CLAYTON, Mo., Jan. 31, 2017 /PRNewswire/ -- Olin Corporation
(NYSE: OLN) announced today financial results for the fourth
quarter ended December 31, 2016.
The fourth quarter 2016 reported net income was $17.5 million, or $0.10 per diluted share. Fourth quarter
2016 adjusted EBITDA of $221.7
million reflects depreciation and amortization expense of
$136.1 million, restructuring charges
of $6.7 million, and
acquisition-related integration costs of $9.2 million. Adjusted net income from
operations was $0.31 per diluted
share, which excludes the aforementioned restructuring charges,
acquisition-related integration costs and step-up depreciation and
amortization expense of $40.3
million. Sales in the fourth quarter 2016 were
$1,385.7 million.
John E. Fischer, President and
Chief Executive Officer, said, "Our fourth quarter 2016 adjusted
EBITDA reflects better than expected results in the Chlor Alkali
Products and Vinyls segment, which more than offset weaker than
expected results in the Epoxy segment. The favorable results
in Chlor Alkali Products and Vinyls were primarily the result of
favorable cost performance, while the shortfall in Epoxy results
reflects softer demand from coatings customers. Winchester's
fourth quarter 2016 segment earnings exceeded 2015 earnings due to
higher sales volumes and lower operating costs. Full year
2016 adjusted EBITDA was $838.5
million.
"In 2017, we expect adjusted EBITDA of approximately
$1 billion with upside opportunities
and downside risks of approximately 5%. Due to a heavy
maintenance turnaround schedule, we expect the first quarter of
2017 to be the lowest adjusted EBITDA quarter of the year.
First quarter 2017 planned maintenance turnaround expenses are
forecast to be approximately $10
million higher than the first quarter of 2016 and
approximately $15 million higher than
the fourth quarter of 2016.
"We enter 2017 with favorable caustic soda and ethylene
dichloride pricing trends. Caustic soda price indices have
increased for nine consecutive months and we are optimistic that
some portion of the $40 per ton price
increase announced for January 1 will
be realized. We are forecasting that first quarter 2017
ethylene dichloride pricing should be approximately 25% higher than
full year 2016 levels. In spite of the weaker than
expected fourth quarter 2016 Epoxy results and increased raw
materials costs associated with benzene and propylene pricing, we
expect 2017 Epoxy results to improve compared to 2016. We are
cautious about the Winchester business, which may experience a
year-over-year decline in segment earnings as a result of lower
ammunition demand, driven by customer efforts to reduce inventory,
and higher commodity and material costs."
The full year 2017 adjusted EBITDA forecast reflects the
following:
- Higher domestic and export caustic soda pricing compared to
2016;
- Lower ethylene costs associated with the acquisition of
additional cost-based ethylene from Dow at mid-year;
- Improved ethylene dichloride pricing;
- Increased bleach sales resulting from the new bleach facility
in Freeport, Texas;
- Incremental cost synergy realizations of approximately
$50 million to $75 million;
- Higher electricity costs, primarily driven by higher natural
gas costs;
- Higher planned maintenance turnaround costs;
- Higher corporate costs reflecting lower pension income and
higher legacy environmental costs compared to 2016;
- Pre-tax acquisition related integration and restructuring costs
of approximately $50 million;
- Capital spending in the $300 million to
$350 million range, excluding the investment associated with
acquiring additional ethylene; and
- Depreciation and amortization costs comparable with 2016.
SEGMENT REPORTING
Olin defines segment earnings as income (loss) before interest
expense, interest income, other operating income (expense) and
income taxes and include the earnings of non-consolidated
affiliates in segment results consistent with management's
monitoring of the operating segments.
Beginning in the fourth quarter of 2015, Olin modified its
reportable segments to incorporate the acquisition of Dow's
chlorine products businesses (the Acquired Business). Olin
reports in three operating segments: Chlor Alkali Products
and Vinyls, Epoxy and Winchester. The new reporting structure
has been retrospectively applied to the financial results for all
periods presented. The former Olin Chlor Alkali Products and
Olin Chemical Distribution segments have been included in the new
Chlor Alkali Products and Vinyls segment.
During 2016, Olin is providing sequential segment
comparisons. Year-over-year segment comparisons for Chlor
Alkali Products and Vinyls and Epoxy are not meaningful because
Olin did not own the Acquired Business until October of 2015.
