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7253_CVRc1.pdf 1
Creating A World-Class,
Sustainable Organization
ANNUAL REPORT 2020
Our Sustainability
Guiding Principle and
Four Cornerstones
To enable our customers’
innovation and sustainability
goals through world-class
products and services.
VISION AND STRATEGY
Our Vision
At Avient, we create specialized and sustainable
material solutions that transform customer challenges
into opportunities, bringing new products to life for a
better world.
Specialization
Operational
Excellence
Commercial
Excellence
Associates
Globalization
Our Strategy
Specialization
Differentiates us through unique value-creating offerings
to our customers.
Globalization
Positions us to serve our customers consistently,
everywhere in the world.
Operational Excellence
Empowers us to respond to the voice of the customer
with relentless continuous improvement.
Commercial Excellence
Governs our activities in the marketplace to deliver
extraordinary value to our customers.
7253_CVRc1.pdf 2
CORPORATE OFFICERS
BOARD OF DIRECTORS
LEADERSHIP
ROBERT M. PATTERSON
Chairman, President and Chief Executive Officer
JAMIE A. BEGGS
Senior Vice President, Chief Financial Officer
GIUSEPPE Di SALVO
Vice President, Treasurer and Investor Relations
CATHY K. DODD
Senior Vice President, President of Distribution
MICHAEL A. GARR ATT
Senior Vice President, President of Color, Additives and Inks, EMEA
JUSTIN M. HESS
Vice President, Corporate Controller
AVERY L. JOHNSON
Vice President, Tax
HOLGER KRONIMUS
LISA K. KUNKLE
Senior Vice President, General Counsel and Secretary
M. JOHN MIDEA, JR.
Senior Vice President, Global Operations and Process Improvement
CHRISTOPHER L. PEDERSON
Senior Vice President, President of Specialty Engineered Materials
JENNIFER N. PRUGH
Vice President, Marketing
JOEL R ATHBUN
Senior Vice President, Mergers and Acquisitions
JOÃO JOSÉ SAN MARTIN NETO
Senior Vice President, Chief Human Resources Officer
THOMAS TAYLOR
Vice President, Global Sourcing and Logistics
Corporate Officers as of December 31, 2020
ROBERT M. PATTERSON
Chairman, President and Chief Executive Officer, Avient Corporation
Committee: 3
RICHARD H. FEARON
Lead Director, Avient Corporation
Committees: 2, 4*
Retired Vice Chairman and Chief Financial and Planning Officer, Eaton
ROBERT E. ABERNATHY
Retired Chairman and Chief Executive Officer, Halyard Health, Inc.
Former Chairman, President and Chief Executive Officer, Andeavor
WILLIAM R. JELLISON
Retired Vice President, Chief Financial Officer, Stryker Corporation
Committees: 1, 2
GREGORY J. GOFF
Committees: 3*, 4
Committees: 1*, 3
SANDR A B. LIN
(now Silicor Materials Inc.)
Committees: 1, 4
KIM ANN MINK, Ph.D.
Innophos Holdings, Inc.
Committees: 1, 3
KERRY J. PREETE
Monsanto Company
Committees: 2*, 4
PATRICIA D. VERDUIN, Ph.D.
Chief Technology Officer, Colgate-Palmolive Company
Committees: 3, 4
WILLIAM A. WULFSOHN
Committees: 1, 2
Former Chairman and Chief Executive Officer, Ashland Global Holdings, Inc.
COMMITTEES
1. Audit
2. Compensation
3. Environmental, Health and Safety
4. Governance and Corporate Responsibility
* Denotes Chairperson
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Vice President, Europe, General Manager, Engineered Materials, Europe
Retired President, Chief Executive Officer and Director, Calisolar Inc.
Former Chairman, President and Chief Executive Officer,
WOON KEAT MOH
Americas and Asia
Senior Vice President, President of Color, Additives and Inks,
Retired Executive Vice President, Chief Strategy Officer,
OUR CULTURE
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Core
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Core Values
Collaboration. Innovation. Excellence.
These core values, which begin with our individual
decisions and actions, focus our attention on
putting the customer first by creating genuine value
through collaboration, innovation and an unwavering
commitment to excellence. We will uphold these values
with the utmost integrity in all that we do.
Personal Values
Integrity. Honesty. Respect.
These personal values begin with each of us—the
judgments and decisions we make as individuals affect
the way Avient is viewed in the marketplace and in the
communities where we work.
In this annual report, statements that are not reported financial results or other historical information are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. Factors that could cause our actual results to differ materially from those implied by
forward-looking statements are described in detail in Part l of the Form 10-K.
LETTER TO OUR SHAREHOLDERS
Creating A World-Class, Sustainable Organization
Meeting the
needs of the
present without
compromising
the ability
of future
generations to
do the same.
1
Annual Report | 2020
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Dear Avient Shareholders,
2020 was a year like no other.
The year started out with great anticipation and enthusiasm.
We were embarking on something truly significant for our
company. You may recall that 2020 was to be PolyOne’s 20th
anniversary year, and we had made some major portfolio
improvements in late 2019 that set the stage for what the
company would become in the next 20 years.
Near the end of 2019, we divested our Performance Products
and Solutions business, and we announced our agreement
to acquire the Clariant Masterbatch business.
As we entered 2020, we were not preparing to reflect on two
decades of a company’s history. Much to the contrary, we
were about to create and celebrate something entirely new
and something very special.
What we didn’t know at that time was that in the first quarter,
a deadly coronavirus would begin to spread throughout the
world and soon become a global pandemic. Travel would
shut down. People would shelter in place. Many lives would
sadly be lost, and all lives would be changed.
Our company was quickly and rightfully deemed an essential
business. We prioritized the health and safety of our
associates, and in doing so, we kept 100+ facilities operating,
nearly without exception. I am proud of how our team
embraced our important role to serve the needs of multiple
industries that were, and remain, crucial to the pandemic
response and recovery efforts.
At the same time, we were working hard in preparation to
close the Clariant Masterbatch acquisition, which we did on
July 1—and became Avient.
We chose our new name to inspire our associates and
customers, as we went to market with a brand that better
represents who we are today, not who we were 20 years ago.
Our new name made it clear that this was not an acquisition
of Clariant Masterbatch by PolyOne. Rather, this was
reflective of the fact we brought two world leaders together
to create something even better.
And we are…better together!
As the largest acquisition in our history, it was
important that we get it right, and we have. I
couldn’t be more pleased with how well our two
companies have come together.
We increased our visibility with our customers, as
virtual collaboration replaced in-person meetings.
Our global associates began working from home,
if they could, or were required to. Meanwhile, our
manufacturing associates never left. They showed
up every day, delivered for customers, and worked
more safely this year than any other year prior,
achieving a world-class injury incident rate of 0.50.
It is one of many performance metrics and
highlights that I’m extremely proud of.
With our increased presence in healthcare,
packaging and consumer goods, we are less
cyclical, and many of our products are higher
margin, faster growing sustainable solutions.
Despite the pandemic, pro forma adjusted EPS
increased 11% to $1.93. Adjusted EBITDA is now the
highest in the company’s history, pro forma for the
Clariant Masterbatch business.
• Our Specialty Engineered Materials segment
delivered record EBITDA, up 10% from 2019,
driven primarily by recent investments we
made in our composites platform. This will be
a continued area of investment and focus for
us well into the future.
• Our Color, Additives and Inks segment also
performed admirably this year, especially in
Asia, which achieved record regional sales and
operating income and increased 7% and 46%
on a pro forma basis respectively. Although
certain industries like consumer discretionary
and transportation were devastated by the
pandemic, our growing positions in healthcare
and packaging helped the pandemic response
and recovery, while mitigating the impacts
from the global economic slowdown.
• Our Distribution segment, after a challenging
first half of 2020, demonstrated the reliance
and trust customers have in our material
supply offerings and world-class service.
Second half volume increased 8% over prior
year, as we expanded our business with
healthcare applications.
Annual Report | 2020
2
And all of our segments contributed to a very strong
year of cash generation. Our working capital as a
percentage of sales declined from 12.4% to 10.6%,
exclusive the Clariant Masterbatch acquisition. This
led to record free cash flow of $338 million.
With this cash we have been able to confidently
increase our dividend for the 10th year in a row,
repurchasing 1.3 million shares at an average price
of $17.89 per share, all while reducing net debt to pro
forma adjusted EBITDA leverage from 3.5x to 2.7x.
I encourage all of our shareholders to read our
most recent Sustainability Report to gain a fuller
appreciation for our company in total and how we
deliver on the sustainability needs of the world. Our
customers are demanding sustainable solutions like
never before, and we accept those challenges. While
sustainability will and should be a priority for all
companies, for Avient, it will also drive our growth.
Behind everything we accomplish are our talented
associates, now 8,400 strong. Culture is everything,
and together over many years, we have built
and nurtured ours to become one of the best
workplaces in the world. It’s one that is inclusive
and increasingly diverse. It’s an innovative culture,
as our people bring ideas to life for a greater good.
It’s a culture that loves to win. But don’t take my
word for it. Our recent engagement survey clearly
highlights that we are globally a great place to work!
In my nearly 13 years with the company, this is one
of my proudest accomplishments.
In closing, I would like to thank our customers for
their trust in Avient, our Board of Directors for their
ongoing guidance and insight, our management
team for their leadership, and all the Avient
associates around the world for their passion
and commitment.
We are Avient. We have purpose. We have
momentum. And it remains an honor to serve all of
our many stakeholders as Chairman, President and
CEO of this great company!
Robert M. Patterson
Chairman, President and CEO
United States
Securities and Exchange Commission
Washington, DC 20549
FORM 10-K
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number 1-16091
Avient Corporation
(Exact name of registrant as specified in its charter)
Ohio
(State or other jurisdiction
of incorporation or organization)
33587 Walker Road,
Avon Lake, Ohio
(Address of principal executive offices)
34-1730488
(I.R.S. Employer Identification No.)
44012
(Zip Code)
Registrant’s telephone number, including area code (440) 930-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Shares, par value $.01 per share
Trading Symbol
AVNT
Name of each exchange on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and
"emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☒
☐
Accelerated filer
Smaller reporting company
☐
☐
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting
firm that prepared or issued its audit report. ☑
Emerging growth company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The aggregate market value of the registrant’s outstanding common shares held by non-affiliates on June 30, 2020, determined using a per
share closing price on that date of $26.23, as quoted on the New York Stock Exchange, was $2.4 billion.
The number of shares of common shares outstanding as of February 5, 2021 was 91,293,388.
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Annual Report on Form 10-K incorporates by reference certain information from the registrant’s definitive Proxy Statement with
respect to the 2021 Annual Meeting of Shareholders.
AVIENT CORPORATION 1
THIS PAGE INTENTIONALLY LEFT BLANK
PART I
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
In this Annual Report on Form 10-K, statements that are not reported financial results or other historical information
are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements give current expectations or forecasts of future events and are not guarantees of future
performance. They are based on management’s expectations that involve a number of business risks and
uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the
forward-looking statements. You can identify these statements by the fact that they do not relate strictly to historic or
current facts. They use words such as "will," “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe”
and other words and terms of similar meaning in connection with any discussion of future operating or financial
condition, performance and/or sales. In particular, these include statements relating to future actions; prospective
changes in raw material costs, product pricing or product demand; future performance; estimated capital
expenditures; results of current and anticipated market conditions and market strategies; sales efforts; expenses;
the outcome of contingencies such as legal proceedings and environmental liabilities; and financial results. Factors
that could cause actual results to differ materially from those implied by these forward-looking statements include,
but are not limited to:
•
•
•
•
•
•
•
•
•
•
•
•
•
disruptions, uncertainty or volatility in the credit markets that could adversely impact the availability of credit
already arranged and the availability and cost of credit in the future;
the effect on foreign operations of currency fluctuations, tariffs and other political, economic and regulatory
risks;
the current and potential future impact of the COVID-19 pandemic on our business, results of operations,
financial position or cash flows;
changes in polymer consumption growth rates and laws and regulations regarding plastics in jurisdictions
where we conduct business;
fluctuations in raw material prices, quality and supply, and in energy prices and supply;
production outages or material costs associated with scheduled or unscheduled maintenance programs;
unanticipated developments that could occur with respect to contingencies such as litigation and
environmental matters;
an inability to achieve the anticipated financial benefit from initiatives related to acquisition and integration,
working capital reductions, cost reductions and employee productivity goals;
our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends;
information systems failures and cyberattacks;
our ability to consummate and successfully integrate acquisitions;
amounts for cash and non-cash charges related to restructuring plans that may differ from original
estimates, including because of timing changes associated with the underlying actions; and
other factors described in this Annual Report on Form 10-K under Item 1A, “Risk Factors.”
We cannot guarantee that any forward-looking statement will be realized, although we believe we have been
prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and
assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove
inaccurate, actual results could vary materially from those anticipated, estimated or projected. Investors should bear
this in mind as they consider forward-looking statements. We undertake no obligation to publicly update forward-
looking statements, whether as a result of new information, future events or otherwise, except as otherwise required
by law. You are advised, however, to consult any further disclosures we make on related subjects in our reports on
Forms 10-Q, 8-K and 10-K filed with the Securities and Exchange Commission (SEC). You should understand that it
is not possible to predict or identify all risk factors. Consequently, you should not consider any such list to be a
complete set of all potential risks or uncertainties.
AVIENT CORPORATION 1
ITEM 1. BUSINESS
Business Overview
We are a premier provider of specialized and sustainable material solutions that transform customer challenges into
opportunities, bringing new products to life for a better world. Our products include specialty engineered materials,
advanced composites, color and additive systems and polymer distribution. We are also a highly specialized
developer and manufacturer of performance enhancing additives, liquid colorants and fluoropolymer and silicone
colorants. When used in this Annual Report on Form 10-K, the terms “we,” “us,” “our," "Avient" and the “Company”
mean Avient Corporation and its consolidated subsidiaries.
Avient was formed as PolyOne Corporation on August 31, 2000 from the consolidation of The Geon Company
(Geon) and M.A. Hanna Company (Hanna). In 1948, B.F.Goodrich created a vinyl plastic division that was
subsequently spun off through a public offering in 1993, creating The Geon Company, a separate publicly-held
company. Hanna was formed in 1885 as a privately-held company and became publicly-held in 1927. In the
mid-1980s, Hanna began to divest its historic mining and shipping businesses to focus on polymers. Hanna
purchased its first polymer company in 1986 and completed its 26th polymer company acquisition in 2000. On July
1, 2020, the Company completed its acquisition of the equity interests in the global masterbatch business of Clariant
AG, a corporation organized and existing under the laws of Switzerland (Clariant), and the masterbatch assets in
India of Clariant Chemicals (India) Limited, a public limited company incorporated in India and an indirect majority
owned subsidiary of Clariant (Clariant India). The business and assets are collectively referred to as Clariant MB
and the acquisitions are collectively referred to as the Clariant MB Acquisition. In connection with the completion of
the Clariant MB Acquisition and effective as of June 30, 2020, the Company amended its existing Articles of
Incorporation to change its name to Avient Corporation. In conjunction with its rebranding and new name, the
Company also changed its ticker symbol from “POL” to “AVNT”, effective at the start of trading on July 13, 2020.
Avient Corporation is incorporated in Ohio and headquartered in Avon Lake, Ohio. We currently have 103
manufacturing sites and eight distribution facilities in North America, South America, Europe, the Middle East, Asia,
and Africa. In 2020, we had sales of $3.2 billion ($3.8 billion on a pro forma basis to include Clariant MB),
approximately 50% of which were to customers outside the United States.
Using our formulation expertise and operational capabilities, we create an essential link between large chemical
producers (our raw material suppliers) and designers, assemblers and processors of plastics (our customers). We
believe that our role in the value chain continues to become more vital as our customers increasingly need reliable
suppliers with a global reach and increasingly effective material-based solutions to improve their products'
sustainability appeal, performance, differentiation, profitability and competitive advantage. Our goal is to provide
customers with specialized and sustainable materials and solutions through our global footprint, broad market
knowledge, technical expertise, product breadth, manufacturing operations, a fully integrated information technology
network and raw material procurement leverage. Our end markets include healthcare, transportation, packaging,
consumer, building and construction, industrial, energy and telecommunications.
Polymer Industry Overview
Polymers are a class of organic materials that are generally produced by converting natural gas or crude oil
derivatives into monomers, such as ethylene, propylene, and styrene. These monomers are then polymerized into
chains called polymers, or plastic resin, such as polyethylene and polypropylene, in their most basic forms. Large
petrochemical companies, including some in the petroleum industry, produce a majority of the monomers and base
resins because they have direct access to the raw materials needed for production. Monomers make up the majority
of the variable cost of manufacturing the base resin. As a result, the cost of a base resin tends to move in tandem
with the industry market prices for monomers and the cost of raw materials and energy used during production.
Resin selling prices can move in tandem with costs, but are largely driven by supply and demand.
Thermoplastic polymers make up a substantial majority of the resin market and are characterized by their ability to
be reshaped repeatedly into new forms after heat and pressure are applied. Thermoplastics offer versatility and a
wide range of applications. The major types of thermoplastics include polyethylene, polypropylene, polystyrene,
polyester and a range of specialized engineering resins. Each type of thermoplastic has unique qualities and
characteristics that make it appropriate for use in a particular application. Thermoplastic composites include these
base resins, but are combined with a structural filler such as glass, wood, carbon or polymer fibers to enhance
strength, rigidity and structure. Further performance can be delivered through an engineered thermoplastic sheet or
thick film, which may incorporate more than one resin formulation or composite in multiple layers to impart additional
properties such as gas barrier, structural integrity and lightweighting.
Thermoplastics and polymer composites are found in a variety of end-use products and markets, including
packaging, building and construction, wire and cable, transportation, medical, furniture and furnishings, durable
2 AVIENT CORPORATION
goods, outdoor high performance equipment, electrical and electronics, adhesives, inks and coatings and fiber.
Each type of thermoplastic resin has unique characteristics (such as flexibility, strength or durability) suitable for use
in a particular end-use application. The packaging industry requires plastics that help keep food fresh and free of
contamination while providing a variety of options for product display, and offering advantages in terms of weight
and user-friendliness. In the wire and cable industry, thermoplastics and composites serve to protect by providing
electrical insulation, flame resistance, durability, water resistance, water swelling and color coding to engineered
fibers, yarn products, wire coatings and connectors. In the transportation industry, plastic has proven to be durable,
lightweight and corrosion resistant while offering fuel savings, design flexibility and high performance, often
replacing traditional materials such as metal and glass. In the medical industry, plastics are used for a vast array of
devices and equipment, including blood and intravenous bags, medical tubing, catheters, lead replacement for
radiation shielding, clamps and connectors to bed frames, curtains and sheeting, electronic enclosures and
equipment housings. In the outdoor high performance industry, plastic applications are used for components and
colorants for all terrain vehicles and reinforced polymers are used for various outdoor equipment and gear. In the
electronics industry, plastic enclosures and connectors not only enhance safety through electrical insulation, but
thermally and electrically conductive plastics provide heat transferring, cooling, anti-static, electrostatic discharge,
and electromagnetic shielding performance for critical applications including integrated circuit chip packaging.
Various additives can be formulated with a base resin and further engineered into a structure to provide them with
greater versatility and performance. Polymer formulations and structures have advantages over metals, wood,
rubber, glass and other traditional materials, which have resulted in the replacement of these materials across a
wide spectrum of applications. These specialized polymers offer advantages compared to traditional materials that
include design freedom, processability, weight reduction, chemical resistance, flame retardance and lower cost.
Plastics are renowned for their durability, aesthetics, ease of handling and recyclability.
Avient Segments
We operate in three reportable segments: (1) Color, Additives and Inks; (2) Specialty Engineered Materials; and (3)
Distribution. Previously, Avient had four reportable segments. However, as a result of the divestiture of the
Performance Products and Solutions segment (PP&S) on October 25, 2019, we have removed PP&S as a separate
operating segment and its results are presented as discontinued operations. Historical information has been
retrospectively adjusted to reflect these changes. Please see Note 3, Discontinued Operations, to the
accompanying consolidated financial statements for additional information.
Our segments are further detailed in Note 15, Segment Information, to the accompanying consolidated financial
statements.
Competition
The production of plastics and the manufacturing of custom and proprietary formulated color and additives systems
for the plastics industry are highly competitive. Competition is based on service, performance, product innovation,
product recognition, speed, delivery, quality and price. The relative importance of these factors varies among our
products and services. We believe that we are the largest independent formulator of plastic materials and producer
of custom and proprietary color and additive systems in the United States and Europe, with a growing presence in
Asia, South America and Africa. Our competitors range from large international companies with broad product
offerings to local independent custom producers whose focus is a specific market niche or product offering.
The distribution of polymer resin is also highly competitive. Speed, service, reputation, product line, brand
recognition, delivery, quality and price are the principal factors affecting competition. We compete against other
national independent resin distributors in North America, along with other regional distributors. Growth in the
polymer distribution market is highly correlated with growth in the base polymer resins market. We believe that the
strength of our company name and reputation, the broad range of product offerings from our suppliers and our
speed and responsiveness, combined with the quality of products and agility of our distribution network, allow us to
compete effectively.
Raw Materials
The primary raw materials used by our manufacturing operations are polyolefin and other thermoplastic resins,
TiO2, inorganic and organic pigments, all of which we believe are in adequate supply. See the discussion of risks
associated with raw material supply and costs in Item 1A, “Risk Factors."
ITEM 1. BUSINESS
Business Overview
We are a premier provider of specialized and sustainable material solutions that transform customer challenges into
opportunities, bringing new products to life for a better world. Our products include specialty engineered materials,
advanced composites, color and additive systems and polymer distribution. We are also a highly specialized
developer and manufacturer of performance enhancing additives, liquid colorants and fluoropolymer and silicone
colorants. When used in this Annual Report on Form 10-K, the terms “we,” “us,” “our," "Avient" and the “Company”
mean Avient Corporation and its consolidated subsidiaries.
Avient was formed as PolyOne Corporation on August 31, 2000 from the consolidation of The Geon Company
(Geon) and M.A. Hanna Company (Hanna). In 1948, B.F.Goodrich created a vinyl plastic division that was
subsequently spun off through a public offering in 1993, creating The Geon Company, a separate publicly-held
company. Hanna was formed in 1885 as a privately-held company and became publicly-held in 1927. In the
mid-1980s, Hanna began to divest its historic mining and shipping businesses to focus on polymers. Hanna
purchased its first polymer company in 1986 and completed its 26th polymer company acquisition in 2000. On July
1, 2020, the Company completed its acquisition of the equity interests in the global masterbatch business of Clariant
AG, a corporation organized and existing under the laws of Switzerland (Clariant), and the masterbatch assets in
India of Clariant Chemicals (India) Limited, a public limited company incorporated in India and an indirect majority
owned subsidiary of Clariant (Clariant India). The business and assets are collectively referred to as Clariant MB
and the acquisitions are collectively referred to as the Clariant MB Acquisition. In connection with the completion of
the Clariant MB Acquisition and effective as of June 30, 2020, the Company amended its existing Articles of
Incorporation to change its name to Avient Corporation. In conjunction with its rebranding and new name, the
Company also changed its ticker symbol from “POL” to “AVNT”, effective at the start of trading on July 13, 2020.
Avient Corporation is incorporated in Ohio and headquartered in Avon Lake, Ohio. We currently have 103
manufacturing sites and eight distribution facilities in North America, South America, Europe, the Middle East, Asia,
and Africa. In 2020, we had sales of $3.2 billion ($3.8 billion on a pro forma basis to include Clariant MB),
approximately 50% of which were to customers outside the United States.
Using our formulation expertise and operational capabilities, we create an essential link between large chemical
producers (our raw material suppliers) and designers, assemblers and processors of plastics (our customers). We
believe that our role in the value chain continues to become more vital as our customers increasingly need reliable
suppliers with a global reach and increasingly effective material-based solutions to improve their products'
sustainability appeal, performance, differentiation, profitability and competitive advantage. Our goal is to provide
customers with specialized and sustainable materials and solutions through our global footprint, broad market
knowledge, technical expertise, product breadth, manufacturing operations, a fully integrated information technology
network and raw material procurement leverage. Our end markets include healthcare, transportation, packaging,
consumer, building and construction, industrial, energy and telecommunications.
Polymer Industry Overview
Polymers are a class of organic materials that are generally produced by converting natural gas or crude oil
derivatives into monomers, such as ethylene, propylene, and styrene. These monomers are then polymerized into
chains called polymers, or plastic resin, such as polyethylene and polypropylene, in their most basic forms. Large
petrochemical companies, including some in the petroleum industry, produce a majority of the monomers and base
resins because they have direct access to the raw materials needed for production. Monomers make up the majority
of the variable cost of manufacturing the base resin. As a result, the cost of a base resin tends to move in tandem
with the industry market prices for monomers and the cost of raw materials and energy used during production.
Resin selling prices can move in tandem with costs, but are largely driven by supply and demand.
Thermoplastic polymers make up a substantial majority of the resin market and are characterized by their ability to
be reshaped repeatedly into new forms after heat and pressure are applied. Thermoplastics offer versatility and a
wide range of applications. The major types of thermoplastics include polyethylene, polypropylene, polystyrene,
characteristics that make it appropriate for use in a particular application. Thermoplastic composites include these
base resins, but are combined with a structural filler such as glass, wood, carbon or polymer fibers to enhance
strength, rigidity and structure. Further performance can be delivered through an engineered thermoplastic sheet or
thick film, which may incorporate more than one resin formulation or composite in multiple layers to impart additional
properties such as gas barrier, structural integrity and lightweighting.
Thermoplastics and polymer composites are found in a variety of end-use products and markets, including
packaging, building and construction, wire and cable, transportation, medical, furniture and furnishings, durable
goods, outdoor high performance equipment, electrical and electronics, adhesives, inks and coatings and fiber.
Each type of thermoplastic resin has unique characteristics (such as flexibility, strength or durability) suitable for use
in a particular end-use application. The packaging industry requires plastics that help keep food fresh and free of
contamination while providing a variety of options for product display, and offering advantages in terms of weight
and user-friendliness. In the wire and cable industry, thermoplastics and composites serve to protect by providing
electrical insulation, flame resistance, durability, water resistance, water swelling and color coding to engineered
fibers, yarn products, wire coatings and connectors. In the transportation industry, plastic has proven to be durable,
lightweight and corrosion resistant while offering fuel savings, design flexibility and high performance, often
replacing traditional materials such as metal and glass. In the medical industry, plastics are used for a vast array of
devices and equipment, including blood and intravenous bags, medical tubing, catheters, lead replacement for
radiation shielding, clamps and connectors to bed frames, curtains and sheeting, electronic enclosures and
equipment housings. In the outdoor high performance industry, plastic applications are used for components and
colorants for all terrain vehicles and reinforced polymers are used for various outdoor equipment and gear. In the
electronics industry, plastic enclosures and connectors not only enhance safety through electrical insulation, but
thermally and electrically conductive plastics provide heat transferring, cooling, anti-static, electrostatic discharge,
and electromagnetic shielding performance for critical applications including integrated circuit chip packaging.
Various additives can be formulated with a base resin and further engineered into a structure to provide them with
greater versatility and performance. Polymer formulations and structures have advantages over metals, wood,
rubber, glass and other traditional materials, which have resulted in the replacement of these materials across a
wide spectrum of applications. These specialized polymers offer advantages compared to traditional materials that
include design freedom, processability, weight reduction, chemical resistance, flame retardance and lower cost.
Plastics are renowned for their durability, aesthetics, ease of handling and recyclability.
Avient Segments
We operate in three reportable segments: (1) Color, Additives and Inks; (2) Specialty Engineered Materials; and (3)
Distribution. Previously, Avient had four reportable segments. However, as a result of the divestiture of the
Performance Products and Solutions segment (PP&S) on October 25, 2019, we have removed PP&S as a separate
operating segment and its results are presented as discontinued operations. Historical information has been
retrospectively adjusted to reflect these changes. Please see Note 3, Discontinued Operations, to the
accompanying consolidated financial statements for additional information.
Our segments are further detailed in Note 15, Segment Information, to the accompanying consolidated financial
statements.
Competition
The production of plastics and the manufacturing of custom and proprietary formulated color and additives systems
for the plastics industry are highly competitive. Competition is based on service, performance, product innovation,
product recognition, speed, delivery, quality and price. The relative importance of these factors varies among our
products and services. We believe that we are the largest independent formulator of plastic materials and producer
of custom and proprietary color and additive systems in the United States and Europe, with a growing presence in
Asia, South America and Africa. Our competitors range from large international companies with broad product
offerings to local independent custom producers whose focus is a specific market niche or product offering.
The distribution of polymer resin is also highly competitive. Speed, service, reputation, product line, brand
recognition, delivery, quality and price are the principal factors affecting competition. We compete against other
national independent resin distributors in North America, along with other regional distributors. Growth in the
polymer distribution market is highly correlated with growth in the base polymer resins market. We believe that the
strength of our company name and reputation, the broad range of product offerings from our suppliers and our
speed and responsiveness, combined with the quality of products and agility of our distribution network, allow us to
compete effectively.
polyester and a range of specialized engineering resins. Each type of thermoplastic has unique qualities and
Raw Materials
The primary raw materials used by our manufacturing operations are polyolefin and other thermoplastic resins,
TiO2, inorganic and organic pigments, all of which we believe are in adequate supply. See the discussion of risks
associated with raw material supply and costs in Item 1A, “Risk Factors."
AVIENT CORPORATION 3
Patents and Trademarks
We own and maintain a number of patents and trademarks in the United States and other key countries that
contribute to our competitiveness in the markets we serve because they protect our inventions and product names
against infringement by others. Patents exist for 20 years from filing date, and trademarks have an indefinite life
based upon continued use. While we view our patents and trademarks to be valuable because of the broad scope
of our products and services and brand recognition we enjoy, we do not believe that the loss or expiration of any
single patent or trademark would have a material adverse effect on our results of operations, financial position or
cash flows. Nevertheless, we have management processes designed to rigorously protect our inventions and
trademarks.
Seasonality and Backlog
Sales of our products and services are typically seasonal, as demand has historically been slower in the first and
fourth calendar quarters of the year. However, the COVID-19 pandemic led to irregular quarterly demand patterns in
2020. Because of the nature of our business, we do not believe that our backlog is a meaningful indicator of the
level of present or future business.
Working Capital Practices
Our products are generally manufactured with a short turnaround time, and the scheduling of manufacturing
activities from customer orders generally includes enough lead time to assure delivery of an adequate supply of raw
materials. We offer payment terms to our customers that are competitive. We generally allow our customers to
return merchandise if pre-agreed quality standards or specifications are not met; however, we employ quality
assurance practices that seek to minimize customer returns. Our customer returns are immaterial.
Significant Customers
No customer accounted for more than 3% of our consolidated revenues in 2020 and we do not believe we would
suffer a material adverse effect to our consolidated financial statements if we were to lose any single customer.
Research and Development
We have substantial technology and development capabilities. Our efforts are largely devoted to developing new
product formulations to satisfy defined market needs by providing quality technical services to evaluate alternative
raw materials, assuring the continued success of our products for customer applications, providing technology to
improve our products, processes and applications and providing support to our manufacturing plants for cost
reduction, productivity and quality improvement programs. We operate research and development centers that
support our commercial development activities and manufacturing operations. These facilities are equipped with
state-of-the-art analytical, synthesis, polymer characterization and testing equipment, along with pilot plants and
polymer manufacturing operations that simulate specific production processes that allow us to rapidly translate new
technologies into new products. Our investment in product research and development was $59.8 million in 2020,
$50.6 million in 2019, and $49.6 million in 2018.
Methods of Distribution
We sell products primarily through direct sales personnel, distributors, including our Distribution segment, and
commissioned sales agents. We primarily use truck carriers to transport our products to customers, although some
customers pick up product at our manufacturing facilities or warehouses. We also ship some of our manufactured
products to customers by rail.
Human Capital Resources
“People” is the first of Avient’s four cornerstones of sustainability (People, Products, Planet and Performance),
which, together with our core values and our four-pillar strategy, form the framework of our company culture. The
success and growth of our business depend in large part on our ability to attract, develop and retain a diverse
population of talented and high-performing employees at all levels of our organization, including the individuals who
comprise our global workforce as well as our executive officers and other key personnel.
We have developed key recruitment and retention strategies, objectives and measures that guide our human capital
management approach as part of the overall management of our business. These strategies, objectives and
measures are advanced through a number of programs, policies and initiatives, as described below. From safety to
training to community engagement, our people are at the forefront of everything that we do. We are dedicated to
building a high-performing and inclusive culture and investing in our people so that our most valuable resource has
the skills and confidence to lead Avient and deliver value for our customers and stakeholders.
4 AVIENT CORPORATION
As of December 31, 2020, Avient employed approximately 8,400 people, 33% of which are located in the U.S. and
Canada, 35% are located in Europe, Middle East, and Africa, 25% are located in Asia, and 7% are located in Latin
America.
Safety and Health
The top priority at Avient is safety and our ultimate goal is to operate injury free. Progress toward this goal is
measured at the business unit and regional levels, communicated globally, and linked to a number of recognition
mechanisms. In 2020, we maintained world-class performance for our industry, with a recordable incident rate of
0.50 per 100 full-time workers per year as compared to industry average of 3.70 in 2019. We continue to set high
standards for our operations as we strive to achieve our goal of zero recordable injuries.
In response to the COVID-19 pandemic, we quickly began implementing changes in our business designed to
protect the health and well-being of our employees, customers and communities, and to support appropriate
physical distancing and other health and safety protocols. We implemented remote, alternate and flexible work
arrangements where possible, including split shifts at facilities and remote work options for non-essential on-site
functions. We mobilized regional COVID task forces and collaboratively developed health and safety protocols,
including enhanced cleaning and sanitary procedures, domestic and international travel restrictions, and return-to-
work and visitor screening procedures. We also postponed or canceled hosting or attending large events. As the
pandemic continues, we are consistently monitoring and adhering to local government requirements and conditions
everywhere we operate. We are working vigilantly to prioritize the health and safety of our associates first, while still
continuing to operate and serve the essential and emerging needs around the world through our products and
services.
Employee Recruitment
We actively recruit and seek the best and the brightest talent through numerous channels, including job fairs, online
talent networks, industry associations, referrals and campus recruiting. We recruit at more than 25 leading
universities around the world and hire approximately 140 new graduates each year as full-time, co-ops or interns.
We have launched seven highly coveted rotational development roles—from marketing to operational excellence to
finance to IT—where newly hired associates rotate through various departments and jobs for up to two years,
contributing their skills while also building diverse, well-rounded knowledge of our Company and its many
stakeholders. We leverage global processes and systems to create a positive candidate experience with
opportunities for entry level and experienced hires.
Training and Development
Training and development of our workforce is crucial for Avient, as it influences our “great place to work” culture
while enabling our teams to accomplish business goals. Training and development opportunities are provided to all
full-time and part-time associates through global programs and technology, to ensure a consistent and high-quality
experience for all associates. Examples of training and development opportunities available to our employees
include: regular performance feedback, career development discussions with managers, training and professional
development courses through Avient Academy, and access to the global eLearning platform, LinkedIn Learning.
Avient also offers nomination-based leadership development programs, such as NextGen, PolyMasters, Lean Six
Sigma Master Blackbelt, as well as Core Leadership, an open-enrollment program for leaders of people globally. In
2019, we sought to improve engagement and our culture of learning in our manufacturing locations. With the launch
of our Engage program, we brought classroom experiences focused on our products and customers to our
production associates. Some of the topics covered by our training programs include: leadership development,
safety, Lean Six Sigma concepts, technical and operational skills, and ethics and compliance. Leaders at Avient play
a key role in our approach to training and development. Executive leaders serve as facilitators in our leadership
programs, and NextGen graduates lead the Engage training sessions.
Diversity and Inclusion
At Avient, we recognize the immense benefits that a diverse team brings to our organization, including delivering
better business outcomes. Our talented people leverage their diverse backgrounds and skills toward a common
goal: meeting the needs of the present without compromising the ability of future generations to do the same. This
spirit of inclusive collaboration can be felt throughout our Company. It drives the innovation that earns us leadership
positions in the markets we serve and underpins the high level of respect we show each other every day.
Our commitment to diversity begins at the highest levels of our organization, as evidenced by our "Winning"
distinction from the 2020 Women on Boards organization for having 30% female board members, exceeding that
Patents and Trademarks
We own and maintain a number of patents and trademarks in the United States and other key countries that
contribute to our competitiveness in the markets we serve because they protect our inventions and product names
based upon continued use. While we view our patents and trademarks to be valuable because of the broad scope
of our products and services and brand recognition we enjoy, we do not believe that the loss or expiration of any
single patent or trademark would have a material adverse effect on our results of operations, financial position or
cash flows. Nevertheless, we have management processes designed to rigorously protect our inventions and
trademarks.
Seasonality and Backlog
level of present or future business.
Working Capital Practices
Sales of our products and services are typically seasonal, as demand has historically been slower in the first and
fourth calendar quarters of the year. However, the COVID-19 pandemic led to irregular quarterly demand patterns in
2020. Because of the nature of our business, we do not believe that our backlog is a meaningful indicator of the
Our products are generally manufactured with a short turnaround time, and the scheduling of manufacturing
activities from customer orders generally includes enough lead time to assure delivery of an adequate supply of raw
materials. We offer payment terms to our customers that are competitive. We generally allow our customers to
return merchandise if pre-agreed quality standards or specifications are not met; however, we employ quality
assurance practices that seek to minimize customer returns. Our customer returns are immaterial.
No customer accounted for more than 3% of our consolidated revenues in 2020 and we do not believe we would
suffer a material adverse effect to our consolidated financial statements if we were to lose any single customer.
Significant Customers
Research and Development
We have substantial technology and development capabilities. Our efforts are largely devoted to developing new
product formulations to satisfy defined market needs by providing quality technical services to evaluate alternative
raw materials, assuring the continued success of our products for customer applications, providing technology to
improve our products, processes and applications and providing support to our manufacturing plants for cost
reduction, productivity and quality improvement programs. We operate research and development centers that
support our commercial development activities and manufacturing operations. These facilities are equipped with
state-of-the-art analytical, synthesis, polymer characterization and testing equipment, along with pilot plants and
polymer manufacturing operations that simulate specific production processes that allow us to rapidly translate new
technologies into new products. Our investment in product research and development was $59.8 million in 2020,
$50.6 million in 2019, and $49.6 million in 2018.
Methods of Distribution
We sell products primarily through direct sales personnel, distributors, including our Distribution segment, and
commissioned sales agents. We primarily use truck carriers to transport our products to customers, although some
customers pick up product at our manufacturing facilities or warehouses. We also ship some of our manufactured
products to customers by rail.
Human Capital Resources
“People” is the first of Avient’s four cornerstones of sustainability (People, Products, Planet and Performance),
which, together with our core values and our four-pillar strategy, form the framework of our company culture. The
population of talented and high-performing employees at all levels of our organization, including the individuals who
comprise our global workforce as well as our executive officers and other key personnel.
We have developed key recruitment and retention strategies, objectives and measures that guide our human capital
management approach as part of the overall management of our business. These strategies, objectives and
measures are advanced through a number of programs, policies and initiatives, as described below. From safety to
training to community engagement, our people are at the forefront of everything that we do. We are dedicated to
building a high-performing and inclusive culture and investing in our people so that our most valuable resource has
the skills and confidence to lead Avient and deliver value for our customers and stakeholders.
against infringement by others. Patents exist for 20 years from filing date, and trademarks have an indefinite life
Safety and Health
As of December 31, 2020, Avient employed approximately 8,400 people, 33% of which are located in the U.S. and
Canada, 35% are located in Europe, Middle East, and Africa, 25% are located in Asia, and 7% are located in Latin
America.
The top priority at Avient is safety and our ultimate goal is to operate injury free. Progress toward this goal is
measured at the business unit and regional levels, communicated globally, and linked to a number of recognition
mechanisms. In 2020, we maintained world-class performance for our industry, with a recordable incident rate of
0.50 per 100 full-time workers per year as compared to industry average of 3.70 in 2019. We continue to set high
standards for our operations as we strive to achieve our goal of zero recordable injuries.
In response to the COVID-19 pandemic, we quickly began implementing changes in our business designed to
protect the health and well-being of our employees, customers and communities, and to support appropriate
physical distancing and other health and safety protocols. We implemented remote, alternate and flexible work
arrangements where possible, including split shifts at facilities and remote work options for non-essential on-site
functions. We mobilized regional COVID task forces and collaboratively developed health and safety protocols,
including enhanced cleaning and sanitary procedures, domestic and international travel restrictions, and return-to-
work and visitor screening procedures. We also postponed or canceled hosting or attending large events. As the
pandemic continues, we are consistently monitoring and adhering to local government requirements and conditions
everywhere we operate. We are working vigilantly to prioritize the health and safety of our associates first, while still
continuing to operate and serve the essential and emerging needs around the world through our products and
services.
Employee Recruitment
We actively recruit and seek the best and the brightest talent through numerous channels, including job fairs, online
talent networks, industry associations, referrals and campus recruiting. We recruit at more than 25 leading
universities around the world and hire approximately 140 new graduates each year as full-time, co-ops or interns.
We have launched seven highly coveted rotational development roles—from marketing to operational excellence to
finance to IT—where newly hired associates rotate through various departments and jobs for up to two years,
contributing their skills while also building diverse, well-rounded knowledge of our Company and its many
stakeholders. We leverage global processes and systems to create a positive candidate experience with
opportunities for entry level and experienced hires.
Training and Development
Training and development of our workforce is crucial for Avient, as it influences our “great place to work” culture
while enabling our teams to accomplish business goals. Training and development opportunities are provided to all
full-time and part-time associates through global programs and technology, to ensure a consistent and high-quality
experience for all associates. Examples of training and development opportunities available to our employees
include: regular performance feedback, career development discussions with managers, training and professional
development courses through Avient Academy, and access to the global eLearning platform, LinkedIn Learning.
Avient also offers nomination-based leadership development programs, such as NextGen, PolyMasters, Lean Six
Sigma Master Blackbelt, as well as Core Leadership, an open-enrollment program for leaders of people globally. In
2019, we sought to improve engagement and our culture of learning in our manufacturing locations. With the launch
of our Engage program, we brought classroom experiences focused on our products and customers to our
production associates. Some of the topics covered by our training programs include: leadership development,
safety, Lean Six Sigma concepts, technical and operational skills, and ethics and compliance. Leaders at Avient play
a key role in our approach to training and development. Executive leaders serve as facilitators in our leadership
programs, and NextGen graduates lead the Engage training sessions.
success and growth of our business depend in large part on our ability to attract, develop and retain a diverse
Diversity and Inclusion
At Avient, we recognize the immense benefits that a diverse team brings to our organization, including delivering
better business outcomes. Our talented people leverage their diverse backgrounds and skills toward a common
goal: meeting the needs of the present without compromising the ability of future generations to do the same. This
spirit of inclusive collaboration can be felt throughout our Company. It drives the innovation that earns us leadership
positions in the markets we serve and underpins the high level of respect we show each other every day.
Our commitment to diversity begins at the highest levels of our organization, as evidenced by our "Winning"
distinction from the 2020 Women on Boards organization for having 30% female board members, exceeding that
AVIENT CORPORATION 5
organization's criteria of 20%. The board is currently exploring adding an additional board member who is from an
underrepresented minority.
You Made a Difference Awards - Recognizes associates who go above and beyond their job
responsibilities on a project or task.
From a management perspective, 60% of our CEO's direct reports are female or minority which we believe sets the
right tone and expectation for diversity and inclusion within the Company.
More broadly within the Company, our diversity and inclusion approach is fostered by multiple Employee Resource
Groups that are driving improvements and opening opportunities throughout our organization. The vision that
guides our collective efforts is consistent and unwavering: to be the company of choice for all. It is from this vision
that our Employee Resource Groups were born and flourish today. Each group has its own mission and supporting
activities, and their efforts coalesce to help educate and inspire our global workforce and fortify sustainable
business practices.
Our Employee Resource Groups include: PRIDE at Avient (which is working to create a safe and accepting
environment that enables LGBTQ+ associates to perform to their fullest potential and contribute to the success of
our company), HYPE (which stands for Harnessing Young Potential Energy and is building a collaborative network
of Avient’s young professionals), and LEAD by Women (which promotes diversity and inclusion by increasing
access to the tools and resources necessary to build leadership skills and accelerate careers).
The executive leadership team manages our diversity and inclusion program, which ensures that we have
leadership accountability in advancing our diversity and inclusion strategy. In addition to bi-annual reviews with the
leadership team, Avient has implemented recruiting guidelines to expand our diverse talent pipeline, with at least
one-third of candidates being female or a U.S. minority.
Additionally, PRIDE at Avient continues to lead best practices and meaningful programming to improve experiences
of LGBTQ+ employees in our workplace. Their efforts were instrumental in our achievement of earning the
distinction of a "Best Place to Work" on the Corporate Equality Index with a perfect score of 100% in 2020 and
2021.
Other initiatives, including Mentoring at Avient and campus partnerships are vital for progress in our diversity and
inclusion journey. We require equality of opportunity for all qualified individuals in accordance with applicable laws.
Decisions on hiring, promotion, development, compensation or advancement are based solely on a person’s
qualifications, abilities, experience and performance, except where local law requires us to take actions to increase
employment opportunities for a specific group. The Avient Ethics Hotline serves as a mechanism for associates to
anonymously report any perceived concerns regarding these topics.
