Ohio | 34-1730488 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
33587 Walker Road, | 44012 | |
Avon Lake, Ohio | (Zip Code) | |
(Address of principal executive offices) |
Title of each class | Name of each exchange on which registered | |
Common Shares, par value $.01 per share | New York Stock Exchange |
Large accelerated filer þ | Accelerated filer £ | Non-accelerated filer £ | Smaller reporting company £ | |||
(Do not check if a smaller reporting company) |
• | effects on foreign operations due to currency fluctuations, tariffs and other political, economic and regulatory risks; |
• | changes in polymer consumption growth rates and laws and regulations regarding the disposal of plastic materials where we conduct business; |
• | changes in global industry capacity or in the rate at which anticipated changes in industry capacity come online in the industries in which we participate; |
• | fluctuations in raw material prices, quality and supply, and in energy prices and supply; |
• | production outages or material costs associated with scheduled or unscheduled maintenance programs; |
• | unanticipated developments that could occur with respect to contingencies such as litigation and environmental matters, including any developments that would require any increase in our costs and/or reserves for such contingencies; |
• | an inability to achieve or delays in achieving or achievement of less than the anticipated financial benefit from initiatives related to working capital reductions, cost reductions and employee productivity goals; |
• | an inability to raise or sustain prices for products or services; |
• | an inability to maintain appropriate relations with unions and employees; |
• | the strength and timing of economic recoveries; |
• | the financial condition of our customers, including the ability of customers (especially those that may be highly leveraged and those with inadequate liquidity) to maintain their credit availability; |
• | disruptions, uncertainty or volatility in the credit markets that may limit our access to capital; |
• | other factors affecting our business beyond our control, including, without limitation, changes in the general economy, changes in interest rates and changes in the rate of inflation; |
• | the amount and timing of repurchases, if any, of PolyOne common shares; |
• | our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends; |
• | our ability to realize anticipated savings and operational benefits from the realignment of assets, including the closure of manufacturing facilities; the timing of closings and shifts of production to new facilities related to asset realignments and any unforeseen loss of customers and/or disruptions of service or quality caused by such closings and/or production shifts; separation and severance amounts that differ from original estimates, amounts for non-cash charges related to asset write-offs and accelerated depreciation realignments of property, plant and equipment, that differ from original estimates; |
• | our ability to identify and evaluate acquisition targets and consummate acquisitions; |
• | the ability to successfully integrate acquired businesses into our operations, including whether such businesses will be accretive to our earnings, retain the management teams of acquired businesses, and retain relationships with customers of acquired businesses, including, without limitation, SilCoTec, Comptek, substantially all of the assets of Gordon Composites, Polystrand and Gordon Holdings and certain TPE assets from Kraton; |
• | information systems failures and cyberattacks; and |
• | other factors described in this Annual Report on Form 10-K under Item 1A, “Risk Factors.” |
• | economic downturns in the significant end markets that we serve; |
• | product obsolescence or technological changes that unfavorably alter the value/cost proposition of our products and services; |
• | competition from existing and unforeseen polymer and non-polymer based products; |
• | declines in general economic conditions or reductions in industrial production growth rates, both domestically and globally, which could impact our customers’ ability to pay amounts owed to us; |
• | changes in environmental regulations that would limit our ability to sell our products and services in specific markets; |
• | changes in laws and regulations regarding the disposal of plastic materials; and |
• | inability to obtain raw materials or supply products to customers due to factors such as supplier work stoppages, supply shortages, plant outages or regulatory changes that may limit or prohibit overland transportation of certain hazardous materials and exogenous factors, like severe weather. |
• | changes in local government regulations and policies including, but not limited to foreign currency exchange controls or monetary policy, repatriation of earnings, expropriation of property, duty or tariff restrictions, investment limitations and tax policies; |
• | political and economic instability and disruptions, including labor unrest, civil strife, acts of war, guerrilla activities, insurrection and terrorism; |
• | legislation that regulates the use of chemicals; |
• | disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act; |
• | compliance with international trade laws and regulations, including export control and economic sanctions; |
• | difficulties in staffing and managing multi-national operations; |
• | limitations on our ability to enforce legal rights and remedies; |
• | reduced protection of intellectual property rights; and |
• | other risks arising out of foreign sovereignty over the areas where our operations are conducted. |
Performance Products and Solutions | Specialty Engineered Materials | Color, Additives and Inks | PolyOne Distribution | Designed Structures and Solutions | ||||
1. Carson, California | 1. McHenry, Illinois | 1. Glendale, Arizona | 1. Rancho Cucamonga, | 1. Cape Girardeau, | ||||
2. Terre Haute, Indiana | 2. Avon Lake, Ohio | 2. Kennesaw, Georgia | California | Missouri | ||||
3. Louisville, Kentucky | Dyersburg, Tennessee (1) | Suwanee, Georgia (3) | 2. Chicago, Illinois | 2. Goodyear, Arizona | ||||
4. Avon Lake, Ohio | 3. North Haven, Connecticut | 3. Elk Grove Village, Illinois | 3. Eagan, Minnesota | 3. Greenville, Ohio | ||||
5. Clinton, Tennessee | Seabrook, Texas (1) | 4. St. Louis, Missouri | 4. Edison, New Jersey | 4. Hackensack, New Jersey | ||||
6. Dyersburg, Tennessee | 4. Gaggenau, Germany | 5. Massillon, Ohio | 5. Statesville, North | 5. La Mirada, California | ||||
7. Pasadena, Texas | 5. Istanbul, Turkey | 6. Norwalk, Ohio | Carolina | 6. Manitowoc, Wisconsin | ||||
8. Seabrook, Texas | 6. Barbastro, Spain | 7. North Baltimore, Ohio | 6. Elyria, Ohio | 7. McMinnville, Oregon | ||||
9. Orangeville, Ontario, | 7. Melle, Germany | 8. Lehigh, Pennsylvania | 7. La Porte, Texas | 8. Muncie, Indiana | ||||
Canada | 8. & 9. Suzhou, China (2) | 9. Mountain Top, | 8. Brampton, Ontario, | 9. Newark, New Jersey | ||||
10. St. Remi de Napierville, | 10. Shenzhen, China | Pennsylvania | Canada | 10. Paulding, Ohio | ||||
Quebec, Canada | Shanghai, China (3) | 10. Vonore, Tennessee | (8 Distribution Facilities) | 11. Pleasant Hill, Iowa | ||||
11. Dongguan, China | 11. Birmingham, Alabama | 11. Toluca, Mexico | 12. Ripon, Wisconsin | |||||
12. Lockport, New York | 12. Englewood, Colorado | 12. Assesse, Belgium | 13. Salisbury, Maryland | |||||
13. Ramos Arizpe, Mexico | 13. Montrose, Colorado | 13. Cergy, France | 14. Portage, Wisconsin | |||||
(13 Manufacturing Plants) | (13 Manufacturing Plants) | 14. Tossiat, France | 15. Sheboygan Falls, | |||||
15. Gyor, Hungary | Wisconsin | |||||||
16. Milan, Italy | 16. Stamford, Connecticut | |||||||
17. Kutno, Poland | Maryland Heights, | |||||||
18. Pune, India | Missouri (3) | |||||||
19. Pamplona, Spain | (16 Manufacturing Plants) | |||||||
20. Bangkok, Thailand | ||||||||
21. Pudong (Shanghai), | ||||||||
China | ||||||||
22. Jeddah, Saudi Arabia | ||||||||
Shenzhen, China (1) | ||||||||
23. Tianjin, China | ||||||||
24. Novo Hamburgo, Brazil | ||||||||
25. Berea, Ohio | ||||||||
26. Richland Hills, Texas | ||||||||
27. Bethel, Connecticut | ||||||||
28. Barberton, Ohio | ||||||||
29. Knowsley, United | ||||||||
Kingdom | ||||||||
30. Eindhoven, Netherlands | ||||||||
31. Suzhou, China | ||||||||
32. & 33. Shanghai, China (4) | ||||||||
34. Itupeva, Brazil | ||||||||
35. Odkarby, Finland | ||||||||
Manitowoc, Wisconsin (1) | ||||||||
36. Cape Town, South Africa | ||||||||
37. Diez, Germany | ||||||||
38. La Porte, Indiana | ||||||||
(38 Manufacturing Plants) |
(1) | Facility is not included in manufacturing plants total as it is also included as part of another segment. |
(2) | There are two manufacturing plants located at Suzhou, China. |
(3) | Facility is not included in manufacturing plants total as it is a design center/lab. |
(4) | There are two manufacturing plants located at Shanghai, China |
Name | Age | Position | ||
Robert M. Patterson | 44 | Chairman, President and Chief Executive Officer | ||
Bradley C. Richardson | 58 | Executive Vice President, Chief Financial Officer | ||
Richard N. Altice | 52 | Senior Vice President, President of Designed Structures and Solutions | ||
Mark D. Crist | 58 | Senior Vice President, President of Distribution | ||
Michael A. Garratt | 53 | Senior Vice President, Chief Commercial Officer | ||
Lisa K. Kunkle | 48 | Senior Vice President, General Counsel and Secretary | ||
M. John Midea, Jr. | 52 | Senior Vice President, Global Operations and Process Improvement | ||
Craig M. Nikrant | 55 | Senior Vice President, President of Specialty Engineered Materials | ||
Joel R. Rathbun | 44 | Senior Vice President, Mergers & Acquisitions | ||
João José San Martin Neto | 56 | Senior Vice President, Chief Human Resource Officer | ||
John V. Van Hulle | 59 | Senior Vice President, President of Color, Additives and Inks | ||
Donald K. Wiseman | 49 | Senior Vice President, President of Performance Products and Solutions |
2016 Quarters | 2015 Quarters | |||||||||||||||||||||||||||||||
Common share price: | Fourth | Third | Second | First | Fourth | Third | Second | First | ||||||||||||||||||||||||
High | $ | 34.68 | $ | 38.34 | $ | 38.41 | $ | 31.30 | $ | 36.24 | $ | 39.89 | $ | 41.20 | $ | 40.72 | ||||||||||||||||
Low | $ | 28.77 | $ | 31.25 | $ | 29.74 | $ | 22.35 | $ | 28.97 | $ | 29.09 | $ | 36.33 | $ | 34.41 |
Quarter Ended: | 2016 | 2015 | |||||
March 31, | $ | 0.120 | $ | 0.100 | |||
June 30, | 0.120 | 0.100 | |||||
September 30, | 0.120 | 0.100 | |||||
December 31, | 0.135 | 0.120 | |||||
Total | $ | 0.495 | $ | 0.420 |
Period | Total Number of Shares Purchased | Weighted Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Maximum Number of Shares that May Yet be Purchased Under the Program(1) | ||||||||
October 1 to October 31 | 593,767 | $ | 29.43 | 593,767 | 9,088,333 | |||||||
November 1 to November 30 | 526,795 | 29.55 | 526,795 | 8,561,538 | ||||||||
December 1 to December 31 | 75,000 | 33.27 | 75,000 | 8,486,538 | ||||||||
Total | 1,195,562 | $ | 29.75 | 1,195,562 |
(In millions, except per share data) | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Sales | $ | 3,339.8 | $ | 3,377.6 | $ | 3,835.5 | $ | 3,771.2 | $ | 2,860.8 | ||||||||||
Operating income | 281.9 | 250.9 | 155.1 | 231.5 | 137.5 | |||||||||||||||
Net income from continuing operations | 165.0 | 144.7 | 77.2 | 92.9 | 53.2 | |||||||||||||||
Net income from continuing operations attributable to PolyOne shareholders | 165.2 | 144.6 | 78.0 | 94.0 | 53.3 | |||||||||||||||
Cash dividends declared per common share | $ | 0.495 | $ | 0.420 | $ | 0.340 | $ | 0.260 | $ | 0.200 | ||||||||||
Earnings per share from continuing operations attributable to PolyOne shareholders: | ||||||||||||||||||||
Basic | $ | 1.97 | $ | 1.65 | $ | 0.85 | $ | 0.98 | $ | 0.60 | ||||||||||
Diluted | $ | 1.95 | $ | 1.63 | $ | 0.83 | $ | 0.97 | $ | 0.59 | ||||||||||
Total assets | $ | 2,723.3 | $ | 2,595.1 | $ | 2,666.3 | $ | 2,896.6 | $ | 2,102.0 | ||||||||||
Long-term debt | $ | 1,239.8 | $ | 1,128.0 | $ | 948.9 | $ | 961.1 | $ | 686.5 |
(In millions) | 2016 | 2015 | 2014 | |||||||||
Sales | $ | 3,339.8 | $ | 3,377.6 | $ | 3,835.5 | ||||||
Operating income | 281.9 | 250.9 | 155.1 | |||||||||
Net income from continuing operations | 165.0 | 144.7 | 77.2 | |||||||||
Net income from continuing operations attributable to PolyOne common shareholders | 165.2 | 144.6 | 78.0 | |||||||||
Liquidity | $ | 612.9 | $ | 621.7 | $ | 475.0 | ||||||
Long-term debt | $ | 1,239.8 | $ | 1,128.0 | $ | 948.9 |
Results of Operations | Variances — Favorable (Unfavorable) | |||||||||||||||||||||||||
2016 versus 2015 | 2015 versus 2014 | |||||||||||||||||||||||||
(Dollars in millions, except per share data) | 2016 | 2015 | 2014 | Change | % Change | Change | % Change | |||||||||||||||||||
Sales | $ | 3,339.8 | $ | 3,377.6 | $ | 3,835.5 | $ | (37.8 | ) | (1.1 | )% | $ | (457.9 | ) | (11.9 | )% | ||||||||||
Cost of sales | 2,633.6 | 2,696.1 | 3,127.6 | 62.5 | 2.3 | % | 431.5 | 13.8 | % | |||||||||||||||||
Gross margin | 706.2 | 681.5 | 707.9 | 24.7 | 3.6 | % | (26.4 | ) | (3.7 | )% | ||||||||||||||||
Selling and administrative expense | 424.3 | 430.6 | 552.8 | 6.3 | 1.5 | % | 122.2 | 22.1 | % | |||||||||||||||||
Operating income | 281.9 | 250.9 | 155.1 | 31.0 | 12.4 | % | 95.8 | 61.8 | % | |||||||||||||||||
Interest expense, net | (59.8 | ) | (64.1 | ) | (62.2 | ) | 4.3 | 6.7 | % | (1.9 | ) | (3.1 | )% | |||||||||||||
Debt extinguishment costs | (0.4 | ) | (16.4 | ) | — | 16.0 | 97.6 | % | (16.4 | ) | (100.0 | )% | ||||||||||||||
Other income (expense), net | 0.6 | (2.7 | ) | (4.5 | ) | 3.3 | 122.2 | % | 1.8 | 40.0 | % | |||||||||||||||
Income from continuing operations, before income taxes | 222.3 | 167.7 | 88.4 | 54.6 | 32.6 | % | 79.3 | 89.7 | % | |||||||||||||||||
Income tax expense | (57.3 | ) | (23.0 | ) | (11.2 | ) | (34.3 | ) | (149.1 | )% | (11.8 | ) | (105.4 | )% | ||||||||||||
Net income from continuing operations | $ | 165.0 | $ | 144.7 | $ | 77.2 | $ | 20.3 | 14.0 | % | $ | 67.5 | 87.4 | % | ||||||||||||
Income from discontinued operations, net of income taxes | — | — | 1.2 | — | — | % | (1.2 | ) | (100.0 | )% | ||||||||||||||||
Net income | 165.0 | 144.7 | 78.4 | 20.3 | 14.0 | % | 66.3 | 84.6 | % | |||||||||||||||||
Net loss (income) attributable to noncontrolling interests | 0.2 | (0.1 | ) | 0.8 | 0.3 | 300.0 | % | (0.9 | ) | (112.5 | )% | |||||||||||||||
Net income attributable to PolyOne common shareholders | $ | 165.2 | $ | 144.6 | $ | 79.2 | $ | 20.6 | 14.2 | % | $ | 65.4 | 82.6 | % | ||||||||||||
Earnings per share attributable to PolyOne common shareholders - basic: | ||||||||||||||||||||||||||
Continuing operations | $ | 1.97 | $ | 1.65 | $ | 0.85 | ||||||||||||||||||||
Discontinued operations | — | — | 0.01 | |||||||||||||||||||||||
Total | $ | 1.97 | $ | 1.65 | $ | 0.86 | ||||||||||||||||||||
Earnings per share attributable to PolyOne common shareholders - diluted: | ||||||||||||||||||||||||||
Continuing operations | $ | 1.95 | $ | 1.63 | $ | 0.83 | ||||||||||||||||||||
Discontinued operations | — | — | 0.02 | |||||||||||||||||||||||
Total | $ | 1.95 | $ | 1.63 | $ | 0.85 | ||||||||||||||||||||
2016 | 2015 | 2014 | |||||||
Income tax expense at 35% | 35.0 | % | 35.0 | % | 35.0 | % | |||
Foreign tax rate differential | (5.2 | ) | (5.0 | ) | (5.7 | ) | |||
State and local tax, net | 2.1 | 2.7 | 2.8 | ||||||
Tax benefits on certain foreign investments | (2.0 | ) | (0.7 | ) | (17.0 | ) | |||
Domestic production activities deduction | (1.6 | ) | (2.0 | ) | (2.5 | ) | |||
Amended prior period tax returns | (1.4 | ) | (18.3 | ) | (2.3 | ) | |||
Uncertain tax positions | (1.3 | ) | 0.6 | 1.0 | |||||
Permanent tax differences | 0.3 | 1.8 | (2.1 | ) | |||||
U.S. credit for research activities | (0.5 | ) | (0.7 | ) | (1.2 | ) | |||
Changes in valuation allowances | 0.4 | 0.3 | 7.8 | ||||||
Settlements | — | — | (3.1 | ) | |||||
Effective income tax rate | 25.8 | % | 13.7 | % | 12.7 | % |
2016 versus 2015 | 2015 versus 2014 | |||||||||||||||||||||||||
(Dollars in millions) | 2016 | 2015 | 2014 | Change | % Change | Change | % Change | |||||||||||||||||||
Sales: | ||||||||||||||||||||||||||
Color, Additives and Inks | 797.7 | 810.7 | 850.8 | (13.0 | ) | (1.6 | )% | (40.1 | ) | (4.7 | )% | |||||||||||||||
Specialty Engineered Materials | 565.8 | 542.8 | 598.3 | 23.0 | 4.2 | % | (55.5 | ) | (9.3 | )% | ||||||||||||||||
Designed Structures and Solutions | 401.7 | 453.5 | 617.5 | (51.8 | ) | (11.4 | )% | (164.0 | ) | (26.6 | )% | |||||||||||||||
Performance Products and Solutions | 668.5 | 694.1 | 816.6 | (25.6 | ) | (3.7 | )% | (122.5 | ) | (15.0 | )% | |||||||||||||||
PolyOne Distribution | 1,071.0 | 1,034.1 | 1,114.4 | 36.9 | 3.6 | % | (80.3 | ) | (7.2 | )% | ||||||||||||||||
Corporate and eliminations | (164.9 | ) | (157.6 | ) | (162.1 | ) | (7.3 | ) | (4.6 | )% | 4.5 | 2.8 | % | |||||||||||||
Sales | $ | 3,339.8 | $ | 3,377.6 | $ | 3,835.5 | $ | (37.8 | ) | (1.1 | )% | $ | (457.9 | ) | (11.9 | )% | ||||||||||
Operating income: | ||||||||||||||||||||||||||
Color, Additives and Inks | 127.5 | 135.4 | 124.9 | (7.9 | ) | (5.8 | )% | 10.5 | 8.4 | % | ||||||||||||||||
Specialty Engineered Materials | 81.1 | 79.6 | 72.4 | 1.5 | 1.9 | % | 7.2 | 9.9 | % | |||||||||||||||||
Designed Structures and Solutions | (3.8 | ) | 13.8 | 45.1 | (17.6 | ) | (127.5 | )% | (31.3 | ) | (69.4 | )% | ||||||||||||||
Performance Products and Solutions | 74.4 | 57.4 | 63.1 | 17.0 | 29.6 | % | (5.7 | ) | (9.0 | )% | ||||||||||||||||
PolyOne Distribution | 68.2 | 68.0 | 68.2 | 0.2 | 0.3 | % | (0.2 | ) | (0.3 | )% | ||||||||||||||||
Corporate and eliminations | (65.5 | ) | (103.3 | ) | (218.6 | ) | 37.8 | 36.6 | % | 115.3 | 52.7 | % | ||||||||||||||
Operating income | $ | 281.9 | $ | 250.9 | $ | 155.1 | $ | 31.0 | 12.4 | % | $ | 95.8 | 61.8 | % | ||||||||||||
Operating income as a percentage of sales: | ||||||||||||||||||||||||||
Color, Additives and Inks | 16.0 | % | 16.7 | % | 14.7 | % | (0.7)% points | 2.0% points | ||||||||||||||||||
Specialty Engineered Materials | 14.3 | % | 14.7 | % | 12.1 | % | (0.4)% points | 2.6% points | ||||||||||||||||||
Designed Structures and Solutions | (0.9 | )% | 3.0 | % | 7.3 | % | (3.9)% points | (4.3)% points | ||||||||||||||||||
Performance Products and Solutions | 11.1 | % | 8.3 | % | 7.7 | % | 2.8% points | 0.6% points | ||||||||||||||||||
PolyOne Distribution | 6.4 | % | 6.6 | % | 6.1 | % | (0.2)% points | 0.5% points | ||||||||||||||||||
Total | 8.4 | % | 7.4 | % | 4.0 | % | 1.0% points | 3.4% points | ||||||||||||||||||
(In millions) | |||
Cash and cash equivalents | $ | 226.7 | |
Revolving credit availability | 386.2 | ||
Liquidity | $ | 612.9 |
(In millions) | 2016 | 2015 | 2014 | |||||||||
Cash provided by (used by): | ||||||||||||
Operating Activities | $ | 221.3 | $ | 227.2 | $ | 208.4 | ||||||
Investing Activities | (235.4 | ) | (106.5 | ) | (111.8 | ) | ||||||
Financing Activities | (34.0 | ) | (70.4 | ) | (218.4 | ) | ||||||
Effect of exchange rate on cash | (5.0 | ) | (9.1 | ) | (4.8 | ) | ||||||
Net (decrease) increase in cash and cash equivalents | $ | (53.1 | ) | $ | 41.2 | $ | (126.6 | ) |
(In millions) | December 31, 2016 | December 31, 2015 | |||||
Senior term loan due 2022 | $ | 635.3 | $ | 541.4 | |||
5.250% senior notes due 2023 | 592.9 | 591.7 | |||||
Other debt (1) | 30.1 | 13.5 | |||||
Total debt | $ | 1,258.3 | $ | 1,146.6 | |||
Less short-term and current portion of long-term debt | 18.5 | 18.6 | |||||
Long-term debt | $ | 1,239.8 | $ | 1,128.0 |
(1) | Other debt includes capital lease obligations of $17.8 million and $0.4 million as of December 31, 2016 and 2015, respectively. |
Payment Due by Period | ||||||||||||||||||||
(In millions) | Total | 2017 | 2018 & 2019 | 2020 & 2021 | Thereafter | |||||||||||||||
Total debt (1) | $ | 1,274.1 | $ | 18.5 | $ | 27.6 | $ | 13.4 | $ | 1,214.6 | ||||||||||
Operating leases | 77.2 | 20.0 | 26.7 | 15.8 | 14.7 | |||||||||||||||
Interest on long-term debt obligations (2) | 338.8 | 55.9 | 108.1 | 107.2 | 67.6 | |||||||||||||||
Pension and post-retirement obligations (3) | 54.1 | 5.7 | 11.1 | 12.2 | 25.1 | |||||||||||||||
Purchase obligations (4) | 18.7 | 13.3 | 5.3 | 0.1 | — | |||||||||||||||
Total | $ | 1,762.9 | $ | 113.4 | $ | 178.8 | $ | 148.7 | $ | 1,322.0 |
(1) | Total debt includes both the current and long-term portions of debt and capital lease obligations. |
(2) | Represents estimated contractual interest payments for all outstanding debt. |
(3) | Pension and post-retirement obligations relate to our U.S. and international pension and other post-retirement plans. The expected payments associated with these plans represent an actuarial estimate of future assumed payments based upon retirement and payment patterns. Due to uncertainties regarding the assumptions involved in estimating future required contributions to our pension and non-pension postretirement benefit plans, including: (i) interest rate levels, (ii) the amount and timing of asset returns and (iii) what, if any, changes may occur in pension funding legislation, the estimates in the table may differ materially from actual future payments. |
(4) | Purchase obligations are primarily comprised of service agreements related to telecommunication, information technology, utilities and other manufacturing plant services and certain capital commitments. |
Description | Judgments and Uncertainties | Effect if Actual Results Differ from Assumptions | ||
Environmental Liabilities | ||||
• Based upon our estimates, we have an undiscounted accrual of $117.3 million at December 31, 2016 for probable future environmental expenditures. Any such provision is recognized using the Company's best estimate of the amount of loss incurred, or at the lower end of an estimated range, when a single best estimate is not determinable. As of December 31, 2016, we have not accrued for costs of remediation to the lower Passaic River as we are unable to estimate a liability, if any, related to this matter. In some cases, the Company recovers a portion of the costs relating to these obligations from insurers or other third parties; however, the Company records such amounts only when they are collected. | • This accrual represents our best estimate of the remaining probable costs based upon information and technology currently available. Depending upon the results of future testing, the ultimate remediation alternatives undertaken, changes in regulations, new information, newly discovered conditions and other factors, it is reasonably possible that we could incur additional costs in excess of the amount accrued. However, such additional costs, if any, cannot currently be estimated. Our estimate of this liability may be revised as new regulations or technologies are developed or additional information is obtained. | • If further developments or resolution of these matters are not consistent with our assumptions and judgments, we may need to recognize a significant adjustment in a future period. • As we progress through certain benchmarks such as completion of the remedial investigation and feasibility study, issuance of a record of decision and remedial design, additional information will become available that may require an adjustment to our existing reserves. |
