SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

3 Months Ended

Mar. 31, 2020

Supplemental Guarantor Financial Information [Abstract]

SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

NOTE 20. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

In October 2015, Blue Cube Spinco LLC (the Issuer) issued $720.0 million aggregate principal amount of 9.75% senior notes due October 15, 2023 (2023 Notes) and $500.0 million aggregate principal amount of 10.00% senior notes due October 15, 2025 (2025 Notes and, together with the 2023 Notes, the Notes). During 2016, the Notes were registered under the Securities Act of 1933, as amended. The Issuer was formed on March 13, 2015 as a wholly owned subsidiary of Dow and upon closing of the Acquisition became a 100% owned subsidiary of Olin (the Parent Guarantor). The Notes are fully and unconditionally guaranteed by the Parent Guarantor.

The following condensed consolidating financial information presents the condensed consolidating balance sheets as of March 31, 2020, December 31, 2019 and March 31, 2019, the related condensed consolidating statements of operations, comprehensive income (loss) and cash flows for each of the three months ended March 31, 2020 and 2019 of (a) the Parent Guarantor, (b) the Issuer, (c) the non-guarantor subsidiaries, (d) elimination entries necessary to consolidate the Parent Guarantor with the Issuer and the non-guarantor subsidiaries and (e) Olin on a consolidated basis. Investments in consolidated subsidiaries are presented under the equity method of accounting.

CONDENSED CONSOLIDATING BALANCE SHEETS
March 31, 2020
(In millions)
(Unaudited)
	Parent Guarantor			Issuer		Subsidiary Non-Guarantor			Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	109.7		$	—	$	84.8		$	—		$	194.5
Receivables, net	64.3			—		738.6			—			802.9
Intercompany receivables	—			—		3,080.9			(3,080.9		)	—
Income taxes receivable	9.7			—		10.2			—			19.9
Inventories, net	141.0			—		526.5			—			667.5
Other current assets	262.4			—		6.7			(214.6		)	54.5
Total current assets	587.1			—		4,447.7			(3,295.5		)	1,739.3
Property, plant and equipment, net	707.4			—		2,575.3			—			3,282.7
Operating lease assets, net	45.4			—		321.1			—			366.5
Investment in subsidiaries	7,035.4			4,322.4		—			(11,357.8		)	—
Deferred income taxes	23.6			—		39.9			(23.9		)	39.6
Other assets	19.3			—		1,186.0			—			1,205.3
Long-term receivables—affiliates	73.4			583.1		—			(656.5		)	—
Intangible assets, net	0.3			—		431.1			—			431.4
Goodwill	—			966.3		1,153.3			—			2,119.6
Total assets	$	8,491.9		$	5,871.8	$	10,154.4		$	(15,333.7	)	$	9,184.4
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt	$	2.0		$	—	$	—		$	—		$	2.0
Accounts payable	2.4			—		672.3			(6.6		)	668.1
Intercompany payables	3,080.9			—		—			(3,080.9		)	—
Income taxes payable	0.1			—		7.3			—			7.4
Current operating lease liabilities	8.2			—		68.4			—			76.6
Accrued liabilities	193.9			—		829.3			(211.4		)	811.8
Total current liabilities	3,287.5			—		1,577.3			(3,298.9		)	1,565.9
Long-term debt	2,130.8			1,209.2		149.5			—			3,489.5
Operating lease liabilities	38.4			—		256.6			—			295.0
Accrued pension liability	480.1			—		297.9			—			778.0
Deferred income taxes	—			6.6		467.3			(24.0		)	449.9
Long-term payables—affiliates	—			—		656.5			(656.5		)	—
Other liabilities	266.0			5.6		45.4			—			317.0
Total liabilities	6,202.8			1,221.4		3,450.5			(3,979.4		)	6,895.3
Commitments and contingencies
Shareholders’ equity:
Common stock	157.8			—		14.6			(14.6		)	157.8
Additional paid-in capital	2,122.8			4,125.7		4,808.2			(8,933.9		)	2,122.8
Accumulated other comprehensive loss	(821.1		)	—		(13.6		)	13.6			(821.1		)
Retained earnings	829.6			524.7		1,894.7			(2,419.4		)	829.6
Total shareholders’ equity	2,289.1			4,650.4		6,703.9			(11,354.3		)	2,289.1
Total liabilities and shareholders’ equity	$	8,491.9		$	5,871.8	$	10,154.4		$	(15,333.7	)	$	9,184.4

