWS RELEASE Attachment 1
https://www.avient.com/company/policies-and-governance/avient-canada-ulc
Avient Canada ULC est un chef de file dans la composition et la distribution de produits de PVC rigides et flexibles, thermoplastiques, des résines spécialisées, des préparations de polymères spécialisés, des systèmes additifs et de couleur, de la formulation de produits à base d'élastomère et des résines à distribution thermoplastique.
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https://www.avient.com/investor-center/news/polyone-appoints-mark-crist-president-color-additives-inks-scott-horn-president-distribution
news library online, please go to www.polyone.com/news.
SEC Filings
https://www.avient.com/sites/default/files/2021-04/avnt-first-quarter-2021-news-release.pdf
Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Reconciliation to Condensed Consolidated Statements of Income $ EPS $ EPS Net income from continuing operations attributable to Avient shareholders $ 79.3 $ 0.86 $ 33.1 $ 0.38 Special items, after tax (Attachment 3) 2.6 0.03 8.6 0.10 Adjusted net income / EPS - excluding special items $ 81.9 $ 0.89 $ 41.7 $ 0.48 7 Attachment 2 Avient Corporation Condensed Consolidated Statements of Income (Unaudited) (In millions, except per share data) Three Months Ended March 31, 2021 2020 Sales $ 1,162.3 $ 711.5 Cost of sales 859.9 540.0 Gross margin 302.4 171.5 Selling and administrative expense 182.0 118.7 Operating income 120.4 52.8 Interest expense, net (19.3) (9.4) Other income, net 1.5 1.6 Income from continuing operations before income taxes 102.6 45.0 Income taxes (22.9) (11.9) Net income from continuing operations 79.7 33.1 Loss from discontinued operations, net of income taxes — (0.3) Net income 79.7 32.8 Net income attributable to noncontrolling interests (0.4) — Net income attributable to Avient common shareholders $ 79.3 $ 32.8 Earnings per share attributable to Avient common shareholders - Basic: Continuing operations $ 0.87 $ 0.38 Discontinued operations — — Total $ 0.87 $ 0.38 Earnings per share attributable to Avient common shareholders - Diluted: Continuing operations $ 0.86 $ 0.38 Discontinued operations — — Total $ 0.86 $ 0.38 Cash dividends declared per share of common stock $ 0.2125 $ 0.2025 Weighted-average shares used to compute earnings per common share: Basic 91.3 86.3 Diluted 92.2 86.7 8 Attachment 3 Avient Corporation Summary of Special Items (Unaudited) (In millions, except per share data) Special items (1) Three Months Ended March 31, 2021 2020 Cost of sales: Restructuring costs, including accelerated depreciation and amortization $ (1.8) $ — Environmental remediation costs (0.5) (0.4) Reimbursement of previously incurred environmental costs 4.5 0.2 Impact on cost of sales 2.2 (0.2) Selling and administrative expense: Restructuring, legal and other (1.3) (1.8) Acquisition earn-out adjustments — (1.0) Acquisition related costs (3.3) (6.7) Impact on selling and administrative expense (4.6) (9.5) Impact on operating income (2.4) (9.7) Other income, net — 0.1 Impact on income from continuing operations before income taxes (2.4) (9.6) Income tax benefit on above special items 0.9 2.0 Tax adjustments(2) (1.1) (1.0) Impact of special items on net income from continuing operations attributable to Avient Shareholders $ (2.6) $ (8.6) Diluted earnings per common share impact $ (0.03) $ (0.10) Weighted average shares used to compute adjusted earnings per share: Diluted 92.2 86.7 (1) Special items include charges related to specific strategic initiatives or financial restructuring such as: consolidation of operations; debt extinguishment costs; costs incurred directly in relation to acquisitions or divestitures; employee separation costs resulting from personnel reduction programs, plant realignment costs, executive separation agreements; asset impairments; settlement gains or losses and mark-to- market adjustments associated with actuarial gains and losses on pension and other post-retirement benefit plans; environmental remediation costs, fines, penalties and related insurance recoveries related to facilities no longer owned or closed in prior years; gains and losses on the divestiture of operating businesses, joint ventures and equity investments; gains and losses on facility or property sales or disposals; results of litigation, fines or penalties, where such litigation (or action relating to the fines or penalties) arose prior to the commencement of the performance period; one-time, non-recurring items; and the effect of changes in accounting principles or other such laws or provisions affecting reported results. (2) Tax adjustments include the net tax benefit/(expense) from one-time income tax items, the set-up or reversal of uncertain tax position reserves and deferred income tax valuation allowance adjustments. 