Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
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Condensed Consolidated Balance Sheets | ||
Allowance for doubtful accounts | $ 5.1 | $ 6.1 |
Accumulated depreciation | $ 632.7 | $ 590.6 |
Ordinary shares, nominal value | $ 0.01 | $ 0.01 |
Ordinary shares, shares authorized | 50,000,000,000.0 | 50,000,000,000.0 |
Ordinary shares, shares issued | 48,800,000 | 48,800,000 |
Ordinary shares, shares outstanding | 40,600,000 | 41,600,000 |
Treasury stock, shares | 8,200,000 | 7,200,000 |
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Condensed Consolidated Statements of Operations | ||||
Net sales | $ 951.8 | $ 1,236.6 | $ 1,964.9 | $ 2,358.1 |
Cost of sales | 865.6 | 1,073.9 | 1,781.2 | 2,020.2 |
Gross profit | 86.2 | 162.7 | 183.7 | 337.9 |
Selling, general and administrative expenses | 71.4 | 61.7 | 140.3 | 126.1 |
Equity in earnings of unconsolidated affiliates | 40.3 | 33.2 | 72.5 | 78.8 |
Operating income | 55.1 | 134.2 | 115.9 | 290.6 |
Interest expense, net | 9.9 | 10.8 | 20.1 | 25.7 |
Loss on extinguishment of long-term debt | 0.2 | 0.2 | ||
Other expense, net | 1.5 | 4.5 | 5.5 | 0.8 |
Income before income taxes | 43.7 | 118.7 | 90.3 | 263.9 |
Provision for income taxes | 15.7 | 20.4 | 26.5 | 45.3 |
Net income | $ 28.0 | $ 98.3 | $ 63.8 | $ 218.6 |
Weighted average shares- basic | 40.8 | 43.1 | 41.0 | 43.3 |
Net income (loss) per share- basic | $ 0.69 | $ 2.28 | $ 1.56 | $ 5.05 |
Weighted average shares- diluted | 41.1 | 43.8 | 41.5 | 44.2 |
Net income (loss) per share- diluted | $ 0.68 | $ 2.24 | $ 1.54 | $ 4.95 |
Dividends on ordinary shares | $ 0.40 | $ 0.36 |
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Condensed Consolidated Statements of Comprehensive Income (Loss) | ||||
Net income | $ 28.0 | $ 98.3 | $ 63.8 | $ 218.6 |
Other comprehensive income (loss), net of tax | ||||
Cumulative translation adjustments | 3.0 | (16.1) | 2.7 | (18.2) |
Net gain on cash flow hedges post adoption | (5.4) | 11.9 | (5.3) | 14.7 |
Pension and other postretirement benefit plans: | ||||
Net loss arising during period (net of tax of: $0.0, $0.0, $0.2, and $0.0) | (2.0) | |||
Amounts reclassified from accumulated other comprehensive income | 0.3 | 0.6 | 1.3 | 1.2 |
Total other comprehensive income (loss), net of tax | (2.1) | (3.6) | (3.3) | (2.3) |
Comprehensive income | $ 25.9 | $ 94.7 | $ 60.5 | $ 216.3 |
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Condensed Consolidated Statements of Comprehensive Income (Loss) | ||||
Net loss arising during period, tax (benefit) expense | $ 0.0 | $ 0.0 | $ 0.2 | $ 0.0 |
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical)) - $ / shares |
3 Months Ended | |||
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Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2018 |
Mar. 31, 2018 |
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Condensed Consolidated Statement of Stockholders' Equity | ||||
Dividends on ordinary shares | $ 0.40 | $ 0.40 | $ 0.36 | $ 0.36 |
Basis of Presentation |
6 Months Ended |
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Jun. 30, 2019 | |
Basis of Presentation | |
Basis of Presentation | NOTE 1—BASIS OF PRESENTATION The unaudited interim condensed consolidated financial statements of Trinseo S.A. and its subsidiaries (the “Company”) as of and for the periods ended June 30, 2019 and 2018 were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect all adjustments, consisting only of normal recurring adjustments, which, in the opinion of management, are considered necessary for the fair statement of the results for the periods presented. Because they cover interim periods, the statements and related notes to the financial statements do not include all disclosures normally provided in annual financial statements, and therefore, these statements should be read in conjunction with the 2018 audited consolidated financial statements included within the Company’s Annual Report on Form 10-K (“Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on February 28, 2019. The December 31, 2018 condensed consolidated balance sheet data presented herein was derived from the Company’s December 31, 2018 audited consolidated financial statements, but does not include all disclosures required by GAAP for annual periods. The presentation of prior year amounts in the condensed consolidated statements of shareholders’ equity have been updated to conform to the current year presentation.
