Third Quarter 2022 and Other
Highlights
- Net loss from continuing operations of $118 million and diluted
EPS from continuing operations of negative $3.35
- Adjusted EBITDA* of negative $37 million, including a $24
million unfavorable impact from net timing, and Adjusted Net Loss*
of $103 million
- Cash provided by operations of $98 million and capital
expenditures of $39 million resulted in Free Cash Flow* of $59
million; included a working capital release of $166 million mainly
from a steep decline in raw material prices and sequentially lower
sales in the third quarter
- Third quarter ending cash of $243 million with over $500
million of additional available liquidity under two undrawn,
committed financing facilities
- Third quarter year-to-date sales volume of products containing
recycled materials increased 65% versus prior year
Trinseo (NYSE: TSE):
Three Months Ended
September 30,
$millions, except per share
data
2022
2021
Net Sales
$
1,178
$
1,269
Net Income (Loss) from continuing
operations
(118)
79
Diluted EPS from continuing operations
($)
(3.35)
2.01
Adjusted Net Income (Loss)*
(103)
80
Adjusted EPS ($)*
(2.91)
2.01
EBITDA*
(54)
158
Adjusted EBITDA*
(37)
173
*For a reconciliation of EBITDA, Adjusted EBITDA, and Adjusted
Net Income (Loss), all of which are non-GAAP measures, to Net
Income (Loss), as well as a reconciliation of Free Cash Flow and
Adjusted EPS, see Notes 2 and 3 to the financial statements
included below.
Trinseo (NYSE: TSE), a specialty material solutions provider,
today reported its third quarter 2022 financial results. Net sales
in the third quarter decreased 7% versus prior year. Lower sales
volumes resulted in an 18% decrease as economic uncertainty and
falling raw material prices led to a high level of customer
destocking, particularly in Europe and in applications supporting
building & construction and consumer durables. Higher prices
resulted in an 11% increase from the passthrough of higher raw
material and utility costs.
Third quarter net loss from continuing operations of $118
million was $197 million below prior year and Adjusted EBITDA of
negative $37 million was $210 million below prior year.
Geopolitical uncertainty in Europe, continued COVID-19 lockdowns in
China, a slowdown in U.S. residential construction and minimal
improvement in automotive production all led to weak demand, which
not only challenged volumes but also pressured margins.
Historically high energy costs in Europe created further economic
uncertainty for our customers and contributed to negative styrene
margins throughout the quarter. In addition, the operating
environment in the third quarter led to several headwinds, most
notably a pre-tax impact of $24 million for negative net timing
from a steep decline in raw material prices and a pre-tax, one-time
charge of $23 million related to raw material contract obligations
and writedowns for slow-moving inventory.
Commenting on the Company’s third quarter performance, Frank
Bozich, President and Chief Executive Officer of Trinseo, said,
“Our third quarter results reflect very challenging market
conditions in Europe. Historically high energy prices and a
declining raw material price environment led to low consumer
confidence and significant destocking. Despite this, we were able
to generate positive free cash flow during the quarter and I’d like
to thank our employees for their efforts in navigating through
these challenges.”
Third Quarter Results and Commentary by
Business Segment
- Engineered Materials net sales of $243 million for the
quarter increased 5% versus prior year. Higher price led to an 8%
increase from the passthrough of higher raw material and energy
costs while two additional months of results from the Aristech
Surfaces acquisition led to an 11% increase. These impacts more
than offset a 13% decrease from lower sales volume caused by weaker
demand in construction, consumer electronics, wellness and
automotive applications. Adjusted EBITDA of $8 million was $25
million below prior year. In addition to lower sales volume,
reduced demand led to lower margins due to weak supply / demand
dynamics and the inability to fully pass through significantly
higher natural gas costs in Europe. North America demand was
relatively stable with some weakening observed in construction
markets. The integration and synergy realization of the newly
acquired businesses remain on track.
