OLIN Corp

We define segment results as income (loss) before interest expense, interest income, other operating income (expense), non-operating pension income, other income and income taxes. We have three operating segments: Chlor Alkali Products and Vinyls, Epoxy and Winchester. The three operating segments reflect the organization used by our management for purposes of allocating resources and assessing performance. Chlorine and caustic soda used in our Epoxy segment is transferred at cost from the Chlor Alkali Products and Vinyls segment.

Chlor Alkali Products and Vinyls

Chlor Alkali Products and Vinyls sales for the three months ended March 31, 2024 were $884.6 million compared to $1,117.1 million for the same period in 2023, a decrease of $232.5 million, or 21%. The sales decrease was primarily due to lower pricing, primarily caustic soda, and lower volume.

Chlor Alkali Products and Vinyls segment income was $76.6 million for the three months ended March 31, 2024 compared to $245.9 million for the same period in 2023. The decrease in segment results of $169.3 million was due to lower pricing ($149.9 million), primarily caustic soda, and lower volumes ($88.2 million), partially offset by lower costs associated with products purchased from other parties ($62.6 million) and lower raw material and operating costs ($6.2 million). Chlor

Alkali Products and Vinyls segment results included depreciation and amortization expense of $106.8 million and $114.4 million for the three months ended March 31, 2024 and 2023, respectively.

Epoxy

Epoxy sales for the three months ended March 31, 2024 were $341.3 million compared to $360.7 million for the same period in 2023, a decrease of $19.4 million, or 5%. The sales decrease was primarily due to lower product prices ($98.1 million) and an unfavorable effect of foreign currency translation ($0.5 million), partially offset by increased sales volumes ($79.2 million).

Epoxy segment loss was $11.8 million for the three months ended March 31, 2024 compared to segment income of $21.4 million for the same period in 2023. The decrease in segment results of $33.2 million was primarily due to lower product prices ($98.1 million), which continues to be impacted by significant exports out of Asia into the European and North American markets, partially offset by increased volumes ($58.4 million) and lower raw material and operating costs ($6.5 million). A significant percentage of our Euro denominated sales are of products manufactured within Europe. As a result, the impact of foreign currency translation on revenue is primarily offset by the impact of foreign currency translation on raw materials and manufacturing costs also denominated in Euros. Epoxy segment results included depreciation and amortization expense of $13.5 million and $14.5 million for the three months ended March 31, 2024 and 2023, respectively.

Winchester

Winchester sales were $409.4 million for the three months ended March 31, 2024 compared to $366.5 million for the same period in 2023, an increase of $42.9 million, or 12%. The increase was due to higher ammunition sales to commercial customers ($42.3 million), higher sales to domestic and international military customers ($6.1 million), partially offset by lower sales to law enforcement agencies ($5.5 million). Commercial ammunition sales were primarily impacted by increased sales volumes and first quarter 2024 sales from White Flyer.

Winchester segment income was $72.2 million for the three months ended March 31, 2024 compared to $61.0 million for the same period in 2023, an increase of $11.2 million. The increase in segment results was due to higher sales volumes ($11.3 million), which includes White Flyer, and lower commodity and operating costs ($4.0 million), partially offset by lower product pricing ($4.1 million). Winchester segment income included depreciation and amortization expense of $7.9 million and $6.2 million for the three months ended March 31, 2024 and 2023, respectively.

Corporate/Other

For the three months ended March 31, 2024, charges to income for environmental investigatory and remedial activities were $5.8 million compared to $3.2 million for the three months ended March 31, 2023. These charges related primarily to expected future investigatory and remedial activities associated with past manufacturing operations and former waste disposal sites.

For the three months ended March 31, 2024, other corporate and unallocated costs were $25.8 million compared to $34.3 million for the three months ended March 31, 2023, a decrease of $8.5 million. The decrease was primarily due to lower variable incentive compensation expense ($4.3 million) and a favorable foreign currency impact ($2.5 million).

Restructurings

As a result of weak global resin demand and higher cost structures within the European region, we began a review of our global Epoxy asset footprint to optimize the most productive and cost effective assets to support our strategic operating model. As part of this review, we announced operational cessations in the fourth quarter of 2022 and the first and second quarters of 2023 (collectively, Epoxy Optimization Plan).

For the three months ended March 31, 2024 and 2023, we recorded restructuring charges of $3.5 million and $57.8 million, respectively, for contract termination costs, the write-off of equipment and facility costs and facility exit costs related to these actions. We expect to incur additional restructuring charges through 2025 of approximately $20 million related to these actions.

For the three months ended March 31, 2024 and 2023, Olin incurred charges of $4.8 million and $3.1 million, respectively, associated with other previously disclosed restructuring plans. We expect to incur additional restructuring charges through 2027 of approximately $45 million related to these actions.