Compensation and Benefits Programs
We strive to remain competitive in the global marketplace and provide foundational rewards to attract and retain top
talent. In general, our overall philosophy on compensation encompasses the following principles:
•
provide all levels of associates with a compensation package that aligns Avient’s and the associates’
interests through the use of base and annual incentive pay programs;
• maintain a competitive pay program that serves to attract, retain, motivate and reward associates, and;
•
award individual pay commensurate with experience, level of responsibility, and marketability.
Associate Benefits: Awards and Recognition Programs
Our ongoing associate feedback is highly valued, discussed, and most importantly, acted upon to make
improvements. This includes our culture and unique benefits we offer. In 2019, we offered Flex Fridays, an adapted
schedule that allows associates to have up to six Fridays off work during the summer without using vacation time.
Associates work with their supervisor to create a flexible schedule that will allow them to complete their work hours.
In 2020, we embraced and directed other workplace flexibility and work from home arrangements to combat the
spread of COVID-19 and protect our people.
In addition, we continue to offer our global benefit of community service hours, where each associate is provided 16
hours of paid time off each year to participate in activities to support and help create more sustainable communities.
Activities can be done as a group of fellow Avient associates or individually. These hours are used during a normally
scheduled work day. Since 2018, Avient associates have performed more than 10,000 hours of community service
through this program.
We celebrate, reward and share our associates’ great work through our recognition programs, some of which are
listed below and available globally:
6 AVIENT CORPORATION
•
•
•
impact on the organization.
Chairman's Awards
Spotlight Awards - Recognizes associates for their extra efforts on a project or task that has a significant
◦
◦
◦
Associate - Our Chairman's Achievement Award recognizes excellence in the execution of Avient's
four-pillar strategy. It's the highest honor a non-sales associate can receive at our company.
Sales - Our Chairman's Club Award recognizes our top 25 sellers and one sales manager for their
outstanding performance and living our values of Collaboration, Innovation and Excellence.
Leadership - Our Chairman's Leadership Award recognizes our top performing General Manager
for performance, culture and inspirational leadership.
A Great Place to Work®
With all the time, effort and resources we invest to build our culture and support our associates, we have been
honored to receive awards that showcase our company and people. Back in 2018, we were very proud to earn our
first Great Place to Work® certification by the Great Place to Work Institute in the U.S. We conducted a pulse
engagement survey in 2019. This shorter, more focused survey was intended to provide actionable insights to
managers in key focus areas. We mapped these survey questions back to core areas of prior surveys, and
achieved improvements in critical areas such as trusting in our managers and team collaboration.
In 2020, for the first time, we included all associates from Clariant MB in our employee engagement survey.
Associates in over 40 countries and nearly 170 locations participated, providing actionable feedback to support our
employee engagement efforts. Our results showed exceptional feedback from our associates, and we were
certified again as a Great Place to Work® in 2020.
Environmental, Health and Safety
We are subject to various environmental laws and regulations that apply to the production, use and sale of
chemicals, emissions into the air, discharges into waterways and other releases of materials into the environment,
and the generation, handling, storage, transportation, treatment and disposal of waste material. We endeavor to
ensure the safe and lawful operation of our facilities in the manufacture and distribution of products, and we believe
we are in material compliance with all applicable laws and regulations.
We maintain a disciplined environmental and occupational safety and health compliance program and conduct
periodic internal and external regulatory audits at our facilities to identify and correct potential environmental
exposures, including compliance matters and operational risk reduction opportunities. This effort can result in
process or operational modifications, the installation of pollution control devices or cleaning up grounds or facilities.
We believe that we are in material compliance with all applicable requirements.
We are strongly committed to safety as evidenced by our record-low injury incidence rate of 0.50 per 100 full-time
workers per year in 2020 and 0.56 in 2019. The 2019 average injury incidence rate for our NAICS Code (326
Plastics and Rubber Products Manufacturing) was 3.70. We hold the American Chemistry Council's certification as a
Responsible Care Management System® (RCMS) company. Certification was granted based on Avient's
conformance to the RCMS's comprehensive environmental health, safety and security requirements. The RCMS
certification affirms the importance Avient places on having world-class environmental, health, safety and security
performance.
In January 2019, Avient, along with 29 other member companies, joined together as founding members of the
Alliance to End Plastic Waste (AEPW). The AEPW has thus far committed over $1.5 billion to help end plastic waste
in the environment through investment in infrastructure, innovation, education, and clean-up activities. The AEPW
intends to enable and bring to scale solutions to minimize and manage plastic waste and promote solutions for used
plastics that move towards a circular economy. Our commitment to AEPW confirms the importance we place on
being a global leader in all aspects of how we define sustainability: People, Products, Planet and performance. We
have invested and are making important contributions in each, which are discussed in depth in our Sustainability
Report.
In our operations, we must comply with product-related governmental law and regulations affecting the plastics
industry generally and also with content-specific law, regulations and non-governmental standards. We believe that
compliance with current governmental laws and regulations and with non-governmental content-specific standards
will not have a material adverse effect on our financial position, results of operations or cash flows. The risk of
organization's criteria of 20%. The board is currently exploring adding an additional board member who is from an
underrepresented minority.
From a management perspective, 60% of our CEO's direct reports are female or minority which we believe sets the
right tone and expectation for diversity and inclusion within the Company.
More broadly within the Company, our diversity and inclusion approach is fostered by multiple Employee Resource
Groups that are driving improvements and opening opportunities throughout our organization. The vision that
guides our collective efforts is consistent and unwavering: to be the company of choice for all. It is from this vision
that our Employee Resource Groups were born and flourish today. Each group has its own mission and supporting
activities, and their efforts coalesce to help educate and inspire our global workforce and fortify sustainable
business practices.
Our Employee Resource Groups include: PRIDE at Avient (which is working to create a safe and accepting
environment that enables LGBTQ+ associates to perform to their fullest potential and contribute to the success of
our company), HYPE (which stands for Harnessing Young Potential Energy and is building a collaborative network
of Avient’s young professionals), and LEAD by Women (which promotes diversity and inclusion by increasing
access to the tools and resources necessary to build leadership skills and accelerate careers).
The executive leadership team manages our diversity and inclusion program, which ensures that we have
leadership accountability in advancing our diversity and inclusion strategy. In addition to bi-annual reviews with the
leadership team, Avient has implemented recruiting guidelines to expand our diverse talent pipeline, with at least
one-third of candidates being female or a U.S. minority.
Additionally, PRIDE at Avient continues to lead best practices and meaningful programming to improve experiences
of LGBTQ+ employees in our workplace. Their efforts were instrumental in our achievement of earning the
distinction of a "Best Place to Work" on the Corporate Equality Index with a perfect score of 100% in 2020 and
2021.
Other initiatives, including Mentoring at Avient and campus partnerships are vital for progress in our diversity and
inclusion journey. We require equality of opportunity for all qualified individuals in accordance with applicable laws.
Decisions on hiring, promotion, development, compensation or advancement are based solely on a person’s
qualifications, abilities, experience and performance, except where local law requires us to take actions to increase
employment opportunities for a specific group. The Avient Ethics Hotline serves as a mechanism for associates to
anonymously report any perceived concerns regarding these topics.
Compensation and Benefits Programs
We strive to remain competitive in the global marketplace and provide foundational rewards to attract and retain top
talent. In general, our overall philosophy on compensation encompasses the following principles:
provide all levels of associates with a compensation package that aligns Avient’s and the associates’
interests through the use of base and annual incentive pay programs;
• maintain a competitive pay program that serves to attract, retain, motivate and reward associates, and;
award individual pay commensurate with experience, level of responsibility, and marketability.
•
•
Associate Benefits: Awards and Recognition Programs
Our ongoing associate feedback is highly valued, discussed, and most importantly, acted upon to make
improvements. This includes our culture and unique benefits we offer. In 2019, we offered Flex Fridays, an adapted
schedule that allows associates to have up to six Fridays off work during the summer without using vacation time.
Associates work with their supervisor to create a flexible schedule that will allow them to complete their work hours.
In 2020, we embraced and directed other workplace flexibility and work from home arrangements to combat the
spread of COVID-19 and protect our people.
In addition, we continue to offer our global benefit of community service hours, where each associate is provided 16
hours of paid time off each year to participate in activities to support and help create more sustainable communities.
Activities can be done as a group of fellow Avient associates or individually. These hours are used during a normally
scheduled work day. Since 2018, Avient associates have performed more than 10,000 hours of community service
through this program.
listed below and available globally:
We celebrate, reward and share our associates’ great work through our recognition programs, some of which are
•
•
•
You Made a Difference Awards - Recognizes associates who go above and beyond their job
responsibilities on a project or task.
Spotlight Awards - Recognizes associates for their extra efforts on a project or task that has a significant
impact on the organization.
Chairman's Awards
◦
◦
◦
Associate - Our Chairman's Achievement Award recognizes excellence in the execution of Avient's
four-pillar strategy. It's the highest honor a non-sales associate can receive at our company.
Sales - Our Chairman's Club Award recognizes our top 25 sellers and one sales manager for their
outstanding performance and living our values of Collaboration, Innovation and Excellence.
Leadership - Our Chairman's Leadership Award recognizes our top performing General Manager
for performance, culture and inspirational leadership.
A Great Place to Work®
With all the time, effort and resources we invest to build our culture and support our associates, we have been
honored to receive awards that showcase our company and people. Back in 2018, we were very proud to earn our
first Great Place to Work® certification by the Great Place to Work Institute in the U.S. We conducted a pulse
engagement survey in 2019. This shorter, more focused survey was intended to provide actionable insights to
managers in key focus areas. We mapped these survey questions back to core areas of prior surveys, and
achieved improvements in critical areas such as trusting in our managers and team collaboration.
In 2020, for the first time, we included all associates from Clariant MB in our employee engagement survey.
Associates in over 40 countries and nearly 170 locations participated, providing actionable feedback to support our
employee engagement efforts. Our results showed exceptional feedback from our associates, and we were
certified again as a Great Place to Work® in 2020.
Environmental, Health and Safety
We are subject to various environmental laws and regulations that apply to the production, use and sale of
chemicals, emissions into the air, discharges into waterways and other releases of materials into the environment,
and the generation, handling, storage, transportation, treatment and disposal of waste material. We endeavor to
ensure the safe and lawful operation of our facilities in the manufacture and distribution of products, and we believe
we are in material compliance with all applicable laws and regulations.
We maintain a disciplined environmental and occupational safety and health compliance program and conduct
periodic internal and external regulatory audits at our facilities to identify and correct potential environmental
exposures, including compliance matters and operational risk reduction opportunities. This effort can result in
process or operational modifications, the installation of pollution control devices or cleaning up grounds or facilities.
We believe that we are in material compliance with all applicable requirements.
We are strongly committed to safety as evidenced by our record-low injury incidence rate of 0.50 per 100 full-time
workers per year in 2020 and 0.56 in 2019. The 2019 average injury incidence rate for our NAICS Code (326
Plastics and Rubber Products Manufacturing) was 3.70. We hold the American Chemistry Council's certification as a
Responsible Care Management System® (RCMS) company. Certification was granted based on Avient's
conformance to the RCMS's comprehensive environmental health, safety and security requirements. The RCMS
certification affirms the importance Avient places on having world-class environmental, health, safety and security
performance.
In January 2019, Avient, along with 29 other member companies, joined together as founding members of the
Alliance to End Plastic Waste (AEPW). The AEPW has thus far committed over $1.5 billion to help end plastic waste
in the environment through investment in infrastructure, innovation, education, and clean-up activities. The AEPW
intends to enable and bring to scale solutions to minimize and manage plastic waste and promote solutions for used
plastics that move towards a circular economy. Our commitment to AEPW confirms the importance we place on
being a global leader in all aspects of how we define sustainability: People, Products, Planet and performance. We
have invested and are making important contributions in each, which are discussed in depth in our Sustainability
Report.
In our operations, we must comply with product-related governmental law and regulations affecting the plastics
industry generally and also with content-specific law, regulations and non-governmental standards. We believe that
compliance with current governmental laws and regulations and with non-governmental content-specific standards
will not have a material adverse effect on our financial position, results of operations or cash flows. The risk of
AVIENT CORPORATION 7
additional costs and liabilities, however, is inherent in certain plant operations and certain products produced at
these plants, as is the case with other companies in the plastics industry. Therefore, we may incur additional costs
or liabilities in the future. Other developments, such as increasingly strict environmental, safety and health laws,
regulations and related enforcement policies, including those under the European Union Restriction of the Use of
Certain Hazardous Substances Directive (RoHS), Registration, Evaluation, Authorization and Restriction of
Chemicals (REACH), the Dodd-Frank Wall Street Reform and Consumer Protection Act (covering Conflict Minerals),
and the Consumer Product Safety Improvement Act, the implementation of additional content-specific standards,
discovery of unknown conditions, and claims for damages to property, persons or natural resources resulting from
plant emissions or products, could also result in additional costs or liabilities.
We expect 2021 cash environmental expenditures to approximate $20 million. Refer to Note 12, Commitments and
Contingencies, to the accompanying consolidated financial statements for discussion of environmental investigation
and remediation matters.
International Operations
Our international operations are subject to a variety of risks, including currency fluctuations and devaluations,
exchange controls, currency restrictions and changes in local economic conditions. While the impact of these risks
is difficult to predict, any one or more of them could adversely affect our future operations. For more information
about the noted risks, see Item 1A. "Risk Factors." For more information about our international operations, see
Note 15, Segment Information, to the accompanying consolidated financial statements.
Where You Can Find Additional Information
Our principal executive offices are located at 33587 Walker Road, Avon Lake, Ohio 44012, and our telephone
number is +1 (440) 930-1000. We are subject to the information reporting requirements of the Securities Exchange
Act of 1934 (the Exchange Act), and, in accordance with these requirements, we file annual, quarterly and other
reports, proxy statements and other information with the SEC relating to our business, financial results and other
matters.
Our internet address is www.avient.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d)
of the Exchange Act are available, free of charge, on our website (select Investors and then SEC Filings) or upon
written request, as soon as reasonably practicable after we electronically file or furnish them to the SEC. The
contents of our website are not part of this Annual Report on Form 10-K, and the reference to our website does not
constitute incorporation by reference into this Form 10-K of the information contained at that site. Our sustainability
report is posted under the Sustainability tab of our website.
8 AVIENT CORPORATION
ITEM 1A. RISK FACTORS
The following are certain risk factors that could affect our business, results of operations, financial position or cash
flows. These risk factors should be considered along with the forward-looking statements contained in this Annual
Report on Form 10-K because these factors could cause our actual results or financial condition to differ materially
from those projected in forward-looking statements. The following discussion is not an all-inclusive listing of risks,
although we believe these are the more material risks that we face. If any of the following occur, our business,
results of operations, financial position or cash flows could be adversely affected.
COVID-19 Risks
The COVID-19 pandemic has had, and may continue to have, an adverse impact on our business.
We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business, including how it
impacts our customers, employees, supply chain, and distribution network. In response to the pandemic, we
implemented changes in our business designed to protect the health and well-being of our employees and
customers and to support appropriate physical distancing and other health and safety protocols. We implemented
remote, alternate and flexible work arrangements where possible, including implementing split shifts at facilities and
remote work options for non-essential on-site functions, enhanced cleaning and sanitary procedures, implemented
domestic and international travel restrictions, implemented return to work and visitor screening protocols, and
postponed or canceled hosting or attending large events. While these measures have been necessary and
appropriate, they have resulted in additional costs, which we expect will continue in 2021 as we work to address
employee safety. We have experienced some challenges in connection with the COVID-19 pandemic, including
lower demand for certain products in North America and Europe. The extent to which our business, results of
operations, financial position or cash flows may ultimately be impacted by the COVID-19 pandemic will depend
largely on future developments, which are highly uncertain and cannot be accurately predicted, including new
information that may emerge concerning the severity of the outbreak and transmission rates of the virus, the timing
and effectiveness of vaccination efforts in the markets where we do business, actions by government authorities to
contain the outbreak or treat its impact, and the nature and scope of government economic recovery measures.
The situation surrounding the COVID-19 pandemic remains fluid, and the continued spread of COVID-19 could
negatively impact our business, financial condition and results of operations in a number of ways in the future,
including but not limited to:
shutdowns or slowdowns of our production facilities;
disruptions in our supply chain and our ability to obtain raw materials, packaging and other sourced
materials due to labor shortages, governmental restrictions or the failure of our suppliers, distributors or
manufacturers to meet their obligations to us;
increases in raw material and commodity costs;
the inability of a significant portion of our workforce, including our management team, to work as a result of
illness or government restrictions; and
reduced liquidity of customers, which could negatively impact the collectability of outstanding receivables
and our cash flows.
The impact of the COVID-19 pandemic may also exacerbate other risks and uncertainties described in this "Risk
Factors" section, any of which could have a material effect on us.
Global Operating Risks
Our operations could be adversely affected by various risks inherent in conducting operations worldwide.
We conduct a substantial portion of our business outside the U.S., with approximately 50% of our sales in foreign
countries. We currently have many facilities located outside the U.S., as detailed in Item 2. “Properties.” Accordingly,
our business is subject to risks related to the differing legal, political, social and regulatory requirements, and
economic conditions of many jurisdictions. Risks inherent in international operations include, but are not limited to,
the following:
•
changes in local government regulations and policies including, but not limited to, duty or tariff restrictions,
foreign currency exchange controls or monetary policy, repatriation of earnings, expropriation of property,
investment limitations and tax policies;
•
•
•
•
•
additional costs and liabilities, however, is inherent in certain plant operations and certain products produced at
these plants, as is the case with other companies in the plastics industry. Therefore, we may incur additional costs
or liabilities in the future. Other developments, such as increasingly strict environmental, safety and health laws,
regulations and related enforcement policies, including those under the European Union Restriction of the Use of
Certain Hazardous Substances Directive (RoHS), Registration, Evaluation, Authorization and Restriction of
Chemicals (REACH), the Dodd-Frank Wall Street Reform and Consumer Protection Act (covering Conflict Minerals),
and the Consumer Product Safety Improvement Act, the implementation of additional content-specific standards,
discovery of unknown conditions, and claims for damages to property, persons or natural resources resulting from
plant emissions or products, could also result in additional costs or liabilities.
We expect 2021 cash environmental expenditures to approximate $20 million. Refer to Note 12, Commitments and
Contingencies, to the accompanying consolidated financial statements for discussion of environmental investigation
and remediation matters.
International Operations
Our international operations are subject to a variety of risks, including currency fluctuations and devaluations,
exchange controls, currency restrictions and changes in local economic conditions. While the impact of these risks
is difficult to predict, any one or more of them could adversely affect our future operations. For more information
about the noted risks, see Item 1A. "Risk Factors." For more information about our international operations, see
Note 15, Segment Information, to the accompanying consolidated financial statements.
Where You Can Find Additional Information
Our principal executive offices are located at 33587 Walker Road, Avon Lake, Ohio 44012, and our telephone
number is +1 (440) 930-1000. We are subject to the information reporting requirements of the Securities Exchange
Act of 1934 (the Exchange Act), and, in accordance with these requirements, we file annual, quarterly and other
reports, proxy statements and other information with the SEC relating to our business, financial results and other
matters.
Our internet address is www.avient.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d)
of the Exchange Act are available, free of charge, on our website (select Investors and then SEC Filings) or upon
written request, as soon as reasonably practicable after we electronically file or furnish them to the SEC. The
contents of our website are not part of this Annual Report on Form 10-K, and the reference to our website does not
constitute incorporation by reference into this Form 10-K of the information contained at that site. Our sustainability
report is posted under the Sustainability tab of our website.
ITEM 1A. RISK FACTORS
The following are certain risk factors that could affect our business, results of operations, financial position or cash
flows. These risk factors should be considered along with the forward-looking statements contained in this Annual
Report on Form 10-K because these factors could cause our actual results or financial condition to differ materially
from those projected in forward-looking statements. The following discussion is not an all-inclusive listing of risks,
although we believe these are the more material risks that we face. If any of the following occur, our business,
results of operations, financial position or cash flows could be adversely affected.
COVID-19 Risks
The COVID-19 pandemic has had, and may continue to have, an adverse impact on our business.
We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business, including how it
impacts our customers, employees, supply chain, and distribution network. In response to the pandemic, we
implemented changes in our business designed to protect the health and well-being of our employees and
customers and to support appropriate physical distancing and other health and safety protocols. We implemented
remote, alternate and flexible work arrangements where possible, including implementing split shifts at facilities and
remote work options for non-essential on-site functions, enhanced cleaning and sanitary procedures, implemented
domestic and international travel restrictions, implemented return to work and visitor screening protocols, and
postponed or canceled hosting or attending large events. While these measures have been necessary and
appropriate, they have resulted in additional costs, which we expect will continue in 2021 as we work to address
employee safety. We have experienced some challenges in connection with the COVID-19 pandemic, including
lower demand for certain products in North America and Europe. The extent to which our business, results of
operations, financial position or cash flows may ultimately be impacted by the COVID-19 pandemic will depend
largely on future developments, which are highly uncertain and cannot be accurately predicted, including new
information that may emerge concerning the severity of the outbreak and transmission rates of the virus, the timing
and effectiveness of vaccination efforts in the markets where we do business, actions by government authorities to
contain the outbreak or treat its impact, and the nature and scope of government economic recovery measures.
The situation surrounding the COVID-19 pandemic remains fluid, and the continued spread of COVID-19 could
negatively impact our business, financial condition and results of operations in a number of ways in the future,
including but not limited to:
•
•
•
•
•
shutdowns or slowdowns of our production facilities;
disruptions in our supply chain and our ability to obtain raw materials, packaging and other sourced
materials due to labor shortages, governmental restrictions or the failure of our suppliers, distributors or
manufacturers to meet their obligations to us;
increases in raw material and commodity costs;
the inability of a significant portion of our workforce, including our management team, to work as a result of
illness or government restrictions; and
reduced liquidity of customers, which could negatively impact the collectability of outstanding receivables
and our cash flows.
The impact of the COVID-19 pandemic may also exacerbate other risks and uncertainties described in this "Risk
Factors" section, any of which could have a material effect on us.
Global Operating Risks
Our operations could be adversely affected by various risks inherent in conducting operations worldwide.
We conduct a substantial portion of our business outside the U.S., with approximately 50% of our sales in foreign
countries. We currently have many facilities located outside the U.S., as detailed in Item 2. “Properties.” Accordingly,
our business is subject to risks related to the differing legal, political, social and regulatory requirements, and
economic conditions of many jurisdictions. Risks inherent in international operations include, but are not limited to,
the following:
•
changes in local government regulations and policies including, but not limited to, duty or tariff restrictions,
foreign currency exchange controls or monetary policy, repatriation of earnings, expropriation of property,
investment limitations and tax policies;
AVIENT CORPORATION 9
•
•
•
•
•
•
•
•
•
political and economic instability and disruptions, including labor unrest, withdrawal or renegotiation of trade
agreements, natural disasters, major public health issues, pandemics, civil strife, acts of war, insurrection
and terrorism;
legislation that regulates the use of chemicals;
disadvantages of competing against companies from countries that are not subject to U.S. laws and
regulations, including the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act;
compliance with international trade laws and regulations, including export control and economic sanctions;
subject to present claims and potential future claims with respect to workplace exposure, workers’ compensation
difficulties in staffing and managing multi-national operations;
limitations on our ability to enforce legal rights and remedies;
reduced protection of intellectual property rights;
other risks arising out of foreign sovereignty over the areas where our operations are conducted; and
increasingly complex laws and regulations concerning privacy and data security, including, but not limited
to, the European Union's General Data Protection Regulation.
We could be adversely affected by violations of the FCPA, UK Bribery Act and similar worldwide anti-bribery laws,
as well as export controls and economic sanction laws. The FCPA, UK Bribery Act and similar anti-bribery laws in
other jurisdictions generally prohibit companies and their intermediaries from making improper payments to
government officials for the purpose of obtaining or retaining business. Our policies mandate compliance with these
laws. We operate in many parts of the world that have experienced governmental corruption to some degree and, in
certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices. We
cannot assure you that our internal controls and procedures will always protect us if reckless or criminal acts are
committed by our employees or agents. If we are found to be liable for FCPA, UK Bribery Act, export control or
sanction violations, we could suffer from criminal or civil penalties or other sanctions, including loss of export
privileges or authorization needed to conduct aspects of our international business, which could have a material
adverse effect on our business.
Any of these risks could have an adverse effect on our international operations by reducing demand for our
products.
Business Risks
Demand for and supply of our products and services may be adversely affected by several factors, some of
which we cannot predict or control.
Several factors may affect the demand for and supply of our products and services, including:
recognition and quality, depending on the product involved.
•
•
•
•
•
•
•
economic downturns or other volatility in the significant end markets that we serve;
product obsolescence or technological changes that unfavorably alter the value/cost proposition of our
products and services;
competition from existing and unforeseen polymer and non-polymer based products;
declines in general economic conditions or reductions in industrial production growth rates, both
domestically and globally, which could impact our customers’ ability to pay amounts owed to us;
changes in environmental regulations that would limit our ability to sell our products and services in specific
markets;
changes in laws and regulations regarding plastic materials; and
inability to obtain raw materials or supply products to customers due to factors such as supplier work
stoppages, supply shortages, plant outages or regulatory changes that may limit or prohibit overland
transportation of certain hazardous materials and exogenous factors, like severe weather.
If any of these events occur, the demand for and supply of our products and services could suffer and potentially
lead to asset impairment or otherwise adversely affect our results.
10 AVIENT CORPORATION
Our manufacturing operations are subject to hazards and other risks associated with polymer production
and the related storage and transportation of raw materials, products and wastes.
The occurrence of an operating problem at our facilities (e.g., an explosion, a mechanical failure, a chemical spill or
a discharge of toxic or hazardous substances) may have a material adverse effect on the productivity and
profitability of a particular manufacturing or distribution facility or on our operations as a whole, during and after the
period of these operating difficulties. Operating problems may cause personal injury and/or loss of life, customer
attrition and severe damage to or destruction of property and equipment and environmental damage. We are
and other matters. Our property and casualty insurance, which we believe are of the types and in the amounts that
are customary for the industry, may not fully insure us against all potential hazards that are incident to our business
or otherwise could occur.
Environmental, health and safety laws and regulations impact our operations and financial statements.
Our operations on, and ownership of, real property are subject to environmental, health and safety laws and
regulations at the national, state and local governmental levels (including, but not limited to, the Restriction of
Hazardous Substances (RoHS) and the Consumer Product Safety Improvement Act of 2008). The nature of our
business exposes us to compliance costs and risks of liability under these laws and regulations due to the
production, storage, transportation, recycling or disposal and/or sale of materials that can cause contamination and
other harm to the environment or personal injury if they are improperly handled and released. Environmental
compliance requirements imposed on us and our vendors may significantly increase the costs of these activities
involving raw materials, energy, finished products and wastes. We may incur substantial costs, including fines,
criminal or civil sanctions, damages, and remediation costs, or experience interruptions in our operations for
violations of these laws.
Natural gas, electricity, fuel, logistics and raw material costs could cause volatility in our results.
The cost of our natural gas, electricity, fuel, logistics and raw materials may not correlate with changes in the prices
we receive for our products, either in the direction of the price change or in absolute magnitude. Natural gas and
raw materials costs represent a substantial part of our manufacturing costs. Most of the raw materials we use are
commodities and the price of each can fluctuate widely for a variety of reasons, including changes in availability
because of major capacity additions or reductions or significant facility operating problems. Other external factors
beyond our control can also cause fluctuations in raw materials prices, which could negatively impact demand for
our products and cause volatility in our results.
We face competition from other companies.
We encounter competition in price, payment terms, delivery, service, performance, product innovation, product
We expect that our competitors will continue to develop and introduce new and enhanced products, which could
cause a decline in the market acceptance of our products. In addition, our competitors could cause a reduction in
the selling prices of some of our products as a result of intensified price competition. Competitive pressures could
also result in the loss of customers.
Cybersecurity breaches, global information systems security threats and more sophisticated and targeted
computer crime could pose a risk to our systems, networks and products, which could harm our business.
We depend on integrated information systems to conduct our business, including communicating with employees
and customers, ordering and managing materials from suppliers, shipping products to customers, and analyzing
and reporting results of operations. In addition, we store sensitive data, including proprietary business information,
intellectual property and confidential employee or other personal data, on our servers and databases.
Cybersecurity breaches, global information systems security threats and more sophisticated and targeted computer
crime pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our
data and communications. We continue to update our infrastructure, security tools, employee training and
processes to protect against security incidents, including both external and internal threats, and to prevent their
recurrence; however, our systems, networks and products may nevertheless be vulnerable to advanced persistent
threats or other types of system failures. Depending on their nature and scope, such threats and system failures
could potentially lead to the compromising of confidential information and communications, improper use of our
systems and networks, manipulation and destruction of data, defective products, production downtimes and
operational disruptions, which in turn could cause customers to cancel orders or otherwise adversely affect our
reputation, competitiveness and results of operations.
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
and terrorism;
legislation that regulates the use of chemicals;
disadvantages of competing against companies from countries that are not subject to U.S. laws and
regulations, including the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act;
compliance with international trade laws and regulations, including export control and economic sanctions;
difficulties in staffing and managing multi-national operations;
limitations on our ability to enforce legal rights and remedies;
reduced protection of intellectual property rights;
other risks arising out of foreign sovereignty over the areas where our operations are conducted; and
increasingly complex laws and regulations concerning privacy and data security, including, but not limited
to, the European Union's General Data Protection Regulation.
We could be adversely affected by violations of the FCPA, UK Bribery Act and similar worldwide anti-bribery laws,
as well as export controls and economic sanction laws. The FCPA, UK Bribery Act and similar anti-bribery laws in
other jurisdictions generally prohibit companies and their intermediaries from making improper payments to
government officials for the purpose of obtaining or retaining business. Our policies mandate compliance with these
laws. We operate in many parts of the world that have experienced governmental corruption to some degree and, in
certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices. We
cannot assure you that our internal controls and procedures will always protect us if reckless or criminal acts are
committed by our employees or agents. If we are found to be liable for FCPA, UK Bribery Act, export control or
sanction violations, we could suffer from criminal or civil penalties or other sanctions, including loss of export
privileges or authorization needed to conduct aspects of our international business, which could have a material
Any of these risks could have an adverse effect on our international operations by reducing demand for our
adverse effect on our business.
products.
Business Risks
which we cannot predict or control.
Several factors may affect the demand for and supply of our products and services, including:
economic downturns or other volatility in the significant end markets that we serve;
product obsolescence or technological changes that unfavorably alter the value/cost proposition of our
products and services;
competition from existing and unforeseen polymer and non-polymer based products;
declines in general economic conditions or reductions in industrial production growth rates, both
domestically and globally, which could impact our customers’ ability to pay amounts owed to us;
changes in environmental regulations that would limit our ability to sell our products and services in specific
markets;
changes in laws and regulations regarding plastic materials; and
inability to obtain raw materials or supply products to customers due to factors such as supplier work
stoppages, supply shortages, plant outages or regulatory changes that may limit or prohibit overland
transportation of certain hazardous materials and exogenous factors, like severe weather.
If any of these events occur, the demand for and supply of our products and services could suffer and potentially
lead to asset impairment or otherwise adversely affect our results.
political and economic instability and disruptions, including labor unrest, withdrawal or renegotiation of trade
agreements, natural disasters, major public health issues, pandemics, civil strife, acts of war, insurrection
Our manufacturing operations are subject to hazards and other risks associated with polymer production
and the related storage and transportation of raw materials, products and wastes.
The occurrence of an operating problem at our facilities (e.g., an explosion, a mechanical failure, a chemical spill or
a discharge of toxic or hazardous substances) may have a material adverse effect on the productivity and
profitability of a particular manufacturing or distribution facility or on our operations as a whole, during and after the
period of these operating difficulties. Operating problems may cause personal injury and/or loss of life, customer
attrition and severe damage to or destruction of property and equipment and environmental damage. We are
subject to present claims and potential future claims with respect to workplace exposure, workers’ compensation
and other matters. Our property and casualty insurance, which we believe are of the types and in the amounts that
are customary for the industry, may not fully insure us against all potential hazards that are incident to our business
or otherwise could occur.
Environmental, health and safety laws and regulations impact our operations and financial statements.
Our operations on, and ownership of, real property are subject to environmental, health and safety laws and
regulations at the national, state and local governmental levels (including, but not limited to, the Restriction of
Hazardous Substances (RoHS) and the Consumer Product Safety Improvement Act of 2008). The nature of our
business exposes us to compliance costs and risks of liability under these laws and regulations due to the
production, storage, transportation, recycling or disposal and/or sale of materials that can cause contamination and
other harm to the environment or personal injury if they are improperly handled and released. Environmental
compliance requirements imposed on us and our vendors may significantly increase the costs of these activities
involving raw materials, energy, finished products and wastes. We may incur substantial costs, including fines,
criminal or civil sanctions, damages, and remediation costs, or experience interruptions in our operations for
violations of these laws.
Natural gas, electricity, fuel, logistics and raw material costs could cause volatility in our results.
The cost of our natural gas, electricity, fuel, logistics and raw materials may not correlate with changes in the prices
we receive for our products, either in the direction of the price change or in absolute magnitude. Natural gas and
raw materials costs represent a substantial part of our manufacturing costs. Most of the raw materials we use are
commodities and the price of each can fluctuate widely for a variety of reasons, including changes in availability
because of major capacity additions or reductions or significant facility operating problems. Other external factors
beyond our control can also cause fluctuations in raw materials prices, which could negatively impact demand for
our products and cause volatility in our results.
Demand for and supply of our products and services may be adversely affected by several factors, some of
We face competition from other companies.
We encounter competition in price, payment terms, delivery, service, performance, product innovation, product
recognition and quality, depending on the product involved.
We expect that our competitors will continue to develop and introduce new and enhanced products, which could
cause a decline in the market acceptance of our products. In addition, our competitors could cause a reduction in
the selling prices of some of our products as a result of intensified price competition. Competitive pressures could
also result in the loss of customers.
Cybersecurity breaches, global information systems security threats and more sophisticated and targeted
computer crime could pose a risk to our systems, networks and products, which could harm our business.
We depend on integrated information systems to conduct our business, including communicating with employees
and customers, ordering and managing materials from suppliers, shipping products to customers, and analyzing
and reporting results of operations. In addition, we store sensitive data, including proprietary business information,
intellectual property and confidential employee or other personal data, on our servers and databases.
Cybersecurity breaches, global information systems security threats and more sophisticated and targeted computer
crime pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our
data and communications. We continue to update our infrastructure, security tools, employee training and
processes to protect against security incidents, including both external and internal threats, and to prevent their
recurrence; however, our systems, networks and products may nevertheless be vulnerable to advanced persistent
threats or other types of system failures. Depending on their nature and scope, such threats and system failures
could potentially lead to the compromising of confidential information and communications, improper use of our
systems and networks, manipulation and destruction of data, defective products, production downtimes and
operational disruptions, which in turn could cause customers to cancel orders or otherwise adversely affect our
reputation, competitiveness and results of operations.
AVIENT CORPORATION 11
We have a significant amount of goodwill, and any future goodwill impairment charges could adversely
impact our results of operations.
As of December 31, 2020, we had goodwill of $1,308.1 million. The future occurrence of a potential indicator of
impairment, such as a significant adverse change in business climate, an adverse action or assessment by a
regulator, unanticipated competition, a material negative change in relationships with customers, strategic decisions
made in response to economic or competitive conditions could result in goodwill impairment charges, which could
adversely impact our results of operations. Based on our 2020 goodwill impairment test, performed as of October 1,
2020, no reporting units were identified as being at risk of future impairment. For additional information, see Note 4,
Goodwill and Intangible Assets, to the accompanying consolidated financial statements and “Critical Accounting
Policies and Estimates” included in Item 7, "Management’s Discussion and Analysis of Financial Condition and
Results of Operations.”
Clariant MB Acquisition Risks
We may not realize the cost synergies that are anticipated from the Clariant MB Acquisition.
The benefits that are expected to result from the Clariant MB Acquisition will depend, in part, on our ability to
integrate and achieve cost synergies. There can be no assurance that we will successfully or cost-effectively
integrate Clariant MB. The failure to do so could have an adverse effect on our business, financial condition, results
of operations and cash flow.
Moreover, we may incur substantial expenses in connection with the integration. While it is anticipated that certain
expenses will be incurred to achieve cost synergies, such expenses are difficult to estimate accurately and may
exceed current estimates. Accordingly, the benefits from the Clariant MB Acquisition may be offset by costs incurred
or delays in integration.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
Capital and Credit Risks
Disruptions in the global credit, financial and/or currency markets could limit our access to credit or
otherwise harm our financial results, which could have a material adverse impact on our business.
Global credit and financial markets experience volatility, including volatility in security prices, liquidity and credit
availability, declining valuations of certain investments and significant changes in the capital and organizational
structures of certain financial institutions. Market conditions may limit our ability to access the capital necessary to
grow and maintain our business. Accordingly, we may be forced to delay raising capital, issue shorter tenors than
we prefer or pay unattractive interest rates, which could increase our interest expense, decrease our profitability and
significantly reduce our financial flexibility.
We are exposed to fluctuations in foreign currency exchange rates. Any significant change in the value of the
currencies of the countries in which we do business against the U.S. dollar, whether precipitated by governmental
monetary policy or otherwise, could affect our ability to sell products competitively and control our cost structure,
which could have a material adverse effect on our business, financial condition and results of operations. For
additional detail related to this risk, see Item 7A, "Quantitative and Qualitative Disclosures About Market Risk."
The agreements governing our debt, including our revolving credit facility, term loan and other debt
instruments, contain various covenants that limit our ability to take certain actions and in certain
circumstances require us to meet financial maintenance tests, failure to comply with which could have a
material adverse effect on us.
The agreements governing our senior secured revolving credit facility and our senior secured term loan, and the
indentures and credit agreements governing our other debt, contain a number of customary restrictive covenants
that, among other things, limit our ability to: sell or otherwise transfer assets, including in a spin-off, incur additional
debt or liens, consolidate or merge with any entity or transfer or sell all or substantially all of our assets, pay
dividends or make certain other restricted payments, make investments, enter into transactions with affiliates, create
dividend or other payment restrictions with respect to subsidiaries, make capital investments and alter the business
we conduct.
In addition, our revolving credit facility requires us to comply under certain circumstances with specific financial
tests, under which we are required to achieve certain or specific financial and operating results. Our ability to
comply with these provisions may be affected by events beyond our control. A breach of any of these covenants
would result in a default under such agreements and instruments, which in certain circumstances could be a default
under all of these agreements and instruments. In the event of any default, our lenders could elect to declare all
amounts borrowed under the agreements, together with accrued interest thereon, to be due and payable. In such
event, we cannot assure that we would have sufficient assets to pay debt then outstanding under the agreements
governing our debt.
Furthermore, certain of these agreements condition our ability to obtain additional borrowing capacity, engage in
certain transactions or take certain other actions, on our achievement of certain or specific financial and operating
results, although our failure to achieve such results would not result in a default under such agreements. Any future
refinancing of our senior secured revolving credit facility or other debt may contain similar restrictive covenants.
To service our indebtedness, we will require a significant amount of cash.
Our ability to pay interest on our debt and to satisfy our other debt obligations will depend in part upon our future
financial and operating performance and that of our subsidiaries, and upon our ability to renew or refinance
borrowings. Prevailing economic conditions and financial, business, competitive, legislative, regulatory and other
factors, many of which are beyond our control, will affect our ability to make these payments. While we believe that
cash flow from our current level of operations, available cash and available borrowings under our revolving credit
facility provide adequate sources of liquidity, a significant drop in operating cash flow resulting from economic
conditions, competition or other uncertainties beyond our control could create the need for alternative sources of
liquidity. If we are unable to generate sufficient cash flow to meet our debt service obligations, we will have to
pursue one or more alternatives, such as reducing or delaying capital or other expenditures, refinancing debt,
selling assets, or raising equity capital.
12 AVIENT CORPORATION
We have a significant amount of goodwill, and any future goodwill impairment charges could adversely
impact our results of operations.
As of December 31, 2020, we had goodwill of $1,308.1 million. The future occurrence of a potential indicator of
impairment, such as a significant adverse change in business climate, an adverse action or assessment by a
regulator, unanticipated competition, a material negative change in relationships with customers, strategic decisions
made in response to economic or competitive conditions could result in goodwill impairment charges, which could
adversely impact our results of operations. Based on our 2020 goodwill impairment test, performed as of October 1,
2020, no reporting units were identified as being at risk of future impairment. For additional information, see Note 4,
Goodwill and Intangible Assets, to the accompanying consolidated financial statements and “Critical Accounting
Policies and Estimates” included in Item 7, "Management’s Discussion and Analysis of Financial Condition and
Results of Operations.”
Clariant MB Acquisition Risks
We may not realize the cost synergies that are anticipated from the Clariant MB Acquisition.
The benefits that are expected to result from the Clariant MB Acquisition will depend, in part, on our ability to
integrate and achieve cost synergies. There can be no assurance that we will successfully or cost-effectively
integrate Clariant MB. The failure to do so could have an adverse effect on our business, financial condition, results
of operations and cash flow.
Moreover, we may incur substantial expenses in connection with the integration. While it is anticipated that certain
expenses will be incurred to achieve cost synergies, such expenses are difficult to estimate accurately and may
exceed current estimates. Accordingly, the benefits from the Clariant MB Acquisition may be offset by costs incurred
or delays in integration.
ITEM 1B. UNRESOLVED STAFF COMMENTS
dividend or other payment restrictions with respect to subsidiaries, make capital investments and alter the business
None.
we conduct.
Capital and Credit Risks
Disruptions in the global credit, financial and/or currency markets could limit our access to credit or
otherwise harm our financial results, which could have a material adverse impact on our business.
Global credit and financial markets experience volatility, including volatility in security prices, liquidity and credit
availability, declining valuations of certain investments and significant changes in the capital and organizational
structures of certain financial institutions. Market conditions may limit our ability to access the capital necessary to
grow and maintain our business. Accordingly, we may be forced to delay raising capital, issue shorter tenors than
we prefer or pay unattractive interest rates, which could increase our interest expense, decrease our profitability and
significantly reduce our financial flexibility.
We are exposed to fluctuations in foreign currency exchange rates. Any significant change in the value of the
currencies of the countries in which we do business against the U.S. dollar, whether precipitated by governmental
monetary policy or otherwise, could affect our ability to sell products competitively and control our cost structure,
which could have a material adverse effect on our business, financial condition and results of operations. For
additional detail related to this risk, see Item 7A, "Quantitative and Qualitative Disclosures About Market Risk."
The agreements governing our debt, including our revolving credit facility, term loan and other debt
instruments, contain various covenants that limit our ability to take certain actions and in certain
circumstances require us to meet financial maintenance tests, failure to comply with which could have a
material adverse effect on us.
The agreements governing our senior secured revolving credit facility and our senior secured term loan, and the
indentures and credit agreements governing our other debt, contain a number of customary restrictive covenants
that, among other things, limit our ability to: sell or otherwise transfer assets, including in a spin-off, incur additional
debt or liens, consolidate or merge with any entity or transfer or sell all or substantially all of our assets, pay
dividends or make certain other restricted payments, make investments, enter into transactions with affiliates, create
In addition, our revolving credit facility requires us to comply under certain circumstances with specific financial
tests, under which we are required to achieve certain or specific financial and operating results. Our ability to
comply with these provisions may be affected by events beyond our control. A breach of any of these covenants
would result in a default under such agreements and instruments, which in certain circumstances could be a default
under all of these agreements and instruments. In the event of any default, our lenders could elect to declare all
amounts borrowed under the agreements, together with accrued interest thereon, to be due and payable. In such
event, we cannot assure that we would have sufficient assets to pay debt then outstanding under the agreements
governing our debt.
Furthermore, certain of these agreements condition our ability to obtain additional borrowing capacity, engage in
certain transactions or take certain other actions, on our achievement of certain or specific financial and operating
results, although our failure to achieve such results would not result in a default under such agreements. Any future
refinancing of our senior secured revolving credit facility or other debt may contain similar restrictive covenants.
To service our indebtedness, we will require a significant amount of cash.
Our ability to pay interest on our debt and to satisfy our other debt obligations will depend in part upon our future
financial and operating performance and that of our subsidiaries, and upon our ability to renew or refinance
borrowings. Prevailing economic conditions and financial, business, competitive, legislative, regulatory and other
factors, many of which are beyond our control, will affect our ability to make these payments. While we believe that
cash flow from our current level of operations, available cash and available borrowings under our revolving credit
facility provide adequate sources of liquidity, a significant drop in operating cash flow resulting from economic
conditions, competition or other uncertainties beyond our control could create the need for alternative sources of
liquidity. If we are unable to generate sufficient cash flow to meet our debt service obligations, we will have to
pursue one or more alternatives, such as reducing or delaying capital or other expenditures, refinancing debt,
selling assets, or raising equity capital.
