Supplemental Guarantor Information (Tables)

9 Months Ended

Sep. 30, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Balance Sheet

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2017

(Unaudited)

(In thousands, except par value)

	Kraton Corporation		Kraton Polymers LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	1,903		$	4,514		$	82,701		$	—		$	89,118
Receivables, net of allowances	—		1,084			106,007			146,346			—			253,437
Inventories of products	—		89			188,728			174,014			—			362,831
Inventories of materials and supplies	—		—			13,890			10,942			—			24,832
Prepaid expenses	—		4,993			20,556			10,799			—			36,348
Other current assets	—		1,281			5,879			38,833			—			45,993
Total current assets	—		9,350			339,574			463,635			—			812,559
Property, plant, and equipment, less accumulated depreciation	—		20,955			461,777			460,102			—			942,834
Goodwill	—		—			740,390			33,245			—			773,635
Intangible assets, less accumulated amortization	—		28,909			327,531			60,307			—			416,747
Investment in consolidated subsidiaries	652,395		894,752			—			—			(1,547,147		)	—
Investment in unconsolidated joint venture	—		813			—			11,285			—			12,098
Debt issuance costs	—		—			2,633			—			—			2,633
Deferred income taxes	—		213			—			8,553			—			8,766
Other long-term assets	—		910,871			238,716			839,392			(1,965,645		)	23,334
Total assets	$	652,395	$	1,865,863		$	2,110,621		$	1,876,519		$	(3,512,792	)	$	2,992,606
LIABILITIES AND STOCKHOLDERS' AND MEMBER'S EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	—		$	1,009		$	32,544		$	—		$	33,553
Accounts payable-trade	—		1,823			72,878			81,725			—			156,426
Other payables and accruals	—		43,832			43,285			64,739			—			151,856
Due to related party	—		—			—			16,045			—			16,045
Total current liabilities	—		45,655			117,172			195,053			—			357,880
Long-term debt, net of current portion	—		1,274,842			1,330			390,902			—			1,667,074
Deferred income taxes	—		(106,969		)	277,893			44,221			—			215,145
Other long-term liabilities	—		258			1,261,509			872,017			(1,965,645		)	168,139
Total liabilities	—		1,213,786			1,657,904			1,502,193			(1,965,645		)	2,408,238
Commitments and contingencies (note 10)
Stockholders' and member's equity:
Preferred stock, $0.01 par value; 100,000 shares authorized; none issued	—		—			—			—			—			—
Common stock, $0.01 par value; 500,000 shares authorized	313		—			—			—			—			313
Additional paid in capital	369,702		—			—			—			—			369,702
Member's equity	—		652,395			519,466			375,286			(1,547,147		)	—
Retained earnings	282,380		—			—			—			—			282,380
Accumulated other comprehensive loss	—		(318		)	(66,749		)	(30,038		)	—			(97,105		)
Kraton Corporation stockholders' and member's equity	652,395		652,077			452,717			345,248			(1,547,147		)	555,290
Noncontrolling interest	—		—			—			29,078			—			29,078
Total stockholders' and member's equity	652,395		652,077			452,717			374,326			(1,547,147		)	584,368
Total liabilities and stockholders' and member's equity	$	652,395	$	1,865,863		$	2,110,621		$	1,876,519		$	(3,512,792	)	$	2,992,606

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2016

(In thousands, except par value) 