- Latex Binders net sales of $341 million for the quarter
increased 8% versus prior year as a 19% price increase, from the
passthrough of higher raw material costs and pricing actions, more
than offset lower volumes, mainly in carpet and construction
applications. Adjusted EBITDA of $31 million was $6 million lower
than prior year primarily from lower volumes in carpet, turf and
construction applications while demand for paper & board
applications remained steady. Sales volume to CASE applications,
which are mainly tied to building & construction, were down 6%
year-to-date as growth in Asia was more than offset by demand
weakness in Europe.
- Base Plastics net sales of $293 million for the quarter
were 25% lower than prior year primarily from lower volumes as a
result of weaker demand for applications supporting building &
construction and consumer durables. Adjusted EBITDA of negative $15
million was $103 million below prior year. Customer destocking from
declining raw material prices and overall weaker demand led to
lower volumes and margins for polycarbonate and ABS products.
Minimal improvement was observed in automotive production in Europe
and North America as supply chain issues such as chip shortages
persisted.
- Polystyrene net sales of $248 million for the quarter
were 10% below prior year as higher prices from the passthrough of
raw material costs were more than offset by volume declines,
particularly in building & construction and appliance
applications, and as customers destocked amid falling raw material
prices. Adjusted EBITDA of $19 million was $32 million below prior
year as weaker demand negatively impacted volumes and margins. An
unfavorable net timing variance of $7 million versus prior year
also contributed to lower earnings.
- Feedstocks Adjusted EBITDA of negative $78 million was
$50 million lower than prior year as high utility costs and weak
demand combined to create significant margin contraction. Results
were also impacted by a $23 million negative net timing variance
versus prior year.
- Americas Styrenics Adjusted EBITDA of $23 million for
the quarter was $6 million higher than prior year as stronger
margins offset lower volume. Prior year results included an $8
million headwind related to Hurricane Ida impacts.
2022 Full-Year Outlook
- Full-year 2022 net loss from continuing operations of $126
million to $91 million and Adjusted EBITDA of $325 million to $375
million
- Full-year 2022 cash from operations of approximately $150
million resulting in approximately breakeven Free Cash Flow
Commenting on the outlook for the fourth quarter of 2022, Bozich
said, “We expect similar market conditions in the fourth quarter
with some level of continued customer destocking, but we anticipate
significant sequential earnings improvement as a result of idling
styrene production in Europe. Also, the combined $47 million of
impacts from raw material obligations, inventory writedowns and
unfavorable net timing from the third quarter are not expected to
reoccur. In addition, we are evaluating asset optimization
initiatives, such as the potential closures of the Boehlen, Germany
styrene plant and one production line at the Stade, Germany
polycarbonate plant, which would be expected to have a positive
financial impact in 2023.”
Bozich continued, “The uncertain economic conditions we’re
currently observing only underscores the importance of our strategy
shift to a specialty material and sustainable solutions provider.
We’re making headway on this transformation as evidenced by the
growth of our sustainable and material substitution products and we
remain on track to achieve the synergies from the PMMA business and
Aristech Surfaces acquisitions. Meanwhile, we are evaluating steps
to improve our cost position and optimize our global asset
footprint to emerge in an even stronger position when market
conditions improve. Despite these challenges, we have ample
liquidity and we anticipate cash generation to fund the
transformation while providing solid shareholder returns.”
Conference Call and Webcast
Information
Trinseo will host a conference call to discuss its third quarter
2022 financial results on Thursday, November 3, 2022 at 10 a.m.
Eastern Time.
Commenting on results will be Frank Bozich, President and Chief
Executive Officer, David Stasse, Executive Vice President and Chief
Financial Officer, and Andy Myers, Director of Investor
Relations.
For those interested in asking questions during the Q&A
session, please register using the following link:
- Conference Call Registration
For those interested in listening only, please register for the
webcast using the following link:
After registering for the conference call, you will receive a
confirmation email with a meeting invitation and information for
entry. Registration is open through the live call, but it is
advised that you register in advance to ensure you are connected
for the full call.