CONDENSED CONSOLIDATING BALANCE SHEETS
December 31, 2019
(In millions)
(Unaudited)
	Parent Guarantor			Issuer		Subsidiary Non-Guarantor			Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	11.6		$	—	$	209.3		$	—		$	220.9
Receivables, net	78.3			—		686.8			(4.7		)	760.4
Intercompany receivables	—			—		2,815.5			(2,815.5		)	—
Income taxes receivable	1.6			—		12.3			—			13.9
Inventories, net	157.1			—		538.6			—			695.7
Other current assets	231.4			—		0.2			(208.5		)	23.1
Total current assets	480.0			—		4,262.7			(3,028.7		)	1,714.0
Property, plant and equipment, net	699.0			—		2,624.8			—			3,323.8
Operating lease assets, net	47.4			—		330.4			—			377.8
Investment in subsidiaries	7,048.2			4,353.5		—			(11,401.7		)	—
Deferred income taxes	1.7			—		34.7			(1.1		)	35.3
Other assets	20.9			—		1,148.2			—			1,169.1
Long-term receivables—affiliates	73.4			605.8		—			(679.2		)	—
Intangible assets, net	0.3			—		447.8			—			448.1
Goodwill	—			966.3		1,153.4			—			2,119.7
Total assets	$	8,370.9		$	5,925.6	$	10,002.0		$	(15,110.7	)	$	9,187.8
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt	$	2.1		$	—	$	—		$	—		$	2.1
Accounts payable	—			—		660.6			(8.7		)	651.9
Intercompany payables	2,815.5			—		—			(2,815.5		)	—
Income taxes payable	11.5			—		8.3			—			19.8
Current operating lease liabilities	8.2			—		71.1			—			79.3
Accrued liabilities	183.7			—		350.8			(205.4		)	329.1
Total current liabilities	3,021.0			—		1,090.8			(3,029.6		)	1,082.2
Long-term debt	2,130.0			1,208.7		—			—			3,338.7
Operating lease liabilities	40.4			—		263.0			—			303.4
Accrued pension liability	496.9			—		300.8			—			797.7
Deferred income taxes	—			6.5		449.2			(1.2		)	454.5
Long-term payables—affiliates	—			—		679.2			(679.2		)	—
Other liabilities	265.1			5.6		523.1			—			793.8
Total liabilities	5,953.4			1,220.8		3,306.1			(3,710.0		)	6,770.3
Commitments and contingencies
Shareholders' equity:
Common stock	157.7			—		14.6			(14.6		)	157.7
Additional paid-in capital	2,122.1			4,125.7		4,808.2			(8,933.9		)	2,122.1
Accumulated other comprehensive loss	(803.4		)	—		(6.5		)	6.5			(803.4		)
Retained earnings	941.1			579.1		1,879.6			(2,458.7		)	941.1
Total shareholders’ equity	2,417.5			4,704.8		6,695.9			(11,400.7		)	2,417.5
Total liabilities and shareholders’ equity	$	8,370.9		$	5,925.6	$	10,002.0		$	(15,110.7	)	$	9,187.8

