OLIN Corp

Previous wording

Olin Corporation (Olin) is a Virginia corporation, incorporated in 1892, having its principal executive offices in Clayton, MO. We are a leading vertically integrated global manufacturer and distributor of chemical products and a leading U.S. manufacturer of ammunition. Our operations are concentrated in three business segments: Chlor Alkali Products and Vinyls, Epoxy and Winchester. All of our business segments are capital-intensive manufacturing businesses. The Chlor Alkali Products and Vinyls segment manufactures and sells chlorine and caustic soda, ethylene dichloride and vinyl chloride monomer, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, hydrochloric acid, hydrogen, bleach products and potassium hydroxide. The Epoxy segment produces and sells a full range of epoxy materials and precursors, including aromatics (acetone and phenol), allyl chloride, epichlorohydrin, liquid epoxy resins, solid epoxy resins and systems and growth products such as converted epoxy resins and additives. The Winchester segment produces and sells sporting ammunition, reloading components, small caliber military ammunition and components, industrial cartridges and clay targets.

Current wording

Epoxy and Winchester. All of our business segments are capital-intensive manufacturing businesses. The Chlor Alkali Products and Vinyls segment manufactures and sells chlorine and caustic soda, ethylene dichloride and vinyl chloride monomer, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, hydrochloric acid, hydrogen, bleach products and potassium hydroxide. The Epoxy segment produces and sells a full range of epoxy materials and precursors, including aromatics (acetone and phenol), allyl chloride, epichlorohydrin, liquid epoxy resins, solid epoxy resins and systems and growth products such as converted epoxy resins and additives. The Winchester segment produces and sells sporting ammunition, reloading components, small caliber military ammunition and components, industrial cartridges and clay targets.

Previous wording

Net income for the three and six months ended June 30, 2024 was $74.2 million and $122.8 million, respectively, compared to $146.9 million and $303.2 million, for the prior year periods, respectively. The decrease of $72.7 million and $180.4 million, respectively, in net income from the prior year periods was primarily due to a decline in operating results across our chemicals business segments, partially offset by improved operating results from our Winchester segment. Net income for both the three and six months ended June 30, 2023 also reflects a gain of $27.0 million for the sale of our domestic private trucking fleet and operations. Diluted net income per share was $0.62 and $1.01 for the three and six months ended June 30, 2024, respectively, compared to $1.13 and $2.29 in the prior year periods, respectively, a decrease of $0.51 and $1.28 per share, or 45% and 56%, respectively.

Current wording

Net (loss) income for the three and nine months ended September 30, 2024, was $(24.9) million and $97.9 million, respectively, compared to $104.1 million and $407.3 million, for the prior year periods, respectively. The decrease of $129.0 million and $309.4 million, respectively, in net (loss) income from the prior year periods was primarily due to a decline in operating results across our Chemicals businesses. The operating results from our Winchester segment were lower for the three months ended September 30, 2024 but were higher for the nine months ended September 30, 2024 compared to the comparable prior year periods. Net income for the nine months ended September 30, 2023 also reflects a gain of $27.0 million for the sale of our domestic private trucking fleet and operations. Diluted net (loss) income per share was $(0.21) and $0.81 for the three and nine months ended September 30, 2024, respectively, compared to $0.82 and $3.12 in the prior year periods, respectively, a decrease of $1.03 and $2.31 per share.

Previous wording

Winchester reported segment income of $70.3 million and $142.5 million for the three and six months ended June 30, 2024, respectively. Winchester segment results were higher than the comparable prior year periods due to higher sales volumes, which included White Flyer results, partially offset by lower product pricing.

Current wording

Winchester reported segment income of $53.4 million and $195.9 million for the three and nine months ended September 30, 2024, respectively. Winchester segment results for the three months ended September 30, 2024 were lower than the comparable prior year period due to higher commodity and operating costs, including propellant costs. Winchester segment results for the nine months ended September 30, 2024 were higher than the comparable prior year period due to higher sales volumes, which included White Flyer results, partially offset by higher commodity and operating costs, including propellant costs. Higher international military sales, military project revenue, and White Flyer sales were partially offset by lower commercial ammunition sales.

Previous wording

During the six months ended June 30, 2024, we repurchased and retired 3.9 million shares of common stock at a total value of $211.4 million. As of June 30, 2024, we had $787.0 million of remaining authorized common stock to be repurchased under our 2022 Repurchase Authorization Program.

Current wording

During the nine months ended September 30, 2024, we repurchased and retired 4.9 million shares of common stock at a total value of $256.8 million. As of September 30, 2024, we had $742.0 million of remaining authorized common stock to be repurchased under our 2022 Repurchase Authorization Program.