Pension and Other Post-retirement Plans | ||||
• We account for our defined benefit pension plans and other post-retirement plans in accordance with FASB ASC Topic 715, Compensation — Retirement Benefits. We immediately recognize actuarial gains and losses in our operating results in the year in which the gains or losses occur. In 2016, we recognized an $8.4 million gain as a result of the recognition of these actuarial gains, which favorably impacted net income, comprehensive income and the funded status of our pension plans. This gain was mainly driven by higher than expected asset returns and updated mortality assumptions. | • Asset returns and interest rates significantly affect the value of future assets and liabilities of our pension and post-retirement plans and therefore the funded status of our plans. It is difficult to predict these factors due to the volatility of market conditions. • To develop our discount rate, we consider the yields of high-quality corporate bonds with maturities that correspond to the timing of our benefit obligations, referred to as the bond matching approach. • To develop our expected long-term return on plan assets, we consider historical and forward looking long-term asset returns and the expected investment portfolio mix of plan assets. The weighted-average expected long-term rate of return on plan assets was 6.87% for 2016, 6.87% for 2015 and 6.86% for 2014. • Life expectancy is a significant assumption that impacts our pension and other post-retirement benefits obligation. During 2016, we adopted the MP-2016 mortality improvement scale which was issued by the Society of Actuaries in October 2016. | • The weighted average discount rates used to value our pension liabilities as of December 31, 2016 and 2015 were 3.97% and 4.10%, respectively, post-retirement liabilities were 4.04% and 4.12%, respectively. As of December 31, 2016, an increase/decrease in the discount rate of 50 basis points, holding all other assumptions constant, would have increased or decreased pre-tax income and the related pension and post-retirement liability by approximately $22.9 million. An increase/decrease in the discount rate of 50 basis points as of December 31, 2016 would result in a change of approximately $1.6 million in the 2017 net periodic benefit cost. • The expected long-term return on plan assets utilized as of January 1, 2016 and 2015 was 6.87%. An increase/decrease in our expected long-term return on plan assets of one percent would result in a change of approximately $4.6 million to 2017 net periodic benefit cost. | ||
Description | Judgments and Uncertainties | Effect if Actual Results Differ from Assumptions | ||
Income Taxes | ||||
• We account for income taxes using the asset and liability method under ASC Topic 740. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In addition, deferred tax assets are also recorded with respect to net operating losses and other tax attribute carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when realization of the benefit of deferred tax assets is not deemed to be more likely than not. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. | • The ultimate recovery of certain of our deferred tax assets is dependent on the amount and timing of taxable income that we will ultimately generate in the future and other factors such as the interpretation of tax laws. We have provided valuation allowances as of December 31, 2016, aggregating to $19.8 million primarily against certain foreign and state net operating loss carryforwards based on our current assessment of future operating results and other factors. At December 31, 2016, the gross liability for unrecognized income tax benefits, including interest and penalties, totaled $11.2 million. | • Although management believes that the estimates and judgments discussed herein are reasonable, actual results could differ, which could result in income tax expense or benefits that could be material. | ||
• We recognize net tax benefits under the recognition and measurement criteria of ASC Topic 740, Income Taxes, which prescribes requirements and other guidance for financial statement recognition and measurement of positions taken or expected to be taken on tax returns. We record interest and penalties related to uncertain tax positions as a component of income tax expense. |
Description | Judgments and Uncertainties | Effect if Actual Results Differ from Assumptions | ||
Goodwill | ||||
• Goodwill represents the excess of the purchase price over the fair value of the net assets of acquired companies. We follow the guidance in ASC 350, Intangibles — Goodwill and Other, and test goodwill for impairment at least annually, absent a triggering event that would warrant an impairment assessment. On an ongoing basis, absent any impairment indicators, we perform our goodwill impairment testing as of the first day of October of each year. | • We have identified our reporting units at the operating segment level, or in most cases, one level below the operating segment level. Goodwill is allocated to the reporting units based on the estimated fair value at the date of acquisition. • We estimated fair value using the best information available to us, including market information and discounted cash flow projections using the income approach. • The income approach requires us to make assumptions and estimates regarding projected economic and market conditions, growth rates, operating margins and cash expenditures. Sensitivity analyses were performed around these assumptions in order to assess the reasonableness of the assumptions and the resulting estimated fair values. | • If actual results are not consistent with our assumptions and estimates, we may be exposed to goodwill impairment charges. • The fair value of the reporting unit is based on a number of subjective factors including: (a) appropriate consideration of valuation approaches, (b) the consideration of our business outlook for fiscal 2017 and beyond and (c) weighted average cost of capital (discount rate), growth rates and market multiples for our estimated cash flows. • Based on our 2016 annual impairment test performed on October 1st, we determined one reporting unit was considered to be at risk of future impairment due to the fair value's close proximity to the carrying value. Weak operating results for the Custom Engineered Structures (CES) reporting unit, included in the Designed Structures and Solutions segment, resulted in the fair value of the reporting unit exceeding the carrying value by 8.0% as of October 1, 2016. Accordingly, we concluded that the goodwill assigned to the CES business was not impaired. Although we believe that the current assumptions and estimates are reasonable, supportable and appropriate, our continued efforts to improve the performance of this business could be impacted by negative or unforeseen changes in market factors, which could impact our existing assumptions used in the impairment test. As such, there can be no assurance that these estimates and assumptions made for the purposes of the goodwill impairment test will prove to be accurate predictions of future performance. The carrying value of our CES reporting unit included goodwill of $108.8 million as of December 31, 2016. We will continue to closely monitor these factors along with the performance of the CES reporting unit. |
Indefinite-lived Intangible Assets | ||||
• At December 31, 2016, our Consolidated Balance Sheet reflected $100.3 million of indefinite lived trade name assets, which includes, $33.2 million associated with the trade name acquired as part of the acquisition of GLS Corporation, $63.1 million associated with trade names acquired as part of the ColorMatrix Group Inc. acquisition and $4.0 million associated with the trade name acquired as part of the Gordon Composites acquisition. | • We estimate the fair value of trade names using a “relief from royalty payments” approach. This approach involves two steps: (1) estimating reasonable royalty rate for the trade name and (2) applying this royalty rate to a net sales stream and discounting the resulting cash flows to determine fair value. Fair value is then compared with the carrying value of the trade name. | • If actual results are not consistent with our assumptions and estimates, we may be exposed to impairment charges related to our indefinite lived trade names. • Based on our 2016 annual impairment test, no trade names were considered at risk. | ||
Page | |
Management’s Report | |
Reports of Independent Registered Public Accounting Firm | |
Consolidated Financial Statements: | |
Consolidated Statements of Income | |
Consolidated Statements of Comprehensive Income | |
Consolidated Balance Sheets | |
Consolidated Statements of Cash Flows | |
Consolidated Statements of Shareholders’ Equity | |
Notes to Consolidated Financial Statements |
/s/ ROBERT M. PATTERSON | /s/ BRADLEY C. RICHARDSON | ||
Robert M. Patterson | Bradley C. Richardson | ||
Chairman, President and Chief Executive Officer | Executive Vice President, Chief Financial Officer | ||
Year Ended December 31, | ||||||||||||
(In millions, except per share data) | 2016 | 2015 | 2014 | |||||||||
Sales | $ | 3,339.8 | $ | 3,377.6 | $ | 3,835.5 | ||||||
Cost of sales | 2,633.6 | 2,696.1 | 3,127.6 | |||||||||
Gross margin | 706.2 | 681.5 | 707.9 | |||||||||
Selling and administrative expense | 424.3 | 430.6 | 552.8 | |||||||||
Operating income | 281.9 | 250.9 | 155.1 | |||||||||
Interest expense, net | (59.8 | ) | (64.1 | ) | (62.2 | ) | ||||||
Debt extinguishment costs | (0.4 | ) | (16.4 | ) | — | |||||||
Other income (expense), net | 0.6 | (2.7 | ) | (4.5 | ) | |||||||
Income from continuing operations, before income taxes | 222.3 | 167.7 | 88.4 | |||||||||
Income tax expense | (57.3 | ) | (23.0 | ) | (11.2 | ) | ||||||
Net income from continuing operations | 165.0 | 144.7 | 77.2 | |||||||||
Income from discontinued operations, net of income taxes | — | — | 1.2 | |||||||||
Net income | 165.0 | 144.7 | 78.4 | |||||||||
Net loss (income) attributable to noncontrolling interests | 0.2 | (0.1 | ) | 0.8 | ||||||||
Net income attributable to PolyOne common shareholders | $ | 165.2 | $ | 144.6 | $ | 79.2 | ||||||
Earnings per share attributable to PolyOne common shareholders - basic: | ||||||||||||
Continuing operations | $ | 1.97 | $ | 1.65 | $ | 0.85 | ||||||
Discontinued operations | — | — | 0.01 | |||||||||
Total | $ | 1.97 | $ | 1.65 | $ | 0.86 | ||||||
Earnings per share attributable to PolyOne common shareholders - diluted: | ||||||||||||
Continuing operations | $ | 1.95 | $ | 1.63 | $ | 0.83 | ||||||
Discontinued operations | — | — | 0.02 | |||||||||
Total | $ | 1.95 | $ | 1.63 | $ | 0.85 | ||||||
Cash dividends declared per common share | $ | 0.495 | $ | 0.420 | $ | 0.340 | ||||||
Weighted-average number of common shares outstanding: | ||||||||||||
Basic | 83.9 | 87.8 | 92.3 | |||||||||
Diluted | 84.6 | 88.7 | 93.5 |
Year Ended December 31, | |||||||||||
(In millions) | 2016 | 2015 | 2014 | ||||||||
Net income | $ | 165.0 | $ | 144.7 | $ | 78.4 | |||||
Other comprehensive loss: | |||||||||||
Translation adjustments | (23.0 | ) | (29.1 | ) | (27.5 | ) | |||||
Unrealized gain on available-for-sale securities | 0.1 | 0.1 | — | ||||||||
Total other comprehensive loss | (22.9 | ) | (29.0 | ) | (27.5 | ) | |||||
Total comprehensive income | 142.1 | 115.7 | 50.9 | ||||||||
Comprehensive loss (income) attributable to noncontrolling interests | 0.2 | (0.1 | ) | 0.8 | |||||||
Comprehensive income attributable to PolyOne common shareholders | $ | 142.3 | $ | 115.6 | $ | 51.7 |
Year Ended December 31, | |||||||
(In millions, except par value per share) | 2016 | 2015 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 226.7 | $ | 279.8 | |||
Accounts receivable, net | 363.7 | 347.0 | |||||
Inventories, net | 312.4 | 287.0 | |||||
Other current assets | 46.7 | 47.0 | |||||
Total current assets | 949.5 | 960.8 | |||||
Property, net | 607.7 | 583.5 | |||||
Goodwill | 677.4 | 597.7 | |||||
Intangible assets, net | 363.5 | 344.6 | |||||
Other non-current assets | 125.2 | 108.5 | |||||
Total assets | $ | 2,723.3 | $ | 2,595.1 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Short-term and current portion of long-term debt | $ | 18.5 | $ | 18.6 | |||
Accounts payable | 361.5 | 351.6 | |||||
Accrued expenses and other liabilities | 129.6 | 127.9 | |||||
Total current liabilities | 509.6 | 498.1 | |||||
Long-term debt | 1,239.8 | 1,128.0 | |||||
Pension and other post-retirement benefits | 63.1 | 77.5 | |||||
Deferred income taxes | 43.1 | 33.8 | |||||
Other non-current liabilities | 142.2 | 152.5 | |||||
Total non-current liabilities | 1,488.2 | 1,391.8 | |||||
SHAREHOLDERS' EQUITY | |||||||
Preferred stock, 40.0 shares authorized, no shares issued | — | — | |||||
Common Shares, $0.01 par, 400.0 shares authorized, 122.2 shares issued | 1.2 | 1.2 | |||||
Additional paid-in capital | 1,157.1 | 1,155.6 | |||||
Retained earnings | 491.2 | 367.1 | |||||
Common shares held in treasury, at cost, 39.6 shares in 2016 and 36.9 shares in 2015 | (830.6 | ) | (748.4 | ) | |||
Accumulated other comprehensive loss | (94.2 | ) | (71.3 | ) | |||
Total PolyOne shareholders' equity | 724.7 | 704.2 | |||||
Noncontrolling interest | 0.8 | 1.0 | |||||
Total equity | 725.5 | 705.2 | |||||
Total liabilities and equity | $ | 2,723.3 | $ | 2,595.1 |
Year Ended December 31, | |||||||||||
(In millions) | 2016 | 2015 | 2014 | ||||||||
Operating activities | |||||||||||
Net income | $ | 165.0 | $ | 144.7 | $ | 78.4 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 100.5 | 98.1 | 100.8 | ||||||||
Accelerated depreciation and fixed asset charges associated with restructuring activities | 5.4 | 17.6 | 33.0 | ||||||||
Deferred income tax expense (benefit) | 10.5 | (27.4 | ) | (45.2 | ) | ||||||
Debt extinguishment costs | 0.4 | 16.4 | — | ||||||||
Share-based compensation expense | 8.4 | 9.1 | 14.2 | ||||||||
Gain on sale of business | — | — | (1.2 | ) | |||||||
Changes in assets and liabilities, net of the effect of acquisitions: | |||||||||||
(Increase) decrease in accounts receivable | (17.6 | ) | 42.6 | 24.4 | |||||||
Decrease in inventories | 0.8 | 21.4 | 28.4 | ||||||||
Increase (decrease) in accounts payable | 12.4 | (8.3 | ) | (15.2 | ) | ||||||
(Decrease) increase in pension and other post-retirement benefits | (43.2 | ) | (24.6 | ) | 30.0 | ||||||
Decrease in accrued expenses and other assets and liabilities - net | (21.3 | ) | (62.4 | ) | (39.2 | ) | |||||
Net cash provided by operating activities | 221.3 | 227.2 | 208.4 | ||||||||
Investing activities | |||||||||||
Capital expenditures | (84.2 | ) | (91.2 | ) | (92.8 | ) | |||||
Business acquisitions, net of cash acquired | (164.2 | ) | (18.3 | ) | (47.2 | ) | |||||
Sale of and proceeds from other assets | 13.0 | 3.0 | 28.2 | ||||||||
Net cash used by investing activities | (235.4 | ) | (106.5 | ) | (111.8 | ) | |||||
Financing activities | |||||||||||
Repayment of long-term debt | (6.0 | ) | (365.3 | ) | (8.0 | ) | |||||
Premium on early extinguishment of long-term debt | — | (13.4 | ) | — | |||||||
Net proceeds from long-term debt | 100.0 | 547.3 | — | ||||||||
Debt financing costs | (2.0 | ) | (6.0 | ) | — | ||||||
Borrowings under credit facilities | 1,031.9 | 891.3 | 168.6 | ||||||||
Repayments under credit facilities | (1,032.7 | ) | (936.8 | ) | (122.8 | ) | |||||
Purchase of common shares for treasury | (86.2 | ) | (156.1 | ) | (233.2 | ) | |||||
Exercise of share awards | 1.2 | 4.3 | 6.9 | ||||||||
Cash dividends paid | (40.2 | ) | (35.7 | ) | (29.9 | ) | |||||
Net cash used by financing activities | (34.0 | ) | (70.4 | ) | (218.4 | ) | |||||
Effect of exchange rate changes on cash | (5.0 | ) | (9.1 | ) | (4.8 | ) | |||||
(Decrease) increase in cash and cash equivalents | (53.1 | ) | 41.2 | (126.6 | ) | ||||||
Cash and cash equivalents at beginning of year | 279.8 | 238.6 | 365.2 | ||||||||
Cash and cash equivalents at end of year | $ | 226.7 | $ | 279.8 | $ | 238.6 |
Common Shares | Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||
(In millions) | Common Shares | Common Shares Held in Treasury | Common Shares | Additional Paid-in Capital | Retained Earnings | Common Shares Held in Treasury | Accumulated Other Comprehensive Loss | Total PolyOne shareholders' equity | Non-controlling Interests | Total equity | ||||||||||||||||||||||||||||
Balance at January 1, 2014 | 122.2 | (27.1 | ) | $ | 1.2 | $ | 1,149.8 | $ | 211.6 | $ | (371.0 | ) | $ | (14.8 | ) | $ | 976.8 | 1.7 | $ | 978.5 | ||||||||||||||||||
Net income (loss) | 79.2 | 79.2 | (0.8 | ) | 78.4 | |||||||||||||||||||||||||||||||||
Other comprehensive loss | (27.5 | ) | (27.5 | ) | (27.5 | ) | ||||||||||||||||||||||||||||||||
Cash dividends declared | (31.1 | ) | (31.1 | ) | (31.1 | ) | ||||||||||||||||||||||||||||||||
Repurchase of common shares | (6.3 | ) | (233.2 | ) | (233.2 | ) | (233.2 | ) | ||||||||||||||||||||||||||||||
Share-based compensation and exercise of awards | 0.5 | 5.6 | 6.5 | 12.1 | 12.1 | |||||||||||||||||||||||||||||||||
Balance at December 31, 2014 | 122.2 | (32.9 | ) | $ | 1.2 | $ | 1,155.4 | $ | 259.7 | $ | (597.7 | ) | $ | (42.3 | ) | $ | 776.3 | $ | 0.9 | $ | 777.2 | |||||||||||||||||
Net income | 144.6 | 144.6 | 0.1 | 144.7 | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | (29.0 | ) | (29.0 | ) | (29.0 | ) | ||||||||||||||||||||||||||||||||
Cash dividends declared | (37.2 | ) | (37.2 | ) | (37.2 | ) | ||||||||||||||||||||||||||||||||
Repurchase of common shares | (4.5 | ) | (156.1 | ) | (156.1 | ) | (156.1 | ) | ||||||||||||||||||||||||||||||
Share-based compensation and exercise of awards | 0.5 | 0.2 | 5.4 | 5.6 | 5.6 | |||||||||||||||||||||||||||||||||
Balance at December 31, 2015 | 122.2 | (36.9 | ) | $ | 1.2 | $ | 1,155.6 | $ | 367.1 | $ | (748.4 | ) | $ | (71.3 | ) | $ | 704.2 | $ | 1.0 | $ | 705.2 | |||||||||||||||||
Net income (loss) | 165.2 | 165.2 | (0.2 | ) | 165.0 | |||||||||||||||||||||||||||||||||
Other comprehensive loss | (22.9 | ) | (22.9 | ) | (22.9 | ) | ||||||||||||||||||||||||||||||||
Cash dividends declared | (41.1 | ) | (41.1 | ) | (41.1 | ) | ||||||||||||||||||||||||||||||||
Repurchase of common shares | (3.0 | ) | (86.2 | ) | (86.2 | ) | (86.2 | ) | ||||||||||||||||||||||||||||||
Share-based compensation and exercise of awards | 0.3 | 1.5 | 4.0 | 5.5 | 5.5 | |||||||||||||||||||||||||||||||||
Balance at December 31, 2016 | 122.2 | (39.6 | ) | $ | 1.2 | $ | 1,157.1 | $ | 491.2 | $ | (830.6 | ) | $ | (94.2 | ) | $ | 724.7 | $ | 0.8 | $ | 725.5 |
(In millions) | Cumulative Translation Adjustment | Pension and other post-retirement benefits | Unrealized gain in available-for-sale securities | Total | ||||||||||||
Balance at January 1, 2014 | $ | (20.2 | ) | $ | 5.2 | $ | 0.2 | $ | (14.8 | ) | ||||||
Translation adjustments | (27.5 | ) | — | — | (27.5 | ) | ||||||||||
Balance at December 31, 2014 | (47.7 | ) | 5.2 | 0.2 | (42.3 | ) | ||||||||||
Translation adjustments | (29.1 | ) | — | — | (29.1 | ) | ||||||||||
Unrecognized gain on available-for-sale securities | — | — | 0.1 | 0.1 | ||||||||||||
Balance at December 31, 2015 | (76.8 | ) | 5.2 | 0.3 | (71.3 | ) | ||||||||||
Translation adjustments | (23.0 | ) | — | — | (23.0 | ) | ||||||||||
Unrecognized gain on available-for-sale securities | — | — | 0.1 | 0.1 | ||||||||||||
Balance at December 31, 2016 | $ | (99.8 | ) | $ | 5.2 | $ | 0.4 | $ | (94.2 | ) |
(in millions) | Fair Value | Useful Life | Valuation Method | |||||
Customer relationships | $ | 17.7 | 8-20 | Multi-period excess earnings | ||||
Patents, technology and other | 19.6 | 7-20 | Relief-from-royalty; lost income method | |||||
Indefinite-lived trade names | 4.0 | N/A | Relief-from-royalty | |||||
Total | $ | 41.3 |
(In millions) | Specialty Engineered Materials | Color, Additives and Inks | Designed Structures and Solutions | Performance Products and Solutions | PolyOne Distribution | Total | ||||||||||||||||||
Goodwill, gross at January 1, 2015 | $ | 111.6 | $ | 349.8 | $ | 144.7 | $ | 186.2 | $ | 1.6 | $ | 793.9 | ||||||||||||
Accumulated impairment losses | (12.2 | ) | (16.1 | ) | — | (175.0 | ) | — | (203.3 | ) | ||||||||||||||
Goodwill, net at January 1, 2015 | 99.4 | 333.7 | 144.7 | 11.2 | 1.6 | 590.6 | ||||||||||||||||||
Acquisitions of businesses | — | 8.6 | — | — | — | 8.6 | ||||||||||||||||||
Currency translation | (1.4 | ) | (0.1 | ) | — | — | — | (1.5 | ) | |||||||||||||||
Balance at December 31, 2015 | 98.0 | 342.2 | 144.7 | 11.2 | 1.6 | 597.7 | ||||||||||||||||||
Acquisitions of businesses | 74.9 | 4.5 | — | — | — | 79.4 | ||||||||||||||||||
Currency translation | 0.6 | (0.3 | ) | — | — | — | 0.3 | |||||||||||||||||
Balance at December 31, 2016 | $ | 173.5 | $ | 346.4 | $ | 144.7 | $ | 11.2 | $ | 1.6 | $ | 677.4 |
As of December 31, 2016 | ||||||||||||||||
(In millions) | Acquisition Cost | Accumulated Amortization | Currency Translation | Net | ||||||||||||
Customer relationships | $ | 217.1 | $ | (52.2 | ) | $ | (0.3 | ) | $ | 164.6 | ||||||
Patents, technology and other | 156.6 | (57.6 | ) | (0.4 | ) | 98.6 | ||||||||||
Indefinite-lived trade names | 100.3 | — | — | 100.3 | ||||||||||||
Total | $ | 474.0 | $ | (109.8 | ) | $ | (0.7 | ) | $ | 363.5 |
As of December 31, 2015 | ||||||||||||||||
(In millions) | Acquisition Cost | Accumulated Amortization | Currency Translation | Net | ||||||||||||
Customer relationships | $ | 199.4 | $ | (42.1 | ) | $ | — | $ | 157.3 | |||||||
Patents, technology and other | 137.0 | (45.7 | ) | (0.3 | ) | 91.0 | ||||||||||
Indefinite-lived trade names | 96.3 | — | — | 96.3 | ||||||||||||
Total | $ | 432.7 | $ | (87.8 | ) | $ | (0.3 | ) | $ | 344.6 |
2017 | 2018 | 2019 | 2020 | 2021 | |||||
Expected amortization expense | $22.9 | $22.9 | $22.9 | $19.5 | $18.5 |
(In millions) | 2016 | 2015 | 2014 | |||||||||
Cost of goods sold | $ | 7.0 | $ | 27.0 | $ | 54.0 | ||||||
Selling and administrative expenses | 12.0 | 14.9 | 40.1 | |||||||||
Total employee separation and restructuring charges | $ | 19.0 | $ | 41.9 | $ | 94.1 |
As of December 31, 2016 (In millions) | Principal Amount | Unamortized discount and debt issuance cost | Net debt | ||||||||
Senior secured term loan due 2022 | $ | 644.0 | $ | 8.7 | $ | 635.3 | |||||
5.250% senior notes due 2023 | 600.0 | 7.1 | 592.9 | ||||||||
Other debt (1) | 30.1 | — | 30.1 | ||||||||
Total long-term debt | $ | 1,274.1 | $ | 15.8 | $ | 1,258.3 | |||||
Less short-term and current portion of long-term debt | 18.5 | — | 18.5 | ||||||||
Total long-term debt, net of current portion | $ | 1,255.6 | $ | 15.8 | $ | 1,239.8 |
As of December 31, 2015 (In millions) | Principal Amount | Unamortized discount and debt issuance cost | Net debt | ||||||||
Senior secured term loan due 2022 | $ | 550.0 | $ | 8.6 | $ | 541.4 | |||||
5.250% senior notes due 2023 | 600.0 | 8.3 | 591.7 | ||||||||
Other debt (1) | 13.5 | — | 13.5 | ||||||||
Total long-term debt | $ | 1,163.5 | $ | 16.9 | $ | 1,146.6 | |||||
Less short-term and current portion of long-term debt | 18.6 | — | 18.6 | ||||||||