	Kraton Corporation		Kraton Polymers LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	214		$	6,280		$	115,255		$	—		$	121,749
Receivables, net of allowances	—		468			95,398			104,994			—			200,860
Inventories of products	—		(1,634		)	176,301			153,329			—			327,996
Inventories of materials and supplies	—		—			13,521			8,871			—			22,392
Prepaid expenses	—		6,077			20,635			9,139			—			35,851
Other current assets	—		253			8,209			29,196			—			37,658
Total current assets	—		5,378			320,344			420,784			—			746,506
Property, plant, and equipment, less accumulated depreciation	—		27,123			457,031			422,568			—			906,722
Goodwill	—		—			740,394			29,618			—			770,012
Intangible assets, less accumulated amortization	—		32,493			351,155			55,550			—			439,198
Investment in consolidated subsidiaries	616,431		2,952,279			—			—			(3,568,710		)	—
Investment in unconsolidated joint venture	—		813			—			10,382			—			11,195
Debt issuance costs	—		—			3,511			—			—			3,511
Deferred income taxes	—		213			—			6,694			—			6,907
Other long-term assets	—		77,963			1,876,402			1,006,230			(2,938,001		)	22,594
Total assets	$	616,431	$	3,096,262		$	3,748,837		$	1,951,826		$	(6,506,711	)	$	2,906,645
LIABILITIES AND STOCKHOLDERS’ AND MEMBER’S EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	29,250		$	990		$	11,585		$	—		$	41,825
Accounts payable-trade	—		5,318			73,501			71,262			—			150,081
Other payables and accruals	—		22,266			51,488			56,644			—			130,398
Due to related party	—		—			—			14,669			—			14,669
Total current liabilities	—		56,834			125,979			154,160			—			336,973
Long-term debt, net of current portion	—		1,591,637			2,051			104,012			—			1,697,700
Deferred income taxes	—		(104,841		)	277,756			38,481			—			211,396
Other long-term liabilities	—		937,569			1,142,952			1,027,819			(2,938,001		)	170,339
Total liabilities	—		2,481,199			1,548,738			1,324,472			(2,938,001		)	2,416,408
Commitments and contingencies (note 10)
Stockholders’ and member’s equity:
Preferred stock, $.01 par value; 100,000 shares authorized; none issued	—		—			—			—			—			—
Common stock, $.01 par value; 500,000 shares authorized	310		—			—			—			—			310
Additional paid in capital	361,682		—			—			—			—			361,682
Member’s equity	—		616,431			2,266,840			685,439			(3,568,710		)	—
Retained earnings	254,439		—			—			—			—			254,439
Accumulated other comprehensive loss	—		(1,368		)	(66,741		)	(90,421		)	—			(158,530		)
Kraton Corporation stockholders’ and member’s equity	616,431		615,063			2,200,099			595,018			(3,568,710		)	457,901
Noncontrolling interest	—		—			—			32,336			—			32,336
Total stockholders’ and member’s equity	616,431		615,063			2,200,099			627,354			(3,568,710		)	490,237
Total liabilities and stockholders’ and member’s equity	$	616,431	$	3,096,262		$	3,748,837		$	1,951,826		$	(6,506,711	)	$	2,906,645

Consolidating Statement of Operations

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Three Months Ended September 30, 2017

(Unaudited)

(In thousands)

	Kraton Corporation			Kraton Polymers LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	—		$	277,964		$	381,147		$	(148,164	)	$	510,947
Cost of goods sold	—			4,257			219,541			306,594			(148,164		)	382,228
Gross profit (loss)	—			(4,257		)	58,423			74,553			—			128,719
Operating expenses:
Research and development	—			4,020			2,503			3,802			—			10,325
Selling, general, and administrative	—			18,636			11,838			12,105			—			42,579
Depreciation and amortization	—			5,580			18,209			10,518			—			34,307
Other (income) expense	—			(26,894		)	(18,355		)	45,249			—			—
Operating income (loss)	—			(5,599		)	44,228			2,879			—			41,508
Loss on extinguishment of debt	—			(15,632		)	—			—			—			(15,632		)
Earnings (loss) in consolidated subsidiaries	(4,851		)	16,926			—			—			(12,075		)	—
Earnings of unconsolidated joint venture	—			—			—			125			—			125
Interest expense, net	—			(2,328		)	(28,757		)	(1,932		)	—			(33,017		)
Income (loss) before income taxes	(4,851		)	(6,633		)	15,471			1,072			(12,075		)	(7,016		)
Income tax benefit (expense)	—			1,782			1,660			(1,277		)	—			2,165
Consolidated net income (loss)	(4,851		)	(4,851		)	17,131			(205		)	(12,075		)	(4,851		)
Net loss attributable to noncontrolling interest	—			—			—			818			—			818
Net income (loss) attributable to Kraton	$	(4,851	)	$	(4,851	)	$	17,131		$	613		$	(12,075	)	$	(4,033	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Three Months Ended September 30, 2016

(Unaudited)

(In thousands)

