UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number 1-1070

Olin Corporation

(Exact name of registrant as specified in its charter)

Virginia	13-1872319
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

190 Carondelet Plaza,	Suite 1530,	Clayton,	MO	63105
(Address of principal executive offices)				(Zip Code)

(314) 480-1400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class:	Trading symbol:	Name of each exchange on which registered:
Common Stock, $1.00 par value per share	OLN	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐ No ☒

As of September 30, 2019, 159,671,335 shares of the registrant’s common stock were outstanding.

1

TABLE OF CONTENTS FOR FORM 10-Q		Page
Part I — Financial Information		3
Item 1.	Financial Statements	3
	Condensed Balance Sheets	3
	Condensed Statements of Operations	4
	Condensed Statements of Comprehensive Income (Loss)	5
	Condensed Statements of Shareholders’ Equity	6
	Condensed Statements of Cash Flows	8
	Notes to Condensed Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
	Business Background	43
	Executive Summary	43
	Consolidated Results of Operations	45
	Segment Results	48
	Outlook	51
	Environmental Matters	52
	Legal Matters and Contingencies	54
	Liquidity, Investment Activity and Other Financial Data	55
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	60
Item 4.	Controls and Procedures	61
	Cautionary Statement Regarding Forward-Looking Statements	62
Part II — Other Information		64
Item 1.	Legal Proceedings	64
Item 1A.	Risk Factors	64
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	64
Item 3.	Defaults Upon Senior Securities	64
Item 4.	Mine Safety Disclosures	65
Item 5.	Other Information	65
Item 6.	Exhibits	65
SIGNATURES		66

2

Part I — Financial Information

Item 1.  Financial Statements.

OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Condensed Balance Sheets

(In millions, except per share data)

(Unaudited)

	September 30, 2019			December 31, 2018			September 30, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	177.4		$	178.8		$	156.7
Receivables, net	849.9			776.3			1,009.2
Income taxes receivable	17.5			5.9			12.8
Inventories, net	700.7			711.4			724.4
Other current assets	24.1			35.0			35.2
Total current assets	1,769.6			1,707.4			1,938.3
Property, plant and equipment (less accumulated depreciation of $3,112.4, $2,781.0 and $2,651.2)	3,367.0			3,482.1			3,456.7
Operating lease assets, net	314.6			—			—
Deferred income taxes	30.3			26.3			24.8
Other assets	1,170.1			1,150.4			1,159.6
Intangible assets, net	461.9			511.6			528.3
Goodwill	2,119.1			2,119.6			2,119.6
Total assets	$	9,232.6		$	8,997.4		$	9,227.3
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt	$	1.1		$	125.9		$	0.9
Accounts payable	647.7			636.5			709.4
Income taxes payable	9.8			22.6			22.1
Current operating lease liabilities	71.2			—			—
Accrued liabilities	347.4			333.3			341.3
Total current liabilities	1,077.2			1,118.3			1,073.7
Long-term debt	3,339.0			3,104.4			3,336.4
Operating lease liabilities	248.2			—			—
Accrued pension liability	622.4			674.3			589.6
Deferred income taxes	515.5			518.9			548.6
Other liabilities	765.6			749.3			756.1
Total liabilities	6,567.9			6,165.2			6,304.4
Commitments and contingencies
Shareholders’ equity:
Common stock, $1.00 par value per share:  authorized, 240.0 shares; issued and outstanding, 159.7, 165.3 and 166.8 shares	159.7			165.3			166.8
Additional paid-in capital	2,128.6			2,247.4			2,276.9
Accumulated other comprehensive loss	(672.7		)	(651.0		)	(571.3		)
Retained earnings	1,049.1			1,070.5			1,050.5
Total shareholders’ equity	2,664.7			2,832.2			2,922.9
Total liabilities and shareholders’ equity	$	9,232.6		$	8,997.4		$	9,227.3

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

3

OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Condensed Statements of Operations