CHLOR ALKALI PRODUCTS AND VINYLS
Chlor Alkali Products and Vinyls sales for the fourth quarter
2016 were $782.6 million compared to
$779.4 million in the third quarter
2016. Fourth quarter 2016 segment earnings of $72.4 million improved compared to $53.7 million in the third quarter 2016 primarily
due to higher caustic soda pricing and lower operating costs,
partially offset by higher electricity costs predominately driven
by higher natural gas costs. Chlor Alkali Products and Vinyls
fourth quarter 2016 results included depreciation and amortization
expense of $106.5 million compared to
$106.3 million in third quarter
2016.
EPOXY
Epoxy sales for the fourth quarter 2016 were $441.7 million compared to $470.1 million in the third quarter 2016.
The decrease in Epoxy sales is primarily due to lower volumes and a
less favorable product mix. Fourth quarter 2016 segment loss
was $3.1 million compared to segment
earnings of $10.3 million in the
third quarter 2016. The Epoxy segment earnings decline was
primarily due to lower volumes and increased operating costs.
Epoxy fourth quarter 2016 results included depreciation and
amortization expense of $22.7 million
compared to $22.6 million in third
quarter 2016.
WINCHESTER
Winchester sales for the fourth quarter 2016 were $161.4 million compared to $203.2 million in the third quarter 2016.
Fourth quarter 2016 segment earnings were $25.0 million compared to $36.0 million in the third quarter 2016.
The decrease in sales and segment earnings primarily reflects lower
shipments to commercial customers reflecting a normal seasonal
pattern. Winchester fourth and third quarter 2016 results
both included depreciation and amortization expense of $4.7 million.
CORPORATE AND OTHER COSTS
Pension income included in the fourth quarter 2016 Corporate and
Other segment was $13.4 million
compared to $15.4 million in the
third quarter of 2016.
Fourth quarter 2016 charges to income for environmental
investigatory and remedial activities were $3.7 million compared to $0.4 million in the third quarter 2016.
These charges relate primarily to remedial and investigatory
activities associated with former waste sites and past operations
of the legacy Olin businesses.
Other corporate and unallocated costs in the fourth quarter 2016
decreased $9.7 million compared to
the third quarter 2016, primarily due to lower legal and litigation
costs and decreased asset retirement costs at past manufacturing
locations.
CASH / DEBT
The cash balance at December 31,
2016 was $184.5 million.
In 2016, we repaid approximately $205
million of maturing debt using available cash. Also
during 2016, we repaid $210 million
of term loan debt using funding from a new accounts receivable
securitization program. During 2017, Olin has maturing debt
of $79.7 million.
DIVIDEND
On January 27, 2017, Olin's Board
of Directors declared a dividend of $0.20 on each share of Olin common stock.
The dividend is payable on March 10,
2017 to shareholders of record at the close of business on
February 10, 2017. This will be
the 361st consecutive quarterly dividend to be paid by the
Company.
CONFERENCE CALL INFORMATION
Olin management will host a conference call to discuss fourth
quarter 2016 earnings at 10:00 A.M.
ET on Wednesday, February 1,
2017. The call, along with associated slides, which
will be available one hour prior to the call, will be accessible
via webcast through Olin's website, www.olin.com. An archived
replay of the webcast will also be available on Olin's Investor
Relations website beginning at 12:00 P.M.
ET. A final transcript of the call will be posted the
day following the event.
COMPANY DESCRIPTION
Olin Corporation is a leading vertically-integrated global
manufacturer and distributor of chemical products and a leading
U.S. manufacturer of ammunition. The chemical products
produced include chlorine and caustic soda, vinyls, epoxies,
chlorinated organics, bleach and hydrochloric acid.
Winchester's principal manufacturing facilities produce and
distribute sporting ammunition, law enforcement ammunition,
reloading components, small caliber military ammunition and
components, and industrial cartridges.
Visit www.olin.com for more information on Olin.
FORWARD-LOOKING
STATEMENTS
This communication includes forward-looking statements.
These statements relate to analyses and other information that are
based on management's beliefs, certain assumptions made by
management, forecasts of future results, and current expectations,
estimates and projections about the markets and economy in which we
and our various segments operate. These statements may
include statements regarding the recent acquisition of the Acquired
Business from The Dow Chemical Company (TDCC), the expected
benefits and synergies of the transaction, and future opportunities
for the combined company following the transaction. The
statements contained in this communication that are not statements
of historical fact may include forward-looking statements that
involve a number of risks and uncertainties.