CONDENSED CONSOLIDATING BALANCE SHEETS
March 31, 2019
(In millions)
(Unaudited)
	Parent Guarantor			Issuer		Subsidiary Non-Guarantor			Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	6.0		$	—	$	99.7		$	—		$	105.7
Receivables, net	99.0			—		709.3			—			808.3
Intercompany receivables	—			—		2,664.7			(2,664.7		)	—
Income taxes receivable	0.3			—		6.0			—			6.3
Inventories, net	172.3			—		545.2			—			717.5
Other current assets	235.7			—		3.5			(192.5		)	46.7
Total current assets	513.3			—		4,028.4			(2,857.2		)	1,684.5
Property, plant and equipment, net	674.0			—		2,759.5			—			3,433.5
Operating lease assets, net	48.9			—		226.2			—			275.1
Investment in subsidiaries	7,024.5			4,339.5		—			(11,364.0		)	—
Deferred income taxes	3.2			—		31.9			(3.4		)	31.7
Other assets	17.0			—		1,114.4			—			1,131.4
Long-term receivables—affiliates	—			1,169.9		—			(1,169.9		)	—
Intangible assets, net	0.3			—		493.9			—			494.2
Goodwill	—			966.3		1,153.2			—			2,119.5
Total assets	$	8,281.2		$	6,475.7	$	9,807.5		$	(15,394.5	)	$	9,169.9
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt	$	1.1		$	—	$	125.0		$	—		$	126.1
Accounts payable	75.8			—		566.8			(5.6		)	637.0
Intercompany payables	2,664.7			—		—			(2,664.7		)	—
Income taxes payable	3.7			—		9.3			—			13.0
Current operating lease liabilities	8.0			—		61.4			—			69.4
Accrued liabilities	138.3			—		345.9			(189.8		)	294.4
Total current liabilities	2,891.6			—		1,108.4			(2,860.1		)	1,139.9
Long-term debt	1,370.3			1,696.9		—			—			3,067.2
Operating lease liabilities	42.0			—		164.0			—			206.0
Accrued pension liability	427.0			—		233.2			—			660.2
Deferred income taxes	—			6.1		523.2			(3.4		)	525.9
Long-term payables—affiliates	419.6			—		750.3			(1,169.9		)	—
Other liabilities	293.1			5.5		434.5			—			733.1
Total liabilities	5,443.6			1,708.5		3,213.6			(4,033.4		)	6,332.3
Commitments and contingencies
Shareholders' equity:
Common stock	164.9			—		14.6			(14.6		)	164.9
Additional paid-in capital	2,239.2			4,125.7		4,808.2			(8,933.9		)	2,239.2
Accumulated other comprehensive loss	(656.9		)	—		(8.1		)	8.1			(656.9		)
Retained earnings	1,090.4			641.5		1,779.2			(2,420.7		)	1,090.4
Total shareholders’ equity	2,837.6			4,767.2		6,593.9			(11,361.1		)	2,837.6
Total liabilities and shareholders’ equity	$	8,281.2		$	6,475.7	$	9,807.5		$	(15,394.5	)	$	9,169.9

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
Three Months Ended March 31, 2020
(In millions)
(Unaudited)
	Parent Guarantor			Issuer			Subsidiary Non-Guarantor			Eliminations			Total
Sales	$	353.3		$	—		$	1,201.8		$	(130.0	)	$	1,425.1
Operating expenses:
Cost of goods sold	333.6			—			1,170.6			(130.0		)	1,374.2
Selling and administration	39.9			—			56.8			—			96.7
Restructuring charges	—			—			1.7			—			1.7
Operating loss	(20.2		)	—			(27.3		)	—			(47.5		)
Equity loss in subsidiaries	(48.5		)	(31.1		)	—			79.6			—
Interest expense	32.4			30.6			3.1			(3.0		)	63.1
Interest income	2.1			—			1.0			(3.0		)	0.1
Non-operating pension income (expense)	6.5			—			(1.9		)	—			4.6
Loss before taxes	(92.5		)	(61.7		)	(31.3		)	79.6			(105.9		)
Income tax benefit	(12.5		)	(7.3		)	(6.1		)	—			(25.9		)
Net loss	$	(80.0	)	$	(54.4	)	$	(25.2	)	$	79.6		$	(80.0	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
Three Months Ended March 31, 2019
(In millions)
(Unaudited)
	Parent Guarantor			Issuer			Subsidiary Non-Guarantor			Eliminations			Total
Sales	$	332.8		$	—		$	1,327.7		$	(107.1	)	$	1,553.4
Operating expenses:
Cost of goods sold	304.1			—			1,150.3			(107.1		)	1,347.3
Selling and administration	51.8			—			55.2			—			107.0
Restructuring charges	1.4			—			2.6			—			4.0
Other operating (expense) income	(2.1		)	—			2.2			—			0.1
Operating (loss) income	(26.6		)	—			121.8			—			95.2
Equity income in subsidiaries	62.6			52.6			—			(115.2		)	—
Interest expense	17.4			36.1			5.2			(1.3		)	57.4
Interest income	0.6			—			0.9			(1.3		)	0.2
Non-operating pension income (expense)	5.4			—			(1.5		)	—			3.9
Other income	11.2			—			—			—			11.2
Income before taxes	35.8			16.5			116.0			(115.2		)	53.1
Income tax (benefit) provision	(5.9		)	(8.7		)	26.0			—			11.4
Net income	$	41.7		$	25.2		$	90.0		$	(115.2	)	$	41.7