9 Attachment 4 Avient Corporation Condensed Consolidated Balance Sheets (In millions) (Unaudited) March 31, 2021 December 31, 2020 ASSETS Current assets: Cash and cash equivalents $ 594.5 $ 649.5 Accounts receivable, net 642.2 516.6 Inventories, net 357.0 327.5 Other current assets 122.7 108.5 Total current assets 1,716.4 1,602.1 Property, net 675.5 694.9 Goodwill 1,281.9 1,308.1 Intangible assets, net 973.3 1,008.5 Operating lease assets, net 80.9 80.9 Other non-current assets 181.4 176.0 Total assets $ 4,909.4 $ 4,870.5 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term and current portion of long-term debt $ 18.8 $ 18.6 Accounts payable 529.6 471.7 Current operating lease obligations 24.3 25.1 Accrued expenses and other current liabilities 290.9 285.6 Total current liabilities 863.6 801.0 Non-current liabilities: Long-term debt 1,852.7 1,854.0 Pension and other post-retirement benefits 111.3 115.0 Non-current operating lease obligations 56.8 56.0 Other non-current liabilities 303.0 332.8 Total non-current liabilities 2,323.8 2,357.8 SHAREHOLDERS' EQUITY Avient shareholders’ equity 1,707.0 1,697.1 Noncontrolling interest 15.0 14.6 Total equity 1,722.0 1,711.7 Total liabilities and equity $ 4,909.4 $ 4,870.5 10 Attachment 5 Avient Corporation Condensed Consolidated Statements of Cash Flows (Unaudited) (In millions) Three Months Ended March 31, 2021 2020 Operating Activities Net income $ 79.7 $ 32.8 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 36.6 19.9 Accelerated depreciation and amortization 0.5 — Share-based compensation expense 2.7 2.1 Changes in assets and liabilities, net of the effect of acquisitions: Increase in accounts receivable (137.6) (56.9) Increase in inventories (35.1) (13.0) Increase in accounts payable 67.3 44.6 Decrease in pension and other post-retirement benefits (7.1) (3.2) Increase in post-acquisition earnout liabilities — 1.0 Decrease in accrued expenses and other assets and liabilities, net (3.4) (19.1) Payment of post-acquisition date earnout liability — (21.0) Net cash provided (used) by operating activities 3.6 (12.8) Investing activities Capital expenditures (16.5) (11.1) Net proceeds from divestiture — 7.1 Net proceeds (used) provided by other assets (2.0) 5.2 Net cash (used) provided by investing activities (18.5) 1.2 Financing activities Purchase of common shares for treasury (4.2) (13.6) Cash dividends paid (19.5) (15.6) Repayment of long-term debt (2.3) (2.0) Payments of withholding tax on share awards (3.1) (1.3) Equity offering proceeds, net of underwriting discount and issuance costs — 496.3 Payment of acquisition date earnout liability — (32.9) Net cash (used) provided by financing activities (29.1) 430.9 Effect of exchange rate changes on cash (11.0) (3.8) (Decrease) increase in cash and cash equivalents (55.0) 415.5 Cash and cash equivalents at beginning of year 649.5 864.7 Cash and cash equivalents at end of period $ 594.5 $ 1,280.2 11 Attachment 6 Avient Corporation Business Segment Operations (Unaudited) (In millions) Operating income and earnings before interest, taxes, depreciation and amortization (EBITDA) at the segment level does not include: special items as defined in Attachment 3; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker.
Three Months Ended March 31, Reconciliation to Consolidated Statements of Income 2021 2020 Sales $ 1,162.3 $ 711.5 Gross margin - GAAP 302.4 171.5 Special items in gross margin (Attachment 3) (2.2) 0.2 Adjusted Gross margin $ 300.2 $ 171.7 Adjusted Gross margin as a percent of sales 25.8 % 24.1 % Operating income - GAAP 120.4 52.8 Special items in operating income (Attachment 3) 2.4 9.7 Adjusted Operating income $ 122.8 $ 62.5 Adjusted Operating income as a percent of sales 10.6 % 8.8 % The table below reconciles pre-special income tax expense and the pre-special effective tax rate to their most comparable US GAAP figures.