Total long-term debt, net of current portion | $ | 1,144.9 | $ | 16.9 | $ | 1,128.0 |
(1) | Other debt includes capital lease obligations of $17.8 million and $0.4 million as of December 31, 2016 and 2015, respectively. |
(In millions) | ||||
2017 | $ | 18.5 | ||
2018 | 20.9 | |||
2019 | 6.7 | |||
2020 | 6.7 | |||
2021 | 6.7 | |||
Thereafter | 1,214.6 | |||
Aggregate maturities | $ | 1,274.1 |
(In millions) | ||||
2017 | $ | 20.0 | ||
2018 | 14.8 | |||
2019 | 11.9 | |||
2020 | 9.4 | |||
2021 | 6.4 | |||
Thereafter | 14.7 | |||
Total | $ | 77.2 |
(In millions) | December 31, 2016 | December 31, 2015 | ||||||
Finished products | $ | 197.4 | $ | 172.7 | ||||
Work in process | 5.8 | 5.0 | ||||||
Raw materials and supplies | 109.2 | 109.3 | ||||||
Inventories, net | $ | 312.4 | $ | 287.0 |
(In millions) | December 31, 2016 | December 31, 2015 | ||||||
Land and land improvements (1) | $ | 49.0 | $ | 46.9 | ||||
Buildings (2) | 335.5 | 318.3 | ||||||
Machinery and equipment | 1,159.9 | 1,104.7 | ||||||
Property, gross | 1,544.4 | 1,469.9 | ||||||
Less accumulated depreciation and amortization | (936.7 | ) | (886.4 | ) | ||||
Property, net | $ | 607.7 | $ | 583.5 |
(1) | Land and land improvements include properties under capital leases of $1.8 million as of December 31, 2016. As of December 31, 2015, the value of the land and land improvements associated with properties under capital leases was less than $0.1 million. |
(2) | Buildings include properties under capital leases of $16.9 million and $0.5 million as of December 31, 2016 and 2015, respectively. |
Accrued expenses and other liabilities | Other non-current liabilities | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Employment costs | $ | 76.4 | $ | 76.8 | $ | 21.7 | $ | 21.7 | ||||||||
Environmental liabilities | 8.8 | 10.2 | 108.5 | 109.7 | ||||||||||||
Accrued taxes | 5.5 | 4.2 | — | — | ||||||||||||
Pension and other post-employment benefits | 5.6 | 5.7 | — | — | ||||||||||||
Accrued interest | 12.1 | 12.1 | — | — | ||||||||||||
Dividends payable | 11.3 | 10.3 | — | — | ||||||||||||
Unrecognized tax benefits | 0.2 | 1.5 | 9.3 | 14.2 | ||||||||||||
Other | 9.7 | 7.1 | 2.7 | 6.9 | ||||||||||||
Total | $ | 129.6 | $ | 127.9 | $ | 142.2 | $ | 152.5 |
Pension Benefits | Health Care Benefits | |||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Change in benefit obligation: | ||||||||||||||||
Projected benefit obligation — beginning of year | $ | 527.4 | $ | 576.8 | $ | 11.8 | $ | 16.6 | ||||||||
Service cost | 1.0 | 1.7 | — | — | ||||||||||||
Interest cost | 20.7 | 21.3 | 0.5 | 0.6 | ||||||||||||
Actuarial gain | (2.0 | ) | (18.3 | ) | (0.6 | ) | (3.6 | ) | ||||||||
Benefits paid | (43.2 | ) | (51.9 | ) | (1.0 | ) | (1.2 | ) | ||||||||
Other | (0.9 | ) | (2.2 | ) | 0.1 | (0.6 | ) | |||||||||
Projected benefit obligation — end of year | $ | 503.0 | $ | 527.4 | $ | 10.8 | $ | 11.8 | ||||||||
Projected salary increases | (1.7 | ) | (1.7 | ) | — | — | ||||||||||
Accumulated benefit obligation | $ | 501.3 | $ | 525.7 | $ | 10.8 | $ | 11.8 | ||||||||
Change in plan assets: | ||||||||||||||||
Plan assets — beginning of year | $ | 456.0 | $ | 484.0 | $ | — | $ | — | ||||||||
Actual return on plan assets | 37.1 | (1.2 | ) | — | — | |||||||||||
Company contributions | 24.7 | 25.8 | 1.0 | 1.2 | ||||||||||||
Benefits paid | (43.2 | ) | (51.9 | ) | (1.0 | ) | (1.2 | ) | ||||||||
Other | (0.3 | ) | (0.7 | ) | — | — | ||||||||||
Plan assets — end of year | $ | 474.3 | $ | 456.0 | $ | — | $ | — | ||||||||
Unfunded status at end of year | $ | (28.7 | ) | $ | (71.4 | ) | $ | (10.8 | ) | $ | (11.8 | ) |
Pension Benefits | Health Care Benefits | |||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Non-current assets | $ | 29.2 | $ | — | $ | — | $ | — | ||||||||
Accrued expenses and other liabilities | $ | 4.4 | $ | 4.4 | $ | 1.2 | $ | 1.3 | ||||||||
Other non-current liabilities | $ | 53.5 | $ | 67.0 | $ | 9.6 | $ | 10.5 |
Pension Benefits | Health Care Benefits | |||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Projected benefit obligation | $ | 62.4 | $ | 527.4 | $ | 10.8 | $ | 11.8 | ||||||||
Accumulated benefit obligation | $ | 60.7 | $ | 525.7 | $ | 10.8 | $ | 11.8 | ||||||||
Fair value of plan assets | $ | 4.5 | $ | 456.0 | $ | — | $ | — |
Pension Benefits | Health Care Benefits | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Discount rate | 3.97 | % | 4.10 | % | 4.04 | % | 4.12 | % | ||||
Assumed health care cost trend rates at December 31: | ||||||||||||
Health care cost trend rate assumed for next year | N/A | N/A | 6.52 | % | 6.69 | % | ||||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | N/A | N/A | 4.50 | % | 4.50 | % | ||||||
Year that the rate reaches the ultimate trend rate | N/A | N/A | 2027 | 2027 |
Pension Benefits | Health Care Benefits | |||||||||||||||||||||||
(In millions) | 2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||||||||
Components of net periodic benefit costs (gains): | ||||||||||||||||||||||||
Service cost | $ | 1.0 | $ | 1.7 | $ | 1.6 | $ | — | $ | — | $ | — | ||||||||||||
Interest cost | 20.7 | 21.3 | 24.9 | 0.5 | 0.6 | 0.7 | ||||||||||||||||||
Expected return on plan assets | (31.4 | ) | (32.7 | ) | (32.2 | ) | — | — | — | |||||||||||||||
Mark-to-market actuarial net (gains) losses | (7.8 | ) | 15.2 | 55.2 | (0.6 | ) | (3.6 | ) | 1.3 | |||||||||||||||
Net periodic (benefit) cost | $ | (17.5 | ) | $ | 5.5 | $ | 49.5 | $ | (0.1 | ) | $ | (3.0 | ) | $ | 2.0 |
Pension Benefits | Health Care Benefits | |||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | |||||||||||||
Discount rate* | 4.10 | % | 3.88 | % | 4.83 | % | 4.12 | % | 3.75 | % | 4.38 | % | ||||||
Expected long-term return on plan assets* | 6.87 | % | 6.87 | % | 6.86 | % | — | % | — | % | — | % | ||||||
Assumed health care cost trend rates at December 31: | ||||||||||||||||||
Health care cost trend rate assumed for next year | N/A | N/A | N/A | 6.69 | % | 6.88 | % | 7.02 | % | |||||||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | N/A | N/A | N/A | 4.50 | % | 4.50 | % | 4.50 | % | |||||||||
Year that the rate reaches the ultimate trend rate | N/A | N/A | N/A | 2027 | 2027 | 2027 |
* | The mark-to-market component of net periodic costs is determined based on discount rates as of year-end and actual asset returns during the year. |
Fair Value of Plan Assets at December 31, 2016 | ||||||||||||||||
(In millions) | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Investments (at Fair Value) | ||||||||||||
Asset category | ||||||||||||||||
Cash | $ | 7.0 | $ | — | $ | — | $ | 7.0 | ||||||||
Other | — | — | 4.5 | 4.5 | ||||||||||||
Total | $ | 7.0 | $ | — | $ | 4.5 | 11.5 | |||||||||
Investments measured at NAV: | ||||||||||||||||
Common collective funds: | ||||||||||||||||
United States equity | 45.5 | |||||||||||||||
International equity | 37.1 | |||||||||||||||
Global equity | 27.6 | |||||||||||||||
Fixed income | 352.6 | |||||||||||||||
Total common collective funds | 462.8 | |||||||||||||||
Total investments at fair value | $ | 474.3 |
Fair Value of Plan Assets at December 31, 2015 | ||||||||||||||||
(In millions) | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Investments (at Fair Value) | ||||||||||||
Asset category | ||||||||||||||||
Cash | $ | 3.6 | $ | — | $ | — | $ | 3.6 | ||||||||
Equities | 15.8 | — | — | 15.8 | ||||||||||||
Registered investment companies: | ||||||||||||||||
Non-U.S. equity | 38.8 | — | — | 38.8 | ||||||||||||
United States treasuries | 87.3 | — | — | 87.3 | ||||||||||||
Fixed income securities | 137.9 | 34.9 | — | 172.8 | ||||||||||||
Other | — | — | 4.8 | 4.8 | ||||||||||||
Total | $ | 283.4 | $ | 34.9 | $ | 4.8 | $ | 323.1 | ||||||||
Investments measured at NAV: | ||||||||||||||||
Common collective funds: | ||||||||||||||||
Short-term investments | $ | 3.4 | ||||||||||||||
United States equity | $ | 53.1 | ||||||||||||||
Fixed income | $ | 76.4 | ||||||||||||||
Total common collective funds | $ | 132.9 | ||||||||||||||
Total investments at fair value | $ | 456.0 |
(In millions) | Pension Benefits | Health Care Benefits | ||||||
2017 | $ | 39.2 | $ | 1.2 | ||||
2018 | 38.9 | 1.1 | ||||||
2019 | 37.9 | 1.1 | ||||||
2020 | 37.8 | 1.0 | ||||||
2021 | 38.0 | 1.0 | ||||||
2022 through 2026 | 172.4 | 3.9 |
(In millions) | 2016 | 2015 | 2014 | |||||||||
Retirement savings match | $ | 10.5 | $ | 9.9 | $ | 9.7 | ||||||
Retirement benefit contribution | 3.9 | 4.1 | 4.0 | |||||||||
Total contributions | $ | 14.4 | $ | 14.0 | $ | 13.7 |
(In millions) | 2016 | 2015 | 2014 | |||||||||
Balance at beginning of the year | $ | 119.9 | $ | 121.1 | $ | 125.9 | ||||||
Environmental expenses | 8.3 | 9.3 | 10.3 | |||||||||
Net cash payments | (11.0 | ) | (9.8 | ) | (14.7 | ) | ||||||
Currency translation and other | 0.1 | (0.7 | ) | (0.4 | ) | |||||||
Balance at end of year | $ | 117.3 | $ | 119.9 | $ | 121.1 |
(In millions) | 2016 | 2015 | 2014 | |||||||||
Domestic | $ | 122.7 | $ | 93.8 | $ | 53.5 | ||||||
Foreign | 99.6 | 73.9 | 34.9 | |||||||||
Income from continuing operations, before income taxes | $ | 222.3 | $ | 167.7 | $ | 88.4 |
(In millions) | 2016 | 2015 | 2014 | |||||||||
Current income tax expense: | ||||||||||||
Domestic | $ | 24.3 | $ | 23.8 | $ | 39.2 | ||||||
Foreign | 22.5 | 26.6 | 17.2 | |||||||||
Total current income tax expense: | $ | 46.8 | $ | 50.4 | $ | 56.4 | ||||||
Deferred income tax expense (benefit): | ||||||||||||
Domestic | $ | 6.0 | $ | (28.6 | ) | $ | (41.3 | ) | ||||
Foreign | 4.5 | 1.2 | (3.9 | ) | ||||||||
Total deferred income tax expense (benefit) | $ | 10.5 | $ | (27.4 | ) | $ | (45.2 | ) | ||||
Total income tax expense | $ | 57.3 | $ | 23.0 | $ | 11.2 |
2016 | 2015 | 2014 | |||||||
Income tax expense at 35% | 35.0 | % | 35.0 | % | 35.0 | % | |||
Foreign tax rate differential | (5.2 | ) | (5.0 | ) | (5.7 | ) | |||
State and local tax, net | 2.1 | 2.7 | 2.8 | ||||||
Tax benefits on certain foreign investments | (2.0 | ) | (0.7 | ) | (17.0 | ) | |||
Domestic production activities deduction | (1.6 | ) | (2.0 | ) | (2.5 | ) | |||
Amended prior period tax returns | (1.4 | ) | (18.3 | ) | (2.3 | ) | |||
Uncertain tax positions | (1.3 | ) | 0.6 | 1.0 | |||||
Permanent tax differences | 0.3 | 1.8 | (2.1 | ) | |||||
U.S. credit for research activities | (0.5 | ) | (0.7 | ) | (1.2 | ) | |||
Changes in valuation allowances | 0.4 | 0.3 | 7.8 | ||||||
Settlements | — | — | (3.1 | ) | |||||
Effective income tax rate | 25.8 | % | 13.7 | % | 12.7 | % |
(In millions) | 2016 | 2015 | ||||||
Deferred tax assets: | ||||||||
Pension and other post-retirement benefits | $ | 12.5 | $ | 29.7 | ||||
Employment costs | 34.3 | 34.7 | ||||||
Environmental reserves | 45.1 | 45.8 | ||||||
Net operating loss carryforwards | 28.8 | 33.3 | ||||||
Foreign tax credit carryforwards | 23.0 | 37.4 | ||||||
Other, net | 33.5 | 22.3 | ||||||
Gross deferred tax assets | $ | 177.2 | $ | 203.2 | ||||
Valuation allowances | (19.8 | ) | (19.3 | ) | ||||
Total deferred tax assets, net of valuation allowances | $ | 157.4 | $ | 183.9 | ||||
Deferred tax liabilities: | ||||||||
Property, plant and equipment | $ | (52.6 | ) | $ | (60.3 | ) | ||
Goodwill and intangibles | (136.9 | ) | (135.8 | ) | ||||
Other, net | (1.8 | ) | (7.2 | ) | ||||
Total deferred tax liabilities | $ | (191.3 | ) | $ | (203.3 | ) | ||
Net deferred tax liabilities | $ | (33.9 | ) | $ | (19.4 | ) | ||
Consolidated Balance Sheets: | ||||||||
Non-current deferred income tax assets | $ | 9.2 | $ | 14.4 | ||||
Non-current deferred income tax liabilities | $ | (43.1 | ) | $ | (33.8 | ) |
Unrecognized Tax Benefits | ||||||||||||
(In millions) | 2016 | 2015 | 2014 | |||||||||
Balance as of January 1, | $ | 12.5 | $ | 28.6 | $ | 15.2 | ||||||
Increases as a result of positions taken during current year | 0.3 | 0.5 | 1.2 | |||||||||
Increases as a result of positions taken for prior years | 1.2 | 12.6 | 3.8 | |||||||||
Balance related to acquired businesses | — | — | 14.2 | |||||||||
Reductions for tax positions of prior years | — | — | (2.3 | ) | ||||||||
Decreases as a result of lapse of statute of limitations | (5.4 | ) | (13.1 | ) | — | |||||||
Decreases relating to settlements with taxing authorities | (0.3 | ) | (15.3 | ) | (2.3 | ) | ||||||
Other, net | (0.4 | ) | (0.8 | ) | (1.2 | ) | ||||||
Balance as of December 31 | $ | 7.9 | $ | 12.5 | $ | 28.6 |
(In millions) | 2016 | 2015 | 2014 | |||||||||
Stock appreciation rights | $ | 3.6 | $ | 4.4 | $ | 5.5 | ||||||
Performance shares | — | 0.5 | 0.7 | |||||||||
Restricted stock units | 4.8 | 4.2 | 8.0 | |||||||||
Total share-based compensation | $ | 8.4 | $ | 9.1 | $ | 14.2 |
2016 | 2015 | 2014 | ||||
Expected volatility | 41.0% | 43.0% | 48.0% | |||
Expected dividends | 1.92% | 1.05% | 0.91% | |||
Expected term (in years) | 6.7 | 6.5 | 6.4 | |||
Risk-free rate | 1.90% | 1.95% | 2.94% | |||
Value of SARs granted | $8.29 | $13.94 | $14.05 |
Stock Appreciation Rights (In millions, except per share data) | Shares | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||
Outstanding as of January 1, 2016 | 1.5 | $ | 25.49 | 6.75 | $ | 13.1 | ||||||||
Granted | 0.5 | 24.98 | — | |||||||||||
Exercised | (0.2 | ) | 12.35 | — | ||||||||||
Outstanding as of December 31, 2016 | 1.8 | $ | 25.73 | 6.68 | $ | 14.3 | ||||||||
Vested and exercisable as of December 31, 2016 | 1.0 | $ | 21.63 | 5.21 | $ | 11.3 |
Year Ended December 31, 2016 (In millions) | Sales to External Customers | Intersegment Sales | Total Sales | Operating Income | Depreciation and Amortization(1) | Capital Expenditures | Total Assets | |||||||||||||||||||||
Color, Additives and Inks | $ | 778.9 | $ | 18.8 | $ | 797.7 | $ | 127.5 | $ | 40.2 | $ | 20.6 | $ | 919.1 | ||||||||||||||
Specialty Engineered Materials | 516.4 | 49.4 | 565.8 | 81.1 | 18.3 | 19.4 | 539.0 | |||||||||||||||||||||
Designed Structures and Solutions | 401.2 | 0.5 | 401.7 | (3.8 | ) | 22.3 | 18.6 | 442.9 | ||||||||||||||||||||
Performance Products and Solutions | 589.2 | 79.3 | 668.5 | 74.4 | 15.0 | 12.4 | 238.6 | |||||||||||||||||||||
PolyOne Distribution | 1,054.1 | 16.9 | 1,071.0 | 68.2 | 0.7 | 0.2 | 206.9 | |||||||||||||||||||||
Corporate and eliminations | — | (164.9 | ) | (164.9 | ) | (65.5 | ) | 7.5 | 13.0 | 376.8 | ||||||||||||||||||
Total | $ | 3,339.8 | $ | — | $ | 3,339.8 | $ | 281.9 | $ | 104.0 | $ | 84.2 | $ | 2,723.3 |
Year Ended December 31, 2015 (In millions) | Sales to External Customers | Intersegment Sales | Total Sales | Operating Income | Depreciation and Amortization(1) | Capital Expenditures | Total Assets | |||||||||||||||||||||
Color, Additives and Inks | $ | 801.2 | $ | 9.5 | $ | 810.7 | $ | 135.4 | $ | 40.7 | $ | 27.3 | $ | 939.5 | ||||||||||||||
Specialty Engineered Materials | 493.1 | 49.7 | 542.8 | 79.6 | 15.2 | 17.7 | 353.4 | |||||||||||||||||||||
Designed Structures and Solutions | 448.8 | 4.7 | 453.5 | 13.8 | 22.2 | 18.4 | 449.5 | |||||||||||||||||||||
Performance Products and Solutions | 615.8 | 78.3 | 694.1 | 57.4 | 15.5 | 9.8 | 237.4 | |||||||||||||||||||||
PolyOne Distribution | 1,018.7 | 15.4 | 1,034.1 | 68.0 | 0.7 | 0.4 | 200.0 | |||||||||||||||||||||
Corporate and eliminations | — | (157.6 | ) | (157.6 | ) | (103.3 | ) | 10.0 | 17.6 | 415.3 | ||||||||||||||||||
Total | $ | 3,377.6 | $ | — | $ | 3,377.6 | $ | 250.9 | $ | 104.3 | $ | 91.2 | $ | 2,595.1 |
Year Ended December 31, 2014 (In millions) | Sales to External Customers | Intersegment Sales | Total Sales | Operating Income | Depreciation and Amortization(1) | Capital Expenditures | Total Assets | |||||||||||||||||||||
Color, Additives and Inks | $ | 835.0 | $ | 15.8 | $ | 850.8 | $ | 124.9 | $ | 39.7 | $ | 28.1 | $ | 934.2 | ||||||||||||||
Specialty Engineered Materials | 555.2 | 43.1 | 598.3 | 72.4 | 16.0 | 15.2 | 370.1 | |||||||||||||||||||||
Designed Structures and Solutions | 616.5 | 1.0 | 617.5 | 45.1 | 23.4 | 25.6 | 490.1 | |||||||||||||||||||||
Performance Products and Solutions | 728.2 | 88.4 | 816.6 | 63.1 | 16.9 | 15.2 | 265.5 | |||||||||||||||||||||
PolyOne Distribution | 1,100.6 | 13.8 | 1,114.4 | 68.2 | 0.6 | 0.1 | 214.2 | |||||||||||||||||||||
Corporate and eliminations | — | (162.1 | ) | (162.1 | ) | (218.6 | ) | 27.3 | 8.6 | 392.2 | ||||||||||||||||||
Total | $ | 3,835.5 | $ | — | $ | 3,835.5 | $ | 155.1 | $ | 123.9 | $ | 92.8 | $ | 2,666.3 |
(In millions) | 2016 | 2015 | 2014 | |||||||||
Sales: | ||||||||||||
United States | $ | 2,148.3 | $ | 2,239.5 | $ | 2,585.5 | ||||||
Europe | 415.2 | 421.8 | 505.6 | |||||||||
Canada | 258.4 | 241.3 | 277.4 | |||||||||
Asia | 266.9 | 249.6 | 257.3 | |||||||||
Mexico | 233.7 | 209.7 | 178.4 | |||||||||
South America | 17.3 | 15.7 | 31.3 | |||||||||
Total Sales | $ | 3,339.8 | $ | 3,377.6 | $ | 3,835.5 | ||||||
Long lived assets: | ||||||||||||
United States | $ | 449.7 | $ | 418.1 | $ | 421.1 | ||||||
Europe | 86.6 | 88.5 | 90.0 | |||||||||
Canada | 7.2 | 6.9 | 12.8 | |||||||||
Asia | 44.6 | 45.7 | 45.2 | |||||||||
Mexico | 18.5 | 19.4 | 19.7 | |||||||||
South America | 1.1 | 4.9 | 7.9 | |||||||||
Total Long lived assets | $ | 607.7 | $ | 583.5 | $ | 596.7 |
(In millions) | 2016 | 2015 | 2014 | ||||||
Weighted-average shares — basic: | 83.9 | 87.8 | 92.3 | ||||||
Plus dilutive impact of share-based compensation | 0.7 | 0.9 | 1.2 | ||||||
Weighted-average shares — diluted: | 84.6 | 88.7 | 93.5 |
2016 Quarters | 2015 Quarters | |||||||||||||||||||||||||||||||
(In millions, except per share data) | Fourth (2) | Third (3) | Second (4) | First (5) | Fourth(6) | Third (7) | Second (8) | First (9) | ||||||||||||||||||||||||
Sales | $ | 787.7 | $ | 843.6 | $ | 861.5 | $ | 847.0 | $ | 775.8 | $ | 841.6 | $ | 887.1 | $ | 873.1 | ||||||||||||||||
Gross Margin | 155.3 | 173.1 | 192.3 | 185.5 | 156.9 | 169.1 | 185.7 | 169.8 | ||||||||||||||||||||||||
Operating income | 57.9 | 71.2 | 81.5 | 71.3 | 31.3 | 69.2 | 80.3 | 70.1 | ||||||||||||||||||||||||
Net income | 33.7 | 42.3 | 50.0 | 39.0 | 3.0 | 44.5 | 67.0 | 30.2 | ||||||||||||||||||||||||
Net income attributable to PolyOne shareholders | $ | 33.8 | $ | 42.3 | $ | 50.0 | $ | 39.1 | $ | 3.1 | $ | 44.5 | $ | 66.8 | $ | 30.2 | ||||||||||||||||
Net income from continuing operations per common share attributable to PolyOne common shareholders: (1) | ||||||||||||||||||||||||||||||||
Basic earnings per share | $ | 0.41 | $ | 0.50 | $ | 0.59 | $ | 0.46 | $ | 0.04 | $ | 0.51 | $ | 0.75 | $ | 0.34 | ||||||||||||||||
Diluted earnings per share | $ | 0.40 | $ | 0.50 | $ | 0.59 | $ | 0.46 | $ | 0.04 | $ | 0.50 | $ | 0.74 | $ | 0.34 |
(1) | Per share amounts for the quarter and the full year have been computed separately. The sum of the quarterly amounts may not equal the annual amounts presented because of differences in the average shares outstanding during each period. |
(2) | Included for the fourth quarter 2016 are: 1) a mark-to-market pension and other post-retirement gain of $8.4 million, 2) employee separation and restructuring costs of $2.5 million and 3) environmental remediation costs of $2.2 million. |
(3) | Included for the third quarter 2016 are: 1) employee separation and restructuring costs of $4.6 million, 2) acquisition related costs and adjustments of $2.5 million and 3) environmental remediation costs of $2.3 million. |
(4) | Included for the second quarter 2016 are: 1) employee separation and restructuring costs of $4.8 million, 2) environmental remediation costs of $2.1 million and 3) a gain related to the reimbursement of previously incurred environmental costs of $5.3 million. |
(5) | Included for the first quarter 2016 are employee separation and restructuring costs of $7.1 million. |
(6) | Included for the fourth quarter 2015 are: 1) a mark-to-market pension and other post-retirement charge of $11.6 million, 2) employee separation and restructuring costs of $10.1 million and 3) $16.4 million of debt extinguishment costs primarily due to the repayment in full of $316.6 million aggregate principal amount of our 7.375% senior notes due 2020. |
(7) | Included for the third quarter 2015 are: 1) employee separation and restructuring costs of $13.7 million and 2) a $7.5 million benefit related to the reversal of an uncertain tax position due to the expiration of the statute of limitations. |
(8) | Included for the second quarter 2015 are: 1) employee separation and restructuring costs of $7.5 million and 2) a $26.0 million tax benefit as a result of amending U.S. federal income tax returns from 2005 to 2012 to use foreign tax credits. |
(9) | Included for the first quarter 2015 are employee separation and restructuring costs of $10.6 million. |
1. | PolyOne’s management is responsible for establishing and maintaining adequate internal control over financial reporting. |
2. | Under the supervision of and with participation of PolyOne’s management, including the Chief Executive Officer and the Chief Financial Officer, we conducted an evaluation of the effectiveness of internal control over financial reporting as of December 31, 2016 based on the guidelines established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013 Framework). Management believes that the COSO framework is a suitable framework for its evaluation of financial reporting because it is free from bias, permits reasonably consistent qualitative and quantitative measurements of PolyOne’s internal control over financial reporting, is sufficiently complete so that those relevant factors that would alter a conclusion about the effectiveness of PolyOne’s internal control over financial reporting are not omitted and is relevant to an evaluation of internal control over financial reporting. |
3. | Based on the results of our evaluation, management has concluded that such internal control over financial reporting was effective as of December 31, 2016. There were no material weaknesses in internal control over financial reporting identified by management. The results of management's assessment were reviewed with our Audit Committee. |
4. | Ernst & Young LLP, who audited the consolidated financial statements of PolyOne for the year ended December 31, 2016, also issued an attestation report on PolyOne’s internal control over financial reporting under Auditing Standard No. 5 of the Public Company Accounting Oversight Board. This attestation report is set forth on page 34 of this Annual Report on Form 10-K and is incorporated by reference into this Item 9A. |
Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||
Plan category | (a) | (b) | (c) | |||
Equity compensation plans approved by security holders | 1,792,671 | $25.73 | 1,577,686 (1) | |||
Equity compensation plans not approved by security holders | — | — | — | |||
Total | 1,792,671 | $25.73 | $1,577,686 |
(1) | In addition to options, warrants and rights, the Amended and Restated PolyOne Corporation 2010 Equity and Performance Incentive Plan (the Restated 2010 EPIP) authorizes the issuance of restricted stock, RSUs, performance shares and awards to Non-Employee Directors. The Restated 2010 EPIP limits the total number of shares that may be issued as one or more of these types of awards to 2.6 million. On May 14, 2015 our shareholders approved an amendment to this plan whereby, among other provisions, a total of 6.2 million common shares are reserved for grant under the Restated 2010 EPIP. |
POLYONE CORPORATION | |||||