	Kraton Corporation		Kraton Polymers LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—	$	—		$	227,916		$	268,179		$	(41,952	)	$	454,143
Cost of goods sold	—		(2,090		)	150,426			212,503			(41,952		)	318,887
Gross profit	—		2,090			77,490			55,676			—			135,256
Operating expenses:
Research and development	—		3,661			2,432			3,600			—			9,693
Selling, general, and administrative	—		36,277			(3,220		)	9,712			—			42,769
Depreciation and amortization	—		5,610			19,818			6,549			—			31,977
Other (income) expense	—		(70,969		)	29,124			41,845			—			—
Operating income (loss)	—		27,511			29,336			(6,030		)	—			50,817
Earnings in consolidated subsidiaries	14,843		21,259			—			—			(36,102		)	—
Earnings of unconsolidated joint venture	—		—			—			94			—			94
Interest income (expense), net	—		(34,163		)	(60		)	353			—			(33,870		)
Income (loss) before income taxes	14,843		14,607			29,276			(5,583		)	(36,102		)	17,041
Income tax benefit (expense)	—		236			288			(2,722		)	—			(2,198		)
Consolidated net income (loss)	14,843		14,843			29,564			(8,305		)	(36,102		)	14,843
Net loss attributable to noncontrolling interest	—		—			—			717			—			717
Net income (loss) attributable to Kraton	$	14,843	$	14,843		$	29,564		$	(7,588	)	$	(36,102	)	$	15,560

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Nine Months Ended September 30, 2017

(Unaudited)

(In thousands)

	Kraton Corporation		Kraton Polymers LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—	$	—		$	826,753		$	1,094,397		$	(426,758	)	$	1,494,392
Cost of goods sold	—		173			610,728			890,908			(426,758		)	1,075,051
Gross profit (loss)	—		(173		)	216,025			203,489			—			419,341
Operating expenses:
Research and development	—		11,588			7,650			11,191			—			30,429
Selling, general, and administrative	—		50,893			35,770			37,773			—			124,436
Depreciation and amortization	—		16,721			55,199			30,120			—			102,040
Other (income) expense	—		(73,860		)	(66		)	73,926			—			—
Operating income (loss)	—		(5,515		)	117,472			50,479			—			162,436
Loss on extinguishment of debt	—		(35,370		)	—			—			—			(35,370		)
Earnings in consolidated subsidiaries	22,763		77,296			—			—			(100,059		)	—
Earnings of unconsolidated joint venture	—		—			—			370			—			370
Interest expense, net	—		(16,703		)	(83,055		)	(2,008		)	—			(101,766		)
Income before income taxes	22,763		19,708			34,417			48,841			(100,059		)	25,670
Income tax benefit (expense)	—		3,055			698			(6,660		)	—			(2,907		)
Consolidated net income	22,763		22,763			35,115			42,181			(100,059		)	22,763
Net loss attributable to noncontrolling interest	—		—			—			5,178			—			5,178
Net income attributable to Kraton	$	22,763	$	22,763		$	35,115		$	47,359		$	(100,059	)	$	27,941

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Nine Months Ended September 30, 2016

(Unaudited)

(In thousands)

	Kraton Corporation		Kraton Polymers LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—	$	—		$	658,995		$	788,826		$	(119,106	)	$	1,328,715
Cost of goods sold	—		(1,519		)	462,311			626,058			(119,106		)	967,744
Gross profit	—		1,519			196,684			162,768			—			360,971
Operating expenses:
Research and development	—		11,259			7,864			11,260			—			30,383
Selling, general, and administrative	—		77,720			23,550			34,575			—			135,845
Depreciation and amortization	—		16,811			58,691			18,411			—			93,913
Other (income) expense	—		(119,947		)	53,682			66,265			—			—
Operating income	—		15,676			52,897			32,257			—			100,830
Disposition and exit of business activities	—		—			36,821			3,180			—			40,001
Loss on extinguishment of debt	—		(13,423		)	—			—			—			(13,423		)
Earnings in consolidated subsidiaries	109,256		121,262			—			—			(230,518		)	—
Earnings of unconsolidated joint venture	—		—			—			274			—			274
Interest income (expense), net	—		(101,521		)	(952		)	1,023			—			(101,450		)
Income before income taxes	109,256		21,994			88,766			36,734			(230,518		)	26,232
Income tax benefit (expense)	—		87,262			(2,071		)	(2,167		)	—			83,024
Consolidated net income	109,256		109,256			86,695			34,567			(230,518		)	109,256
Net loss attributable to noncontrolling interest	—		—			—			1,792			—			1,792
Net income attributable to Kraton	$	109,256	$	109,256		$	86,695		$	36,359		$	(230,518	)	$	111,048