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Recent Accounting Guidance |
6 Months Ended |
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Jun. 30, 2019 | |
Recent Accounting Guidance | |
Recent Accounting Guidance | NOTE 2—RECENT ACCOUNTING GUIDANCE In February 2016, the FASB issued guidance related to leases that outlines a comprehensive lease accounting model and supersedes prior lease guidance. The new guidance requires lessees to recognize on the consolidated balance sheets lease liabilities and corresponding right-of-use (“ROU”) assets for all leases with terms of greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The new guidance must be adopted using a modified retrospective transition, applying the new standard to all leases existing at the date of initial application. The Company adopted the standard effective January 1, 2019, and as a result, the Company recorded ROU assets and lease liabilities of $73.0 million and $72.4 million, respectively, on the condensed consolidated balance sheet as of January 1, 2019. The Company’s adoption of this standard did not result in a cumulative effect adjustment being recorded to opening retained earnings as of January 1, 2019 and did not have a material impact on the Company’s condensed consolidated statements of operations or cash flows. Refer to Note 18 for new disclosure requirements in effect as a result of this adoption. In August 2018, the FASB issued guidance which modifies the disclosure requirements for employers that sponsor defined benefit pension plans or other postretirement plans. This amendment is effective for public companies for fiscal years ending after December 15, 2020. Early adoption is permitted, and the provisions of the amendment should be applied on a retrospective basis to all periods presented. The Company does not anticipate that adoption of the new guidance will have a material impact on its consolidated financial statements. In August 2018, the FASB issued guidance which aligns the requirements for capitalizing implementation costs incurred in a cloud computing hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard update is effective for public companies for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company will adopt the new guidance prospectively to eligible costs incurred on or after the date first applied. The Company does not anticipate that adoption of this guidance will have a material impact on its consolidated financial statements, barring significant future cloud computing transactions. |
Net Sales |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Sales | NOTE 3—NET SALES Sales are recognized at a point when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services, and when the Company’s related performance obligation is satisfied under the terms of the contract. Standard terms of delivery are included in contracts of sale, order confirmation documents, and invoices. Sales and other taxes that the Company collects concurrent with sales-producing activities are excluded from “Net sales” and included as a component of “Cost of sales” in the condensed consolidated statements of operations. Additionally, freight and any directly related costs of transporting finished products to customers are accounted for as fulfilment costs and are also included within “Cost of sales.” The amount of net sales recognized varies with changes in returns, rebates, cash sales incentives, and other allowances offered to customers based on the Company's experience. The following table provides disclosure of net sales to external customers by primary geographical market (based on the location where sales originated), by segment for the three and six months ended June 30, 2019 and 2018:
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Investments in Unconsolidated Affiliates |
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Investments in Unconsolidated Affiliates | NOTE 4—INVESTMENTS IN UNCONSOLIDATED AFFILIATES The Company’s investments held in unconsolidated affiliates are accounted for by the equity method. The Company is currently supplemented by one joint venture, Americas Styrenics LLC (“Americas Styrenics,” a styrene and polystyrene joint venture with Chevron Phillips Chemical Company LP). The results of Americas Styrenics are included within its own reporting segment. Americas Styrenics is a privately held company; therefore, a quoted market price for its equity interests are not available. The summarized financial information of the Company’s unconsolidated affiliate is shown below.
Americas Styrenics As of June 30, 2019 and December 31, 2018, the Company’s investment in Americas Styrenics was $199.1 million and $179.1 million, respectively, which was $18.9 million and $46.4 million less than the Company’s 50% share of the underlying net assets of Americas Styrenics, respectively. This amount represents the difference between the book value of assets contributed to the joint venture at the time of formation (May 1, 2008) and the Company’s 50% share of the total recorded value of the joint venture’s assets and certain adjustments to conform with the Company’s accounting policies. This difference is being amortized over the weighted average remaining useful life of the contributed assets of approximately 1.7 years as of June 30, 2019. The Company received dividends from Americas Styrenics of $40.0 million and $52.5 million during the three and six months ended June 30, 2019, respectively, compared to $37.5 million and $67.5 million during the three and six months ended June 30, 2018, respectively. |
Inventories |
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Inventories | NOTE 5—INVENTORIES Inventories consisted of the following:
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Debt |
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Debt | NOTE 6—DEBT Refer to the Annual Report for definitions of capitalized terms not included herein and further background on the Company’s debt structure discussed below. The Company was in compliance with all debt related covenants as of June 30, 2019 and December 31, 2018. As of June 30, 2019 and December 31, 2018, debt consisted of the following:
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Goodwill |
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Goodwill | NOTE 7—GOODWILL The following table shows changes in the carrying amount of goodwill, by segment, from December 31, 2018 to June 30, 2019:
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Derivative Instruments |