Previous wording

During the six months ended June 30, 2024, we had net borrowings of $238.9 million with $343.0 million borrowed under our Senior Revolving Credit Facility, which was utilized to repay $70.0 million of tax-exempt variable-rate bonds and $29.7 million under our Receivables Financing Agreement.

Current wording

During the nine months ended September 30, 2024, we had net borrowings of $216.7 million with $282.0 million borrowed under our Senior Revolving Credit Facility, which was partially utilized to repay $70.0 million of tax-exempt variable-rate bonds, and $11.3 million under our Receivables Financing Agreement.

Previous wording

On July 10, 2024, we announced a temporary disruption of operations at our Freeport, TX, facility as a result of Hurricane Beryl. In response to this disruption, we declared a system-wide Force Majeure for our Chlor Alkali Products & Vinyls products and aromatics shipments for our Epoxy segment. This disruption is a result of hurricane-related damage to Olin facilities in Freeport, TX, impacting Olin’s normal production and logistics capabilities including access to power, raw materials, and other essential feedstocks and services. During July 2024, we safely returned many Freeport, TX plants to operation. Wind damage to ancillary equipment has prevented some assets from returning to operation. Once this critical equipment is restored, those remaining assets, including our vinyl chloride monomer and phenol/acetone plants, will be restarted. We expect our third quarter 2024 Chemical businesses’ results to be reduced by approximately $100 million due to incremental costs to restore operations, unabsorbed fixed manufacturing costs, and reduced profit from lost sales.

Current wording

On July 10, 2024, we announced a temporary disruption of operations at our Freeport, TX, facility as a result of Hurricane Beryl. In response to this disruption, we declared a system-wide force majeure for our Chlor Alkali Products & Vinyls products and aromatics shipments for our Epoxy segment. This disruption was a result of hurricane-related damage to Olin facilities in Freeport, TX, impacting Olin’s normal production and logistics capabilities including access to power, raw materials, and other essential feedstocks and services. During the third quarter, we safely returned many Freeport, TX plants to operation and on August 28, 2024, we lifted the system wide force majeure on Chlor Alkali Products and Vinyls products. However, persistent operating limitations necessitated an additional outage, which we commenced in late September and successfully completed during October.

Previous wording

Sales for the six months ended June 30, 2024 were $3,279.3 million compared to $3,547.0 million in the same period last year, a decrease of $267.7 million, or 8%. Chlor Alkali Products and Vinyls sales decreased by $314.5 million primarily due to lower caustic soda pricing, partially offset by increased sales volumes associated with product purchased from other parties. Epoxy sales decreased by $35.5 million, primarily due to lower product pricing, partially offset by increased sales volumes. Winchester sales increased by $82.3 million, primarily due to 2024 sales from White Flyer, higher commercial ammunition sales volumes, and increased sales to international military customers.

Current wording

Sales for the three months ended September 30, 2024 were $1,589.5 million compared to $1,671.4 million in the same period last year, a decrease of $81.9 million, or 5%. Chlor Alkali Products and Vinyls sales decreased by $98.0 million primarily due to lower pricing, primarily caustic soda. Epoxy sales decreased by $36.5 million, primarily due to lower sales volumes, primarily as a result of Hurricane Beryl. Winchester sales increased by $52.6 million, primarily due to third quarter 2024 sales from White Flyer and increased sales to international military customers and military project revenue, partially offset by lower commercial ammunition sales.

Previous wording

Gross margin decreased $72.3 million for the three months ended June 30, 2024 compared to the prior year. Chlor Alkali Products and Vinyls gross margin decreased by $77.8 million primarily due to lower caustic soda pricing. Epoxy gross margin decreased by $4.4 million primarily due to lower product pricing, partially offset by increased volumes. Winchester gross margin increased by $2.9 million primarily due to higher sales volumes, including White Flyer, partially offset by lower product pricing. Gross margin as a percentage of sales decreased to 14% in 2024 from 18% in 2023, across all segments.

Current wording

Gross margin decreased $134.6 million for the three months ended September 30, 2024 compared to the prior year. Chlor Alkali Products and Vinyls gross margin decreased by $117.7 million primarily due to the impact of Hurricane Beryl and lower pricing, primarily caustic soda. Epoxy gross margin decreased by $11.0 million primarily due to the impact of Hurricane Beryl, partially offset by lower raw material and operating costs. Winchester gross margin decreased by $6.9 million primarily due to higher commodity and operating costs, including propellant costs. Gross margin as a percentage of sales decreased to 8% in 2024 from 16% in 2023, across all segments.