Three Months Ended March 31, 2021 2020 GAAP Results Special Items Adjusted Results GAAP Results Special Items Adjusted Results Income from continuing operations before income taxes $ 102.6 $ 2.4 $ 105.0 $ 45.0 $ 9.6 $ 54.6 Income tax expense - GAAP (22.9) — (22.9) (11.9) — (11.9) Income tax impact of special items (Attachment 3) — (0.9) (0.9) — (2.0) (2.0) Tax adjustments (Attachment 3) — 1.1 1.1 — 1.0 1.0 Income tax (expense) benefit $ (22.9) $ 0.2 $ (22.7) $ (11.9) $ (1.0) $ (12.9) Effective Tax Rate(1) 22.3 % 21.6 % 26.5 % 23.7 % (1) Rates may not recalculate from figures presented herein due to rounding 13 The following pro forma adjustments are referenced by management to provide comparable business performance by incorporating the Clariant Masterbatch business in periods prior to the acquisition date (July 1, 2020).
https://www.avient.com/sites/default/files/2024-05/AVNT Q1 2024 Investor Presentation_website w Non-GAAP.pdf
Q1 2023 (TOTAL COMPANY) $846 $829 Q1 23 Q1 24 $134 $143 Q1 23 Q1 24 17.3% Sales Adjusted EBITDA (in millions) $0.63 $0.76 Q1 23 Q1 24 Adjusted EPS (in millions) + 7% + 21% Sales Adjusted EBITDA Adjusted EPS 9 - 2% 15.8% +150 bps * * * Adjusted EBITDA Margin % Q1 2024 SEGMENT PERFORMANCE (COLOR, ADDITIVES & INKS) $537 $515 Q1 23 Q1 24 $91 $97 Q1 23 Q1 24 18.8% Sales Adjusted EBITDA (in millions) (in millions) + 7% Sales Adjusted EBITDA 10 - 4% 17.0% +180 bps * * * Adjusted EBITDA Margin % • Year over year demand continues to improve for the segment but slowly due to continued weakness in Europe • Raw material deflation & cost reduction actions primary drivers of adjusted EBITDA growth and margin expansion of +180 bps vs Q1 2023 Q1 2024 SEGMENT PERFORMANCE (SPECIALTY ENGINEERED MATERIALS) $310 $314 Q1 23 Q1 24 $64 $73 Q1 23 Q1 24 23.2% Sales Adjusted EBITDA (in millions) (in millions) + 14% Sales Adjusted EBITDA 11 + 1% 20.8% +240 bps * * * Adjusted EBITDA Margin % • Sales growth in defense end market offset by weaker demand in telecommunications end market • Raw material deflation and favorable mix impact from defense sales primary drivers of adjusted EBITDA growth and margin expansion of +240 bps vs Q1 2023 Q1 EBITDA BRIDGE (TOTAL COMPANY) 12 $ millions CAI: Price / Mix (1) Deflation 16 SEM: Price / Mix 4 Deflation 7 Net Price Benefit 26 Wage/Other Inflation (9) FX (2) Q1 2024 $143 Adjusted EBITDA Q1 2023 $ 134 Demand (6) • Positive net price benefit: o Favorable raw material deflation in both segments • Wage and other inflation more than offset cost reductions/synergies 2024 G U IDA N CE FY 2024 GUIDANCE Original Revised Adjusted EBITDA $505 to $535 million $510 to $535 million Adjusted EPS $2.40 to $2.65 $2.50 to $2.65 Interest Expense $105 to $110 million $105 million Adjusted Effective Tax Rate 23% to 25% 23% to 25% Capital Expenditures ~$140 million ~$140 million 14 Q2 2024: Adjusted EPS of $0.71 