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Derivative Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | NOTE 8—DERIVATIVE INSTRUMENTS The Company’s ongoing business operations expose it to various risks, including fluctuating foreign exchange rates and interest rate risk. To manage these risks, the Company periodically enters into derivative financial instruments, such as foreign exchange forward contracts and interest rate swap agreements. The Company does not hold or enter into financial instruments for trading or speculative purposes. All derivatives are recorded on the condensed consolidated balance sheets at fair value. Foreign Exchange Forward Contracts Certain subsidiaries have assets and liabilities denominated in currencies other than their respective functional currencies, which creates foreign exchange risk. The Company’s principal strategy in managing its exposure to changes in foreign currency exchange rates is to naturally hedge the foreign currency-denominated liabilities on its balance sheet against corresponding assets of the same currency, such that any changes in liabilities due to fluctuations in exchange rates are offset by changes in their corresponding foreign currency assets. In order to further reduce this exposure, the Company also uses foreign exchange forward contracts to economically hedge the impact of the variability in exchange rates on assets and liabilities denominated in certain foreign currencies. These derivative contracts are not designated for hedge accounting treatment. As of June 30, 2019, the Company had open foreign exchange forward contracts with a notional U.S. dollar equivalent absolute value of $403.8 million. The following table displays the notional amounts of the most significant net foreign exchange hedge positions outstanding as of June 30, 2019:
Open foreign exchange forward contracts as of June 30, 2019 had maturities occurring over a period of two months. Foreign Exchange Cash Flow Hedges The Company also enters into forward contracts with the objective of managing the currency risk associated with forecasted U.S. dollar-denominated raw materials purchases by one of its subsidiaries whose functional currency is the euro. By entering into these forward contracts, which are designated as cash flow hedges, the Company buys a designated amount of U.S. dollars and sells euros at the prevailing market rate to mitigate the risk associated with the fluctuations in the euro-to-U.S. dollar foreign currency exchange rates. The qualifying hedge contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in Accumulated Other Comprehensive Income (“AOCI”) to the extent effective, and reclassified to cost of sales in the period during which the transaction affects earnings or it becomes probable that the forecasted transaction will not occur. Open foreign exchange cash flow hedges as of June 30, 2019 had maturities occurring over a period of six months, and had a net notional U.S. dollar equivalent of $71.4 million. Interest Rate Swaps On September 6, 2017, the Company issued the 2024 Term Loan B, which currently bears an interest rate of the London Interbank Offered Rate (“LIBOR”) plus 2.00%, subject to a 0.00% LIBOR floor. In order to reduce the variability in interest payments associated with the Company’s variable rate debt, during 2017 the Company entered into certain interest rate swap agreements to convert a portion of these variable rate borrowings into a fixed rate obligation. These interest rate swap agreements are designated as cash flow hedges, and as such, the contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in AOCI to the extent effective, and reclassified to interest expense in the period during which the transaction affects earnings or it becomes probable that the forecasted transaction will not occur. As of June 30, 2019, the Company had open interest rate swap agreements with a net notional U.S. dollar equivalent of $200.0 million which had an effective date of September 29, 2017 and mature in September 2022. Under the terms of the swap agreements, the Company is required to pay the counterparties a stream of fixed interest payments at a rate of 1.81%, and in turn, receives variable interest payments based on 1-month LIBOR (2.40% as of June 30, 2019) from the counterparties. Net Investment Hedge On September 1, 2017, the Company entered into certain fixed-for-fixed cross currency swaps (“CCS”), swapping USD principal and interest payments on its 2025 Senior Notes for euro-denominated payments. Under the terms of the CCS, the Company has notionally exchanged $500.0 million at an interest rate of 5.375% for €420.0 million at a weighted average interest rate of 3.45% for approximately five years. On September 1, 2017, the Company designated the full notional amount of the CCS (€420.0 million) as a hedge of its net investment in certain European subsidiaries under the forward method, with all changes in the fair value of the CCS recorded as a component of AOCI, as the CCS were deemed to be highly effective hedges. A cumulative foreign currency translation loss of $38.0 million was recorded within AOCI related to the CCS through March 31, 2018. Effective April 1, 2018, the Company elected as an accounting policy to re-designate the CCS as a net investment hedge (and any future similar hedges) under the spot method. As such, changes in the fair value of the CCS that are included in the assessment of effectiveness (changes due to spot foreign exchange rates) are recorded as cumulative foreign currency translation within OCI, and will remain in AOCI until either the sale or substantially complete liquidation of the subsidiary. As of June 30, 2019, no gains or losses have been reclassified from AOCI into income related to the sale or substantially complete liquidation of the relevant subsidiaries. As an additional accounting policy election applied to similar hedges under this new standard, the initial value of any component excluded from the assessment of effectiveness is recognized in income using a systematic and rational method over the life of the hedging instrument. Any difference between the change in the fair value of the excluded component and amounts recognized in income under that systematic and rational method is recognized in AOCI. Prior to April 1, 2018, no components were excluded from the assessment of effectiveness for any of the Company’s existing net investment hedges. As of April 1, 2018, the initial excluded component value related to the CCS was $23.6 million, which the Company elected to amortize as a reduction of “Interest expense, net” in the condensed consolidated statements of operations using the straight-line method over the remaining term of the CCS. Additionally, the accrual of periodic USD and euro-denominated interest receipts and payments under the terms of the CCS are being recognized within “Interest expense, net” in the condensed consolidated statements of operations. Summary of Derivative Instruments The following tables present the effect of the Company’s derivative instruments, including those not designated for hedge accounting treatment, on the condensed consolidated statements of operations for the three and six months ended June 30, 2019 and 2018:
The following table presents the effect of cash flow and net investment hedge accounting on AOCI for the three and six months ended June 30, 2019 and 2018:
The Company recorded a loss of $2.4 million and a gain of $0.3 million during the three and six months ended June 30, 2019, respectively, and gains of $14.1 million and $8.8 million during the three and six months ended June 30, 2018, respectively, from settlements and changes in the fair value of outstanding forward contracts (not designated as hedges). The gains and losses from these forward contracts offset net foreign exchange transaction gains of $2.6 million and losses of $0.5 million during the three and six months ended June 30, 2019, respectively, and losses of $16.1 million and $5.7 million during the three and six months ended June 30, 2018, respectively, which resulted from the re-measurement of the Company’s foreign currency denominated assets and liabilities. The cash settlements of these foreign exchange forward contracts are included within operating activities in the condensed consolidated statements of cash flows. The Company expects to reclassify in the next twelve months an approximate $2.5 million net gain from AOCI into earnings related to the Company’s outstanding foreign exchange cash flow hedges and interest rate swaps as of June 30, 2019 based on current foreign exchange rates. The following tables summarize the gross and net unrealized gains and losses, as well as the balance sheet classification, of outstanding derivatives recorded in the condensed consolidated balance sheets:
Forward contracts, interest rate swaps, and cross currency swaps are entered into with a limited number of counterparties, each of which allows for net settlement of all contracts through a single payment in a single currency in the event of a default on or termination of any one contract. As such, in accordance with the Company’s accounting policy, these derivative instruments are recorded on a net basis by counterparty within the condensed consolidated balance sheets. Refer to Notes 9 and 16 of the condensed consolidated financial statements for further information regarding the fair value of the Company’s derivative instruments and the related changes in AOCI. |
Fair Value Measurements |
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Fair Value Measurements | NOTE 9—FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date. Level 1—Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3—Valuation is based upon other unobservable inputs that are significant to the fair value measurement. The following table summarizes the basis used to measure certain assets and liabilities at fair value on a recurring basis in the condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018:
The Company uses an income approach to value its derivative instruments, utilizing discounted cash flow techniques, considering the terms of the contract and observable market information available as of the reporting date, such as interest rate yield curves and currency spot and forward rates. Significant inputs to the valuation for these derivative instruments are obtained from broker quotations or from listed or over-the-counter market data, and are classified as Level 2 in the fair value hierarchy. Fair Value of Debt Instruments The following table presents the estimated fair value of the Company’s outstanding debt not carried at fair value as of June 30, 2019 and December 31, 2018:
The fair value of the Company’s debt facilities above (each Level 2 securities) is determined using over-the-counter market quotes and benchmark yields received from independent vendors. There were no other significant financial instruments outstanding as of June 30, 2019 and December 31, 2018. |
Provision for Income Taxes |
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Provision for Income Taxes | NOTE 10—PROVISION FOR INCOME TAXES
Provision for income taxes for the three and six months ended June 30, 2019 totaled $15.7 million and $26.5 million, respectively, resulting in an effective tax rate of 36.0% and 29.3%, respectively. Provision for income taxes for the three and six months ended June 30, 2018 totaled $20.4 million and $45.3 million, respectively, resulting in an effective tax rate of 17.2%. The increase in the effective tax rate for the three and six months ended June 30, 2019 as compared to the same period in 2018 was primarily driven by a lower proportion of income before taxes attributable to non-U.S. jurisdictions, which includes losses not anticipated to provide a tax benefit to the Company in the future. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure | |
Commitments and Contingencies | NOTE 11—COMMITMENTS AND CONTINGENCIES Environmental Matters Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on current law, existing technologies and other information. Pursuant to the terms of the agreement associated with the Company’s formation, the pre-closing environmental liabilities were retained by Dow, and Dow agreed, subject to temporal, monetary, and other limitations to indemnify the Company from and against environmental liabilities incurred or relating to the predecessor periods. No environmental claims have been asserted or threatened against the Company, and the Company is not a potentially responsible party at any Superfund Sites. As of June 30, 2019 and December 31, 2018, the Company had no accrued obligations for environmental remediation or restoration costs. Inherent uncertainties exist in the Company’s potential environmental liabilities primarily due to unknown conditions, whether future claims may fall outside the scope of the indemnity, changing governmental regulations and legal standards regarding liability, and evolving technologies for handling site remediation and restoration. In connection with the Company’s existing indemnification, the possibility is considered remote that environmental remediation costs will have a material adverse impact on the condensed consolidated financial statements over the next 12 months. Purchase Commitments In the normal course of business, the Company has certain raw material purchase contracts where it is required to purchase certain minimum volumes at current market prices. These commitments range from one to three years. In certain raw material purchase contracts, the Company has the right to purchase less than the required minimums and pay a liquidated damages fee, or, in case of a permanent plant shutdown, to terminate the contracts. In such cases, these obligations would be less than the annual commitment as disclosed in the Notes to Consolidated Financial Statements included in the Annual Report. Litigation Matters From time to time, the Company may be subject to various legal claims and proceedings incidental to the normal conduct of business, relating to such matters as employees, product liability, antitrust/competition, past waste disposal practices and release of chemicals into the environment. While it is impossible at this time to determine with certainty the ultimate outcome of these routine claims, the Company does not believe that the ultimate resolution of these claims will have a material adverse effect on the Company’s results of operations, financial condition or cash flow. Legal costs, including those legal costs expected to be incurred in connection with a loss contingency, are expensed as incurred. European Commission Request for Information On June 6, 2018, Trinseo Europe GmbH, a subsidiary of the Company, received a Request for Information in the form of a letter from the European Commission Directorate General for Competition (the “European Commission”) related to styrene monomer commercial activity in the European Economic Area. In addition, the Company commenced an internal investigation into these commercial activities and discovered instances of inappropriate activity. The Company is fully cooperating with the European Commission and delivered all requested documents responsive to its information request. Notwithstanding the delivery of the Company’s response to the European Commission, this matter remains open with the European Commission. Based on its findings, the European Commission may decide to: (i) require further information; (ii) conduct unannounced raids of the Company’s premises; (iii) adopt decisions imposing fines, interim measures to halt immediately any anti-competitive behavior, orders for the Company to cease anti-competitive activities, and/or certain behavioral or structural commitments from the Company; or (iv) take no further action. As a result of the above factors, the Company is unable to predict the ultimate outcome of this matter or estimate the range of reasonably possible losses that could be incurred. However, any potential losses incurred could be material to the Company’s results of operations, balance sheet, and cash flows for the period in which they are resolved or become probable and reasonably estimable. |