AVIENT CORPORATION 13
ITEM 2. PROPERTIES
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
Headquartered in Avon Lake, Ohio, we operate globally with principal locations consisting of 103 manufacturing
sites and eight distribution facilities in North America, South America, Europe, the Middle East, Asia, and Africa. We
own the majority of our manufacturing sites and lease our distribution facilities. We believe that the quality and
production capacity of our facilities is sufficient to maintain our competitive position for the foreseeable future. The
following table identifies the principal facilities of our segments:
Specialty Engineered
Materials
Color, Additives and Inks
1. Birmingham, Alabama
1. Glendale, Arizona
30. Toronto, Canada
60. Butterworth, Malaysia
2. Englewood, Colorado
2. & 3. Phoenix, Arizona (c)
31. Maipu, Chile
61. Santa Clara, Mexico
Distribution
1. Rancho Cucamonga,
California
2. Chicago, Illinois
3. Montrose, Colorado
4. Bethel, Connecticut
32. Chuzhou, China
62. Toluca, Mexico
3. Eagan, Minnesota
4. North Haven, Connecticut
5. Dalton, Georgia
33. Guangzhou, China
63. Eindhoven, Netherlands
4. Edison, New Jersey
5. McHenry, Illinois
6. Kennesaw, Georgia
34. Pudong, China
64. Auckland, New Zealand
5. Statesville, North Carolina
6. Winona, Minnesota
7. Elk Grove Village, Illinois
35., 36. & 37. Shanghai,
China (d)
65. Karachi, Pakistan
6. Elyria, Ohio
7. Hickory, North Carolina
8. West Chicago, Illinois
38. Suzhou, China
66. Lahore, Pakistan
7. La Porte, Texas
8. Avon Lake, Ohio
9. La Porte, Indiana
39. Tianjin, China
67. Lima, Peru
8. Brampton, Ontario,
Canada
9. Hatfield, Pennsylvania
10. Lewiston, Maine
40. Cota, Colombia
68. Konstantynow, Poland
(8 Distribution Facilities)
10. Changzhou, China
11. Holden, Massachusetts
41. Aland, Finland
69. Kutno, Poland
11. Shenzhen, China
12. Albion, Michigan
42. Cergy, France
70. Jeddah, Saudi Arabia
12. Suzhou, China
13. Minneapolis, Minnesota
43. Saint-Jeoire, France
71. Riyadh, Saudi Arabia
13. Gaggenau, Germany
14. St. Louis, Missouri
44. Tossiat, France
72. Yanbu, Saudi Arabia
14. Melle, Germany
15. Lockport, New York
45. Ahrensburg, Germany
73. Randburg, South Africa
15. Leeuwarden, Netherlands
16. Mooresville, North Carolina
46. Diez, Germany
74. Alicante, Spain
16. Barbastro, Spain
17. Berea, Ohio
47. Lahnstein, Germany
75. Barcelona, Spain
17. Istanbul, Turkey
18. Massillon, Ohio
48. Guatemala City,
Guatemala
76. Pamplona, Spain
18. Leek, United Kingdom
19. North Baltimore, Ohio
49. Gyor, Hungary
77. Sant Andreu, Spain
Shanghai, China (b)
20. Norwalk, Ohio
50. Kalol, India
78. Malmoe, Sweden
Pune, India (a)
21. Lehigh Valley, Pennsylvania
51. Pune, India
79. Taoyuan, Taiwan
Pamplona, Spain (a)
22. Mountain Top, Pennsylvania
52. Rania, India
80. Bangkok, Thailand
(18 Manufacturing Plants)
23. Vonore, Tennessee
53. Vashere, India
81. Phan Thong, Thailand
24. Winchester, Virginia
54. Tangerang, Indonesia
82. Gazientep, Turkey
25. Lomas de Zamora, Argentina
55. Naas, Ireland
83. Gebze, Turkey
26. Assesse, Belgium
56. Lomagna, Italy
84. Knowsley, United Kingdom
27. Louvain-La-Nueve, Belgium
57. Merate, Italy
85. Thuan An, Vietnam
28. Itupeva, Brazil
29. Suzano, Brazil
58. Milan, Italy
(85 Manufacturing Plants)
59. Pogliano, Italy
(a) Facility is not included in manufacturing plants total as it is also included as part of another segment.
(b) Facility is not included in manufacturing plants total as it is a design center/lab.
(c) There are two manufacturing plants located in Phoenix, Arizona.
(d) There are three manufacturing plants located in Shanghai, China.
ITEM 3. LEGAL PROCEEDINGS
Information regarding certain legal proceedings can be found in Note 12, Commitments and Contingencies, to the
accompanying consolidated financial statements and is incorporated by reference herein.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
14 AVIENT CORPORATION
Executive officers are elected by our Board of Directors to serve one-year terms. The following table lists the name
of each person serving as an executive officer of the Company, their age, and position with the Company as of
February 5, 2021.
Name
Robert M. Patterson
Jamie A. Beggs
Cathy K. Dodd
Michael A. Garratt
Lisa K. Kunkle
M. John Midea, Jr.
Woon Keat Moh
Chris L. Pederson
Joel R. Rathbun
Age
48
44
55
57
52
56
47
54
48
60
Position
Chairman, President and Chief Executive Officer
Senior Vice President, Chief Financial Officer
Senior Vice President, President of Distribution
Senior Vice President, President Color, Additives and Inks, EMEA
Senior Vice President, General Counsel and Secretary
Senior Vice President, Global Operations and Process Improvement
Senior Vice President, President of Color, Additives and Inks, Americas and Asia
Senior Vice President, President of Specialty Engineered Materials
Senior Vice President, Mergers & Acquisitions
João José San Martin Neto
Senior Vice President, Chief Human Resources Officer
Robert M. Patterson: Chairman, President and Chief Executive Officer, May 2016 to date. President and Chief
Executive Officer, May 2014 to May 2016. Executive Vice President and Chief Operating Officer, March 2012 to May
2014. Executive Vice President and Chief Financial Officer, January 2011 to March 2012. Senior Vice President and
Chief Financial Officer, May 2008 to January 2011. Vice President and Treasurer of Novelis, Inc. (an aluminum
rolled products manufacturer) from 2007 to May 2008. Vice President, Controller and Chief Accounting Officer of
Novelis from 2006 to 2007. Mr. Patterson served as Vice President and Segment Chief Financial Officer, Thermal
and Flow Technology Segments of SPX Corporation (a multi-industry manufacturer and developer) from 2005 to
2006 and as Vice President and Chief Financial Officer, Cooling Technologies and Services of SPX from 2004 to
2005.
Jamie A. Beggs: Senior Vice President, Chief Financial Officer, August 2020 to date. Senior Vice President and
Chief Financial Officer of Hunt Consolidated, Inc. (a diversified holding company focused primarily in the energy
industry) from January 2017 through December 2019. Vice President and Treasurer at Celanese Corporation (a
global technology leader in the production of specialty materials and chemical products) from 2015 to 2017. Chief
Financial Officer, Material Solutions at Celanese Corporation from 2011 to 2015. Prior to 2011, Ms. Beggs worked in
various roles of increasing responsibility at Celanese in both business and finance from May 2007.
Cathy K. Dodd: Senior Vice President, President of Distribution, October 2020 to date. Senior Vice President, Chief
Commercial Officer from April 2020 to October 2020. Vice President, Marketing from February 2014 to April 2020.
Director of Downstream Engagement and Design and Strategic Account Executive, Retail at Eastman Chemical
Company (a global specialty chemical company that produces a broad range of advanced materials, additives and
functional products, specialty chemicals, and fibers) from 2010 to 2014.
Michael A. Garratt: Senior Vice President, President Color, Additives and Inks, EMEA, April 2020 to present. Senior
Vice President, Chief Commercial Officer, April 2016 to March 2020. Senior Vice President, President of
Performance Products and Solutions, September 2013 to April 2016. President, Marmon Utility (a manufacturer of
medium-high voltage utility, subsea and down-hole power cables and molded insulator systems) from March 2011 to
September 2013. Chief Operating Officer, Excel Polymers (a custom thermoset rubber formulator) from November
2009 to December 2010. Vice President and General Manager - Americas Compounding and Performance
Additives, Excel Polymers from March 2009 to November 2009. Vice President and General Manager - Industrial
and Consumer, Excel Polymers from December 2005 to March 2009. From April 1996 to June 2005, Mr. Garratt
worked for DuPont Dow Elastomers, a joint venture of Dupont and Dow (global manufacturers of engineered
thermoset rubber and thermoplastic elastomer materials) in market development and product management
positions, culminating in a regional commercial leadership role for Europe, the Middle East and Africa.
Lisa K. Kunkle: Senior Vice President, General Counsel and Secretary, May 2015 to date. Vice President, General
Counsel and Secretary, August 2007 to May 2015, Assistant General Counsel February 2007 to August 2007.
Partner, Jones Day (a global law firm) from January 2006 to February 2007. Associate, Jones Day from August
1995 to January 2006.
M. John Midea, Jr.: Senior Vice President, Global Operations and Process Improvement, February 2015 to date.
President and Chief Executive Officer, Resco Products (a refractory products company) from August 2012 to
October 2014. President and Chief Operating Officer, Ennis Traffic Safety Solutions (a traffic safety and
infrastructure company) from June 2008 to July 2012. Vice President, North American - General Industrial, Valspar
Headquartered in Avon Lake, Ohio, we operate globally with principal locations consisting of 103 manufacturing
sites and eight distribution facilities in North America, South America, Europe, the Middle East, Asia, and Africa. We
own the majority of our manufacturing sites and lease our distribution facilities. We believe that the quality and
production capacity of our facilities is sufficient to maintain our competitive position for the foreseeable future. The
following table identifies the principal facilities of our segments:
Specialty Engineered
Materials
Color, Additives and Inks
Distribution
1. Birmingham, Alabama
1. Glendale, Arizona
30. Toronto, Canada
60. Butterworth, Malaysia
1. Rancho Cucamonga,
California
2. Englewood, Colorado
2. & 3. Phoenix, Arizona (c)
31. Maipu, Chile
61. Santa Clara, Mexico
2. Chicago, Illinois
3. Montrose, Colorado
4. Bethel, Connecticut
32. Chuzhou, China
62. Toluca, Mexico
3. Eagan, Minnesota
4. North Haven, Connecticut
5. Dalton, Georgia
33. Guangzhou, China
63. Eindhoven, Netherlands
4. Edison, New Jersey
5. McHenry, Illinois
6. Kennesaw, Georgia
34. Pudong, China
64. Auckland, New Zealand
5. Statesville, North Carolina
6. Winona, Minnesota
7. Elk Grove Village, Illinois
35., 36. & 37. Shanghai,
65. Karachi, Pakistan
6. Elyria, Ohio
7. Hickory, North Carolina
8. West Chicago, Illinois
38. Suzhou, China
66. Lahore, Pakistan
7. La Porte, Texas
8. Avon Lake, Ohio
9. La Porte, Indiana
39. Tianjin, China
67. Lima, Peru
8. Brampton, Ontario,
Canada
9. Hatfield, Pennsylvania
10. Lewiston, Maine
40. Cota, Colombia
68. Konstantynow, Poland
(8 Distribution Facilities)
10. Changzhou, China
11. Holden, Massachusetts
41. Aland, Finland
69. Kutno, Poland
11. Shenzhen, China
12. Albion, Michigan
42. Cergy, France
70. Jeddah, Saudi Arabia
12. Suzhou, China
13. Minneapolis, Minnesota
43. Saint-Jeoire, France
71. Riyadh, Saudi Arabia
13. Gaggenau, Germany
14. St. Louis, Missouri
44. Tossiat, France
72. Yanbu, Saudi Arabia
14. Melle, Germany
15. Lockport, New York
45. Ahrensburg, Germany
73. Randburg, South Africa
15. Leeuwarden, Netherlands
16. Mooresville, North Carolina
46. Diez, Germany
74. Alicante, Spain
16. Barbastro, Spain
17. Berea, Ohio
47. Lahnstein, Germany
75. Barcelona, Spain
17. Istanbul, Turkey
18. Massillon, Ohio
76. Pamplona, Spain
48. Guatemala City,
Guatemala
18. Leek, United Kingdom
19. North Baltimore, Ohio
49. Gyor, Hungary
77. Sant Andreu, Spain
Shanghai, China (b)
20. Norwalk, Ohio
50. Kalol, India
78. Malmoe, Sweden
Pune, India (a)
21. Lehigh Valley, Pennsylvania
51. Pune, India
79. Taoyuan, Taiwan
Pamplona, Spain (a)
22. Mountain Top, Pennsylvania
52. Rania, India
80. Bangkok, Thailand
(18 Manufacturing Plants)
23. Vonore, Tennessee
53. Vashere, India
81. Phan Thong, Thailand
24. Winchester, Virginia
54. Tangerang, Indonesia
82. Gazientep, Turkey
25. Lomas de Zamora, Argentina
55. Naas, Ireland
83. Gebze, Turkey
26. Assesse, Belgium
56. Lomagna, Italy
84. Knowsley, United Kingdom
27. Louvain-La-Nueve, Belgium
57. Merate, Italy
85. Thuan An, Vietnam
28. Itupeva, Brazil
29. Suzano, Brazil
58. Milan, Italy
(85 Manufacturing Plants)
59. Pogliano, Italy
(a) Facility is not included in manufacturing plants total as it is also included as part of another segment.
(b) Facility is not included in manufacturing plants total as it is a design center/lab.
(c) There are two manufacturing plants located in Phoenix, Arizona.
(d) There are three manufacturing plants located in Shanghai, China.
ITEM 3. LEGAL PROCEEDINGS
Information regarding certain legal proceedings can be found in Note 12, Commitments and Contingencies, to the
accompanying consolidated financial statements and is incorporated by reference herein.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 2. PROPERTIES
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
Executive officers are elected by our Board of Directors to serve one-year terms. The following table lists the name
of each person serving as an executive officer of the Company, their age, and position with the Company as of
February 5, 2021.
Name
Robert M. Patterson
Jamie A. Beggs
Cathy K. Dodd
Michael A. Garratt
Lisa K. Kunkle
M. John Midea, Jr.
Woon Keat Moh
Chris L. Pederson
Joel R. Rathbun
China (d)
João José San Martin Neto
Age
48
44
55
57
52
56
47
54
48
60
Position
Chairman, President and Chief Executive Officer
Senior Vice President, Chief Financial Officer
Senior Vice President, President of Distribution
Senior Vice President, President Color, Additives and Inks, EMEA
Senior Vice President, General Counsel and Secretary
Senior Vice President, Global Operations and Process Improvement
Senior Vice President, President of Color, Additives and Inks, Americas and Asia
Senior Vice President, President of Specialty Engineered Materials
Senior Vice President, Mergers & Acquisitions
Senior Vice President, Chief Human Resources Officer
Robert M. Patterson: Chairman, President and Chief Executive Officer, May 2016 to date. President and Chief
Executive Officer, May 2014 to May 2016. Executive Vice President and Chief Operating Officer, March 2012 to May
2014. Executive Vice President and Chief Financial Officer, January 2011 to March 2012. Senior Vice President and
Chief Financial Officer, May 2008 to January 2011. Vice President and Treasurer of Novelis, Inc. (an aluminum
rolled products manufacturer) from 2007 to May 2008. Vice President, Controller and Chief Accounting Officer of
Novelis from 2006 to 2007. Mr. Patterson served as Vice President and Segment Chief Financial Officer, Thermal
and Flow Technology Segments of SPX Corporation (a multi-industry manufacturer and developer) from 2005 to
2006 and as Vice President and Chief Financial Officer, Cooling Technologies and Services of SPX from 2004 to
2005.
Jamie A. Beggs: Senior Vice President, Chief Financial Officer, August 2020 to date. Senior Vice President and
Chief Financial Officer of Hunt Consolidated, Inc. (a diversified holding company focused primarily in the energy
industry) from January 2017 through December 2019. Vice President and Treasurer at Celanese Corporation (a
global technology leader in the production of specialty materials and chemical products) from 2015 to 2017. Chief
Financial Officer, Material Solutions at Celanese Corporation from 2011 to 2015. Prior to 2011, Ms. Beggs worked in
various roles of increasing responsibility at Celanese in both business and finance from May 2007.
Cathy K. Dodd: Senior Vice President, President of Distribution, October 2020 to date. Senior Vice President, Chief
Commercial Officer from April 2020 to October 2020. Vice President, Marketing from February 2014 to April 2020.
Director of Downstream Engagement and Design and Strategic Account Executive, Retail at Eastman Chemical
Company (a global specialty chemical company that produces a broad range of advanced materials, additives and
functional products, specialty chemicals, and fibers) from 2010 to 2014.
Michael A. Garratt: Senior Vice President, President Color, Additives and Inks, EMEA, April 2020 to present. Senior
Vice President, Chief Commercial Officer, April 2016 to March 2020. Senior Vice President, President of
Performance Products and Solutions, September 2013 to April 2016. President, Marmon Utility (a manufacturer of
medium-high voltage utility, subsea and down-hole power cables and molded insulator systems) from March 2011 to
September 2013. Chief Operating Officer, Excel Polymers (a custom thermoset rubber formulator) from November
2009 to December 2010. Vice President and General Manager - Americas Compounding and Performance
Additives, Excel Polymers from March 2009 to November 2009. Vice President and General Manager - Industrial
and Consumer, Excel Polymers from December 2005 to March 2009. From April 1996 to June 2005, Mr. Garratt
worked for DuPont Dow Elastomers, a joint venture of Dupont and Dow (global manufacturers of engineered
thermoset rubber and thermoplastic elastomer materials) in market development and product management
positions, culminating in a regional commercial leadership role for Europe, the Middle East and Africa.
Lisa K. Kunkle: Senior Vice President, General Counsel and Secretary, May 2015 to date. Vice President, General
Counsel and Secretary, August 2007 to May 2015, Assistant General Counsel February 2007 to August 2007.
Partner, Jones Day (a global law firm) from January 2006 to February 2007. Associate, Jones Day from August
1995 to January 2006.
M. John Midea, Jr.: Senior Vice President, Global Operations and Process Improvement, February 2015 to date.
President and Chief Executive Officer, Resco Products (a refractory products company) from August 2012 to
October 2014. President and Chief Operating Officer, Ennis Traffic Safety Solutions (a traffic safety and
infrastructure company) from June 2008 to July 2012. Vice President, North American - General Industrial, Valspar
AVIENT CORPORATION 15
Corporation (a manufacturer of paints and coatings) from June 2007 to May 2008. Vice President and General
Manager, Power Coatings, Valspar Corporation from February 2002 to June 2007.
Woon Keat Moh: Senior Vice President, President Color, Additives and Inks, Americas and Asia, April 2020 to date.
Senior Vice President, President of Color, Additives and Inks, January 2020 to March 2020. Vice President of Asia,
January 2019 to December 2019. General Manager of Specialty Engineered Materials Asia, December 2014 to
December 2018. Sales Director of Color and Additives Asia, February 2011 to November 2014. Business
Development Manager, Color and Additives Asia, February 2010 to January 2011. From October 1999 to January
2010, Mr. Moh worked for Clariant AG (a global manufacturer of color and additives masterbatch) in various roles of
increasing responsibility, culminating in a commercial leadership role in Southeast Asia. He also served as a
technical sales executive for Bayer AG (a manufacturer of pigments, dyestuffs, additives, chemical auxiliaries for
textile, leather, paper and plastic industry) with its Specialty Products division from 1997 to 1999.
Chris L. Pederson: Senior Vice President, President of Specialty Engineered Materials, November 2018 to date.
Vice President, Strategy, Hexcel Corporation (a global leader in advanced composites technology) from March 2017
to November 2018. Vice President, Aerospace of Cytec Engineered Materials (a producer of specialty bonding
adhesives and composite materials) from November 2009 to February 2016. Vice President, Research and
Development of Cytec from January 2004 to November 2009. Mr. Pederson served as a Senior Engineer at Boeing
(a global aerospace company) from 1992 to 2001.
Joel R. Rathbun: Senior Vice President, Mergers and Acquisitions, January 2016 to date. General Manager,
Specialty Engineered Materials North America, February 2013 to January 2016. Vice President, Mergers and
Acquisitions, June 2011 to February 2013. Mr. Rathbun served as Senior Vice President, Mergers and Acquisitions,
Moelis & Company (an American global independent investment bank) from January 2008 to June 2011. He also
served as Executive Director, Mergers and Acquisitions of CIBC World Markets (an investment bank in the domestic
and international equity and debt capital markets) from 2006 to 2008.
João José San Martin Neto: Senior Vice President, Chief Human Resources Officer, November 2016 to date. Senior
Director, Human Resources, Color, Additives and Inks, February 2013 to November 2016. Group Global Director,
Human Resources, Engineered Products and Solutions from November 2012 to February 2013. Vice President
Human Resources, Alcoa Power and Propulsion (a business unit of Alcoa Inc. specializing in titanium and aluminum
castings) from May 2009 to October 2012. Vice President Human Resources, Alcoa Electrical & Electronic Solutions
(a business unit of Alcoa Inc. specializing in the design, development and production of electrical and electronic
distribution systems) from August 2003 to April 2009.
PART II
“AVNT.”
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Our common shares, $0.01 par value per share, are traded on the New York Stock Exchange under the symbol
As of February 5, 2021, there were 1,632 holders of record of our common shares.
We currently have an authorized common share repurchase program. For the full year 2020, we repurchased 1.25
million common shares at a weighted average share price of $22.28. During the three months ended December 31,
2020, we repurchased 250,000 common shares as shown in the table below.
Total Number
of Shares
Purchased
Weighted
Average Price
Paid Per Share
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Program
Maximum
Number of
Shares that
May Yet be
Purchased
Under the
Program(1)
— $
150,000 $
100,000 $
250,000 $
—
31.85
40.05
35.59
—
1,107,472
957,472
5,857,472
150,000
100,000
250,000
(1) Our Board of Directors approved a common share repurchase program authorizing Avient to purchase its common shares in August 2008,
which share repurchase authorization has been subsequently increased from time to time. On December 9, 2020, we announced that we
would increase our share buyback by an additional 5 million shares. As of December 31, 2020, approximately 5.9 million shares remained
available for purchase under these authorizations, which have no expiration. Purchases of common shares may be made by open market
purchases or privately negotiated transactions and may be made pursuant to Rule 10b5-1 plans and accelerated share repurchases.
October 1 to October 31
November 1 to November 30
December 1 to December 31
Period
Total
ITEM 6. SELECTED FINANCIAL DATA
Not required.
16 AVIENT CORPORATION
Corporation (a manufacturer of paints and coatings) from June 2007 to May 2008. Vice President and General
PART II
Manager, Power Coatings, Valspar Corporation from February 2002 to June 2007.
Woon Keat Moh: Senior Vice President, President Color, Additives and Inks, Americas and Asia, April 2020 to date.
Senior Vice President, President of Color, Additives and Inks, January 2020 to March 2020. Vice President of Asia,
January 2019 to December 2019. General Manager of Specialty Engineered Materials Asia, December 2014 to
December 2018. Sales Director of Color and Additives Asia, February 2011 to November 2014. Business
Development Manager, Color and Additives Asia, February 2010 to January 2011. From October 1999 to January
2010, Mr. Moh worked for Clariant AG (a global manufacturer of color and additives masterbatch) in various roles of
increasing responsibility, culminating in a commercial leadership role in Southeast Asia. He also served as a
technical sales executive for Bayer AG (a manufacturer of pigments, dyestuffs, additives, chemical auxiliaries for
textile, leather, paper and plastic industry) with its Specialty Products division from 1997 to 1999.
Chris L. Pederson: Senior Vice President, President of Specialty Engineered Materials, November 2018 to date.
Vice President, Strategy, Hexcel Corporation (a global leader in advanced composites technology) from March 2017
to November 2018. Vice President, Aerospace of Cytec Engineered Materials (a producer of specialty bonding
adhesives and composite materials) from November 2009 to February 2016. Vice President, Research and
Development of Cytec from January 2004 to November 2009. Mr. Pederson served as a Senior Engineer at Boeing
(a global aerospace company) from 1992 to 2001.
Joel R. Rathbun: Senior Vice President, Mergers and Acquisitions, January 2016 to date. General Manager,
Specialty Engineered Materials North America, February 2013 to January 2016. Vice President, Mergers and
Acquisitions, June 2011 to February 2013. Mr. Rathbun served as Senior Vice President, Mergers and Acquisitions,
Moelis & Company (an American global independent investment bank) from January 2008 to June 2011. He also
served as Executive Director, Mergers and Acquisitions of CIBC World Markets (an investment bank in the domestic
and international equity and debt capital markets) from 2006 to 2008.
João José San Martin Neto: Senior Vice President, Chief Human Resources Officer, November 2016 to date. Senior
Director, Human Resources, Color, Additives and Inks, February 2013 to November 2016. Group Global Director,
Human Resources, Engineered Products and Solutions from November 2012 to February 2013. Vice President
Human Resources, Alcoa Power and Propulsion (a business unit of Alcoa Inc. specializing in titanium and aluminum
castings) from May 2009 to October 2012. Vice President Human Resources, Alcoa Electrical & Electronic Solutions
(a business unit of Alcoa Inc. specializing in the design, development and production of electrical and electronic
distribution systems) from August 2003 to April 2009.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Our common shares, $0.01 par value per share, are traded on the New York Stock Exchange under the symbol
“AVNT.”
As of February 5, 2021, there were 1,632 holders of record of our common shares.
We currently have an authorized common share repurchase program. For the full year 2020, we repurchased 1.25
million common shares at a weighted average share price of $22.28. During the three months ended December 31,
2020, we repurchased 250,000 common shares as shown in the table below.
Period
October 1 to October 31
November 1 to November 30
December 1 to December 31
Total
Total Number
of Shares
Purchased
Weighted
Average Price
Paid Per Share
— $
150,000 $
100,000 $
250,000 $
—
31.85
40.05
35.59
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Program
Maximum
Number of
Shares that
May Yet be
Purchased
Under the
Program(1)
—
1,107,472
150,000
100,000
250,000
957,472
5,857,472
(1) Our Board of Directors approved a common share repurchase program authorizing Avient to purchase its common shares in August 2008,
which share repurchase authorization has been subsequently increased from time to time. On December 9, 2020, we announced that we
would increase our share buyback by an additional 5 million shares. As of December 31, 2020, approximately 5.9 million shares remained
available for purchase under these authorizations, which have no expiration. Purchases of common shares may be made by open market
purchases or privately negotiated transactions and may be made pursuant to Rule 10b5-1 plans and accelerated share repurchases.
ITEM 6. SELECTED FINANCIAL DATA
Not required.
AVIENT CORPORATION 17
strategy supports these trends can be found in numerous initiatives: active participation in the medical device
market, leveraging our global footprint to deliver consistent solutions globally, light weighting and metal replacement
and development of solutions that respond to ever-changing market needs by offering alternatives to traditional
materials.
COVID-19
Recent Developments
We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business, including how it will
impact our employees, customers, supply chain and distribution network. Although we are unable to predict the
ultimate impact of the COVID-19 outbreak at this time, the pandemic has adversely affected, and is expected to
continue to adversely affect our business. While we concluded there were no indicators of impairment as of
December 31, 2020, any significant sustained adverse change in financial results or macroeconomic conditions
could result in future impairments of long-lived assets. The extent to which our operations may continue to be
impacted by the COVID-19 pandemic will depend largely on future developments, which are highly uncertain and
cannot be accurately predicted, including new information which may emerge concerning the severity of the
outbreak and actions by government authorities to contain the outbreak or treat its impact.
Clariant MB Acquisition
On July 1, 2020, the Company completed the Clariant MB Acquisition. The Clariant MB Acquisition increased the
Company's scale, product depth and geographic reach in its Color, Additives and Inks segment. Clariant MB has
leading portfolios of solid and liquid masterbatches that include sustainable solutions for alternative energy, and
reduced material requirements for packaging and light weighting. In connection with the completion of the Clariant
MB Acquisition and effective as of June 30, 2020, the Company amended its existing Articles of Incorporation to
change its name to Avient Corporation. In conjunction with its rebranding and new name, the Company also
changed its ticker symbol from "POL" to "AVNT", effective at the start of trading on July 13, 2020.
Total consideration paid by the Company to complete the Clariant MB Acquisition was $1.4 billion net of cash and
debt. To finance the purchase of Clariant MB, the Company used $496.1 million net proceeds from the issuance of
common shares in an underwritten public offering completed in February 2020 and $640.5 million in net proceeds
from a senior unsecured notes offering completed in May 2020, and funded the balance using the net proceeds of
the October 2019 sale of PP&S.
Highlights and Executive Summary
(In millions)
Sales
Operating income
A summary of Avient’s sales, operating income, income from continuing operations, net of income taxes and net
income from continuing operations attributable to Avient common shareholders is included in the following table:
Net income from continuing operations, net of income taxes
Net income from continuing operations attributable to Avient common shareholders
2020
2019
2018
$ 3,242.1 $ 2,862.7 $ 2,881.0
189.3
133.8
132.0
156.8
75.7
75.5
178.6
87.4
87.7
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Overview
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to
provide information that is supplemental to, and should be read together with, our consolidated financial statements
and the accompanying notes contained in this Annual Report on Form 10-K. Information in this Item 7 is intended to
assist the reader in obtaining an understanding of our consolidated financial statements, the changes in certain key
items in those financial statements from year to year, the primary factors that accounted for those changes, and any
known trends or uncertainties that we are aware of that may have a material effect on our future performance, as
well as how certain accounting principles affect our consolidated financial statements. Unless otherwise noted, the
discussion that follows includes a comparison of our results of operations, liquidity and capital resources, and cash
flows for fiscal years 2020 and 2019. For a discussion of changes from fiscal year 2018 to fiscal year 2019, refer to
Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our
Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 19, 2020.
The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in these forward-looking statements. Factors that could
cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this
Annual Report on Form 10-K, particularly in “Cautionary Note on Forward-Looking Statements” and Item 1A, “Risk
Factors.”
Our Business
We are a premier provider of specialized and sustainable material solutions that transform customer challenges into
opportunities, bringing new products to life for a better world. Our products include specialty engineered materials,
advanced composites, color and additive systems and polymer distribution. We are also a highly specialized
developer and manufacturer of performance enhancing additives, liquid colorants and fluoropolymer and silicone
colorants. Headquartered in Avon Lake, Ohio, with 2020 sales of $3.2 billion ($3.8 billion on a pro forma basis to
include Clariant MB), we have manufacturing sites and distribution facilities around the globe, with 69% and 44% of
our respective Color, Additives and Inks and Specialty Engineered Materials segments' sales outside the United
States. We provide value to our customers through our ability to link our knowledge of polymers and formulation
technology with our manufacturing and supply chain capabilities to provide value-added solutions to designers,
assemblers and processors of plastics.
Strategy and Key Trends
To achieve our vision, we have implemented a strategy with four core components: specialization, globalization,
operational excellence and commercial excellence. Specialization differentiates us through products, services,
technology and solutions that add value. Globalization allows us to service our customers with consistency
wherever their operations might be around the world. Operational excellence empowers us to respond to the voice
of the customer while focusing on continuous improvement. Commercial excellence enables us to deliver value to
customers by supporting their growth and profitability with superior customer service.
We are also committed to sustainability through our four cornerstones of People, Products, Planet, and
Performance. We have invested in and are making important contributions to each, which are discussed in depth in
our most recent Sustainability Report.
In the short term, we will maintain our focus on sales growth with expanding margins, with a goal of offsetting
economic headwinds in certain end markets and geographies, raw material volatility and logistics cost inflation.
Longer term, we will continue to focus on accelerating the launch of new products and collaborating with our
customers to develop new and unique solutions for their benefit while focusing on our four cornerstones of
sustainability named above to ensure the growth we achieve is sustainable for us and our customers. Capital
expenditures will be focused primarily to support sales growth, investment in recent acquisitions, and other strategic
investments. We also continue to consider acquisitions and other synergy opportunities that complement our core
platforms. These actions will ensure that we continue to invest in our core capabilities and continue to support
growth in key markets and product offerings.
We will continue our enterprise-wide Lean Six Sigma program directed at improving margin, profitability and cash
flow by applying proven management techniques and strategies to key areas of the business, such as pricing,
supply chain and operations management, productivity and quality. Long-term trends that currently provide
opportunities to leverage our strategy and commitment to sustainability include improving health and wellness,
protecting the environment, globalizing and localizing and increasing energy efficiency. Examples of how our
18 AVIENT CORPORATION
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Overview
Factors.”
Our Business
assist the reader in obtaining an understanding of our consolidated financial statements, the changes in certain key
items in those financial statements from year to year, the primary factors that accounted for those changes, and any
known trends or uncertainties that we are aware of that may have a material effect on our future performance, as
well as how certain accounting principles affect our consolidated financial statements. Unless otherwise noted, the
discussion that follows includes a comparison of our results of operations, liquidity and capital resources, and cash
flows for fiscal years 2020 and 2019. For a discussion of changes from fiscal year 2018 to fiscal year 2019, refer to
Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our
Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 19, 2020.
The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in these forward-looking statements. Factors that could
cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this
Annual Report on Form 10-K, particularly in “Cautionary Note on Forward-Looking Statements” and Item 1A, “Risk
We are a premier provider of specialized and sustainable material solutions that transform customer challenges into
opportunities, bringing new products to life for a better world. Our products include specialty engineered materials,
advanced composites, color and additive systems and polymer distribution. We are also a highly specialized
developer and manufacturer of performance enhancing additives, liquid colorants and fluoropolymer and silicone
colorants. Headquartered in Avon Lake, Ohio, with 2020 sales of $3.2 billion ($3.8 billion on a pro forma basis to
include Clariant MB), we have manufacturing sites and distribution facilities around the globe, with 69% and 44% of
our respective Color, Additives and Inks and Specialty Engineered Materials segments' sales outside the United
States. We provide value to our customers through our ability to link our knowledge of polymers and formulation
technology with our manufacturing and supply chain capabilities to provide value-added solutions to designers,
assemblers and processors of plastics.
Strategy and Key Trends
To achieve our vision, we have implemented a strategy with four core components: specialization, globalization,
operational excellence and commercial excellence. Specialization differentiates us through products, services,
technology and solutions that add value. Globalization allows us to service our customers with consistency
wherever their operations might be around the world. Operational excellence empowers us to respond to the voice
of the customer while focusing on continuous improvement. Commercial excellence enables us to deliver value to
customers by supporting their growth and profitability with superior customer service.
We are also committed to sustainability through our four cornerstones of People, Products, Planet, and
Performance. We have invested in and are making important contributions to each, which are discussed in depth in
our most recent Sustainability Report.
In the short term, we will maintain our focus on sales growth with expanding margins, with a goal of offsetting
economic headwinds in certain end markets and geographies, raw material volatility and logistics cost inflation.
Longer term, we will continue to focus on accelerating the launch of new products and collaborating with our
customers to develop new and unique solutions for their benefit while focusing on our four cornerstones of
sustainability named above to ensure the growth we achieve is sustainable for us and our customers. Capital
expenditures will be focused primarily to support sales growth, investment in recent acquisitions, and other strategic
investments. We also continue to consider acquisitions and other synergy opportunities that complement our core
platforms. These actions will ensure that we continue to invest in our core capabilities and continue to support
growth in key markets and product offerings.
We will continue our enterprise-wide Lean Six Sigma program directed at improving margin, profitability and cash
flow by applying proven management techniques and strategies to key areas of the business, such as pricing,
supply chain and operations management, productivity and quality. Long-term trends that currently provide
opportunities to leverage our strategy and commitment to sustainability include improving health and wellness,
protecting the environment, globalizing and localizing and increasing energy efficiency. Examples of how our
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to
provide information that is supplemental to, and should be read together with, our consolidated financial statements
Recent Developments
and the accompanying notes contained in this Annual Report on Form 10-K. Information in this Item 7 is intended to
COVID-19
strategy supports these trends can be found in numerous initiatives: active participation in the medical device
market, leveraging our global footprint to deliver consistent solutions globally, light weighting and metal replacement
and development of solutions that respond to ever-changing market needs by offering alternatives to traditional
materials.
We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business, including how it will
impact our employees, customers, supply chain and distribution network. Although we are unable to predict the
ultimate impact of the COVID-19 outbreak at this time, the pandemic has adversely affected, and is expected to
continue to adversely affect our business. While we concluded there were no indicators of impairment as of
December 31, 2020, any significant sustained adverse change in financial results or macroeconomic conditions
could result in future impairments of long-lived assets. The extent to which our operations may continue to be
impacted by the COVID-19 pandemic will depend largely on future developments, which are highly uncertain and
cannot be accurately predicted, including new information which may emerge concerning the severity of the
outbreak and actions by government authorities to contain the outbreak or treat its impact.
Clariant MB Acquisition
On July 1, 2020, the Company completed the Clariant MB Acquisition. The Clariant MB Acquisition increased the
Company's scale, product depth and geographic reach in its Color, Additives and Inks segment. Clariant MB has
leading portfolios of solid and liquid masterbatches that include sustainable solutions for alternative energy, and
reduced material requirements for packaging and light weighting. In connection with the completion of the Clariant
MB Acquisition and effective as of June 30, 2020, the Company amended its existing Articles of Incorporation to
change its name to Avient Corporation. In conjunction with its rebranding and new name, the Company also
changed its ticker symbol from "POL" to "AVNT", effective at the start of trading on July 13, 2020.
Total consideration paid by the Company to complete the Clariant MB Acquisition was $1.4 billion net of cash and
debt. To finance the purchase of Clariant MB, the Company used $496.1 million net proceeds from the issuance of
common shares in an underwritten public offering completed in February 2020 and $640.5 million in net proceeds
from a senior unsecured notes offering completed in May 2020, and funded the balance using the net proceeds of
the October 2019 sale of PP&S.
Highlights and Executive Summary
A summary of Avient’s sales, operating income, income from continuing operations, net of income taxes and net
income from continuing operations attributable to Avient common shareholders is included in the following table:
(In millions)
Sales
Operating income
Net income from continuing operations, net of income taxes
Net income from continuing operations attributable to Avient common shareholders
2020
2019
2018
$ 3,242.1 $ 2,862.7 $ 2,881.0
189.3
133.8
132.0
156.8
75.7
75.5
178.6
87.4
87.7
AVIENT CORPORATION 19
Results of Operations
Variances — Favorable (Unfavorable)
2020 versus 2019
2019 versus 2018
Other income (expense), net increased $12.2 million in 2020 as compared to 2019 as a result of actuarial gains and
losses recognized on our pension and other post-employment benefit obligations (see Note 11, Employee Benefit
Plans) to the accompanying condensed consolidated financial statements. All components of net periodic benefit
(Dollars in millions, except per share data)
2020
2019
2018
Change
%
Change
Change
%
Change
cost, except for service costs, are presented herein.
Other income (expense), net
nm
nm
3.3
1.1
25.0
(15.1)
(25.4) %
127.1
19.3 %
76.8 % $
(11.7)
(13.4) %
—
12.2
29.6
28.5
58.1
50.7
32.4
2.2 %
5.2 %
5.3 %
nm
nm
7.5 %
nm
27.1 %
7.6
nm
(19.3)
2,457.8
2,205.5
2,256.2
(252.3)
(11.4) %
Net income from continuing operations
$
133.8 $
75.7 $
87.4 $
(94.6)
(18.9) %
(54.2)
(12.1) %
32.5
20.7 %
(21.8)
(12.2) %
$ 3,242.1 $ 2,862.7 $ 2,881.0 $ 379.4
13.3 % $
(18.3)
(0.6) %
Income taxes
Sales
Cost of sales
Gross margin
Selling and administrative expense
Operating income
Interest expense, net
Debt extinguishment costs
Other income (expense), net
Income from continuing operations before income
taxes
Income tax expense
784.3
595.0
189.3
657.2
500.4
156.8
(74.6)
(59.5)
—
24.3
—
12.1
139.0
(5.2)
109.4
(33.7)
624.8
446.2
178.6
(62.8)
(1.1)
(12.9)
101.8
(14.4)
(Loss) income from discontinued operations, net of
income taxes
Net income
Net (income) loss attributable to noncontrolling
interests
Net income (loss) attributable to Avient common
shareholders
(0.4)
133.4
513.1
588.8
72.1
159.5
(513.5)
(455.4)
nm
441.0
nm
429.3
(1.8)
(0.2)
0.3
(1.6)
nm
(0.5)
$
131.6 $
588.6 $
159.8 $
(457.0)
nm $ 428.8
nm
nm
nm
nm
Earnings (loss) per share attributable to Avient common shareholders - basic:
Continuing operations
Discontinued operations
Total
$
$
1.47 $
0.98 $
(0.01)
6.64
1.46 $
7.62 $
1.10
0.91
2.01
Earnings (loss) per share attributable to Avient common shareholders - diluted:
Continuing operations
Discontinued operations
Total
nm - not meaningful
Sales
$
$
1.46 $
0.97 $
(0.01)
6.61
1.45 $
7.58 $
1.09
0.90
1.99
Sales increased $379.4 million, or 13.3%, in 2020 compared to 2019, as a result of the Clariant MB Acquisition
which was partially offset by COVID related demand weakness.
Cost of sales
As a percent of sales, cost of sales decreased from 77.0% in 2019 to 75.8% in 2020, primarily as a result of
improved mix, lower raw material costs and cost containment.
Selling and administrative expense
For 2020, we recognized a one-time U.S. tax benefit of $18.2 million (13.1%) from an internal reorganization of
These costs include selling, technology, administrative functions, corporate and general expenses. Selling and
administrative expense in 2020 increased $94.6 million compared to 2019, primarily driven by the Clariant MB
Acquisition.
Interest expense, net
Interest expense, net increased $15.1 million in 2020 compared to 2019 as a result of interest expense related to
our senior unsecured notes offering completed in May 2020 and $10.1 million of committed financing fees related to
the Clariant MB Acquisition. These costs were offset by lower average outstanding variable debt balances as well as
interest income earned on cash and cash equivalents from our equity issuance completed in February 2020 along
with the divestment of PP&S in October 2019.
20 AVIENT CORPORATION
The Company is subject to taxation in the U.S. and numerous international jurisdictions. In determining the effective
income tax rate, the Company analyzes various factors, including annual earnings, the laws of taxing jurisdictions in
which the earnings were generated, the impact of state and local income taxes, the ability to use tax credits, net
operating loss carryforwards, and available planning alternatives. Discrete items, including the effect of changes in
tax laws, statutory tax rates, and valuation allowances or other non-recurring tax adjustments are reflected in the
period in which they occur as an addition to, or reduction from, the tax provision.
We recognize the resulting tax on global intangible low-taxed income (GILTI) and the deduction of foreign-derived
intangible income (FDII) as a period expense in the period in which the tax is incurred.
A reconciliation of the applicable U.S. federal statutory tax rate to the consolidated effective income tax rate from
continuing operations along with a description of significant or other reconciling items is included below.
(In millions)
Federal statutory income tax rate
Tax on GILTI and FDII
International tax on certain current and prior year earnings
Net impact of non-deductible acquisition earnouts and transaction cost
Tax on one-time gain from sale of other assets
U.S. tax reform
Research and development credit
Domestic production activities deduction
One-time U.S. tax benefit from internal reorganization of international subsidiaries
State and local tax, net
International tax rate differential
International permanent items
Net impact of uncertain tax positions
Changes in valuation allowances
Other
Effective income tax rate
2020 compared to 2019
international subsidiaries.
Twelve Months Ended December 31,
2020
2019
2018
21.0 %
21.0 %
21.0 %
3.1
2.0
1.8
—
—
(2.1)
—
(13.1)
(3.4)
(2.7)
(5.2)
1.0
0.5
0.8
(0.1)
1.6
2.8
6.0
0.2
—
—
4.2
(2.8)
(8.9)
7.5
(2.4)
1.7
—
2.9
9.4
0.2
—
(3.3)
(0.8)
(1.1)
—
2.3
(12.1)
(1.6)
(0.6)
(3.4)
1.2
3.7 %
30.8 %
14.1 %
For 2020, the State and local tax, net line totaled a benefit of $4.7 million (3.4%) which included favorable tax return
to prior year tax provision adjustments and a one-time state tax benefit from an internal reorganization of
international subsidiaries. This was more favorable than 2019 as 2019 included unfavorable state audit decisions
and higher domestic earnings in 2020.
International permanent items line included the favorable tax effect of notional interest deductions, favorable tax
treatment of foreign exchanges losses, offset by non-deductibility of interest expense related to the receipt of tax-
exempt dividends, which caused a net favorable tax impact of $7.2 million (5.2%). For 2019, International
permanent items line included a higher tax effect of non-deductibility of interest expense related to the receipt of tax-
(Dollars in millions, except per share data)
2020
2019
2018
Change
Change
Change
Change
Results of Operations
Sales
Cost of sales
Gross margin
Selling and administrative expense
Operating income
Interest expense, net
Debt extinguishment costs
Other income (expense), net
Income from continuing operations before income
taxes
Income tax expense
(Loss) income from discontinued operations, net of
income taxes
Net income
interests
shareholders
Net (income) loss attributable to noncontrolling
Net income (loss) attributable to Avient common
Variances — Favorable (Unfavorable)
2020 versus 2019
2019 versus 2018
%
%
127.1
19.3 %
50.7
32.4
2.2 %
5.2 %
(94.6)
(18.9) %
(54.2)
(12.1) %
32.5
20.7 %
(21.8)
(12.2) %
3.3
1.1
25.0
nm
nm
27.1 %
7.6
nm
(19.3)
—
12.2
29.6
28.5
58.1
2,457.8
2,205.5
2,256.2
(252.3)
(11.4) %
(74.6)
(59.5)
(15.1)
(25.4) %
784.3
595.0
189.3
—
24.3
657.2
500.4
156.8
—
12.1
139.0
(5.2)
109.4
(33.7)
624.8
446.2
178.6
(62.8)
(1.1)
(12.9)
101.8
(14.4)
(0.4)
133.4
513.1
588.8
72.1
159.5
(513.5)
(455.4)
nm
441.0
nm
429.3
(1.8)
(0.2)
0.3
(1.6)
nm
(0.5)
$
131.6 $
588.6 $
159.8 $
(457.0)
nm $ 428.8
5.3 %
nm
nm
7.5 %
nm
nm
nm
nm
nm
Net income from continuing operations
$
133.8 $
75.7 $
87.4 $
76.8 % $
(11.7)
(13.4) %
Earnings (loss) per share attributable to Avient common shareholders - basic:
Earnings (loss) per share attributable to Avient common shareholders - diluted:
$
$
$
$
1.47 $
0.98 $
(0.01)
6.64
1.46 $
7.62 $
1.10
0.91
2.01
1.46 $
0.97 $
(0.01)
6.61
1.45 $
7.58 $
1.09
0.90
1.99
Sales increased $379.4 million, or 13.3%, in 2020 compared to 2019, as a result of the Clariant MB Acquisition
which was partially offset by COVID related demand weakness.
