Avient Announces Fourth Quarter and Full Year 2024 Results

Attachment 1

Avient Corporation

Summary of Condensed Consolidated Statements of Income (Unaudited)

(In millions, except per share data)

Three Months Ended

December 31,

Year Ended

December 31,

2024

2023

2024

2023

Sales

$       746.5

$       719.0

$    3,240.4

$    3,142.8

Operating income

85.6

43.1

329.3

196.8

Net income from continuing operations attributable to Avient
shareholders

48.3

27.8

169.5

75.8

Diluted earnings per share from continuing operations attributable to
Avient shareholders

$         0.52

$         0.30

$         1.84

$         0.83

Senior management uses comparisons of adjusted net income from continuing operations attributable to Avient shareholders and diluted adjusted earnings per share (EPS) from continuing operations attributable to Avient shareholders, excluding special items, to assess performance and facilitate comparability of results. Further, as a result of Avient's strategic shift to an innovator of materials solutions, it has completed several acquisitions and divestitures which have resulted in a significant amount of intangible asset amortization. Management excludes intangible asset amortization from adjusted EPS as it believes excluding acquired intangible asset amortization is a useful measure of current period earnings per share. Senior management believes these measures are useful to investors because they allow for comparison to Avient's performance in prior periods without the effect of items that, by their nature, tend to obscure Avient's operating results due to the potential variability across periods based on timing, frequency and magnitude. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or solely as alternatives to, financial measures prepared in accordance with GAAP. Below is a reconciliation of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with GAAP. See Attachment 3 for a definition and summary of special items.

Three Months Ended December 31,

2024

2023

Reconciliation to Condensed Consolidated Statements of Income

$

EPS⁽¹⁾ 

$

EPS⁽¹⁾ 

Net income from continuing operations attributable to Avient shareholders

$         48.3

$         0.52

$         27.8

$         0.30

Special items, after-tax (Attachment 3)

(18.0)

(0.20)

5.4

0.06

Amortization expense, after-tax

14.8

0.17

15.0

0.16

Adjusted net income / EPS

$         45.1

$         0.49

$         48.2

$         0.52

⁽¹⁾

Per share amounts may not recalculate from figures presented herein due to rounding

Year Ended December 31,

2024

2023

Reconciliation to Condensed Consolidated Statements of Income

$

EPS⁽¹⁾ 

$

EPS⁽¹⁾ 

Net income from continuing operations attributable to Avient shareholders

$       169.5

$         1.84

$         75.8

$         0.83

Special items, after-tax (Attachment 3)

15.9

0.17

79.3

0.86

Amortization expense, after-tax

59.5

0.65

61.5

0.67

Adjusted net income / EPS

$       244.9

$         2.66

$       216.6

$         2.36

⁽¹⁾

Per share amounts may not recalculate from figures presented herein due to rounding

Attachment 2

Avient Corporation

Condensed Consolidated Statements of Income (Unaudited)

(In millions, except per share data)

Three Months Ended

December 31,

Year Ended

December 31,

2024

2023

2024

2023

Sales

$        746.5

$        719.0

$    3,240.4

$    3,142.8

Cost of sales

487.0

510.1

2,183.7

2,250.3

Gross margin

259.5

208.9

1,056.7

892.5

Selling and administrative expense

173.9

165.8

727.4

695.7

Operating income

85.6

43.1

329.3

196.8

Interest expense, net

(25.5)

(26.8)

(105.6)

(115.3)

Other income, net

3.2

4.3

1.1

5.8

Income from continuing operations before income taxes

63.3

20.6

224.8

87.3

Income tax (expense) benefit

(14.8)

7.0

(54.1)

(11.0)

Net income from continuing operations

48.5

27.6

170.7

76.3

Income (loss) from discontinued operations, net of income taxes

—

0.8

—

(0.1)

Net income

48.5

28.4

170.7

76.2

Net (income) loss attributable to noncontrolling interests

(0.2)

0.2

(1.2)

(0.5)

Net income attributable to Avient common shareholders

$          48.3

$          28.6

$        169.5

$          75.7

Earnings per share attributable to Avient common shareholders - Basic:

Continuing operations

$          0.53

$          0.30

$          1.86

$          0.83

Discontinued operations

—

0.01

—

—

Total

$          0.53

$          0.31

$          1.86

$          0.83

Earnings per share attributable to Avient common shareholders - Diluted:

Continuing operations

$          0.52

$          0.30

$          1.84

$          0.83

Discontinued operations

—

0.01

—

—

Total

$          0.52

$          0.31

$          1.84

$          0.83

Cash dividends declared per share of common stock

$     0.2700

$     0.2575

$     1.0425

$     1.0000

Weighted-average shares used to compute earnings per common share:

Basic

91.4

91.2

91.3

91.1

Diluted

92.2

91.9

92.0

91.8

Attachment 3

Avient Corporation

Summary of Special Items (Unaudited)

(In millions, except per share data)

Special items ⁽¹⁾

Three Months Ended

December 31,

Year Ended

December 31,

2024

2023

2024

2023

Cost of sales:

Restructuring costs, including accelerated depreciation

$         (4.6)

$         (2.0)

$          1.0

$      (11.9)

Environmental remediation costs

(6.8)

(17.2)

(35.0)

(69.7)

Reimbursement of previously incurred environmental costs

34.7

1.6

34.7

1.6

Impact on cost of sales

23.3

(17.6)

0.7

(80.0)

Selling and administrative expense:

Restructuring and employee separation costs

(2.6)

(1.1)

(9.2)

(14.9)

Legal and other

(0.3)

(6.1)

(10.4)

(15.2)

Acquisition related costs

—

(1.3)

(2.5)

(5.9)

Impact on selling and administrative expense

(2.9)

(8.5)

(22.1)

(36.0)

Impact on operating income

20.4

(26.1)

(21.4)

(116.0)

Interest expense, net - financing costs

—

(0.1)

(2.3)

(2.3)

Pension and post retirement mark-to-market adjustments and other

3.5

3.8

3.6

3.7

Impact on other income, net

3.5

3.8

3.6

3.7

Impact on income from continuing operations before income taxes

23.9

(22.4)

(20.1)

(114.6)

Income tax (expense) benefit on above special items

(5.8)

4.5

6.1

27.7

Tax adjustments⁽²⁾

(0.1)

12.5

(1.9)

7.6

Impact of special items on net income from continuing operations

$        18.0

$         (5.4)

$      (15.9)

$      (79.3)

Diluted earnings per common share impact

$        0.20

$       (0.06)

$      (0.17)

$      (0.86)

Weighted average shares used to compute adjusted earnings per share:

Diluted

92.2

91.9

92.0

91.8

⁽¹⁾

Special items include charges related to specific strategic initiatives or financial restructuring such as: consolidation of operations; debt extinguishment costs; costs incurred directly in relation to acquisitions or divestitures; employee separation costs resulting from personnel reduction programs, plant realignment costs, executive separation agreements; asset impairments; settlement gains or losses and mark-to-market adjustments associated with gains and losses on pension and other post-retirement benefit plans; environmental remediation costs, fines, penalties and related insurance recoveries related to facilities no longer owned or closed in prior years; gains and losses on facility or property sales or disposals; results of litigation, fines or penalties, where such litigation (or action relating to the fines or penalties) arose prior to the commencement of the performance period; one-time, non-recurring items; and the effect of changes in accounting principles or other such laws or provisions affecting reported results.

⁽²⁾

Tax adjustments include the net tax impact from non-recurring income tax items and certain adjustments to uncertain tax position reserves and valuation allowances.

Attachment 4

Avient Corporation

Condensed Consolidated Balance Sheets (Unaudited)

(In millions)

Year Ended December 31,

2024

2023

ASSETS

Current assets:

Cash and cash equivalents

$                             544.5

$                           545.8

Accounts receivable, net

399.5

399.9

Inventories, net

346.8

347.0

Other current assets

131.3

114.9

Total current assets

1,422.1

1,407.6

Property, net

955.3

1,028.9

Goodwill

1,659.7

1,719.3

Intangible assets, net

1,450.4

1,590.8

Operating lease assets, net

89.1

65.3

Deferred income tax assets

81.3

92.3

Other non-current assets

153.2

64.3

Total assets

$                          5,811.1

$                        5,968.5

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term and current portion of long-term debt

$                                 7.7

$                               9.5

Accounts payable

417.4

432.3

Accrued expenses and other current liabilities

331.0

331.8

Total current liabilities

756.1

773.6

Non-current liabilities:

Long-term debt

2,059.3

2,070.5

Deferred income taxes

260.4

281.6

Other non-current liabilities

405.7

504.8

Total non-current liabilities

2,725.4

2,856.9

SHAREHOLDERS' EQUITY

Avient shareholders' equity

2,313.8

2,319.2

Noncontrolling interest

15.8

18.8

Total equity

2,329.6

2,338.0

Total liabilities and equity

$                          5,811.1

$                        5,968.5

Attachment 5

Avient Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)

Year Ended

December 31,

2024

2023

Operating activities

Net income

$              170.7

$                76.2

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

179.7

188.8

Increase in environmental insurance receivable

(34.0)

—

Deferred income tax benefit

(23.8)

(61.3)

Share-based compensation expense

15.4

13.2

Changes in assets and liabilities, net of the effect of acquisitions:

(Increase) decrease in accounts receivable

(15.2)

38.6

(Increase) decrease in inventories

(13.7)

24.3

Increase (decrease) in accounts payable

0.3

(22.2)

Decrease in pension, retirement benefits and deferred compensation

(34.3)

(8.7)

Taxes paid on gain on sale of business

—

(104.1)

(Decrease) increase in environmental obligations

(11.2)

38.9

Accrued expenses and other assets and liabilities, net

22.9

17.9

Net cash provided by operating activities

256.8

201.6

Investing activities

Capital expenditures

(121.9)

(119.4)

Net proceeds from divestiture

—

7.3

Proceeds from plant closures

3.4

7.6

Other investing activities

(2.1)

10.3

Net cash used by investing activities

(120.6)

(94.2)

Financing activities

Proceeds from long-term borrowings

650.0

—

Payments on long-term borrowings

(660.9)

(105.8)

Cash dividends paid

(94.0)

(90.2)

Payments on withholding tax on share awards

(6.4)

(3.4)

Debt financing costs

(9.6)

(2.3)

Net cash used by financing activities

(120.9)

(201.7)

Effect of exchange rate changes on cash

(16.6)

(1.0)

Decrease in cash and cash equivalents

(1.3)

(95.3)

Cash and cash equivalents at beginning of year

545.8

641.1

Cash and cash equivalents at end of year

$              544.5

$              545.8

Attachment 6

Avient Corporation

Business Segment Operations (Unaudited)

(In millions)

Operating income and earnings before interest, taxes, depreciation and amortization (EBITDA) at the segment level does not include: special items
as defined in Attachment 3; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations;
share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and
reviewed by the chief operating decision maker. These costs are included in Corporate.

Three Months Ended

December 31,

Year Ended

December 31,

2024

2023

2024

2023

Sales:

   Color, Additives and Inks

$               467.7

$               459.4

$            2,046.5

$            2,007.4

   Specialty Engineered Materials

279.7

259.8

1,196.8

1,138.2

   Corporate

(0.9)

(0.2)

(2.9)

(2.8)

      Sales

$               746.5

$               719.0

$            3,240.4

$            3,142.8

Gross margin:

   Color, Additives and Inks

$               152.6

$               148.3

$               681.1

$               631.2

   Specialty Engineered Materials

84.2

78.1

374.9

341.8

   Corporate

22.7

(17.5)

0.7

(80.5)

      Gross margin

$               259.5

$               208.9

$            1,056.7

$               892.5

Selling and administrative expense:

   Color, Additives and Inks

$                 92.8

$                 86.5

$               384.9

$               371.3

   Specialty Engineered Materials

49.6

48.7

207.7

199.3

   Corporate

31.5

30.6

134.8

125.1

      Selling and administrative expense

$               173.9

$               165.8

$               727.4

$               695.7

Operating income:

   Color, Additives and Inks

$                 59.8

$                 61.8

$               296.2

$               259.9

   Specialty Engineered Materials

34.6

29.4

167.2

142.5

   Corporate

(8.8)

(48.1)

(134.1)

(205.6)

      Operating income

$                 85.6

$                 43.1

$               329.3

$               196.8

Depreciation and amortization:

Color, Additives and Inks

$                 21.9

$                 22.2

$                 87.5

$                 98.3

Specialty Engineered Materials

21.0

19.8

82.1

81.5

Corporate

2.5

2.2

10.1

9.0

Depreciation and amortization

$                 45.4

$                 44.2

$               179.7

$               188.8

Earnings before interest, taxes, depreciation and
amortization (EBITDA):