Previous wording

Selling and administrative expenses for the three months ended June 30, 2024 were $94.6 million, a decrease of $6.6 million from the prior year. The decrease was primarily due to lower stock-based compensation expense of $6.7 million, which includes mark-to-market adjustments. Selling and administrative expenses as a percentage of sales was 6% for both the three months ended June 30, 2024 and 2023.

Current wording

Selling and administrative expenses for the three months ended September 30, 2024 were $111.7 million, an increase of $20.8 million from the prior year. The increase was primarily due to higher legal and legal-related settlement expense of $11.9 million, consulting and contract services of $2.3 million, and stock-based compensation expense of $2.2 million, which includes mark-to-market adjustments. Selling and administrative expenses as a percentage of sales increased to 7% in 2024 from 5% in 2023.

Previous wording

Restructuring charges for the six months ended June 30, 2024 and 2023 were $15.1 million and $80.1 million, respectively. The decrease in charges was primarily due to a decline in charges associated with our 2023 actions to reconfigure our global Epoxy asset footprint to optimize the most productive and cost effective assets to support our strategic operating model, which resulted in pretax restructuring charges of $9.3 million and $71.1 million for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Restructuring charges for the three months ended September 30, 2024 and 2023 were $7.9 million and $11.9 million, respectively. Restructuring charges were primarily associated with our 2023 actions to reconfigure our global Epoxy asset footprint to optimize the most productive and cost effective assets to support our strategic operating model, which resulted in pretax restructuring charges of $6.3 million and $8.6 million for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

Interest expense increased by $1.3 million for the three months ended June 30, 2024 from the prior year, primarily due to higher average interest rates.

Current wording

Interest expense increased by $2.2 million for the three months ended September 30, 2024 from the prior year, primarily due to higher average interest rates.

Previous wording

The effective tax rate for the three months ended June 30, 2024 included a net $0.6 million tax benefit, primarily associated with stock-based compensation and U.S. Federal tax credits purchased at a discount, partially offset by an expense from prior year tax positions and a change in tax contingencies. Excluding these items, the effective tax rate for the three months ended June 30, 2024 of 25.8% was higher than the 21.0% U.S. federal statutory rate primarily due to state income tax and foreign income inclusions, partially offset by favorable permanent salt depletion deductions. The effective tax rate for the three months ended June 30, 2023 included a net $12.0 million tax benefit, primarily associated with stock-based compensation and prior year tax positions, partially offset by an expense from a net increase in the valuation allowance related to deferred tax assets in foreign jurisdictions and from a change in tax contingencies. Excluding these items, the effective tax rate for the three months ended June 30, 2023 of 25.4% was higher than the 21.0% U.S. federal statutory rate primarily due to state income tax and an increase in the valuation allowance related to losses in foreign jurisdictions, partially offset by favorable permanent salt depletion deductions.

Current wording

The effective tax rate for the three months ended September 30, 2024 included a net $2.9 million tax expense, primarily associated with a change in tax contingencies and remeasurement of deferred taxes due to an increase in our state effective tax rates, partially offset by a benefit from prior year tax positions. Excluding these items, the effective tax rate for the three months ended September 30, 2024 of 11.5% was lower than the 21.0% U.S. federal statutory rate primarily due to state income tax, foreign income inclusions and an increase in the estimated annual effective tax rate, partially offset by favorable permanent salt depletion deductions. The effective tax rate for the three months ended September 30, 2023 included a net $7.2 million tax benefit, primarily associated with stock-based compensation and prior year tax positions, partially offset by an expense from a change in tax contingencies. Excluding these items, the effective tax rate for the three months ended September 30, 2023 of 23.2% was higher than the 21.0% U.S. federal statutory rate primarily due to state income tax and an increase in the valuation allowance related to losses in foreign jurisdictions, partially offset by favorable permanent salt depletion deductions and foreign income taxes.

Previous wording

Sales for the three months ended June 30, 2024 were $1,644.0 million compared to $1,702.7 million in the same period last year, a decrease of $58.7 million, or 3%. Chlor Alkali Products and Vinyls sales decreased by $82.0 million primarily due to lower caustic soda pricing, partially offset by increased volumes which were primarily associated with products purchased from other parties. Epoxy sales decreased by $16.1 million, primarily due to lower product pricing, partially offset by increased sales volumes. Winchester sales increased by $39.4 million, primarily due to second quarter 2024 sales from White Flyer and increased sales to international military customers.

Current wording

Sales for the nine months ended September 30, 2024 were $4,868.8 million compared to $5,218.4 million in the same period last year, a decrease of $349.6 million, or 7%. Chlor Alkali Products and Vinyls sales decreased by $412.5 million primarily due to lower pricing, primarily caustic soda. Epoxy sales decreased by $72.0 million, primarily due to lower product pricing, partially offset by increased sales volumes. Winchester sales increased by $134.9 million, primarily due to 2024 sales from White Flyer and increased sales to international military customers and military project revenue.