As a percent of sales, cost of sales decreased from 77.0% in 2019 to 75.8% in 2020, primarily as a result of
improved mix, lower raw material costs and cost containment.
Selling and administrative expense
These costs include selling, technology, administrative functions, corporate and general expenses. Selling and
administrative expense in 2020 increased $94.6 million compared to 2019, primarily driven by the Clariant MB
Interest expense, net increased $15.1 million in 2020 compared to 2019 as a result of interest expense related to
our senior unsecured notes offering completed in May 2020 and $10.1 million of committed financing fees related to
the Clariant MB Acquisition. These costs were offset by lower average outstanding variable debt balances as well as
interest income earned on cash and cash equivalents from our equity issuance completed in February 2020 along
with the divestment of PP&S in October 2019.
Continuing operations
Discontinued operations
Total
Continuing operations
Discontinued operations
Total
Sales
nm - not meaningful
Cost of sales
Acquisition.
Interest expense, net
$ 3,242.1 $ 2,862.7 $ 2,881.0 $ 379.4
13.3 % $
(18.3)
(0.6) %
Income taxes
Other income (expense), net
Other income (expense), net increased $12.2 million in 2020 as compared to 2019 as a result of actuarial gains and
losses recognized on our pension and other post-employment benefit obligations (see Note 11, Employee Benefit
Plans) to the accompanying condensed consolidated financial statements. All components of net periodic benefit
cost, except for service costs, are presented herein.
The Company is subject to taxation in the U.S. and numerous international jurisdictions. In determining the effective
income tax rate, the Company analyzes various factors, including annual earnings, the laws of taxing jurisdictions in
which the earnings were generated, the impact of state and local income taxes, the ability to use tax credits, net
operating loss carryforwards, and available planning alternatives. Discrete items, including the effect of changes in
tax laws, statutory tax rates, and valuation allowances or other non-recurring tax adjustments are reflected in the
period in which they occur as an addition to, or reduction from, the tax provision.
We recognize the resulting tax on global intangible low-taxed income (GILTI) and the deduction of foreign-derived
intangible income (FDII) as a period expense in the period in which the tax is incurred.
A reconciliation of the applicable U.S. federal statutory tax rate to the consolidated effective income tax rate from
continuing operations along with a description of significant or other reconciling items is included below.
(In millions)
Federal statutory income tax rate
Tax on GILTI and FDII
International tax on certain current and prior year earnings
Net impact of non-deductible acquisition earnouts and transaction cost
Tax on one-time gain from sale of other assets
U.S. tax reform
Research and development credit
Domestic production activities deduction
One-time U.S. tax benefit from internal reorganization of international subsidiaries
State and local tax, net
International tax rate differential
International permanent items
Net impact of uncertain tax positions
Changes in valuation allowances
Other
Effective income tax rate
2020 compared to 2019
Twelve Months Ended December 31,
2020
2019
2018
21.0 %
21.0 %
21.0 %
3.1
2.0
1.8
—
—
(2.1)
—
(13.1)
(3.4)
(2.7)
(5.2)
1.0
0.5
0.8
(0.1)
1.6
2.8
6.0
0.2
(2.8)
—
—
4.2
(8.9)
7.5
(2.4)
1.7
—
2.9
9.4
0.2
—
(3.3)
(0.8)
(1.1)
—
2.3
(12.1)
(1.6)
(0.6)
(3.4)
1.2
3.7 %
30.8 %
14.1 %
For 2020, we recognized a one-time U.S. tax benefit of $18.2 million (13.1%) from an internal reorganization of
international subsidiaries.
For 2020, the State and local tax, net line totaled a benefit of $4.7 million (3.4%) which included favorable tax return
to prior year tax provision adjustments and a one-time state tax benefit from an internal reorganization of
international subsidiaries. This was more favorable than 2019 as 2019 included unfavorable state audit decisions
and higher domestic earnings in 2020.
International permanent items line included the favorable tax effect of notional interest deductions, favorable tax
treatment of foreign exchanges losses, offset by non-deductibility of interest expense related to the receipt of tax-
exempt dividends, which caused a net favorable tax impact of $7.2 million (5.2%). For 2019, International
permanent items line included a higher tax effect of non-deductibility of interest expense related to the receipt of tax-
AVIENT CORPORATION 21
exempt dividends, which was partially offset by the tax impact of other net favorable permanent items resulting in a
net unfavorable impact of $8.3 million (7.5%).
Color, Additives and Inks
Segment Information
Operating income is the primary measure that is reported to our chief operating decision maker for purposes of
making decisions about allocating resources to the segments and assessing their performance. Operating income
at the segment level does not include: corporate general and administrative costs that are not allocated to
segments; intersegment sales and profit eliminations; charges related to specific strategic initiatives, such as the
consolidation of operations; restructuring activities, including employee separation costs resulting from personnel
reduction programs, plant closure and phase-in costs; costs incurred directly in relation to acquisitions or
divestitures; integration costs; executive separation agreements; share-based compensation costs; environmental
remediation costs and other liabilities for facilities no longer owned or closed in prior years; actuarial gains and
losses associated with our pension and post-retirement benefit plans; and certain other items that are not included
in the measure of segment profit or loss that is reported to and reviewed by our chief operating decision maker.
These costs are included in Corporate and eliminations.
Avient has three reportable segments: (1) Color, Additives and Inks; (2) Specialty Engineered Materials; and (3)
Distribution. Our segments are further discussed in Note 15, Segment Information, to the accompanying
consolidated financial statements.
Sales and Operating Income
(Dollars in millions)
2020
2019
2018
Change
% Change
Change
% Change
2020 versus 2019
2019 versus 2018
Distribution
Sales:
Color, Additives and Inks
Specialty Engineered Materials
Distribution
Corporate and eliminations
Sales
Operating income:
Color, Additives and Inks
Specialty Engineered Materials
Distribution
Corporate and eliminations
Operating income
$ 1,502.9
$ 1,003.8
$ 1,046.5
$ 499.1
49.7 % $
(42.7)
708.8
745.7
645.8
1,110.3
1,192.2
1,265.4
(79.9)
(79.0)
(76.7)
(36.9)
(81.9)
(0.9)
(4.9) %
99.9
(6.9) %
(73.2)
(1.1) %
(2.3)
$ 3,242.1
$ 2,862.7
$ 2,881.0
$ 379.4
13.3 % $
(18.3)
$ 180.8
$ 147.4
$ 158.5
$
94.4
69.5
83.7
75.4
72.3
71.5
(155.4)
(149.7)
(123.7)
33.4
10.7
(5.9)
(5.7)
22.7 % $
(11.1)
12.8 %
(7.8) %
11.4
3.9
(3.8) %
(26.0)
$ 189.3
$ 156.8
$ 178.6
$
32.5
20.7 % $
(21.8)
(4.1) %
15.5 %
(5.8) %
(3.0) %
(0.6) %
(7.0) %
15.8 %
5.5 %
(21.0) %
(12.2) %
Operating income as a percentage of sales:
Color, Additives and Inks
Specialty Engineered Materials
Distribution
Total
12.0 %
13.3 %
6.3 %
5.8 %
14.7 %
11.2 %
6.3 %
5.5 %
15.1 %
11.2 %
5.7 %
6.2 %
(2.7) % points
2.1 % points
— % points
0.3 % points
(0.4) % points
— % points
0.6 % points
(0.7) % points
Sales increased $499.1 million, or 49.7%, as a result of the Clariant MB Acquisition. Organic sales decreased by
4.5% in 2020 compared to 2019 as a result of the combination of lower sales due to the COVID-19 pandemic,
partially offset by strong demand in healthcare and packaging end markets.
On a pro forma basis to include Clariant MB in all periods, sales decreased by 3.7% in 2020 compared to 2019, as
gains in the healthcare end market, as well as improved pricing and mix, were more than offset by weakness in
sales due to the COVID-19 pandemic.
Operating income increased $33.4 million, or 22.7%, driven by the Clariant MB Acquisition partially offset by lower
sales due to the COVID-19 pandemic. Organic operating income decreased by 7% due to lower sales, including
weakness in our higher margin Specialty Inks business.
On a pro forma basis to include Clariant MB in all periods, operating income increased by 2.5% as the demand
decline as a result of the COVID-19 pandemic was more than offset by favorable mix, lower raw material input costs
and the benefit of expanded margins driven by early capture of integration synergies.
Specialty Engineered Materials
Sales decreased by $36.9 million, or 4.9%, in 2020 compared to 2019, largely driven by lower demand in North
America and Europe due to the COVID-19 pandemic, which offset improvements in composites demand.
Operating income increased by $10.7 million in 2020 compared to 2019 as lower raw material costs, improved mix
and lower discretionary spending more than offset the negative volume impact of the COVID-19 pandemic.
Sales declined $81.9 million, or 6.9%, in 2020 compared to 2019 driven primarily by raw material deflation which
subsequently resulted in lower selling prices. Operating income declined $5.9 million, or 7.8%, in 2020 compared to
2019 primarily as a result of lower sales.
Corporate and Eliminations
and Fiber-Line, and lower discretionary spending.
Liquidity and Capital Resources
Corporate and eliminations operating income increased $5.7 million in 2020 compared to 2019 due to costs
associated with the Clairant MB Acquisition, offset by lower acquisition earn-out adjustments related to PlastiComp
Our objective is to finance our business through operating cash flow and an appropriate mix of debt and equity. By
laddering the maturity structure, we avoid concentrations of debt maturities, reducing liquidity risk. We may from
time to time seek to retire or purchase our outstanding debt with cash and/or exchanges for equity securities, in
open market purchases, privately negotiated transactions or otherwise. We may also seek to repurchase our
outstanding common shares. Such repurchases, if any, will depend on prevailing market conditions, our liquidity
requirements, contractual restrictions and other factors. The amounts involved have been and may continue to be
The following table summarizes our liquidity as of December 31, 2020:
$
$
649.5
279.9
929.4
material.
(In millions)
Cash and cash equivalents
Revolving credit availability
Liquidity
United States.
As of December 31, 2020, approximately 72% of the Company’s cash and cash equivalents resided outside the
Based on current projections, we believe that we will be able to continue to manage and control working capital,
discretionary spending and capital expenditures and that cash provided by operating activities, along with available
borrowing capacity under our revolving credit facilities, will allow us to maintain adequate levels of available capital
to fund our operations, meet debt service obligations, continue paying dividends, and opportunistically repurchase
outstanding common shares.
Expected sources of cash needed to satisfy cash requirements in 2021 include our cash on hand, cash from
operations and available liquidity under our revolving credit facility, if needed. Expected uses of cash in 2021 include
integration costs related to the Clariant MB Acquisition, interest payments, cash taxes, dividend payments, share
22 AVIENT CORPORATION
exempt dividends, which was partially offset by the tax impact of other net favorable permanent items resulting in a
net unfavorable impact of $8.3 million (7.5%).
Segment Information
Operating income is the primary measure that is reported to our chief operating decision maker for purposes of
making decisions about allocating resources to the segments and assessing their performance. Operating income
at the segment level does not include: corporate general and administrative costs that are not allocated to
segments; intersegment sales and profit eliminations; charges related to specific strategic initiatives, such as the
consolidation of operations; restructuring activities, including employee separation costs resulting from personnel
reduction programs, plant closure and phase-in costs; costs incurred directly in relation to acquisitions or
divestitures; integration costs; executive separation agreements; share-based compensation costs; environmental
remediation costs and other liabilities for facilities no longer owned or closed in prior years; actuarial gains and
losses associated with our pension and post-retirement benefit plans; and certain other items that are not included
in the measure of segment profit or loss that is reported to and reviewed by our chief operating decision maker.
These costs are included in Corporate and eliminations.
Avient has three reportable segments: (1) Color, Additives and Inks; (2) Specialty Engineered Materials; and (3)
Distribution. Our segments are further discussed in Note 15, Segment Information, to the accompanying
(Dollars in millions)
2020
2019
2018
Change
% Change
Change
% Change
consolidated financial statements.
Sales and Operating Income
Sales:
Color, Additives and Inks
Specialty Engineered Materials
Distribution
Sales
Corporate and eliminations
Operating income:
Color, Additives and Inks
Specialty Engineered Materials
Distribution
Corporate and eliminations
Operating income
$ 1,502.9
$ 1,003.8
$ 1,046.5
$ 499.1
49.7 % $
(42.7)
708.8
745.7
645.8
1,110.3
1,192.2
1,265.4
(79.9)
(79.0)
(76.7)
(36.9)
(81.9)
(0.9)
(4.9) %
99.9
(6.9) %
(73.2)
(1.1) %
(2.3)
$ 3,242.1
$ 2,862.7
$ 2,881.0
$ 379.4
13.3 % $
(18.3)
$ 180.8
$ 147.4
$ 158.5
$
94.4
69.5
83.7
75.4
72.3
71.5
(155.4)
(149.7)
(123.7)
33.4
10.7
(5.9)
(5.7)
22.7 % $
(11.1)
12.8 %
(7.8) %
11.4
3.9
(3.8) %
(26.0)
$ 189.3
$ 156.8
$ 178.6
$
32.5
20.7 % $
(21.8)
(4.1) %
15.5 %
(5.8) %
(3.0) %
(0.6) %
(7.0) %
15.8 %
5.5 %
(21.0) %
(12.2) %
Operating income as a percentage of sales:
Color, Additives and Inks
Specialty Engineered Materials
Distribution
Total
12.0 %
13.3 %
6.3 %
5.8 %
14.7 %
11.2 %
6.3 %
5.5 %
15.1 %
11.2 %
5.7 %
6.2 %
(2.7) % points
2.1 % points
— % points
0.3 % points
(0.4) % points
— % points
0.6 % points
(0.7) % points
Color, Additives and Inks
Sales increased $499.1 million, or 49.7%, as a result of the Clariant MB Acquisition. Organic sales decreased by
4.5% in 2020 compared to 2019 as a result of the combination of lower sales due to the COVID-19 pandemic,
partially offset by strong demand in healthcare and packaging end markets.
On a pro forma basis to include Clariant MB in all periods, sales decreased by 3.7% in 2020 compared to 2019, as
gains in the healthcare end market, as well as improved pricing and mix, were more than offset by weakness in
sales due to the COVID-19 pandemic.
Operating income increased $33.4 million, or 22.7%, driven by the Clariant MB Acquisition partially offset by lower
sales due to the COVID-19 pandemic. Organic operating income decreased by 7% due to lower sales, including
weakness in our higher margin Specialty Inks business.
On a pro forma basis to include Clariant MB in all periods, operating income increased by 2.5% as the demand
decline as a result of the COVID-19 pandemic was more than offset by favorable mix, lower raw material input costs
and the benefit of expanded margins driven by early capture of integration synergies.
Specialty Engineered Materials
Sales decreased by $36.9 million, or 4.9%, in 2020 compared to 2019, largely driven by lower demand in North
America and Europe due to the COVID-19 pandemic, which offset improvements in composites demand.
Operating income increased by $10.7 million in 2020 compared to 2019 as lower raw material costs, improved mix
and lower discretionary spending more than offset the negative volume impact of the COVID-19 pandemic.
2020 versus 2019
2019 versus 2018
Distribution
Sales declined $81.9 million, or 6.9%, in 2020 compared to 2019 driven primarily by raw material deflation which
subsequently resulted in lower selling prices. Operating income declined $5.9 million, or 7.8%, in 2020 compared to
2019 primarily as a result of lower sales.
Corporate and Eliminations
Corporate and eliminations operating income increased $5.7 million in 2020 compared to 2019 due to costs
associated with the Clairant MB Acquisition, offset by lower acquisition earn-out adjustments related to PlastiComp
and Fiber-Line, and lower discretionary spending.
Liquidity and Capital Resources
Our objective is to finance our business through operating cash flow and an appropriate mix of debt and equity. By
laddering the maturity structure, we avoid concentrations of debt maturities, reducing liquidity risk. We may from
time to time seek to retire or purchase our outstanding debt with cash and/or exchanges for equity securities, in
open market purchases, privately negotiated transactions or otherwise. We may also seek to repurchase our
outstanding common shares. Such repurchases, if any, will depend on prevailing market conditions, our liquidity
requirements, contractual restrictions and other factors. The amounts involved have been and may continue to be
material.
The following table summarizes our liquidity as of December 31, 2020:
(In millions)
Cash and cash equivalents
Revolving credit availability
Liquidity
$
$
649.5
279.9
929.4
As of December 31, 2020, approximately 72% of the Company’s cash and cash equivalents resided outside the
United States.
Based on current projections, we believe that we will be able to continue to manage and control working capital,
discretionary spending and capital expenditures and that cash provided by operating activities, along with available
borrowing capacity under our revolving credit facilities, will allow us to maintain adequate levels of available capital
to fund our operations, meet debt service obligations, continue paying dividends, and opportunistically repurchase
outstanding common shares.
Expected sources of cash needed to satisfy cash requirements in 2021 include our cash on hand, cash from
operations and available liquidity under our revolving credit facility, if needed. Expected uses of cash in 2021 include
integration costs related to the Clariant MB Acquisition, interest payments, cash taxes, dividend payments, share
AVIENT CORPORATION 23
repurchases, environmental remediation costs, capital expenditures and debt repayment. Capital expenditures are
currently estimated to be approximately $95.0 million in 2021, primarily to support sales growth, our continued
investment in recent acquisitions and other strategic investments.
daily average excess availability during the previous quarter. As of December 31, 2020, we had no borrowings
outstanding under our revolving credit facility, which had remaining availability of $278.2 million. As of December 31,
2019, we had no borrowings under our revolving credit facility, which had remaining availability of $279.4 million.
Cash Flows
The following table summarizes our cash flows from operating, investing and financing activities:
(In millions)
2020
2019
2018
Cash provided by (used by):
Operating Activities
Investing Activities
Financing Activities
Effect of exchange rate on cash
Net increase (decrease) in cash and cash equivalents
$
$
221.6 $
(1,431.6)
982.0
12.8
(215.2) $
300.8 $
611.9
(218.3)
(0.6)
693.8 $
253.7
(170.3)
(148.1)
(8.0)
(72.7)
Operating activities
In 2020, net cash provided by operating activities was $221.6 million as compared to $300.8 million in 2019,
primarily due to payments in 2020 for earnout liabilities of $38.1 million and a $142.0 million payment of taxes
associated with the gain on sale of PP&S. These payments partially offset the benefit from lower working capital.
Investing Activities
Net cash used by investing activities during 2020 of $1,431.6 million primarily reflects $1,380.2 million related to the
Clariant MB Acquisition and capital expenditures of $63.7 million.
Financing Activities
Net cash provided by financing activities in 2020 primarily reflects $496.1 million of net proceeds received from the
issuance of common shares in an underwritten public offering that we completed in February 2020 and $640.5
million of net proceeds from the senior unsecured notes offering completed in May 2020, offset by $71.3 in
dividends paid, repurchases of our outstanding common shares of $22.4 and the payment of acquisition date
earnout liabilities of $50.8 million.
Total Debt
The following table summarizes debt as presented at December 31, 2020 and 2019.
(In millions)
Senior secured revolving credit facility due 2022
5.25% senior notes due 2023
5.75% senior notes due 2025
Senior secured term loan due 2026
Other Debt
Total Debt
Less short-term and current portion of long-term debt
Total long-term debt, net of current portion
December 31,
2020
December 31,
2019
$
$
$
— $
597.5
641.2
610.0
23.9
1,872.6 $
18.6
1,854.0 $
—
596.3
—
614.7
18.3
1,229.3
18.4
1,210.9
The Company maintains a senior secured revolving credit facility, which matures on February 24, 2022 and
provides a maximum borrowing facility size of $450.0 million, subject to a borrowing base with advances against
certain U.S. and Canadian accounts receivable, inventory and other assets as specified in the agreement. On June
28, 2019, the Company amended and restated its senior secured revolving credit facility to, among other things, add
a European line of credit, up to the euro equivalent of $50.0 million, subject to a borrowing base with advances
against certain European accounts receivable. Advances under the U.S. portion of our revolving credit facility bear
interest, at the Company’s option, at a Base Rate or a LIBOR Rate plus an applicable margin. The Base Rate is a
fluctuating rate equal to the greater of (i) the Federal Funds Rate plus one-half percent, (ii) the prevailing LIBOR
Rate plus one percent, and (iii) the prevailing Prime Rate. The applicable margins vary based on the Company’s
24 AVIENT CORPORATION
On April 11, 2018, the Company entered into a fifth amendment to its senior secured term loan. Under the terms of
the amended senior secured term loan, the margin was reduced by 25 basis points to 175 basis points. At the
Company's discretion, interest is based upon (i) a margin rate of 75 basis points plus a Prime Rate, subject to a
floor of 175 basis points. On November 9, 2018, the Company entered into a sixth amendment to its senior secured
term loan, which extended the maturity to 2026. Repayments in the amount of one percent of the aggregate
principal amount as of August 3, 2016 are payable annually, while the remaining balance matures on January 30,
2026. The total principal repayments for the year ended December 31, 2020 were $6.5 million.
The agreements governing our revolving credit facility and our senior secured term loan, and the indentures and
credit agreements governing other debt, contain a number of customary financial and restrictive covenants. As of
December 31, 2020, we were in compliance with all customary financial and restrictive covenants pertaining to our
debt.
As of both December 31, 2020 and 2019, the Company maintained a credit line of $12.0 million with Saudi Hollandi
Bank. The credit line has an interest rate equal to the Saudi Arabia Interbank Offered Rate plus a fixed rate of
0.85% and is subject to annual renewal. Borrowings under the credit line were primarily used to fund capital
expenditures related to the manufacturing facility in Jeddah, Saudi Arabia. As of December 31, 2020, letters of credit
under the credit line were immaterial and borrowings were $10.3 million with a weighted average annual interest
rate of 1.85%. As of December 31, 2019, letters of credit under the credit line were immaterial and borrowings were
$10.3 million with a weighted average annual interest rate of 3.14%. As of December 31, 2020 and 2019, there was
remaining availability on the credit line of $1.7 million and $1.7 million, respectively.
For additional information regarding our debt, please see Note 6, Financing Arrangements to the accompanying
condensed consolidated financial statements.
Letters of Credit
mainly related to insurance claims.
Contractual Cash Obligations
Our revolving credit facility provides up to $50.0 million for the issuance of letters of credit, $12.1 million of which
was used at December 31, 2020. These letters of credit are issued by the bank in favor of third parties and are
The following table summarizes our obligations under debt agreements, operating leases, interest obligations,
pension and other post-retirement plan obligations and purchase obligations as of December 31, 2020.
(In millions)
Total debt (1)
Operating leases
Interest on long-term debt obligations (2)
Pension and post-retirement obligations (3)
Purchase obligations (4)
Total
Payment Due by Period
Total
2021
2022 & 2023
2024 & 2025
Thereafter
$
1,891.9 $
18.6 $
617.2 $
667.3 $
588.8
91.1
375.4
83.2
52.4
28.0
90.4
8.9
33.9
36.4
172.7
16.9
17.4
13.4
109.2
16.7
1.1
13.3
3.1
40.7
—
$
2,494.0 $
179.8 $
860.6 $
807.7 $
645.9
(1) Total debt includes both the current and long-term portions of debt and capital lease obligations.
(2) Represents estimated contractual interest payments for all outstanding debt.
(3) Pension and post-retirement obligations relate to our U.S. and international pension and other post-retirement plans. The expected
payments associated with these plans represent an actuarial estimate of future assumed payments based upon retirement and payment
patterns for a 10 year period. Due to uncertainties regarding the assumptions involved in estimating future required contributions to our
pension and non-pension postretirement benefit plans, including: (i) interest rate levels, (ii) the amount and timing of asset returns and
(iii) what, if any, changes may occur in pension funding legislation, the estimates in the table may differ materially from actual future
payments.
(4) Purchase obligations are primarily comprised of service agreements related to telecommunication, information technology, utilities and
other manufacturing plant services and certain capital commitments.
repurchases, environmental remediation costs, capital expenditures and debt repayment. Capital expenditures are
currently estimated to be approximately $95.0 million in 2021, primarily to support sales growth, our continued
investment in recent acquisitions and other strategic investments.
daily average excess availability during the previous quarter. As of December 31, 2020, we had no borrowings
outstanding under our revolving credit facility, which had remaining availability of $278.2 million. As of December 31,
2019, we had no borrowings under our revolving credit facility, which had remaining availability of $279.4 million.
Cash Flows
(In millions)
Cash provided by (used by):
Operating Activities
Investing Activities
Financing Activities
Operating activities
Investing Activities
Financing Activities
The following table summarizes our cash flows from operating, investing and financing activities:
Effect of exchange rate on cash
Net increase (decrease) in cash and cash equivalents
2020
2019
2018
$
$
221.6 $
(1,431.6)
982.0
12.8
(215.2) $
300.8 $
611.9
(218.3)
(0.6)
693.8 $
253.7
(170.3)
(148.1)
(8.0)
(72.7)
In 2020, net cash provided by operating activities was $221.6 million as compared to $300.8 million in 2019,
primarily due to payments in 2020 for earnout liabilities of $38.1 million and a $142.0 million payment of taxes
associated with the gain on sale of PP&S. These payments partially offset the benefit from lower working capital.
Net cash used by investing activities during 2020 of $1,431.6 million primarily reflects $1,380.2 million related to the
Clariant MB Acquisition and capital expenditures of $63.7 million.
Net cash provided by financing activities in 2020 primarily reflects $496.1 million of net proceeds received from the
issuance of common shares in an underwritten public offering that we completed in February 2020 and $640.5
million of net proceeds from the senior unsecured notes offering completed in May 2020, offset by $71.3 in
dividends paid, repurchases of our outstanding common shares of $22.4 and the payment of acquisition date
earnout liabilities of $50.8 million.
Total Debt
The following table summarizes debt as presented at December 31, 2020 and 2019.
(In millions)
Senior secured revolving credit facility due 2022
5.25% senior notes due 2023
5.75% senior notes due 2025
Senior secured term loan due 2026
Other Debt
Total Debt
Less short-term and current portion of long-term debt
Total long-term debt, net of current portion
December 31,
December 31,
2020
2019
$
$
$
— $
597.5
641.2
610.0
23.9
1,872.6 $
18.6
1,854.0 $
596.3
—
—
614.7
18.3
1,229.3
18.4
1,210.9
The Company maintains a senior secured revolving credit facility, which matures on February 24, 2022 and
provides a maximum borrowing facility size of $450.0 million, subject to a borrowing base with advances against
certain U.S. and Canadian accounts receivable, inventory and other assets as specified in the agreement. On June
28, 2019, the Company amended and restated its senior secured revolving credit facility to, among other things, add
a European line of credit, up to the euro equivalent of $50.0 million, subject to a borrowing base with advances
against certain European accounts receivable. Advances under the U.S. portion of our revolving credit facility bear
interest, at the Company’s option, at a Base Rate or a LIBOR Rate plus an applicable margin. The Base Rate is a
fluctuating rate equal to the greater of (i) the Federal Funds Rate plus one-half percent, (ii) the prevailing LIBOR
Rate plus one percent, and (iii) the prevailing Prime Rate. The applicable margins vary based on the Company’s
On April 11, 2018, the Company entered into a fifth amendment to its senior secured term loan. Under the terms of
the amended senior secured term loan, the margin was reduced by 25 basis points to 175 basis points. At the
Company's discretion, interest is based upon (i) a margin rate of 75 basis points plus a Prime Rate, subject to a
floor of 175 basis points. On November 9, 2018, the Company entered into a sixth amendment to its senior secured
term loan, which extended the maturity to 2026. Repayments in the amount of one percent of the aggregate
principal amount as of August 3, 2016 are payable annually, while the remaining balance matures on January 30,
2026. The total principal repayments for the year ended December 31, 2020 were $6.5 million.
The agreements governing our revolving credit facility and our senior secured term loan, and the indentures and
credit agreements governing other debt, contain a number of customary financial and restrictive covenants. As of
December 31, 2020, we were in compliance with all customary financial and restrictive covenants pertaining to our
debt.
As of both December 31, 2020 and 2019, the Company maintained a credit line of $12.0 million with Saudi Hollandi
Bank. The credit line has an interest rate equal to the Saudi Arabia Interbank Offered Rate plus a fixed rate of
0.85% and is subject to annual renewal. Borrowings under the credit line were primarily used to fund capital
expenditures related to the manufacturing facility in Jeddah, Saudi Arabia. As of December 31, 2020, letters of credit
under the credit line were immaterial and borrowings were $10.3 million with a weighted average annual interest
rate of 1.85%. As of December 31, 2019, letters of credit under the credit line were immaterial and borrowings were
$10.3 million with a weighted average annual interest rate of 3.14%. As of December 31, 2020 and 2019, there was
remaining availability on the credit line of $1.7 million and $1.7 million, respectively.
For additional information regarding our debt, please see Note 6, Financing Arrangements to the accompanying
condensed consolidated financial statements.
Letters of Credit
Our revolving credit facility provides up to $50.0 million for the issuance of letters of credit, $12.1 million of which
was used at December 31, 2020. These letters of credit are issued by the bank in favor of third parties and are
mainly related to insurance claims.
Contractual Cash Obligations
The following table summarizes our obligations under debt agreements, operating leases, interest obligations,
pension and other post-retirement plan obligations and purchase obligations as of December 31, 2020.
(In millions)
Total debt (1)
Operating leases
Interest on long-term debt obligations (2)
Pension and post-retirement obligations (3)
Purchase obligations (4)
Total
Payment Due by Period
Total
2021
2022 & 2023
2024 & 2025
Thereafter
$
1,891.9 $
18.6 $
617.2 $
667.3 $
588.8
91.1
375.4
83.2
52.4
28.0
90.4
8.9
33.9
36.4
172.7
16.9
17.4
13.4
109.2
16.7
1.1
13.3
3.1
40.7
—
$
2,494.0 $
179.8 $
860.6 $
807.7 $
645.9
(1) Total debt includes both the current and long-term portions of debt and capital lease obligations.
(2) Represents estimated contractual interest payments for all outstanding debt.
(3) Pension and post-retirement obligations relate to our U.S. and international pension and other post-retirement plans. The expected
payments associated with these plans represent an actuarial estimate of future assumed payments based upon retirement and payment
patterns for a 10 year period. Due to uncertainties regarding the assumptions involved in estimating future required contributions to our
pension and non-pension postretirement benefit plans, including: (i) interest rate levels, (ii) the amount and timing of asset returns and
(iii) what, if any, changes may occur in pension funding legislation, the estimates in the table may differ materially from actual future
payments.
(4) Purchase obligations are primarily comprised of service agreements related to telecommunication, information technology, utilities and
other manufacturing plant services and certain capital commitments.
AVIENT CORPORATION 25
Critical Accounting Policies and Estimates
Significant accounting policies are described more fully in Note 1, Description of Business and Summary of
Significant Accounting Policies, to the accompanying consolidated financial statements. The preparation of financial
statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires us to make
estimates and assumptions about future events that affect the amounts reported in our consolidated financial
statements and accompanying notes. We base our estimates on historical experience and assumptions that we
believe are reasonable considering the related facts and circumstances. The application of these critical accounting
policies involves the exercise of judgment and use of assumptions for future uncertainties. Accordingly, actual
results could differ significantly from these estimates. We believe that the following discussion addresses our most
critical accounting policies, which are those that are the most important to the portrayal of our financial condition and
results of operations and require our most difficult, subjective and complex judgments.
Description
Judgments and Uncertainties
Effect if Actual Results
Differ from Assumptions
• This accrual represents our best
estimate of the remaining probable
costs based upon information and
technology currently available.
Depending upon the results of future
testing, the ultimate remediation
alternatives undertaken, changes in
regulations, new information, newly
discovered conditions and other
factors, it is reasonably possible that
we could incur additional costs in
excess of the amount accrued.
However, such additional costs, if
any, cannot currently be estimated.
Our estimate of this liability may be
revised as new regulations or
technologies are developed or
additional information is obtained.
• If further developments or
resolution of these matters are not
consistent with our assumptions and
judgments, we may need to
recognize a significant adjustment in
a future period.
• As we progress through certain
benchmarks such as completion of
the remedial investigation and
feasibility study, issuance of a record
of decision and remedial design,
additional information will become
available that may require an
adjustment to our existing reserves.
Environmental Liabilities
• Based upon our estimates, we had an
undiscounted accrual of $119.7 million at
December 31, 2020 for probable future environmental
expenditures. Any such provision is recognized using
the Company's best estimate of the amount of loss
incurred, or at the lower end of an estimated range,
when a single best estimate is not determinable.
• With respect to the former Goodrich Corporation
Calvert City site, the United States Environmental
Protection Agency (USEPA) issued its Record of
Decision (ROD) in September 2018, selecting a
remedy consistent with our accrual assumptions. In
April 2019, the respondents signed an Administrative
Settlement Agreement and Order on Consent with the
USEPA to conduct the remedial design. In October
2019, the USEPA sent a Special Notice Letter to
Avient, Westlake Vinyls, and Goodrich Corporation,
inviting negotiation of a Consent Decree to perform the
remedial actions at the site. In 2020, the three
companies, USEPA, and the US Department of Justice
signed the agreed Consent Decree, which is currently
under Federal Court review.
• Franklin-Burlington, a subsidiary of Avient, is listed
as a cooperating party along with approximately 70
other companies. The cooperating parties are working
with the EPA on the lower Passaic River Study Area.
Based on currently available information as of
December 31, 2020, we have not identified evidence
that Franklin-Burlington contributed materially to the
contamination into the lower Passaic River and that the
best estimate of any liability that may be assigned to
Franklin-Burlington will not be material to the
consolidated financial statements.
• In some cases, the Company recovers a portion of
the costs relating to these obligations from insurers or
other third parties; however, the Company records
such amounts only when they are collected.
26 AVIENT CORPORATION
Description
Judgments and Uncertainties
Effect if Actual Results
Differ from Assumptions
• We account for our defined benefit pension
• Asset returns and interest rates
significantly affect the value of future
assets and liabilities of our pension and
post-retirement plans and therefore the
• The weighted average discount
rates used to value our pension
liabilities as of December 31, 2020 and
2019 were 3.19% and 4.11%,
funded status of our plans. It is difficult to
respectively, post-retirement liabilities
predict these factors due to the volatility of
were 3.06% and 3.98%, respectively.
Pension and Other Post-retirement Plans
plans and other post-retirement plans in
accordance with Financial Accounting
Standards Board (FASB) Accounting
Standards Update (ASC) Topic 715,
Compensation — Retirement Benefits. We
immediately recognize actuarial gains and
losses in our operating results in the year in
which the gains or losses occur. In 2020, we
recognized a $17.2 million benefit as a result
of the recognition of these actuarial gains,
which favorably impacted net income (loss),
comprehensive income (loss) and the funded
status of our pension plans, primarily the result
of actual asset returns that were higher than
our assumed returns and mortality
assumptions. Partially offsetting these gains
was a decrease in our discount rate.
market conditions.
• To develop our discount rate, we
consider the yields of high-quality
corporate bonds with maturities that
correspond to the timing of our benefit
obligations, referred to as the bond
matching approach.
• To develop our expected long-term
return on plan assets, we consider
historical and forward looking long-term
asset returns and the expected investment
portfolio mix of plan assets. The weighted-
average expected long-term rate of return
on plan assets was 5.05% for 2020, 5.68%
for 2019 and 5.09% for 2018.
• Life expectancy is a significant
assumption that impacts our pension and
other post-retirement benefits obligation.
During 2020, we adopted the MP-2020
mortality improvement scale which was
issued by the Society of Actuaries in
October 2020.
As of December 31, 2020, an increase/
decrease in the discount rate of 50
basis points, holding all other
assumptions constant, would have
increased or decreased pre-tax income
and the related pension and post-
retirement liability by approximately
$19.4 million. An increase/decrease in
the discount rate of 50 basis points as
of December 31, 2020 would result in a
change of approximately $1.3 million in
the 2021 net periodic benefit cost.
• The expected long-term return on
plan assets utilized as of January 1,
2020 and 2019 was 5.05% and 5.68%,
respectively. An increase/decrease in
our expected long-term return on plan
assets of 50 basis points as of
December 31, 2020, would result in a
change of approximately $2.2 million to
2021 net periodic benefit cost.
Income Taxes
• We account for income taxes using the
asset and liability method under ASC Topic
740. Under the asset and liability method,
deferred tax assets and liabilities are
recognized for the estimated future tax
consequences attributable to differences
between the financial statement carrying
amounts of existing assets and liabilities and
• The ultimate recovery of certain of our
• Although management believes that
deferred tax assets is dependent on the
the estimates and judgments
amount and timing of taxable income that
discussed herein are reasonable,
we will ultimately generate in the future
actual results could differ, which could
and other factors such as the interpretation
result in income tax expense or
of tax laws. We have provided valuation
benefits that could be material.
allowances as of December 31, 2020,
aggregating to $20.7 million primarily
their respective tax bases. In addition, deferred
against certain international and state net
tax assets are also recorded with respect to
net operating losses and other tax attribute
carryforwards. Deferred tax assets and
operating loss carryforwards based on our
current assessment of future operating
results and other factors. At December 31,
liabilities are measured using enacted tax rates
2020, the gross liability for unrecognized
in effect for the year in which those temporary
income tax benefits, including interest and
differences are expected to be recovered or
penalties, totaled $10.6 million.
settled. Valuation allowances are established
when realization of the benefit of deferred tax
assets is not deemed to be more likely than
not. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized
in income in the period that includes the
enactment date.
• We recognize net tax benefits under the
recognition and measurement criteria of ASC
Topic 740, Income Taxes, which prescribes
requirements and other guidance for financial
statement recognition and measurement of
positions taken or expected to be taken on tax
returns. We record interest and penalties
related to uncertain tax positions as a
component of income tax expense.
• Undistributed and indefinitely reinvested
earnings for certain consolidated non-U.S.
subsidiaries were approximately $456
million as of December 31, 2020. No tax
provision was made on these earnings as
APB 23 provides guidance that U.S.
companies do not need to recognize tax
effects on international earnings that are
indefinitely reinvested. Additionally, no
deferred income taxes were recorded on
taxable outside basis differences as it was
not practicable to determine the tax
provision impact.
Critical Accounting Policies and Estimates
Significant accounting policies are described more fully in Note 1, Description of Business and Summary of
Significant Accounting Policies, to the accompanying consolidated financial statements. The preparation of financial
statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires us to make
estimates and assumptions about future events that affect the amounts reported in our consolidated financial
statements and accompanying notes. We base our estimates on historical experience and assumptions that we
believe are reasonable considering the related facts and circumstances. The application of these critical accounting
policies involves the exercise of judgment and use of assumptions for future uncertainties. Accordingly, actual
results could differ significantly from these estimates. We believe that the following discussion addresses our most
critical accounting policies, which are those that are the most important to the portrayal of our financial condition and
results of operations and require our most difficult, subjective and complex judgments.
Description
Judgments and Uncertainties
Effect if Actual Results
Differ from Assumptions
Environmental Liabilities
• Based upon our estimates, we had an
undiscounted accrual of $119.7 million at
December 31, 2020 for probable future environmental
costs based upon information and
consistent with our assumptions and
expenditures. Any such provision is recognized using
technology currently available.
judgments, we may need to
the Company's best estimate of the amount of loss
Depending upon the results of future
recognize a significant adjustment in
incurred, or at the lower end of an estimated range,
testing, the ultimate remediation
a future period.
• This accrual represents our best
• If further developments or
estimate of the remaining probable
resolution of these matters are not
alternatives undertaken, changes in
regulations, new information, newly
discovered conditions and other
factors, it is reasonably possible that
we could incur additional costs in
excess of the amount accrued.
However, such additional costs, if
any, cannot currently be estimated.
Our estimate of this liability may be
revised as new regulations or
technologies are developed or
additional information is obtained.
• As we progress through certain
benchmarks such as completion of
the remedial investigation and
feasibility study, issuance of a record
of decision and remedial design,
additional information will become
available that may require an
adjustment to our existing reserves.
when a single best estimate is not determinable.
• With respect to the former Goodrich Corporation
Calvert City site, the United States Environmental
Protection Agency (USEPA) issued its Record of
Decision (ROD) in September 2018, selecting a
remedy consistent with our accrual assumptions. In
April 2019, the respondents signed an Administrative
Settlement Agreement and Order on Consent with the
USEPA to conduct the remedial design. In October
2019, the USEPA sent a Special Notice Letter to
Avient, Westlake Vinyls, and Goodrich Corporation,
inviting negotiation of a Consent Decree to perform the
remedial actions at the site. In 2020, the three
companies, USEPA, and the US Department of Justice
signed the agreed Consent Decree, which is currently
under Federal Court review.
• Franklin-Burlington, a subsidiary of Avient, is listed
as a cooperating party along with approximately 70
other companies. The cooperating parties are working
with the EPA on the lower Passaic River Study Area.
Based on currently available information as of
December 31, 2020, we have not identified evidence
that Franklin-Burlington contributed materially to the
contamination into the lower Passaic River and that the
best estimate of any liability that may be assigned to
Franklin-Burlington will not be material to the
consolidated financial statements.
• In some cases, the Company recovers a portion of
the costs relating to these obligations from insurers or
other third parties; however, the Company records
such amounts only when they are collected.
Description
Judgments and Uncertainties
Effect if Actual Results
Differ from Assumptions
Pension and Other Post-retirement Plans
• We account for our defined benefit pension
plans and other post-retirement plans in
accordance with Financial Accounting
Standards Board (FASB) Accounting
Standards Update (ASC) Topic 715,
Compensation — Retirement Benefits. We
immediately recognize actuarial gains and
losses in our operating results in the year in
which the gains or losses occur. In 2020, we
recognized a $17.2 million benefit as a result
of the recognition of these actuarial gains,
which favorably impacted net income (loss),
comprehensive income (loss) and the funded
status of our pension plans, primarily the result
of actual asset returns that were higher than
our assumed returns and mortality
assumptions. Partially offsetting these gains
was a decrease in our discount rate.
Income Taxes
• We account for income taxes using the
asset and liability method under ASC Topic
740. Under the asset and liability method,
deferred tax assets and liabilities are
recognized for the estimated future tax
consequences attributable to differences
between the financial statement carrying
amounts of existing assets and liabilities and
their respective tax bases. In addition, deferred
tax assets are also recorded with respect to
net operating losses and other tax attribute
carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates
in effect for the year in which those temporary
differences are expected to be recovered or
settled. Valuation allowances are established
when realization of the benefit of deferred tax
assets is not deemed to be more likely than
not. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized
in income in the period that includes the
enactment date.
• We recognize net tax benefits under the
recognition and measurement criteria of ASC
Topic 740, Income Taxes, which prescribes
requirements and other guidance for financial
statement recognition and measurement of
positions taken or expected to be taken on tax
returns. We record interest and penalties
related to uncertain tax positions as a
component of income tax expense.
• Asset returns and interest rates
significantly affect the value of future
assets and liabilities of our pension and
post-retirement plans and therefore the
funded status of our plans. It is difficult to
predict these factors due to the volatility of
market conditions.
• To develop our discount rate, we
consider the yields of high-quality
corporate bonds with maturities that
correspond to the timing of our benefit
obligations, referred to as the bond
matching approach.
• To develop our expected long-term
return on plan assets, we consider
historical and forward looking long-term
asset returns and the expected investment
portfolio mix of plan assets. The weighted-
average expected long-term rate of return
on plan assets was 5.05% for 2020, 5.68%
for 2019 and 5.09% for 2018.
• Life expectancy is a significant
assumption that impacts our pension and
other post-retirement benefits obligation.
During 2020, we adopted the MP-2020
mortality improvement scale which was
issued by the Society of Actuaries in
October 2020.
• The ultimate recovery of certain of our
deferred tax assets is dependent on the
amount and timing of taxable income that
we will ultimately generate in the future
and other factors such as the interpretation
of tax laws. We have provided valuation
allowances as of December 31, 2020,
aggregating to $20.7 million primarily
against certain international and state net
operating loss carryforwards based on our
current assessment of future operating
results and other factors. At December 31,
2020, the gross liability for unrecognized
income tax benefits, including interest and
penalties, totaled $10.6 million.
• Undistributed and indefinitely reinvested
earnings for certain consolidated non-U.S.
subsidiaries were approximately $456
million as of December 31, 2020. No tax
provision was made on these earnings as
APB 23 provides guidance that U.S.
companies do not need to recognize tax
effects on international earnings that are
indefinitely reinvested. Additionally, no
deferred income taxes were recorded on
taxable outside basis differences as it was
not practicable to determine the tax
provision impact.
• The weighted average discount
rates used to value our pension
liabilities as of December 31, 2020 and
2019 were 3.19% and 4.11%,
respectively, post-retirement liabilities
were 3.06% and 3.98%, respectively.