February 16, 2017 | BY: | /S/ BRADLEY C. RICHARDSON | |||
Bradley C. Richardson Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer) |
Signature and Title | ||||
/S/ ROBERT M. PATTERSON | Chairman, President and Chief Executive Officer and Director (Principal Executive Officer) | Date: February 16, 2017 | ||
Robert M. Patterson | ||||
/S/ BRADLEY C. RICHARDSON | Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer) | Date: February 16, 2017 | ||
Bradley C. Richardson | ||||
/S/ RICHARD H. FEARON | Director | Date: February 16, 2017 | ||
Richard H. Fearon | ||||
/S/ GREGORY J. GOFF | Director | Date: February 16, 2017 | ||
Gregory J. Goff | ||||
/S/ WILLIAM R. JELLISON | Director | Date: February 16, 2017 | ||
William R. Jellison | ||||
/S/ SANDRA BEACH LIN | Director | Date: February 16, 2017 | ||
Sandra Beach Lin | ||||
/S/ RICHARD A. LORRAINE | Director | Date: February 16, 2017 | ||
Richard A. Lorraine | ||||
/S/ WILLIAM H. POWELL | Director | Date: February 16, 2017 | ||
William H. Powell | ||||
/S/ KERRY J. PREETE | Director | Date: February 16, 2017 | ||
Kerry J. Preete | ||||
/S/ FARAH M. WALTERS | Director | Date: February 16, 2017 | ||
Farah M. Walters | ||||
/S/ WILLIAM A. WULFSOHN | Director | Date: February 16, 2017 | ||
William A. Wulfsohn |
Exhibit No. | Exhibit Description |
2.1† | Purchase Agreement, dated as of February 28, 2011, by and among PolyOne Corporation, 1997 Chloralkali Venture, LLC, Olin Corporation and Olin SunBelt II, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed March 3, 2011, SEC File No. 1-16091) |
2.2† | Agreement and Plan of Merger, dated October 23, 2012, by and among PolyOne Corporation, 2012 RedHawk, Inc., 2012 RedHawk, LLC and Spartech Corporation (Incorporated by reference to Exhibit 2.1 to PolyOne Corporation’s current report on Form 8-K filed on October 24, 2012, SEC File No. 1-16091) |
2.3† | Asset Purchase Agreement, dated as of March 25, 2013, by and between PolyOne Corporation and Mexichem Specialty Resins Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed March 27, 2013, SEC File No. 1-16091) |
3.1 | Articles of Incorporation (incorporated by reference to Exhibit 3(i) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, SEC File No. 1-16091) |
3.2 | Amendment to the Second Article of the Articles of Incorporation, as filed with the Ohio Secretary of State, November 25, 2003 (incorporated by reference to Exhibit 3.1a to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003, SEC File No. 1-16091) |
3.3 | Regulations (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on July 17, 2009, SEC File No. 1-16091) |
4.1 | Indenture, dated February 28, 2013, between PolyOne Corporation and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 5, 2013, SEC File No. 1-16091) |
10.1 | Amended and Restated Credit Agreement, dated March 1, 2013, among the Company, PolyOne Canada and certain other subsidiaries of the Company, Wells Fargo Capital Finance, LLC, as administrative agent, Bank of America, N.A. and U.S. Bank National Association, as syndication agents, PNC Bank National Association and KeyBank National Association, as documentation agents, and Wells Fargo Capital Finance, LLC and Merrill, Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arrangers and bookrunners (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 5, 2013, SEC File No. 1-16091) |
10.2 | First Amendment to Amended and Restated Credit Agreement, dated as of March 28, 2014, among the Company, PolyOne Canada Inc. and certain other subsidiaries of the Company, Wells Fargo Capital Finance, LLC, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, SEC File No. 1-16091) |
10.3 | Second Amendment to Amended and Restated Credit Agreement, dated as of June 3, 2015, among the Company, PolyOne Canada Inc. and certain other subsidiaries of the Company, Wells Fargo Capital Finance, LLC, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, SEC File No. 1-16091) |
10.4 | Third Amendment to Amended and Restated Credit Agreement, dated as of June 30, 2015, among the Company, PolyOne Canada Inc. and certain other subsidiaries of the Company, Wells Fargo Capital Finance, LLC, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, SEC File No. 1-16091) |
10.5 | Fourth Amendment to Amended and Restated Credit Agreement and Release, dated November 12, 2015, by and among PolyOne Corporation, the subsidiaries of PolyOne Corporation party thereto, Wells Fargo Capital Finance, LLC, as agent, and the lenders party thereto (incorporated by reference to Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, SEC File No. 1-16091) |
10.6 | Fifth Amendment to Amended and Restated Credit Agreement, dated as of April 19, 2016, among the Company, PolyOne Canada Inc. and certain other subsidiaries of the Company, Wells Fargo Capital Finance, LLC, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30. 2016, SEC File No. 16091) |
10.7 | Credit Agreement, dated November 12, 2015, by and among PolyOne Corporation, as borrower, Citibank, N.A., as administrative agent, each of Citigroup Global Markets Inc., Wells Fargo Securities LLC, Goldman, Sachs & Co., HSBC Securities (USA) Inc. and Morgan Stanley & Co. LLC, as joint-lead arrangers and joint-book managers, Jefferies Finance LLC, KeyBanc Capital Markets Inc. and SunTrust Robinson Humphrey, Inc., as co-managers, and several other commercial lending institutions that are parties thereto (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, SEC File No. 1-16091) |
10.8 | Amendment Agreement No. 1 to the Credit Agreement, dated as of June 15, 2016, among the Company, certain subsidiaries of the Company, Citibank, N.A., as administrative agent, and the additional lender party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30. 2016, SEC File No. 16091) |
10.9 | Amendment Agreement No. 2, dated August 3, 2016, by and among PolyOne Corporation, the subsidiaries of PolyOne Corporation party thereto, Citibank, N.A, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 5, 2016, SEC File No. 1-16091) |
10.10+ | Form of 2011 Award Agreement under the 2010 Equity and Performance Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, SEC File No. 1-16091) |
10.11+ | Amended and Restated PolyOne Corporation 2010 Equity and Performance Incentive Plan (incorporated by reference to Appendix B to the Company’s definitive proxy statement on Schedule 14A filed on April 3, 2015, SEC File No. 1-16091) |
10.12+ | Amended and Restated PolyOne Senior Executive Annual Incentive Plan (incorporated by reference to Appendix C to the Company’s definitive proxy statement on Schedule 14A filed on April 3, 2015, SEC File No. 1-16091) |
10.13+ | Form of Grant of Stock-Settled Stock Appreciation Rights under the 2010 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, SEC File No. 1-16091) |
Exhibit No. | Exhibit Description |
10.14+ | Amended and Restated Deferred Compensation Plan for Non-Employee Directors (as amended and restated effective May 20, 2014) (incorporated by reference to Exhibit 10.7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, SEC File No. 1-16091) |
10.15+ | Form of Management Continuity Agreement for Executive Officers prior to 2011 (incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, SEC File No. 1-16091) |
10.16+ | Form of Management Continuity Agreement for Executive Officers after 2011 (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, SEC File No. 1-16091) |
10.17+ | Schedule of Executive Officers with Management Continuity Agreements** |
10.18+ | PolyOne Supplemental Retirement Benefit Plan (As Amended and Restated Effective January 1, 2014) (incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, SEC file No. 1-16091) |
10.19+ | Amended and Restated Letter Agreement, dated as of March 6, 2014, between the Company and Stephen D. Newlin, originally effective as of February 13, 2006 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, SEC File No. 1-16091) |
10.20 | Amendment to the Letter Agreement between the Company and Stephen D. Newlin, dated February 10, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, SEC File No. 1-16091) |
10.21+ | Assumption of Liabilities and Indemnification Agreement, dated March 1, 1993, amended and restated by Amended and Restated Assumption of Liabilities and Indemnification Agreement, dated April 27, 1993 (incorporated by reference to Exhibit 10.14 to The Geon Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996, SEC File No. 1-11804) |
10.22+ | Unconditional and Continuing Guaranty, between the Company and Olin Corporation and Sunbelt Chlor Alkali Partnership (incorporated by reference to Exhibit 10(c) to The Geon Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, SEC File No. 1-11804) |
10.23+ | PolyOne Corporation 2008 Equity and Performance Incentive Plan (incorporated herein by reference to Appendix A to the Registrant’s proxy statement on Schedule 14A (SEC File No. 1-16091), filed on March 25, 2008) |
10.24+ | Executive Severance Plan, as amended and restated effective May 15, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, SEC File No. 1-16091) |
10.25+ | Form of 2012 Award Agreement under the PolyOne Corporation 2010 Equity and Performance Incentive Plan, as amended (incorporated by reference to Exhibit 10.38 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, SEC File No. 1-16091) |
10.26+ | Form of 2013 Award Agreement under the PolyOne Corporation 2010 Equity and Performance Incentive Plan, as amended (incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, SEC File No. 1-16091) |
10.27+ | Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 5, 2006, SEC File No. 1-16091) |
10.28+ | Form of 2014 Award Agreement under the PolyOne Corporation 2010 Equity and Performance Incentive Plan, as amended (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, SEC File No. 1-16091) |
21.1 | Subsidiaries of the Company** |
23.1 | Consent of Independent Registered Public Accounting Firm - Ernst & Young LLP** |
31.1 | Certification of Robert M. Patterson, Chairman, President and Chief Executive Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002** |
31.2 | Certification of Bradley C. Richardson, Executive Vice President and Chief Financial Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002** |
32.1 | Certification pursuant to 18 U.S.C. § 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as signed by Robert M. Patterson, Chairman, President and Chief Executive Officer** |
32.2 | Certification pursuant to 18 U.S.C. § 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as signed by Bradley C. Richardson, Executive Vice President and Chief Financial Officer** |
101 .INS | XBRL Instance Document** |
101 .SCH | XBRL Taxonomy Extension Schema Document** |
101 .CAL | XBRL Taxonomy Extension Calculation Linkbase Document** |
101 .LAB | XBRL Taxonomy Extension Label Linkbase Document** |
101 .PRE | XBRL Taxonomy Extension Presentation Linkbase Document** |
101 .DEF | XBRL Taxonomy Definition Linkbase Document** |
+ | Indicates management contract or compensatory plan, contract or arrangement in which one or more directors or executive officers of the Registrant may be participants |
† | The exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the Securities and Exchange Commission upon request. |
** | Filed herewith. |
Exhibit 10.17 | ||||||
SCHEDULE OF EXECUTIVES WITH MANAGEMENT CONTINUITY AGREEMENTS | ||||||
Title | Name | Years /Comp* | Excise Tax Gross Up? | |||
Chairman, President and Chief Executive Officer | Robert M. Patterson | 3 | Y | |||
Executive Vice President, Chief Financial Officer | Bradley C. Richardson | 2 | N | |||
Senior Vice President, President of Designed Structures and Solutions | Richard N. Altice | 2 | N | |||
Senior Vice President, President of Distribution | Mark D. Crist | 2 | N | |||
Senior Vice President, Chief Commercial Officer | Michael A. Garratt | 2 | N | |||
Senior Vice President, General Counsel and Secretary | Lisa K. Kunkle | 3 | Y | |||
Senior Vice President, Global Operations and Process Improvement | M. John Midea, Jr. | 2 | N | |||
Senior Vice President, President of Specialty Engineered Materials | Craig M. Nikrant | 2 | N | |||
Senior Vice President, Mergers & Acquisitions | Joel R. Rathbun | 2 | N | |||
Senior Vice President, Chief Human Resources Officer | João José San Martin Neto | 2 | N | |||
Senior Vice President, President of Color, Additives and Inks | John V. Van Hulle | 2 | N | |||
Senior Vice President, President of Performance Products and Solutions | Donald K. Wiseman | 2 | N |
Exhibit 21.1 | ||
SUBSIDIARIES OF THE COMPANY | ||
Name | Formation Jurisdiction | |
Altona Properties Pty Ltd. (37.4% owned) | Australia | |
Auseon Limited | Australia | |
Braspenco Indústria de Compostos de Plásticos Ltda. | Brazil | |
Burton Rubber Company | Delaware | |
Butler Brothers, Inc. (49% owned) | Minnesota | |
Canada Films Venture, Inc. | Ontario | |
Chromatics, Inc. | Connecticut | |
Colorant Chromatics AB | Finland | |
Colorant Chromatics AG | Switzerland | |
Colorant Chromatics Europe B.V. | Netherlands | |
Colorant Chromatics Trading Shanghai, Ltd. | China | |
Colorant GmbH | Germany | |
ColorMatrix Argentina S.A. | Argentina | |
ColorMatrix Asia Limited | Hong Kong | |
ColorMatrix Corporation, The | Ohio | |
ColorMatrix do Brasil Indústria e Comércio de Pigmentos e Aditivos Ltda. | Brazil | |
ColorMatrix Europe BV | Netherlands | |
ColorMatrix Europe Limited | United Kingdom | |
ColorMatrix Group, Inc. | Delaware | |
ColorMatrix Holdings, Inc. | Delaware | |
ColorMatrix Plastic Colorant (Suzhou) Co. Ltd. | China | |
ColorMatrix Russia LLC | Russia | |
ColorMatrix South Africa (Pty) Ltd. | South Africa | |
ColorMatrix UK Holdings Limited | United Kingdom | |
ColorMatrix UK Limited | United Kingdom | |
ColorMatrix-Brazil, LLC | Ohio | |
COMPTEK Kunststoffverarbeitung GmbH | Germany | |
Conexus, LLC | Nevada | |
Franklin-Burlington Plastics, Inc. | Delaware | |
Geon Company Australia Limited, The | Australia | |
Geon Development, Inc. | Ohio | |
Glasforms, Inc. | California | |
GLS Hong Kong Limited | China | |
GLS International, Inc. | Illinois | |
GLS Thermoplastic Alloys (Suzhou) Co., Ltd. | China | |
GLS Trading (Suzhou) Co., Ltd. | China | |
GSDI Specialty Dispersions, Inc. | Ohio | |
Hanna France S.à.r.l. | France | |
Hanna-Itasca Company | Delaware | |
Hanna Proprietary Limited | Delaware | |
Hansand Steamship Company (33% owned) | Delaware | |
Hollinger Development Company | Nevada | |
Juffali-PolyOne Master Batches Company (51% owned) | Saudi Arabia | |
Kimberly Iron (14% owned) | Michigan | |
L.E. Carpenter & Company | Delaware | |
M.A. Hanna Asia Holding Company | Delaware |
Name | Formation Jurisdiction | |
M.A. Hanna Export Services Corp. | Barbados | |
M.A. Hanna Plastics Group, Inc. | Michigan | |
MAG International (50% owned) | Delaware | |
Magenta Master Fibers S.r.l. | Italy | |
Magenta Master Fibers Co., Ltd. | China | |
NEU Specialty Engineered Materials, LLC | Ohio | |
Orangeville-Brampton Rail Access Group, Inc. (16.6% owned) | Canada | |
O'Sullivan Plastics, LLC | Nevada | |
Paramount Coal Company (50% owned) | Virginia | |
P.I. Europe C.V. | Netherlands | |
Pilot Knob Pellet Co. (50% owned) | Missouri | |
Polymer Diagnostics, Inc. | Ohio | |
PolyOne Belgium S.A. | Belgium | |
PolyOne Canada Inc. | Canada | |
PolyOne Color and Additives Germany, GmbH | Germany | |
PolyOne Corporation UK Limited | United Kingdom | |
PolyOne Costa Rica S.A. | Costa Rica | |
PolyOne CR s.r.o. | Czech Republic | |
PolyOne de Mexico Distribution, S. de R.L. de C.V. | Mexico | |
PolyOne de Mexico Manufacturing, S. de R.L. de C.V. | Mexico | |
PolyOne de Mexico S.A. de C.V. | Mexico | |
PolyOne Designed Structures and Solutions LLC | Delaware | |
PolyOne Deutschland, GmbH | Germany | |
PolyOne Distribution Trading (Shanghai) Co. Ltd. | China | |
PolyOne (Dongguan) Vinyl Compounds Company Ltd. | China | |
PolyOne DSS Canada Inc. | New Brunswick | |
PolyOne Engineered Films, LLC | Virginia | |
PolyOne España, S.L. | Spain | |
PolyOne Europe Finance S.à.r.l. | Luxembourg | |
PolyOne Europe Logistics S.A. | Belgium | |
PolyOne Europe S.à.r.l. | Luxembourg | |
PolyOne France S.A.S. | France | |
PolyOne Funding Corporation | Delaware | |
PolyOne Global S.à.r.l. | Luxembourg | |
PolyOne Hong Kong Holding Limited | Hong Kong | |
PolyOne Hungary, Ltd. | Hungary | |
PolyOne International Finance Unlimited Company | Ireland | |
PolyOne International Ltd. | British Virgin Islands | |
PolyOne International Real Estate Corporation | Ohio | |
PolyOne International Trading (Shanghai) Co., Ltd. | China | |
PolyOne Italy S.r.l. | Italy | |
PolyOne Japan K.K. | Japan | |
PolyOne Korea, Ltd. | Korea | |
PolyOne Limited | Cyprus | |
PolyOne LLC | Delaware | |
PolyOne Luxembourg S.à.r.l. | Luxembourg |
Name | Formation Jurisdiction | |
PolyOne Management International Holding, S.à.r.l. | Luxembourg | |
PolyOne Management (Shanghai) Co. Ltd. | China | |
PolyOne Manufacturing S.à.r.l. | Luxembourg | |
PolyOne Poland Manufacturing, Sp.z.o.o. | Poland | |
PolyOne Polimeks Plastik Tic. ve San. A.S. | Turkey | |
PolyOne Polymers India Pvt. Ltd. | India | |
PolyOne Puerto Rico, LLC | Puerto Rico | |
PolyOne Shanghai, China | China | |
PolyOne Shenzhen Co. Ltd. | China | |
PolyOne Singapore Pte Ltd | Singapore | |
PolyOne Suzhou, China | China | |
PolyOne Sweden, A.B. | Sweden | |
PolyOne Tekno Polimer Mühendislik Plastikleri San. ve Tic. A.S. | Turkey | |
PolyOne Tekno Ticaret Mühendislik Plastikleri San. ve Tic. A.S. | Turkey | |
PolyOne Termoplásticos do Brasil Ltda. | Brazil | |
PolyOne Th. Bergmann GmbH | Germany | |
PolyOne (Thailand) Co., Ltd. | Thailand | |
PolyOne Vinyl Compounds Asia Holdings Limited | British Virgin Islands | |
RA Products, Inc. | Michigan | |
Regalite Plastics, LLC | Massachusetts | |
Seola ApS | Denmark | |
Shanghai Colorant Chromatics Co., Ltd. | China | |
Shawnee Holdings, LLC | Virginia | |
Spartech de Mexico Holding Company, S. de R.L. de C.V. | Mexico | |
Spartech Luxembourg Holding Co. S.à.r.l. | Luxembourg | |
Spartech Mexico Holding Company | Missouri | |
Spartech Mexico Holding Company Two | Missouri | |
Spartech Mexico Holdings, LLC | Missouri | |
Spartech, S.A.S. | France | |
Syngold Exploration, Inc. (4.3% owned) | Canada | |
Uniplen Indústria de Polimeros Ltda. | Brazil |
(1) | Registration Statement (Form S-8 No. 333-205919) pertaining to the amended and restated PolyOne Corporation 2010 Equity and Performance Incentive Plan; | ||
(2) | Registration Statement (Form S-8 No. 333-187201) pertaining to the Spartech Corporation 2004 Equity Compensation Plan, as amended, and the Spartech Corporation 2001 Stock Option Plan; | ||
(3) | Registration Statement (Form S-8 No. 333-181787) pertaining to the PolyOne Corporation 2010 Equity and Performance Incentive Plan; | ||
(4) | Registration Statement (Form S-8 No. 333-166775) pertaining to the PolyOne Corporation 2010 Equity and Performance Incentive Plan; | ||
(5) | Registration Statement (Form S-8 No. 333-157486) pertaining to the PolyOne Retirement Savings Plan; | ||
(6) | Registration Statement (Form S-8 No. 333-151057) pertaining to the PolyOne Corporation 2008 Equity and Performance Incentive Plan; | ||
(7) | Registration Statement (Form S-8 No. 333-47796) pertaining to Post Effective Amendment No. 3 on Form S-8 to Form S-4 pertaining to the Geon Company 1993 Incentive Stock Plan, the Geon Company 1995 Incentive Stock Plan, the Geon Company 1998 Interim Stock Award Plan, the Geon Company 1999 Incentive Stock Plan, the PolyOne Corporation Deferred Compensation Plan for Non-Employee Directors and the M.A. Hanna Company Long-Term Incentive Plan; | ||
(8) | Registration Statement (Form S-8 No. 333-141029) pertaining to the PolyOne Retirement Savings Plan and the DH Compounding Company Savings and Retirement Plan and Trust; and | ||
(9) | Registration Statement (Form S-8 No. 333-141028) pertaining to the M.A. Hanna Company Long-Term Incentive Plan; |
/s/ Robert M. Patterson | |
Robert M. Patterson Chairman, President and Chief Executive Officer |
/s/ Bradley C. Richardson | |
Bradley C. Richardson Executive Vice President, Chief Financial Officer |
/s/ Robert M. Patterson | |
Robert M. Patterson Chairman, President and Chief Executive Officer |
/s/ Bradley C. Richardson | |
Bradley C. Richardson Executive Vice President, Chief Financial Officer |
Document And Entity Information - USD ($) $ in Billions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Feb. 01, 2017 |
Jun. 30, 2016 |
|
Document And Entity Information [Abstract] | |||
Entity Registrant Name | POLYONE CORP | ||
Entity Central Index Key | 0001122976 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 82,167,364 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 3.0 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 165.0 | $ 144.7 | $ 78.4 |
Other comprehensive loss: | |||
Translation adjustments | (23.0) | (29.1) | (27.5) |
Unrealized gain on available-for-sale securities | 0.1 | 0.1 | 0.0 |
Total other comprehensive loss | (22.9) | (29.0) | (27.5) |
Total comprehensive income | 142.1 | 115.7 | 50.9 |
Comprehensive loss (income) attributable to noncontrolling interests | 0.2 | (0.1) | 0.8 |
Comprehensive income attributable to PolyOne common shareholders | $ 142.3 | $ 115.6 | $ 51.7 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized (in shares) | 40,000,000 | 40,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common shares, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common shares, authorized (in shares) | 400,000,000 | 400,000,000 |
Common shares, issued (in shares) | 122,200,000 | 122,200,000 |
Treasury stock, shares (in shares) | 39,600,000 | 36,900,000 |