Trinseo has posted its third quarter 2022 financial results on
the Company’s Investor Relations website. The presentation slides
will also be made available in the webcast player prior to the
conference call. The Company will also furnish copies of the
financial results press release and presentation slides to
investors by means of a Form 8-K filing with the U.S. Securities
and Exchange Commission.
A replay of the conference call and transcript will be archived
on the Company’s Investor Relations website shortly following the
conference call. The replay will be available until November 3,
2023.
About Trinseo
Trinseo (NYSE: TSE) a specialty material solutions provider,
partners with companies to bring ideas to life in an imaginative,
smart, and sustainability-focused manner by combining its premier
expertise, forward-looking innovations and best-in-class materials
to unlock value for companies and consumers.
From design to manufacturing, Trinseo taps into decades of
experience in diverse material solutions to address customers’
unique challenges in a wide range of industries, including consumer
goods, mobility, building and construction, and medical.
Trinseo’s approximately 3,400 employees bring endless creativity
to reimagining the possibilities with clients all over the world
from the company’s locations in North America, Europe, and Asia
Pacific. Trinseo reported net sales of approximately $4.8 billion
in 2021. Discover more by visiting www.trinseo.com and connecting
with Trinseo on LinkedIn, Twitter, Facebook and WeChat.
Use of non-GAAP measures
In addition to using standard measures of performance and
liquidity that are recognized in accordance with accounting
principles generally accepted in the United States of America
(“GAAP”), we use additional measures of income excluding certain
GAAP items (“non-GAAP measures”), such as Adjusted Net Income,
EBITDA, Adjusted EBITDA and Adjusted EPS and measures of liquidity
excluding certain GAAP items, such as Free Cash Flow. We believe
these measures are useful for investors and management in
evaluating business trends and performance each period. These
measures are also used to manage our business and assess current
period profitability, as well as to provide an appropriate basis to
evaluate the effectiveness of our pricing strategies. Such measures
are not recognized in accordance with GAAP and should not be viewed
as an alternative to GAAP measures of performance or liquidity, as
applicable. The definitions of each of these measures, further
discussion of usefulness, and reconciliations of non-GAAP measures
to GAAP measures are provided in the Notes to Condensed
Consolidated Financial Information presented herein.
Cautionary Note on Forward-Looking
Statements
This press release may contain forward-looking statements
including, without limitation, statements concerning plans,
objectives, goals, projections, forecasts, strategies, future
events or performance, and underlying assumptions and other
statements, which are not statements of historical facts or
guarantees or assurances of future performance. Forward-looking
statements may be identified by the use of words like "expect,"
"anticipate," “believe,” "intend," "forecast," "outlook," "will,"
"may," "might," "see," "tend," "assume," "potential," "likely,"
"target," "plan," "contemplate," "seek," "attempt," "should,"
"could," "would" or expressions of similar meaning. Forward-looking
statements reflect management’s evaluation of information currently
available and are based on our current expectations and
assumptions, our business, the economy and other future conditions.
Because forward-looking statements relate to the future, they are
subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. Factors that might
cause future results to differ from those expressed by the
forward-looking statements include, but are not limited to, our
ability to successfully execute our transformation strategy and
business strategy; our ability to integrate acquired businesses;
global supply chain volatility and increased costs or disruption in
the supply of raw materials; increased energy costs or costs for
transportation of our products; the nature of investment
opportunities presented to the Company from time to time; the
outcome of the European Commission’s request for information; and
those discussed in our Annual Report on Form 10-K, under Part I,
Item 1A —"Risk Factors" and elsewhere in our other reports, filings
and furnishings made with the U.S. Securities and Exchange
Commission from time to time. As a result of these or other
factors, our actual results, performance or achievements may differ
materially from those contemplated by the forward-looking
statements. Therefore, we caution you against relying on any of
these forward-looking statements. The forward-looking statements
included in this press release are made only as of the date hereof.