Pension Plans and Other Postretirement Benefits |
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Pension Plans and Other Postretirement Benefits | NOTE 12—PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS The components of net periodic benefit costs for all significant plans were as follows:
Service cost related to the Company’s defined benefit pension plans and other postretirement plans is included within “Cost of sales” and “Selling, general and administrative expenses” whereas all other components of net periodic benefit cost are included within “Other expense, net” in the condensed consolidated statements of operations. As of June 30, 2019 and December 31, 2018, the Company’s benefit obligations included primarily in “Other noncurrent obligations” in the condensed consolidated balance sheets were $196.4 million and $189.2 million, respectively. The Company made cash contributions and benefit payments to unfunded plans of approximately $2.0 million and $2.9 million during the three and six months ended June 30, 2019, respectively. The Company expects to make additional cash contributions, including benefit payments to unfunded plans, of approximately $3.3 million to its defined benefit plans for the remainder of 2019. |
Share-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | NOTE 13—SHARE-BASED COMPENSATION Refer to the Annual Report for definitions of capitalized terms not included herein and further background on the Company’s share-based compensation programs included in the tables below. The following table summarizes the Company’s share-based compensation expense for the three and six months ended June 30, 2019 and 2018, as well as unrecognized compensation cost as of June 30, 2019:
The following table summarizes awards granted and the respective weighted average grant date fair value for the six months ended June 30, 2019:
Option Awards The following are the weighted average assumptions used within the Black-Scholes pricing model for the Company’s option awards granted during the six months ended June 30, 2019:
Since the Company’s equity interests were privately held prior to its initial public offering in June 2014, there is limited publicly traded history of the Company’s ordinary shares. Until such time that the Company can determine expected volatility based solely on the publicly traded history of its ordinary shares, expected volatility used in the Black-Scholes model for option awards granted is based on a combination of the Company’s historical volatility and similar companies’ shares that are publicly traded. The expected term of option awards represents the period of time that option awards granted are expected to be outstanding. For the option awards granted during the six months ended June 30, 2019, the simplified method was used to calculate the expected term, given the Company’s limited historical exercise data. The risk-free interest rate for the periods within the expected term of option awards is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is estimated based on historical and expected dividend activity. Performance Share Units (PSUs) The following are the weighted average assumptions used within the Monte Carlo valuation model for PSUs granted during the six months ended June 30, 2019:
Determining the fair value of PSUs requires considerable judgment, including estimating the expected volatility of the price of the Company’s ordinary shares, the correlation between the Company’s share price and that of its peer companies, and the expected rate of interest. The expected volatility for each grant is determined based on the historical volatility of the Company’s ordinary shares. The expected term of PSUs represents the length of the performance period. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for a duration equivalent to the performance period. The share price is the closing price of the Company’s ordinary shares on the grant date. |
Segments |
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Segments | NOTE 14—SEGMENTS The Company operates under six segments: Latex Binders, Synthetic Rubber, Performance Plastics, Polystyrene, Feedstocks, and Americas Styrenics. The Latex Binders segment produces styrene-butadiene latex (“SB latex”) and other latex polymers and binders, primarily for coated paper and packaging board, carpet and artificial turf backings, as well as a number of performance latex binders applications, such as adhesive, building and construction and the technical textile paper market. The Synthetic Rubber segment produces synthetic rubber products used predominantly in high-performance tires, impact modifiers and technical rubber products, such as conveyer belts, hoses, seals and gaskets. The Performance Plastics segment includes a variety of highly engineered compounds and blends, the Company’s acrylonitrile-butadiene-styrene (“ABS”), styrene-acrylonitrile (“SAN”), and polycarbonate (“PC”) businesses, and the Company’s soft-touch polymers and bioplastics business, which includes thermoplastic elastomers (“TPEs”). The Polystyrene segment includes a variety of general purpose polystyrenes (“GPPS”) and polystyrene that has been modified with polybutadiene rubber to increase its impact resistant properties (“HIPS”). The Feedstocks segment includes the Company’s production and procurement of styrene monomer outside of North America, which is used as a key raw material in many of the Company’s products, including polystyrene, SB latex, ABS resins, and solution styrene- butadiene rubber (“SSBR”). Lastly, the Americas Styrenics segment consists solely of the operations of the Company’s 50%-owned joint venture, Americas Styrenics, a producer of both styrene monomer and polystyrene in North America. The following table provides disclosure of the Company’s segment Adjusted EBITDA, which is used to measure segment operating performance and is defined below, for the three and six months ended June 30, 2019 and 2018. Asset and intersegment sales information by reporting segment is not regularly reviewed or included with the Company’s reporting to the chief operating decision maker. Therefore, this information has not been disclosed below. Refer to Note 3 for the Company’s net sales to external customers by segment for the three and six months ended June 30, 2019 and 2018.