Consolidating Statement of Comprehensive Income

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, 2017

(Unaudited)

(In thousands)

	Kraton Corporation			Kraton Polymers LLC			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss) attributable to Kraton	$	(4,851	)	$	(4,851	)	$	17,131	$	613		$	(12,075	)	$	(4,033	)
Other comprehensive income:
Foreign currency translation adjustments, net of tax	—			—			—		18,910			—			18,910
Unrealized loss on cash flow hedges, net of tax	—			(239		)	—		—			—			(239		)
Reclassification of loss on cash flow hedge	—			920			—		—			—			920
Other comprehensive income, net of tax	—			681			—		18,910			—			19,591
Comprehensive income (loss) attributable to Kraton	(4,851		)	(4,170		)	17,131		19,523			(12,075		)	15,558
Comprehensive loss attributable to noncontrolling interest	—			—			—		(787		)	—			(787		)
Consolidated comprehensive income (loss)	$	(4,851	)	$	(4,170	)	$	17,131	$	18,736		$	(12,075	)	$	14,771

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, 2016

(Unaudited)

(In thousands)

	Kraton Corporation		Kraton Polymers LLC			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss) attributable to Kraton	$	14,843	$	14,843		$	29,564	$	(7,588	)	$	(36,102	)	$	15,560
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax	—		—			—		3,994			—			3,994
Unrealized loss on cash flow hedges, net of tax	—		(21		)	—		(27		)	—			(48		)
Other comprehensive income (loss), net of tax	—		(21		)	—		3,967			—			3,946
Comprehensive income (loss) attributable to Kraton	14,843		14,822			29,564		(3,621		)	(36,102		)	19,506
Comprehensive loss attributable to noncontrolling interest	—		—			—		339			—			339
Consolidated comprehensive income (loss)	$	14,843	$	14,822		$	29,564	$	(3,282	)	$	(36,102	)	$	19,845

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

Nine Months Ended September 30, 2017

(Unaudited)

(In thousands)

	Kraton Corporation		Kraton Polymers LLC			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income attributable to Kraton	$	22,763	$	22,763		$	35,115	$	47,359		$	(100,059	)	$	27,941
Other comprehensive income:
Foreign currency translation adjustments, net of tax	—		—			—		60,691			—			60,691
Unrealized loss on cash flow hedges, net of tax	—		(145		)	—		—			—			(145		)
Reclassification of loss on cash flow hedge	—		879			—		—			—			879
Other comprehensive income, net of tax	—		734			—		60,691			—			61,425
Comprehensive income attributable to Kraton	22,763		23,497			35,115		108,050			(100,059		)	89,366
Comprehensive loss attributable to noncontrolling interest	—		—			—		(3,258		)	—			(3,258		)
Consolidated comprehensive income	$	22,763	$	23,497		$	35,115	$	104,792		$	(100,059	)	$	86,108

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

Nine Months Ended September 30, 2016

(Unaudited)

(In thousands)

	Kraton Corporation		Kraton Polymers LLC			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income attributable to Kraton	$	109,256	$	109,256		$	86,695	$	36,359		$	(230,518	)	$	111,048
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax	—		—			—		27,311			—			27,311
Unrealized loss on cash flow hedges, net of tax	—		(5,293		)	—		(61		)	—			(5,354		)
Other comprehensive income (loss), net of tax	—		(5,293		)	—		27,250			—			21,957
Comprehensive income attributable to Kraton	109,256		103,963			86,695		63,609			(230,518		)	133,005
Comprehensive loss attributable to noncontrolling interest	—		—			—		(199		)	—			(199		)
Consolidated comprehensive income	$	109,256	$	103,963		$	86,695	$	63,410		$	(230,518	)	$	132,806

Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2017

(Unaudited)

(In thousands)