We undertake no obligation to publicly update or revise any
forward-looking statement as a result of new information, future
events or otherwise, except as otherwise required by law.
TRINSEO PLC
Condensed Consolidated
Statements of Operations
(In millions, except per share
data)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2021
2022
2021
Net sales
$
1,178.1
$
1,269.3
$
3,990.3
$
3,529.0
Cost of sales
1,217.6
1,101.0
3,714.8
2,951.7
Gross profit (loss)
(39.5
)
168.3
275.5
577.3
Selling, general and administrative
expenses
80.5
76.4
262.8
230.4
Equity in earnings of unconsolidated
affiliates
22.8
17.1
83.8
70.2
Other charges
1.9
1.2
39.5
3.0
Operating income (loss)
(99.1
)
107.8
57.0
414.1
Interest expense, net
30.4
23.0
77.7
56.6
Acquisition purchase price hedge loss
—
—
—
22.0
Other expense (income), net
0.5
(0.1
)
1.6
8.4
Income (loss) from continuing operations
before income taxes
(130.0
)
84.9
(22.3
)
327.1
Provision for (benefit from) income
taxes
(12.1
)
5.5
41.4
48.9
Net income (loss) from continuing
operations
(117.9
)
79.4
(63.7
)
278.2
Net income (loss) from discontinued
operations, net of income taxes
(1.9
)
13.7
(1.9
)
38.0
Net income (loss)
$
(119.8
)
$
93.1
$
(65.6
)
$
316.2
Weighted average shares- basic
35.2
38.8
36.3
38.7
Net income (loss) per share- basic:
Continuing operations
$
(3.35
)
$
2.04
$
(1.76
)
$
7.19
Discontinued operations
(0.06
)
0.35
(0.05
)
0.98
Net income (loss) per share- basic
$
(3.41
)
$
2.39
$
(1.81
)
$
8.17
Weighted average shares- diluted
35.2
39.5
36.3
39.6
Net income (loss) per share- diluted:
Continuing operations
$
(3.35
)
$
2.01
$
(1.76
)
$
7.03
Discontinued operations
(0.06
)
0.35
(0.05
)
0.96
Net income (loss) per share- diluted
$
(3.41
)
$
2.36
$
(1.81
)
$
7.99
TRINSEO PLC
Condensed Consolidated Balance
Sheets
(In millions)
(Unaudited)
September 30,
December 31,
2022
2021
Assets
Cash and cash equivalents
$
242.8
$
573.0
Accounts receivable, net of allowance
673.7
740.2
Inventories
614.0
621.0
Other current assets
40.5
44.3
Investments in unconsolidated
affiliates
269.2
247.8
Property, plant, equipment, goodwill, and
other intangible assets, net
2,094.9
2,252.9
Right-of-use assets - operating, net
74.8
85.3
Other long-term assets
122.0
147.7
Total assets
$
4,131.9
$
4,712.2
Liabilities and shareholders’
equity
Current liabilities
717.6
914.4
Long-term debt, net of unamortized
deferred financing fees
2,297.8
2,305.6
Noncurrent lease liabilities -
operating
59.3
69.2
Other noncurrent obligations
359.1
409.9
Shareholders’ equity
698.1
1,013.1
Total liabilities and
shareholders’ equity
$
4,131.9
$
4,712.2
TRINSEO PLC
Condensed Consolidated
Statements of Cash Flows
(In millions)
(Unaudited)
Nine Months Ended
September 30,
2022
2021
Cash flows from operating
activities
Cash provided by operating activities -
continuing operations
$
10.8
$
218.7
Cash provided by (used in) operating
activities - discontinued operations
(1.4
)
19.5
Cash provided by operating activities
9.4
238.2
Cash flows from investing
activities
Capital expenditures
(94.0
)
(64.7
)
Cash paid for asset or business
acquisitions, net of cash acquired ($1.0 and $12.1)
(22.2
)
(1,806.6
)
Proceeds from the sale of businesses and
other assets
5.3
0.2
Proceeds from (payments for) the
settlement of hedging instruments
1.9
(14.7