The reconciliation of income before income taxes to segment Adjusted EBITDA is as follows:
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Restructuring |
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Restructuring | NOTE 15—RESTRUCTURING Refer to the Annual Report for further details regarding the Company’s previously announced restructuring activities included in the tables below. Restructuring charges are included within “Selling, general and administrative expenses” in the condensed consolidated statements of operations. The following table provides detail of the Company’s restructuring charges for the three and six months ended June 30, 2019 and 2018:
The following table provides a roll forward of the liability balances associated with the Company’s restructuring activities as of June 30, 2019. Employee termination benefit and contract termination charges are recorded within “Accrued expenses and other current liabilities” in the condensed consolidated balance sheets.
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Accumulated Other Comprehensive Income (Loss) |
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Accumulated Other Comprehensive Income (Loss) | NOTE 16—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The components of AOCI, net of income taxes, consisted of:
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Earnings Per Share | NOTE 17—EARNINGS PER SHARE Basic earnings per ordinary share (“basic EPS”) is computed by dividing net income available to ordinary shareholders by the weighted average number of the Company’s ordinary shares outstanding for the applicable period. Diluted earnings per ordinary share (“diluted EPS”) is calculated using net income available to ordinary shareholders divided by diluted weighted average ordinary shares outstanding during each period, which includes unvested RSUs, option awards, and PSUs. Diluted EPS considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential ordinary shares would have an anti-dilutive effect. The following table presents basic EPS and diluted EPS for the three and six months ended June 30, 2019 and 2018:
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Leases |
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Lessee Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | NOTE 18—LEASES As discussed in Note 2, effective January 1, 2019, the Company adopted accounting guidance, Topic 842, issued by the FASB related to leases that outlines a comprehensive lease accounting model and supersedes the prior lease guidance. The Company adopted this guidance using the modified retrospective approach and elected the optional transition method. As a result, comparative prior periods in the Company’s financial statements are not adjusted for the impacts of the new standard. The Company’s accounting policy and practical expedient elections related to accounting for leases, including those elected as a result of the adoption of Topic 842, are summarized as follows:
The Company routinely enters into leasing arrangements for a variety of assets including buildings/offices, warehouses and tanks for product storage, railcars and other vehicles for product transportation, motor vehicles, and other equipment. The Company determines if a contract is or contains a lease based on its relevant terms in accordance with Topic 842, including whether it conveys to the Company the right to obtain substantially all the economic benefits of the identified leased asset and to direct its use. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company’s lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses its incremental borrowing rate based on the information available at the lease commencement date to determine the appropriate discount rate by multiple asset classes, pursuant to the aforementioned portfolio approach methodology. Variable lease payments that are not based on an index or that result from changes to an index subsequent to the initial measurement of the corresponding lease liability are not included in the measurement of lease ROU assets or liabilities and instead are recognized in earnings in the period in which the obligation for those payments is incurred. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise any such options. Lease expense is recognized on a straight‐line basis over the expected lease term. The Company's ROU assets and lease liabilities are classified on its condensed consolidated balance sheets as follows:
The components of the Company's lease costs are classified on its condensed consolidated statements of operations as follows:
The table below shows the cash and non-cash activity related to the Company’s lease liabilities during the period:
As of June 30, 2019, the maturities of the Company's operating and finance lease liabilities were as follows:
As of June 30, 2019, the weighted average remaining lease term of the Company's operating and finance leases was 9.1 and 6.8 years, respectively, and the weighted average discount rate used to determine the lease liability for operating and finance leases was 4.6% and 4.4%, respectively. As of June 30, 2019, the Company has additional operating leases that have not yet commenced of $6.0 million. The leases will commence in July 2019 with lease terms of 0.5 to 16.0 years. Disclosures related to periods prior to adoption of Topic 842 As discussed above, the Company adopted Topic 842 effective January 1, 2019 using a modified retrospective approach. As required, the following disclosure is provided for periods prior to adoption. The Company’s total future minimum annual rentals in effect at December 31, 2018 for noncancelable operating leases, which were accounted for under the previous leasing standard, Accounting Standards Codification 840, were as follows:
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Subsequent Events |
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Subsequent Events | NOTE 19—SUBSEQUENT EVENTS On August 6, 2019, new federal income tax legislation was enacted in Switzerland. As a result, the Company anticipates a higher effective tax rate in its entities in Switzerland, beginning in 2020. Additionally, a one-time deferred tax benefit will be recorded in the third quarter of 2019 related to re-measurement of the Company’s deferred tax assets and liabilities in Switzerland due to a change in the enacted Swiss Federal tax rate, which the Company is in the process of quantifying.
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Basis of Presentation | The unaudited interim condensed consolidated financial statements of Trinseo S.A. and its subsidiaries (the “Company”) as of and for the periods ended June 30, 2019 and 2018 were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect all adjustments, consisting only of normal recurring adjustments, which, in the opinion of management, are considered necessary for the fair statement of the results for the periods presented. Because they cover interim periods, the statements and related notes to the financial statements do not include all disclosures normally provided in annual financial statements, and therefore, these statements should be read in conjunction with the 2018 audited consolidated financial statements included within the Company’s Annual Report on Form 10-K (“Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on February 28, 2019. The December 31, 2018 condensed consolidated balance sheet data presented herein was derived from the Company’s December 31, 2018 audited consolidated financial statements, but does not include all disclosures required by GAAP for annual periods. The presentation of prior year amounts in the condensed consolidated statements of shareholders’ equity have been updated to conform to the current year presentation.