We have used the words "anticipate," "intend," "may," "expect,"
"believe," "should," "plan," "project," "estimate," "forecast,"
"optimistic," and variations of such words and similar expressions
in this communication to identify such forward-looking
statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties and
assumptions, which are difficult to predict and many of which are
beyond our control. Therefore, actual outcomes and results
may differ materially from those matters expressed or implied in
such forward-looking statements. We undertake no obligation
to update publicly any forward-looking statements, whether as a
result of future events, new information or otherwise.
Relative to the dividend, the payment of cash dividends is subject
to the discretion of our board of directors and will be determined
in light of then-current conditions, including our earnings, our
operations, our financial conditions, our capital requirements and
other factors deemed relevant by our board of directors. In
the future, our board of directors may change our dividend policy,
including the frequency or amount of any dividend, in light of
then-existing conditions.
The risks, uncertainties and assumptions involved in our
forward-looking statements, many of which are discussed in more
detail in our filings with the SEC, including without limitation
the "Risk Factors" section of our Annual Report on Form 10-K for
the year ended December 31, 2015,
include, but are not limited to, the following:
- sensitivity to economic, business and market conditions in
the United States and overseas,
including economic instability or a downturn in the sectors served
by us, such as ammunition, vinyls, urethanes, and pulp and paper,
and the migration by United States
customers to low-cost foreign locations;
- the cyclical nature of our operating results, particularly
declines in average selling prices in the chlor alkali industry and
the supply/demand balance for our products, including the impact of
excess industry capacity or an imbalance in demand for our chlor
alkali products;
- our substantial amount of indebtedness and significant debt
service obligations;
- weak industry conditions could affect our ability to comply
with the financial maintenance covenants in our senior credit
facilities;
- the integration of the Acquired Business being more difficult,
time-consuming or costly than expected;
- higher-than-expected raw material and energy, transportation,
and/or logistics costs;
- our reliance on a limited number of suppliers for specified
feedstock and services and our reliance on third-party
transportation;
- economic and industry downturns that result in diminished
product demand and excess manufacturing capacity in any of our
segments and that, in many cases, result in lower selling prices
and profits;
- new regulations or public policy changes regarding the
transportation of hazardous chemicals and the security of chemical
manufacturing facilities;
- changes in legislation or government regulations or
policies;
- failure to control costs or to achieve targeted cost
reductions;
- adverse conditions in the credit and capital markets, limiting
or preventing our ability to borrow or raise capital;
- costs and other expenditures in excess of those projected for
environmental investigation and remediation or other legal
proceedings;
- unexpected litigation outcomes;
- complications resulting from our multiple enterprise resource
planning (ERP) systems;
- the failure or an interruption of our information technology
systems;
- the occurrence of unexpected manufacturing interruptions and
outages, including those occurring as a result of labor disruptions
and production hazards;
- the effects of any declines in global equity markets on asset
values and any declines in interest rates used to value the
liabilities in our pension plan;
- future funding obligations to our qualified defined benefit
pension plan attributable to assumed pension liabilities;
- fluctuations in foreign currency exchange rates;
- failure to attract, retain and motivate key employees;
- our ability to provide the same types and levels of benefits,
services and resources to the Acquired Business that historically
have been provided by TDCC at the same cost;
- differences between the historical financial information of
Olin and the Acquired Business and our future operating
performance;
- the effect of any changes resulting from the transaction with
TDCC in customer, supplier and other business relationships;
and
- the effects of restrictions imposed on our business following
the transaction with TDCC in order to avoid significant tax-related
liabilities.
All of our forward-looking statements should be considered in
light of these factors. In addition, other risks and
uncertainties not presently known to us or that we consider
immaterial could affect the accuracy of our forward-looking
statements.