)
Cash used in investing activities -
continuing operations
(109.0
)
(1,885.8
)
Cash used in investing activities -
discontinued operations
(0.8
)
(3.3
)
Cash used in investing activities
(109.8
)
(1,889.1
)
Cash flows from financing
activities
Deferred financing fees
—
(35.0
)
Short-term borrowings, net
(12.2
)
(11.6
)
Purchase of treasury shares
(151.9
)
—
Dividends paid
(36.3
)
(9.5
)
Proceeds from exercise of option
awards
2.9
10.5
Withholding taxes paid on restricted share
units
(3.1
)
(0.8
)
Repurchases and repayments of long-term
debt
(12.9
)
(7.1
)
Net proceeds from issuance of 2028 Term
Loan B
—
746.3
Net proceeds from issuance of 2029 Senior
Notes
—
450.0
Proceeds from Accounts Receivable
Securitization Facility
—
150.0
Repayments of Accounts Receivable
Securitization Facility
—
(20.0
)
Cash provided by (used in) by financing
activities
(213.5
)
1,272.8
Effect of exchange rates on cash
(16.3
)
(3.1
)
Net change in cash, cash equivalents, and
restricted cash
(330.2
)
(381.2
)
Cash, cash equivalents, and restricted
cash—beginning of period
573.0
588.7
Cash, cash equivalents, and restricted
cash—end of period
$
242.8
$
207.5
Less: Restricted cash
—
—
Cash and cash equivalents—end of
period
$
242.8
$
207.5
TRINSEO PLC
Notes to Condensed
Consolidated Financial Information
(Unaudited)
Note 1: Net Sales
by Segment
Three Months Ended
Nine Months Ended
September 30,
September 30,
(In millions)
2022
2021
2022
2021
Engineered Materials
$
242.7
$
230.8
$
839.2
$
477.5
Latex Binders
340.9
315.6
1,001.3
877.6
Base Plastics
293.4
393.3
1,051.8
1,119.3
Polystyrene
247.7
274.8
877.7
855.0
Feedstocks
53.4
54.8
220.3
199.6
Americas Styrenics*
—
—
—
—
Total Net Sales
$
1,178.1
$
1,269.3
$
3,990.3
$
3,529.0
* The results of this segment are comprised entirely of earnings
from Americas Styrenics, our 50%-owned equity method investment. As
such, we do not separately report net sales of Americas Styrenics
within our condensed consolidated statements of operations.
Note 2: Reconciliation of Non-GAAP
Performance Measures to Net Income
EBITDA is a non-GAAP financial performance measure, which is
defined as income from continuing operations before interest
expense, net; income tax provision; depreciation and amortization
expense. We refer to EBITDA in making operating decisions because
we believe it provides our management as well as our investors with
meaningful information regarding the Company’s operational
performance. We believe the use of EBITDA as a metric assists our
board of directors, management and investors in comparing our
operating performance on a consistent basis.
We also present Adjusted EBITDA as a non-GAAP financial
performance measure, which we define as income from continuing
operations before interest expense, net; income tax provision;
depreciation and amortization expense; loss on extinguishment of
long-term debt; asset impairment charges; gains or losses on the
dispositions of businesses and assets; restructuring charges;
acquisition related costs and benefits, and other items. In doing
so, we are providing management, investors, and credit rating
agencies with an indicator of our ongoing performance and business
trends, removing the impact of transactions and events that we
would not consider a part of our core operations.
