AVIENT CORP

Condensed Consolidated Statements of Income (Unaudited)

(In millions, except per share data)

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Condensed Consolidated Statements of Comprehensive Income (Unaudited)

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Condensed Consolidated Balance Sheets

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Condensed Consolidated Statements of Cash Flows (Unaudited)

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Condensed Consolidated Statements of Shareholders' Equity (Unaudited)

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 — BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Form 10-Q instructions and in the opinion of management contain all adjustments, including those that are normal, recurring and necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. These interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2024 of Avient Corporation. When used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “Avient” and the “Company” mean Avient Corporation and its consolidated subsidiaries.

Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be attained in subsequent periods or for the year ending December 31, 2025.

Accounting Standards Adopted

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires additional segment disclosures on an annual and interim basis, including significant segment expenses that are regularly provided to the chief operating decision maker. The Company adopted this standard for the year ended December 31, 2024, and interim periods thereafter, and applied retrospective changes to all periods presented in the condensed consolidated financial statements. The adoption of ASU 2023-07 impacted segment disclosures within Note 9, Segment Information.

Accounting Standards Not Yet Adopted

ASU 2023-09, Income Taxes, provides guidance requiring disaggregated income tax disclosures on an annual basis, including information on the Company's effective tax rate reconciliation and income taxes paid. This guidance is effective for fiscal years beginning after December 15, 2024, and may be applied prospectively or retrospectively. The Company is currently evaluating the impacts of adopting this standard to its income taxes disclosures.

ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures, provides guidance requiring disaggregated disclosure of income statement expenses. This guidance is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. This guidance may be applied prospectively or retrospectively. The Company is currently evaluating the impacts of adopting this standard to its financial statement disclosures.

Note 2 — GOODWILL AND INTANGIBLE ASSETS

Goodwill as of September 30, 2025 and December 31, 2024 and changes in the carrying amount of goodwill by segment were as follows:

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Indefinite and finite-lived intangible assets consisted of the following:

Note 3 — RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES

Cloud-based Enterprise Resource Planning System Impairment and Other Related Charges

In the first quarter of 2025, the Company completed a review of its cloud-based enterprise resource planning system, S/4HANA, including updated project timelines, cost incurred to date, required internal resources and expected costs to complete the initial site implementations, and the evolution of options that could provide better returns for shareholders. As a result of this review, the Company determined it would cease the ongoing development of S/4HANA.

As a result of this decision, in the first quarter of 2025, the Company recognized a non-cash, pre-tax impairment charge of $71.6 million associated with capitalized implementation costs. The Company also recognized pre-tax charges of $14.7 million associated with unpaid contractual obligations for hosting fees. Further, the Company recognized charges of $2.8 million associated to severance actions resulting from the decision to cease development of S/4HANA. These charges are included in Selling and administrative expense within the Condensed Consolidated Statements of Income.

Clariant Color Integration Restructuring Program

We are engaged in a restructuring program associated with our integration of Clariant Color. These actions are expected to enable us to better serve customers, improve efficiency and deliver cost savings. We expect that the full restructuring plan will be implemented by the end of 2025 and anticipate that we will incur approximately $66.0 million of charges in connection with the restructuring plan. As of September 30, 2025, $64.3 million had been incurred.

A summary of the Clariant Color integration restructuring is shown below:

Other Restructuring Actions

During the three and nine months ended September 30, 2025, the Company recognized charges of $5.5 million and $15.7 million, respectively, primarily associated with plant closure costs and workforce reduction.

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Note 4 — INVENTORIES, NET

Components of Inventories, net are as follows:

Note 5 — PROPERTY, NET

Components of Property, netare as follows:

Note 6 — INCOME TAXES

During the three and nine months ended September 30, 2025, the Company’s effective tax rates were 23.5% and 23.9%, respectively, compared to the U.S federal statutory rate of 21.0%. The differences were primarily due to earnings mix and withholding taxes on foreign earnings. These impacts were partially offset by research and development tax credits.