As of December 31, 2020, an increase/
decrease in the discount rate of 50
basis points, holding all other
assumptions constant, would have
increased or decreased pre-tax income
and the related pension and post-
retirement liability by approximately
$19.4 million. An increase/decrease in
the discount rate of 50 basis points as
of December 31, 2020 would result in a
change of approximately $1.3 million in
the 2021 net periodic benefit cost.
• The expected long-term return on
plan assets utilized as of January 1,
2020 and 2019 was 5.05% and 5.68%,
respectively. An increase/decrease in
our expected long-term return on plan
assets of 50 basis points as of
December 31, 2020, would result in a
change of approximately $2.2 million to
2021 net periodic benefit cost.
• Although management believes that
the estimates and judgments
discussed herein are reasonable,
actual results could differ, which could
result in income tax expense or
benefits that could be material.
AVIENT CORPORATION 27
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to certain market risks as part of our ongoing business operations, including risks from changes in
interest rates on debt obligations and foreign currency exchange rates that could impact our financial condition,
results of operations and cash flows. We manage our exposure to these and other market risks through regular
operating and financing activities, including the use of derivative financial instruments. We intend to use these
derivative financial instruments as risk management tools and not for speculative investment purposes.
Interest rate exposure — Interest on our revolving credit facility and senior secured term loan is based upon a Prime
rate or LIBOR, plus a margin. Interest on the credit line with Saudi Hollandi Bank is based upon SAIBOR plus a
fixed rate of 0.85%. There would be no material impact on our interest expense or cash flows from either a 10%
increase or decrease in market rates of interest on our outstanding variable rate debt as of December 31, 2020.
Foreign currency exposure — We enter into intercompany transactions that are denominated in various foreign
currencies and are subject to financial exposure from foreign exchange rate movement from the date a loan is
recorded to the date it is settled or revalued. To mitigate this risk, we may enter into foreign exchange forward
contracts and derivative instruments. Gains and losses on these contracts generally offset gains and losses on the
assets and liabilities being hedged.
We face translation risks related to the changes in foreign currency exchange rates. Amounts invested in our foreign
operations are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. The resulting
translation adjustments are recorded as a component of Accumulated other comprehensive loss in the
Shareholders’ equity section of the accompanying Consolidated Balance Sheets. Net sales and expenses in our
foreign operations’ foreign currencies are translated into varying amounts of U.S. dollars depending upon whether
the U.S. dollar weakens or strengthens against other currencies. Therefore, changes in exchange rates may either
positively or negatively affect our net sales and expenses from foreign operations as expressed in U.S. dollars.
Description
Judgments and Uncertainties
Effect if Actual Results
Differ from Assumptions
Goodwill
• Goodwill represents the excess of the
purchase price over the fair value of the net
assets of acquired companies. We follow the
guidance in ASC 350, Intangibles — Goodwill
and Other, including subsequent updates, and
test goodwill for impairment at least annually,
absent a triggering event that would warrant
an impairment assessment. On an ongoing
basis, absent any impairment indicators, we
perform our goodwill impairment testing as of
the first day of October of each year.
Indefinite-lived Intangible Assets
• Indefinite-lived intangible assets represent
trade names associated with acquired
companies.
• We have identified our reporting units
at the operating segment level, or in most
cases, one level below the operating
segment level. Goodwill is allocated to the
reporting units based on the estimated fair
value at the date of acquisition.
• We estimated fair value using the best
information available to us, including
market information and discounted cash
flow projections using the income
approach.
• The income approach requires us to
make assumptions and estimates
regarding projected economic and market
conditions, growth rates, operating
margins and cash expenditures. Sensitivity
analyses were performed around these
assumptions in order to assess the
reasonableness of the assumptions and
the resulting estimated fair values.
• Goodwill related to our acquisition of
Clariant MB as of December 31, 2020 was
determined on a preliminary basis. The
final valuation of the acquisition and
related goodwill balance will be completed
in 2021, and actual results could differ
from our estimates.
• If actual results are not consistent
with our assumptions and estimates,
we may be exposed to goodwill
impairment charges.
• The fair value of the reporting unit
is based on a number of subjective
factors including: (a) appropriate
consideration of valuation approaches,
(b) the consideration of our business
outlook and (c) weighted average cost
of capital (discount rate), growth rates
and market multiples for our estimated
cash flows.
• Based on our 2020 annual
impairment test performed on October
1st, we determined there were no
reporting units considered to be at risk
of impairment. We believe that the
current assumptions and estimates are
reasonable, supportable and
appropriate. The business could be
impacted by unforeseen changes in
market factors or opportunities, which
could impact our existing assumptions
used in our impairment test. As such,
there can be no assurance that these
estimates and assumptions made for
the purposes of the goodwill
impairment test will prove to be
accurate predictions of future
performance.
• We estimate the fair value of trade
names using a “relief from royalty
payments” approach. This approach
involves two steps: (1) estimating
reasonable royalty rate for the trade name
and (2) applying this royalty rate to a net
sales stream and discounting the resulting
cash flows to determine fair value. Fair
value is then compared with the carrying
value of the trade name.
• If actual results are not consistent
with our assumptions and estimates,
we may be exposed to impairment
charges related to our indefinite lived
trade name
• Based on our 2020 annual
impairment test, no trade names were
considered at risk.
Recent and Future Adoption of Accounting Standards
Information regarding recent and future adoption of accounting standards can be found in Note 1, Description of
Business and Summary of Significant Accounting Policies, to the accompanying consolidated financial statements
and is incorporated by reference herein.
28 AVIENT CORPORATION
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to certain market risks as part of our ongoing business operations, including risks from changes in
interest rates on debt obligations and foreign currency exchange rates that could impact our financial condition,
results of operations and cash flows. We manage our exposure to these and other market risks through regular
operating and financing activities, including the use of derivative financial instruments. We intend to use these
derivative financial instruments as risk management tools and not for speculative investment purposes.
Interest rate exposure — Interest on our revolving credit facility and senior secured term loan is based upon a Prime
rate or LIBOR, plus a margin. Interest on the credit line with Saudi Hollandi Bank is based upon SAIBOR plus a
fixed rate of 0.85%. There would be no material impact on our interest expense or cash flows from either a 10%
increase or decrease in market rates of interest on our outstanding variable rate debt as of December 31, 2020.
Foreign currency exposure — We enter into intercompany transactions that are denominated in various foreign
currencies and are subject to financial exposure from foreign exchange rate movement from the date a loan is
recorded to the date it is settled or revalued. To mitigate this risk, we may enter into foreign exchange forward
contracts and derivative instruments. Gains and losses on these contracts generally offset gains and losses on the
assets and liabilities being hedged.
We face translation risks related to the changes in foreign currency exchange rates. Amounts invested in our foreign
operations are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. The resulting
translation adjustments are recorded as a component of Accumulated other comprehensive loss in the
Shareholders’ equity section of the accompanying Consolidated Balance Sheets. Net sales and expenses in our
foreign operations’ foreign currencies are translated into varying amounts of U.S. dollars depending upon whether
the U.S. dollar weakens or strengthens against other currencies. Therefore, changes in exchange rates may either
positively or negatively affect our net sales and expenses from foreign operations as expressed in U.S. dollars.
Description
Judgments and Uncertainties
Effect if Actual Results
Differ from Assumptions
Goodwill
• Goodwill represents the excess of the
• We have identified our reporting units
• If actual results are not consistent
purchase price over the fair value of the net
at the operating segment level, or in most
with our assumptions and estimates,
assets of acquired companies. We follow the
cases, one level below the operating
we may be exposed to goodwill
guidance in ASC 350, Intangibles — Goodwill
segment level. Goodwill is allocated to the
impairment charges.
and Other, including subsequent updates, and
reporting units based on the estimated fair
test goodwill for impairment at least annually,
value at the date of acquisition.
• The fair value of the reporting unit
is based on a number of subjective
absent a triggering event that would warrant
an impairment assessment. On an ongoing
basis, absent any impairment indicators, we
perform our goodwill impairment testing as of
the first day of October of each year.
• We estimated fair value using the best
factors including: (a) appropriate
information available to us, including
consideration of valuation approaches,
market information and discounted cash
(b) the consideration of our business
flow projections using the income
approach.
outlook and (c) weighted average cost
of capital (discount rate), growth rates
and market multiples for our estimated
• The income approach requires us to
make assumptions and estimates
cash flows.
regarding projected economic and market
• Based on our 2020 annual
conditions, growth rates, operating
impairment test performed on October
margins and cash expenditures. Sensitivity
1st, we determined there were no
analyses were performed around these
reporting units considered to be at risk
assumptions in order to assess the
of impairment. We believe that the
reasonableness of the assumptions and
current assumptions and estimates are
the resulting estimated fair values.
reasonable, supportable and
• Goodwill related to our acquisition of
Clariant MB as of December 31, 2020 was
determined on a preliminary basis. The
final valuation of the acquisition and
related goodwill balance will be completed
in 2021, and actual results could differ
from our estimates.
appropriate. The business could be
impacted by unforeseen changes in
market factors or opportunities, which
could impact our existing assumptions
used in our impairment test. As such,
there can be no assurance that these
estimates and assumptions made for
the purposes of the goodwill
impairment test will prove to be
accurate predictions of future
performance.
• Indefinite-lived intangible assets represent
• We estimate the fair value of trade
Indefinite-lived Intangible Assets
trade names associated with acquired
companies.
reasonable royalty rate for the trade name
trade name
names using a “relief from royalty
payments” approach. This approach
involves two steps: (1) estimating
and (2) applying this royalty rate to a net
sales stream and discounting the resulting
cash flows to determine fair value. Fair
value is then compared with the carrying
value of the trade name.
• If actual results are not consistent
with our assumptions and estimates,
we may be exposed to impairment
charges related to our indefinite lived
• Based on our 2020 annual
impairment test, no trade names were
considered at risk.
Recent and Future Adoption of Accounting Standards
Information regarding recent and future adoption of accounting standards can be found in Note 1, Description of
Business and Summary of Significant Accounting Policies, to the accompanying consolidated financial statements
and is incorporated by reference herein.
AVIENT CORPORATION 29
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
MANAGEMENT’S REPORT
Index to Financial Statements
Management’s Report
Reports of Independent Registered Public Accounting Firm
Consolidated Financial Statements:
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Shareholders’ Equity
Notes to Consolidated Financial Statements
Page
31
32
36
37
38
39
40
41
The management of Avient Corporation is responsible for preparing the consolidated financial statements and
disclosures included in this Annual Report on Form 10-K. The consolidated financial statements and disclosures
included in this Annual Report fairly present in all material respects the consolidated financial position, results of
operations, shareholders’ equity and cash flows of Avient Corporation as of and for the year ended December 31,
2020.
Management is responsible for establishing and maintaining disclosure controls and procedures designed to ensure
that the information required to be disclosed by the Company is captured and reported in a timely manner.
Management has evaluated the design and operation of the Company’s disclosure controls and procedures at
December 31, 2020 and found them to be effective.
Management is also responsible for establishing and maintaining a system of internal control over financial reporting
that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles. Internal
control over financial reporting includes policies and procedures that provide reasonable assurance that: Avient
Corporation’s accounting records accurately and fairly reflect the transactions and dispositions of the assets of the
Company; unauthorized or improper acquisition, use or disposal of Company assets will be prevented or timely
detected; the Company’s transactions are properly recorded and reported to permit the preparation of the
Company’s consolidated financial statements in conformity with generally accepted accounting principles; and the
Company’s receipts and expenditures are made only in accordance with authorizations of management and the
Board of Directors of the Company.
Management has assessed the effectiveness of Avient’s internal control over financial reporting as of December 31,
2020 and has prepared Management’s Annual Report On Internal Control Over Financial Reporting contained on
page 68 of this Annual Report, which concludes that as of December 31, 2020, Avient’s internal control over
financial reporting was effective and that no material weaknesses were identified.
Management's assessment of internal control over financial reporting as of December 31, 2020 excludes internal
control over financial reporting related to Clariant MB (acquired July 1, 2020), which constituted approximately
41.6% of the Company's total assets (inclusive of acquired intangible assets) as of December 31, 2020, and
approximately 16.8% of the Company's net sales for the year ended December 31, 2020.
/s/ ROBERT M. PATTERSON
/s/ JAMIE A. BEGGS
Robert M. Patterson
Jamie A. Beggs
Chairman, President and Chief Executive Officer
Senior Vice President and Chief Financial Officer
February 25, 2021
30 AVIENT CORPORATION
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
MANAGEMENT’S REPORT
Index to Financial Statements
Management’s Report
Reports of Independent Registered Public Accounting Firm
Consolidated Financial Statements:
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Shareholders’ Equity
Notes to Consolidated Financial Statements
Page
31
32
36
37
38
39
40
41
The management of Avient Corporation is responsible for preparing the consolidated financial statements and
disclosures included in this Annual Report on Form 10-K. The consolidated financial statements and disclosures
included in this Annual Report fairly present in all material respects the consolidated financial position, results of
operations, shareholders’ equity and cash flows of Avient Corporation as of and for the year ended December 31,
2020.
Management is responsible for establishing and maintaining disclosure controls and procedures designed to ensure
that the information required to be disclosed by the Company is captured and reported in a timely manner.
Management has evaluated the design and operation of the Company’s disclosure controls and procedures at
December 31, 2020 and found them to be effective.
Management is also responsible for establishing and maintaining a system of internal control over financial reporting
that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles. Internal
control over financial reporting includes policies and procedures that provide reasonable assurance that: Avient
Corporation’s accounting records accurately and fairly reflect the transactions and dispositions of the assets of the
Company; unauthorized or improper acquisition, use or disposal of Company assets will be prevented or timely
detected; the Company’s transactions are properly recorded and reported to permit the preparation of the
Company’s consolidated financial statements in conformity with generally accepted accounting principles; and the
Company’s receipts and expenditures are made only in accordance with authorizations of management and the
Board of Directors of the Company.
Management has assessed the effectiveness of Avient’s internal control over financial reporting as of December 31,
2020 and has prepared Management’s Annual Report On Internal Control Over Financial Reporting contained on
page 68 of this Annual Report, which concludes that as of December 31, 2020, Avient’s internal control over
financial reporting was effective and that no material weaknesses were identified.
Management's assessment of internal control over financial reporting as of December 31, 2020 excludes internal
control over financial reporting related to Clariant MB (acquired July 1, 2020), which constituted approximately
41.6% of the Company's total assets (inclusive of acquired intangible assets) as of December 31, 2020, and
approximately 16.8% of the Company's net sales for the year ended December 31, 2020.
/s/ ROBERT M. PATTERSON
/s/ JAMIE A. BEGGS
Robert M. Patterson
Jamie A. Beggs
Chairman, President and Chief Executive Officer
Senior Vice President and Chief Financial Officer
February 25, 2021
AVIENT CORPORATION 31
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders of Avient Corporation
Opinion on Internal Control over Financial Reporting
We have audited Avient Corporation’s internal control over financial reporting as of December 31, 2020, based on
criteria established in Internal Control -Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Avient Corporation (the
Company) maintained, in all material respects, effective internal control over financial reporting as of December 31,
2020, based on the COSO criteria.
As indicated in the accompanying Management’s Annual Report on Internal Control, management’s assessment of
and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of
Clariant MB, which is included in the 2020 consolidated financial statements of the Company and constituted 41.6%
of total assets as of December 31, 2020, and 16.8% of sales for the year then ended. Our audit of internal control
over financial reporting of the Company also did not include an evaluation of the internal control over financial
reporting of Clariant MB.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of Avient Corporation as of December 31, 2020 and 2019, the
related consolidated statements of income, comprehensive income, cash flows and shareholders' equity for each of
the three years in the period ended December 31, 2020, and the related notes of Avient Corporation and our report
dated February 25, 2021, expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting included in the accompanying
“Management’s Annual Report on Internal Control over Financial Reporting.” Our responsibility is to express an
opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
/s/ Ernst & Young LLP
Cleveland, Ohio
February 25, 2021
32 AVIENT CORPORATION
The Board of Directors and Shareholders of Avient Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Avient Corporation (the Company) as of
December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, cash flows
and shareholders' equity for each of the three years in the period ended December 31, 2020, and the related notes
(collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and
2019, and the results of its operations and its cash flows for each of the three years in the period ended December
31, 2020, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on
criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (2013 framework) and our report dated February 25, 2021 expressed an unqualified
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
opinion thereon.
Basis for Opinion
PCAOB.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which
they relate.
Environmental Accrued Liabilities
Description of the
As described in Note 12 to the consolidated financial statements, the environmental
Matter
accrued liability as of December 31, 2020 is approximately $119.7 million and is comprised
primarily of the cost estimate for the Calvert City location of $106.4 million. The Company
records an accrual for probable future environmental remediation projects on an
undiscounted basis which represents management’s best estimate of probable future costs
based upon currently available information and technology and management’s view of the
most likely remedy.
Auditing the determination of the accrual involved a high degree of subjectivity as
estimates underlying the determination of the accrual were based on assumptions unique
to the affected site and subject to various laws and regulations governing the protection of
the applicable environment. Actual costs incurred in future periods could differ from
amounts estimated and future changes to environmental laws and regulations could
increase the extent of remediation work required, therefore the calculation is complicated
due to uncertainty in determining the probable future costs and the extent of the
remediation efforts.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders of Avient Corporation
Opinion on Internal Control over Financial Reporting
We have audited Avient Corporation’s internal control over financial reporting as of December 31, 2020, based on
criteria established in Internal Control -Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Avient Corporation (the
Company) maintained, in all material respects, effective internal control over financial reporting as of December 31,
2020, based on the COSO criteria.
As indicated in the accompanying Management’s Annual Report on Internal Control, management’s assessment of
and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of
Clariant MB, which is included in the 2020 consolidated financial statements of the Company and constituted 41.6%
of total assets as of December 31, 2020, and 16.8% of sales for the year then ended. Our audit of internal control
over financial reporting of the Company also did not include an evaluation of the internal control over financial
reporting of Clariant MB.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of Avient Corporation as of December 31, 2020 and 2019, the
related consolidated statements of income, comprehensive income, cash flows and shareholders' equity for each of
the three years in the period ended December 31, 2020, and the related notes of Avient Corporation and our report
dated February 25, 2021, expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting included in the accompanying
“Management’s Annual Report on Internal Control over Financial Reporting.” Our responsibility is to express an
opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
/s/ Ernst & Young LLP
Cleveland, Ohio
February 25, 2021
The Board of Directors and Shareholders of Avient Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Avient Corporation (the Company) as of
December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, cash flows
and shareholders' equity for each of the three years in the period ended December 31, 2020, and the related notes
(collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and
2019, and the results of its operations and its cash flows for each of the three years in the period ended December
31, 2020, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on
criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (2013 framework) and our report dated February 25, 2021 expressed an unqualified
opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which
they relate.
Description of the
Matter
Environmental Accrued Liabilities
As described in Note 12 to the consolidated financial statements, the environmental
accrued liability as of December 31, 2020 is approximately $119.7 million and is comprised
primarily of the cost estimate for the Calvert City location of $106.4 million. The Company
records an accrual for probable future environmental remediation projects on an
undiscounted basis which represents management’s best estimate of probable future costs
based upon currently available information and technology and management’s view of the
most likely remedy.
Auditing the determination of the accrual involved a high degree of subjectivity as
estimates underlying the determination of the accrual were based on assumptions unique
to the affected site and subject to various laws and regulations governing the protection of
the applicable environment. Actual costs incurred in future periods could differ from
amounts estimated and future changes to environmental laws and regulations could
increase the extent of remediation work required, therefore the calculation is complicated
due to uncertainty in determining the probable future costs and the extent of the
remediation efforts.
AVIENT CORPORATION 33
How We Addressed
the Matter in Our
Audit
Description of the
Matter
We obtained an understanding, evaluated the design and tested the operating
effectiveness of controls over the Company’s process to establish the environmental
accrued liability, including management’s review and evaluation of the information
included in the Calvert City Record of Decision and the Administrative Settlement
Agreement and Order on Consent issued by the United States Environmental Protection
Agency (USEPA). For example, we tested controls over management’s review of the
estimation and the significant assumptions used to develop future cost estimates. We
also tested management’s controls to validate that the data used in the accrual estimate
was complete and accurate.
With the assistance of our specialist, we tested the balance of the environmental accrued
liability and the disclosure of the expected cost to remediate. Our audit procedures
included, among others, making inquiries of internal general counsel, obtaining internal
general counsel’s representation and external communications used in determining the
environmental accrued liability. This included an evaluation of externally available
information and a comparison of management’s cost estimates to the estimates published
in the Record of Decision by the USEPA. We tested the significant assumptions used by
management by comparing those assumptions to accepted industry practice and
information included in the Record of Decision issued by the USEPA. We examined
historical costs for recurring items and compared those amounts to future projections for
similar costs.
Quantitative Impairment Assessment of Goodwill
At December 31, 2020, the Company’s goodwill was approximately $1,294.9 million. As
discussed in Note 1 to the consolidated financial statements, goodwill is tested for
impairment at least annually at the reporting unit level or at an interim date if potential
impairment indicators are present. The Company’s goodwill is initially assigned to its
reporting units as of the acquisition date. Goodwill is tested for impairment, quantitatively
or qualitatively, at the reporting unit level. As it relates to the quantitative approach, the
Company uses an income approach to estimate the fair value of the reporting units using
a combination of internal forecasts, external market information and discounted cash flow
projections.
Auditing the impairment assessment of the quantitative goodwill assessment for a certain
reporting unit is complex as the income approach requires the Company to make
assumptions and estimates regarding projected economic and market conditions, growth
rates, operating margins and cash expenditures. The fair value of the reporting unit is
based on a number of subjective factors including; (a) appropriate consideration of
valuation approaches, (b) the consideration of the Company’s business outlook, and (c)
weighted average cost of capital (discount rate), annual and terminal growth rates.
How We Addressed
the Matter in Our
Audit
We obtained an understanding, evaluated the design and tested the operating
effectiveness of controls over the quantitative impairment assessment of goodwill,
including controls over management’s review of the significant assumptions described
above.
To test the estimated fair value of the Company’s reporting units, we performed audit
procedures that included, among others, assessing methodologies and testing the
significant assumptions discussed above and the underlying data used by the Company
in its analyses. We compared the significant assumptions used by management to
current industry and economic trends. We assessed the historical accuracy of
management’s estimates and performed sensitivity analyses of significant assumptions to
evaluate the changes in the fair value of the reporting units that would result from
changes in the assumptions. We also utilized our specialist to assist in the review of the
methodology, weighted average cost of capital, terminal growth rates used by the
Company and the reconciliation of the aggregate estimated fair value of the reporting
units to the market capitalization of the Company.
34 AVIENT CORPORATION
Accounting for the Clariant Masterbatch Business Combination
Description of the
As discussed in Note 2 to the consolidated financial statements, on July 1, 2020 the
Matter
Company completed its acquisition of the equity interests in the global masterbatch
business of Clariant AG and the masterbatch assets in India of Clariant Chemicals (India)
Limited. The business and assets are collectively referred to as Clariant MB and the
acquisitions are collectively referred to as the Clariant MB Acquisition. Total consideration
paid by the Company to complete the Clariant MB Acquisition was approximately $1.4
billion, net of cash and debt. The acquisition is being accounted for under the acquisition
method of accounting.
Auditing the Company’s accounting for the preliminary allocation of the purchase price
to the identifiable assets and liabilities for the Clariant MB Acquisition was complex due to
the significant estimation in determining the preliminary fair value of identifiable intangible
assets, which principally consisted of customer relationships and developed technology.
The Company used the relief from royalty and multi-period excess earnings method to
determine
the
fair value of developed
technology and customer relationships,
respectively. The purchase price allocation, including the fair value estimates of the
identifiable intangible assets, were recorded on a preliminary basis. The high degree of
subjectivity was primarily due to the sensitivity of the respective fair values to underlying
assumptions about the future performance of the acquired business. The significant
assumptions used to estimate the value of the intangible assets included discount rates
and certain assumptions that form the basis of the forecasted results including revenue
growth rates, profitability, and royalty rates.
How We Addressed
the Matter in Our
We obtained an understanding, evaluated the design and tested the operating
effectiveness of controls over the determination of the preliminary fair value of the
identifiable intangible assets. This included testing controls over management’s review of
the fair value methodologies and significant assumptions described above.
Audit
To test the preliminary estimated fair values of the acquired intangible assets, our audit
procedures included, among others, assessing methodologies and testing the significant
assumptions discussed above and the underlying data used by the Company. We
compared the significant assumptions used by management to current industry and
economic trends. We performed sensitivity analyses of significant assumptions to
evaluate the changes in the fair value that would result from changes in the assumptions.
We utilized our specialist in assessing the methodologies applied and evaluating
significant assumptions. Furthermore, we assessed
the appropriateness of
the
disclosures in the consolidated financial statements regarding the acquisition.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as Avient Corporation's auditor since 1993.
/s/ Ernst & Young LLP
Cleveland, Ohio
February 25, 2021
How We Addressed
We obtained an understanding, evaluated the design and tested the operating
the Matter in Our
effectiveness of controls over the Company’s process to establish the environmental
Audit
accrued liability, including management’s review and evaluation of the information
included in the Calvert City Record of Decision and the Administrative Settlement
Agreement and Order on Consent issued by the United States Environmental Protection
Agency (USEPA). For example, we tested controls over management’s review of the
estimation and the significant assumptions used to develop future cost estimates. We
also tested management’s controls to validate that the data used in the accrual estimate
was complete and accurate.
With the assistance of our specialist, we tested the balance of the environmental accrued
liability and the disclosure of the expected cost to remediate. Our audit procedures
included, among others, making inquiries of internal general counsel, obtaining internal
general counsel’s representation and external communications used in determining the
environmental accrued liability. This included an evaluation of externally available
information and a comparison of management’s cost estimates to the estimates published
in the Record of Decision by the USEPA. We tested the significant assumptions used by
management by comparing those assumptions to accepted industry practice and
information included in the Record of Decision issued by the USEPA. We examined
historical costs for recurring items and compared those amounts to future projections for
similar costs.
Quantitative Impairment Assessment of Goodwill
discussed in Note 1 to the consolidated financial statements, goodwill is tested for
impairment at least annually at the reporting unit level or at an interim date if potential
impairment indicators are present. The Company’s goodwill is initially assigned to its
reporting units as of the acquisition date. Goodwill is tested for impairment, quantitatively
or qualitatively, at the reporting unit level. As it relates to the quantitative approach, the
Company uses an income approach to estimate the fair value of the reporting units using
a combination of internal forecasts, external market information and discounted cash flow
projections.
Auditing the impairment assessment of the quantitative goodwill assessment for a certain
reporting unit is complex as the income approach requires the Company to make
assumptions and estimates regarding projected economic and market conditions, growth
rates, operating margins and cash expenditures. The fair value of the reporting unit is
based on a number of subjective factors including; (a) appropriate consideration of
valuation approaches, (b) the consideration of the Company’s business outlook, and (c)
weighted average cost of capital (discount rate), annual and terminal growth rates.
Description of the
At December 31, 2020, the Company’s goodwill was approximately $1,294.9 million. As
Matter
How We Addressed
the Matter in Our
Audit
We obtained an understanding, evaluated the design and tested the operating
effectiveness of controls over the quantitative impairment assessment of goodwill,
including controls over management’s review of the significant assumptions described
above.
To test the estimated fair value of the Company’s reporting units, we performed audit
procedures that included, among others, assessing methodologies and testing the
significant assumptions discussed above and the underlying data used by the Company
in its analyses. We compared the significant assumptions used by management to
current industry and economic trends. We assessed the historical accuracy of
management’s estimates and performed sensitivity analyses of significant assumptions to
evaluate the changes in the fair value of the reporting units that would result from
changes in the assumptions. We also utilized our specialist to assist in the review of the
methodology, weighted average cost of capital, terminal growth rates used by the
Company and the reconciliation of the aggregate estimated fair value of the reporting
units to the market capitalization of the Company.
Accounting for the Clariant Masterbatch Business Combination
Description of the
Matter
As discussed in Note 2 to the consolidated financial statements, on July 1, 2020 the
Company completed its acquisition of the equity interests in the global masterbatch
business of Clariant AG and the masterbatch assets in India of Clariant Chemicals (India)
Limited. The business and assets are collectively referred to as Clariant MB and the
acquisitions are collectively referred to as the Clariant MB Acquisition. Total consideration
paid by the Company to complete the Clariant MB Acquisition was approximately $1.4
billion, net of cash and debt. The acquisition is being accounted for under the acquisition
method of accounting.
the
Auditing the Company’s accounting for the preliminary allocation of the purchase price
to the identifiable assets and liabilities for the Clariant MB Acquisition was complex due to
the significant estimation in determining the preliminary fair value of identifiable intangible
assets, which principally consisted of customer relationships and developed technology.
The Company used the relief from royalty and multi-period excess earnings method to
determine
technology and customer relationships,
respectively. The purchase price allocation, including the fair value estimates of the
identifiable intangible assets, were recorded on a preliminary basis. The high degree of
subjectivity was primarily due to the sensitivity of the respective fair values to underlying
assumptions about the future performance of the acquired business. The significant
assumptions used to estimate the value of the intangible assets included discount rates
and certain assumptions that form the basis of the forecasted results including revenue
growth rates, profitability, and royalty rates.
fair value of developed
How We Addressed
the Matter in Our
Audit
We obtained an understanding, evaluated the design and tested the operating
effectiveness of controls over the determination of the preliminary fair value of the
identifiable intangible assets. This included testing controls over management’s review of
the fair value methodologies and significant assumptions described above.
To test the preliminary estimated fair values of the acquired intangible assets, our audit
procedures included, among others, assessing methodologies and testing the significant
assumptions discussed above and the underlying data used by the Company. We
compared the significant assumptions used by management to current industry and
economic trends. We performed sensitivity analyses of significant assumptions to
evaluate the changes in the fair value that would result from changes in the assumptions.
We utilized our specialist in assessing the methodologies applied and evaluating
significant assumptions. Furthermore, we assessed
the
disclosures in the consolidated financial statements regarding the acquisition.
the appropriateness of
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young LLP
We have served as Avient Corporation's auditor since 1993.
Cleveland, Ohio
February 25, 2021
AVIENT CORPORATION 35
(In millions)
Net income
Other comprehensive income (loss), net of tax:
Translation adjustments and related hedging instruments
Cash flow hedges
Other
Total other comprehensive income (loss)
Total comprehensive income
Comprehensive (income) loss attributable to noncontrolling interests
Comprehensive income attributable to Avient common shareholders
The accompanying notes to the consolidated financial statements are an integral part of these statements.
Year Ended December 31,
2020
2019
2018
$ 133.4 $ 588.8 $ 159.5
110.6
2.2
(27.6)
(1.6)
(2.5)
—
—
(1.3)
(0.4)
109.0
(0.3)
(29.3)
242.4
588.5
130.2
(1.8)
(0.2)
0.3
$ 240.6 $ 588.3 $ 130.5
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
(In millions, except per share data)
Sales
Cost of sales
Gross margin
Selling and administrative expense
Operating income
Interest expense, net
Debt extinguishment costs
Other income (expense), net
Income from continuing operations before income taxes
Income tax expense
Net income from continuing operations
Income (loss) from discontinued operations, net of income taxes
Net income
Net (income) loss attributable to noncontrolling interests
Net income attributable to Avient common shareholders
Earnings per share attributable to Avient common shareholders - Basic:
Continuing operations
Discontinued operations
Total
Earnings per share attributable to Avient common shareholders - Diluted:
Continuing operations
Discontinued operations
Total
Weighted-average shares used to compute earnings per common share:
Basic
Plus dilutive impact of share-based compensation
Diluted
Year Ended December 31,
2020
2019
2018
$ 3,242.1 $ 2,862.7 $ 2,881.0
2,457.8
2,205.5
2,256.2
784.3
595.0
189.3
657.2
500.4
156.8
(74.6)
(59.5)
—
24.3
139.0
—
12.1
109.4
(5.2)
(33.7)
133.8
(0.4)
133.4
75.7
513.1
588.8
(1.8)
(0.2)
624.8
446.2
178.6
(62.8)
(1.1)
(12.9)
101.8
(14.4)
87.4
72.1
159.5
0.3
$
131.6 $
588.6 $
159.8
$
$
$
$
1.47 $
0.98 $
(0.01)
6.64
1.46 $
7.62 $
1.46 $
0.97 $
(0.01)
6.61
1.45 $
7.58 $
90.1
0.5
90.6
77.2
0.5
77.7
1.10
0.91
2.01
1.09
0.90
1.99
79.7
0.7
80.4
Anti-dilutive shares not included in diluted common shares outstanding
0.8
0.6
—
Cash dividends declared per share of common stock
$
0.820 $
0.788 $
0.720
The accompanying notes to the consolidated financial statements are an integral part of these statements.
36 AVIENT CORPORATION
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
(In millions)
Net income
Other comprehensive income (loss), net of tax:
Translation adjustments and related hedging instruments
Cash flow hedges
Other
Total other comprehensive income (loss)
Total comprehensive income
Comprehensive (income) loss attributable to noncontrolling interests
Comprehensive income attributable to Avient common shareholders
The accompanying notes to the consolidated financial statements are an integral part of these statements.
Year Ended December 31,
2020
2019
2018
$ 133.4 $ 588.8 $ 159.5
110.6
2.2
(27.6)
(1.6)
(2.5)
—
—
(1.3)
(0.4)
109.0
(0.3)
(29.3)
242.4
588.5
130.2
(1.8)
(0.2)
0.3
$ 240.6 $ 588.3 $ 130.5
(In millions, except per share data)
Sales
Cost of sales
Gross margin
Selling and administrative expense
Operating income
Interest expense, net
Debt extinguishment costs
Other income (expense), net
Income from continuing operations before income taxes
Income tax expense
Net income from continuing operations
Income (loss) from discontinued operations, net of income taxes
Net income
Net (income) loss attributable to noncontrolling interests
Net income attributable to Avient common shareholders
Earnings per share attributable to Avient common shareholders - Basic:
Continuing operations
Discontinued operations
Total
Continuing operations
Discontinued operations
Total
Basic
Diluted
Earnings per share attributable to Avient common shareholders - Diluted:
Weighted-average shares used to compute earnings per common share:
Plus dilutive impact of share-based compensation
Year Ended December 31,
2020
2019
2018
$ 3,242.1 $ 2,862.7 $ 2,881.0
2,457.8
2,205.5
2,256.2
(74.6)
(59.5)
784.3
595.0
189.3
—
24.3
139.0
133.8
(0.4)
133.4
657.2
500.4
156.8
—
12.1
109.4
75.7
513.1
588.8
(5.2)
(33.7)
(1.8)
(0.2)
$
131.6 $
588.6 $
159.8
$
$
$
$
1.47 $
0.98 $
(0.01)
6.64
1.46 $
7.62 $
1.46 $
0.97 $
(0.01)
6.61
1.45 $
7.58 $
90.1
0.5
90.6
77.2
0.5
77.7
624.8
446.2
178.6
(62.8)
(1.1)
(12.9)
101.8
(14.4)
87.4
72.1
159.5
0.3
1.10
0.91
2.01
1.09
0.90
1.99
79.7
0.7
80.4
Anti-dilutive shares not included in diluted common shares outstanding
0.8
0.6
—
Cash dividends declared per share of common stock
$
0.820 $
0.788 $
0.720
The accompanying notes to the consolidated financial statements are an integral part of these statements.
AVIENT CORPORATION 37
Consolidated Balance Sheets
(In millions, except par value per share)
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable, net
Inventories, net
Other current assets
Total current assets
Property, net
Goodwill
Intangible assets, net
Operating lease assets, net
Other non-current assets
Total assets
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term and current portion of long-term debt
Accounts payable
Current operating lease obligations
Accrued expenses and other current liabilities
Total current liabilities
Non-current liabilities:
Long-term debt
Pension and other post-retirement benefits
Deferred income taxes
Non-current operating lease obligations
Other non-current liabilities
Total non-current liabilities
SHAREHOLDERS' EQUITY
Common Shares, $0.01 par, 400.0 shares authorized, 122.2 shares issued
Additional paid-in capital
Retained earnings
Year Ended December 31,
2020
2019
$
649.5 $
516.6
327.5
108.5
1,602.1
694.9
1,308.1
1,008.5
80.9
176.0
864.7
330.0
260.9
57.7
1,513.3
407.4
685.7
469.3
63.8
133.8
Consolidated Statements of Cash Flows
(In millions)
Operating activities
Net income
Gain on sale of business, net of tax
Depreciation and amortization
activities
Deferred income tax benefit
Debt extinguishment costs
Share-based compensation expense
Adjustments to reconcile net income to net cash provided by operating activities:
Accelerated depreciation and fixed asset charges associated with restructuring
Changes in assets and liabilities, net of the effect of acquisitions:
(Increase) decrease in accounts receivable
Decrease (increase) in inventories
Increase (decrease) in accounts payable
$
4,870.5 $
3,273.3
Increase (decrease) in pension and other post-retirement benefits
Increase in post-acquisition earnout liabilities
(Decrease) increase in accrued expenses and other assets and liabilities - net
$
18.6 $
471.7
25.1
285.6
801.0
18.4
287.7
21.0
375.4
702.5
1,854.0
1,210.9
115.0
140.0
56.0
192.8
2,357.8
1.2
1,513.3
1,057.4
56.6
63.5
42.8
144.3
1,518.1
1.2
1,175.2
1,001.2
Common shares held in treasury, at cost, 30.9 shares in 2020 and 45.3 shares in 2019
(901.2)
(1,043.1)
Accumulated other comprehensive income (loss)
Avient shareholders’ equity
Noncontrolling interest
Total equity
Total liabilities and equity
26.4
1,697.1
14.6
1,711.7
(82.6)
1,051.9
0.8
1,052.7
$
4,870.5 $
3,273.3
The accompanying notes to the consolidated financial statements are an integral part of these statements.
38 AVIENT CORPORATION
Year Ended December 31,
2020
2019
2018
$
133.4 $
588.8 $
159.5
—
111.8
(457.7)
87.5
3.2
(1.7)
—
11.3
(4.6)
40.2
78.4
30.7
1.0
(2.0)
(142.0)
(38.1)
221.6
—
(3.2)
—
11.6
29.7
40.2
36.4
9.9
—
—
(22.7)
(19.7)
—
88.5
3.0
(4.8)
1.1
10.9
(11.3)
(10.6)
7.9
4.8
0.7
4.0
—
—
300.8
253.7
(63.7)
(81.7)
(1,380.2)
(119.6)
7.1
5.2
(1,431.6)
761.8
51.4
611.9
(76.0)
(98.6)
—
4.3
(170.3)
650.0
—
—
(22.4)
(71.3)
—
(7.8)
(2.3)
(9.5)
496.1
(50.8)
982.0
—
—
963.4
1,152.9
(1,083.9)
(1,090.3)
(26.9)
(123.0)
(60.3)
(1.8)
(6.5)
(2.1)
(0.2)
—
—
(56.1)
(16.4)
(6.5)
(4.1)
(4.6)
—
—
(218.3)
(148.1)
12.8
(0.6)
(8.0)
(215.2)
864.7
693.8
170.9
$
649.5 $
864.7 $
(72.7)
243.6
170.9
Taxes paid on gain on sale of business
Payment of post-acquisition date earnout liability
Net cash provided by operating activities
Investing activities
Capital expenditures
Business acquisitions, net of cash acquired
Net proceeds from divestiture
Net proceeds from other assets
Net cash (used) provided by investing activities
Financing activities
Debt offering proceeds
Borrowings under credit facilities
Repayments under credit facilities
Purchase of common shares for treasury
Cash dividends paid
Repayment of other debt
Repayment of long-term debt
Payments on withholding tax on share awards
Debt financing costs
Payment of acquisition date earnout liability
Net cash provided (used) by financing activities
Effect of exchange rate changes on cash
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Equity offering proceeds, net of underwriting discount and issuance costs
The accompanying notes to the consolidated financial statements are an integral part of these statements.
Consolidated Balance Sheets
(In millions, except par value per share)
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable, net
Inventories, net
Other current assets
Total current assets
Property, net
Goodwill
Intangible assets, net
Operating lease assets, net
Other non-current assets
Total assets
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term and current portion of long-term debt
Accounts payable
Current operating lease obligations
Accrued expenses and other current liabilities
Total current liabilities
Non-current liabilities:
Long-term debt
Pension and other post-retirement benefits
Deferred income taxes
Non-current operating lease obligations
Other non-current liabilities
Total non-current liabilities
SHAREHOLDERS' EQUITY
Additional paid-in capital
Retained earnings
Avient shareholders’ equity
Noncontrolling interest
Total equity
Total liabilities and equity
Common Shares, $0.01 par, 400.0 shares authorized, 122.2 shares issued
Common shares held in treasury, at cost, 30.9 shares in 2020 and 45.3 shares in 2019
(901.2)
(1,043.1)
Accumulated other comprehensive income (loss)
The accompanying notes to the consolidated financial statements are an integral part of these statements.
$
4,870.5 $
3,273.3
Year Ended December 31,
2020
2019
$
649.5 $
$
4,870.5 $
3,273.3
$
18.6 $
1,854.0
1,210.9
1,513.3
864.7
330.0
260.9
57.7
407.4
685.7
469.3
63.8
133.8
18.4
287.7
21.0
375.4
702.5
56.6
63.5
42.8
144.3
1,518.1
1.2
1,175.2
1,001.2
(82.6)
1,051.9
0.8
1,052.7
516.6
327.5
108.5
1,602.1
694.9
1,308.1
1,008.5
80.9
176.0
471.7
25.1
285.6
801.0
115.0
140.0
56.0
192.8
2,357.8
1.2
1,513.3
1,057.4
26.4
1,697.1
14.6
1,711.7
Consolidated Statements of Cash Flows
(In millions)
Operating activities
Year Ended December 31,
2020
2019
2018
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
$
133.4 $
588.8 $
159.5
Gain on sale of business, net of tax
Depreciation and amortization
Accelerated depreciation and fixed asset charges associated with restructuring
activities
Deferred income tax benefit
Debt extinguishment costs
Share-based compensation expense
Changes in assets and liabilities, net of the effect of acquisitions:
(Increase) decrease in accounts receivable
Decrease (increase) in inventories
Increase (decrease) in accounts payable
Increase (decrease) in pension and other post-retirement benefits
Increase in post-acquisition earnout liabilities
(Decrease) increase in accrued expenses and other assets and liabilities - net
Taxes paid on gain on sale of business
Payment of post-acquisition date earnout liability
Net cash provided by operating activities
—
111.8
(457.7)
87.5
3.2
(1.7)
—
11.3
(4.6)
40.2
78.4
30.7
1.0
(2.0)
(142.0)
(38.1)
221.6
—
(3.2)
—
11.6
29.7
40.2
(22.7)
(19.7)
36.4
9.9
—
—
300.8
—
88.5
3.0
(4.8)
1.1
10.9
(11.3)
(10.6)
7.9
4.8
0.7
4.0
—
—
253.7
Investing activities
Capital expenditures
Business acquisitions, net of cash acquired
Net proceeds from divestiture
Net proceeds from other assets
Net cash (used) provided by investing activities
Financing activities
Debt offering proceeds
Borrowings under credit facilities
Repayments under credit facilities
Purchase of common shares for treasury
Cash dividends paid
Repayment of other debt
Repayment of long-term debt
Payments on withholding tax on share awards
Debt financing costs
Equity offering proceeds, net of underwriting discount and issuance costs
Payment of acquisition date earnout liability
Net cash provided (used) by financing activities
Effect of exchange rate changes on cash
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
(63.7)
(81.7)
(1,380.2)
(119.6)
7.1
5.2
(1,431.6)
761.8
51.4
611.9
(76.0)
(98.6)
—
4.3
(170.3)
650.0
—
—
(22.4)
(71.3)
—
(7.8)
(2.3)
(9.5)
496.1
(50.8)
982.0
—
—
963.4
1,152.9
(1,083.9)
(1,090.3)
(26.9)
(123.0)
(60.3)
(1.8)
(6.5)
(2.1)
(0.2)
—
(56.1)
(16.4)
(6.5)
(4.1)
(4.6)
—
—
(218.3)
—
(148.1)
12.8
(0.6)
(8.0)
(215.2)
864.7
649.5 $
693.8
170.9
864.7 $
(72.7)
243.6
170.9
$
The accompanying notes to the consolidated financial statements are an integral part of these statements.