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Net Sales (Tables) |
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Disaggregation of Revenue [Table Text Block] |
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Schedule of Debt [Table Text Block] |
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Changes in Carrying Amount of Goodwill, by Segment |
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Derivative Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notional Amounts of Most Significant Net Foreign Exchange Hedge Positions Outstanding |
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Schedule of Effect of Derivative Instruments on Statements of Operations |
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Schedule of Effect of Hedges on AOCI |
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Schedule of Gross and Net Unrealized Gains and Losses and Balance Sheet Classification |
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities at Fair Value on Recurring Basis |
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Estimated Fair Value of Outstanding Debt Not Carried at Fair Value |
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Provision for Income Taxes (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for Income Taxes | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Tax Rate |
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Pension Plans and Other Postretirement Benefits (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans and Other Postretirement Benefits | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Benefit Costs |
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Share-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Share-Based Compensation Expense and Unrecognized Compensation Cost |
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Summary of Awards Granted and Weighted Average Grant-Date Fair Value |
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Option Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Weighted-average Assumptions |
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Performance Share Units | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Weighted-average Assumptions |
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Segments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] |
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Reconciliation of IBT to Adjusted EBITDA |
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Restructuring (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Detail of Restructuring Charges |
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Rollforward of Liability Balances |
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Accumulated Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of AOCI, Net of Income Taxes |
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Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] |
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Earnings Per Share (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings per Share Basic and Diluted |
. |
Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lessee Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of ROU Assets and Lease Liabilities |
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Schedule of Lease Costs |
The table below shows the cash and non-cash activity related to the Company’s lease liabilities during the period:
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Schedule of Maturity of Operating Lease Liabilities ASC842 |
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Schedule of Future Minimum Rental Payments under Operating Leases ASC840 |
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Recent Accounting Guidance (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right of use assets - operating | $ 70.8 | ||
Operating lease liability | $ 71.1 | ||
Adoption of new accounting standard | $ 0.0 | ||
Accounting Standards Update 2016-02 [Member] | Restatement Adjustment [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right of use assets - operating | $ 73.0 | ||
Operating lease liability | $ 72.4 |
Investments in Unconsolidated Affiliates - Summarized Financial Information (Details) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019
USD ($)
item
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
item
|
Jun. 30, 2018
USD ($)
|
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Investments in Unconsolidated Affiliates - Summarized Information | ||||
Number of joint ventures | item | 1 | 1 | ||
Summarized Financial Information, Net Income | ||||
Sales | $ 418.4 | $ 481.5 | $ 787.6 | $ 968.1 |
Gross profit | 85.9 | 73.0 | 140.1 | 168.2 |
Net income | $ 72.8 | $ 58.7 | $ 115.7 | $ 144.4 |
Investments in Unconsolidated Affiliates - Detail (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Investments in Unconsolidated Affiliates | |||||
Investments in unconsolidated affiliates | $ 199.1 | $ 199.1 | $ 179.1 | ||
Americas Styrenics | |||||
Investments in Unconsolidated Affiliates | |||||
Investments in unconsolidated affiliates | 199.1 | 199.1 | 179.1 | ||
Investment in unconsolidated affiliates-difference between carrying amount and underlying equity | $ 18.9 | $ 18.9 | $ 46.4 | ||
Percentage of ownership underlying net assets | 50.00% | 50.00% | 50.00% | ||
Amortized weighted average remaining useful life | 1.7 | ||||
Dividends received from operating activities | $ 40.0 | $ 37.5 | $ 52.5 | $ 67.5 |
Inventories (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Inventories | ||
Finished goods | $ 223.7 | $ 269.8 |
Raw materials and semi-finished goods | 199.7 | 205.8 |
Supplies | 35.1 | 34.8 |
Total | $ 458.5 | $ 510.4 |
Goodwill (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning Balance | $ 69.0 |
Foreign currency impact | (0.3) |
Ending Balance | 68.7 |
Latex Binders Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 15.9 |
Foreign currency impact | (0.1) |
Ending Balance | 15.8 |
Synthetic Rubber Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 11.3 |
Foreign currency impact | (0.1) |
Ending Balance | 11.2 |