Previous wording

Gross margin decreased $267.6 million for the six months ended June 30, 2024 compared to the prior year. Chlor Alkali Products and Vinyls gross margin decreased by $243.2 million primarily due to lower caustic soda pricing, partially offset by lower costs. Epoxy gross margin decreased by $39.9 million primarily due to lower product pricing, partially offset by increased volumes. Winchester gross margin increased by $11.0 million primarily due to higher sales volume, including White Flyer, partially offset by lower product pricing. Gross margin as a percentage of sales decreased to 14% in 2024 from 20% in 2023, across all segments.

Current wording

Gross margin decreased $402.2 million for the nine months ended September 30, 2024 compared to the prior year. Chlor Alkali Products and Vinyls gross margin decreased by $360.9 million primarily due to lower pricing, primarily caustic soda, partially offset by lower costs. Epoxy gross margin decreased by $50.9 million primarily due to lower product pricing, partially offset by increased volumes. Winchester gross margin increased by $4.1 million primarily due to higher sales volume, including White Flyer, partially offset by higher commodity and operating costs, including propellant costs. Gross margin as a percentage of sales decreased to 12% in 2024 from 19% in 2023, across all segments.

Previous wording

Selling and administration expenses for the six months ended June 30, 2024 were $196.5 million, a decrease of $16.5 million from the prior year. The decrease was primarily due to lower stock-based compensation expense of $4.9 million, which includes mark-to-market adjustments, lower costs of $4.8 million associated with consulting and contract services and a favorable foreign currency impact of $3.8 million. Selling and administration expenses as a percentage of sales was 6% for both the six months ended June 30, 2024 and 2023.

Current wording

Selling and administration expenses for the nine months ended September 30, 2024 were $308.2 million, an increase of $4.3 million from the prior year. The increase was primarily due to higher legal and legal-related settlement expense of $13.6 million, partially offset by a favorable foreign currency impact of $3.0 million and lower stock-based compensation expense of $2.7 million, which includes mark-to-market adjustments. Selling and administration expenses as a percentage of sales was 6% for both the nine months ended September 30, 2024 and 2023.

Previous wording

Restructuring charges for the three months ended June 30, 2024 and 2023 were $6.8 million and $19.2 million, respectively. The decrease in charges was primarily due to a decline in charges associated with our 2023 actions to reconfigure our global Epoxy asset footprint to optimize the most productive and cost effective assets to support our strategic operating model, which resulted in pretax restructuring charges of $5.8 million and $13.3 million for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Restructuring charges for the nine months ended September 30, 2024 and 2023 were $23.0 million and $92.0 million, respectively. The decrease was primarily due to charges associated with our 2023 actions to reconfigure our global Epoxy asset footprint to optimize the most productive and cost effective assets to support our strategic operating model, which resulted in pretax restructuring charges of $15.6 million and $79.7 million for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Other operating income for the three months ended June 30, 2023 included a gain of $27.0 million for the sale of our domestic private trucking fleet and operations.

Current wording

Other operating income for the nine months ended September 30, 2023 included a gain of $27.0 million for the sale of our domestic private trucking fleet and operations.

Previous wording

Interest expense increased by $3.5 million for the six months ended June 30, 2024 from the prior year primarily due to higher average interest rates.

Current wording

Interest expense increased by $5.7 million for the nine months ended September 30, 2024 from the prior year primarily due to higher average interest rates.

Previous wording

Non-operating pension income includes all components of pension and other postretirement net periodic benefit (income) cost, other than service costs. Non-operating pension income was higher for the six months ended June 30, 2024 primarily due to a decrease in the discount rate used to determine interest costs, partially offset by higher actuarial losses recognized to income.

Current wording

Non-operating pension income includes all components of pension and other postretirement net periodic benefit (income) cost, other than service costs. Non-operating pension income was higher for the nine months ended September 30, 2024 primarily due to a decrease in the discount rate used to determine interest costs, partially offset by higher actuarial losses recognized to income.