Description Of Business And Summary Of Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description Of Business And Summary Of Significant Accounting Policies | Note 1 — DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business We are a premier provider of specialized polymer materials, services and solutions with operations in specialty engineered materials, color and additive systems, plastic sheet and packaging solutions, and polymer distribution. We are also a highly specialized developer and manufacturer of performance enhancing additives, liquid colorants, and fluoropolymer and silicone colorants. Headquartered in Avon Lake, Ohio, we have employees at manufacturing sites and distribution facilities in North America, South America, Europe, Asia and Africa. We provide value to our customers through our ability to link our knowledge of polymers and formulation technology with our manufacturing and supply chain to provide value added solutions to designers, assemblers and processors of plastics (our customers). When used in these notes to the consolidated financial statements, the terms “we,” “us,” “our”, "PolyOne" and the “Company” mean PolyOne Corporation and its consolidated subsidiaries. Our operations are located primarily in North America, South America, Europe and Asia. Our operations are reported in five reportable segments: Color, Additives and Inks; Specialty Engineered Materials; Designed Structures and Solutions; Performance Products and Solutions; and PolyOne Distribution. See Note 14, Segment Information, for more information. Accounting Standards Adopted In May 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2015-07, Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or its Equivalent) (ASU 2015-07). ASU 2015-07 amended Accounting Standards Codification (ASC) 820, Fair Value Measurements, and removed the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value (NAV) per share. The amendment also limits certain disclosures for investments for which the entity has elected to measure at fair value using the NAV per share. We adopted this standard as of December 31, 2016 and reflected the required retrospective application to the disclosures in Note 10, Employee Benefit Plans. Accounting Standards Not Yet Adopted In May 2014, the FASB issued Auditing Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09). Under this standard, a company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard implements a five-step process for customer contract revenue recognition that focuses on transfer of control. We are analyzing the impact of the standard on our contract portfolio and reviewing our current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The implementation team is currently assessing the adoption method and impact that ASU 2014-09, along with the subsequent updates and clarifications, will have on our Consolidated Financial Statements. The Company will adopt ASU 2014-09 no later than the required date of January 1, 2018. In July 2015, the FASB issued Accounting Standards Update 2015-11, Inventory (Topic 300): Simplifying the Measurement of Inventory (ASU 2015-11), which applies to inventory measured using first-in, first out (FIFO) or average cost. This update requires that an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This update is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. The Company will adopt ASU 2015-11 no later than the required date of January 1, 2017. We do not expect this standard to have a material impact on our Consolidated Financial Statements. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842) (ASU 2016-02), which requires a lessee to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with a lease term of more than twelve months. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of expenses and cash flows arising from a lease. The Company will adopt ASU 2016-02 no later than the required date of January 1, 2019. We are currently assessing the impact this standard will have on our Consolidated Financial Statements. In March 2016, the FASB issued Accounting Standards Update 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09), which simplifies the accounting for share-based payment transactions. This update requires that excess tax benefits and tax deficiencies be recognized as income tax expense or benefit in the Consolidated Statements of Income rather than additional paid-in capital. Additionally, the excess tax benefits will be classified along with other income tax cash flows as an operating activity, rather than a financing activity, on the Statement of Cash Flows. Further, the update allows an entity to make a policy election to recognize forfeitures as they occur or estimate the number of awards expected to be forfeited. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively, with certain cumulative effect adjustments. The Company will adopt ASU 2016-09 no later than the required date of January 1, 2017. Upon adoption, we will assess the impact of any share price movement on the income tax expense or benefit recognized, but we do not expect this standard to have a material impact on our Consolidated Financial Statements. In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires the allowance recorded for trade receivables to be measured by expected loss rather than incurred loss. Expected loss measurement will be based on historical experience, current conditions and reasonable and supportable forecasts. The Company will adopt ASU 2016-13 no later than the required date of January 1, 2020. We do not expect this standard to have a material impact on our Consolidated Financial Statements. In October 2016, the FASB issued Accounting Standards Update 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16), which requires companies to recognize the income tax effects of intercompany sales or transfers of assets, other than inventory, in the income statement as income tax expense (or benefit) in the period the sale or transfer occurs. There would be no material impact on our Consolidated Financial Statements from intercompany transactions completed as of December 31, 2016. We will continue to assess the impact of ASU 2016-16 on future transactions and the Company will adopt ASU 2016-16 no later than the required date of January 1, 2018. In January 2017, the FASB issued Auditing Standards Update 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. This standard removes the second step of the goodwill impairment test, where a determination of the fair value of individual assets and liabilities of a reporting unit were needed to measure the goodwill impairment. Under this updated standard, goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. We will adopt this update for any impairment test performed after January 1, 2017 as permitted under the standard. Consolidation and Basis of Presentation The consolidated financial statements include the accounts of PolyOne and its subsidiaries. All majority-owned affiliates over which we have control are consolidated. Transactions with related parties, including joint ventures, are in the ordinary course of business. Reclassifications Certain reclassifications of the prior period amounts and presentation have been made to conform to the presentation for the current period. Use of Estimates Preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from these estimates. Cash and Cash Equivalents We consider all highly liquid investments purchased with a maturity of less than three months to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value. Allowance for Doubtful Accounts We evaluate the collectability of receivables based on a combination of factors. We regularly analyze significant customer accounts and, when we become aware of a specific customer’s inability to meet its financial obligations to us, such as in the case of a bankruptcy filing or deterioration in the customer’s operating results or financial position, we record a specific allowance for bad debt to reduce the related receivable to the amount we reasonably believe is collectible. We also record bad debt allowances for all other customers based on a variety of factors including the length of time the receivables are past due, the financial health of the customer, economic conditions and historical experience. In estimating the allowances, we take into consideration the existence of credit insurance. If circumstances related to specific customers change, our estimates of the recoverability of receivables could be adjusted further. Accounts receivable balances are written off against the allowance for doubtful accounts after a final determination of uncollectability has been made. The allowance for doubtful accounts was $2.6 million and $3.0 million as of December 31, 2016 and 2015, respectively. Inventories External purchases of raw materials and finished goods are valued at weighted average cost. Manufactured finished goods are stated at the lower of cost or market using the first-in, first-out (FIFO) method. Long-lived Assets Property, plant and equipment is carried at cost, net of depreciation and amortization that is computed using the straight-line method over the estimated useful lives of the assets, which generally ranges from three to 15 years for machinery and equipment and up to 40 years for buildings. During 2016, 2015 and 2014, we depreciated certain assets associated with closing manufacturing locations over a shortened life (through a cease-use date). Software is amortized over periods not exceeding 10 years. Property, plant and equipment is generally depreciated on accelerated methods for income tax purposes. We expense repair and maintenance costs as incurred. We capitalize replacements and betterments that increase the estimated useful life of an asset. We retain fully depreciated assets in property and accumulated depreciation accounts until we remove them from service. In the case of sale, retirement or disposal, the asset cost and related accumulated depreciation balance is removed from the respective account, and the resulting net amount, less any proceeds, is included as a component of income from continuing operations in the accompanying Consolidated Statements of Income. We account for operating and capital leases under the provisions of FASB Accounting Standards Codification (ASC) Topic 840, Leases. Finite-lived intangible assets, which consist primarily of customer relationships, patents and technology are amortized over their estimated useful lives. The remaining useful lives range up to 20 years. We assess the recoverability of long-lived assets when events or changes in circumstances indicate that we may not be able to recover the assets’ carrying amount. We measure the recoverability of assets to be held and used by a comparison of the carrying amount of the asset to the expected future undiscounted cash flows associated with the asset. We measure the amount of impairment of long-lived assets as the amount by which the carrying value of the asset exceeds the fair value of the asset, which is generally determined based on projected discounted future cash flows or appraised values. No such impairments were recognized during 2016, 2015 or 2014. Goodwill and Indefinite Lived Intangible Assets Goodwill is the excess of the purchase price paid over the fair value of the net assets of the acquired business. Goodwill is tested for impairment at the reporting unit level. Our reporting units have been identified at the operating segment level, or in most cases, one level below the operating segment level. Goodwill is allocated to the reporting units based on the estimated fair value at the date of acquisition. Our annual measurement date for testing impairment of goodwill and indefinite-lived intangibles is October 1. We completed our testing of impairment as of October 1, noting no impairment in 2016, 2015 or 2014. Additionally, as noted within our "Critical Accounting Policies and Estimates" section of Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations", our Customer Engineered Services reporting unit, which is included in our Designed Structures and Solutions segment, is at-risk of future impairment. The future occurrence of a potential indicator of impairment would require an interim assessment for some or all of the reporting units prior to the next required annual assessment on October 1, 2017. Refer to Note 16, Fair Value, for further discussion of our approach for assessing the fair value of goodwill. Litigation Reserves FASB ASC Topic 450, Contingencies, requires that we accrue for loss contingencies associated with outstanding litigation, claims and assessments for which management has determined it is probable that a loss contingency exists and the amount of loss can be reasonably estimated. We recognize expense associated with professional fees related to litigation claims and assessments as incurred. Refer to Note 11, Commitments and Contingencies, for further information. Derivative Financial Instruments FASB ASC Topic 815, Derivative and Hedging, requires that all derivative financial instruments, such as foreign exchange contracts, be recognized in the financial statements and measured at fair value, regardless of the purpose or intent in holding them. We are exposed to foreign currency changes in the normal course of business. We have established policies and procedures that manage this exposure through the use of financial instruments. By policy, we do not enter into these instruments for trading purposes or speculation. These instruments are not designated as hedges and, as a result, are adjusted to fair value, with the resulting gains and losses recognized in the accompanying Consolidated Statements of Income immediately. Pension and Other Post-retirement Plans We account for our pensions and other post-retirement benefits in accordance with FASB ASC Topic 715, Compensation — Retirement Benefits. We immediately recognize actuarial gains and losses in our operating results in the year in which the gains or losses occur. Refer to Note 10, Employee Benefit Plans, for more information. Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss in 2016, 2015 and 2014 were as follows:
Fair Value of Financial Instruments FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosures of the fair value of financial instruments. The estimated fair values of financial instruments were principally based on market prices where such prices were available and, where unavailable, fair values were estimated based on market prices of similar instruments. See Note 16, Fair Value, for further discussion. Foreign Currency Translation Revenues and expenses are translated at average currency exchange rates during the related period. Assets and liabilities of foreign subsidiaries are translated using the exchange rate at the end of the period. The resulting translation adjustments are recorded as accumulated other comprehensive income or loss. Gains and losses resulting from foreign currency transactions, including intercompany transactions that are not considered permanent investments, are included in Other income (expense), net in the accompanying Consolidated Statements of Income. Revenue Recognition We recognize revenue when the revenue is realized or realizable and has been earned. We recognize revenue when a firm sales agreement is in place, shipment has occurred and collectability is reasonably assured. Shipping and Handling Costs Shipping and handling costs are included in cost of sales. Research and Development Expense Research and development costs of $54.5 million in 2016, $53.0 million in 2015 and $53.4 million in 2014, are charged to expense as incurred. Environmental Costs We expense costs that are associated with managing hazardous substances and pollution in ongoing operations on a current basis. Costs associated with environmental contamination are accrued when it becomes probable that a liability has been incurred and our proportionate share of the cost can be reasonably estimated. Any such provision is recognized using the Company's best estimate of the amount of loss incurred, or at the lower end of an estimated range, when a single best estimate is not determinable. In some cases, the Company may be able to recover a portion of the costs relating to these obligations from insurers or other third parties; however, the Company records such amounts only when it is probable that they will be collected. Share-Based Compensation We account for share-based compensation under the provisions of FASB ASC Topic 718, Compensation — Stock Compensation, which requires us to estimate the fair value of share-based awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the accompanying Consolidated Statements of Income. As of December 31, 2016, we had one active share-based employee compensation plan, which is described more fully in Note 13, Share-Based Compensation. Income Taxes Deferred income tax liabilities and assets are determined based upon the differences between the financial reporting and tax basis of assets and liabilities and are measured using the tax rate and laws currently in effect. In accordance with FASB ASC Topic 740, Income Taxes, we evaluate our deferred income taxes to determine whether a valuation allowance should be established against the deferred tax assets or whether the valuation allowance should be reduced based on consideration of all available evidence, both positive and negative, using a “more likely than not” standard. |
Business Combinations |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | Note 2 — BUSINESS COMBINATIONS 2016 Significant Acquisitions On January 29, 2016, the Company completed the acquisition of certain technologies and assets from Kraton Performance Polymers, Inc. (Kraton), to expand its global footprint and expertise in thermoplastic elastomer (TPE) innovation and design, for approximately $72.8 million. The results of operations of Kraton are included in the Company's Consolidated Statements of Income for the period subsequent to the date of the acquisition and are reported in the Specialty Engineered Materials segment. The purchase price allocation for Kraton is final. On July 26, 2016, the Company completed the acquisition of substantially all of the assets of Gordon Composites, Inc. (Gordon Composites), Polystrand, Inc. (Polystrand) and Gordon Holdings, Inc. (Gordon Holdings). Gordon Composites develops high strength profiles and laminates for use in vertical and crossbow archery, sports and recreation equipment, prosthetics and office furniture systems. Polystrand operates in the advanced area of continuous reinforced thermoplastic composite technology space, a next generation material science that delivers the high strength and lightweight characteristics of composites, further enhanced with the design flexibility to form more complex shapes. The purchase price was $85.5 million and the results of operations of the acquired businesses are included in the Company's Consolidated Statements of Income for the period subsequent to the date of the acquisition and are reported in the Specialty Engineered Materials segment. The preliminary purchase price allocation is subject to change and not yet finalized. The purchase price allocation for the acquisitions of Gordon Composites, Polystrand and Kraton resulted in goodwill of $74.9 million, $41.3 million in intangible assets, $31.7 million in property, plant and equipment, $27.8 million in inventory and $17.4 million of capital lease obligations. Goodwill, intangible assets and property, plant and equipment recognized as a result of these acquisitions are deductible for tax purposes. Sales and operating income for Gordon Composites, Polystrand and Kraton recognized in the results of operations, subsequent to the acquisition date, were $48.7 million and $4.8 million, respectively, for the year ended December 31, 2016. The fair value of the intangible assets acquired during the year ended December 31, 2016, including their estimated useful lives and valuation methodology are as follows:
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Goodwill And Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets | Note 3 — GOODWILL AND INTANGIBLE ASSETS The total purchase price associated with acquisitions is allocated to the fair value of assets acquired and liabilities assumed based on their fair values at the acquisition date, with excess amounts recorded as goodwill. Goodwill as of December 31, 2016 and 2015, and changes in the carrying amount of goodwill by segment were as follows:
At December 31, 2016, PolyOne had $100.3 million of indefinite-lived intangible assets that are not subject to amortization, consisting of a trade name of $33.2 million acquired as part of the acquisition of GLS Corporation (GLS), trade names of $63.1 million acquired as part of the acquisition of ColorMatrix Group, Inc. (ColorMatrix) and a trade name of $4.0 million acquired as part of the acquisition of Gordon Composites. Indefinite and finite-lived intangible assets consisted of the following:
Amortization of finite-lived intangible assets for the years ended December 31, 2016, 2015 and 2014 was $22.0 million, $19.9 million and $19.2 million, respectively. We expect finite-lived intangibles amortization expense for the next five years as follows:
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Employee Separation and Restructuring Costs |
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Employee Separation and Restructuring Costs | Note 4 — EMPLOYEE SEPARATION AND RESTRUCTURING COSTS Employee separation and restructuring charges recognized in 2016, 2015 and 2014 were as follows:
These charges are primarily associated with the current Designed Structures and Solutions (DSS) segment and the former Spartech Corporation (Spartech) businesses, which are further detailed below. In the second half of 2015, PolyOne determined it would close two manufacturing facilities within the DSS segment and take other corporate actions to reduce administrative costs. These actions were taken as a result of Designed Structures and Solutions' declining results and near term outlook. During the years ended December 31, 2016 and 2015, we recognized charges of $10.0 million and $17.1 million, respectively. Total costs for these actions to-date has been $27.1 million, which includes $8.0 million of severance costs, $13.5 million of asset-related charges, including accelerated depreciation of $9.3 million, and $5.6 million of other ongoing costs associated with exiting these plants and transferring equipment. Of the total charges, approximately $13.6 million were cash costs. These actions are substantially complete as of December 31, 2016. In addition to the actions noted above, we recognized $9.0 million of charges during 2016, primarily related to restructuring actions taken at other North American locations. In June 2014, PolyOne determined it would close its Diadema and Joinville, Brazil facilities that were acquired in 2011 with the acquisition of Uniplen Industria de Polimeros Ltda. These actions were taken to streamline operations and improve our financial performance in Brazil. We recognized $1.3 million and $17.0 million related to these actions in 2015 and 2014, respectively. Total costs of $18.3 million in connection with these actions include $11.2 million of asset-related charges, including accelerated depreciation, $2.7 million of severance and $4.4 million of other associated costs. Of the total charges, approximately $7.0 million were cash costs. During 2014, in addition to the actions noted above, we recognized $17.4 million of employee separation and restructuring costs primarily in Europe related to the closure of our Bendorf, Germany manufacturing plant along with other reductions in force across Europe. In 2013, PolyOne determined it would close seven former Spartech manufacturing facilities and one administrative office and relocate operations to other PolyOne facilities. The closure of these manufacturing facilities was part of the Company’s efforts to improve service, on time delivery and quality as we align assets with our customers' needs. In addition to these actions, PolyOne incurred severance costs related to former Spartech executives and other employees, as well as fixed asset-related charges and other ongoing costs associated with restructuring actions that were underway prior to PolyOne's acquisition of Spartech. From the date of the Spartech acquisition to December 31, 2015, the Company incurred $123.4 million of charges in connection with the 2013 Spartech actions. Costs include $47.2 million of asset-related charges, including accelerated depreciation and asset write-offs, and total cash charges of $76.2 million, including $25.9 million for severance and $50.3 million of other associated costs. Of the total cash charges, approximately $64.0 million relates to manufacturing realignment actions initiated by PolyOne. We recognized $19.6 million and $59.7 million related to these actions and incurred $15.9 million and $44.8 million of cash payments during the years ended December 31, 2015 and 2014, respectively. There were no charges related to the Spartech actions during the year ended December 31, 2016 as these actions were complete as of December 31, 2015. |