2017-03
Olin
Corporation
|
Consolidated
Statements of Operations (a)
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
(In millions,
except per share amounts)
|
2016
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
Sales
|
$
|
1,385.7
|
|
$
|
1,452.7
|
|
$
|
5,550.6
|
Operating
Expenses:
|
|
|
|
|
|
|
Cost of Goods
Sold
|
|
1,227.0
|
|
|
1,284.4
|
|
|
4,923.7
|
|
Selling and
Administration
|
|
73.8
|
|
|
82.0
|
|
|
323.2
|
|
Restructuring
Charges (b)
|
|
6.7
|
|
|
5.2
|
|
|
112.9
|
|
Acquisition-related Costs (c)
|
|
9.2
|
|
|
13.1
|
|
|
48.8
|
Other Operating
Income (Expense) (d)
|
|
0.1
|
|
|
(0.2)
|
|
|
10.6
|
|
Operating
Income
|
|
69.1
|
|
|
67.8
|
|
|
152.6
|
Earnings of
Non-consolidated Affiliates
|
|
0.6
|
|
|
0.5
|
|
|
1.7
|
Interest
Expense
|
|
48.3
|
|
|
47.5
|
|
|
191.9
|
Interest
Income
|
|
2.1
|
|
|
0.5
|
|
|
3.4
|
|
Income (Loss)
before Taxes
|
|
23.5
|
|
|
21.3
|
|
|
(34.2)
|
Income Tax
Provision (Benefit)
|
|
6.0
|
|
|
3.8
|
|
|
(30.3)
|
Net Income
(Loss)
|
$
|
17.5
|
|
$
|
17.5
|
|
$
|
(3.9)
|
Net Income (Loss)
Per Common Share:
|
|
|
|
|
|
|
Basic
|
$
|
0.11
|
|
$
|
0.11
|
|
$
|
(0.02)
|
|
Diluted
|
$
|
0.10
|
|
$
|
0.11
|
|
$
|
(0.02)
|
Dividends Per
Common Share
|
$
|
0.20
|
|
$
|
0.20
|
|
$
|
0.80
|
Average Common
Shares Outstanding - Basic
|
|
165.3
|
|
|
165.2
|
|
|
165.2
|
Average Common
Shares Outstanding - Diluted
|
|
166.7
|
|
|
166.5
|
|
|
165.2
|
|
|
|
|
|
|
|
(a)
|
Unaudited.
|
(b)
|
Restructuring
charges were primarily associated with the closure of 433,000 tons
of chlor alkali capacity across three separate Olin locations, of
which $76.6 million was non-cash impairment charges for equipment
and facilities for the year ended December 31,
2016.
|
(c)
|
Acquisition-related costs were associated with our
acquisition of the Acquired Business.
|
(d)
|
Other operating
income (expense) for the year ended December 31, 2016 included an
$11.0 million insurance recovery for property damage and business
interruption related to a 2008 Henderson, NV chlor alkali facility
incident.
|
Olin
Corporation
|
|
|
|
|
|
Segment
Information (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
(In
millions)
|
2016
|
|
2016
|
|
2016
|
Sales:
|
|
|
|
|
|
|
Chlor Alkali
Products and Vinyls
|
$
782.6
|
|
$
779.4
|
|
$
2,999.3
|
|
Epoxy
|
441.7
|
|
470.1
|
|
1,822.0
|
|
Winchester
|
161.4
|
|
203.2
|
|
729.3
|
|
Total Sales
|
$
1,385.7
|
|
$
1,452.7
|
|
$
5,550.6
|
Income (Loss)
before Taxes:
|
|
|
|
|
|
|
Chlor Alkali
Products and Vinyls
|
$
72.4
|
|
$
53.7
|
|
$
224.9
|
|
Epoxy
|
(3.1)
|
|
10.3
|
|
15.4
|
|
Winchester
|
25.0
|
|
36.0
|
|
120.9
|
|
Corporate/Other:
|
|
|
|
|
|
|
Pension Income
(b)
|
13.4
|
|
15.4
|
|
53.6
|
|
Environmental
Expense
|
(3.7)
|
|
(0.4)
|
|
(9.2)
|
|
Other Corporate and
Unallocated Costs
|
(18.5)
|
|
(28.2)
|
|
(100.2)
|
|
Restructuring Charges
(c)
|
(6.7)
|
|
(5.2)
|
|
(112.9)
|
|
Acquisition-related Costs
(d)
|
(9.2)
|
|
(13.1)
|
|
(48.8)
|
|
Other Operating
Income (Expense) (e)
|
0.1
|
|
(0.2)
|
|
10.6
|
|
Interest
Expense
|
(48.3)
|
|
(47.5)
|
|
(191.9)
|
|
Interest
Income
|
2.1
|
|
0.5
|
|
3.4
|
|
Income (Loss) before
Taxes
|
$
23.5
|
|
$
21.3
|
|
$
(34.2)
|
(a)
|
Unaudited.