Previous wording

The effective tax rate for the six months ended June 30, 2024 included a net $3.3 million tax benefit, primarily associated with stock-based compensation and U.S. Federal tax credits purchased at a discount, partially offset by an expense from prior year tax positions and a change in tax contingencies. Excluding these items, the effective tax rate for the six months ended June 30, 2024 of 25.6% was higher than the 21.0% U.S. federal statutory rate primarily due to state income tax and foreign income inclusions, partially offset by favorable permanent salt depletion deductions. The effective tax rate for the six months ended June 30, 2023 included a net $17.2 million tax benefit, primarily associated with stock-based compensation, remeasurement of deferred taxes due to a decrease in our state effective tax rates, and prior year tax positions, partially offset by an expense from a net increase in the valuation allowance related to deferred tax assets in foreign jurisdictions and from a change in tax contingencies. Excluding these items, the effective tax rate for the six months ended June 30, 2023 of 24.5% was higher than the 21.0% U.S. federal statutory rate primarily due to state income tax and an increase in the valuation allowance related to losses in foreign jurisdictions, partially offset by favorable permanent salt depletion deductions.

Current wording

The effective tax rate for the nine months ended September 30, 2024 included a net $0.4 million tax benefit, primarily associated with stock-based compensation, U.S. Federal tax credits purchased at a discount, and a benefit from prior year tax positions, partially offset by a change in tax contingencies and remeasurement of deferred taxes due to an increase in our state effective tax rates. Excluding these items, the effective tax rate for the nine months ended September 30, 2024 of 28.2% was higher than the 21.0% U.S. federal statutory rate primarily due to state income tax and foreign income inclusions, partially offset by favorable permanent salt depletion deductions. The effective tax rate for the nine months ended September 30, 2023 included a net $24.4 million tax benefit, primarily associated with stock-based compensation and prior year tax positions, partially offset by an expense from a change in tax contingencies. Excluding these items, the effective tax rate for the nine months ended September 30, 2023 of 24.1% was higher than the 21.0% U.S. federal statutory rate primarily due to state income tax and an increase in the valuation allowance related to losses in foreign jurisdictions, partially offset by favorable permanent salt depletion deductions and foreign income taxes.

Previous wording

Chlor Alkali Products and Vinyls segment income was $99.3 million for the three months ended June 30, 2024 compared to $180.1 million for the same period in 2023. The decrease in segment results of $80.8 million was primarily due to lower caustic soda pricing ($243.4 million), partially offset by lower raw material and operating costs ($85.7 million), lower costs associated with product purchased from other parties ($40.5 million) and increased volumes ($36.4 million). Chlor Alkali Products and Vinyls second quarter 2023 segment results were negatively impacted by the maintenance turnaround and subsequent operating issues with the vinyl chloride monomer plant at the Freeport, TX facility, resulting in higher costs and reduced profit from lost sales. Chlor Alkali Products and Vinyls segment results included depreciation and amortization expense of $105.8 million and $113.3 million for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Chlor Alkali Products and Vinyls segment income was $45.3 million for the three months ended September 30, 2024 compared to $172.3 million for the same period in 2023. The decrease in segment results of $127.0 million was due to the negative impact of Hurricane Beryl resulting in incremental costs to restore operations, unabsorbed fixed manufacturing costs, and reduced profit from lost sales ($76.7 million), lower pricing ($79.5 million), primarily caustic soda, and higher raw material and operating costs ($17.6 million), partially offset by increased volumes ($43.6 million) and lower costs associated with product purchased from other parties ($3.2 million). Chlor Alkali Products and Vinyls third quarter 2023 segment results were negatively impacted by a maintenance turnaround and subsequent operating issues with the vinyl chloride monomer plant at the Freeport, TX facility, resulting in higher costs and reduced profit from lost sales. Chlor Alkali Products and Vinyls segment results included depreciation and amortization expense of $106.5 million and $107.6 million for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

Chlor Alkali Products and Vinyls sales for the six months ended June 30, 2024 were $1,804.9 million compared to $2,119.4 million for the same period in 2023, a decrease of $314.5 million, or 15%. The sales decrease was primarily due to lower caustic soda pricing, partially offset by increased sales volumes associated with products purchased from other parties.

Current wording

Chlor Alkali Products and Vinyls sales for the nine months ended September 30, 2024 were $2,676.5 million compared to $3,089.0 million for the same period in 2023, a decrease of $412.5 million, or 13%. The sales decrease was primarily due to lower pricing, primarily caustic soda, partially offset by increased sales volumes associated with products purchased from other parties.