Financing Arrangements |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing Arrangements | Note 5 — FINANCING ARRANGEMENTS Total debt consisted of the following:
On November 12, 2015, PolyOne entered into a senior secured term loan having an aggregate principal amount of $550.0 million. On June 15, 2016, the Company entered into an amendment to its senior secured term loan. Under the terms of the amended senior secured term loan, the margin was reduced by 25 basis points to 275 basis points. At the Company's discretion, interest is based upon (i) a margin rate of 275 basis points plus the 1-, 2-, 3-, or 6-month LIBOR, subject to a floor of 75 basis points or (ii) a margin rate of 175 basis points plus a Prime rate, subject to a floor of 175 basis points. In connection with the amendment, the Company recognized $0.4 million of Debt extinguishment costs in our Consolidated Statements of Income. On August 3, 2016, the Company increased the senior secured term loan due 2022 by $100.0 million in connection with the acquisition of substantially all of the assets of Gordon Composites, Polystrand and Gordon Holdings. Repayments in the amount of one percent of the aggregate principal amount as of August 3, 2016 are payable annually, while the remaining balance matures on November 12, 2022. The total aggregate principal repayments as of December 31, 2016 was $6.0 million. The weighted average annual interest rate for the senior secured term loan for the years ended December 31, 2016 and 2015 was 3.61% and 3.75%, respectively. PolyOne has outstanding $600.0 million aggregate principal amount of senior notes, which mature on March 15, 2023. The senior notes bear an interest rate of 5.25% per year, payable semi-annually, in arrears, on March 15 and September 15 of each year. The Company maintains a senior secured revolving credit facility, which matures on March 1, 2018, which provides a maximum borrowing facility size of $400.0 million, subject to a borrowing base with advances against certain U.S. and Canadian accounts receivable, inventory and other assets as specified in the agreement. We have the option to increase the availability under the facility to $450.0 million, subject to meeting certain requirements and obtaining commitments for such increase. The revolving credit facility has a U.S. and a Canadian line of credit. Currently there are no borrowings on the U.S. or Canadian portion of the facility. Advances under the U.S. portion of our revolving credit facility bear interest, at the Company’s option, at a Base Rate or a LIBOR Rate plus an applicable margin. The Base Rate is a fluctuating rate equal to the greater of (i) the Federal Funds Rate plus one-half percent, (ii) the prevailing LIBOR Rate plus one percent, and (iii) the prevailing Prime Rate. The applicable margins vary based on the Company’s daily average excess availability during the previous quarter. The weighted average annual interest rate under this facility for the year ended December 31, 2016 and 2015 were 3.15% and 2.46%, respectively. As of December 31, 2016 and 2015, we had no borrowings under our revolving credit facility, which had availability of $382.7 million and $338.7 million, respectively. The agreements governing our revolving credit facility and our senior secured term loan, and the indentures and credit agreements governing other debt, contain a number of customary financial and restrictive covenants that, among other things, limit our ability to: consummate asset sales, incur additional debt or liens, consolidate or merge with any entity or transfer or sell all or substantially all of our assets, pay dividends or make certain other restricted payments, make investments, enter into transactions with affiliates, create dividend or other payment restrictions with respect to subsidiaries, make capital investments and alter the business we conduct. As of December 31, 2016, we were in compliance with all covenants. The Company also has a credit line of $16.0 million with Saudi Hollandi Bank. The credit line has an interest rate equal to the Saudi Arabia Interbank Offered Rate plus a fixed rate of 0.85% and is subject to annual renewal. Borrowings under the credit line were primarily used to fund capital expenditures related to the manufacturing facility in Jeddah, Saudi Arabia. As of December 31, 2016, letters of credit under the credit line were $0.2 million and borrowings were $12.3 million with an interest rate of 2.84%. As of December 31, 2015, letters of credit under the credit line were $0.2 million and borrowings were $12.6 million with an interest rate of 1.78%. As of December 31, 2016 and 2015, there was remaining availability on the credit line of $3.5 million and $3.2 million, respectively. Aggregate maturities of the principal amount of debt for the next five years and thereafter are as follows:
Included in Interest expense, net for the years ended December 31, 2016, 2015 and 2014 was interest income of $0.8 million, $1.0 million and $1.1 million, respectively. Total interest paid on debt was $56.3 million in 2016, $65.9 million in 2015 and $59.8 million in 2014. |
Leasing Arrangements |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Leasing Arrangements | Note 6 — LEASING ARRANGEMENTS We lease certain manufacturing facilities, warehouse space, machinery and equipment, automobiles, railcars, computers and software under operating leases. Rent expense from continuing operations was $27.0 million in 2016, $27.1 million in 2015 and $30.4 million in 2014. Future minimum lease payments under non-cancelable operating leases with initial lease terms longer than one year as of December 31, 2016 are as follows:
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Inventories, Net |
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Inventories, Net | Note 7 — INVENTORIES, NET Components of Inventories, net are as follows:
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Property, Net |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Net | Note 8 — PROPERTY, NET Components of Property, net are as follows:
Depreciation expense from continuing operations was $82.0 million in 2016, $84.4 million in 2015 and $104.7 million in 2014. Included in depreciation expense from continuing operations was accelerated depreciation of $3.5 million, $6.2 million and $23.1 million during 2016, 2015 and 2014, respectively, related to restructuring actions. |
Other Balance Sheet Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Balance Sheet Liabilities | Note 9 — OTHER BALANCE SHEET LIABILITIES Other liabilities at December 31, 2016 and 2015 consist of the following:
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Employee Benefit Plans |
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Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Note 10 — EMPLOYEE BENEFIT PLANS We recognize actuarial gains and losses in our operating results in the year in which the gains or losses occur. These gains and losses are generally only measured annually as of December 31 and, accordingly, are recorded during the fourth quarter of each year. We recognized a benefit of $8.4 million in the fourth quarter of 2016 related to the actuarial gain during the year. We recognized a charge of $11.6 million and $56.5 million in the fourth quarter of 2015 and 2014, respectively, related to the actuarial losses during the year. All U.S. qualified defined benefit pension plans are frozen, no longer accrue benefits and are closed to new participants. We have foreign pension plans that accrue benefits. The plans generally provide benefit payments using a formula that is based upon employee compensation and length of service. The following tables present the change in benefit obligation, change in plan assets and components of funded status for defined benefit pension and post-retirement health care benefit plans.
Amounts included in the accompanying Consolidated Balance Sheets as of December 31 are as follows:
As of December 31, 2016 and 2015, we had plans with total projected and accumulated benefit obligations in excess of the related plan assets as follows:
Weighted-average assumptions used to determine benefit obligations at December 31:
The following table summarizes the components of net periodic benefit cost or gain that was recognized during each of the years in the three-year period ended December 31, 2016.
In 2016, we recognized an $8.4 million mark-to-market gain that was primarily a result of actual asset returns that were $5.7 million higher than our assumed returns and updated mortality assumptions. Partially offsetting these gains was the decrease in our year end discount rates, from 4.10% to 3.97%. In 2015, we recognized an $11.6 million mark-to-market charge that was primarily a result of actual asset returns that were $33.9 million lower than our assumed returns. Partially offsetting the lower asset returns was the increase in our year end discount rates, from 3.88% to 4.10%, and updated mortality assumptions. Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
The expected long-term rate of return on pension assets was determined after considering the historical and forward looking long-term asset returns by asset category and the expected investment portfolio mix. Our pension investment strategy is to diversify the portfolio among asset categories to enhance the portfolio’s risk-adjusted return as well as insulate it from exposure to changes in interest rates. Our asset mix considers the duration of plan liabilities, historical and expected returns of the investments, and the funded status of the plan. The pension asset allocation is reviewed and actively managed based on the funded status of the plan. As the funded status of the plan increases, the asset allocation is adjusted to increase the mix of fixed income investments and match the duration of those investments with the duration of the plan liabilities. Based on the current funded status of the plan, our pension asset investment allocation guidelines are to invest 70% to 80% in fixed income securities and 20% to 30% in equity securities. The plan keeps a minimal amount of cash available to fund benefit payments. These alternative investments may include funds of multiple asset investment strategies and funds of hedge funds. The fair values of pension plan assets at December 31, 2016 and 2015, by asset category, are as follows:
2016 Pension Plan Assets Other assets are primarily insurance contracts for international plans. The U.S. equity common collective funds are predominately invested in equity securities actively traded in public markets. The international and global equity common collective funds have broadly diversified investments across economic sectors and focus on low volatility, long-term investments. The fixed income common collective funds consist primarily of publicly traded United States fixed interest obligations (principally investment grade bonds and government securities).
2015 Pension Plan Assets Equities represent U.S. publicly-traded equity securities of companies, varying in size, with a focus on growth and value. The registered investment company non-US equity funds invest in underlying securities that are actively traded in public, non-US markets. The United States treasuries and fixed income securities consist of publicly traded United States and non-United States fixed interest obligations (principally corporate and government bonds and debentures). Other assets are primarily insurance contracts for international plans. Short-term investments in common collective funds represent cash and other short-term investments. The U.S. equity and fixed income common collective funds are invested in equity and investment grade fixed income securities, respectively, and these securities are actively traded in public markets. Level 1 assets are valued based on quoted market prices. Level 2 investments are valued based on quoted market prices and/or other market data for the same or comparable instruments and transactions of the underlying fixed income investments. The insurance contracts included in the other asset category are valued at the transacted price. Common collective funds are valued at the net asset value of units held by the fund at year end. The unit value is determined by the total value of fund assets divided by the total number of units of the fund owned. The estimated future benefit payments for our pension and health care plans are as follows:
We currently estimate that 2017 employer contributions will be $4.4 million to all qualified and non-qualified pension plans and $1.2 million to all healthcare benefit plans. PolyOne sponsors various voluntary retirement savings plans (RSP). Under the provisions of the plans, eligible employees receive defined Company contributions and are eligible for Company matching contributions based on their eligible earnings contributed to the plan. In addition, we may make discretionary contributions to the plans for eligible employees based on a specific percentage of each employee’s compensation. Following are our contributions to the RSP:
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Commitments And Contingencies |
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Commitments And Contingencies | Note 11 — COMMITMENTS AND CONTINGENCIES Environmental — We have been notified by federal and state environmental agencies and by private parties that we may be a potentially responsible party (PRP) in connection with the environmental investigation and remediation of certain sites. While government agencies frequently assert that PRPs are jointly and severally liable at these sites, in our experience, the interim and final allocations of liability costs are generally made based on the relative contribution of waste. We may also initiate corrective and preventive environmental projects of our own to ensure safe and lawful activities at our operations. We believe that compliance with current governmental regulations at all levels will not have a material adverse effect on our financial position, results of operations or cash flows. In September 2007, we were informed of rulings by the United States District Court for the Western District of Kentucky on several pending motions in the case of Westlake Vinyls, Inc. v. Goodrich Corporation, et al., which had been pending since 2003. The Court held that PolyOne must pay the remediation costs at the former Goodrich Corporation Calvert City facility (now largely owned and operated by Westlake Vinyls), together with certain defense costs of Goodrich Corporation. The rulings also provided that PolyOne can seek indemnification for contamination attributable to Westlake Vinyls. The environmental obligation at the site arose as a result of an agreement between The B.F.Goodrich Company (n/k/a Goodrich Corporation) and our predecessor, The Geon Company, at the time of the initial public offering in 1993, by which The Geon Company became a public company, to indemnify Goodrich Corporation for environmental costs at the site. At the time, neither PolyOne nor The Geon Company ever owned or operated the facility. Following the Court rulings, the parties to the litigation entered into settlement negotiations and agreed to settle all claims regarding past environmental costs incurred at the site. The settlement agreement provides a mechanism to pursue allocation of future remediation costs at the Calvert City site to Westlake Vinyls. While we do not currently assume any allocation of costs in our current accrual, we will adjust our accrual, in the future, consistent with any such future allocation of costs. A remedial investigation and feasibility study (RIFS) is underway at Calvert City. During the third quarter of 2013, we submitted a remedial investigation report to the United States Environmental Protection Agency (USEPA). The USEPA required certain changes to the remedial investigation report and provided a final report in the third quarter of 2015. Additionally, in the third quarter of 2015, the USEPA assumed responsibility for the completion of the feasibility study. In 2016, the USEPA conducted additional site investigations from which results are still being reviewed. We continue to pursue available insurance coverage related to this matter and recognize gains as we receive reimbursement. No receivable has been recognized for future recoveries. On March 13, 2013, PolyOne acquired Spartech. One of Spartech's subsidiaries, Franklin-Burlington Plastics, Inc. (Franklin-Burlington), operated a plastic resin compounding facility in Kearny, New Jersey, located adjacent to the Passaic River. The USEPA has requested that companies located in the area of the lower Passaic River, including Franklin-Burlington, cooperate in an investigation of contamination of approximately 17 miles of the lower Passaic River (the lower Passaic River Study Area). In response, Franklin-Burlington and approximately 70 other companies (collectively, the Cooperating Parties) agreed, pursuant to an Administrative Order on Consent (AOC) with the USEPA, to assume responsibility for development of a RIFS of the lower Passaic River Study Area. The RIFS costs are exclusive of any costs that may ultimately be required to remediate the lower Passaic River Study Area or costs associated with natural resource damages that may be assessed. By agreeing to bear a portion of the cost of the RIFS, Franklin-Burlington did not admit to any liability or agree to bear any such remediation or natural resource damage costs. In February 2015, the Cooperating Parties submitted to the USEPA a remedial investigation report for the lower Passaic River Study Area. In March 2015, Franklin-Burlington, along with nine other PRPs, submitted a de minimis settlement petition to the USEPA, asserting the ten entities contributed little or no impact to the lower Passaic River and seeking a meeting to commence settlement discussions. In April 2015, the Cooperating Parties submitted a feasibility study to the USEPA. The feasibility study does not contemplate who is responsible for remediation nor does it determine how such costs will be allocated to PRPs. The Cooperating Parties are currently revising their RIFS, which has not yet been approved by the USEPA, as part of continuing technical discussions with the USEPA. On March 4, 2016, the USEPA issued a Record of Decision selecting a remedy for an eight-mile portion of the lower Passaic River Study Area at an estimated and discounted cost of $1.4 billion. On March 31, 2016, the USEPA sent a Notice of Potential Liability (the Notice) to over 100 companies, including Franklin-Burlington, and several municipalities for this eight-mile portion, in which the USEPA stated it intended to negotiate an AOC for Remedial Design with Occidental Chemical Corporation (OCC) and, upon signature, planned to negotiate a consent decree with other major PRPs to perform remedial actions. The Notice did not identify the “other major PRPs.” Further, the Notice communicated that the USEPA will provide to certain parties separate notice of the opportunity to discuss a cash-out settlement at a later date. On September 30, 2016, the USEPA reached an agreement with OCC, which orders OCC to perform the remedial design for the lower eight mile portion of the Passaic River. Based on the currently available information, we have found no evidence that Franklin-Burlington contributed any of the primary contaminants of concern to the lower Passaic River. Any allocation to Franklin-Burlington, including a final resolution of our de minimis petition or other opportunity for cash-out settlement, or further appropriate legal actions has not been determined. As a result of these uncertainties, we are unable to estimate a liability, if any, related to this matter. As of December 31, 2016, we have not accrued for costs of remediation related to the lower Passaic River. Our Consolidated Balance Sheet includes accruals totaling $117.3 million and $119.9 million as of December 31, 2016 and 2015, respectively, based on our estimates of probable future environmental expenditures relating to previously contaminated sites. These undiscounted amounts are included in Accrued expenses and other liabilities and Other non-current liabilities on the accompanying Consolidated Balance Sheets. The accruals represent our best estimate of probable future costs that we can reasonably estimate, based upon currently available information and technology and our view of the most likely remedy. Depending upon the results of future testing, completion and results of remedial investigation and feasibility studies, the ultimate remediation alternatives undertaken, changes in regulations, technology development, new information, newly discovered conditions and other factors, it is reasonably possible that we could incur additional costs in excess of the amount accrued at December 31, 2016. However, such additional costs, if any, cannot be currently estimated. The following table details the changes in the environmental accrued liabilities:
Included in Cost of sales in the accompanying Consolidated Statements of Income are insurance recoveries received for previously incurred environmental costs of $6.1 million, $3.5 million and $3.7 million in 2016, 2015 and 2014, respectively. Such insurance recoveries are recognized as a gain when received. Other Litigation — We are involved in various pending or threatened claims, lawsuits and administrative proceedings, all arising from the ordinary course of business concerning commercial, product liability, employment and environmental matters that seek remedies or damages. We believe that the probability is remote that losses in excess of the amounts we have accrued would be materially adverse to our financial position, results of operations or cash flows. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Note 12 — INCOME TAXES Income from continuing operations, before income taxes is summarized below based on the geographic location of the operation to which such earnings are attributable. Income from continuing operations, before income taxes consists of the following:
A summary of income tax expense (benefit) from continuing operations is as follows:
A reconciliation of the U.S. federal statutory tax rate to the consolidated effective income tax rate along with a description of significant or unusual reconciling items is included below.