AVIENT CORPORATION 39
Consolidated Statements of Shareholders' Equity
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Common Shares
Common
Shares
Held
in
Treasury
Common
Shares
Common
Shares
Additional
Paid-in
Capital
Retained
Earnings
Shareholders’ Equity
Common
Shares
Held
in
Treasury
Accumulated
Other
Comprehensive
Income (Loss)
Total Avient
shareholders'
equity
Non-
controlling
Interests
Total
equity
122.2
(41.3) $
1.2
$ 1,161.5
$
387.1
$
(898.3) $
(53.0) $
598.5
$
0.9
$ 599.4
—
—
—
—
—
—
—
—
—
(3.4)
0.2
—
—
—
—
—
—
—
—
—
—
—
5.4
—
159.8
—
(57.5)
—
—
—
—
(123.0)
—
(16.5)
2.6
—
—
159.8
(0.3)
159.5
(29.3)
—
—
—
—
(29.3)
(57.5)
—
—
(29.3)
(57.5)
(123.0)
—
(123.0)
8.0
(16.5)
—
—
8.0
(16.5)
122.2
(44.5) $
1.2
$ 1,166.9
$
472.9
$ (1,018.7) $
(82.3) $
540.0
$
0.6
$ 540.6
—
—
—
—
—
—
—
—
(1.0)
0.2
—
—
—
—
—
—
—
—
—
8.3
588.6
—
(60.3)
—
—
—
—
—
(26.9)
2.5
—
(0.3)
—
—
—
588.6
0.2
588.8
(0.3)
(60.3)
(26.9)
—
—
—
(0.3)
(60.3)
(26.9)
10.8
—
10.8
122.2
(45.3) $
1.2
$ 1,175.2
$
1,001.2
$ (1,043.1) $
(82.6) $
1,051.9
$
0.8
$ 1,052.7
—
—
—
—
—
—
—
—
—
—
—
—
(1.0)
15.3
0.1
—
$
—
—
—
—
—
—
—
—
—
—
—
—
—
334.8
3.3
131.6
—
—
(75.1)
—
—
—
—
—
—
—
(22.4)
161.3
3.0
$
—
$
(0.3) $
—
$
—
131.6
1.8
133.4
109.0
109.0
—
109.0
—
—
—
—
—
—
—
(0.8)
(0.8)
(75.1)
(22.4)
—
—
(75.1)
(22.4)
496.1
—
496.1
6.3
—
6.3
$
(0.3) $
12.8
$ 12.5
122.2
(30.9) $
1.2
$ 1,513.3
$
1,057.4
$
(901.2) $
26.4
$
1,697.1
$
14.6
$ 1,711.7
(In millions)
Balance at January 1,
2018
Net income (loss)
Other
comprehensive loss
Cash dividends
declared (1)
Repurchase of
common shares
Share-based
compensation and
exercise of awards
Other (2)
Balance at December
31, 2018
Net income
Other
comprehensive loss
Cash dividends
declared (1)
Repurchase of
common shares
Share-based
compensation and
exercise of awards
Balance at December
31, 2019
Net income
Other
comprehensive
income
Noncontrolling
interest activity
Cash dividends
declared (1)
Repurchase of
common shares
Common shares
equity offering
Share-based
compensation and
exercise of awards
Acquisitions/other
Balance at December
31, 2020
(1) Dividends declared per share were $0.820, $0.788, and $0.720 for the years ended December 31, 2020, 2019, and 2018, respectively.
(2) In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other than Inventory (ASU 2016-16), which requires
companies to recognize the income tax effects of intercompany sales or transfers of assets, other than inventory, in the income statement as income tax expense or
benefit in the period the sale or transfer occurs. We recognized an adjustment of $17.0 million to beginning retained earnings upon adoption of this standard on
January 1, 2018 from transactions completed as of December 31, 2017.
The accompanying notes to the consolidated financial statements are an integral part of these statements.
40 AVIENT CORPORATION
Note 1 — DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
We are a premier provider of specialized and sustainable material solutions that transform customer challenges into
opportunities, bringing new products to life for a better world. Our products include specialty engineered materials,
advanced composites, color and additive systems and polymer distribution. We are also a highly specialized
developer and manufacturer of performance enhancing additives, liquid colorants, and fluoropolymer and silicone
colorants. Headquartered in Avon Lake, Ohio, we have employees at sales, manufacturing and distribution facilities
across North America, South America, Europe, the Middle East, Asia, and Africa. We provide value to our customers
through our ability to link our knowledge of polymers and formulation technology with our manufacturing and supply
chain to provide value added solutions to designers, assemblers and processors of plastics. When used in these
notes to the consolidated financial statements, the terms “we,” “us,” “our,” “Avient” and the “Company” mean Avient
Corporation and its consolidated subsidiaries.
Our operations are reported in three reportable segments: Color, Additives and Inks; Specialty Engineered
Materials; and Distribution. See Note 15, Segment Information, for more information.
Accounting Standards Adopted
On January 1, 2020, the Company adopted Financial Accounting Standards Board (FASB) Account Standards
Update (ASU) 2016-03, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on
Financial Instruments (ASU 2016-13). ASU 2016-13 changed the impairment model for most financial instruments.
Previous guidance required the recognition of credit losses based on an incurred loss impairment methodology that
reflects losses once the losses are probable. Under ASU 2016-13, the Company is required to use a current
expected credit loss (CECL) model that immediately recognizes an estimate of credit losses that are expected to
occur over the life of the financial instruments that are in the scope of the update, including trade receivables. The
CECL model uses a broader range of reasonable and supportable information in the development of credit loss
estimates. The adoption of ASU 2016-13 resulted in a cumulative-effect adjustment to beginning retained earnings
that was not material.
On January 1, 2019, the Company adopted FASB Accounting Standards Codification (ASC) 842, Leases (ASC
842). ASC 842 was issued to increase transparency and comparability among entities by recognizing right-of-use
assets and lease liabilities on the balance sheet and disclosing key information about lease arrangements.
We elected to transition to ASC 842 using the option to apply the standard on its effective date, January 1, 2019.
There was not a material cumulative-effect adjustment to our beginning retained earnings as a result of adopting
ASC 842. We elected to not reassess prior conclusions related to the identification, classification and accounting for
initial direct costs for leases that commenced prior to January 1, 2019. Additionally, we elected to not use hindsight
to determine lease terms and to not separate non-lease components within our lease portfolio.
Accounting Standards Not Yet Adopted
ASU 2019-12, Income Taxes (ASC 740) - Simplifying the Accounting for Income Taxes, simplifies the accounting for
income taxes by removing certain exceptions to the general principles in ASC 740 is effective for fiscal years
beginning after December 15, 2020. Depending on the amendment, adoption may be applied on the retrospective,
modified retrospective or prospective basis. The Company is currently evaluating the impact of adopting this
standard on our consolidated financial statements and disclosures.
ASU 2020-04 “Reference Rate Reform" provides optional guidance for a limited period of time to ease potential
accounting impacts associated with transitioning away from reference rates that are expected to be discontinued,
such as LIBOR. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other
transactions that reference LIBOR or another reference rate expected to be discontinued. The amendments in ASU
2020-04 are effective through December 31, 2022. The Company is currently evaluating the impact of adopting this
standard on our consolidated financial statements and disclosures.
Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of Avient and its subsidiaries. All majority-owned
affiliates over which we have control are consolidated. Transactions with related parties, including joint ventures, are
in the ordinary course of business.
Historical information has been retrospectively adjusted to reflect the classification of discontinued operations.
Discontinued operations are further discussed in Note 3, Discontinued Operations.
Common Shares
Common
Shares
Held
in
Treasury
Common
Shares
Common
Shares
Additional
Paid-in
Capital
Retained
Earnings
Total Avient
shareholders'
equity
Non-
controlling
Interests
Total
equity
Shareholders’ Equity
Common
Shares
Held
in
Treasury
Accumulated
Other
Comprehensive
Income (Loss)
122.2
(41.3) $
1.2
$ 1,161.5
$
387.1
$
(898.3) $
(53.0) $
598.5
$
0.9
$ 599.4
—
159.8
(0.3)
159.5
—
(123.0)
(123.0)
—
(123.0)
—
—
—
(3.4)
0.2
—
—
—
—
(1.0)
0.2
—
—
—
—
(1.0)
15.3
0.1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5.4
—
—
—
—
—
8.3
—
—
—
—
—
334.8
3.3
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
159.8
—
(57.5)
—
(16.5)
588.6
(60.3)
—
—
—
—
—
—
—
—
(75.1)
—
—
—
2.6
—
—
—
—
2.5
—
—
—
—
(26.9)
(22.4)
161.3
3.0
(29.3)
(0.3)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(29.3)
(57.5)
8.0
(16.5)
(0.3)
(60.3)
(26.9)
—
—
—
—
—
—
—
(29.3)
(57.5)
8.0
(16.5)
(0.3)
(60.3)
(26.9)
10.8
—
10.8
109.0
109.0
—
109.0
—
(0.8)
(0.8)
(75.1)
(22.4)
—
—
(75.1)
(22.4)
496.1
—
496.1
6.3
—
6.3
122.2
(45.3) $
1.2
$ 1,175.2
$
1,001.2
$ (1,043.1) $
(82.6) $
1,051.9
$
0.8
$ 1,052.7
131.6
131.6
1.8
133.4
(In millions)
Balance at January 1,
2018
Net income (loss)
Other
comprehensive loss
Cash dividends
declared (1)
Repurchase of
common shares
Share-based
compensation and
exercise of awards
Other (2)
Balance at December
31, 2018
Net income
Other
comprehensive loss
Cash dividends
declared (1)
Repurchase of
common shares
Share-based
compensation and
exercise of awards
Balance at December
31, 2019
Net income
Other
income
comprehensive
Noncontrolling
interest activity
Cash dividends
declared (1)
Repurchase of
common shares
Common shares
equity offering
Share-based
compensation and
exercise of awards
Acquisitions/other
Balance at December
31, 2020
122.2
(30.9) $
1.2
$ 1,513.3
$
1,057.4
$
(901.2) $
26.4
$
1,697.1
$
14.6
$ 1,711.7
(1) Dividends declared per share were $0.820, $0.788, and $0.720 for the years ended December 31, 2020, 2019, and 2018, respectively.
(2) In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other than Inventory (ASU 2016-16), which requires
companies to recognize the income tax effects of intercompany sales or transfers of assets, other than inventory, in the income statement as income tax expense or
benefit in the period the sale or transfer occurs. We recognized an adjustment of $17.0 million to beginning retained earnings upon adoption of this standard on
January 1, 2018 from transactions completed as of December 31, 2017.
The accompanying notes to the consolidated financial statements are an integral part of these statements.
Consolidated Statements of Shareholders' Equity
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
We are a premier provider of specialized and sustainable material solutions that transform customer challenges into
opportunities, bringing new products to life for a better world. Our products include specialty engineered materials,
advanced composites, color and additive systems and polymer distribution. We are also a highly specialized
developer and manufacturer of performance enhancing additives, liquid colorants, and fluoropolymer and silicone
colorants. Headquartered in Avon Lake, Ohio, we have employees at sales, manufacturing and distribution facilities
across North America, South America, Europe, the Middle East, Asia, and Africa. We provide value to our customers
through our ability to link our knowledge of polymers and formulation technology with our manufacturing and supply
chain to provide value added solutions to designers, assemblers and processors of plastics. When used in these
notes to the consolidated financial statements, the terms “we,” “us,” “our,” “Avient” and the “Company” mean Avient
Corporation and its consolidated subsidiaries.
Our operations are reported in three reportable segments: Color, Additives and Inks; Specialty Engineered
Materials; and Distribution. See Note 15, Segment Information, for more information.
122.2
(44.5) $
1.2
$ 1,166.9
$
472.9
$ (1,018.7) $
(82.3) $
540.0
$
0.6
$ 540.6
588.6
0.2
588.8
Accounting Standards Adopted
On January 1, 2020, the Company adopted Financial Accounting Standards Board (FASB) Account Standards
Update (ASU) 2016-03, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on
Financial Instruments (ASU 2016-13). ASU 2016-13 changed the impairment model for most financial instruments.
Previous guidance required the recognition of credit losses based on an incurred loss impairment methodology that
reflects losses once the losses are probable. Under ASU 2016-13, the Company is required to use a current
expected credit loss (CECL) model that immediately recognizes an estimate of credit losses that are expected to
occur over the life of the financial instruments that are in the scope of the update, including trade receivables. The
CECL model uses a broader range of reasonable and supportable information in the development of credit loss
estimates. The adoption of ASU 2016-13 resulted in a cumulative-effect adjustment to beginning retained earnings
that was not material.
On January 1, 2019, the Company adopted FASB Accounting Standards Codification (ASC) 842, Leases (ASC
842). ASC 842 was issued to increase transparency and comparability among entities by recognizing right-of-use
assets and lease liabilities on the balance sheet and disclosing key information about lease arrangements.
We elected to transition to ASC 842 using the option to apply the standard on its effective date, January 1, 2019.
There was not a material cumulative-effect adjustment to our beginning retained earnings as a result of adopting
ASC 842. We elected to not reassess prior conclusions related to the identification, classification and accounting for
initial direct costs for leases that commenced prior to January 1, 2019. Additionally, we elected to not use hindsight
to determine lease terms and to not separate non-lease components within our lease portfolio.
—
$
$
—
$
(0.3) $
—
$
$
(0.3) $
12.8
$ 12.5
Accounting Standards Not Yet Adopted
ASU 2019-12, Income Taxes (ASC 740) - Simplifying the Accounting for Income Taxes, simplifies the accounting for
income taxes by removing certain exceptions to the general principles in ASC 740 is effective for fiscal years
beginning after December 15, 2020. Depending on the amendment, adoption may be applied on the retrospective,
modified retrospective or prospective basis. The Company is currently evaluating the impact of adopting this
standard on our consolidated financial statements and disclosures.
ASU 2020-04 “Reference Rate Reform" provides optional guidance for a limited period of time to ease potential
accounting impacts associated with transitioning away from reference rates that are expected to be discontinued,
such as LIBOR. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other
transactions that reference LIBOR or another reference rate expected to be discontinued. The amendments in ASU
2020-04 are effective through December 31, 2022. The Company is currently evaluating the impact of adopting this
standard on our consolidated financial statements and disclosures.
Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of Avient and its subsidiaries. All majority-owned
affiliates over which we have control are consolidated. Transactions with related parties, including joint ventures, are
in the ordinary course of business.
Historical information has been retrospectively adjusted to reflect the classification of discontinued operations.
Discontinued operations are further discussed in Note 3, Discontinued Operations.
AVIENT CORPORATION 41
Use of Estimates
Goodwill and Indefinite Lived Intangible Assets
Preparation of financial statements in conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions in certain circumstances that affect amounts reported in
the accompanying consolidated financial statements and notes. Actual results could differ from these estimates.
Cash and Cash Equivalents
We consider all highly liquid investments purchased with a maturity of less than three months to be cash
equivalents. Cash equivalents are stated at cost, which approximates fair value.
acquisition.
Allowance for Doubtful Accounts
We evaluate the collectability of receivables based on a combination of factors, each of which are adjusted if
specific circumstances change. We reserve for amounts determined to be uncollectible based on a specific
customer’s inability to meet its financial obligation to us. We also record a general reserve based on the age of
receivables past due, current conditions and forecasted information, the credit risk of specific customers, economic
conditions and historical experience. In estimating the allowance, we take into consideration the existence of credit
insurance.
Inventories
Raw materials and finished goods are carried at lower of cost or market using either the weighted average cost or
the the first-in, first-out (FIFO) method. The inventory reserve totaled $22.5 million and $18.2 million at December
31, 2020 and 2019, respectively.
Long-lived Assets
Property, plant and equipment is carried at cost, net of depreciation and amortization that is computed using the
straight-line method over the estimated useful lives of the assets, which generally ranges from three to 15 years for
machinery and equipment and up to 40 years for buildings. We depreciate certain assets associated with closing
manufacturing locations over a shortened life (through the cease-use date). Software is amortized over periods not
exceeding 10 years. Property, plant and equipment is generally depreciated on accelerated methods for income tax
purposes. We expense repair and maintenance costs as incurred. We capitalize replacements and improvements
that increase the estimated useful life of an asset.
We retain fully depreciated assets in property and accumulated depreciation accounts until we remove them from
service. In the case of sale, retirement or disposal, the asset cost and related accumulated depreciation balance is
removed from the respective account, and the resulting net amount, less any proceeds, is included as a component
of income from continuing operations in the accompanying Consolidated Statements of Income.
We account for operating and finance leases under the provisions of ASC 842.
Finite-lived intangible assets, which consist primarily of customer relationships, patents and technology are
amortized over their estimated useful lives. The useful lives range up to 20 years.
We assess the recoverability of long-lived assets when events or changes in circumstances indicate that we may
not be able to recover the assets’ carrying amount. We measure the recoverability of assets to be held and used by
a comparison of the carrying amount of the asset to the expected future undiscounted cash flows associated with
the asset. We measure the amount of impairment of long-lived assets as the amount by which the carrying value of
the asset exceeds the fair value of the asset, which is generally determined based on projected discounted future
cash flows or appraised values. No such impairments were recognized during 2020, 2019 or 2018.
42 AVIENT CORPORATION
In accordance with the provisions of FASB ASC Topic 350, Intangibles — Goodwill and Other, we assess the fair
value of goodwill, quantitatively or qualitatively, on an annual basis or at an interim date if potential impairment
indicators are present. Goodwill is the excess of the purchase price paid over the fair value of the net assets of the
acquired business. Goodwill is tested for impairment, quantitatively or qualitatively, at the reporting unit level. Our
reporting units have been identified at the operating segment level, or in most cases, one level below the operating
segment level. Goodwill is allocated to the reporting units based on the estimated fair value at the date of
Our annual measurement date for testing impairment of goodwill and indefinite-lived intangibles is October 1. We
completed our testing of impairment as of October 1, noting no impairment in 2020, 2019 or 2018. There are no
reporting units identified as at-risk of impairment. The future occurrence of a potential indicator of impairment would
require an interim assessment for some or all of the reporting units prior to the next required annual assessment on
October 1, 2021.
We test our goodwill either quantitatively or qualitatively for impairment. For our quantitative approach, we use an
income approach to estimate the fair value of our reporting units. The income approach uses a reporting unit’s
projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital
that is determined based on current market conditions. The projection uses management’s best estimates of
economic and market conditions over the projected period including growth rates in sales, costs and number of
units, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates
and assumptions include terminal value growth rates, terminal value margin rates, future capital expenditures and
changes in future working capital requirements. We validate our estimates of fair value under the income approach
by considering the implied control premium and conclude whether the implied control premium is reasonable based
on other recent market transactions.
A qualitative approach for both goodwill and indefinite-lived intangible assets is performed if the last quantitative test
exceeded certain thresholds. During our qualitative approach, we assess whether the existence of events or
circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than
its carrying amount. If, after assessing the totality of events and circumstances, we determine it is more likely than
not that the fair value is less than carrying value, a quantitative impairment test is performed for each asset, as
described above.
Indefinite-lived intangible assets primarily consist of the GLS, ColorMatrix, Gordon Composites, and Fiber-Line
trade names. Indefinite-lived intangible assets are tested, quantitatively or qualitatively, for impairment annually at
the same time we test goodwill for impairment. For our quantitative approach, the implied fair value of indefinite-
lived intangible assets is determined based on significant unobservable inputs, as summarized below. The fair value
of the trade names is calculated using a “relief from royalty” methodology. This approach involves two steps
(1) estimating reasonable royalty rates for the trade name and (2) applying this royalty rate to a net sales stream
and discounting the resulting cash flows to determine fair value using a weighted-average cost of capital that is
determined based on current market conditions. This fair value is then compared with the carrying value of the trade
name.
Litigation Reserves
for further information.
Derivative Financial Instruments
FASB ASC Topic 450, Contingencies, requires that we accrue for loss contingencies associated with outstanding
litigation, claims and assessments for which management has determined it is probable that a loss contingency
exists and the amount of loss can be reasonably estimated. We recognize expense associated with professional
fees related to litigation claims and assessments as incurred. Refer to Note 12, Commitments and Contingencies,
FASB ASC Topic 815, Derivative and Hedging, requires that all derivative financial instruments, such as foreign
exchange contracts, be recognized in the financial statements and measured at fair value, regardless of the
purpose or intent in holding them.
We are exposed to foreign currency changes and to changes in cash flows due to changes in our contractually
specified interest rates (e.g., LIBOR) in the normal course of business. We have established policies and
procedures that manage this exposure through the use of financial instruments. By policy, we do not enter into
these instruments for trading purposes or speculation. We formally assess, designate and document, as a hedge of
an underlying exposure, the qualifying derivative instrument that will be accounted for as an accounting hedge at
inception. Additionally, in accordance with ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted
Use of Estimates
Goodwill and Indefinite Lived Intangible Assets
Preparation of financial statements in conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions in certain circumstances that affect amounts reported in
the accompanying consolidated financial statements and notes. Actual results could differ from these estimates.
We consider all highly liquid investments purchased with a maturity of less than three months to be cash
equivalents. Cash equivalents are stated at cost, which approximates fair value.
Cash and Cash Equivalents
Allowance for Doubtful Accounts
We evaluate the collectability of receivables based on a combination of factors, each of which are adjusted if
specific circumstances change. We reserve for amounts determined to be uncollectible based on a specific
customer’s inability to meet its financial obligation to us. We also record a general reserve based on the age of
receivables past due, current conditions and forecasted information, the credit risk of specific customers, economic
conditions and historical experience. In estimating the allowance, we take into consideration the existence of credit
insurance.
Inventories
31, 2020 and 2019, respectively.
Long-lived Assets
Raw materials and finished goods are carried at lower of cost or market using either the weighted average cost or
the the first-in, first-out (FIFO) method. The inventory reserve totaled $22.5 million and $18.2 million at December
Property, plant and equipment is carried at cost, net of depreciation and amortization that is computed using the
straight-line method over the estimated useful lives of the assets, which generally ranges from three to 15 years for
machinery and equipment and up to 40 years for buildings. We depreciate certain assets associated with closing
manufacturing locations over a shortened life (through the cease-use date). Software is amortized over periods not
exceeding 10 years. Property, plant and equipment is generally depreciated on accelerated methods for income tax
purposes. We expense repair and maintenance costs as incurred. We capitalize replacements and improvements
that increase the estimated useful life of an asset.
We retain fully depreciated assets in property and accumulated depreciation accounts until we remove them from
service. In the case of sale, retirement or disposal, the asset cost and related accumulated depreciation balance is
removed from the respective account, and the resulting net amount, less any proceeds, is included as a component
of income from continuing operations in the accompanying Consolidated Statements of Income.
We account for operating and finance leases under the provisions of ASC 842.
Finite-lived intangible assets, which consist primarily of customer relationships, patents and technology are
amortized over their estimated useful lives. The useful lives range up to 20 years.
We assess the recoverability of long-lived assets when events or changes in circumstances indicate that we may
not be able to recover the assets’ carrying amount. We measure the recoverability of assets to be held and used by
a comparison of the carrying amount of the asset to the expected future undiscounted cash flows associated with
the asset. We measure the amount of impairment of long-lived assets as the amount by which the carrying value of
the asset exceeds the fair value of the asset, which is generally determined based on projected discounted future
cash flows or appraised values. No such impairments were recognized during 2020, 2019 or 2018.
In accordance with the provisions of FASB ASC Topic 350, Intangibles — Goodwill and Other, we assess the fair
value of goodwill, quantitatively or qualitatively, on an annual basis or at an interim date if potential impairment
indicators are present. Goodwill is the excess of the purchase price paid over the fair value of the net assets of the
acquired business. Goodwill is tested for impairment, quantitatively or qualitatively, at the reporting unit level. Our
reporting units have been identified at the operating segment level, or in most cases, one level below the operating
segment level. Goodwill is allocated to the reporting units based on the estimated fair value at the date of
acquisition.
Our annual measurement date for testing impairment of goodwill and indefinite-lived intangibles is October 1. We
completed our testing of impairment as of October 1, noting no impairment in 2020, 2019 or 2018. There are no
reporting units identified as at-risk of impairment. The future occurrence of a potential indicator of impairment would
require an interim assessment for some or all of the reporting units prior to the next required annual assessment on
October 1, 2021.
We test our goodwill either quantitatively or qualitatively for impairment. For our quantitative approach, we use an
income approach to estimate the fair value of our reporting units. The income approach uses a reporting unit’s
projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital
that is determined based on current market conditions. The projection uses management’s best estimates of
economic and market conditions over the projected period including growth rates in sales, costs and number of
units, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates
and assumptions include terminal value growth rates, terminal value margin rates, future capital expenditures and
changes in future working capital requirements. We validate our estimates of fair value under the income approach
by considering the implied control premium and conclude whether the implied control premium is reasonable based
on other recent market transactions.
A qualitative approach for both goodwill and indefinite-lived intangible assets is performed if the last quantitative test
exceeded certain thresholds. During our qualitative approach, we assess whether the existence of events or
circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than
its carrying amount. If, after assessing the totality of events and circumstances, we determine it is more likely than
not that the fair value is less than carrying value, a quantitative impairment test is performed for each asset, as
described above.
Indefinite-lived intangible assets primarily consist of the GLS, ColorMatrix, Gordon Composites, and Fiber-Line
trade names. Indefinite-lived intangible assets are tested, quantitatively or qualitatively, for impairment annually at
the same time we test goodwill for impairment. For our quantitative approach, the implied fair value of indefinite-
lived intangible assets is determined based on significant unobservable inputs, as summarized below. The fair value
of the trade names is calculated using a “relief from royalty” methodology. This approach involves two steps
(1) estimating reasonable royalty rates for the trade name and (2) applying this royalty rate to a net sales stream
and discounting the resulting cash flows to determine fair value using a weighted-average cost of capital that is
determined based on current market conditions. This fair value is then compared with the carrying value of the trade
name.
Litigation Reserves
FASB ASC Topic 450, Contingencies, requires that we accrue for loss contingencies associated with outstanding
litigation, claims and assessments for which management has determined it is probable that a loss contingency
exists and the amount of loss can be reasonably estimated. We recognize expense associated with professional
fees related to litigation claims and assessments as incurred. Refer to Note 12, Commitments and Contingencies,
for further information.
Derivative Financial Instruments
FASB ASC Topic 815, Derivative and Hedging, requires that all derivative financial instruments, such as foreign
exchange contracts, be recognized in the financial statements and measured at fair value, regardless of the
purpose or intent in holding them.
We are exposed to foreign currency changes and to changes in cash flows due to changes in our contractually
specified interest rates (e.g., LIBOR) in the normal course of business. We have established policies and
procedures that manage this exposure through the use of financial instruments. By policy, we do not enter into
these instruments for trading purposes or speculation. We formally assess, designate and document, as a hedge of
an underlying exposure, the qualifying derivative instrument that will be accounted for as an accounting hedge at
inception. Additionally, in accordance with ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted
AVIENT CORPORATION 43
Improvements to Accounting for Hedging Activities, we assess at inception whether the financial instruments used
in the hedging transaction are highly effective at offsetting changes in either the fair values or cash flows of the
underlying exposures. If highly effective, any subsequent test may be done qualitatively.
The net interest payments accrued each month for effective instruments designated as a hedge are reflected in net
income as adjustments of interest expense and the remaining change in the fair value of the derivatives is recorded
as a component of Accumulated Other Comprehensive Income (Loss) (AOCI). Instruments not designated as
hedges are adjusted to fair value at each period end, with the resulting gains and losses recognized in the
accompanying Consolidated Statements of Income immediately.
Refer to Note 16, Derivatives and Hedging, for more information.
Pension and Other Post-retirement Plans
We account for our pensions and other post-retirement benefits in accordance with FASB ASC Topic 715,
Compensation — Retirement Benefits. We immediately recognize actuarial gains and losses in our operating results
in the year in which the gains or losses occur. Refer to Note 11, Employee Benefit Plans, for more information.
Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income (loss) in 2020, 2019 and 2018 were as follows:
(In millions)
Balance at January 1, 2018
Translation Adjustments
Unrealized losses
Other
Balance at December 31, 2018
Translation Adjustments
Unrealized losses
Other
Balance at December 31, 2019
Translation Adjustments
Unrealized gains (losses)
Other
Cumulative
Translation
Adjustment and
Related Hedging
Instruments
Pension and
other post-
retirement
benefits
Cash Flow
Hedges
Other
Total
Income Taxes
$
(58.6) $
5.2 $
— $
0.4 $
(53.0)
(25.6)
(2.0)
—
(86.2)
(6.9)
9.1
—
(84.0)
110.6
—
—
—
—
—
5.2
—
—
—
5.2
—
—
—
—
(1.3)
—
(1.3)
—
(2.5)
—
(3.8)
—
(1.6)
—
—
—
(0.4)
—
—
—
—
—
—
—
—
(25.6)
(3.3)
(0.4)
(82.3)
(6.9)
6.6
—
(82.6)
110.6
(1.6)
—
Balance at December 31, 2020
$
26.6 $
5.2 $
(5.4) $
— $
26.4
Fair Value of Financial Instruments
FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosures of the fair value of financial
instruments. The estimated fair values of financial instruments were principally based on market prices where such
prices were available and, where unavailable, fair values were estimated based on market prices of similar
instruments.
Foreign Currency Translation
Revenues and expenses are translated at average currency exchange rates during the related period. Assets and
liabilities of foreign subsidiaries are translated using the exchange rate at the end of the period. The resulting
translation adjustments are recorded as accumulated other comprehensive income or loss. Gains and losses
resulting from foreign currency transactions, including intercompany transactions that are not considered long-term
investments, are included in Other income (expense), net.
Revenue Recognition
We recognize revenue once control of the product is transferred to the customer, which typically occurs when
products are shipped from our facilities.
Shipping and Handling Costs
Shipping and handling costs are included in cost of sales.
44 AVIENT CORPORATION
Research and development costs of $59.8 million in 2020, $50.6 million in 2019 and $49.6 million in 2018 are
Research and Development Expense
charged to expense as incurred.
Environmental Costs
We expense costs that are associated with managing hazardous substances and pollution in ongoing operations on
a current basis. Costs associated with environmental contamination are accrued when it becomes probable that a
liability has been incurred and our proportionate share of the cost can be reasonably estimated. Any such provision
is recognized using the Company's best estimate of the amount of loss incurred, or at the lower end of an estimated
range, when a single best estimate is not determinable. In some cases, the Company may be able to recover a
portion of the costs relating to these obligations from insurers or other third parties; however, the Company records
such amounts only when they are collected.
Share-Based Compensation
We account for share-based compensation under the provisions of FASB ASC Topic 718, Compensation - Stock
Compensation, which requires us to estimate the fair value of share-based awards on the date of grant. The value
of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service
periods in the accompanying Consolidated Statements of Income. As of December 31, 2020, we had one active
share-based employee compensation plan, which is described more fully in Note 14, Share-Based Compensation.
Deferred income tax liabilities and assets are determined based upon the differences between the financial
reporting and tax basis of assets and liabilities and are measured using the tax rate and laws currently in effect. In
accordance with FASB ASC Topic 740, Income Taxes, we evaluate our deferred income taxes to determine whether
a valuation allowance should be established against the deferred tax assets or whether the valuation allowance
should be reduced based on consideration of all available evidence, both positive and negative, using a “more likely
than not” standard. See Note 13, Income Taxes, for additional detail.
Note 2 — BUSINESS COMBINATIONS
On July 1, 2020, we completed our acquisition of the equity interests in the global masterbatch business of Clariant
AG, a corporation organized and existing under the law of Switzerland (Clariant), and the masterbatch assets in
India of Clariant Chemicals (India) Limited, a public limited company incorporated in India and an indirect majority
owned subsidiary of Clariant (Clariant India). The business and assets are collectively referred to as Clariant MB
and the acquisitions are collectively referred to as the Clariant MB Acquisition. The Clariant MB Acquisition
increased our scale, product depth and geographic reach in the Color, Additives and Inks segment. Clariant MB has
leading portfolios of solid and liquid masterbatches that include sustainable solutions. In connection with the
completion of the Clariant MB Acquisition and effective as of June 30, 2020, the Company amended its existing
Articles of Incorporation to change its name to Avient Corporation. In conjunction with our rebranding and new
name, we also changed our ticker symbol from “POL” to “AVNT”, effective at the start of trading on July 13, 2020.
Total consideration paid by the Company to complete the Clariant MB Acquisition was $1.4 billion, net of cash and
debt. To finance the purchase of Clariant MB, the Company used $496.1 million in net proceeds from the issuance
of common shares in an underwritten public offering completed in February 2020 and $640.5 million in net proceeds
from a senior unsecured notes offering completed in May 2020, and funded the balance using the net proceeds of
the October 2019 sale of our Performance Products and Solutions business segment (PP&S). For additional details
related to the sale of PP&S and the senior unsecured notes offering, refer to Note 3, Discontinued Operations and
Note 9, Financing Arrangements, respectively.
The Clariant MB Acquisition is being accounted for under the acquisition method of accounting. As of December 31,
2020, the purchase accounting for the Clariant MB Acquisition is preliminary and the amounts recognized in the
financial statements for the Clariant MB Acquisition are provisional. The purchase price allocation adjustments will
be made throughout the measurement period, which is not to exceed one year from the acquisition date. During the
measurement period, we will continue to obtain information to assist in finalizing the fair value of assets acquired
and liabilities assumed, which may differ materially from the preliminary estimates. We are in the ongoing process of
conducting a valuation of the assets acquired and liabilities assumed related to the acquisition, including the
personal and real property, lease obligations, pension and other post-retirement liabilities, deferred taxes, and
intangible assets. The provisional measurements and preliminary allocation of consideration transferred and
determination of fair values of assets acquired and liabilities assumed, reflect estimates, judgments and
Improvements to Accounting for Hedging Activities, we assess at inception whether the financial instruments used
in the hedging transaction are highly effective at offsetting changes in either the fair values or cash flows of the
underlying exposures. If highly effective, any subsequent test may be done qualitatively.
The net interest payments accrued each month for effective instruments designated as a hedge are reflected in net
income as adjustments of interest expense and the remaining change in the fair value of the derivatives is recorded
as a component of Accumulated Other Comprehensive Income (Loss) (AOCI). Instruments not designated as
hedges are adjusted to fair value at each period end, with the resulting gains and losses recognized in the
accompanying Consolidated Statements of Income immediately.
Refer to Note 16, Derivatives and Hedging, for more information.
Pension and Other Post-retirement Plans
We account for our pensions and other post-retirement benefits in accordance with FASB ASC Topic 715,
Compensation — Retirement Benefits. We immediately recognize actuarial gains and losses in our operating results
in the year in which the gains or losses occur. Refer to Note 11, Employee Benefit Plans, for more information.
Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income (loss) in 2020, 2019 and 2018 were as follows:
(In millions)
Balance at January 1, 2018
Translation Adjustments
Unrealized losses
Other
Balance at December 31, 2018
Translation Adjustments
Unrealized losses
Other
Balance at December 31, 2019
Translation Adjustments
Unrealized gains (losses)
Other
Cumulative
Translation
Adjustment and
Related Hedging
Instruments
Pension and
other post-
retirement
benefits
Cash Flow
Hedges
Other
Total
$
(58.6) $
5.2 $
— $
0.4 $
(53.0)
(25.6)
(2.0)
—
(86.2)
(6.9)
(84.0)
110.6
9.1
—
—
—
—
—
—
5.2
—
—
—
5.2
—
—
—
(1.3)
(1.3)
(2.5)
(3.8)
(1.6)
—
—
—
—
—
—
(0.4)
—
—
—
—
—
—
—
—
—
—
(25.6)
(3.3)
(0.4)
(82.3)
(6.9)
6.6
—
(82.6)
110.6
(1.6)
—
Balance at December 31, 2020
$
26.6 $
5.2 $
(5.4) $
— $
26.4
Fair Value of Financial Instruments
FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosures of the fair value of financial
instruments. The estimated fair values of financial instruments were principally based on market prices where such
prices were available and, where unavailable, fair values were estimated based on market prices of similar
instruments.
Foreign Currency Translation
Revenues and expenses are translated at average currency exchange rates during the related period. Assets and
liabilities of foreign subsidiaries are translated using the exchange rate at the end of the period. The resulting
translation adjustments are recorded as accumulated other comprehensive income or loss. Gains and losses
resulting from foreign currency transactions, including intercompany transactions that are not considered long-term
investments, are included in Other income (expense), net.
We recognize revenue once control of the product is transferred to the customer, which typically occurs when
Revenue Recognition
products are shipped from our facilities.
Shipping and Handling Costs
Shipping and handling costs are included in cost of sales.
Research and Development Expense
Research and development costs of $59.8 million in 2020, $50.6 million in 2019 and $49.6 million in 2018 are
charged to expense as incurred.
Environmental Costs
We expense costs that are associated with managing hazardous substances and pollution in ongoing operations on
a current basis. Costs associated with environmental contamination are accrued when it becomes probable that a
liability has been incurred and our proportionate share of the cost can be reasonably estimated. Any such provision
is recognized using the Company's best estimate of the amount of loss incurred, or at the lower end of an estimated
range, when a single best estimate is not determinable. In some cases, the Company may be able to recover a
portion of the costs relating to these obligations from insurers or other third parties; however, the Company records
such amounts only when they are collected.
Share-Based Compensation
We account for share-based compensation under the provisions of FASB ASC Topic 718, Compensation - Stock
Compensation, which requires us to estimate the fair value of share-based awards on the date of grant. The value
of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service
periods in the accompanying Consolidated Statements of Income. As of December 31, 2020, we had one active
share-based employee compensation plan, which is described more fully in Note 14, Share-Based Compensation.
Income Taxes
Deferred income tax liabilities and assets are determined based upon the differences between the financial
reporting and tax basis of assets and liabilities and are measured using the tax rate and laws currently in effect. In
accordance with FASB ASC Topic 740, Income Taxes, we evaluate our deferred income taxes to determine whether
a valuation allowance should be established against the deferred tax assets or whether the valuation allowance
should be reduced based on consideration of all available evidence, both positive and negative, using a “more likely
than not” standard. See Note 13, Income Taxes, for additional detail.
Note 2 — BUSINESS COMBINATIONS
On July 1, 2020, we completed our acquisition of the equity interests in the global masterbatch business of Clariant
AG, a corporation organized and existing under the law of Switzerland (Clariant), and the masterbatch assets in
India of Clariant Chemicals (India) Limited, a public limited company incorporated in India and an indirect majority
owned subsidiary of Clariant (Clariant India). The business and assets are collectively referred to as Clariant MB
and the acquisitions are collectively referred to as the Clariant MB Acquisition. The Clariant MB Acquisition
increased our scale, product depth and geographic reach in the Color, Additives and Inks segment. Clariant MB has
leading portfolios of solid and liquid masterbatches that include sustainable solutions. In connection with the
completion of the Clariant MB Acquisition and effective as of June 30, 2020, the Company amended its existing
Articles of Incorporation to change its name to Avient Corporation. In conjunction with our rebranding and new
name, we also changed our ticker symbol from “POL” to “AVNT”, effective at the start of trading on July 13, 2020.
Total consideration paid by the Company to complete the Clariant MB Acquisition was $1.4 billion, net of cash and
debt. To finance the purchase of Clariant MB, the Company used $496.1 million in net proceeds from the issuance
of common shares in an underwritten public offering completed in February 2020 and $640.5 million in net proceeds
from a senior unsecured notes offering completed in May 2020, and funded the balance using the net proceeds of
the October 2019 sale of our Performance Products and Solutions business segment (PP&S). For additional details
related to the sale of PP&S and the senior unsecured notes offering, refer to Note 3, Discontinued Operations and
Note 9, Financing Arrangements, respectively.
The Clariant MB Acquisition is being accounted for under the acquisition method of accounting. As of December 31,
2020, the purchase accounting for the Clariant MB Acquisition is preliminary and the amounts recognized in the
financial statements for the Clariant MB Acquisition are provisional. The purchase price allocation adjustments will
be made throughout the measurement period, which is not to exceed one year from the acquisition date. During the
measurement period, we will continue to obtain information to assist in finalizing the fair value of assets acquired
and liabilities assumed, which may differ materially from the preliminary estimates. We are in the ongoing process of
conducting a valuation of the assets acquired and liabilities assumed related to the acquisition, including the
personal and real property, lease obligations, pension and other post-retirement liabilities, deferred taxes, and
intangible assets. The provisional measurements and preliminary allocation of consideration transferred and
determination of fair values of assets acquired and liabilities assumed, reflect estimates, judgments and
AVIENT CORPORATION 45
assumptions made by management. These estimates, judgments and assumptions are subject to change upon final
valuation.
The summarized preliminary purchase price allocation is as follows:
July 1, 2020
in the pro forma financial information.
Cash and cash equivalents
$
Accounts receivable
Inventories
Other current assets
Property
Goodwill
Intangible assets:
Customer relationships
Trade names and trademarks
Patents, technology and other
Operating lease assets
Other long-term assets
Short term debt
Accounts payable
Current operating lease obligations
Accrued expenses and other current liabilities
Long-term debt
Non-current operating lease obligations
Deferred tax liabilities
Pension and other post-retirement benefits
Other long-term liabilities
Non-controlling interests
Total purchase price consideration
$
1,525.3
The intangible assets that have been acquired are being amortized over a period of 18 to 20 years.
Goodwill of $569.0 million was recorded and allocated to the Color, Additives and Inks segment. The goodwill
recognized is primarily attributable to the expected synergies to be achieved from the business combination. We
expect a portion of goodwill to be deductible for tax purposes.
The amounts of revenue and income from continuing operations before income taxes of Clariant MB since the
acquisition date included in the consolidated income statement for 2020 are $544.2 million and $32.7 million,
respectively. Had the Clariant MB Acquisition occurred as of the beginning of fiscal 2019, sales and income from
continuing operations before income taxes on a pro forma basis would have been as follows:
Sales
Income from continuing operations before income taxes
(Unaudited)
Year Ended December 31,
2020
$
3,782.5
204.2
2019
$
3,981.3
98.9
The unaudited pro forma financial information has been calculated after applying our accounting policies and
adjusting the historical results with pro forma adjustments that assume the acquisition occurred on January 1, 2019.
These unaudited pro forma results do not represent financial results realized, nor are they intended to be a
projection of future results. In preparation of the pro forma financial information, we eliminated certain historical
allocations made by Clariant as they do not represent the stand alone operations of Clariant MB and replaced them
46 AVIENT CORPORATION
145.1
170.8
99.0
56.9
267.6
569.0
221.9
32.0
273.9
30.1
1.3
(0.4)
(92.7)
(2.8)
(81.2)
(6.7)
(25.8)
(60.7)
(53.8)
(5.4)
(12.8)
with costs more likely to occur as a part of Avient. This elimination removed expense of $6.6 million and $12.7
million during 2020 and 2019, respectively. The amortization of inventory step-up from the preliminary purchase
price allocation was $9.7 million, and is reflected in Cost of sales. Additionally, we incurred $10.1 million of costs
related to committed financing which are reflected in Interest expense, net. The amounts associated with the
amortization of inventory step-up and costs related to committed financing were removed from 2020, and presented
Costs incurred in connection with the Clariant MB Acquisition were $19.2 million in 2020. These fees were charged
to Selling and Administrative expense.
Other Acquisitions
Our acquisitions of PlastiComp, Inc. (PlastiComp) on May 31, 2018 and Fiber-Line, LLC (Fiber-Line) on January 2,
2019 involved contingent earnout consideration. The PlastiComp earnout had a ceiling of $35.0 million that was
reached during the first quarter of 2020 and paid in the third quarter of 2020. The Fiber-Line earnout was based on
two annual earnout periods, with the second earnout period target based on year-one results. The second earnout
period ended on December 31, 2020. A payment of $53.9 million associated with the first Fiber-Line earnout period
was made in the first quarter of 2020 and no additional payments are expected to be made. During the twelve
months ended December 31, 2020 and 2019, the Company recorded charges of $1.0 million and $36.4 million,
respectively, associated with the earnouts within Selling and administrative expense that were primarily attributable
to improved earnings from the acquisitions.
Note 3 — DISCONTINUED OPERATIONS
On October 25, 2019, we divested the Performance Products and Solutions segment (PP&S) for $782.1 million
cash. The sale resulted in the recognition of an after-tax gain of $457.7 million, which is reflected within Income
(loss) from discontinued operations, net of income taxes.
The Company has continuing involvement with the former PP&S business following the close of the transaction.
The Company entered into a four-year distribution agreement with the former PP&S business to be the exclusive
distributor for certain products, under terms that were similar prior to the disposal transaction. The Company and the
former PP&S business have also entered into contract manufacturing and supply agreements for certain products
for a two-year period. For the twelve months ended December 31, 2020, our net cash outflow related to the
agreements was approximately $65.0 million.
The following table summarizes the discontinued operations primarily associated with PP&S for the years ended
December 31, 2020, 2019 and 2018.
(In millions)
Sales
Cost of sales
Gain on sale
Selling and administrative expense
Pretax (loss) income of discontinued operations
Income tax expense
2020
2019
2018
$
— $
—
488.9 $
(390.1)
652.4
(532.3)
(0.9)
(28.0)
—
(0.9)
0.5
591.2
662.0
(148.9)
(24.7)
(1.8)
93.6
(21.5)
72.1
Income from discontinued operations, net of taxes
$
(0.4) $
513.1 $
The following table presents the depreciation, amortization, and capital expenditures of our discontinued operations
for the twelve months ended December 31, 2020, 2019 and 2018. There were no other significant operating or
investing non-cash items for the twelve months ended December 31, 2020, 2019 and 2018.
(In millions)
Depreciation and amortization
Capital Expenditures
Year Ended December 31,
2020
2019
2018
$
$
9.4
$
—
—
14.1
15.9
19.5
assumptions made by management. These estimates, judgments and assumptions are subject to change upon final
valuation.
The summarized preliminary purchase price allocation is as follows:
July 1, 2020
$
Cash and cash equivalents
Accounts receivable
Inventories
Other current assets
Property
Goodwill
Intangible assets:
Customer relationships
Trade names and trademarks
Patents, technology and other
Operating lease assets
Other long-term assets
Short term debt
Accounts payable
Current operating lease obligations
Accrued expenses and other current liabilities
Long-term debt
Non-current operating lease obligations
Deferred tax liabilities
Pension and other post-retirement benefits
Other long-term liabilities
Non-controlling interests
Total purchase price consideration
with costs more likely to occur as a part of Avient. This elimination removed expense of $6.6 million and $12.7
million during 2020 and 2019, respectively. The amortization of inventory step-up from the preliminary purchase
price allocation was $9.7 million, and is reflected in Cost of sales. Additionally, we incurred $10.1 million of costs
related to committed financing which are reflected in Interest expense, net. The amounts associated with the
amortization of inventory step-up and costs related to committed financing were removed from 2020, and presented
in the pro forma financial information.