Previous wording

Chlor Alkali Products and Vinyls segment income was $175.9 million for the six months ended June 30, 2024 compared to $426.0 million for the same period in 2023. The decrease in segment results of $250.1 million was primarily due to lower caustic soda pricing ($396.6 million), and an unfavorable product mix ($82.7 million), partially offset by lower costs associated with products purchased from other parties ($117.7 million) and lower raw material and operating costs ($111.5 million). Chlor Alkali Products and Vinyls second quarter 2023 segment results were negatively impacted by the maintenance turnaround and subsequent operating issues with the vinyl chloride monomer plant at the Freeport, TX facility, resulting in higher costs and reduced profit from lost sales. Chlor Alkali Products and Vinyls segment results included depreciation and amortization expense of $212.6 million and $227.7 million for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Chlor Alkali Products and Vinyls segment income was $221.2 million for the nine months ended September 30, 2024 compared to $598.3 million for the same period in 2023. The decrease in segment results of $377.1 million was due to lower pricing ($476.1 million), primarily caustic soda, the negative impact of Hurricane Beryl resulting in incremental costs to restore operations, unabsorbed fixed manufacturing costs, and reduced profit from lost sales ($76.7 million), and an unfavorable product mix ($39.9 million), partially offset by lower costs associated with products purchased from other parties ($120.9 million) and lower raw material and operating costs ($94.7 million). Chlor Alkali Products and Vinyls third quarter 2023 segment results were negatively impacted by a maintenance turnaround and subsequent operating issues with the vinyl chloride monomer plant at the Freeport, TX facility, resulting in higher costs and reduced profit from lost sales. Chlor Alkali Products and Vinyls segment results included depreciation and amortization expense of $319.1 million and $335.3 million for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Epoxy sales for the three months ended June 30, 2024 were $317.7 million compared to $333.8 million for the same period in 2023, a decrease of $16.1 million, or 5%. The sales decrease was primarily due to lower product prices ($35.5 million) and an unfavorable effect of foreign currency translation ($1.9 million), partially offset by increased sales volumes ($21.3 million).

Current wording

Epoxy sales for the three months ended September 30, 2024 were $285.1 million compared to $321.6 million for the same period in 2023, a decrease of $36.5 million, or 11%. The sales decrease was due to lower sales volumes ($35.4 million), primarily as a result of Hurricane Beryl and an unfavorable effect of foreign currency translation ($2.1 million), partially offset by higher product prices ($1.0 million).

Previous wording

Epoxy segment loss was $3.0 million for the three months ended June 30, 2024 compared to segment loss of $0.5 million for the same period in 2023. The decrease in segment results of $2.5 million was primarily due to lower product prices ($35.5 million), which continue to be impacted by significant exports out of Asia into Europe and North America markets, partially offset by increased volumes and improved product mix ($25.1 million) and lower raw material and operating costs ($7.9 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 $13.4 million and $15.2 million for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Epoxy segment loss was $42.8 million for the three months ended September 30, 2024 compared to segment loss of $28.8 million for the same period in 2023. The decrease in segment results of $14.0 million was due to the negative impact of Hurricane Beryl resulting in incremental costs to restore operations, unabsorbed fixed manufacturing costs, and reduced profit from lost sales ($32.7 million) and decreased volumes ($1.3 million), partially offset by lower raw material and operating costs ($20.0 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 $13.7 million and $14.7 million for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

Epoxy sales for the six months ended June 30, 2024 were $659.0 million compared to $694.5 million for the same period in 2023, a decrease of $35.5 million, or 5%. The sales decrease was primarily due to lower product prices ($133.6 million) and an unfavorable effect of foreign currency translation ($2.4 million), partially offset by increased sales volumes ($100.5 million).

Current wording

Epoxy sales for the nine months ended September 30, 2024 were $944.1 million compared to $1,016.1 million for the same period in 2023, a decrease of $72.0 million, or 7%. The sales decrease was due to lower product prices ($132.6 million) and an unfavorable effect of foreign currency translation ($4.5 million), partially offset by increased sales volumes ($65.1 million), which were negatively impacted by Hurricane Beryl.

Previous wording

Epoxy segment loss was $14.8 million for the six months ended June 30, 2024 compared to segment income of $20.9 million for the same period in 2023. The decrease in segment results of $35.7 million was primarily due to lower product prices ($133.6 million), which continues to be impacted by significant exports out of Asia into the European and North American markets, partially offset by increased volumes and improved product mix ($83.5 million) and lower raw material and operating costs ($14.4 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 $26.9 million and $29.7 million for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Epoxy segment loss was $57.6 million for the nine months ended September 30, 2024 compared to segment loss of $7.9 million for the same period in 2023. The decrease in segment results of $49.7 million was due to lower product prices ($133.4 million), which continues to be impacted by significant exports out of Asia into the European and North American markets, and the negative impact of Hurricane Beryl resulting in incremental costs to restore operations, unabsorbed fixed manufacturing costs, and reduced profit from lost sales ($32.7 million), partially offset by increased volumes and improved product mix ($82.2 million) and lower raw material and operating costs ($34.2 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 $40.6 million and $44.4 million for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Winchester sales were $406.0 million for the three months ended June 30, 2024 compared to $366.6 million for the same period in 2023, an increase of $39.4 million, or 11%. The increase was due to higher sales to commercial customers ($22.6 million), higher sales to domestic and international military customers ($20.5 million), partially offset by lower sales to law enforcement agencies ($3.7 million). Commercial sales were primarily impacted by 2024 sales from White Flyer, partially offset by lower ammunition volumes. The increase in sales to military customers was due to international military sales more than doubling in 2024 compared to 2023.