Lastly, we present Adjusted Net Income (Loss) and Adjusted EPS
as additional performance measures. Adjusted Net Income (Loss) is
calculated as Adjusted EBITDA (defined beginning with net income
from continuing operations, above), less interest expense, less the
provision for income taxes and depreciation and amortization, tax
affected for various discrete items, as appropriate. Adjusted EPS
is calculated as Adjusted Net Income (Loss) per weighted average
diluted shares outstanding for a given period. We believe that
Adjusted Net Income (Loss) and Adjusted EPS provide transparent and
useful information to management, investors, analysts and other
stakeholders in evaluating and assessing our operating results from
period-to-period after removing the impact of certain transactions
and activities that affect comparability and that are not
considered part of our core operations.
There are limitations to using the financial performance
measures noted above. These performance measures are not intended
to represent net income or other measures of financial performance.
As such, they should not be used as alternatives to net income as
indicators of operating performance. Other companies in our
industry may define these performance measures differently than we
do. As a result, it may be difficult to use these or
similarly-named financial measures that other companies may use, to
compare the performance of those companies to our performance. We
compensate for these limitations by providing reconciliations of
these performance measures to our net income, which is determined
in accordance with GAAP.
Three Months Ended
September 30,
(In millions, except per share
data)
2022
2021
Net income (loss)
$
(119.8
)
$
93.1
Net income (loss) from discontinued
operations
(1.9
)
13.7
Net income (loss) from continuing
operations
$
(117.9
)
$
79.4
Interest expense, net
30.4
23.0
Provision for (benefit from) income
taxes
(12.1
)
5.5
Depreciation and amortization
45.9
49.8
EBITDA
$
(53.7
)
$
157.7
Restructuring and other charges
—
0.2
Selling, general, and administrative
expenses
Acquisition transaction and integration
net costs (a)
0.4
13.6
Cost of goods sold; Selling, general, and
administrative expenses
Asset impairment charges or write-offs
1.9
1.2
Other charges
Other items (b)
14.8
0.7
Selling, general, and administrative
expenses; Other expense, net
Adjusted EBITDA
$
(36.6
)
$
173.4
Adjusted EBITDA to
Adjusted Net Income (Loss):
Adjusted EBITDA
(36.6
)
173.4
Interest expense, net
30.4
23.0
Provision for (benefit from) income taxes
- Adjusted (c)
(9.6
)
24.7
Depreciation and amortization - Adjusted
(d)
45.1
46.1
Adjusted Net Income (Loss)
$
(102.5
)
$
79.6
Weighted average shares- diluted
35.2
39.5
Adjusted EPS
$
(2.91
)
$
2.01
Adjusted EBITDA by
Segment:
Engineered Materials
$
7.5
$
32.7
Latex Binders
31.0
37.1
Base Plastics
(14.9
)
87.9
Polystyrene
18.7
51.2
Feedstocks
(78.0
)
(27.6
)
Americas Styrenics
22.8
17.1
Corporate Unallocated
(23.7
)
(25.0
)
Adjusted EBITDA
$
(36.6
)
$
173.4
(a) Acquisition transaction and integration net costs for the
three months ended September 30, 2022 and 2021 primarily relate to
expenses incurred for the Company’s acquisition and integration of
the PMMA business and Aristech Surfaces Acquisitions.
(b) Other items for the three months ended September 30, 2022
and 2021 primarily relate to fees incurred in conjunction with
certain of the Company’s strategic initiatives, as well as costs
related to our transition to a new enterprise resource planning
system.
(c) Adjusted to remove the tax impact of the items noted within
the table above. The income tax expense (benefit) related to these
items was determined utilizing either (1) the estimated annual
effective tax rate on our ordinary income based upon our forecasted
ordinary income for the full year or, (2) for items treated
discretely for tax purposes, we utilized the applicable rates in
the taxing jurisdictions in which these adjustments occurred.
(d) Amounts for the three months ended September 30, 2022 and
2021 exclude accelerated depreciation of $0.8 million and $3.7
million, respectively, related to the shortening of the useful life
of certain IT assets related to the Company’s transition to a new
enterprise resource planning system.