During the three and nine months ended September 30, 2024, the Company's effective tax rates of 22.5% and 24.3%, respectively, were above the U.S. federal statutory rate of 21.0% primarily due to withholding tax on foreign earnings and the impacts of global intangible low-taxed income (GILTI), partially offset by research and development tax credits.

In December 2024, Avient received a Notice of Deficiency (Notice) from the U.S. Internal Revenue Service (IRS) proposing an adjustment to the 2019 tax year resulting from a disallowed capital loss. The proposed incremental tax associated with the Notice is $23.8 million plus estimated interest of $6.9 million. We contested the Notice by filing a petition in U.S. Tax Court on March 4, 2025. The IRS' answer to Avient's petition included an additional accuracy-related penalty of $4.8 million and is subject to interest. The Company believes that the proposed penalty is also without merit, and we intend to contest the penalty vigorously in U.S. Tax Court. However, there can be no assurance this dispute with the IRS will be resolved favorably. As of September 30, 2025, the Company has not recorded any income tax provision related to this matter; therefore an unfavorable ruling or settlement in U.S. Tax Court would adversely impact our effective tax rate and result in a cash tax payment.

The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025. The OBBBA includes tax law changes that impact Avient, such as changes to the limitation on the business interest expense deductions, effective in 2025, and updates to the rules for GILTI and foreign-derived intangible income, effective in 2026. The Company is currently evaluating the OBBBA's impact, however, does not expect it to have a material impact to the current year consolidated financial statements.

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Note 7 — FINANCING ARRANGEMENTS

Debt consists of the following instruments:

On March 12, 2025, the Company refinanced its senior secured term loan by amending the credit agreement governing such term loan (the Term Loan Amendment). The Term Loan Amendment reduced the interest rate per annum by 25 basis points, which now is either (i) Adjusted Term SOFR (as defined in the Term Loan Amendment) plus 1.75%, or (ii) a Base Rate (as defined in the Term Loan Amendment) plus 0.75%. The maturity date and other terms and conditions are substantially the same as the terms and conditions under the credit agreement immediately prior to the Term Loan Amendment.

During the three and nine months ended September 30, 2025, the Company made voluntary prepayments of $50.0 million and $100.0 million, respectively, on its senior secured term loan, which were applied to the principal installments in direct order of maturity. These prepayments were made without penalty or premium.

On June 12, 2025, the Company entered into a revolving credit agreement (the Revolving Credit Agreement) with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent, which replaced our previous credit agreement. The Revolving Credit Agreement provides for a senior secured revolving credit facility of up to $500.0 million, which may be increased by up to $250.0 million, subject to certain conditions. Loans under the Revolving Credit Agreement will mature on June 12, 2030. The Revolving Credit Agreement contains representations and warranties, affirmative covenants, negative covenants and events of default that are substantially similar to those contained in the Company's existing term loan credit agreement.

As of September 30, 2025, we hadno borrowings outstanding under the senior secured revolving credit facility.

The agreements governing our senior secured revolving credit facility and our senior secured term loan, and the indentures and credit agreements governing our other debt, contain a number of customary financial and restrictive covenants that, among other things, limit our ability to: sell or otherwise transfer assets, including in a spin-off, incur additional debt or liens, consolidate or merge with any entity or transfer or sell all or substantially all of our assets, pay dividends or make certain other restricted payments, make investments, enter into transactions with affiliates, create dividend or other payment restrictions with respect to subsidiaries, make capital investments and alter the business we conduct. As of September 30, 2025, we were in compliance with all covenants.

The estimated fair value of Avient’s debt instruments at September 30, 2025 and December 31, 2024 was $2,007.7 million and $2,083.3 million, respectively. The fair value of Avient’s debt instruments was estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities and represent Level 2 measurements within the fair value hierarchy.