Current wording

Winchester sales were $432.8 million for the three months ended September 30, 2024 compared to $380.2 million for the same period in 2023, an increase of $52.6 million, or 14%. The increase was due to higher sales to domestic and international military customers ($43.5 million), higher sales to commercial customers ($10.4 million), partially offset by lower sales to law enforcement agencies ($1.3 million). Commercial sales were primarily impacted by 2024 sales from White Flyer, partially offset by lower ammunition volumes.

Previous wording

Winchester segment income was $142.5 million for the six months ended June 30, 2024 compared to $125.7 million for the same period in 2023, an increase of $16.8 million. The increase in segment results was due to higher sales volumes ($23.0 million), which includes White Flyer, and lower commodity and operating costs ($0.4 million), partially offset by lower product pricing ($6.6 million). Winchester segment income included depreciation and amortization expense of $16.2 million and $12.5 million for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Winchester segment income was $53.4 million for the three months ended September 30, 2024 compared to $64.5 million for the same period in 2023, a decrease of $11.1 million. The decrease in segment results was due to higher commodity and operating costs ($17.2 million), including propellant costs, partially offset by higher sales volumes ($4.1 million), which includes White Flyer, and higher product pricing ($2.0 million). Winchester segment income included depreciation and amortization expense of $8.5 million and $6.6 million for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

Winchester sales were $815.4 million for the six months ended June 30, 2024 compared to $733.1 million for the same period in 2023, an increase of $82.3 million, or 11%. The increase was due to higher sales to commercial customers ($64.9 million), higher sales to domestic and international military customers ($26.6 million), partially offset by lower sales to law enforcement agencies ($9.2 million). Commercial sales were primarily impacted by 2024 sales from White Flyer and increased ammunition volumes. The increase in sales to military customers was primarily due to international military sales increasing 165% compared to 2023.

Current wording

Winchester sales were $1,248.2 million for the nine months ended September 30, 2024 compared to $1,113.3 million for the same period in 2023, an increase of $134.9 million, or 12%. The increase was due to higher sales to commercial customers ($75.3 million) and higher sales to domestic and international military customers ($70.1 million), partially offset by lower sales to law enforcement agencies ($10.5 million). Commercial sales were primarily impacted by 2024 sales from White Flyer.

Previous wording

Winchester segment income was $70.3 million for the three months ended June 30, 2024 compared to $64.7 million for the same period in 2023, an increase of $5.6 million. The increase in segment results was due to higher sales volumes ($11.7 million), which includes White Flyer, partially offset by higher commodity and operating costs ($3.6 million) and lower product pricing ($2.5 million). Winchester segment income included depreciation and amortization expense of $8.3 million and $6.3 million for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Winchester segment income was $195.9 million for the nine months ended September 30, 2024 compared to $190.2 million for the same period in 2023, an increase of $5.7 million. The increase in segment results was due to higher sales volumes ($27.1 million), which includes White Flyer, partially offset by higher commodity and operating costs ($16.8 million), including propellant costs, and lower product pricing ($4.6 million). Winchester segment income included depreciation and amortization expense of $24.7 million and $19.1 million for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

For the three months ended June 30, 2024, charges to income for environmental investigatory and remedial activities were $6.4 million compared to $13.0 million for the three months ended June 30, 2023. These charges related primarily to expected future investigatory and remedial activities associated with past manufacturing operations and former waste disposal sites.

Current wording

For the three months ended September 30, 2024, charges to income for environmental investigatory and remedial activities were $7.2 million compared to $6.9 million for the three months ended September 30, 2023. These charges related primarily to expected future investigatory and remedial activities associated with past manufacturing operations and former waste disposal sites.

Previous wording

For the six months ended June 30, 2024, charges to income for environmental investigatory and remedial activities were $12.2 million compared to $16.2 million for the six months ended June 30, 2023. These charges related primarily to expected future investigatory and remedial activities associated with past manufacturing operations and former waste disposal sites.

Current wording

For the nine months ended September 30, 2024, charges to income for environmental investigatory and remedial activities were $19.4 million compared to $23.1 million for the nine months ended September 30, 2023. These charges related primarily to expected future investigatory and remedial activities associated with past manufacturing operations and former waste disposal sites.