Color, Additives and Inks

$                 81.7

$                 84.0

$               383.7

$               358.2

Specialty Engineered Materials

55.6

49.2

249.3

224.0

Corporate

(6.3)

(45.9)

(124.0)

(196.6)

Other income, net

3.2

4.3

1.1

5.8

EBITDA from continuing operations

$               134.2

$                 91.6

$               510.1

$               391.4

Special items, before tax

(23.9)

22.4

20.1

114.6

Interest expense included in special items

—

(0.1)

(2.3)

(2.3)

Depreciation and amortization included in special items

(0.3)

—

(1.5)

(1.9)

Adjusted EBITDA

$               110.0

$               113.9

$               526.4

$               501.8

Attachment 7

Avient Corporation

Reconciliation of Non-GAAP Financial Measures (Unaudited)

(In millions, except per share data)

Senior management uses operating income before special items to assess performance and allocate resources because senior management believes
that this measure is most useful in understanding current profitability levels and how it may serve as a basis for future performance. In addition,
operating income before the effect of special items is a component of Avient's annual incentive plans and is used in debt covenant computations.
Senior management believes this measure is useful to investors because it allows for comparison to Avient's performance in prior periods without the
effect of items that, by their nature, tend to obscure Avient's operating results due to the potential variability across periods based on timing, frequency
and magnitude. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or solely as alternatives
to, financial measures prepared in accordance with GAAP. Below is a reconciliation of these non-GAAP financial measures to their most directly
comparable financial measures calculated and presented in accordance with GAAP. See Attachment 3 for a definition and summary of special items.

Three Months Ended

December 31,

Year Ended

December 31,

Reconciliation to Consolidated Statements of Income:

2024

2023

2024

2023

Sales

$      746.5

$      719.0

$   3,240.4

$   3,142.8

Gross margin - GAAP

259.5

208.9

1,056.7

892.5

Special items in gross margin (Attachment 3)

(23.3)

17.6

(0.7)

80.0

Adjusted gross margin

$      236.2

$      226.5

$   1,056.0

$      972.5

Adjusted gross margin as a percent of sales

31.6 %

31.5 %

32.6 %

30.9 %

Operating income - GAAP

85.6

43.1

329.3

196.8

Special items in operating income (Attachment 3)

(20.4)

26.1

21.4

116.0

Adjusted operating income

$         65.2

$         69.2

$      350.7

$      312.8

Adjusted operating income as a percent of sales

8.7 %

9.6 %

10.8 %

10.0 %

Three Months Ended

December 31,

Year Ended

December 31,

Reconciliation to EBITDA and Adjusted EBITDA:

2024

2023

2024

2023

Net income from continuing operations – GAAP

$        48.5

$        27.6

$      170.7

$        76.3

Income tax expense (benefit)

14.8

(7.0)

54.1

11.0

Interest expense

25.5

26.8

105.6

115.3

Depreciation and amortization from continuing operations

45.4

44.2

179.7

188.8

EBITDA from continuing operations

$      134.2

$        91.6

$      510.1

$      391.4

Special items, before tax

(23.9)

22.4

20.1

114.6

Interest expense included in special items

—

(0.1)

(2.3)

(2.3)

Depreciation and amortization included in special items

(0.3)

—

(1.5)

(1.9)

Adjusted EBITDA

$      110.0

$      113.9

$      526.4

$      501.8

Adjusted EBITDA as a percent of sales

14.7 %

15.8 %

16.2 %

16.0 %

Three Months Ended March 31, 2024

Reconciliation to Condensed Consolidated Statements of Income

$

EPS⁽¹⁾ 

Net income from continuing operations attributable to Avient shareholders

$                           49.4

$                           0.54

Special items, after-tax

5.5

0.06

Amortization expense, after-tax

14.9

0.16

Adjusted net income / EPS

$                           69.8

$                           0.76

⁽¹⁾ Per share amounts may not recalculate from figures presented herein due to rounding

Year Ended December 31,

Adjusted Free Cash Flow Calculation

2024

2023

Cash provided by operating activities

$                         256.8

$                         201.6

Taxes paid on gain on sale of business

—

104.1

One-time payout associated with deferred compensation plans

20.8

—

Adjusted cash provided by operating activities

$                         277.6

$                         305.7

Capital expenditures

(121.9)

(119.4)

Adjusted free cash flow

$                         155.7

$                         186.3