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Note 8 — DERIVATIVES AND HEDGING

We are exposed to market risks, such as changes in foreign currency exchange rates and interest rates. To manage the volatility related to these exposures we may enter into various derivative transactions. We formally assess, designate and document, as a hedge of an underlying exposure, the qualifying derivative instrument that will be accounted for as an accounting hedge at inception. Additionally, we assess both at inception and at least quarterly thereafter, whether the financial instruments used in the hedging transaction are effective at offsetting changes in either the fair values or cash flows of the underlying exposures. In accordance with ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities(ASU 2017-12), that ongoing assessment will be done qualitatively for highly effective relationships.

As a means of mitigating the impact of currency fluctuations on our Euro investments in foreign entities, we have executed cross-currency swaps, in which we pay fixed-rate interest in Euros and receive fixed-rate interest in U.S. dollars related to our future obligations to exchange euros for U.S. dollars. These cross-currency swaps effectively convert a portion of our U.S. dollar denominated fixed-rate debt to Euro denominated fixed-rate debt.

We currently hold cross-currency swaps with a combined notional amount of €700.0 million maturing in November 2026, €900.0 million maturing in August 2027, €510.5 million maturing in January 2028 and €464.9 million maturing in January 2029. We designated the cross-currency swaps as net investment hedges of our net investment in our European operations under ASU 2017-12 and applied the spot method to these hedges. The changes in fair value of these derivative instruments are recognized within Accumulated Other Comprehensive Income(AOCI) to offset the changes in the values of the net investment being hedged. For the three and nine months ended September 30, 2025, a gain of $3.3 million and loss of $207.3 million were recognized within translation adjustments in AOCI, net of tax, respectively, compared to losses of $73.3 million and $20.9 million, net of tax, for the three and nine months ended September 30, 2024, respectively. Included in Interest expense, net on the Condensed Consolidated Statements of Income is income of $9.0 million and $27.1 million, respectively, for the three and nine months ended September 30, 2025, compared to income of $9.7 million and $29.1 million, respectively, for the three and nine months ended September 30, 2024, related to interest payments received from counterparties.

All of our derivative assets and liabilities measured at fair value are classified as Level 2 within the fair value hierarchy. We determine the fair value of our derivatives based on valuation methods, which project future cash flows and discount the future amounts to present value using market based observable inputs, including interest rate curves and foreign currency rates.

The fair value of derivative financial instruments recognized in the Condensed Consolidated Balance Sheets is as follows:

Note 9 — SEGMENT INFORMATION

Avient hastwo reportable segments: (1) Color, Additives and Inks and (2) Specialty Engineered Materials.

Operating income is the primary segment performance measure that is reported to our chief operating decision maker (CODM), which is the Company's chief executive officer. Our CODM utilizes this measure as an input to determine appropriate resource allocations to our segments in the annual planning process and to periodically assess segment performance, primarily by evaluating actual results in comparison to the annual operating plan and forecast. Operating income at the segment level does not include corporate general and administrative expenses that are not allocated to segments, restructuring charges, share-based compensation costs, environmental remediation costs and associated recoveries, asset impairments, acquisition-related charges, mark-to-market adjustments on pension and other post-retirement obligations, and certain other items that are not included in the measure of segment profit or loss that is reported to and reviewed by our CODM. These costs are included in Corporate.

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Financial information by reportable segment is as follows:

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Note 10 — COMMITMENTS AND CONTINGENCIES

We have been notified by federal and state environmental agencies and by private parties that we may be a potentially responsible party (PRP) in connection with the environmental investigation and remediation of certain sites. While government agencies frequently assert that PRPs are jointly and severally liable at these sites, in our experience, the interim and final allocations of liability costs are generally made based on the relative contribution of waste. We may also initiate corrective and preventive environmental projects of our own to support safe and lawful activities at our operations. We believe that compliance with current governmental regulations at all levels will not have a material adverse effect on our financial position, results of operations or cash flows.