Previous wording

For the three months ended June 30, 2024, other corporate and unallocated costs were $17.0 million compared to $22.4 million for the three months ended June 30, 2023, a decrease of $5.4 million. The decrease was primarily due to lower variable incentive compensation costs ($2.1 million), which includes mark-to-market adjustments on stock-based compensation expense, lower legal and legal-related settlement expenses ($1.3 million) and a favorable foreign currency impact ($1.3 million).

Current wording

For the nine months ended September 30, 2024, other corporate and unallocated costs were $68.7 million compared to $79.6 million for the nine months ended September 30, 2023, a decrease of $10.9 million. The decrease was primarily due to lower variable incentive compensation costs ($6.3 million), which includes mark-to-market adjustments on stock-based compensation expense, and a favorable foreign currency impact ($3.0 million).

Previous wording

In connection with the previously announced Epoxy Optimization Plan, for the three months ended June 30, 2024 and 2023, we recorded restructuring charges of $5.8 million and $13.3 million, respectively, and for the six month ended June 30, 2024 and 2023, we recorded restructuring charges of $9.3 million and $71.1 million, respectively. We expect to incur additional restructuring charges through 2025 of approximately $15 million related to these actions.

Current wording

In connection with the previously announced Epoxy Optimization Plan, for the three months ended September 30, 2024 and 2023, we recorded restructuring charges of $6.3 million and $8.6 million, respectively, and for the nine months ended September 30, 2024 and 2023, we recorded restructuring charges of $15.6 million and $79.7 million, respectively. We expect to incur additional restructuring charges through 2025 of approximately $10 million related to these actions.

Previous wording

For the three months ended June 30, 2024 and 2023, we incurred charges of $1.0 million and $5.9 million, respectively, and for the six month ended June 30, 2024 and 2023, we incurred charges of $5.8 million and $9.0 million, respectively, associated with other previously disclosed restructuring plans. We expect to incur additional restructuring charges through 2027 of approximately $40 million related to these actions. Discussion on our restructuring activity, including a description of each plan, is referenced under Item 1, within Note 4, “Restructuring Charges.” Pretax restructuring charges related to our actions include facility exit costs, lease and other contract termination costs, employee severance and related benefits costs and the write-off of equipment and facilities.

Current wording

For the three months ended September 30, 2024 and 2023, we incurred charges of $1.6 million and $3.3 million, respectively, and for the nine months ended September 30, 2024 and 2023, we incurred charges of $7.4 million and $12.3 million, respectively, associated with other previously disclosed restructuring plans. We expect to incur additional restructuring charges through 2027 of approximately $40 million related to these actions. Discussion on our restructuring activity, including a description of each plan, is referenced under Item 1, within Note 4, “Restructuring Charges.” Pretax restructuring charges related to our actions include facility exit costs, lease and other contract termination costs, employee severance and related benefits costs and the write-off of equipment and facilities.

Previous wording

During 2024, we anticipate environmental expenses in the $25 million to $35 million range, compared to $23.7 million in 2023.

Current wording

During 2024, we anticipate environmental expenses in the $25 million to $30 million range, compared to $23.7 million in 2023.

Previous wording

In 2024, we currently expect our capital spending to be in the $225 million range, including $10 million of additional capital associated with Hurricane Beryl, and we expect to make payments under other long-term supply contracts of approximately $50 million for energy modernization on the U.S. Gulf Coast. We expect 2024 depreciation and amortization expense to be in the $500 million to $525 million range.

Current wording

In 2024, we currently expect our capital spending to be approximately $200 million, including approximately $10 million of additional capital associated with Hurricane Beryl. Our payments under other long-term supply contracts for energy modernization on the U.S. Gulf Coast will be $58.6 million as we made our final payment during the third quarter 2024. We expect 2024 depreciation and amortization expense to be approximately $525 million.

Previous wording

We currently believe the 2024 effective tax rate will be in the 25% to 30% range and our cash tax rate to be in the 30% range.

Current wording

We currently believe the 2024 effective tax rate will be in the 25% to 30% range and cash taxes paid to be approximately $110 million.

Previous wording

Environmental provisions charged to income, which are included in costs of goods sold, were $6.4 million and $13.0 million for the three months ended June 30, 2024 and 2023, respectively, and were $12.2 million and $16.2 million for the six month ended June 30, 2024 and 2023, respectively.

Current wording

Environmental provisions charged to income, which are included in costs of goods sold, were $7.2 million and $6.9 million for the three months ended September 30, 2024 and 2023, respectively, and were $19.4 million and $23.1 million for the nine months ended September 30, 2024 and 2023, respectively.