(In millions, except per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019		2018
Sales	$	1,576.6		$	1,872.4		$	4,722.9	$	5,311.1
Operating expenses:
Cost of goods sold	1,357.6			1,441.7			4,168.6		4,431.1
Selling and administration	110.8			110.8			314.8		321.6
Restructuring charges	4.9			3.3			12.7		13.7
Acquisition-related costs	—			0.4			—		1.0
Other operating income (expense)	0.1			(1.7		)	0.3		6.4
Operating income	103.4			314.5			227.1		550.1
Earnings (losses) of non-consolidated affiliates	—			0.4			—		(20.2		)
Interest expense	63.9			59.2			179.2		184.0
Interest income	0.2			0.3			0.7		1.1
Non-operating pension income	4.1			5.4			12.2		16.2
Other income	—			—			11.2		—
Income before taxes	43.8			261.4			72.0		363.2
Income tax (benefit) provision	(0.4		)	66.3			6.1		88.6
Net income	$	44.2		$	195.1		$	65.9	$	274.6
Net income per common share:
Basic	$	0.27		$	1.17		$	0.40	$	1.64
Diluted	$	0.27		$	1.16		$	0.40	$	1.63
Average common shares outstanding:
Basic	161.9			167.0			163.7		167.1
Diluted	162.8			168.6			164.5		168.9

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

4

OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Condensed Statements of Comprehensive Income (Loss)

(In millions)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net income	$	44.2		$	195.1		$	65.9		$	274.6
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments, net	(15.7		)	(2.0		)	(20.7		)	(15.7		)
Unrealized losses on derivative contracts, net	(2.5		)	(3.6		)	(17.9		)	(6.1		)
Amortization of prior service costs and actuarial losses, net	5.9			7.5			16.9			21.0
Total other comprehensive (loss) income, net of tax	(12.3		)	1.9			(21.7		)	(0.8		)
Comprehensive income	$	31.9		$	197.0		$	44.2		$	273.8

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

5

OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Condensed Statements of Shareholders’ Equity

(In millions, except per share data)

(Unaudited)

	Nine Months Ended September 30, 2019
	Common Stock					Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders’ Equity
	Shares Issued		Par Value
Balance at January 1, 2019	165.3		$	165.3		$	2,247.4		$	(651.0	)	$	1,070.5		$	2,832.2
Lease accounting adoption adjustment	—		—			—			—			11.2			11.2
Net income	—		—			—			—			41.7			41.7
Other comprehensive loss	—		—			—			(5.9		)	—			(5.9		)
Dividends paid:
Common stock ($0.20 per share)	—		—			—			—			(33.0		)	(33.0		)
Common stock repurchased and retired	(0.6	)	(0.6		)	(12.6		)	—			—			(13.2		)
Common stock issued for:
Stock options exercised	0.1		0.1			1.3			—			—			1.4
Other transactions	0.1		0.1			0.3			—			—			0.4
Stock-based compensation	—		—			2.8			—			—			2.8
Balance at March 31, 2019	164.9		164.9			2,239.2			(656.9		)	1,090.4			2,837.6
Net loss	—		—			—			—			(20.0		)	(20.0		)
Other comprehensive loss	—		—			—			(3.5		)	—			(3.5		)
Dividends paid:
Common stock ($0.20 per share)	—		—			—			—			(32.7		)	(32.7		)
Common stock repurchased and retired	(0.6	)	(0.6		)	(12.9		)	—			—			(13.5		)
Common stock issued for:
Stock options exercised	—		—			0.1			—			—			0.1
Other transactions	—		—			0.9			—			—			0.9
Stock-based compensation	—		—			1.9			—			—			1.9
Balance at June 30, 2019	164.3		$	164.3		$	2,229.2		$	(660.4	)	$	1,037.7		$	2,770.8
Net income	—		—			—			—			44.2			44.2
Other comprehensive loss	—		—			—			(12.3		)	—			(12.3		)
Dividends paid:
Common stock ($0.20 per share)	—		—			—			—			(32.8		)	(32.8		)
Common stock repurchased and retired	(4.8	)	(4.8		)	(104.1		)	—			—			(108.9		)
Common stock issued for:
Stock options exercised	—		—			—			—			—			—
Other transactions	0.2		0.2			1.6			—			—			1.8
Stock-based compensation	—		—			1.9			—			—			1.9
Balance at September 30, 2019	159.7		$	159.7		$	2,128.6		$	(672.7	)	$	1,049.1		$	2,664.7

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

6

OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Condensed Statements of Shareholders’ Equity

(In millions, except per share data)

(Unaudited)