Performance Plastics Segment [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 37.3 |
Foreign currency impact | (0.1) |
Ending Balance | 37.2 |
Polystyrene [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 4.5 |
Ending Balance | $ 4.5 |
Derivative Instruments - Effect on AOCI (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Derivative Instruments | ||||
Gain (Loss) Recognized in AOCI, Cash flow hedges - post adoption | $ (5.4) | $ 11.9 | $ (5.3) | $ 14.7 |
Gain (Loss) Recognized in AOCI, Net investment hedges | (3.6) | 30.8 | 7.9 | 10.3 |
Foreign Exchange Forward Contracts | ||||
Derivative Instruments | ||||
Gain (Loss) Recognized in AOCI, Cash flow hedges - post adoption | (1.8) | 10.7 | 0.5 | 10.2 |
Cross Currency Swap | ||||
Derivative Instruments | ||||
Gain (Loss) Recognized in AOCI, Net investment hedges | (3.6) | 30.8 | 7.9 | 10.3 |
Interest Rate Swap | ||||
Derivative Instruments | ||||
Gain (Loss) Recognized in AOCI, Cash flow hedges - post adoption | $ (3.6) | $ 1.2 | $ (5.8) | $ 4.5 |
Derivative Instruments - Gains and Losses (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Foreign exchange transaction gains (losses) | $ 2,600,000 | $ (16,100,000) | $ (500,000) | $ (5,700,000) |
Information regarding changes in fair value of derivatives | ||||
Current foreign currency translation gain | 0 | |||
Maximum | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Reclassification expected during next 12 months | 2,500,000 | |||
Foreign Exchange Forward Contracts | Not Designated as Hedging Instruments - Economic | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Gain (loss) from settlements and changes in fair value | $ (2,400,000) | $ 14,100,000 | $ 300,000 | $ 8,800,000 |
Fair Value Measurements - Items not at Fair Value (Details) - Significant Other Observable Inputs (Level 2) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Fair Value of Debt Instruments | ||
Total fair value of long term debt | $ 1,163.6 | $ 1,097.2 |
2025 Senior Notes | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | 482.3 | 438.3 |
2024 Term Loan B | ||
Fair Value of Debt Instruments | ||
Total fair value of long term debt | $ 681.3 | $ 658.9 |
Provision for Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Provision for Income Taxes | ||||
Effective tax rate | 36.00% | 17.20% | 29.30% | 17.20% |
Provision for income taxes | $ 15.7 | $ 20.4 | $ 26.5 | $ 45.3 |
Commitments and Contingencies (Details) |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2019
USD ($)
item
|
Jun. 30, 2019
USD ($)
item
|
Dec. 31, 2018
USD ($)
|
|
Commitments and Contingencies Disclosure | |||
Rental expense for leases ASC842 | $ 4,600,000 | $ 9,100,000 | |
Accrued obligations for environmental remediation and restoration costs | $ 0 | $ 0 | $ 0 |
Environmental claims asserted | item | 0 | 0 |
Commitments and Contingencies - Purchase Commitments (Details) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Maximum | |
Loss Contingencies [Line Items] | |
Purchase commitment period | 3 years |
Minimum | |
Loss Contingencies [Line Items] | |
Purchase commitment period | 1 year |
Pension Plans and Other Postretirement Benefits - Net Amounts Recognized (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Net amounts recognized in the balance sheets at December 31 | |||
Noncurrent liabilities | $ (196.4) | $ (196.4) | $ (189.2) |
Cash contributions and benefit payments to unfunded plans | 2.0 | 2.9 | |
Expected contributions, remainder of current year | $ 3.3 | $ 3.3 |
Share-Based Compensation - RSUs (Details) - Restricted Share Units |
6 Months Ended |
---|---|
Jun. 30, 2019
$ / shares
shares
| |
Other-than-Options, Shares Activity | |
Granted, Shares | shares | 236,156 |
Other-than-Options, FV Activity | |
Granted, Weighted-Average Grant Date Fair Value per Share | $ / shares | $ 48.63 |
Share-Based Compensation - Options and PSUs (Details) - USD ($) $ / shares in Units, $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Options, Additional Disclosures | ||
Proceeds from exercise of option awards | $ 0.8 | $ 2.3 |
Option Awards | ||
Options Outstanding Roll Forward | ||
Granted, Options | 237,071 | |
Options, Additional Disclosures | ||
Unrecognized compensation cost, options | $ 2.8 | |
Fair Value Assumptions | ||
Expected term (in years) | 5 years 6 months | |
Expected volatility | 36.00% | |
Risk-free interest rate | 2.53% | |
Dividend yield | 2.00% | |
Options granted, Weighted average grant date fair value | $ 15.40 | |
Performance Share Units | ||
Fair Value Assumptions | ||
Expected term (in years) | 3 years | |
Expected volatility | 36.40% | |
Risk-free interest rate | 2.58% | |
Share Price | $ 50.95 | |
Other-than-Options, Shares Activity | ||
Granted, Shares | 117,053 | |
Other-than-Options, FV Activity | ||
Granted, Weighted-Average Grant Date Fair Value per Share | $ 54.01 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Earnings: | ||||||
Net income (loss) | $ 28.0 | $ 35.8 | $ 98.3 | $ 120.3 | $ 63.8 | $ 218.6 |
Shares: | ||||||
Weighted average ordinary shares outstanding | 40.8 | 43.1 | 41.0 | 43.3 | ||
Dilutive effect of RSUs and option awards | 0.3 | 0.7 | 0.5 | 0.9 | ||
Diluted weighted average ordinary shares outstanding | 41.1 | 43.8 | 41.5 | 44.2 | ||
Income (loss) per share: | ||||||
Income per share- basic | $ 0.69 | $ 2.28 | $ 1.56 | $ 5.05 | ||
Income per share- diluted | $ 0.68 | $ 2.24 | $ 1.54 | $ 4.95 | ||
Anti-dilutive shares excluded | 0.7 | 0.4 | 0.8 | 0.2 |
Leases - Costs and SCF (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Lease, Cost [Abstract] | ||
Finance Lease, Right-of-Use Asset, Amortization | $ 0.1 | $ 0.1 |
Operating Lease, Expense | 4.6 | 9.1 |
Variable Lease, Cost | 0.1 | |
Total lease cost | 4.7 | 9.3 |
Operating Lease, Payments | 4.2 | 8.0 |
Finance Lease, Principal Payments | 0.1 | 0.1 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 5.7 | 78.2 |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | $ 1.4 | 2.1 |
Maximum | ||
Lease, Cost [Abstract] | ||
Variable Lease, Cost | 0.1 | |
Finance Lease, Interest Payment on Liability | 0.1 | |
Finance Lease, Principal Payments | $ 0.1 |