For the same reasons discussed above, we are providing the
following reconciliation of forecasted net income (loss) to
forecasted Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted
EPS for the full year ended December 31, 2022. See “Note on
Forward-Looking Statements” above for a discussion of the
limitations of these forecasts.
Year Ended
December 31,
(In millions, except per share
data)
2022
Adjusted EBITDA
$
325 - 375
Interest expense, net
(113
)
Provision for income taxes
(35) - (50
)
Depreciation and amortization
(200
)
Reconciling items to Adjusted EBITDA
(e)
(103
)
Net Income (Loss) from continuing
operations
(126) – (91
)
Reconciling items to Adjusted Net Income
(Loss) (e)
107
Adjusted Net Income (Loss)
$
(19) - 16
Weighted average shares - diluted (f)
36.3
EPS from continuing operations - diluted
($)
$
(3.47) – (2.51
)
Adjusted EPS ($)
$
(0.52) – 0.44
(e) Reconciling items to Adjusted EBITDA and Adjusted Net Income
(Loss) are not typically forecasted by the Company based on their
nature as being primarily driven by transactions that are not part
of the core operations of the business and, as a result, cannot be
estimated without unreasonable cost or uncertainty. As such, for
the forecasted full year ended December 31, 2022, we have only
included known reconciling items incurred through the nine months
ended September 30, 2022. We have not included forecasted amounts
for the remainder of 2022.
(f) Weighted average shares presented for the purpose of
forecasting EPS and Adjusted EPS assume that the Company will be in
a full year 2022 net loss position, and therefore excludes the
impact of potentially dilutive shares, as the inclusion of said
shares would have an anti-dilutive effect. Further, the weighted
average shares presented do not forecast significant future share
transactions or events, such as repurchases, significant
share-based compensation award grants, and changes in the Company’s
share price. These are all factors which could have a significant
impact on the calculation of EPS and Adjusted EPS during actual
future periods.
Note 3: Reconciliation of Non-GAAP
Liquidity Measures to Cash from Operations
The Company uses certain measures, such as Free Cash Flow as
non-GAAP measures, to evaluate and discuss its liquidity position
and results. Free Cash Flow is defined as cash from operating
activities, less capital expenditures. We believe that Free Cash
Flow provides an indicator of the Company’s ongoing ability to
generate cash through core operations, as it excludes the cash
impacts of various financing transactions as well as cash flows
from business combinations that are not considered organic in
nature. We also believe that Free Cash Flow provides management and
investors with useful analytical indicators of our ability to
service our indebtedness, pay dividends (when declared), and meet
our ongoing cash obligations.
Free Cash Flow is not intended to represent cash flows from
operations as defined by GAAP, and therefore, should not be used as
alternatives for that measure. Other companies in our industry may
define Free Cash Flow differently than we do. As a result, it may
be difficult to use this or similarly-named financial measures that
other companies may use, to compare the liquidity and cash
generation of those companies to our own. The Company compensates
for these limitations by providing the following detail, which is
determined in accordance with GAAP.
Free Cash Flow
Three Months Ended
Nine Months Ended
September 30,
September 30,
(In millions)
2022
2021
2022
2021
Cash provided by operating activities
$
97.6
$
208.2
$
9.4
$
238.2
Capital expenditures
(38.5
)
(35.7
)
(94.8
)
(68.0
)
Free Cash Flow
$
59.1
$
172.5
$
(85.4
)
$
170.2
For the same reasons discussed above, we are providing the
following reconciliation of forecasted cash provided by operations
and cash used for capital expenditures to forecasted Free Cash Flow
for the year ended December 31, 2022. See “Note on Forward-Looking
Statements” above for a discussion of the limitations of these
forecasts.
Year Ended
(In millions)
December 31, 2022
Cash provided by operating activities
$
~150
Capital expenditures
~(150
)
Free Cash Flow
$
~0
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221102006019/en/
Trinseo Andy Myers Tel : +1 610-240-3221 Email:
aemyers@trinseo.com
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