The effective tax rates for all periods differed from the U.S. federal statutory tax rate as a result of permanent items, state and local income taxes, differences in foreign tax rates and certain unusual items. Permanent items primarily consist of income or expense not taxable or deductible. Significant or unusual items impacting the effective income tax rate are described below. 2015 Significant items Amending U.S. federal income tax returns for 2004 through 2012 to use foreign tax credits decreased the effective tax rate by 18.3% ($30.7 million). Uncertain tax positions increased the effective tax rate by 0.6% ($1.0 million). The reversal of an uncertain tax position due to the expiration of the statute of limitations decreased the effective tax rate by 5.9% ($9.9 million). A foreign court ruling, which settled an uncertain position taken in a prior year, increased the effective tax rate by 4.7% ($7.9 million). Other unfavorable uncertain tax positions more than offset the net decrease in the effective tax rate of these two items. 2014 Significant items Tax benefits on certain foreign investments decreased the effective tax rate by 17.0% ($15.0 million) related to the write-off of our investment in certain Brazil subsidiaries for tax purposes and operating losses primarily as a result of restructuring actions to close certain Brazil facilities discussed in Note 4, Employee Separation and Restructuring Costs. Permanent tax differences decreased the effective tax rate by 2.1% ($1.9 million) primarily related to foreign tax law changes and the utilization of foreign tax credits. Changes in valuation allowances increased the effective tax rate by 7.8% ($6.9 million) primarily related to certain Brazilian subsidiaries as a result of cumulative operating losses. Components of our deferred tax assets (liabilities) as of December 31, 2016 and 2015 were as follows:
As of December 31, 2016, the Company had $23.0 million of U.S. foreign tax credit carryforwards that expire between 2018 and 2025. The Company plans to utilize all U.S. foreign tax credits prior to the expiration period. As of December 31, 2016, we had gross state net operating loss carryforwards of $173.2 million that expire between 2017 and 2032. Various foreign subsidiaries have gross net operating loss carryforwards totaling $85.2 million that expire between 2017 and 2036 with limited exceptions that have indefinite carryforward periods. We have provided valuation allowances of $17.5 million against certain foreign and state net operating loss carryforwards that are expected to expire prior to utilization. In addition, we have valuation allowances of $2.3 million against other net deferred tax assets. No provision has been made for income taxes on undistributed earnings of consolidated non-U.S. subsidiaries of $336.9 million as of December 31, 2016, because our intention is to reinvest indefinitely undistributed earnings of our foreign subsidiaries. It is not practicable to estimate the additional income taxes and applicable foreign withholding taxes that would be payable on the remittance of such undistributed earnings. We made worldwide income tax payments of $50.3 million and received refunds of $2.4 million in 2016. We made worldwide income tax payments of $57.7 million and $70.0 million in 2015 and 2014, respectively, and received refunds of $2.6 million and $4.2 million in 2015 and 2014, respectively. Payments made in 2014 included U.S. federal tax payments related to 2013 U.S. federal income of $9.7 million. The Company records provisions for uncertain tax positions in accordance with ASC Topic 740, Income Taxes. A reconciliation of unrecognized tax benefits is as follows:
We recognize interest and penalties related to uncertain tax positions in the provision for income taxes. As of December 31, 2016 and 2015, we had $3.3 million and $4.5 million accrued for interest and penalties, respectively. Although the timing and outcome of tax settlements are uncertain, it is reasonably possible that during the next twelve months a reduction in unrecognized tax benefits may occur up to $0.7 million based on the outcome of tax examinations and the expiration of statutes of limitations. If all unrecognized tax benefits were recognized, the net impact on the provision for income tax expense would be a benefit of $5.8 million. The Company is currently being audited by federal, state and foreign taxing jurisdictions. With the exception of amended tax returns for 2004 to 2012, which are limited in scope to foreign tax credits, we are no longer subject to U.S. federal income tax examinations for periods preceding 2013. With limited exceptions, we are no longer subject to state tax and foreign tax examinations for periods preceding 2012. |
Share-Based Compensation |
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Share-Based Compensation | Note 13 — SHARE-BASED COMPENSATION Share-based compensation cost is based on the value of the portion of share-based payment awards that are ultimately expected to vest during the period. Share-based compensation cost recognized in the accompanying Consolidated Statements of Income includes compensation cost for share-based payment awards based on the grant date fair value estimated in accordance with the provision of FASB ASC Topic 718, Compensation — Stock Compensation. Share-based compensation expense is based on awards expected to vest and therefore has been reduced for estimated forfeitures. Equity and Performance Incentive Plans The PolyOne Corporation 2010 Equity and Performance Incentive Plan (2010 EPIP), as amended and restated in 2015, reserved 6.2 million common shares for the award of a variety of share-based compensation alternatives, including non-qualified stock options, incentive stock options, restricted stock, restricted stock units (RSUs), performance shares, performance units and stock appreciation rights (SARs). It is anticipated that all share-based grants and awards that are earned and exercised will be issued from PolyOne common shares that are held in treasury. Share-based compensation is included in Selling and administrative expense in the accompanying Consolidated Statements of Income. A summary of compensation expense by type of award follows:
Stock Appreciation Rights During the years ended December 31, 2016, 2015 and 2014, the total number of SARs granted were 0.5 million, 0.3 million and 0.3 million, respectively. Awards vest in one-third increments upon the later of the attainment of time-based vesting over a three-year service period and stock price targets. Awards granted in 2016, 2015 and 2014 are subject to an appreciation cap of 200% of the base price. Outstanding SARs have contractual terms ranging from seven to ten years from the date of the grant. The SARs were valued using a Monte Carlo simulation method as the vesting is dependent on the achievement of certain stock price targets. The SARs have time and market-based vesting conditions but vest no earlier than their three year graded vesting schedule. The expected term is an output from the Monte Carlo model, and are derived from employee exercise assumptions that are based on PolyOne historical exercise experience. The expected volatility was determined based on the average weekly volatility for our common shares for the contractual life of the awards. The expected dividend assumption was determined based upon PolyOne's dividend yield at the time of grant. The risk-free rate of return was based on available yields on U.S. Treasury bills of the same duration as the contractual life of the awards. Forfeitures were estimated at 3% per year based on our historical experience. The following is a summary of the weighted average assumptions related to the grants issued during 2016, 2015 and 2014:
A summary of SAR activity for 2016 is presented below:
The total intrinsic value of SARs exercised during 2016, 2015 and 2014 was $2.8 million, $9.7 million and $15.0 million, respectively. As of December 31, 2016, there was $2.1 million of total unrecognized compensation cost related to SARs, which is expected to be recognized over the weighted average remaining vesting period of 22 months. Restricted Stock Units RSUs represent contingent rights to receive one common share at a future date provided certain vesting criteria are met. During 2016, 2015 and 2014, the total number of RSUs granted were 0.2 million, 0.1 million and 0.2 million, respectively. These RSUs, which vest on the third anniversary of the grant date, were granted to executives and other key employees. Compensation expense is measured on the grant date using the quoted market price of our common shares and is recognized on a straight-line basis over the requisite service period. As of December 31, 2016, 0.5 million RSUs remain unvested with a weighted-average grant date fair value of $32.86. Unrecognized compensation cost for RSUs at December 31, 2016 was $5.4 million, which is expected to be recognized over the weighted average remaining vesting period of 22 months. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Note 14 — SEGMENT INFORMATION A segment is a component of an enterprise whose operating results are regularly reviewed by the enterprise’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. Operating income is the primary measure that is reported to our chief operating decision maker for purposes of allocating resources to the segments and assessing their performance. Operating income at the segment level does not include: corporate general and administrative expenses that are not allocated to segments; intersegment sales and profit eliminations; charges related to specific strategic initiatives such as the consolidation of operations; restructuring activities, including employee separation costs resulting from personnel reduction programs, plant closure and phase-in costs; executive separation agreements; share-based compensation costs; asset impairments; environmental remediation costs and other liabilities for facilities no longer owned or closed in prior years; gains and losses on the divestiture of joint ventures and equity investments; actuarial gains and losses associated with our pension and other post-retirement benefit plans; and certain other items that are not included in the measure of segment profit or loss that is reported to and reviewed by our chief operating decision maker. These costs are included in Corporate and eliminations. Segment assets are primarily customer receivables, inventories, net property, plant and equipment, intangible assets and goodwill. Intersegment sales are generally accounted for at prices that approximate those for similar transactions with unaffiliated customers. Corporate and eliminations assets and liabilities primarily include cash, debt, pension and other employee benefits, environmental liabilities, retained assets and liabilities of discontinued operations, and other unallocated corporate assets and liabilities. The accounting policies of each segment are consistent with those described in Note 1, Description of Business and Summary of Significant Accounting Policies. The following is a description of each of our five reportable segments. Color, Additives and Inks Color, Additives and Inks is a leading provider of specialized custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets, as well as specialty inks, plastisols, and vinyl slush molding solutions. Color and additive solutions include an innovative array of colors, special effects and performance-enhancing and eco-friendly solutions. When combined with polymer resins, our solutions help customers achieve differentiated specialized colors and effects targeted at the demands of today’s highly design-oriented consumer and industrial end markets. Our additive concentrates encompass a wide variety of performance and process enhancing characteristics and are commonly categorized by the function that they perform, including UV light stabilization and blocking, antimicrobial, anti-static, blowing or foaming, antioxidant, lubricant, oxygen and visible light blocking and productivity enhancement. Our colorant and additives concentrates are used in a broad range of polymers, including those used in medical and pharmaceutical devices, food packaging, personal care and cosmetics, transportation, building products, wire and cable markets. We also provide custom-formulated liquid systems that meet a variety of customer needs and chemistries, including polyester, vinyl, natural rubber and latex, polyurethane and silicone. Our offerings also include proprietary inks and latexes for diversified markets such as recreational and athletic apparel, construction and filtration, outdoor furniture and healthcare. Our liquid polymer coatings and additives are largely based on vinyl and are used in a variety of markets, including building and construction, consumer, healthcare, industrial, packaging, textiles, appliances, transportation, and wire and cable. Color, Additives and Inks has manufacturing, sales and service facilities located throughout North America, South America, Europe, Asia and Africa. Specialty Engineered Materials Specialty Engineered Materials is a leading provider of specialty polymer formulations, services and solutions for designers, assemblers and processors of thermoplastic materials across a wide variety of markets and end-use applications. Our product portfolio, which we believe to be one of the most diverse in our industry, includes specialty formulated high-performance polymer materials that are manufactured using thermoplastic resins and elastomers, which are then combined with advanced polymer additives, reinforcement, filler, colorant and/or biomaterial technologies. We also have what we believe is the broadest composite platform of solutions, which include a full range of products from long glass and carbon fiber technology to thermoset and thermoplastic composites. These solutions meet a wide variety of unique customer requirements for light weighting. Our technical and market expertise enables us to expand the performance range and structural properties of traditional engineering-grade thermoplastic resins to meet evolving customer needs. Specialty Engineered Materials has manufacturing, sales and service facilities located throughout North America, Europe, and Asia. Our product development and application reach is further enhanced by the capabilities of our Innovation Centers in the United States, Germany and China, which produce and evaluate prototype and sample parts to help assess end-use performance and guide product development. Our manufacturing capabilities are targeted at meeting our customers’ demand for speed, flexibility and critical quality. Designed Structures and Solutions The Designed Structures and Solutions segment was created on March 13, 2013, as a result of the acquisition of Spartech Corporation (Spartech). PolyOne's Designed Structures and Solutions segment utilizes a variety of polymers, specialty additives and processing technologies to produce a complete portfolio of sheet, custom rollstock and specialty film, laminate and acrylic solutions. Our solutions can be engineered to provide structural or functional performance in an application or design and visual aesthetics to meet our customers’ needs. Our offerings also include a wide range of sustainable, cost-effective stock and custom packaging solutions for various industry processes used in the food, medical and consumer markets. In addition to packaging, we also work closely with customers to provide solutions for transportation, building and construction, healthcare and consumer markets. Designed Structures and Solutions has manufacturing, sales and service facilities located throughout North America. Performance Products and Solutions Performance Products and Solutions is comprised of the Geon Performance Materials (Geon) and Producer Services business units. The Geon business delivers an array of products and services for vinyl molding and extrusion processors located in North America and Asia. The GeonTM brand name carries strong recognition globally. Geon's products are sold to manufacturers of durable plastic parts and consumer-oriented products. We also offer a wide range of services including materials testing, component analysis, custom formulation development, colorant and additive services, part design assistance, structural analysis, process simulations, mold design and flow analysis and extruder screw design. Vinyl is used across a broad range of markets and applications, including, but not limited to: healthcare, wire and cable, building and construction, consumer and recreational products and transportation and packaging. The Producer Services business unit offers contract manufacturing and outsourced polymer manufacturing services to resin producers and polymer marketers, primarily in the United States and Mexico, as well as its own proprietary formulations for certain applications. As a strategic and integrated supply chain partner, Producer Services offers resin producers a capital-efficient way to effectively develop custom products for niche markets by leveraging its extensive process technology expertise, broad manufacturing capabilities and geographic locations. PolyOne Distribution The PolyOne Distribution business distributes more than 4,000 grades of engineering and commodity grade resins, including PolyOne-produced solutions, principally to the North American and Asian markets. These products are sold to over 6,500 custom injection molders and extruders who, in turn, convert them into plastic parts that are sold to end-users in a wide range of industries. Representing over 25 major suppliers, we offer our customers a broad product portfolio, just-in-time delivery from multiple stocking locations and local technical support. Recent expansion in Central America and Asia have bolstered PolyOne Distribution's ability to serve the specialized needs of customers globally. Financial information by reportable segment is as follows:
(1) Corporate and eliminations includes accelerated depreciation associated with restructuring actions of $3.5 million.
(1) Corporate and eliminations includes accelerated depreciation associated with restructuring actions of $6.2 million.
(1) Corporate and eliminations includes accelerated depreciation associated with restructuring actions of $23.1 million. Our sales are primarily to customers in the United States, Canada, Mexico, Europe, South America and Asia, and the majority of our assets are located in these same geographic areas. Following is a summary of sales and long-lived assets based on the geographic areas where the sales originated and where the assets are located:
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Common Share Data | Note 15 — COMMON SHARE DATA Weighted-average shares used in computing net income per share are as follows:
Outstanding share-based awards with exercise prices greater than the average price of the common shares are anti-dilutive and are not included in the computation of diluted net income per share. The number of anti-dilutive options and awards was 0.2 million and 0.4 million at December 31, 2016 and 2014, respectively. Less than 0.1 million options and awards were anti-dilutive for the computation of diluted earnings per common share at December 31, 2015. We purchased 3.0 million, 4.5 million and 6.3 million shares in 2016, 2015 and 2014, respectively, at an aggregate cost of $86.2 million, $156.1 million and $233.2 million, respectively. |
Fair Value |
12 Months Ended |
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Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 16 — FAIR VALUE Fair value is measured based on an exit price, representing the amount that would be received to sell an asset or paid to satisfy a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a fair value hierarchy is established, which categorizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The estimated fair value of PolyOne’s debt instruments at December 31, 2016 and 2015 was $1,272.1 million and $1,136.2 million, respectively, compared to carrying values of $1,258.3 million and $1,146.6 million as of December 31, 2016 and 2015, respectively. The fair value of PolyOne’s debt instruments was estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities and represent Level 2 measurements within the fair value hierarchy. In accordance with the provisions of FASB ASC Topic 350, Intangibles — Goodwill and Other, we assess the fair value of goodwill on an annual basis or at an interim date if potential impairment indicators are present. The implied fair value of goodwill is determined based on significant unobservable inputs. Accordingly, these inputs fall within Level 3 of the fair value hierarchy. We use an income approach to estimate the fair value of our reporting units. The income approach uses a reporting unit’s projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital that is determined based on current market conditions. The projection uses management’s best estimates of economic and market conditions over the projected period including growth rates in sales, costs and number of units, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, terminal value margin rates, future capital expenditures and changes in future working capital requirements. We validate our estimates of fair value under the income approach by considering the implied control premium and conclude whether the implied control premium is reasonable based on other recent market transactions. No impairment charges were required in 2016, 2015 or 2014. Indefinite-lived intangible assets primarily consist of the GLS, ColorMatrix and Gordon Composites trade names. Indefinite-lived intangible assets are tested for impairment annually at the same time we test goodwill for impairment. The implied fair value of indefinite-lived intangible assets is determined based on significant unobservable inputs, as summarized below. Accordingly, these inputs fall within Level 3 of the fair value hierarchy. The fair value of the trade names is calculated using a “relief from royalty” methodology. This approach involves two steps (1) estimating reasonable royalty rates for the trade name and (2) applying this royalty rate to a net sales stream and discounting the resulting cash flows to determine fair value. This fair value is then compared with the carrying value of the trade name. No impairment charges were required in 2016, 2015 or 2014. |
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Selected Quarterly Financial Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Data (Unaudited) | Note 17 — SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
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Description Of Business And Summary Of Significant Accounting Policies (Policy) |
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Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accounting Standards Adopted and Accounting Standards Not Yet Adopted | Accounting Standards Adopted In May 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2015-07, Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or its Equivalent) (ASU 2015-07). ASU 2015-07 amended Accounting Standards Codification (ASC) 820, Fair Value Measurements, and removed the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value (NAV) per share. The amendment also limits certain disclosures for investments for which the entity has elected to measure at fair value using the NAV per share. We adopted this standard as of December 31, 2016 and reflected the required retrospective application to the disclosures in Note 10, Employee Benefit Plans. Accounting Standards Not Yet Adopted In May 2014, the FASB issued Auditing Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09). Under this standard, a company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard implements a five-step process for customer contract revenue recognition that focuses on transfer of control. We are analyzing the impact of the standard on our contract portfolio and reviewing our current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The implementation team is currently assessing the adoption method and impact that ASU 2014-09, along with the subsequent updates and clarifications, will have on our Consolidated Financial Statements. The Company will adopt ASU 2014-09 no later than the required date of January 1, 2018. In July 2015, the FASB issued Accounting Standards Update 2015-11, Inventory (Topic 300): Simplifying the Measurement of Inventory (ASU 2015-11), which applies to inventory measured using first-in, first out (FIFO) or average cost. This update requires that an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This update is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. The Company will adopt ASU 2015-11 no later than the required date of January 1, 2017. We do not expect this standard to have a material impact on our Consolidated Financial Statements. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842) (ASU 2016-02), which requires a lessee to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with a lease term of more than twelve months. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of expenses and cash flows arising from a lease. The Company will adopt ASU 2016-02 no later than the required date of January 1, 2019. We are currently assessing the impact this standard will have on our Consolidated Financial Statements. In March 2016, the FASB issued Accounting Standards Update 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09), which simplifies the accounting for share-based payment transactions. This update requires that excess tax benefits and tax deficiencies be recognized as income tax expense or benefit in the Consolidated Statements of Income rather than additional paid-in capital. Additionally, the excess tax benefits will be classified along with other income tax cash flows as an operating activity, rather than a financing activity, on the Statement of Cash Flows. Further, the update allows an entity to make a policy election to recognize forfeitures as they occur or estimate the number of awards expected to be forfeited. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively, with certain cumulative effect adjustments. The Company will adopt ASU 2016-09 no later than the required date of January 1, 2017. Upon adoption, we will assess the impact of any share price movement on the income tax expense or benefit recognized, but we do not expect this standard to have a material impact on our Consolidated Financial Statements. In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires the allowance recorded for trade receivables to be measured by expected loss rather than incurred loss. Expected loss measurement will be based on historical experience, current conditions and reasonable and supportable forecasts. The Company will adopt ASU 2016-13 no later than the required date of January 1, 2020. We do not expect this standard to have a material impact on our Consolidated Financial Statements. In October 2016, the FASB issued Accounting Standards Update 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16), which requires companies to recognize the income tax effects of intercompany sales or transfers of assets, other than inventory, in the income statement as income tax expense (or benefit) in the period the sale or transfer occurs. There would be no material impact on our Consolidated Financial Statements from intercompany transactions completed as of December 31, 2016. We will continue to assess the impact of ASU 2016-16 on future transactions and the Company will adopt ASU 2016-16 no later than the required date of January 1, 2018. In January 2017, the FASB issued Auditing Standards Update 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. This standard removes the second step of the goodwill impairment test, where a determination of the fair value of individual assets and liabilities of a reporting unit were needed to measure the goodwill impairment. Under this updated standard, goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. We will adopt this update for any impairment test performed after January 1, 2017 as permitted under the standard. |
Consolidation And Basis Of Presentation | Consolidation and Basis of Presentation The consolidated financial statements include the accounts of PolyOne and its subsidiaries. All majority-owned affiliates over which we have control are consolidated. Transactions with related parties, including joint ventures, are in the ordinary course of business. |
Reclassifications | Reclassifications Certain reclassifications of the prior period amounts and presentation have been made to conform to the presentation for the current period. |
Use Of Estimates | Use of Estimates Preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from these estimates. |
Cash And Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments purchased with a maturity of less than three months to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value. |
Allowance For Doubtful Accounts | Allowance for Doubtful Accounts We evaluate the collectability of receivables based on a combination of factors. We regularly analyze significant customer accounts and, when we become aware of a specific customer’s inability to meet its financial obligations to us, such as in the case of a bankruptcy filing or deterioration in the customer’s operating results or financial position, we record a specific allowance for bad debt to reduce the related receivable to the amount we reasonably believe is collectible. We also record bad debt allowances for all other customers based on a variety of factors including the length of time the receivables are past due, the financial health of the customer, economic conditions and historical experience. In estimating the allowances, we take into consideration the existence of credit insurance. If circumstances related to specific customers change, our estimates of the recoverability of receivables could be adjusted further. Accounts receivable balances are written off against the allowance for doubtful accounts after a final determination of uncollectability has been made. |
Inventories | Inventories External purchases of raw materials and finished goods are valued at weighted average cost. Manufactured finished goods are stated at the lower of cost or market using the first-in, first-out (FIFO) method. |
Long-lived Assets | Long-lived Assets Property, plant and equipment is carried at cost, net of depreciation and amortization that is computed using the straight-line method over the estimated useful lives of the assets, which generally ranges from three to 15 years for machinery and equipment and up to 40 years for buildings. During 2016, 2015 and 2014, we depreciated certain assets associated with closing manufacturing locations over a shortened life (through a cease-use date). Software is amortized over periods not exceeding 10 years. Property, plant and equipment is generally depreciated on accelerated methods for income tax purposes. We expense repair and maintenance costs as incurred. We capitalize replacements and betterments that increase the estimated useful life of an asset. We retain fully depreciated assets in property and accumulated depreciation accounts until we remove them from service. In the case of sale, retirement or disposal, the asset cost and related accumulated depreciation balance is removed from the respective account, and the resulting net amount, less any proceeds, is included as a component of income from continuing operations in the accompanying Consolidated Statements of Income. |
Intangible Assets | Finite-lived intangible assets, which consist primarily of customer relationships, patents and technology are amortized over their estimated useful lives. |
Impairment or Disposal of Long-Lived Assets | We assess the recoverability of long-lived assets when events or changes in circumstances indicate that we may not be able to recover the assets’ carrying amount. We measure the recoverability of assets to be held and used by a comparison of the carrying amount of the asset to the expected future undiscounted cash flows associated with the asset. We measure the amount of impairment of long-lived assets as the amount by which the carrying value of the asset exceeds the fair value of the asset, which is generally determined based on projected discounted future cash flows or appraised values. |
Goodwill And Indefinite Lived Intangible Assets | Goodwill and Indefinite Lived Intangible Assets Goodwill is the excess of the purchase price paid over the fair value of the net assets of the acquired business. Goodwill is tested for impairment at the reporting unit level. Our reporting units have been identified at the operating segment level, or in most cases, one level below the operating segment level. Goodwill is allocated to the reporting units based on the estimated fair value at the date of acquisition. Our annual measurement date for testing impairment of goodwill and indefinite-lived intangibles is October 1. We completed our testing of impairment as of October 1, noting no impairment in 2016, 2015 or 2014. Additionally, as noted within our "Critical Accounting Policies and Estimates" section of Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations", our Customer Engineered Services reporting unit, which is included in our Designed Structures and Solutions segment, is at-risk of future impairment. The future occurrence of a potential indicator of impairment would require an interim assessment for some or all of the reporting units prior to the next required annual assessment on October 1, 2017. |
Litigation Reserves | Litigation Reserves FASB ASC Topic 450, Contingencies, requires that we accrue for loss contingencies associated with outstanding litigation, claims and assessments for which management has determined it is probable that a loss contingency exists and the amount of loss can be reasonably estimated. We recognize expense associated with professional fees related to litigation claims and assessments as incurred. |
Derivative Financial Instruments | Derivative Financial Instruments FASB ASC Topic 815, Derivative and Hedging, requires that all derivative financial instruments, such as foreign exchange contracts, be recognized in the financial statements and measured at fair value, regardless of the purpose or intent in holding them. We are exposed to foreign currency changes in the normal course of business. We have established policies and procedures that manage this exposure through the use of financial instruments. By policy, we do not enter into these instruments for trading purposes or speculation. These instruments are not designated as hedges and, as a result, are adjusted to fair value, with the resulting gains and losses recognized in the accompanying Consolidated Statements of Income immediately. |
Pension And Other Post-Retirement Plans | Pension and Other Post-retirement Plans We account for our pensions and other post-retirement benefits in accordance with FASB ASC Topic 715, Compensation — Retirement Benefits. We immediately recognize actuarial gains and losses in our operating results in the year in which the gains or losses occur. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosures of the fair value of financial instruments. The estimated fair values of financial instruments were principally based on market prices where such prices were available and, where unavailable, fair values were estimated based on market prices of similar instruments. |
Foreign Currency Translation | Foreign Currency Translation Revenues and expenses are translated at average currency exchange rates during the related period. Assets and liabilities of foreign subsidiaries are translated using the exchange rate at the end of the period. The resulting translation adjustments are recorded as accumulated other comprehensive income or loss. Gains and losses resulting from foreign currency transactions, including intercompany transactions that are not considered permanent investments, are included in Other income (expense), net in the accompanying Consolidated Statements of Income. |
Revenue Recognition | Revenue Recognition We recognize revenue when the revenue is realized or realizable and has been earned. We recognize revenue when a firm sales agreement is in place, shipment has occurred and collectability is reasonably assured. |
Shipping And Handling Costs | Shipping and Handling Costs Shipping and handling costs are included in cost of sales. |
Research And Development Expense | Research and Development Expense Research and development costs of $54.5 million in 2016, $53.0 million in 2015 and $53.4 million in 2014, are charged to expense as incurred. |
Environmental Costs | Environmental Costs We expense costs that are associated with managing hazardous substances and pollution in ongoing operations on a current basis. Costs associated with environmental contamination are accrued when it becomes probable that a liability has been incurred and our proportionate share of the cost can be reasonably estimated. Any such provision is recognized using the Company's best estimate of the amount of loss incurred, or at the lower end of an estimated range, when a single best estimate is not determinable. In some cases, the Company may be able to recover a portion of the costs relating to these obligations from insurers or other third parties; however, the Company records such amounts only when it is probable that they will be collected. |
Share-Based Compensation | Share-Based Compensation We account for share-based compensation under the provisions of FASB ASC Topic 718, Compensation — Stock Compensation, which requires us to estimate the fair value of share-based awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the accompanying Consolidated Statements of Income. |
Income Taxes | Income Taxes Deferred income tax liabilities and assets are determined based upon the differences between the financial reporting and tax basis of assets and liabilities and are measured using the tax rate and laws currently in effect. In accordance with FASB ASC Topic 740, Income Taxes, we evaluate our deferred income taxes to determine whether a valuation allowance should be established against the deferred tax assets or whether the valuation allowance should be reduced based on consideration of all available evidence, both positive and negative, using a “more likely than not” standard. |
Description Of Business And Summary Of Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss in 2016, 2015 and 2014 were as follows:
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Business Combinations (Tables) |
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The fair value of the intangible assets acquired during the year ended December 31, 2016, including their estimated useful lives and valuation methodology are as follows:
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Goodwill And Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill By Operating Segment | Goodwill as of December 31, 2016 and 2015, and changes in the carrying amount of goodwill by segment were as follows:
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Carrying Value And Accumulated Amortization Of Intangible Assets | Indefinite and finite-lived intangible assets consisted of the following:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | We expect finite-lived intangibles amortization expense for the next five years as follows:
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Employee Separation and Restructuring Costs (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | Employee separation and restructuring charges recognized in 2016, 2015 and 2014 were as follows:
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Financing Arrangements (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | Total debt consisted of the following:
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Schedule of Maturities of Long-term Debt | Aggregate maturities of the principal amount of debt for the next five years and thereafter are as follows:
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Leasing Arrangements (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments under non-cancelable operating leases with initial lease terms longer than one year as of December 31, 2016 are as follows:
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components Of Inventories | Components of Inventories, net are as follows:
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Property (Tables) |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components Of Property, Net | Components of Property, net are as follows:
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Other Balance Sheet Liabilities (Tables) |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components Of Other Liabilities | Other liabilities at December 31, 2016 and 2015 consist of the following:
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Employee Benefit Plans (Tables) |
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Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change In Benefit Obligation, Change In Plan Assets And Components Of Funded Status | The following tables present the change in benefit obligation, change in plan assets and components of funded status for defined benefit pension and post-retirement health care benefit plans.