|
|
|
|
|
|
(b)
|
The service cost
and the amortization of prior service cost components of pension
expense related to the employees of the operating segments are
allocated to the operating segments based on their respective
estimated census data. All other components of pension costs
are included in Corporate/Other and include items such as the
expected return on plan assets, interest cost and recognized
actuarial gains and losses.
|
(c)
|
Restructuring
charges were primarily associated with the closure of 433,000 tons
of chlor alkali capacity across three separate Olin locations, of
which $76.6 million was non-cash impairment charges for equipment
and facilities for the year ended December 31,
2016.
|
(d)
|
Acquisition-related costs were associated with our
acquisition of the Acquired Business.
|
(e)
|
Other operating
income (expense) for the year ended December 31, 2016 included an
$11.0 million insurance recovery for property damage and business
interruption related to a 2008 Henderson, NV chlor alkali facility
incident.
|
Olin
Corporation
|
|
|
|
Consolidated
Balance Sheets (a)
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
(In millions,
except per share data)
|
2016
|
|
2015
|
|
|
|
|
Assets:
|
|
|
|
Cash &
Cash Equivalents
|
$
184.5
|
|
$
392.0
|
Accounts
Receivable, Net
|
675.0
|
|
783.4
|
Income
Taxes Receivable
|
25.5
|
|
32.9
|
Inventories
|
630.4
|
|
685.2
|
Other
Current Assets
|
30.8
|
|
39.9
|
Total Current Assets
|
1,546.2
|
|
1,933.4
|
Property,
Plant and Equipment
|
|
|
|
(Less Accumulated
Depreciation of $1,891.6 and $1,499.4)
|
3,704.9
|
|
3,953.4
|
Deferred
Income Taxes
|
119.5
|
|
95.9
|
Other
Assets
|
644.4
|
|
454.6
|
Intangibles, Net
|
629.6
|
|
677.5
|
Goodwill
|
2,118.0
|
|
2,174.1
|
Total
Assets
|
$
8,762.6
|
|
$
9,288.9
|
|
|
|
|
Liabilities and
Shareholders' Equity:
|
|
|
|
Current
Installments of Long-term Debt
|
$
80.3
|
|
$
205.0
|
Accounts
Payable
|
570.8
|
|
608.2
|
Income
Taxes Payable
|
7.5
|
|
4.9
|
Accrued
Liabilities
|
263.8
|
|
328.1
|
Total Current Liabilities
|
922.4
|
|
1,146.2
|
Long-term
Debt
|
3,537.3
|
|
3,643.8
|
Accrued
Pension Liability
|
640.4
|
|
648.9
|
Deferred
Income Taxes
|
1,031.7
|
|
1,095.2
|
Other
Liabilities
|
359.3
|
|
336.0
|
Total
Liabilities
|
6,491.1
|
|
6,870.1
|
Commitments and
Contingencies
|
|
|
|
Shareholders'
Equity:
|
|
|
|
Common Stock, Par
Value $1 Per Share, Authorized 240.0 Shares:
|
|
|
|
Issued and Outstanding 165.4 Shares (165.1 in
2015)
|
165.4
|
|
165.1
|
Additional Paid-in
Capital
|
2,243.8
|
|
2,236.4
|
Accumulated Other
Comprehensive Loss
|
(511.5)
|
|
(492.5)
|
Retained
Earnings
|
373.8
|
|
509.8
|
Total
Shareholders' Equity
|
2,271.5
|
|
2,418.8
|
Total Liabilities
and Shareholders' Equity
|
$
8,762.6
|
|
$
9,288.9
|
|
|
|
|
(a)
Unaudited.