CE O “TO P O F M IN D ” FO CU S ARE A S AREAS OF FOCUS 16 +7% Drive Profitable Organic Top-Line Growth with Margin Expansion Amplify Innovation Build Leadership & Talent Pipeline AP P EN D IX 19 Performance Additives 15% Pigments 13% TiO2 9% Dyestuffs 2% Polyethylene 10%Nylon 5% Polypropylene 4% Styrenic Block Copolymer 4% Other Raw Materials 38% ~40% hydrocarbon based (Grey shaded materials are hydrocarbon based, includes portion of “Other Raw Materials”) Non-hydrocarbon based materials RAW MATERIAL BASKET SEGMENT DATA U.S. & Canada 41% EMEA 36% Asia 18% Latin America 5% 2023 SEGMENT, END MARKET AND GEOGRAPHY GEOGRAPHY REVENUESEGMENT FINANCIALS Consumer 19% Packaging 23%Industrial 16% Building and Construction 9% Telecommunications 4% Energy 5% Defense 7% END MARKET REVENUE $2,007M $358M $1,138M $224M Sales EBITDA Specialty Engineered Materials Color Additives and Inks $502M$3,143M (1) Transportation 10% Healthcare 7% 21 (1) Total company sales and adjusted EBITDA of $3,143M and $502M, respectively, include intercompany sales eliminations and corporate costs 2023 REVENUE | $2 .0 B ILL ION US & Canada 34% EMEA 37% Asia 21% Latin America 8% END MARKET REGION 22 Packaging 34% Consumer 21% Healthcare 8% Industrial 15% Transportation 9% Building & Construction 10% Telecommunications 1% Energy 2% COLOR, ADDITIVES & INKS 2023 REVENUE | $1 .1 B ILL ION US & Canada 52% EMEA 35% Asia 13% 23 Packaging 5% Consumer 16% Healthcare 6%Industrial 16% Transportation 12% Telecommunications 9% Energy 10% Defense 18% Building & Construction 8% END MARKET REGION SPECIALTY ENGINEERED MATERIALS Packaging 32% Consumer 26% Healthcare 9% Industrial 13% Building & Construction 6% Telecommunications 2% Energy 2% Defense 1% Asia (18% of sales) Transportation 9% 2023 AVIENT REGIONAL SALES Packaging 25% Consumer 13% Healthcare 5% Industrial 18% Building & Construction 9% Energy 5% Defense 8% EMEA (36% of sales)Transportation 13% Packaging 13% Consumer 22% Healthcare 10% Industrial 16% Building & Construction 12% Energy 6% Defense 8% US & Canada (41% of sales) Transportation 9% Packaging 59% Consumer 22% Healthcare 2% Industrial 8% Building & Construction 4% LATAM (5% of sales) Transportation 5% Telecommunications 4% Telecommunications 4% 24 BY END MARKET Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except for per share data) Senior management uses comparisons of adjusted net income from continuing operations attributable to Avient shareholders and diluted adjusted earnings per share (EPS) from continuing operations attributable to Avient shareholders, excluding special items, to assess performance and facilitate comparability of results.
We also monitor earnings (defined as net income from continuing operations) before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA (EBITDA before the impact of special items) as a supplement to our GAAP measures.