In September 2007, the United States District Court for the Western District of Kentucky (Court) in the case of Westlake Vinyls, Inc. v. Goodrich Corporation, et al., held that Avient must pay the remediation costs at the former Goodrich Corporation Calvert City facility (now largely owned and operated by Westlake Vinyls, Inc. (Westlake Vinyls)), together with certain defense costs of Goodrich Corporation. The rulings also provided that Avient can seek indemnification for contamination attributable to Westlake Vinyls. Following the rulings, the parties to the litigation agreed to settle all claims regarding past environmental costs incurred at the site. The settlement agreement provides a mechanism to pursue allocation of future remediation costs at the Calvert City site to Westlake Vinyls.

The environmental obligation at the site arose as a result of an agreement between The B.F. Goodrich Company (n/k/a Goodrich Corporation) and our predecessor, The Geon Company, at the time of the initial public offering in 1993. Under the agreement, The Geon Company agreed to indemnify Goodrich Corporation for certain environmental costs at the site. Neither Avient nor The Geon Company ever operated the facility.

Since 2009, Avient, along with respondents Westlake Vinyls and Goodrich Corporation, has worked with the United States Environmental Protection Agency (USEPA) to address the remedial activities at the site. The USEPA issued its Record of Decision (ROD) in September 2018. In April 2019, the respondents signed an Administrative Settlement Agreement and Order on Consent with the USEPA to conduct the remedial actions at the site. In February 2020, three companies signed the agreed Consent Decree and remedial action Work Plan, which received Federal Court approval in January 2021.

The largest component of remedial action at Calvert City is construction of a barrier wall around the site. Construction of the initial barrier wall section began in 2024 and was completed in the first quarter of 2025. The remaining wall designs and construction are expected to be completed in phases through 2028. As the Company completes further design work and begins construction on the remaining sections of the barrier wall and other remedial components, the Company will update its accrual, which was $136.9 million as of September 30, 2025, for any new information as it becomes available.

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Total environmental accruals of $144.5 million and $146.0 million are reflected within Accrued expenses and other current liabilities and Other non-current liabilities in our Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, respectively. These undiscounted accruals represent our best estimate of probable future costs that we can reasonably estimate, based upon currently available information and technology and how the remedy will be implemented. It is reasonably possible that we could incur additional costs in excess of the amount accrued, which could be material to our Condensed Consolidated Statements of Income. However, such additional costs cannot be currently estimated as they are dependent upon the results of future testing and findings during the execution of remedial design and remedial action, changes in the Calvert City construction timeline, changes in regulations, technology development, new information, newly discovered conditions and other factors that are not currently known.

During the three and nine months ended September 30, 2025, Avient recognized costs of $12.8 million and $19.5 million, primarily associated with the ongoing remedial design and remedial action at Calvert City, compared to costs of $2.4 million and $28.2 million recognized during the three and nine months ended September 30, 2024. These costs are recognized in Cost of Sales within the Condensed Consolidated Statements of Income.

We received $34.0 million of cash associated with Calvert City insurance recoveries in the first quarter of 2025. The associated gain was recognized in the fourth quarter of 2024. Further insurance recoveries, if any, related to remedial activities at the Calvert City site are expected to be immaterial. During the three and nine months ended September 30, 2025, Avient recognized gains related to insurance and other environmental recoveries of $0.1 million and $2.0 million, respectively, unrelated to Calvert City. These gains are included in Cost of sales within the Consolidated Statements of Income.

Avient is subject to a broad range of claims, administrative and legal proceedings such as lawsuits that relate to contractual allegations, tax audits, product claims, personal injuries and employment related matters. Although it is not possible to predict with certainty the outcome or cost of these matters, the Company believes our current reserves are appropriate and these matters will not have a material adverse effect on the condensed consolidated financial statements.

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