Costs incurred in connection with the Clariant MB Acquisition were $19.2 million in 2020. These fees were charged
to Selling and Administrative expense.
Other Acquisitions
Our acquisitions of PlastiComp, Inc. (PlastiComp) on May 31, 2018 and Fiber-Line, LLC (Fiber-Line) on January 2,
2019 involved contingent earnout consideration. The PlastiComp earnout had a ceiling of $35.0 million that was
reached during the first quarter of 2020 and paid in the third quarter of 2020. The Fiber-Line earnout was based on
two annual earnout periods, with the second earnout period target based on year-one results. The second earnout
period ended on December 31, 2020. A payment of $53.9 million associated with the first Fiber-Line earnout period
was made in the first quarter of 2020 and no additional payments are expected to be made. During the twelve
months ended December 31, 2020 and 2019, the Company recorded charges of $1.0 million and $36.4 million,
respectively, associated with the earnouts within Selling and administrative expense that were primarily attributable
to improved earnings from the acquisitions.
Note 3 — DISCONTINUED OPERATIONS
On October 25, 2019, we divested the Performance Products and Solutions segment (PP&S) for $782.1 million
cash. The sale resulted in the recognition of an after-tax gain of $457.7 million, which is reflected within Income
(loss) from discontinued operations, net of income taxes.
The Company has continuing involvement with the former PP&S business following the close of the transaction.
The Company entered into a four-year distribution agreement with the former PP&S business to be the exclusive
distributor for certain products, under terms that were similar prior to the disposal transaction. The Company and the
former PP&S business have also entered into contract manufacturing and supply agreements for certain products
for a two-year period. For the twelve months ended December 31, 2020, our net cash outflow related to the
agreements was approximately $65.0 million.
The following table summarizes the discontinued operations primarily associated with PP&S for the years ended
December 31, 2020, 2019 and 2018.
145.1
170.8
99.0
56.9
267.6
569.0
221.9
32.0
273.9
30.1
1.3
(0.4)
(92.7)
(2.8)
(81.2)
(6.7)
(25.8)
(60.7)
(53.8)
(5.4)
(12.8)
(In millions)
Sales
Cost of sales
Selling and administrative expense
Gain on sale
Pretax (loss) income of discontinued operations
Income tax expense
2020
2019
2018
$
— $
—
488.9 $
(390.1)
652.4
(532.3)
(0.9)
(28.0)
—
(0.9)
0.5
591.2
662.0
(148.9)
(24.7)
(1.8)
93.6
(21.5)
72.1
Income from discontinued operations, net of taxes
$
(0.4) $
513.1 $
The following table presents the depreciation, amortization, and capital expenditures of our discontinued operations
for the twelve months ended December 31, 2020, 2019 and 2018. There were no other significant operating or
investing non-cash items for the twelve months ended December 31, 2020, 2019 and 2018.
(In millions)
Depreciation and amortization
Capital Expenditures
Year Ended December 31,
2020
2019
2018
$
—
—
$
9.4
$
14.1
15.9
19.5
AVIENT CORPORATION 47
The intangible assets that have been acquired are being amortized over a period of 18 to 20 years.
Goodwill of $569.0 million was recorded and allocated to the Color, Additives and Inks segment. The goodwill
recognized is primarily attributable to the expected synergies to be achieved from the business combination. We
expect a portion of goodwill to be deductible for tax purposes.
The amounts of revenue and income from continuing operations before income taxes of Clariant MB since the
acquisition date included in the consolidated income statement for 2020 are $544.2 million and $32.7 million,
respectively. Had the Clariant MB Acquisition occurred as of the beginning of fiscal 2019, sales and income from
continuing operations before income taxes on a pro forma basis would have been as follows:
$
1,525.3
Sales
Income from continuing operations before income taxes
(Unaudited)
Year Ended December 31,
2020
$
3,782.5
204.2
2019
$
3,981.3
98.9
The unaudited pro forma financial information has been calculated after applying our accounting policies and
adjusting the historical results with pro forma adjustments that assume the acquisition occurred on January 1, 2019.
These unaudited pro forma results do not represent financial results realized, nor are they intended to be a
projection of future results. In preparation of the pro forma financial information, we eliminated certain historical
allocations made by Clariant as they do not represent the stand alone operations of Clariant MB and replaced them
Note 4 — GOODWILL AND INTANGIBLE ASSETS
The total purchase price associated with acquisitions is allocated to the fair value of assets acquired and liabilities
assumed based on their fair values at the acquisition date, with excess amounts recorded as goodwill.
Goodwill as of December 31, 2020 and 2019 and changes in the carrying amount of goodwill by segment were as
follows:
(In millions)
Balance at January 1, 2019
Acquisition of businesses
Currency translation
Balance at December 31, 2019
Acquisition of businesses
Currency translation
Specialty
Engineered
Materials
Color, Additives
and Inks
Distribution
Total
$
188.9 $
448.6 $
1.6 $
47.9
(0.5)
236.3
—
1.5
—
(0.8)
447.8
569.0
51.9
—
—
1.6
—
—
639.1
47.9
(1.3)
685.7
569.0
53.4
Balance at December 31, 2020
$
237.8 $
1,068.7 $
1.6 $
1,308.1
Indefinite and finite-lived intangible assets consisted of the following:
(In millions)
Customer relationships
Patents, technology and other
Indefinite-lived trade names
Total
Acquisition Cost
$
$
508.7 $
549.9
109.5
1,168.1 $
As of December 31, 2020
Accumulated
Amortization
Currency
Translation
(109.8) $
(102.4)
—
(212.2) $
23.8 $
28.8
—
52.6 $
Net
422.7
476.3
109.5
1,008.5
(In millions)
Customer relationships
Patents, technology and other
Indefinite-lived trade names
Total
Acquisition Cost
Accumulated
Amortization
Currency
Translation
Net
$
$
286.8 $
244.0
109.5
640.3 $
(89.1) $
(79.6)
—
(168.7) $
(1.0) $
(1.3)
—
(2.3) $
196.7
163.1
109.5
469.3
As of December 31, 2019
Amortization of finite-lived intangible assets included in continuing operations for the years ended December 31,
2020, 2019 and 2018 was $43.5 million, $29.5 million and $25.5 million, respectively.
We expect finite-lived intangibles amortization expense for the next five years as follows:
(In millions)
2021
2022
2023
2024
2025
Expected Amortization Expense
$
56.4 $
54.3 $
52.0 $
51.9 $
51.6
Senior secured revolving credit facility due 2022
$
— $
— $
48 AVIENT CORPORATION
Note 5 — EMPLOYEE SEPARATION AND RESTRUCTURING COSTS
As part of our integration efforts associated with the Clariant MB Acquisition, we are engaged in a restructuring plan.
The restructuring plan is expected to enable us to better serve customers, improve efficiency and deliver anticipated
synergy-related cost savings. We expect to incur costs for exit and disposal activities under generally accepted
accounting principles when actions associated with the restructuring plan are approved and announced. The costs
recorded in Cost of sales during 2020 included $0.4 million related to fixed asset disposals and $0.2 million related
to severance. The costs recorded in Selling and administrative expense include $6.4 million of severance and
$0.2 million of other costs. We expect that the full restructuring plan will be implemented through 2023 and
anticipate that we will incur approximately $75 million of charges in connection with the restructuring plan.
We also initiated other restructuring activities in 2020 primarily associated with streamlining operations of our
Specialty Inks business. The expense recognized in Cost of sales associated with these other activities in 2020
consisted of $3.2 million of accelerated depreciation and lease amortization, and $0.4 million of expense related to
severance. The total costs recorded in Selling and administrative expense include $7.6 million of severance and
$1.2 million of other costs. Future costs associated with these other restructuring activities are not expected to be
Line item in the Consolidated Statement of Income in which the costs above are included:
material.
(in millions)
Cost of goods sold
Selling and administrative expenses
Total employee separation and restructuring charges
Year ended December 31, 2020
$
$
Note 6 — FINANCING ARRANGEMENTS
For each of the periods presented, total debt consisted of the following:
Senior secured revolving credit facility due 2022
$
— $
— $
Principal
Amount
Unamortized
discount and debt
issuance cost
Net Debt
Weighted
average
interest rate
As of December 31, 2020 (in millions)
5.25% senior notes due 2023
5.75% senior notes due 2025
Senior secured term loan due 2026
Other Debt
Total Debt
600.0
650.0
618.0
23.9
18.6
$1,873.3
Less short-term and current portion of long-term debt
Total long-term debt, net of current portion
—
$19.3
18.6
$1,854.0
$
1,891.9 $
19.3 $
1,872.6
Principal
Amount
Unamortized
discount and debt
issuance cost
Net Debt
Weighted
average
interest rate
As of December 31, 2019 (in millions)
5.25%senior notes due 2023
Senior secured term loan due 2026
Other Debt
Total Debt
Less short-term and current portion of long-term debt
Total long-term debt, net of current portion
600.0
624.5
18.3
$
$
1,242.8 $
18.4
1,224.4 $
—
596.3
614.7
18.3
18.4
13.5 $
1,229.3
13.5 $
1,210.9
The Company maintains a senior secured revolving credit facility, which matures on February 24, 2022 and
provides a maximum borrowing facility size of $450.0 million, subject to a borrowing base with advances against
—
597.5
641.2
610.0
23.9
2.5
8.8
8.0
—
3.7
9.8
—
—
4.2
15.4
19.6
— %
5.25 %
5.75 %
2.36 %
3.90 %
5.25 %
4.01 %
Note 4 — GOODWILL AND INTANGIBLE ASSETS
The total purchase price associated with acquisitions is allocated to the fair value of assets acquired and liabilities
assumed based on their fair values at the acquisition date, with excess amounts recorded as goodwill.
Goodwill as of December 31, 2020 and 2019 and changes in the carrying amount of goodwill by segment were as
follows:
(In millions)
Balance at January 1, 2019
Acquisition of businesses
Currency translation
Balance at December 31, 2019
Acquisition of businesses
Currency translation
Specialty
Engineered
Materials
Color, Additives
and Inks
Distribution
Total
$
188.9 $
448.6 $
1.6 $
47.9
(0.5)
236.3
—
1.5
—
(0.8)
447.8
569.0
51.9
—
—
1.6
—
—
639.1
47.9
(1.3)
685.7
569.0
53.4
Balance at December 31, 2020
$
237.8 $
1,068.7 $
1.6 $
1,308.1
Indefinite and finite-lived intangible assets consisted of the following:
(In millions)
Acquisition Cost
Customer relationships
Patents, technology and other
Indefinite-lived trade names
Total
508.7 $
549.9
109.5
1,168.1 $
(109.8) $
(102.4)
—
(212.2) $
23.8 $
28.8
—
52.6 $
Net
422.7
476.3
109.5
1,008.5
As of December 31, 2020
Accumulated
Amortization
Currency
Translation
(In millions)
Acquisition Cost
Customer relationships
Patents, technology and other
Indefinite-lived trade names
Total
286.8 $
244.0
109.5
640.3 $
(89.1) $
(79.6)
—
(168.7) $
(1.0) $
(1.3)
—
(2.3) $
Net
196.7
163.1
109.5
469.3
As of December 31, 2019
Accumulated
Amortization
Currency
Translation
Amortization of finite-lived intangible assets included in continuing operations for the years ended December 31,
2020, 2019 and 2018 was $43.5 million, $29.5 million and $25.5 million, respectively.
We expect finite-lived intangibles amortization expense for the next five years as follows:
(In millions)
2021
2022
2023
2024
2025
Expected Amortization Expense
$
56.4 $
54.3 $
52.0 $
51.9 $
51.6
$
$
$
$
Note 5 — EMPLOYEE SEPARATION AND RESTRUCTURING COSTS
As part of our integration efforts associated with the Clariant MB Acquisition, we are engaged in a restructuring plan.
The restructuring plan is expected to enable us to better serve customers, improve efficiency and deliver anticipated
synergy-related cost savings. We expect to incur costs for exit and disposal activities under generally accepted
accounting principles when actions associated with the restructuring plan are approved and announced. The costs
recorded in Cost of sales during 2020 included $0.4 million related to fixed asset disposals and $0.2 million related
to severance. The costs recorded in Selling and administrative expense include $6.4 million of severance and
$0.2 million of other costs. We expect that the full restructuring plan will be implemented through 2023 and
anticipate that we will incur approximately $75 million of charges in connection with the restructuring plan.
We also initiated other restructuring activities in 2020 primarily associated with streamlining operations of our
Specialty Inks business. The expense recognized in Cost of sales associated with these other activities in 2020
consisted of $3.2 million of accelerated depreciation and lease amortization, and $0.4 million of expense related to
severance. The total costs recorded in Selling and administrative expense include $7.6 million of severance and
$1.2 million of other costs. Future costs associated with these other restructuring activities are not expected to be
material.
Line item in the Consolidated Statement of Income in which the costs above are included:
(in millions)
Cost of goods sold
Selling and administrative expenses
Total employee separation and restructuring charges
Year ended December 31, 2020
$
$
4.2
15.4
19.6
Note 6 — FINANCING ARRANGEMENTS
For each of the periods presented, total debt consisted of the following:
As of December 31, 2020 (in millions)
Senior secured revolving credit facility due 2022
5.25% senior notes due 2023
5.75% senior notes due 2025
Senior secured term loan due 2026
Other Debt
Total Debt
Less short-term and current portion of long-term debt
Total long-term debt, net of current portion
As of December 31, 2019 (in millions)
Senior secured revolving credit facility due 2022
5.25%senior notes due 2023
Senior secured term loan due 2026
Other Debt
Total Debt
Less short-term and current portion of long-term debt
Total long-term debt, net of current portion
$
$
$
$
Principal
Amount
Unamortized
discount and debt
issuance cost
Net Debt
Weighted
average
interest rate
$
— $
600.0
650.0
618.0
23.9
1,891.9 $
18.6
$1,873.3
— %
5.25 %
5.75 %
2.36 %
— $
2.5
8.8
8.0
—
19.3 $
—
$19.3
—
597.5
641.2
610.0
23.9
1,872.6
18.6
$1,854.0
Principal
Amount
Unamortized
discount and debt
issuance cost
Net Debt
Weighted
average
interest rate
— $
600.0
624.5
18.3
1,242.8 $
18.4
1,224.4 $
— $
3.7
9.8
—
13.5 $
—
13.5 $
—
596.3
614.7
18.3
1,229.3
18.4
1,210.9
3.90 %
5.25 %
4.01 %
The Company maintains a senior secured revolving credit facility, which matures on February 24, 2022 and
provides a maximum borrowing facility size of $450.0 million, subject to a borrowing base with advances against
AVIENT CORPORATION 49
certain U.S. and Canadian accounts receivable, inventory and other assets as specified in the agreement. On June
28, 2019, the Company amended and restated its senior secured revolving credit facility to, among other things, add
a European line of credit, up to the euro equivalent of $50.0 million, subject to a borrowing base with advances
against certain European accounts receivable. Advances under the U.S. portion of our revolving credit facility bear
interest, at the Company’s option, at a Base Rate or a LIBOR Rate plus an applicable margin. The Base Rate is a
fluctuating rate equal to the greater of (i) the Federal Funds Rate plus one-half percent, (ii) the prevailing LIBOR
Rate plus one percent, and (iii) the prevailing Prime Rate. The applicable margins vary based on the Company’s
daily average excess availability during the previous quarter. As of December 31, 2020, we had no borrowings
outstanding under our revolving credit facility, which had remaining availability of $278.2 million. As of December 31,
2019, we had no borrowings under our revolving credit facility, which had remaining availability of $279.4 million.
On May 13, 2020, the Company entered into an indenture (the Indenture) with U.S. Bank National Association, as
trustee (the Trustee), relating to the issuance by the Company of $650 million aggregate principal amount of 5.75%
Senior Notes due 2025 (the Notes). The Notes were sold on May 13, 2020 in a private transaction exempt from the
registration requirements of the Securities Act of 1933 (the Securities Act), have not been and will not be registered
under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act. The Company received net proceeds of
$640.5 million from the Notes offering, net of debt issuance costs, which were recorded on the balance sheet and
are being amortized into Interest expense, net over the term of the debt. Also included in Interest expense, net for
the year ended December 31, 2020, are costs associated with committed financing of $10.1 million related to the
Clariant MB acquisition.
On April 11, 2018, the Company entered into a fifth amendment to its senior secured term loan. Under the terms of
the amended senior secured term loan, the margin was reduced by 25 basis points to 175 basis points. At the
Company's discretion, interest is based upon (i) a margin rate of 75 basis points plus a Prime Rate, subject to a
floor of 175 basis points. On November 9, 2018, the Company entered into a sixth amendment to its senior secured
term loan, which extended the maturity to 2026. Repayments in the amount of one percent of the aggregate
principal amount as of August 3, 2016 are payable annually, while the remaining balance matures on January 30,
2026. The total principal repayments for the year ended December 31, 2020 were $6.5 million.
The agreements governing our revolving credit facility and our senior secured term loan, and the indentures and
credit agreements governing other debt, contain a number of customary financial and restrictive covenants that,
among other things, limit our ability to: sell or otherwise transfer assets, including in a spin-off, incur additional debt
or liens, consolidate or merge with any entity or transfer or sell all or substantially all of our assets, pay dividends or
make certain other restricted payments, make investments, enter into transactions with affiliates, create dividend or
other payment restrictions with respect to subsidiaries, make capital investments and alter the business we conduct.
As of December 31, 2020, we were in compliance with all covenants.
As of both December 31, 2020 and 2019, the Company maintained a credit line of $12.0 million with Saudi Hollandi
Bank. The credit line has an interest rate equal to the Saudi Arabia Interbank Offered Rate plus a fixed rate of
0.85% and is subject to annual renewal. Borrowings under the credit line were primarily used to fund capital
expenditures related to the manufacturing facility in Jeddah, Saudi Arabia. As of December 31, 2020, letters of credit
under the credit line were immaterial and borrowings were $10.3 million with a weighted average annual interest
rate of 1.85%. As of December 31, 2019, letters of credit under the credit line were immaterial and borrowings were
$10.3 million with a weighted average annual interest rate of 3.14%. As of December 31, 2020 and 2019, there was
remaining availability on the credit line of $1.7 million and $1.7 million, respectively.
The estimated fair value of Avient’s debt instruments at December 31, 2020 and 2019 was $1,955.9 million and
$1,271.8 million, respectively, compared to carrying values of $1,872.6 million and $1,229.3 million as of
December 31, 2020 and 2019, respectively. The fair value of Avient’s debt instruments was estimated using
prevailing market interest rates on debt with similar creditworthiness, terms and maturities and represent Level 2
measurements within the fair value hierarchy.
Aggregate maturities of the principal amount of debt for the next five years and thereafter are as follows:
(In millions)
2021
2022
2023
2024
2025
Thereafter
Aggregate maturities
$
18.6
8.5
608.7
8.6
658.7
588.8
$
1,891.9
Included in Interest expense, net for the years ended December 31, 2020, 2019 and 2018 was interest income of
$19.9 million, $11.0 million, and $3.1 million, respectively. Total interest paid on debt was $70.8 million in 2020,
$67.0 million in 2019 and $61.0 million in 2018.
Note 7 — LEASING ARRANGEMENTS
We lease certain manufacturing facilities, warehouse space, machinery and equipment, vehicles and information
technology equipment under operating leases. The majority of our leases are operating leases. Finance leases are
immaterial to our condensed consolidated financial statements. Operating lease assets and obligations are reflected
within Operating lease assets, net, Current operating lease obligations, and Non-current operating lease obligations,
respectively.
Lease expense for these leases is recognized on a straight-line basis over the lease term, with variable lease
payments recognized in the period those payments are incurred. The components of lease cost from continued
operations recognized within our Condensed Consolidated Statements of Income were as follows:
(In millions)
Cost of sales
Selling and administrative expense
Total Operating lease cost
Year Ended December 31,
2020
2019
$
$
11.9 $
19.1
31.0 $
10.9
13.1
24.0
We often have options to renew lease terms for buildings and other assets. The exercise of lease renewal options
are generally at our sole discretion. In addition, certain lease arrangements may be terminated prior to their original
expiration date at our discretion. We evaluate renewal and termination options at the lease commencement date to
determine if we are reasonably certain to exercise the option on the basis of economic factors. The weighted
average remaining lease term for our operating leases as of December 31, 2020 and 2019 was 5.4 years and 4.0
years, respectively. The non-cash net increase in operating lease liabilities was $10.5 million and $11.3 million for
the years ended December 31, 2020 and 2019, respectively.
The discount rate implicit within our leases is generally not determinable and, therefore, the Company determines
the discount rate based on its incremental borrowing rate. The incremental borrowing rate for our leases is
determined based on lease term and currency in which lease payments are made, adjusted for impacts of collateral.
The weighted average discount rate used to measure our operating lease liabilities as of December 31, 2020 and
2019 were 3.9% and 7.9%, respectively.
50 AVIENT CORPORATION
certain U.S. and Canadian accounts receivable, inventory and other assets as specified in the agreement. On June
Aggregate maturities of the principal amount of debt for the next five years and thereafter are as follows:
28, 2019, the Company amended and restated its senior secured revolving credit facility to, among other things, add
a European line of credit, up to the euro equivalent of $50.0 million, subject to a borrowing base with advances
against certain European accounts receivable. Advances under the U.S. portion of our revolving credit facility bear
interest, at the Company’s option, at a Base Rate or a LIBOR Rate plus an applicable margin. The Base Rate is a
fluctuating rate equal to the greater of (i) the Federal Funds Rate plus one-half percent, (ii) the prevailing LIBOR
Rate plus one percent, and (iii) the prevailing Prime Rate. The applicable margins vary based on the Company’s
daily average excess availability during the previous quarter. As of December 31, 2020, we had no borrowings
outstanding under our revolving credit facility, which had remaining availability of $278.2 million. As of December 31,
2019, we had no borrowings under our revolving credit facility, which had remaining availability of $279.4 million.
On May 13, 2020, the Company entered into an indenture (the Indenture) with U.S. Bank National Association, as
trustee (the Trustee), relating to the issuance by the Company of $650 million aggregate principal amount of 5.75%
Senior Notes due 2025 (the Notes). The Notes were sold on May 13, 2020 in a private transaction exempt from the
registration requirements of the Securities Act of 1933 (the Securities Act), have not been and will not be registered
under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act. The Company received net proceeds of
$640.5 million from the Notes offering, net of debt issuance costs, which were recorded on the balance sheet and
are being amortized into Interest expense, net over the term of the debt. Also included in Interest expense, net for
the year ended December 31, 2020, are costs associated with committed financing of $10.1 million related to the
Clariant MB acquisition.
On April 11, 2018, the Company entered into a fifth amendment to its senior secured term loan. Under the terms of
the amended senior secured term loan, the margin was reduced by 25 basis points to 175 basis points. At the
Company's discretion, interest is based upon (i) a margin rate of 75 basis points plus a Prime Rate, subject to a
floor of 175 basis points. On November 9, 2018, the Company entered into a sixth amendment to its senior secured
term loan, which extended the maturity to 2026. Repayments in the amount of one percent of the aggregate
principal amount as of August 3, 2016 are payable annually, while the remaining balance matures on January 30,
2026. The total principal repayments for the year ended December 31, 2020 were $6.5 million.
The agreements governing our revolving credit facility and our senior secured term loan, and the indentures and
credit agreements governing other debt, contain a number of customary financial and restrictive covenants that,
among other things, limit our ability to: sell or otherwise transfer assets, including in a spin-off, incur additional debt
or liens, consolidate or merge with any entity or transfer or sell all or substantially all of our assets, pay dividends or
make certain other restricted payments, make investments, enter into transactions with affiliates, create dividend or
other payment restrictions with respect to subsidiaries, make capital investments and alter the business we conduct.
As of December 31, 2020, we were in compliance with all covenants.
As of both December 31, 2020 and 2019, the Company maintained a credit line of $12.0 million with Saudi Hollandi
Bank. The credit line has an interest rate equal to the Saudi Arabia Interbank Offered Rate plus a fixed rate of
0.85% and is subject to annual renewal. Borrowings under the credit line were primarily used to fund capital
expenditures related to the manufacturing facility in Jeddah, Saudi Arabia. As of December 31, 2020, letters of credit
under the credit line were immaterial and borrowings were $10.3 million with a weighted average annual interest
rate of 1.85%. As of December 31, 2019, letters of credit under the credit line were immaterial and borrowings were
$10.3 million with a weighted average annual interest rate of 3.14%. As of December 31, 2020 and 2019, there was
remaining availability on the credit line of $1.7 million and $1.7 million, respectively.
The estimated fair value of Avient’s debt instruments at December 31, 2020 and 2019 was $1,955.9 million and
$1,271.8 million, respectively, compared to carrying values of $1,872.6 million and $1,229.3 million as of
December 31, 2020 and 2019, respectively. The fair value of Avient’s debt instruments was estimated using
prevailing market interest rates on debt with similar creditworthiness, terms and maturities and represent Level 2
measurements within the fair value hierarchy.
(In millions)
2021
2022
2023
2024
2025
Thereafter
Aggregate maturities
$
18.6
8.5
608.7
8.6
658.7
588.8
$
1,891.9
Included in Interest expense, net for the years ended December 31, 2020, 2019 and 2018 was interest income of
$19.9 million, $11.0 million, and $3.1 million, respectively. Total interest paid on debt was $70.8 million in 2020,
$67.0 million in 2019 and $61.0 million in 2018.
Note 7 — LEASING ARRANGEMENTS
We lease certain manufacturing facilities, warehouse space, machinery and equipment, vehicles and information
technology equipment under operating leases. The majority of our leases are operating leases. Finance leases are
immaterial to our condensed consolidated financial statements. Operating lease assets and obligations are reflected
within Operating lease assets, net, Current operating lease obligations, and Non-current operating lease obligations,
respectively.
Lease expense for these leases is recognized on a straight-line basis over the lease term, with variable lease
payments recognized in the period those payments are incurred. The components of lease cost from continued
operations recognized within our Condensed Consolidated Statements of Income were as follows:
(In millions)
Cost of sales
Selling and administrative expense
Total Operating lease cost
Year Ended December 31,
2020
2019
$
$
11.9 $
19.1
31.0 $
10.9
13.1
24.0
We often have options to renew lease terms for buildings and other assets. The exercise of lease renewal options
are generally at our sole discretion. In addition, certain lease arrangements may be terminated prior to their original
expiration date at our discretion. We evaluate renewal and termination options at the lease commencement date to
determine if we are reasonably certain to exercise the option on the basis of economic factors. The weighted
average remaining lease term for our operating leases as of December 31, 2020 and 2019 was 5.4 years and 4.0
years, respectively. The non-cash net increase in operating lease liabilities was $10.5 million and $11.3 million for
the years ended December 31, 2020 and 2019, respectively.
The discount rate implicit within our leases is generally not determinable and, therefore, the Company determines
the discount rate based on its incremental borrowing rate. The incremental borrowing rate for our leases is
determined based on lease term and currency in which lease payments are made, adjusted for impacts of collateral.
The weighted average discount rate used to measure our operating lease liabilities as of December 31, 2020 and
2019 were 3.9% and 7.9%, respectively.
AVIENT CORPORATION 51
Note 10 — OTHER BALANCE SHEET LIABILITIES
Other liabilities at December 31, 2020 and 2019 consist of the following:
Pension and other post-employment benefits
(in millions)
Employment costs
Earnouts payable
Environmental liabilities
Accrued taxes
Accrued interest
Dividends payable
Unrecognized tax benefits
Net investment hedge
Other
Total
Accrued expenses and
other current liabilities
December 31,
Other non-current liabilities
December 31,
2020
2019
2020
2019
$
142.7 $
68.6 $
6.1 $
—
20.3
49.0
6.7
14.1
19.4
3.2
—
30.2
87.9
11.2
165.4
4.8
10.0
15.6
0.7
—
11.2
—
99.4
—
—
—
—
7.3
48.4
31.6
$
285.6 $
375.4 $
192.8 $
20.5
—
100.8
—
—
—
—
11.9
5.1
6.0
144.3
Note 11 — EMPLOYEE BENEFIT PLANS
We recognize actuarial gains and losses in our operating results in the year in which the gains or losses occur.
These gains and losses are generally only measured annually as of December 31 and, accordingly, are recorded
during the fourth quarter of each year. We recognized benefits of $17.2 million and $9.6 million in the fourth quarter
of 2020 and 2019, respectively and a charge of $15.6 million in the fourth quarter of 2018, related to the actuarial
losses during the year.
All U.S. qualified defined benefit pension plans are frozen, no longer accrue benefits and are closed to new
participants. We have foreign pension plans that accrue benefits. The plans generally provide benefit payments
using a formula that is based upon employee compensation and length of service.
Future minimum lease payments under non-cancelable operating leases with initial lease terms longer than one
year as of December 31, 2020 are as follows:
in 2018.
Depreciation expense from continuing operations was $68.2 million in 2020, $48.6 million in 2019 and $47.1 million
Maturity Analysis of Lease Liabilities:
(in millions)
2021
2022
2023
2024
2025
Thereafter
Total
Less amount of lease payment representing interest
Total present value of lease payments
(in millions)
2020
2021
2022
2023
2024
Thereafter
Total
Less amount of lease payment representing interest
Total present value of lease payments
Note 8 — INVENTORIES, NET
Components of Inventories, net are as follows:
(In millions)
Finished products
Work in process
Raw materials and supplies
Inventories, net
Note 9 — PROPERTY, NET
Components of Property, net are as follows:
(In millions)
Land and land improvements
Buildings
Machinery and equipment
Property, gross
Less accumulated depreciation
Property, net
52 AVIENT CORPORATION
Operating leases
As of December 31, 2020
$
$
$
28.0
21.4
15.0
8.7
4.7
13.3
91.1
(10.0)
81.1
Operating leases
As of December 31, 2019
$
$
$
24.0
16.0
11.3
8.1
4.5
7.8
71.7
(7.9)
63.8
December 31,
2020
2019
171.7 $
16.6
139.2
327.5 $
157.6
8.0
95.3
260.9
December 31,
2020
2019
95.7 $
333.5
948.2
1,377.4
(682.5)
694.9 $
32.8
231.8
748.9
1,013.5
(606.1)
407.4
$
$
$
$
Future minimum lease payments under non-cancelable operating leases with initial lease terms longer than one
Depreciation expense from continuing operations was $68.2 million in 2020, $48.6 million in 2019 and $47.1 million
in 2018.
Operating leases
As of December 31, 2020
Operating leases
As of December 31, 2019
28.0
21.4
15.0
8.7
4.7
13.3
91.1
(10.0)
81.1
24.0
16.0
11.3
8.1
4.5
7.8
71.7
(7.9)
63.8
$
$
$
$
$
$
Note 10 — OTHER BALANCE SHEET LIABILITIES
Other liabilities at December 31, 2020 and 2019 consist of the following:
(in millions)
Employment costs
Earnouts payable
Environmental liabilities
Accrued taxes
Pension and other post-employment benefits
Accrued interest
Dividends payable
Unrecognized tax benefits
Net investment hedge
Other
Total
$
$
Note 11 — EMPLOYEE BENEFIT PLANS
Accrued expenses and
other current liabilities
December 31,
Other non-current liabilities
December 31,
2020
2019
2020
2019
142.7 $
—
20.3
49.0
6.7
14.1
19.4
3.2
—
30.2
285.6 $
68.6 $
87.9
11.2
165.4
4.8
10.0
15.6
0.7
—
11.2
375.4 $
6.1 $
—
99.4
—
—
—
—
7.3
48.4
31.6
192.8 $
20.5
—
100.8
—
—
—
—
11.9
5.1
6.0
144.3
We recognize actuarial gains and losses in our operating results in the year in which the gains or losses occur.
These gains and losses are generally only measured annually as of December 31 and, accordingly, are recorded
during the fourth quarter of each year. We recognized benefits of $17.2 million and $9.6 million in the fourth quarter
of 2020 and 2019, respectively and a charge of $15.6 million in the fourth quarter of 2018, related to the actuarial
losses during the year.
All U.S. qualified defined benefit pension plans are frozen, no longer accrue benefits and are closed to new
participants. We have foreign pension plans that accrue benefits. The plans generally provide benefit payments
using a formula that is based upon employee compensation and length of service.
year as of December 31, 2020 are as follows:
Maturity Analysis of Lease Liabilities:
Less amount of lease payment representing interest
Total present value of lease payments
(in millions)
2021
2022
2023
2024
2025
Total
Thereafter
(in millions)
2020
2021
2022
2023
2024
Total
Thereafter
Less amount of lease payment representing interest
Total present value of lease payments
Note 8 — INVENTORIES, NET
Components of Inventories, net are as follows:
(In millions)
Finished products
Work in process
Raw materials and supplies
Inventories, net
Note 9 — PROPERTY, NET
Components of Property, net are as follows:
Land and land improvements
(In millions)
Buildings
Machinery and equipment
Property, gross
Less accumulated depreciation
Property, net
December 31,
2020
2019
171.7 $
16.6
139.2
327.5 $
157.6
8.0
95.3
260.9
December 31,
2020
2019
95.7 $
333.5
948.2
1,377.4
(682.5)
694.9 $
32.8
231.8
748.9
1,013.5
(606.1)
407.4
$
$
$
$
AVIENT CORPORATION 53
The following tables present the change in benefit obligation, change in plan assets and components of funded
status for defined benefit pension and post-retirement health care benefit plans.
Pension Benefits
Health Care Benefits
2019
2020
(in millions)
Change in benefit obligation:
Projected benefit obligation - beginning of year
Service cost
Interest cost
Actuarial loss
Benefits paid
Effect of settlement and/or curtailment
Acquired benefit obligation
Other
Projected benefit obligation - end of year
Projected salary increases
Accumulated benefit obligation
Change in plan assets:
Plan assets - beginning of year
Actual return on plan assets
Company contributions
Benefits paid
Effect of settlement and curtailment
Acquired plan assets
Other
Plan assets - end of year
Unfunded status at end of year
$
$
$
$
$
2020
2019
478.0 $
3.0
15.3
24.5
(40.9)
(23.0)
137.3
7.8
602.0
(8.8)
593.2 $
469.1 $
60.5
5.4
(40.9)
(16.5)
92.4
3.6
573.6 $
462.7 $
0.5
18.2
34.0
(36.9)
—
—
(0.5)
478.0
(1.9) $
476.1 $
434.4 $
67.4
4.4
(36.9)
—
— $
(0.2) $
469.1 $
7.1 $
0.1
0.4
—
(0.7)
—
11.3 $
0.1 $
18.3
— $
18.3 $
— $
—
0.7
(0.7)
—
— $
— $
— $
7.4
—
0.2
0.1
(0.8)
—
—
0.2
7.1
—
7.1
—
—
0.8
(0.8)
—
—
—
—
(7.1)
(28.4) $
(8.9) $
(18.3) $
Amounts included in the accompanying Consolidated Balance Sheets as of December 31 are as follows:
(in millions)
Non-current assets
Accrued expenses and other liabilities
Pension and other post-retirement benefits
Pension Benefits
2020
2019
Health Care Benefits
2019
2020
$
75.0 $
45.4 $
5.4
98.0
4.0
50.3
— $
1.3
17.0
—
0.8
6.3
As of December 31, 2020 and 2019, we had plans with total projected and accumulated benefit obligations in
excess of the related plan assets as follows:
(in millions)
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets
Pension Benefits
2019
2020
Health Care Benefits
2019
2020
$
149.5 $
122.8
74.9
58.9 $
57.0
4.6
18.3 $
18.3
—
7.1
7.1
—
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate
Assumed health care cost trend rates at December 31:
Pension Benefits
Health Care Benefits
2020
2019
2020
2019
2.95 %
3.19 %
2.66 %
3.18 %
Health care cost trend rate assumed for next year
Rate to which the cost trend rate is assumed to
decline (the ultimate trend rate)
Year that the rate reaches the ultimate trend rate
N/A
N/A
N/A
N/A
N/A
N/A
5.99 %
5.88 %
4.04 %
2065
4.50 %
2027
54 AVIENT CORPORATION
The following table summarizes the components of net periodic benefit cost or gain that was recognized during
each of the years in the three-year period ended December 31, 2020.
Components of net periodic benefit costs (gains):
(in millions)
Service Cost
Interest Cost
Expected return on plan assets
Mark-to-market actuarial net losses (gains)
Curtailment
Net periodic cost (benefit)
Pension Benefits
Health Care Benefits
2020
2019
2018
2020
2019
2018
$
3.0 $
0.5 $
0.6 $
0.1 $
— $ —
15.3
18.2
17.6
(25.3)
(23.7)
(23.8)
(10.8)
(9.7)
16.2
(6.4)
—
(0.1)
0.4
—
—
—
0.2
—
0.1
—
0.3
—
(0.6)
—
$
(24.2) $
(14.7) $
10.5 $
0.5 $
0.3 $
(0.3)
In 2020, we recognized a $17.2 million mark-to-market gain that was primarily the result of actual asset returns that
were higher than our assumed returns and mortality assumptions. Partially offsetting the higher asset returns was
the decrease in our year end discount rate from 3.19% to 2.95%. A component of the $17.2 million mark-to-market
gain was a $6.4 million gain related to lump sum payments that were offered to certain eligible participants of our
US Qualified Pension Plan in the second quarter of 2020 which resulted in a settlement of $1.1 million, and a
curtailment gain of $5.3 million related to certain acquired pension plans during the fourth quarter of 2020.
In 2019, we recognized a $9.6 million mark-to-market gain that was primarily a result of actual asset returns that
were higher than our assumed returns and mortality assumptions. Partially offsetting the higher asset returns was
the decrease in our year end discount rates from 4.11% to 3.19%.
In 2018, we recognized a $15.6 million mark-to-market charge that was primarily a result of actual asset returns
that were lower than our assumed returns. Partially offsetting the lower asset returns was the increase in our year
end discount rates from 3.62% to 4.11%.
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
Discount rate*
Expected long-term return on plan assets*
Assumed health care cost trend rates at December 31:
Health care cost trend rate assumed for next year
Rate to which the cost trend rate is assumed to
decline (the ultimate trend rate)
Year that the rate reaches the ultimate trend rate
Pension Benefits
Health Care Benefits
2020
3.19 %
5.05 %
2019
4.11 %
5.68 %
2018
2020
2019
2018
3.62 %
5.09 %
3.06 %
3.98 % 3.60 %
—
—
—
N/A
N/A
N/A
N/A
N/A
N/A
N/A
6.16 %
6.09 % 6.29 %
N/A
N/A
4.14 %
4.50 % 4.50 %
2054
2027
2027
*The mark-to-market component of net periodic costs is determined based on discount rates as of year-end and actual asset returns during the
year.
The expected long-term rate of return on pension assets was determined after considering the historical and
forward looking long-term asset returns by asset category and the expected investment portfolio mix.
Our pension investment strategy is to diversify the portfolio among asset categories to enhance the portfolio’s risk-
adjusted return as well as insulate it from exposure to changes in interest rates. Our asset mix considers the
duration of plan liabilities, historical and expected returns of the investments, and the funded status of the plan. The
pension asset allocation is reviewed and actively managed based on the funded status of the plan. Based on the
current funded status of the plan, our pension asset investment allocation guidelines are to invest 83% in fixed
income securities and 17% in equity securities. The plan keeps a minimal amount of cash available to fund benefit
payments. These investments may include funds of multiple asset investment strategies and funds of hedge funds.
The following tables present the change in benefit obligation, change in plan assets and components of funded
status for defined benefit pension and post-retirement health care benefit plans.
The following table summarizes the components of net periodic benefit cost or gain that was recognized during
each of the years in the three-year period ended December 31, 2020.
Projected benefit obligation - beginning of year
$
478.0 $
462.7 $
7.1 $
(in millions)
Change in benefit obligation:
Service cost
Interest cost
Actuarial loss
Benefits paid
Effect of settlement and/or curtailment
Acquired benefit obligation
Other
Projected benefit obligation - end of year
Projected salary increases
Accumulated benefit obligation
Change in plan assets:
Plan assets - beginning of year
Actual return on plan assets
Company contributions
Benefits paid
Effect of settlement and curtailment
Acquired plan assets
Other
Plan assets - end of year
Unfunded status at end of year
Pension Benefits
2020
2019
Health Care Benefits
2020
2019
3.0
15.3
24.5
(40.9)
(23.0)
137.3
7.8
602.0
(8.8)
593.2 $
60.5
5.4
(40.9)
(16.5)
92.4
3.6
0.5
18.2
34.0
—
—
(36.9)
(0.5)
478.0
(1.9) $
476.1 $
67.4
4.4
(36.9)
—
— $
(0.2) $
0.1
0.4
—
(0.7)
—
11.3 $
0.1 $
18.3
— $
18.3 $
—
0.7
(0.7)
—
— $
— $
— $
469.1 $
434.4 $
— $
$
$
$
$
573.6 $
469.1 $
(28.4) $
(8.9) $
(18.3) $
(7.1)
Amounts included in the accompanying Consolidated Balance Sheets as of December 31 are as follows:
(in millions)
Non-current assets
Accrued expenses and other liabilities
Pension and other post-retirement benefits
Pension Benefits
Health Care Benefits
2020
2019
2020
2019
$
75.0 $
45.4 $
— $
5.4
98.0
4.0
50.3
1.3
17.0
As of December 31, 2020 and 2019, we had plans with total projected and accumulated benefit obligations in
excess of the related plan assets as follows:
(in millions)
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets
Pension Benefits
Health Care Benefits
2020
2019
2020
2019
$
149.5 $
58.9 $
18.3 $
122.8
74.9
57.0
4.6
18.3
—
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate
Assumed health care cost trend rates at December 31:
Pension Benefits
Health Care Benefits
2020
2019
2020
2019
2.95 %
3.19 %
2.66 %
3.18 %
Health care cost trend rate assumed for next year
Rate to which the cost trend rate is assumed to
decline (the ultimate trend rate)
Year that the rate reaches the ultimate trend rate
N/A
N/A
N/A
N/A
N/A
N/A
5.99 %
5.88 %
4.04 %
2065
4.50 %
2027
(0.8)
7.4
—
0.2
0.1
—
—
0.2
7.1
—
7.1
—
—
0.8
(0.8)
—
—
—
—
—
0.8
6.3
7.1
7.1
—
(in millions)
Components of net periodic benefit costs (gains):
Service Cost
Interest Cost
Expected return on plan assets
Mark-to-market actuarial net losses (gains)
Curtailment
Net periodic cost (benefit)
Pension Benefits
2019
2018
2020
Health Care Benefits
2019
2020
2018
$
3.0 $
0.5 $
0.6 $
15.3
(25.3)
18.2
(23.7)
17.6
(23.8)
0.1 $
0.4
—
— $ —
0.3
0.2
—
—
(10.8)
(9.7)
16.2
—
0.1
(6.4)
(24.2) $
—
(14.7) $
$
(0.1)
10.5 $
—
0.5 $
—
0.3 $
(0.6)
—
(0.3)
In 2020, we recognized a $17.2 million mark-to-market gain that was primarily the result of actual asset returns that
were higher than our assumed returns and mortality assumptions. Partially offsetting the higher asset returns was
the decrease in our year end discount rate from 3.19% to 2.95%. A component of the $17.2 million mark-to-market
gain was a $6.4 million gain related to lump sum payments that were offered to certain eligible participants of our
US Qualified Pension Plan in the second quarter of 2020 which resulted in a settlement of $1.1 million, and a
curtailment gain of $5.3 million related to certain acquired pension plans during the fourth quarter of 2020.
In 2019, we recognized a $9.6 million mark-to-market gain that was primarily a result of actual asset returns that
were higher than our assumed returns and mortality assumptions. Partially offsetting the higher asset returns was
the decrease in our year end discount rates from 4.11% to 3.19%.
In 2018, we recognized a $15.6 million mark-to-market charge that was primarily a result of actual asset returns
that were lower than our assumed returns. Partially offsetting the lower asset returns was the increase in our year
end discount rates from 3.62% to 4.11%.
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
Discount rate*
Expected long-term return on plan assets*
Assumed health care cost trend rates at December 31:
Health care cost trend rate assumed for next year
Rate to which the cost trend rate is assumed to
decline (the ultimate trend rate)
Year that the rate reaches the ultimate trend rate
Pension Benefits
Health Care Benefits
2020
3.19 %
5.05 %
2019
4.11 %
5.68 %
2018
3.62 %
5.09 %
2020
3.06 %
—
2019
3.98 % 3.60 %
2018
—
—
N/A
N/A
N/A
N/A
N/A
N/A
N/A
6.16 %
6.09 % 6.29 %
N/A
N/A
4.14 %
2054
4.50 % 4.50 %
2027
2027
*The mark-to-market component of net periodic costs is determined based on discount rates as of year-end and actual asset returns during the
year.
The expected long-term rate of return on pension assets was determined after considering the historical and
forward looking long-term asset returns by asset category and the expected investment portfolio mix.
Our pension investment strategy is to diversify the portfolio among asset categories to enhance the portfolio’s risk-
adjusted return as well as insulate it from exposure to changes in interest rates. Our asset mix considers the
duration of plan liabilities, historical and expected returns of the investments, and the funded status of the plan. The
pension asset allocation is reviewed and actively managed based on the funded status of the plan. Based on the
current funded status of the plan, our pension asset investment allocation guidelines are to invest 83% in fixed
income securities and 17% in equity securities. The plan keeps a minimal amount of cash available to fund benefit
payments. These investments may include funds of multiple asset investment strategies and funds of hedge funds.