Three Months Ended March 31, 2024 2023 Reconciliation to Condensed Consolidated Statements of Income $ EPS $ EPS Net income from continuing operations attributable to Avient shareholders $ 49.4 $ 0.54 $ 20.8 $ 0.23 Special items, after-tax 5.5 0.06 22.3 0.24 Amortization expense, after-tax 14.9 0.16 15.1 0.16 Adjusted net income / EPS $ 69.8 $ 0.76 $ 58.2 $ 0.63 Three Months Ended March 31, Reconciliation to EBITDA and Adjusted EBITDA 2024 2023 Net income from continuing operations – GAAP $ 49.7 $ 21.3 Income tax expense 16.8 7.7 Interest expense, net 26.6 28.8 Depreciation and amortization 44.3 50.5 EBITDA from continuing operations 137.4 108.3 Special items, before tax 6.2 27.3 Depreciation and amortization included in special items (0.5) (1.8) Adjusted EBITDA $ 143.1 $ 133.8 Adjusted EBITDA as a percent of sales 17.3 % 15.8 % 1 Three Months Ended March 31, 2024 2023 Sales: Color, Additives and Inks $ 515.3 $ 537.0 Specialty Engineered Materials 314.4 309.7 Corporate (0.7) (1.0) Sales $ 829.0 $ 845.7 Operating income: Color, Additives and Inks $ 74.8 $ 65.6 Specialty Engineered Materials 53.4 43.1 Corporate (34.2) (51.6) Operating income $ 94.0 $ 57.1 Depreciation & amortization: Color, Additives and Inks $ 21.9 $ 25.8 Specialty Engineered Materials 19.6 21.2 Corporate 2.8 3.5 Depreciation & amortization $ 44.3 $ 50.5 Earnings before interest, taxes, depreciation and amortization (EBITDA): Color, Additives and Inks $ 96.7 $ 91.4 Specialty Engineered Materials 73.0 64.3 Corporate (31.4) (48.1) Other (expense) income, net (0.9) 0.7 EBITDA from continuing operations 137.4 108.3 Special items, before tax 6.2 27.3 Depreciation and amortization included in special items (0.5) (1.8) Adjusted EBITDA $ 143.1 $ 133.8 Adjusted EBITDA as a percent of sales: Color, Additives and Inks 18.8 % 17.0 % Specialty Engineered Materials 23.2 % 20.8 % 2 Year Ended December 31, 2023 Reconciliation to Condensed Consolidated Statements of Income $ EPS Net income from continuing operations attributable to Avient shareholders $ 75.8 $ 0.83 Special items, after-tax 79.3 0.86 Amortization expense, after-tax 61.5 0.67 Adjusted net income / EPS $ 216.6 $ 2.36 Free Cash Flow Calculation December 31, 2023 Cash provided by operating activities $ 201.6 Taxes paid on gain on sale of business 104.1 Adjusted cash provided by operating activities 305.7 Capital expenditures (119.4) Free cash flow $ 186.3 Year Ended December 31, 2023 Sales: Color, Additives and Inks $ 2,007.4 Specialty Engineered Materials 1,138.2 Corporate (2.8) Sales $ 3,142.8 Operating income: Color, Additives and Inks $ 259.9 Specialty Engineered Materials 142.5 Corporate (205.6) Operating income $ 196.8 Depreciation & amortization: Color, Additives and Inks $ 98.3 Specialty Engineered Materials 81.5 Corporate 9.0 Depreciation & amortization $ 188.8 Earnings before interest, taxes, depreciation and amortization (EBITDA): Color, Additives and Inks $ 358.2 Specialty Engineered Materials 224.0 Corporate (196.6) Other income, net 5.8 EBITDA from continuing operations 391.4 Special items, before tax 114.6 Interest expense included in special items (2.3) Depreciation and amortization included in special items (1.9) Adjusted EBITDA $ 501.8 Adjusted EBITDA as a percent of sales 16.0 % 3 Year Ended December 31, Reconciliation to EBITDA and Adjusted EBITDA: 2006 2014 Sales $ 2,622.4 $ 3,835.5 Net income from continuing operations – GAAP $ 133.5 $ 77.2 Income tax expense 29.7 11.2 Interest expense, net 63.1 62.2 Depreciation and amortization 57.1 123.9 EBITDA from continuing operations 283.4 274.5 Special items, before tax (34.0) 164.9 Depreciation and amortization included in special items — (23.1) Joint venture equity income (107.0) — Adjusted EBITDA $ 142.4 $ 416.3 Adjusted EBITDA as a percent of sales 5.4 % 10.9 % Year Ended December 31, Reconciliation of Adjusted EPS: 2006 2014 Net income from continuing operations attributable to Avient common shareholders $ 130.9 $ 78.0 Joint venture equity earnings, after-tax (68.5) — Special items, after-tax (21.2) 101.0 Special items, tax adjustments (30.0) (10.5) Amortization expense, after-tax 1.4 12.4 Adjusted net income from continuing operations attributable to Avient common shareholders $ 12.6 $ 180.9 Diluted shares 92.8 93.5 Adjusted EPS attributable to Avient common shareholders $ 0.14 $ 1.93 4 AVNT Q1 2024 Investor Presentation_w Non-GAAP.pdf IR Deck - AVNT-2024.03.31 5.09 4PM.pdf Attachment