|
|
|
|
|
|
|
|
Olin
Corporation
|
|
Consolidated
Statements of Cash Flows (a)
|
|
|
|
|
Year
Ended
|
(In
millions)
|
December 31,
2016
|
Operating
Activities:
|
|
Net
Loss
|
$
(3.9)
|
Earnings of
Non-consolidated Affiliates
|
(1.7)
|
Losses on
Disposition of Property, Plant and Equipment
|
0.7
|
Stock-Based
Compensation
|
7.5
|
Depreciation and
Amortization
|
533.5
|
Deferred Income
Taxes
|
(32.7)
|
Write-off of
Equipment and Facility Included in Restructuring
Charges
|
76.6
|
Qualified Pension
Plan Contributions
|
(7.3)
|
Qualified Pension
Plan Income
|
(37.5)
|
Changes
in:
|
|
Receivables
|
38.5
|
Income Taxes
Receivable/Payable
|
10.7
|
Inventories
|
23.9
|
Other Current
Assets
|
20.9
|
Accounts
Payable and Accrued Liabilities
|
(13.1)
|
Other
Assets
|
(4.3)
|
Other
Noncurrent Liabilities
|
(12.1)
|
Other Operating
Activities
|
3.5
|
Net Operating
Activities
|
603.2
|
Investing
Activities:
|
|
Capital
Expenditures
|
(278.0)
|
Business Acquired
in Purchase Transaction, Net of Cash Acquired
|
(69.5)
|
Payments under
Long-term Supply Contract
|
(175.7)
|
Proceeds from
Sale/Leaseback of Equipment
|
40.4
|
Proceeds from
Disposition of Property, Plant and Equipment
|
0.5
|
Proceeds from
Disposition of Affiliated Companies
|
8.8
|
Net Investing
Activities
|
(473.5)
|
Financing
Activities:
|
|
Long-term
Debt:
|
|
Borrowings
|
230.0
|
Repayments
|
(435.3)
|
Stock Options
Exercised
|
0.5
|
Excess Tax Benefit
from Stock-Based Compensation
|
0.4
|
Dividends
Paid
|
(132.1)
|
Debt Issuance
Costs
|
(1.0)
|
Net Financing
Activities
|
(337.5)
|
Net Decrease in
Cash and Cash Equivalents
|
(207.8)
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
0.3
|
Cash and Cash
Equivalents, Beginning of Year
|
392.0
|
Cash and Cash
Equivalents, End of Year
|
$
184.5
|
|
|
(a)
Unaudited.
|
|
Olin
Corporation
|
Non-GAAP Financial
Measures (a)
|
Olin's definition
of Adjusted EBITDA (Earnings before interest, taxes, depreciation,
and amortization) is net income (loss) plus an add-back for
depreciation and amortization, interest expense (income), income
tax expense (benefit), other expense (income), restructuring
charges, acquisition-related costs and certain other non-recurring
items. Adjusted EBITDA is a non-GAAP financial measure.
Management believes that this measure is meaningful to investors as
a supplemental financial measure to assess the financial
performance of our assets without regard to financing methods,
capital structures, taxes or historical cost basis. The use
of non-GAAP financial measures is not intended to replace any
measures of performance determined in accordance with GAAP and
Adjusted EBITDA presented may not be comparable to similarly titled
measures of other companies. Reconciliation of
forward-looking non-GAAP financial measures to the most directly
comparable GAAP financial measures are omitted from this release
because Olin is unable to provide such reconciliations without the
use of unreasonable efforts. This inability results from the
inherent difficulty in forecasting generally and quantifying
certain projected amounts that are necessary for such
reconciliations. In particular, sufficient information is not
available to calculate certain adjustments required for such
reconciliations, including interest expense (income), income tax
expense (benefit), other expense (income), restructuring charges
and acquisition-related costs. Because of our inability to
calculate such adjustments, forward-looking net income guidance is
also omitted from this release. We expect these adjustments
to have a potentially significant impact on our future GAAP
financial results.
|
|
|
Three Months
Ended
|
Year
Ended
|
|
December
31,
|
September
30,
|
December
31,
|
(In
millions)
|
2016
|
2016
|
2016
|
|
|
|
|
|
Reconciliation of
Net Income (Loss) to Adjusted EBITDA:
|
|
|
|
Net Income
(Loss)
|
$
17.5
|
$
17.5
|
$
(3.9)
|
|
Add
Back:
|
|
|
|
|
Interest
Expense
|
48.3
|
47.5
|
191.9
|
|
Interest
Income
|
(2.1)
|
(0.5)
|
(3.4)
|
|
Income Tax
Provision (Benefit)
|
6.0
|
3.8
|
(30.3)
|
|
Depreciation and
Amortization
|
136.1
|
135.3
|
533.5
|
EBITDA
|
205.8
|
203.6
|
687.8
|
|
Add
Back:
|
|
|
|
|
Restructuring
Charges (b)
|
6.7
|
5.2
|
112.9
|
|
Acquisition-related Costs (c)
|
9.2
|
13.1
|
48.8
|
|
Certain
Non-recurring Items (d)
|
-
|
-
|
(11.0)
|
Adjusted
EBITDA
|
$
221.7
|
$
221.9
|
$
838.5
|
|
|
|
|
|
(a)
|
Unaudited.