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Amounts Included In Consolidated Balance Sheets | Amounts included in the accompanying Consolidated Balance Sheets as of December 31 are as follows:
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Schedule Of Projected And Accumulated Benefit Obligations In Excess Of Plan Assets | As of December 31, 2016 and 2015, we had plans with total projected and accumulated benefit obligations in excess of the related plan assets as follows:
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Weighted Average Assumptions Used To Determine Net Periodic Benefit Cost and Benefit Obligation | Weighted-average assumptions used to determine benefit obligations at December 31:
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
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Components Of Net Period Benefit Cost | The following table summarizes the components of net periodic benefit cost or gain that was recognized during each of the years in the three-year period ended December 31, 2016.
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Fair Values Of Pension Plan Assets |
The fair values of pension plan assets at December 31, 2016 and 2015, by asset category, are as follows:
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Estimated Future Benefit Payments | The estimated future benefit payments for our pension and health care plans are as follows:
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Schedule Of Contributions To The Retirement Savings Plan | Following are our contributions to the RSP:
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Commitments And Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Changes In Environmental Accrued Liabilities | The following table details the changes in the environmental accrued liabilities:
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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Income (Loss) Before Income Taxes | Income from continuing operations, before income taxes consists of the following:
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Summary Of Income Tax (Expense) Benefit | A summary of income tax expense (benefit) from continuing operations is as follows:
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Difference Between Effective Income Tax Rate And U.S. Statutory Rate | A reconciliation of the U.S. federal statutory tax rate to the consolidated effective income tax rate along with a description of significant or unusual reconciling items is included below.
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Components Of Deferred Tax Liabilities And Assets | Components of our deferred tax assets (liabilities) as of December 31, 2016 and 2015 were as follows:
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Changes In Unrecognized Tax Benefits | The Company records provisions for uncertain tax positions in accordance with ASC Topic 740, Income Taxes. A reconciliation of unrecognized tax benefits is as follows:
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Share-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Compensation Expense | Share-based compensation is included in Selling and administrative expense in the accompanying Consolidated Statements of Income. A summary of compensation expense by type of award follows:
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Summary Of Stock Appreciation Rights | A summary of SAR activity for 2016 is presented below:
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Stock Appreciation Rights | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Assumptions Related To Grants | The following is a summary of the weighted average assumptions related to the grants issued during 2016, 2015 and 2014:
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Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Financial information by reportable segment is as follows:
(1) Corporate and eliminations includes accelerated depreciation associated with restructuring actions of $3.5 million.
(1) Corporate and eliminations includes accelerated depreciation associated with restructuring actions of $6.2 million.
(1) Corporate and eliminations includes accelerated depreciation associated with restructuring actions of $23.1 million. |
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Schedule Of Revenue And Long-Lived Assets | Our sales are primarily to customers in the United States, Canada, Mexico, Europe, South America and Asia, and the majority of our assets are located in these same geographic areas. Following is a summary of sales and long-lived assets based on the geographic areas where the sales originated and where the assets are located:
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Common Share Data (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Number of Shares | Weighted-average shares used in computing net income per share are as follows:
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Selected Quarterly Financial Data (Tables) |
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Selected Quarterly Financial Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Quarterly Financial Data |
|
Description Of Business And Summary Of Significant Accounting Policies (Narrative) (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016
USD ($)
segment
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
|
Accounting Policies [Line Items] | |||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 |
Number of reportable segments | segment | 5 | ||
Allowance for doubtful accounts | $ 2,600,000 | 3,000,000 | |
Research and development costs | $ 54,500,000 | $ 53,000,000 | $ 53,400,000 |
Minimum | Machinery and equipment | |||
Accounting Policies [Line Items] | |||
Property and equipment useful lives | 3 years | ||
Maximum | |||
Accounting Policies [Line Items] | |||
Finite-lived intangible asset useful life | 20 years | ||
Maximum | Machinery and equipment | |||
Accounting Policies [Line Items] | |||
Property and equipment useful lives | 15 years | ||
Maximum | Building | |||
Accounting Policies [Line Items] | |||
Property and equipment useful lives | 40 years | ||
Maximum | Software | |||
Accounting Policies [Line Items] | |||
Property and equipment useful lives | 10 years |
Goodwill And Intangible Assets (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Goodwill and Intangible Assets [Line Items] | |||
Indefinite-lived other intangible assets | $ 100.3 | ||
Amortization of other finite-lived intangible assets | 22.0 | $ 19.9 | $ 19.2 |
ColorMatrix | |||
Goodwill and Intangible Assets [Line Items] | |||
Trade names acquired | 63.1 | ||
GLS Corporation | |||
Goodwill and Intangible Assets [Line Items] | |||
Trade names acquired | 33.2 | ||
Gordon Composites | |||
Goodwill and Intangible Assets [Line Items] | |||
Trade names acquired | $ 4.0 |
Goodwill And Intangible Assets (Carrying Value And Accumulated Amortization Of Intangible Assets) (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived other intangible assets | $ 100.3 | |
Finite-Lived Intangible Assets [Line Items] | ||
Acquisition Cost | 474.0 | $ 432.7 |
Accumulated Amortization | (109.8) | (87.8) |
Currency Translation | (0.7) | (0.3) |
Net | 363.5 | 344.6 |
Indefinite-lived trade names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived other intangible assets | 100.3 | 96.3 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquisition Cost | 217.1 | 199.4 |
Accumulated Amortization | (52.2) | (42.1) |
Currency Translation | (0.3) | 0.0 |
Net | 164.6 | 157.3 |
Patents, technology and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquisition Cost | 156.6 | 137.0 |
Accumulated Amortization | (57.6) | (45.7) |
Currency Translation | (0.4) | (0.3) |
Net | $ 98.6 | $ 91.0 |
Goodwill And Intangible Assets Schedule of Future Amortization (Details) $ in Millions |
Dec. 31, 2016
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2017 | $ 22.9 |
2018 | 22.9 |
2019 | 22.9 |
2020 | 19.5 |
2021 | $ 18.5 |
Long-Term Debt Maturity Schedule (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Debt Disclosure [Abstract] | ||
2017 | $ 18.5 | |
2018 | 20.9 | |
2019 | 6.7 | |
2020 | 6.7 | |
2021 | 6.7 | |
Thereafter | 1,214.6 | |
Aggregate maturities | $ 1,274.1 | $ 1,163.5 |
Leasing Arrangements (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Leases [Abstract] | |||
Rent expense | $ 27.0 | $ 27.1 | $ 30.4 |
2017 | 20.0 | ||
2018 | 14.8 | ||
2019 | 11.9 | ||
2020 | 9.4 | ||
2021 | 6.4 | ||
Thereafter | 14.7 | ||
Total | $ 77.2 |
Inventories (Components Of Inventories) (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished products | $ 197.4 | $ 172.7 |
Work in process | 5.8 | 5.0 |
Raw materials and supplies | 109.2 | 109.3 |
Inventories, net | $ 312.4 | $ 287.0 |
Property (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Property, Plant and Equipment [Line Items] | |||
Property, gross | $ 1,544.4 | $ 1,469.9 | |
Less accumulated depreciation and amortization | (936.7) | (886.4) | |
Property, net | 607.7 | 583.5 | $ 596.7 |
Depreciation expense | 82.0 | 84.4 | 104.7 |
Restructuring related cost, accelerated depreciation | 3.5 | 6.2 | $ 23.1 |
Land and land improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, gross | 49.0 | 46.9 | |
Properties under capital leases | 1.8 | 0.1 | |
Building | |||
Property, Plant and Equipment [Line Items] | |||
Property, gross | 335.5 | 318.3 | |
Properties under capital leases | 16.9 | 0.5 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, gross | $ 1,159.9 | $ 1,104.7 |
Employee Benefit Plans (Amounts Included In Consolidated Balance Sheets) (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Pension Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Non-current assets | $ 29.2 | $ 0.0 |
Accrued expenses and other liabilities | 4.4 | 4.4 |
Other non-current liabilities | 53.5 | 67.0 |
Health Care Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Non-current assets | 0.0 | 0.0 |
Accrued expenses and other liabilities | 1.2 | 1.3 |
Other non-current liabilities | $ 9.6 | $ 10.5 |
Employee Benefit Plans (Schedule Of Projected And Accumulated Benefit Obligations In Excess Of Plan Assets) (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Pension Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | $ 62.4 | $ 527.4 |
Accumulated benefit obligation | 60.7 | 525.7 |
Fair value of plan assets | 4.5 | 456.0 |
Health Care Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | 10.8 | 11.8 |
Accumulated benefit obligation | 10.8 | 11.8 |
Fair value of plan assets | $ 0.0 | $ 0.0 |
Employee Benefit Plans (Components Of Net Period Benefit Cost) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||
Mark-to-market actuarial net (gains) losses | $ (8.4) | $ 11.6 | $ 56.5 | $ (8.4) | $ 11.6 | |
Pension Benefits | ||||||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||
Service cost | 1.0 | 1.7 | $ 1.6 | |||
Interest cost | 20.7 | 21.3 | 24.9 | |||
Expected return on plan assets | (31.4) | (32.7) | (32.2) | |||
Mark-to-market actuarial net (gains) losses | (7.8) | 15.2 | 55.2 | |||
Net periodic (benefit) cost | (17.5) | 5.5 | 49.5 | |||
Health Care Benefits | ||||||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||
Service cost | 0.0 | 0.0 | 0.0 | |||
Interest cost | 0.5 | 0.6 | 0.7 | |||
Expected return on plan assets | 0.0 | 0.0 | 0.0 | |||
Mark-to-market actuarial net (gains) losses | (0.6) | (3.6) | 1.3 | |||
Net periodic (benefit) cost | $ (0.1) | $ (3.0) | $ 2.0 |
Employee Benefit Plans (Weighted Average Assumptions Used To Determine Net Periodic Benefit Cost) (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Pension Benefits | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 4.10% | 3.88% | 4.83% |
Expected long-term return on plan assets | 6.87% | 6.87% | 6.86% |
Health Care Benefits | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 4.12% | 3.75% | 4.38% |
Expected long-term return on plan assets | 0.00% | 0.00% | 0.00% |
Net Periodic Benefit Cost | Health Care Benefits | |||
Assumed health care cost trend rates at December 31: | |||
Health care cost trend rate assumed for next year | 6.69% | 6.88% | 7.02% |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 4.50% | 4.50% | 4.50% |
Year that the rate reaches the ultimate trend rate | 2027 | 2027 | 2027 |
Employee Benefit Plans (Estimated Future Benefit Payments) (Details) $ in Millions |
Dec. 31, 2016
USD ($)
|
---|---|
Pension Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2017 | $ 39.2 |
2018 | 38.9 |
2019 | 37.9 |
2020 | 37.8 |
2021 | 38.0 |
2022 through 2026 | 172.4 |
Health Care Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2017 | 1.2 |
2018 | 1.1 |
2019 | 1.1 |
2020 | 1.0 |
2021 | 1.0 |
2022 through 2026 | $ 3.9 |
Employee Benefit Plans (Schedule Of Contributions To The Retirement Savings Plan) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||
Retirement savings match | $ 10.5 | $ 9.9 | $ 9.7 |
Retirement benefit contribution | 3.9 | 4.1 | 4.0 |
Total contributions | $ 14.4 | $ 14.0 | $ 13.7 |
Commitments And Contingencies (Schedule Of Changes In Environmental Accrued Liabilities) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Accrual for Environmental Loss Contingencies [Roll Forward] | |||
Balance at beginning of the year | $ 119.9 | $ 121.1 | $ 125.9 |
Environmental expenses | 8.3 | 9.3 | 10.3 |
Net cash payments | (11.0) | (9.8) | (14.7) |
Currency translation and other | 0.1 | (0.7) | (0.4) |
Balance at end of year | $ 117.3 | $ 119.9 | $ 121.1 |
Income Taxes (Schedule Of Income (Loss) Before Income Taxes) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Domestic | $ 122.7 | $ 93.8 | $ 53.5 |
Foreign | 99.6 | 73.9 | 34.9 |
Income from continuing operations, before income taxes | $ 222.3 | $ 167.7 | $ 88.4 |
Income Taxes (Summary Of Income Tax (Expense) Benefit) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Current income tax expense: | |||
Domestic | $ 24.3 | $ 23.8 | $ 39.2 |
Foreign | 22.5 | 26.6 | 17.2 |
Total current income tax expense: | 46.8 | 50.4 | 56.4 |
Deferred income tax expense (benefit): | |||
Domestic | 6.0 | (28.6) | (41.3) |
Foreign | 4.5 | 1.2 | (3.9) |
Total deferred income tax expense (benefit) | 10.5 | (27.4) | (45.2) |
Total income tax expense | $ 57.3 | $ 23.0 | $ 11.2 |
Income Taxes Income Taxes (Effective Income Tax Rate Reconciliation) (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Income tax expense at 35% | 35.00% | 35.00% | 35.00% |
Foreign tax rate differential | (5.20%) | (5.00%) | (5.70%) |
State and local tax, net | 2.10% | 2.70% | 2.80% |
Tax benefits on certain foreign investments | (2.00%) | (0.70%) | (17.00%) |
Domestic production activities deduction | (1.60%) | (2.00%) | (2.50%) |
Amended prior period tax returns | (1.40%) | (18.30%) | (2.30%) |
Uncertain tax positions | (1.30%) | 0.60% | 1.00% |
Permanent tax differences | 0.30% | 1.80% | (2.10%) |
U.S. credit for research activities | (0.50%) | (0.70%) | (1.20%) |
Changes in valuation allowances | 0.40% | 0.30% | 7.80% |
Settlements | 0.00% | 0.00% | (3.10%) |
Effective income tax rate | 25.80% | 13.70% | 12.70% |
Income Taxes (Components Of Deferred Tax Liabilities And Assets) (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Deferred tax assets: | ||
Pension and other post-retirement benefits | $ 12.5 | $ 29.7 |
Employment costs | 34.3 | 34.7 |
Environmental reserves | 45.1 | 45.8 |
Net operating loss carryforwards | 28.8 | 33.3 |
Foreign tax credit carryforwards | 23.0 | 37.4 |
Other, net | 33.5 | 22.3 |
Gross deferred tax assets | 177.2 | 203.2 |
Valuation allowances | (19.8) | (19.3) |
Total deferred tax assets, net of valuation allowances | 157.4 | 183.9 |
Deferred tax liabilities: | ||
Property, plant and equipment | (52.6) | (60.3) |
Goodwill and intangibles | (136.9) | (135.8) |
Other, net | (1.8) | (7.2) |
Total deferred tax liabilities | (191.3) | (203.3) |
Net deferred tax liabilities | (33.9) | (19.4) |
Non-current deferred income tax assets | 9.2 | 14.4 |
Non-current deferred income tax liabilities | $ (43.1) | $ (33.8) |
Income Taxes (Changes In Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance as of January 1 | $ 12.5 | $ 28.6 | $ 15.2 |
Additions based on tax positions related to the current year | 0.3 | 0.5 | 1.2 |
Additions for tax positions of prior years | 1.2 | 12.6 | 3.8 |
Balance related to acquired businesses | 0.0 | 0.0 | 14.2 |
Reductions for tax positions of prior years | 0.0 | 0.0 | (2.3) |
Decreases as a result of lapse of statute of limitations | (5.4) | (13.1) | 0.0 |
Settlements and other | (0.3) | (15.3) | (2.3) |
Other, net | (0.4) | (0.8) | (1.2) |
Balance as of December 31 | $ 7.9 | $ 12.5 | $ 28.6 |
Share-Based Compensation (Summary Of Compensation Expense) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Share-Based Compensation Arrangement By Share-based Payment Award [Line Items] | |||
Share-based compensation | $ 8.4 | $ 9.1 | $ 14.2 |
Stock appreciation rights | |||
Share-Based Compensation Arrangement By Share-based Payment Award [Line Items] | |||
Share-based compensation | 3.6 | 4.4 | 5.5 |
Performance Shares | |||
Share-Based Compensation Arrangement By Share-based Payment Award [Line Items] | |||
Share-based compensation | 0.0 | 0.5 | 0.7 |
Restricted stock units | |||
Share-Based Compensation Arrangement By Share-based Payment Award [Line Items] | |||
Share-based compensation | $ 4.8 | $ 4.2 | $ 8.0 |
Share-Based Compensation (Summary Of Assumptions Related To Grants) (Details) - Stock appreciation rights - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Share-Based Compensation Arrangement By Share-based Payment Award [Line Items] | |||
Expected volatility | 41.00% | 43.00% | 48.00% |
Expected dividends | 1.92% | 1.05% | 0.91% |
Expected term (in years) | 6 years 8 months 12 days | 6 years 6 months | 6 years 4 months 24 days |
Risk-free rate | 1.90% | 1.95% | 2.94% |
Value of SARs granted (in dollars per share) | $ 8.29 | $ 13.94 | $ 14.05 |
Segment Information (Narrative) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2016
segment
grade_resin
supplier
injection_molder_extruder
| |
Segment Reporting [Abstract] | |
Number of reportable segments | segment | 5 |
Number of grades of resins sold by polyone distribution (more than) | grade_resin | 4,000 |
Number of products sold | injection_molder_extruder | 6,500 |
Number of suppliers represented by PolyOne distribution (more than) | supplier | 25 |
Segment Information (Schedule Of Revenue And Long-Lived Assets) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Segment Reporting Information [Line Items] | |||||||||||
Sales: | $ 787.7 | $ 843.6 | $ 861.5 | $ 847.0 | $ 775.8 | $ 841.6 | $ 887.1 | $ 873.1 | $ 3,339.8 | $ 3,377.6 | $ 3,835.5 |
Long lived assets: | 607.7 | 583.5 | 607.7 | 583.5 | 596.7 | ||||||
UNITED STATES | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales: | 2,148.3 | 2,239.5 | 2,585.5 | ||||||||
Long lived assets: | 449.7 | 418.1 | 449.7 | 418.1 | 421.1 | ||||||
Europe | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales: | 415.2 | 421.8 | 505.6 | ||||||||
Long lived assets: | 86.6 | 88.5 | 86.6 | 88.5 | 90.0 | ||||||
CANADA | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales: | 258.4 | 241.3 | 277.4 | ||||||||
Long lived assets: | 7.2 | 6.9 | 7.2 | 6.9 | 12.8 | ||||||
Asia | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales: | 266.9 | 249.6 | 257.3 | ||||||||
Long lived assets: | 44.6 | 45.7 | 44.6 | 45.7 | 45.2 | ||||||
MEXICO | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales: | 233.7 | 209.7 | 178.4 | ||||||||
Long lived assets: | 18.5 | 19.4 | 18.5 | 19.4 | 19.7 | ||||||
South America | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales: | 17.3 | 15.7 | 31.3 | ||||||||
Long lived assets: | $ 1.1 | $ 4.9 | $ 1.1 | $ 4.9 | $ 7.9 |
Weighted-Average Shares Used In Computing Earnings Per Share (Schedule Of Weighted-Average Shares Used In Computing Earnings Per Share) (Details) - shares shares in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Earnings Per Share [Abstract] | |||
Weighted-average shares - basic: (in shares) | 83.9 | 87.8 | 92.3 |
Plus dilutive impact of share-based compensation (in shares) | 0.7 | 0.9 | 1.2 |
Weighted-average shares - diluted: (in shares) | 84.6 | 88.7 | 93.5 |
Common Share Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Earnings Per Share [Abstract] | |||
Anti-dilutive effect on computation of diluted earnings per share (less than 0.1 million for 2015) (in shares) | 200,000 | 100,000 | 400,000 |
Repurchase of common shares (in shares) | 3,000,000.0 | 4,500,000.0 | 6,300,000.0 |
Purchase of common shares for treasury | $ 86.2 | $ 156.1 | $ 233.2 |
Fair Value (Narrative) (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Estimated fair value of PolyOne’s debt instruments | $ 1,272.1 | $ 1,136.2 |
Debt carrying value | $ 1,258.3 | $ 1,146.6 |
Selected Quarterly Financial Data (Schedule Of Quarterly Financial Data) (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Selected Quarterly Financial Data [Line Items] | ||||||||||||
Sales | $ 787.7 | $ 843.6 | $ 861.5 | $ 847.0 | $ 775.8 | $ 841.6 | $ 887.1 | $ 873.1 | $ 3,339.8 | $ 3,377.6 | $ 3,835.5 | |
Gross Margin | 155.3 | 173.1 | 192.3 | 185.5 | 156.9 | 169.1 | 185.7 | 169.8 | 706.2 | 681.5 | 707.9 | |
Operating income | 57.9 | 71.2 | 81.5 | 71.3 | 31.3 | 69.2 | 80.3 | 70.1 | $ 281.9 | $ 250.9 | $ 155.1 | |
Net income | 33.7 | 42.3 | 50.0 | 39.0 | 3.0 | 44.5 | 67.0 | 30.2 | ||||
Net income attributable to PolyOne shareholders | $ 33.8 | $ 42.3 | $ 50.0 | $ 39.1 | $ 3.1 | $ 44.5 | $ 66.8 | $ 30.2 | ||||
Basic net income - continuing operations (in usd per share) | $ 0.41 | $ 0.50 | $ 0.59 | $ 0.46 | $ 0.04 | $ 0.51 | $ 0.75 | $ 0.34 | $ 1.97 | $ 1.65 | $ 0.85 | |
Diluted net income - continuing operations (in usd per share) | $ 0.40 | $ 0.50 | $ 0.59 | $ 0.46 | $ 0.04 | $ 0.50 | $ 0.74 | $ 0.34 | $ 1.95 | $ 1.63 | $ 0.83 | |
Mark-to-market actuarial net (gains) losses | $ (8.4) | $ 11.6 | $ 56.5 | $ (8.4) | $ 11.6 | |||||||
Restructuring charges | 19.0 | 41.9 | $ 94.1 | |||||||||
Acquisition related costs and adjustments | $ 2.5 | |||||||||||
Environmental remediation expense | 2.2 | 2.3 | $ 2.1 | |||||||||
Reimbursement of previously incurred environmental costs | 5.3 | 6.1 | 3.5 | 3.7 | ||||||||
Debt extinguishment costs paid | $ 0.0 | 13.4 | $ 0.0 | |||||||||
Uncertain tax positions | $ (7.5) | |||||||||||
Plant Closure and Reductions in Force | ||||||||||||
Selected Quarterly Financial Data [Line Items] | ||||||||||||
Restructuring charges | $ 2.5 | $ 4.6 | $ 4.8 | $ 7.1 | 10.1 | $ 13.7 | $ 7.5 | $ 10.6 | ||||
Debt extinguishment costs | Line of Credit | ||||||||||||
Selected Quarterly Financial Data [Line Items] | ||||||||||||
Debt extinguishment costs paid | 16.4 | |||||||||||
7.375% senior notes due 2020 | ||||||||||||
Selected Quarterly Financial Data [Line Items] | ||||||||||||
Debt repurchase amount | $ 316.6 | $ 316.6 | ||||||||||
7.375% senior notes due 2020 | Senior Notes | ||||||||||||
Selected Quarterly Financial Data [Line Items] | ||||||||||||
Stated interest rate | 7.375% | 7.375% | ||||||||||
Tax Year 2005-2012 [Member] | ||||||||||||
Selected Quarterly Financial Data [Line Items] | ||||||||||||
Foreign tax credit | $ 26.0 |
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