	Nine Months Ended September 30, 2018
	Common Stock					Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders’ Equity
	Shares Issued		Par Value
Balance at January 1, 2018	167.1		$	167.1		$	2,280.9		$	(484.6	)	$	790.3		$	2,753.7
Income tax reclassification adjustment	—		—			—			(85.9		)	85.9			—
Net income	—		—			—			—			20.9			20.9
Other comprehensive income	—		—			—			17.7			—			17.7
Dividends paid:
Common stock ($0.20 per share)	—		—			—			—			(33.4		)	(33.4		)
Common stock issued for:
Stock options exercised	0.1		0.1			0.9			—			—			1.0
Other transactions	—		—			0.5			—			—			0.5
Stock-based compensation	—		—			2.7			—			—			2.7
Balance at March 31, 2018	167.2		167.2			2,285.0			(552.8		)	863.7			2,763.1
Net income	—		—			—			—			58.6			58.6
Other comprehensive loss	—		—			—			(20.4		)	—			(20.4		)
Dividends paid:
Common stock ($0.20 per share)	—		—			—			—			(33.5		)	(33.5		)
Common stock repurchased and retired	(0.3	)	(0.3		)	(8.8		)	—			—			(9.1		)
Common stock issued for:
Stock options exercised	0.1		0.1			1.1			—			—			1.2
Other transactions	—		—			0.1			—			—			0.1
Stock-based compensation	—		—			3.1			—			—			3.1
Balance at June 30, 2018	167.0		$	167.0		$	2,280.5		$	(573.2	)	$	888.8		$	2,763.1
Net income	—		—			—			—			195.1			195.1
Other comprehensive income	—		—			—			1.9			—			1.9
Dividends paid:
Common stock ($0.20 per share)	—		—			—			—			(33.4		)	(33.4		)
Common stock repurchased and retired	(0.2	)	(0.2		)	(7.5		)	—			—			(7.7		)
Common stock issued for:
Stock options exercised	—		—			1.0			—			—			1.0
Other transactions	—		—			0.9			—			—			0.9
Stock-based compensation	—		—			2.0			—			—			2.0
Balance at September 30, 2018	166.8		$	166.8		$	2,276.9		$	(571.3	)	$	1,050.5		$	2,922.9

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

7

OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Condensed Statements of Cash Flows

(In millions)

(Unaudited)

	Nine Months Ended September 30,
	2019			2018
Operating Activities
Net income	$	65.9		$	274.6
Adjustments to reconcile net income to net cash and cash equivalents provided by (used for) operating activities:
Gain on disposition of non-consolidated affiliate	(11.2		)	—
Losses of non-consolidated affiliates	—			20.2
Losses on disposition of property, plant and equipment	—			1.9
Stock-based compensation	8.9			9.2
Depreciation and amortization	460.3			451.0
Deferred income taxes	(11.0		)	44.0
Qualified pension plan contributions	(13.2		)	(1.3		)
Qualified pension plan income	(6.9		)	(11.1		)
Change in:
Receivables	(77.4		)	(280.1		)
Income taxes receivable/payable	(24.1		)	17.1
Inventories	2.5			(44.5		)
Other current assets	4.9			4.5
Accounts payable and accrued liabilities	14.2			110.1
Other assets	(4.8		)	(2.0		)
Other noncurrent liabilities	12.9			(3.8		)
Other operating activities	(4.4		)	(3.5		)
Net operating activities	416.6			586.3
Investing Activities
Capital expenditures	(271.8		)	(274.5		)
Proceeds from disposition of non-consolidated affiliate	20.0			—
Proceeds from disposition of property, plant and equipment	—			2.9
Net investing activities	(251.8		)	(271.6		)
Financing Activities
Long-term debt:
Borrowings	825.0			570.0
Repayments	(744.1		)	(823.7		)
Common stock repurchased and retired	(135.6		)	(16.8		)
Stock options exercised	1.5			3.2
Dividends paid	(98.5		)	(100.3		)
Debt issuance costs	(14.4		)	(8.5		)
Net financing activities	(166.1		)	(376.1		)
Effect of exchange rate changes on cash and cash equivalents	(0.1		)	(0.3		)
Net decrease in cash and cash equivalents	(1.4		)	(61.7		)
Cash and cash equivalents, beginning of period	178.8			218.4
Cash and cash equivalents, end of period	$	177.4		$	156.7
Cash paid for interest and income taxes:
Interest, net	$	135.2		$	153.9
Income taxes, net of refunds	$	47.6		$	31.9
Non-cash investing activities:
Decrease (increase) in capital