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Three Months Ended March 31, 2020
(In millions)
(Unaudited)
	Parent Guarantor			Issuer			Subsidiary Non-Guarantor			Eliminations		Total
Net loss	$	(80.0	)	$	(54.4	)	$	(25.2	)	$	79.6	$	(80.0	)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments, net	—			—			(9.0		)	—		(9.0		)
Unrealized losses on derivative contracts, net	(17.9		)	—			—			—		(17.9		)
Amortization of prior service costs and actuarial losses, net	7.9			—			1.3			—		9.2
Total other comprehensive loss, net of tax	(10.0		)	—			(7.7		)	—		(17.7		)
Comprehensive loss	$	(90.0	)	$	(54.4	)	$	(32.9	)	$	79.6	$	(97.7	)

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Three Months Ended March 31, 2019
(In millions)
(Unaudited)
	Parent Guarantor			Issuer		Subsidiary Non-Guarantor			Eliminations			Total
Net income	$	41.7		$	25.2	$	90.0		$	(115.2	)	$	41.7
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net	—			—		(8.3		)	—			(8.3		)
Unrealized losses on derivative contracts, net	(3.3		)	—		—			—			(3.3		)
Amortization of prior service costs and actuarial losses, net	5.1			—		0.6			—			5.7
Total other comprehensive income (loss), net of tax	1.8			—		(7.7		)	—			(5.9		)
Comprehensive income	$	43.5		$	25.2	$	82.3		$	(115.2	)	$	35.8

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2020
(In millions)
(Unaudited)
	Parent Guarantor			Issuer		Subsidiary Non-Guarantor			Eliminations		Total
Net operating activities	$	162.0		$	—	$	(209.9	)	$	—	$	(47.9	)
Investing Activities
Capital expenditures	(32.1		)	—		(63.8		)	—		(95.9		)
Net investing activities	(32.1		)	—		(63.8		)	—		(95.9		)
Financing Activities
Long-term debt:
Borrowings	75.0			—		150.0			—		225.0
Repayments	(75.4		)	—		—			—		(75.4		)
Stock options exercised	0.5			—		—			—		0.5
Dividends paid	(31.5		)	—		—			—		(31.5		)
Debt issuance costs	(0.4		)	—		—			—		(0.4		)
Net financing activities	(31.8		)	—		150.0			—		118.2
Effect of exchange rate changes on cash and cash equivalents	—			—		(0.8		)	—		(0.8		)
Net increase (decrease) in cash and cash equivalents	98.1			—		(124.5		)	—		(26.4		)
Cash and cash equivalents, beginning of period	11.6			—		209.3			—		220.9
Cash and cash equivalents, end of period	$	109.7		$	—	$	84.8		$	—	$	194.5

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2019
(In millions)
(Unaudited)
	Parent Guarantor			Issuer			Subsidiary Non-Guarantor			Eliminations		Total
Net operating activities	$	39.7		$	—		$	64.6		$	—	$	104.3
Investing Activities
Capital expenditures	(50.7		)	—			(51.5		)	—		(102.2		)
Proceeds from disposition of non-consolidated affiliate	20.0			—			—			—		20.0
Net investing activities	(30.7		)	—			(51.5		)	—		(82.2		)
Financing Activities
Long-term debt repayments	(0.2		)	(50.0		)	—			—		(50.2		)
Common stock repurchased and retired	(13.2		)	—			—			—		(13.2		)
Stock options exercised	1.4			—			—			—		1.4
Dividends paid	(33.0		)	—			—			—		(33.0		)
Intercompany financing activities	(50.0		)	50.0			—			—		—
Net financing activities	(95.0		)	—			—			—		(95.0		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(0.2		)	—		(0.2		)
Net (decrease) increase in cash and cash equivalents	(86.0		)	—			12.9			—		(73.1		)
Cash and cash equivalents, beginning of period	92.0			—			86.8			—		178.8
Cash and cash equivalents, end of period	$	6.0		$	—		$	99.7		$	—	$	105.7