	Kraton Corporation			Kraton Polymers LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows provided by operating activities	$	—		$	3,202		$	83,812		$	48,435		$	—		$	135,449
Cash flows provided by (used in) investing activities:
Proceeds from intercompany loans	—			44,961			—			—			(44,961		)	—
Kraton purchase of property, plant and equipment	—			(2,943		)	(39,904		)	(28,748		)	—			(71,595		)
KFPC purchase of property, plant and equipment	—			—			—			(11,790		)	—			(11,790		)
Purchase of software and other intangibles	—			(3,956		)	(147		)	(856		)	—			(4,959		)
Net cash provided by (used in) investing activities	—			38,062			(40,051		)	(41,394		)	(44,961		)	(88,344		)
Cash flows used in financing activities:
Proceeds from debt	—			399,350			32,797			307,020			—			739,167
Repayments of debt	—			(778,000		)	(32,797		)	(26,215		)	—			(837,012		)
KFPC proceeds from debt	—			—			—			39,898			—			39,898
KFPC repayments of debt	—			—			—			(16,244		)	—			(16,244		)
Capital lease payments	—			—			(703		)	—			—			(703		)
Purchase of treasury stock	(2,297		)	—			—			—			—			(2,297		)
Cash contributions from member	—			(2,297		)	—			(351,324		)	353,621			—
Cash distributions to member	(657		)	354,278			—			—			(353,621		)	—
Proceeds from the exercise of stock options	2,954			—			—			—			—			2,954
Settlement of interest rate swap	—			(879		)	—			—			—			(879		)
Settlement of foreign currency hedges	—			(716		)	—			—			—			(716		)
Debt issuance costs	—			(11,311		)	—			(2,618		)	—			(13,929		)
Payments on intercompany loans	—			—			(44,824		)	(137		)	44,961			—
Net cash used in financing activities	—			(39,575		)	(45,527		)	(49,620		)	44,961			(89,761		)
Effect of exchange rate differences on cash	—			—			—			10,025			—			10,025
Net increase (decrease) in cash and cash equivalents	—			1,689			(1,766		)	(32,554		)	—			(32,631		)
Cash and cash equivalents, beginning of period	—			214			6,280			115,255			—			121,749
Cash and cash equivalents, end of period	$	—		$	1,903		$	4,514		$	82,701		$	—		$	89,118

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2016

(Unaudited)

(In thousands)

	Kraton Corporation			Kraton Polymers LLC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	—		$	(53,043	)	$	142,718		$	36,454		$	—		$	126,129
Cash flows provided by (used in) investing activities:
Proceeds from intercompany loans	—			167,868			—			—			(167,868		)	—
Kraton purchase of property, plant, and equipment	—			(2,253		)	(38,082		)	(22,550		)	—			(62,885		)
KFPC purchase of property, plant, and equipment	—			—			—			(16,995		)	—			(16,995		)
Purchase of software and other intangibles	—			(3,280		)	(1,411		)	—			—			(4,691		)
Acquisition, net of cash acquired	—			(1,367,088		)	11,590			43,393			—			(1,312,105		)
Sale of assets	—			—			72,803			—			—			72,803
Net cash provided by (used in) investing activities	—			(1,204,753		)	44,900			3,848			(167,868		)	(1,323,873		)
Cash flows provided by (used in) financing activities:
Proceeds from debt	—			1,732,890			50,075			—			—			1,782,965
Repayments of debt	—			(430,058		)	(50,075		)	—			—			(480,133		)
KFPC proceeds from debt	—			—			—			24,368			—			24,368
Capital lease payments	—			—			(105		)	—			—			(105		)
Purchase of treasury stock	(967		)	—			—			—			—			(967		)
Cash contributions from member	—			(967		)	—			—			967			—
Cash distributions to member	(1,658		)	2,625			—			—			(967		)	—
Proceeds from the exercise of stock options	2,625			—			—			—			—			2,625
Settlement of interest rate swap	—			—			(5,155		)	—			—			(5,155		)
Debt issuance costs	—			(53,929		)	(3,717		)	—			—			(57,646		)
Payments on intercompany loans	—			—			(168,075		)	207			167,868			—
Net cash provided by (used in) financing activities	—			1,250,561			(177,052		)	24,575			167,868			1,265,952
Effect of exchange rate differences on cash	—			—			—			5,291			—			5,291
Net increase (decrease) in cash and cash equivalents	—			(7,235		)	10,566			70,168			—			73,499
Cash and cash equivalents, beginning of period	—			7,256			11,595			51,198			—			70,049
Cash and cash equivalents, end of period	$	—		$	21		$	22,161		$	121,366		$	—		$	143,548