|
|
|
|
(b)
|
Restructuring
charges were primarily associated with the closure of 433,000 tons
of chlor alkali capacity across three separate Olin locations, of
which $76.6 million was non-cash impairment charges for equipment
and facilities for the year ended December 31,
2016.
|
(c)
|
Acquisition-related costs were associated with our
acquisition of the Acquired Business.
|
(d)
|
Certain
non-recurring items for the year ended December 31, 2016 included
an $11.0 million insurance recovery for property damage and
business interruption related to a 2008 Henderson, NV chlor alkali
facility incident.
|
Olin
Corporation
|
Non-GAAP Financial
Measures(a)
|
Olin's definition
of adjusted net income (loss) from operations per share is net
income (loss) per share plus a per dilutive share add-back for
step-up depreciation and amortization recorded in conjunction with
the Acquired Business, restructuring charges, acquisition-related
costs, certain other non-recurring items and the tax impact of the
aforementioned adjustments. Adjusted net income (loss) from
operations per share is a non-GAAP financial measure excluding
certain items that we do not consider part of ongoing
operations. Management believes that this supplemental
financial measure is meaningful to investors as a financial
performance metric which is useful to investors for comparative
purposes. The use of non-GAAP financial measures is not intended to
replace any measures of performance determined in accordance with
GAAP and adjusted net income (loss) from operations per share
presented may not be comparable to similarly titled measures of
other companies.
|
|
|
|
|
|
|
|
Three Months
Ended
|
Year
Ended
|
|
|
December
31,
|
September
30,
|
December
31,
|
|
|
2016
|
2016
|
2016
|
|
|
|
|
|
Reconciliation of
Net Income (Loss) Per Share to Adjusted Net Income from Operations
Per Share:
|
|
Net Income (Loss)
Per Share
|
$
|
0.10
|
$
|
0.11
|
$
|
(0.02)
|
|
Add
Back:
|
|
|
|
|
Restructuring
Charges (b)
|
|
0.04
|
|
0.03
|
|
0.68
|
|
Acquisition-related Costs (c)
|
|
0.06
|
|
0.08
|
|
0.30
|
|
Certain
Non-recurring Items (d)
|
|
-
|
|
-
|
|
(0.07)
|
|
Step-Up
Depreciation and Amortization (e)
|
|
0.24
|
|
0.24
|
|
0.98
|
|
Income Tax Impact
(f)
|
|
(0.13)
|
|
(0.13)
|
|
(0.71)
|
Adjusted Net
Income from Operations Per Share
|
$
|
0.31
|
$
|
0.33
|
$
|
1.16
|
|
|
|
|
|
(a)
|
Unaudited.
|
|
|
|
(b)
|
Restructuring
charges were primarily associated with the closure of 433,000 tons
of chlor alkali capacity across three separate Olin locations, of
which $76.6 million was non-cash impairment charges for equipment
and facilities for the year ended December 31,
2016.
|
(c)
|
Acquisition-related costs were associated with our
acquisition of the Acquired Business.
|
(d)
|
Certain
non-recurring items for the year ended December 31, 2016 included
an $11.0 million insurance recovery for property damage and
business interruption related to a 2008 Henderson, NV chlor alkali
facility incident.
|
(e)
|
Step-up
depreciation and amortization of $40.3 million for both the three
months ended December 31, 2016 and September 30, 2016 and $161.4
million for the year ended December 31, 2016 was associated with
the increase to fair value of property, plant and equipment,
acquired intangible assets and long-term supply contracts at the
acquisition date related to the purchase accounting of the Acquired
Business.
|
(f)
|
The effective tax
rate on the pretax adjustments from net income (loss) per share to
adjusted net income from operations per share is approximately
37%.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/olin-announces-fourth-quarter-2016-earnings-300400037.html
SOURCE Olin Corporation