AVIENT CORPORATION 55
The fair values of pension plan assets at December 31, 2020 and 2019, by asset category, are as follows:
income investments. The insurance contracts included in the other asset category are valued at the transacted
price. Common collective funds are valued at the net asset value of units held by the fund at year end. The unit
Fair Value of Plan Assets at December 31, 2020
value is determined by the total value of fund assets divided by the total number of units of the fund owned.
(In millions)
Asset category
Cash
Bonds and Notes
Global Equity
Other
Total
Investments measured at NAV:
Common collective funds:
United States equity
International equity
Global equity
Fixed income
Balanced
Total common collective funds
Total investments at fair value
(In millions)
Asset category
Cash
Other
Total
Investments at NAV
Common collective funds
United States equity
International equity
Global equity
Fixed income
Total common collective funds
Total investments at fair value
Pension Plan Assets
Quoted
Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Investments
(at Fair Value)
$
8.2 $
— $
— $
53.4
4.5
—
—
—
3.1
$
66.1 $
3.1 $
—
—
17.4
17.4
$
$
8.2
53.4
4.5
20.5
86.6
35.2
34.0
383.8
16.3
17.7
487.0
573.6
Fair Value of Plan Assets at December 31, 2019
Quoted
Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Investments
(at Fair Value)
$
$
3.7 $
—
3.7 $
— $
—
— $
— $
4.6
4.6
3.7
4.6
8.3
31.7
31.9
15.7
381.5
460.8
469.1
$
$
Other assets are primarily insurance contracts for international plans. The U.S. equity common collective funds are
predominately invested in equity securities actively traded in public markets. The international and global equity
common collective funds have broadly diversified investments across economic sectors and focus on low volatility,
long-term investments. The fixed income common collective funds consist primarily of publicly traded United States
fixed interest obligations (principally investment grade bonds and government securities).
Level 1 assets are valued based on quoted market prices. Level 2 investments are valued based on quoted market
prices and/or other market data for the same or comparable instruments and transactions of the underlying fixed
56 AVIENT CORPORATION
One of the foreign plans that was acquired with the Masterbatch transaction was in-process to receive statutory
approval to transfer the assets that funded the plan to an Avient trust. As we had legal right to the assets but did not
receive regulatory approval for the asset transfer until January 7, 2021, we have recognized the related
$16.8 million as a receivable, noting that the underlying assets are mutual funds that would otherwise qualify for the
NAV disclosure practical expedient.
The estimated future benefit payments for our pension and health care plans are as follows:
(In millions)
2021
2022
2023
2024
2025
2026 through 2030
Pension Benefits
$
47.5 $
Health Care
benefits
42.5
42.5
40.9
39.8
184.0
1.3
1.3
1.3
1.3
1.3
5.7
We currently estimate that 2021 employer contributions will be $8.2 million to all qualified and non-qualified pension
plans and $1.3 million to all healthcare benefit plans.
The Company sponsors various voluntary retirement savings plans (RSP). Under the provisions of the plans,
eligible employees receive defined Company contributions and are eligible for Company matching contributions
based on their eligible earnings contributed to the plan. In addition, we may make discretionary contributions to the
plans for eligible employees based on a specific percentage of each employee’s compensation.
Following are our contributions to the RSP:
(In millions)
Retirement savings match
Retirement savings contribution
Total contribution
2020
2019
2018
$
$
9.9 $
0.6
10.5 $
10.4 $
—
10.4 $
10.1
—
10.1
Note 12 — COMMITMENTS AND CONTINGENCIES
Environmental — We have been notified by federal and state environmental agencies and by private parties that
we may be a potentially responsible party (PRP) in connection with the environmental investigation and remediation
of certain sites. While government agencies frequently assert that PRPs are jointly and severally liable at these
sites, in our experience, the interim and final allocations of liability costs are generally made based on the relative
contribution of waste. We may also initiate corrective and preventive environmental projects of our own to ensure
safe and lawful activities at our operations. We believe that compliance with current governmental regulations at all
levels will not have a material adverse effect on our financial position, results of operations or cash flows.
In September 2007, the United States District Court for the Western District of Kentucky (Court) in the case of
Westlake Vinyls, Inc. v. Goodrich Corporation, et al., held that we must pay the remediation costs at the former
Goodrich Corporation Calvert City facility (now largely owned and operated by Westlake Vinyls, Inc. (Westlake
Vinyls)), together with certain defense costs of Goodrich Corporation. The rulings also provided that we can seek
indemnification for contamination attributable to Westlake Vinyls.
Following the rulings, the parties to the litigation agreed to settle all claims regarding past environmental costs
incurred at the site. The settlement agreement provides a mechanism to pursue allocation of future remediation
costs at the Calvert City site to Westlake Vinyls. We will adjust our accrual, in the future, consistent with any such
future allocation of costs. Additionally, we continue to pursue available insurance coverage related to this matter and
recognize gains as we receive reimbursement.
The environmental obligation at the site arose as a result of an agreement between The B.F. Goodrich Company (n/
k/a Goodrich Corporation) and our predecessor, The Geon Company, at the time of the initial public offering in 1993.
Under the agreement, The Geon Company agreed to indemnify Goodrich Corporation for certain environmental
costs at the site. Neither the Company nor The Geon Company ever operated the facility.
The fair values of pension plan assets at December 31, 2020 and 2019, by asset category, are as follows:
(In millions)
Asset category
Cash
Bonds and Notes
Global Equity
Other
Total
Investments measured at NAV:
Common collective funds:
United States equity
International equity
Global equity
Fixed income
Balanced
Total common collective funds
Total investments at fair value
(In millions)
Asset category
Cash
Other
Total
Investments at NAV
Common collective funds
United States equity
International equity
Global equity
Fixed income
Total common collective funds
Total investments at fair value
Pension Plan Assets
Fair Value of Plan Assets at December 31, 2020
Quoted
Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Investments
(at Fair Value)
$
8.2 $
— $
— $
53.4
4.5
—
—
—
3.1
$
66.1 $
3.1 $
—
—
17.4
17.4
Fair Value of Plan Assets at December 31, 2019
Quoted
Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Investments
(at Fair Value)
$
$
3.7 $
—
3.7 $
— $
—
— $
— $
4.6
4.6
3.7
4.6
8.3
8.2
53.4
4.5
20.5
86.6
35.2
34.0
383.8
16.3
17.7
487.0
573.6
31.7
31.9
15.7
381.5
460.8
469.1
$
$
$
$
Other assets are primarily insurance contracts for international plans. The U.S. equity common collective funds are
predominately invested in equity securities actively traded in public markets. The international and global equity
common collective funds have broadly diversified investments across economic sectors and focus on low volatility,
long-term investments. The fixed income common collective funds consist primarily of publicly traded United States
fixed interest obligations (principally investment grade bonds and government securities).
Level 1 assets are valued based on quoted market prices. Level 2 investments are valued based on quoted market
prices and/or other market data for the same or comparable instruments and transactions of the underlying fixed
income investments. The insurance contracts included in the other asset category are valued at the transacted
price. Common collective funds are valued at the net asset value of units held by the fund at year end. The unit
value is determined by the total value of fund assets divided by the total number of units of the fund owned.
One of the foreign plans that was acquired with the Masterbatch transaction was in-process to receive statutory
approval to transfer the assets that funded the plan to an Avient trust. As we had legal right to the assets but did not
receive regulatory approval for the asset transfer until January 7, 2021, we have recognized the related
$16.8 million as a receivable, noting that the underlying assets are mutual funds that would otherwise qualify for the
NAV disclosure practical expedient.
The estimated future benefit payments for our pension and health care plans are as follows:
(In millions)
2021
2022
2023
2024
2025
2026 through 2030
Pension Benefits
$
47.5 $
42.5
42.5
40.9
39.8
184.0
Health Care
benefits
1.3
1.3
1.3
1.3
1.3
5.7
We currently estimate that 2021 employer contributions will be $8.2 million to all qualified and non-qualified pension
plans and $1.3 million to all healthcare benefit plans.
The Company sponsors various voluntary retirement savings plans (RSP). Under the provisions of the plans,
eligible employees receive defined Company contributions and are eligible for Company matching contributions
based on their eligible earnings contributed to the plan. In addition, we may make discretionary contributions to the
plans for eligible employees based on a specific percentage of each employee’s compensation.
Following are our contributions to the RSP:
(In millions)
Retirement savings match
Retirement savings contribution
Total contribution
2020
2019
2018
$
$
9.9 $
0.6
10.5 $
10.4 $
—
10.4 $
10.1
—
10.1
Note 12 — COMMITMENTS AND CONTINGENCIES
Environmental — We have been notified by federal and state environmental agencies and by private parties that
we may be a potentially responsible party (PRP) in connection with the environmental investigation and remediation
of certain sites. While government agencies frequently assert that PRPs are jointly and severally liable at these
sites, in our experience, the interim and final allocations of liability costs are generally made based on the relative
contribution of waste. We may also initiate corrective and preventive environmental projects of our own to ensure
safe and lawful activities at our operations. We believe that compliance with current governmental regulations at all
levels will not have a material adverse effect on our financial position, results of operations or cash flows.
In September 2007, the United States District Court for the Western District of Kentucky (Court) in the case of
Westlake Vinyls, Inc. v. Goodrich Corporation, et al., held that we must pay the remediation costs at the former
Goodrich Corporation Calvert City facility (now largely owned and operated by Westlake Vinyls, Inc. (Westlake
Vinyls)), together with certain defense costs of Goodrich Corporation. The rulings also provided that we can seek
indemnification for contamination attributable to Westlake Vinyls.
Following the rulings, the parties to the litigation agreed to settle all claims regarding past environmental costs
incurred at the site. The settlement agreement provides a mechanism to pursue allocation of future remediation
costs at the Calvert City site to Westlake Vinyls. We will adjust our accrual, in the future, consistent with any such
future allocation of costs. Additionally, we continue to pursue available insurance coverage related to this matter and
recognize gains as we receive reimbursement.
The environmental obligation at the site arose as a result of an agreement between The B.F. Goodrich Company (n/
k/a Goodrich Corporation) and our predecessor, The Geon Company, at the time of the initial public offering in 1993.
Under the agreement, The Geon Company agreed to indemnify Goodrich Corporation for certain environmental
costs at the site. Neither the Company nor The Geon Company ever operated the facility.
AVIENT CORPORATION 57
Since 2009, the Company, along with respondents Westlake Vinyls, and Goodrich Corporation, have worked with
the United States Environmental Protection Agency (USEPA) on the investigation of contamination at the site as
well as the evaluation of potential remedies to address the contamination. The USEPA issued its Record of Decision
(ROD) in September 2018, selecting a remedy consistent with our accrual assumptions. In April 2019, the
respondents signed an Administrative Settlement Agreement and Order on Consent with the USEPA to conduct the
remedial actions at the site. In February 2020, the three companies signed the agreed Consent Decree and
remedial action Work Plan, which received Federal Court approval in January 2021. Our current reserve of $106.4
million is consistent with the USEPA's estimates contained in the ROD.
On March 13, 2013, the Company acquired Spartech Corporation (Spartech). One of Spartech's subsidiaries,
Franklin-Burlington Plastics, Inc. (Franklin-Burlington), operated a plastic resin compounding facility in Kearny, New
Jersey, located adjacent to the Passaic River. The USEPA requested that companies located in the area of the
lower Passaic River, including Franklin-Burlington, cooperate in an investigation of contamination of approximately
17 miles of the lower Passaic River Study Area (LPRSA). In response, Franklin-Burlington and approximately 70
other companies (collectively, the Cooperating Parties) agreed, pursuant to an Administrative Order on Consent with
the USEPA, to assume responsibility for development of a Remedial Investigation and Feasibility Study of the
LPRSA. Franklin-Burlington has not admitted to any liability or agreed to bear any other costs for remediation or
natural resource damage.
In 2015, the Cooperating Parties submitted to the USEPA a remedial investigation report and feasibility study for the
LPRSA, and are currently engaged in technical discussions with the USEPA regarding those documents. Neither of
those documents contemplates who is responsible for remediation or how such costs might be allocated to PRPs. In
March 2016, the USEPA issued a ROD selecting a remedy for an eight-mile portion of the LPRSA at an estimated
and discounted cost of $1.4 billion. On March 31, 2016, the USEPA sent a Notice of Potential Liability to over 100
companies, including Franklin-Burlington, and several municipalities for this eight-mile portion. In September 2016,
the USEPA reached an agreement with Occidental Chemical Corporation (OCC), which orders OCC to conduct the
remedial design for the lower eight mile portion of the Passaic River. In September 2017, the USEPA sent a letter to
over 80 companies, including Franklin-Burlington, indicating that the USEPA would engage the recipients in an
allocation process for the lower eight miles of the LPRSA, and has engaged a third-party allocator as part of that
process. Along with other parties, Franklin-Burlington is participating in the development of this allocation process
with the allocator retained by the USEPA, and this process is expected to continue into 2021. On June 30, 2018,
OCC, independent of the USEPA, filed suit against 100 named entities, including Franklin-Burlington, seeking
contribution for past and future costs associated with the remediation of the lower eight-mile portion of the LPRSA.
Based on the currently available information, we have not identified evidence that Franklin-Burlington contributed
materially to the contamination into to the lower Passaic River. A timeline as to when an allocation of the remedial
costs may be determined is not yet known and any final allocation to Franklin-Burlington has not been determined.
Based upon the information provided to it as part of the allocation process for the lower eight miles of the LPRSA,
Franklin-Burlington has determined that the current best estimate of any allocation of the liability that may be
assigned to Franklin-Burlington will not be material to the consolidated financial statements.
Our Consolidated Balance Sheets include accruals totaling $119.7 million and $112.0 million as of December 31,
2020 and 2019, respectively, based on our estimates of probable future environmental expenditures relating to
previously contaminated sites. These undiscounted amounts are included in Accrued expenses and other current
liabilities and Other non-current liabilities on the accompanying Consolidated Balance Sheets. The accruals
represent our best estimate of probable future costs that we can reasonably estimate, based upon currently
available information and technology and our view of the most likely remedy. Depending upon the results of future
testing, completion and results of remedial investigation and feasibility studies, the ultimate remediation alternatives
undertaken, changes in regulations, technology development, new information, newly discovered conditions and
other factors, it is reasonably possible that we could incur additional costs in excess of the amount accrued at
December 31, 2020. However, such additional costs, if any, cannot be currently estimated.
The following table details the changes in the environmental accrued liabilities:
(in millions)
Balance at beginning of the year
Environmental expenses
Net cash payments
Currency translation and other
Balance at the end of year
58 AVIENT CORPORATION
2020
2019
2018
$
112.0 $
111.9 $
20.4
(12.7)
—
10.2
(10.3)
0.2
114.8
23.1
(26.0)
—
$
119.7 $
112.0 $
111.9
The environmental expenses noted in the table above are included in Cost of sales as are insurance recoveries
received for previously incurred environmental costs. We received insurance recoveries of $8.7 million, $4.5 million,
and $4.3 million in 2020, 2019 and 2018, respectively. Such insurance recoveries are recognized as a gain when
received.
Other Litigation — Avient is subject to a broad range of claims, administrative and legal proceedings such as
lawsuits that relate to contractual allegations, tax audits, product claims, personal injuries, and employment related
matters. Although it is not possible to predict with certainty the outcome or cost of these matters, the Company
believes our current reserves are appropriate and these matters will not have a material adverse effect on the
condensed consolidated financial statements.
Note 13 — INCOME TAXES
Income from continuing operations, before income taxes is summarized below based on the geographic location of
the operation to which such earnings are attributable.
Income from continuing operations, before income taxes consists of the following:
Income from continuing operations, before income taxes
A summary of income tax expense from continuing operations is as follows:
(In millions)
Domestic
International
(In millions)
Domestic
International
Domestic
International
Current income tax expense (benefit):
Total current income tax expense
Deferred income tax (benefit) expense:
Total deferred income tax benefit
Total income tax expense
2020
2019
2018
19.6 $
119.4
139.0 $
41.2 $
68.2
109.4 $
4.1
97.7
101.8
2020
2019
2018
(25.8) $
32.7
6.9 $
17.2 $
(18.9)
(1.7) $
5.2 $
24.8 $
21.9
46.7 $
(12.5) $
(0.5)
(13.0) $
33.7 $
(0.4)
22.0
21.6
11.1
(18.3)
(7.2)
14.4
$
$
$
$
$
$
$
As of December 31, 2018, we completed our accounting for the tax effects of the enactment of the 2017 Tax Cuts
and Jobs Act (TCJA). In compliance with the one-year measurement period of the SEC's Staff Accounting Bulletin
118 (SAB 118) (issued December 22, 2017), we finalized in 2018 the effects of the TCJA on our existing deferred
income tax balances, the one-time transition tax assessed for 2017 or 2018 based on the year end of international
corporate subsidiaries for US tax purposes, and, as discussed below, the impact the TCJA had on our indefinite
reinvestment assertion pursuant to Accounting Principles Board 23 (APB 23). These finalized effects are included as
components of income tax expense from continuing operations and are noted in the following tabular reconciliation.
We also elected to recognize the resulting tax on global intangible low-taxed income (GILTI) and foreign-derived
intangible income (FDII) as a period expense in the period in which the tax is incurred.
As of December 31, 2018, we completed our analysis with respect to the impact of the TCJA on our continuing
assertion that our international earnings are indefinitely reinvested pursuant to APB 23. APB 23 provides guidance
that US companies do not need to recognize tax effects on international earnings that are indefinitely reinvested.
Our assertion changed with respect to prior year earnings of certain international affiliates, which resulted in a
recognition of tax liabilities. For all other international affiliates, we did not change our assertion and no tax provision
was made on these investments. For the years ended December 31, 2020, 2019, and 2018, see the following
tabular reconciliation for the impact of International tax on certain current and prior year earnings.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted. The CARES
Act includes certain provisions for the amount of interest expense that can be deducted. The Company expects to
be able to deduct all U.S. interest expense incurred in 2020 pursuant to the CARES Act.
A reconciliation of the applicable U.S. federal statutory tax rate to the consolidated effective income tax rate from
continuing operations along with a description of significant or unusual reconciling items is included below.
Since 2009, the Company, along with respondents Westlake Vinyls, and Goodrich Corporation, have worked with
the United States Environmental Protection Agency (USEPA) on the investigation of contamination at the site as
well as the evaluation of potential remedies to address the contamination. The USEPA issued its Record of Decision
(ROD) in September 2018, selecting a remedy consistent with our accrual assumptions. In April 2019, the
respondents signed an Administrative Settlement Agreement and Order on Consent with the USEPA to conduct the
remedial actions at the site. In February 2020, the three companies signed the agreed Consent Decree and
remedial action Work Plan, which received Federal Court approval in January 2021. Our current reserve of $106.4
million is consistent with the USEPA's estimates contained in the ROD.
On March 13, 2013, the Company acquired Spartech Corporation (Spartech). One of Spartech's subsidiaries,
Franklin-Burlington Plastics, Inc. (Franklin-Burlington), operated a plastic resin compounding facility in Kearny, New
Jersey, located adjacent to the Passaic River. The USEPA requested that companies located in the area of the
lower Passaic River, including Franklin-Burlington, cooperate in an investigation of contamination of approximately
17 miles of the lower Passaic River Study Area (LPRSA). In response, Franklin-Burlington and approximately 70
other companies (collectively, the Cooperating Parties) agreed, pursuant to an Administrative Order on Consent with
the USEPA, to assume responsibility for development of a Remedial Investigation and Feasibility Study of the
LPRSA. Franklin-Burlington has not admitted to any liability or agreed to bear any other costs for remediation or
natural resource damage.
In 2015, the Cooperating Parties submitted to the USEPA a remedial investigation report and feasibility study for the
LPRSA, and are currently engaged in technical discussions with the USEPA regarding those documents. Neither of
those documents contemplates who is responsible for remediation or how such costs might be allocated to PRPs. In
March 2016, the USEPA issued a ROD selecting a remedy for an eight-mile portion of the LPRSA at an estimated
and discounted cost of $1.4 billion. On March 31, 2016, the USEPA sent a Notice of Potential Liability to over 100
companies, including Franklin-Burlington, and several municipalities for this eight-mile portion. In September 2016,
the USEPA reached an agreement with Occidental Chemical Corporation (OCC), which orders OCC to conduct the
remedial design for the lower eight mile portion of the Passaic River. In September 2017, the USEPA sent a letter to
over 80 companies, including Franklin-Burlington, indicating that the USEPA would engage the recipients in an
allocation process for the lower eight miles of the LPRSA, and has engaged a third-party allocator as part of that
process. Along with other parties, Franklin-Burlington is participating in the development of this allocation process
with the allocator retained by the USEPA, and this process is expected to continue into 2021. On June 30, 2018,
OCC, independent of the USEPA, filed suit against 100 named entities, including Franklin-Burlington, seeking
contribution for past and future costs associated with the remediation of the lower eight-mile portion of the LPRSA.
Based on the currently available information, we have not identified evidence that Franklin-Burlington contributed
materially to the contamination into to the lower Passaic River. A timeline as to when an allocation of the remedial
costs may be determined is not yet known and any final allocation to Franklin-Burlington has not been determined.
Based upon the information provided to it as part of the allocation process for the lower eight miles of the LPRSA,
Franklin-Burlington has determined that the current best estimate of any allocation of the liability that may be
assigned to Franklin-Burlington will not be material to the consolidated financial statements.
Our Consolidated Balance Sheets include accruals totaling $119.7 million and $112.0 million as of December 31,
2020 and 2019, respectively, based on our estimates of probable future environmental expenditures relating to
previously contaminated sites. These undiscounted amounts are included in Accrued expenses and other current
liabilities and Other non-current liabilities on the accompanying Consolidated Balance Sheets. The accruals
represent our best estimate of probable future costs that we can reasonably estimate, based upon currently
available information and technology and our view of the most likely remedy. Depending upon the results of future
testing, completion and results of remedial investigation and feasibility studies, the ultimate remediation alternatives
undertaken, changes in regulations, technology development, new information, newly discovered conditions and
other factors, it is reasonably possible that we could incur additional costs in excess of the amount accrued at
December 31, 2020. However, such additional costs, if any, cannot be currently estimated.
The following table details the changes in the environmental accrued liabilities:
(in millions)
Balance at beginning of the year
Environmental expenses
Net cash payments
Currency translation and other
Balance at the end of year
2020
2019
2018
$
112.0 $
111.9 $
20.4
(12.7)
—
10.2
(10.3)
0.2
114.8
23.1
(26.0)
—
$
119.7 $
112.0 $
111.9
The environmental expenses noted in the table above are included in Cost of sales as are insurance recoveries
received for previously incurred environmental costs. We received insurance recoveries of $8.7 million, $4.5 million,
and $4.3 million in 2020, 2019 and 2018, respectively. Such insurance recoveries are recognized as a gain when
received.
Other Litigation — Avient is subject to a broad range of claims, administrative and legal proceedings such as
lawsuits that relate to contractual allegations, tax audits, product claims, personal injuries, and employment related
matters. Although it is not possible to predict with certainty the outcome or cost of these matters, the Company
believes our current reserves are appropriate and these matters will not have a material adverse effect on the
condensed consolidated financial statements.
Note 13 — INCOME TAXES
Income from continuing operations, before income taxes is summarized below based on the geographic location of
the operation to which such earnings are attributable.
Income from continuing operations, before income taxes consists of the following:
(In millions)
Domestic
International
2020
$
Income from continuing operations, before income taxes
$
A summary of income tax expense from continuing operations is as follows:
19.6 $
119.4
139.0 $
2019
2018
41.2 $
68.2
109.4 $
4.1
97.7
101.8
(In millions)
Current income tax expense (benefit):
Domestic
International
Total current income tax expense
Deferred income tax (benefit) expense:
Domestic
International
Total deferred income tax benefit
Total income tax expense
2020
2019
2018
$
$
$
$
$
(25.8) $
32.7
6.9 $
17.2 $
(18.9)
(1.7) $
5.2 $
24.8 $
21.9
46.7 $
(12.5) $
(0.5)
(13.0) $
33.7 $
(0.4)
22.0
21.6
11.1
(18.3)
(7.2)
14.4
As of December 31, 2018, we completed our accounting for the tax effects of the enactment of the 2017 Tax Cuts
and Jobs Act (TCJA). In compliance with the one-year measurement period of the SEC's Staff Accounting Bulletin
118 (SAB 118) (issued December 22, 2017), we finalized in 2018 the effects of the TCJA on our existing deferred
income tax balances, the one-time transition tax assessed for 2017 or 2018 based on the year end of international
corporate subsidiaries for US tax purposes, and, as discussed below, the impact the TCJA had on our indefinite
reinvestment assertion pursuant to Accounting Principles Board 23 (APB 23). These finalized effects are included as
components of income tax expense from continuing operations and are noted in the following tabular reconciliation.
We also elected to recognize the resulting tax on global intangible low-taxed income (GILTI) and foreign-derived
intangible income (FDII) as a period expense in the period in which the tax is incurred.
As of December 31, 2018, we completed our analysis with respect to the impact of the TCJA on our continuing
assertion that our international earnings are indefinitely reinvested pursuant to APB 23. APB 23 provides guidance
that US companies do not need to recognize tax effects on international earnings that are indefinitely reinvested.
Our assertion changed with respect to prior year earnings of certain international affiliates, which resulted in a
recognition of tax liabilities. For all other international affiliates, we did not change our assertion and no tax provision
was made on these investments. For the years ended December 31, 2020, 2019, and 2018, see the following
tabular reconciliation for the impact of International tax on certain current and prior year earnings.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted. The CARES
Act includes certain provisions for the amount of interest expense that can be deducted. The Company expects to
be able to deduct all U.S. interest expense incurred in 2020 pursuant to the CARES Act.
A reconciliation of the applicable U.S. federal statutory tax rate to the consolidated effective income tax rate from
continuing operations along with a description of significant or unusual reconciling items is included below.
AVIENT CORPORATION 59
Federal statutory income tax rate
International tax rate differential:
Asia
Europe
North and South America
Total international tax rate differential
Tax on GILTI and FDII
International tax on certain current and prior year earnings
Net impact of non-deductible acquisition earnouts and transaction cost
Tax on one-time gain from sale of other assets
U.S. tax reform
Research and development credit
Domestic production activities deduction
One-time U.S. tax benefit from internal reorganization of international subsidiaries
State and local tax, net
International permanent items
Net impact of uncertain tax positions
Changes in valuation allowances
Other
Effective income tax rate
Twelve Months Ended December 31,
2020
2019
2018
21.0 %
21.0 %
21.0 %
2018 Significant items
transaction.
State and local tax, net line was unfavorably impacted by a state tax audit decision.
International permanent items line included a favorable tax treatment of an international intellectual property
The benefit reflected in the Changes in valuation allowances line resulted primarily from the realizability of a
deferred tax asset of one international entity.
Components of our deferred tax assets (liabilities) as of December 31, 2020 and 2019 were as follows:
2020
2019
0.5
(4.4)
1.2
(2.7)
3.1
2.0
1.8
—
—
(2.1)
—
(13.1)
(3.4)
(5.2)
1.0
0.5
0.8
0.7
(10.3)
0.7
(8.9)
(0.1)
1.6
2.8
6.0
0.2
(2.8)
—
—
4.2
7.5
(2.4)
1.7
—
0.4
(11.6)
(0.9)
(12.1)
2.9
9.4
0.2
—
(3.3)
(0.8)
(1.1)
—
2.3
(1.6)
(0.6)
(3.4)
1.2
3.7 %
30.8 %
14.1 %
(In millions)
Deferred tax assets:
Employment costs
Environmental reserves
Net operating loss carryforwards
Operating leases
Other, net
Gross deferred tax assets
Valuation allowances
Deferred tax liabilities:
Property, plant and equipment
Goodwill and intangibles
Operating leases
Other, net
Total deferred tax liabilities
Net deferred tax (liabilities) assets
Total deferred tax assets, net of valuation allowances
The effective tax rates for all periods differed from the applicable U.S. federal statutory tax rate as a result of
permanent items, state and local income taxes, differences in international tax rates and certain other items.
Permanent items primarily consist of income or expense not taxable or deductible. Significant or other items
impacting the effective income tax rate are described below.
Consolidated Balance Sheets:
Non-current deferred income tax assets
Non-current deferred income tax liabilities
24.9
29.7
55.6
16.6
43.9
170.7 $
(20.7)
150.0 $
(47.6) $
(144.9)
(17.0)
(2.4)
(211.9) $
(61.9) $
78.1 $
(140.0) $
20.5
27.9
45.3
18.0
40.1
151.8
(16.2)
135.6
(25.9)
(95.1)
(18.0)
(9.2)
(148.2)
(12.6)
50.9
(63.5)
$
$
$
$
$
$
$
2020 Significant items
For 2020, we recognized a one-time U.S. tax benefit of $18.2 million (13.1%) from an internal reorganization of
international subsidiaries.
For 2020, the State and local tax, net line totaled a benefit of $4.7 million (3.4%) which included favorable tax return
to prior year tax provision adjustments and a one-time state tax benefit from an internal reorganization of
international subsidiaries.
International permanent items line included the favorable tax effect of notional interest deductions, favorable tax
treatment of foreign exchanges losses, offset by non-deductibility of interest expense related to the receipt of tax-
exempt dividends, which caused a net favorable tax impact of $7.2 million (5.2%).
2019 Significant items
The State and local tax, net line included the result from an unfavorable state tax audit decision combined with
higher domestic earnings in 2019.
International permanent items line included the tax effect of non-deductibility of interest expense related to the
receipt of tax-exempt dividends, which caused an unfavorable tax effect of $10.3 million (9.4%) partially offset by the
tax impact of other net favorable permanent items of $2.0 million (1.9%).
Net impact of uncertain tax positions line resulted from the expiration of statute of limitations and favorable tax
settlements.
Changes in valuation allowances line in 2019 resulted from international operational losses.
60 AVIENT CORPORATION
As of December 31, 2020, we had gross state net operating loss carryforwards of $38.6 million that expire between
2021 and 2040 or that have indefinite carryforward periods. Various international subsidiaries have gross net
operating loss carryforwards totaling $208.3 million that expire between 2021 and 2038 or that have indefinite
carryforward periods. Total tax valuation allowances increased $4.5 million from the prior year primarily due to a
valuation allowance associated with certain assets acquired in the acquisition of Clariant Masterbatch. We have
provided valuation allowances of $11.0 million against certain international and state net operating loss
carryforwards that are expected to expire prior to utilization.
As of December 31, 2020, no tax provision has been made on approximately $456 million of undistributed earnings
of certain non-U.S. subsidiaries as these amounts continue to be indefinitely reinvested consistent with our policy.
The ending balance of our international tax on certain current and prior year earnings accrual as of December 31,
2020 and 2019 is included in the above Other, net deferred tax liabilities line ($9.2 million and $6.7 million
respectively) above.
We made worldwide income tax payments of $188.8 million and received refunds of $9.9 million in 2020. We made
worldwide income tax payments of $45.7 million and $40.5 million in 2019 and 2018, respectively, and received
refunds of $20.0 million and $29.9 million in 2019 and 2018, respectively.
Federal statutory income tax rate
International tax rate differential:
Asia
Europe
North and South America
Total international tax rate differential
Tax on GILTI and FDII
State and local tax, net
International permanent items
Net impact of uncertain tax positions
Changes in valuation allowances
Other
Effective income tax rate
International tax on certain current and prior year earnings
Net impact of non-deductible acquisition earnouts and transaction cost
Tax on one-time gain from sale of other assets
U.S. tax reform
Research and development credit
Domestic production activities deduction
One-time U.S. tax benefit from internal reorganization of international subsidiaries
Twelve Months Ended December 31,
2020
2019
2018
21.0 %
21.0 %
21.0 %
0.5
(4.4)
1.2
(2.7)
3.1
2.0
1.8
—
—
(2.1)
—
(13.1)
(3.4)
(5.2)
1.0
0.5
0.8
0.7
(10.3)
0.7
(8.9)
(0.1)
(2.8)
1.6
2.8
6.0
0.2
—
—
4.2
7.5
(2.4)
1.7
—
0.4
(11.6)
(0.9)
(12.1)
2.9
9.4
0.2
—
(3.3)
(0.8)
(1.1)
—
2.3
(1.6)
(0.6)
(3.4)
1.2
The effective tax rates for all periods differed from the applicable U.S. federal statutory tax rate as a result of
permanent items, state and local income taxes, differences in international tax rates and certain other items.
Permanent items primarily consist of income or expense not taxable or deductible. Significant or other items
impacting the effective income tax rate are described below.
3.7 %
30.8 %
14.1 %
2020 Significant items
international subsidiaries.
international subsidiaries.
For 2020, we recognized a one-time U.S. tax benefit of $18.2 million (13.1%) from an internal reorganization of
For 2020, the State and local tax, net line totaled a benefit of $4.7 million (3.4%) which included favorable tax return
to prior year tax provision adjustments and a one-time state tax benefit from an internal reorganization of
International permanent items line included the favorable tax effect of notional interest deductions, favorable tax
treatment of foreign exchanges losses, offset by non-deductibility of interest expense related to the receipt of tax-
exempt dividends, which caused a net favorable tax impact of $7.2 million (5.2%).
2019 Significant items
higher domestic earnings in 2019.
The State and local tax, net line included the result from an unfavorable state tax audit decision combined with
International permanent items line included the tax effect of non-deductibility of interest expense related to the
receipt of tax-exempt dividends, which caused an unfavorable tax effect of $10.3 million (9.4%) partially offset by the
tax impact of other net favorable permanent items of $2.0 million (1.9%).
Net impact of uncertain tax positions line resulted from the expiration of statute of limitations and favorable tax
settlements.
Changes in valuation allowances line in 2019 resulted from international operational losses.
2018 Significant items
State and local tax, net line was unfavorably impacted by a state tax audit decision.
International permanent items line included a favorable tax treatment of an international intellectual property
transaction.
The benefit reflected in the Changes in valuation allowances line resulted primarily from the realizability of a
deferred tax asset of one international entity.
Components of our deferred tax assets (liabilities) as of December 31, 2020 and 2019 were as follows:
(In millions)
Deferred tax assets:
Employment costs
Environmental reserves
Net operating loss carryforwards
Operating leases
Other, net
Gross deferred tax assets
Valuation allowances
Total deferred tax assets, net of valuation allowances
Deferred tax liabilities:
Property, plant and equipment
Goodwill and intangibles
Operating leases
Other, net
Total deferred tax liabilities
Net deferred tax (liabilities) assets
Consolidated Balance Sheets:
Non-current deferred income tax assets
Non-current deferred income tax liabilities
2020
2019
24.9
29.7
55.6
16.6
43.9
170.7 $
(20.7)
150.0 $
(47.6) $
(144.9)
(17.0)
(2.4)
(211.9) $
(61.9) $
78.1 $
(140.0) $
20.5
27.9
45.3
18.0
40.1
151.8
(16.2)
135.6
(25.9)
(95.1)
(18.0)
(9.2)
(148.2)
(12.6)
50.9
(63.5)
$
$
$
$
$
$
$
As of December 31, 2020, we had gross state net operating loss carryforwards of $38.6 million that expire between
2021 and 2040 or that have indefinite carryforward periods. Various international subsidiaries have gross net
operating loss carryforwards totaling $208.3 million that expire between 2021 and 2038 or that have indefinite
carryforward periods. Total tax valuation allowances increased $4.5 million from the prior year primarily due to a
valuation allowance associated with certain assets acquired in the acquisition of Clariant Masterbatch. We have
provided valuation allowances of $11.0 million against certain international and state net operating loss
carryforwards that are expected to expire prior to utilization.
As of December 31, 2020, no tax provision has been made on approximately $456 million of undistributed earnings
of certain non-U.S. subsidiaries as these amounts continue to be indefinitely reinvested consistent with our policy.
The ending balance of our international tax on certain current and prior year earnings accrual as of December 31,
2020 and 2019 is included in the above Other, net deferred tax liabilities line ($9.2 million and $6.7 million
respectively) above.
We made worldwide income tax payments of $188.8 million and received refunds of $9.9 million in 2020. We made
worldwide income tax payments of $45.7 million and $40.5 million in 2019 and 2018, respectively, and received
refunds of $20.0 million and $29.9 million in 2019 and 2018, respectively.
AVIENT CORPORATION 61
The Company records tax provisions for uncertain tax positions in accordance with ASC Topic 740, Income Taxes. A
reconciliation of unrecognized tax benefits is as follows:
Stock Appreciation Rights
(In millions)
Balance as of January 1,
Increases as a result of positions taken during current year
Increases as a result of positions taken for prior years
Reductions for tax positions of prior years
Decreases as a result of lapse of statute of limitations
Decreases relating to settlements with taxing authorities
Other, net
Balance as of December 31,
Unrecognized Tax Benefits
2020
2019
2018
$
11.2 $
16.4 $
0.6
0.6
—
(0.5)
(2.8)
0.4
$
9.5 $
1.1
0.4
(0.7)
(5.0)
—
(1.0)
11.2 $
17.8
1.3
1.1
(2.6)
(0.2)
(0.5)
(0.5)
16.4
We recognize interest and penalties related to uncertain tax positions in the tax provision. As of December 31, 2020
and 2019, we had $1.1 million and $1.4 million accrued for interest and penalties, respectively.
and 2018:
Although the timing and outcome of tax settlements are uncertain, it is reasonably possible that during the next
twelve months a reduction in unrecognized tax benefits may occur up to $1.7 million based on the outcome of tax
examinations and the expiration of statutes of limitations.
If all unrecognized tax benefits were recognized, the net impact on the tax provision would be a benefit of
$8.7 million.
The Company is currently being audited by state and international taxing jurisdictions. With limited exceptions, we
are no longer subject to U.S. federal, state and international tax examinations for periods preceding 2017.
For the income tax impact associated with PP&S, refer to Note 3, Discontinued Operations.
Note 14 — SHARE-BASED COMPENSATION
Share-based compensation cost is based on the value of the portion of share-based payment awards that are
ultimately expected to vest during the period. Share-based compensation cost recognized in the accompanying
Consolidated Statements of Income includes compensation cost for share-based payment awards based on the
grant date fair value estimated in accordance with the provision of FASB ASC Topic 718, Compensation — Stock
Compensation. Share-based compensation expense is based on awards expected to vest and therefore has been
reduced for estimated forfeitures.
Equity and Performance Incentive Plans
In May 2020, our shareholders approved the Avient Corporation 2020 Equity and Incentive Compensation Plan
(2020 EICP). This plan replaced the PolyOne Corporation 2017 Equity and Incentive Compensation Plan (2017
EICP). The 2017 EICP was frozen upon the approval of the 2020 EICP. The 2020 EICP reserved 2.5 million
common shares for the award of a variety of share-based compensation alternatives, including non-qualified stock
options, incentive stock options, restricted stock, restricted stock units (RSUs), performance shares, performance
units and stock appreciation rights (SARs). It is anticipated that all share-based grants and awards that are earned
and exercised will be issued from Avient common shares that are held in treasury.
Share-based compensation is included in Selling and administrative expense. A summary of compensation expense
by type of award follows:
(In millions)
Stock appreciation rights
Performance shares
Restricted stock units
Total share-based compensation
2020
2019
2018
$
$
4.4 $
0.2
6.7
11.3 $
4.8 $
0.3
6.5
11.6 $
4.2
0.4
5.6
10.2
62 AVIENT CORPORATION
During the years ended December 31, 2020, 2019 and 2018, the total number of SARs granted was 0.5 million, 0.6
million and 0.3 million, respectively. Awards vest in one-third increments upon the later of the attainment of time-
based vesting over a three-year service period and stock price targets. Awards granted in 2020, 2019 and 2018 are
subject to an appreciation cap of 200% of the base price. SARs have contractual terms of ten years from the date of
the grant.
The SARs were valued using a Monte Carlo simulation method as the vesting is dependent on the achievement of
certain stock price targets. The SARs have time and market-based vesting conditions but vest no earlier than their
three year graded vesting schedule. The expected term is an output from the Monte Carlo model and is derived
from employee exercise assumptions that are based on Avient historical exercise experience. The expected
volatility was determined based on the average weekly volatility for our common shares for the contractual life of the
awards. The expected dividend assumption was determined based upon Avient's dividend yield at the time of grant.
The risk-free rate of return was based on available yields on U.S. Treasury bills of the same duration as the
contractual life of the awards. Forfeitures were estimated at 3% per year based on our historical experience.
The following is a summary of the weighted average assumptions related to the grants issued during 2020, 2019
Expected volatility
Expected dividends
Expected term (in years)
Risk-free rate
Value of SARs granted
A summary of SAR activity for 2020 is presented below:
(In millions, except per share data)
Outstanding as of January 1, 2020
Granted
Exercised
Forfeited or expired
Outstanding as of December 31, 2020
Vested and exercisable as of December 31, 2020
2020
33.0%
2.57%
6.9
1.56%
$8.11
2019
40.0%
2.47%
6.6
2.78%
$10.13
2018
41.0%
1.67%
6.5
3.06%
$14.82
Weighted-
Average
Exercise Price
per Share
Weighted-
Average
Remaining
Contractual
Term
Shares
Aggregate
Intrinsic
value
6.6 $
12.3
2.2 $
0.5
(0.1)
—
2.6 $
1.3 $
32.04
31.48
17.95
33.40
32.43
30.60
6.4 $
4.9 $
20.7
13.0
The total intrinsic value of SARs exercised during 2020, 2019 and 2018 was $1.8 million, $0.4 million and
$6.5 million, respectively. As of December 31, 2020, there was $2.6 million of total unrecognized compensation cost
related to SARs, which is expected to be recognized over the weighted average remaining vesting period of 22
Restricted Stock Units
months.
met.
RSUs represent contingent rights to receive one common share at a future date provided certain vesting criteria are
During 2020, 2019 and 2018, the total number of RSUs granted was 0.3 million, 0.2 million and 0.2 million,
respectively. In 2020, there were 0.2 million RSUs exercised. These RSUs, which generally vest on the third
anniversary of the grant date, were granted to executives and other key employees. Compensation expense is
measured on the grant date using the quoted market price of our common shares and is recognized on a straight-
line basis over the requisite service period.
As of December 31, 2020, 0.6 million RSUs remain unvested with a weighted-average grant date fair value of
$32.86. Unrecognized compensation cost for RSUs at December 31, 2020 was $7.2 million, which is expected to be
recognized over the weighted average remaining vesting period of 23 months.
reconciliation of unrecognized tax benefits is as follows:
(In millions)
Balance as of January 1,
Increases as a result of positions taken during current year
Increases as a result of positions taken for prior years
Reductions for tax positions of prior years
Decreases as a result of lapse of statute of limitations
Decreases relating to settlements with taxing authorities
Other, net
Balance as of December 31,
Unrecognized Tax Benefits
2020
2019
2018
$
11.2 $
16.4 $
0.6
0.6
—
(0.5)
(2.8)
0.4
1.1
0.4
(0.7)
(5.0)
—
(1.0)
11.2 $
$
9.5 $
17.8
1.3
1.1
(2.6)
(0.2)
(0.5)
(0.5)
16.4
We recognize interest and penalties related to uncertain tax positions in the tax provision. As of December 31, 2020
and 2019, we had $1.1 million and $1.4 million accrued for interest and penalties, respectively.
Although the timing and outcome of tax settlements are uncertain, it is reasonably possible that during the next
twelve months a reduction in unrecognized tax benefits may occur up to $1.7 million based on the outcome of tax
examinations and the expiration of statutes of limitations.
If all unrecognized tax benefits were recognized, the net impact on the tax provision would be a benefit of
$8.7 million.
For the income tax impact associated with PP&S, refer to Note 3, Discontinued Operations.
Note 14 — SHARE-BASED COMPENSATION
Share-based compensation cost is based on the value of the portion of share-based payment awards that are
ultimately expected to vest during the period. Share-based compensation cost recognized in the accompanying
Consolidated Statements of Income includes compensation cost for share-based payment awards based on the
grant date fair value estimated in accordance with the provision of FASB ASC Topic 718, Compensation — Stock
Compensation. Share-based compensation expense is based on awards expected to vest and therefore has been
reduced for estimated forfeitures.
Equity and Performance Incentive Plans
In May 2020, our shareholders approved the Avient Corporation 2020 Equity and Incentive Compensation Plan
(2020 EICP). This plan replaced the PolyOne Corporation 2017 Equity and Incentive Compensation Plan (2017
EICP). The 2017 EICP was frozen upon the approval of the 2020 EICP. The 2020 EICP reserved 2.5 million
common shares for the award of a variety of share-based compensation alternatives, including non-qualified stock
options, incentive stock options, restricted stock, restricted stock units (RSUs), performance shares, performance
units and stock appreciation rights (SARs). It is anticipated that all share-based grants and awards that are earned
and exercised will be issued from Avient common shares that are held in treasury.
Share-based compensation is included in Selling and administrative expense. A summary of compensation expense
by type of award follows:
(In millions)
Stock appreciation rights
Performance shares
Restricted stock units
Total share-based compensation
2020
2019
2018
$
$
4.4 $
0.2
6.7
4.8 $
0.3
6.5
11.3 $
11.6 $
4.2
0.4
5.6
10.2
The Company records tax provisions for uncertain tax positions in accordance with ASC Topic 740, Income Taxes. A
Stock Appreciation Rights
During the years ended December 31, 2020, 2019 and 2018, the total number of SARs granted was 0.5 million, 0.6
million and 0.3 million, respectively. Awards vest in one-third increments upon the later of the attainment of time-
based vesting over a three-year service period and stock price targets. Awards granted in 2020, 2019 and 2018 are
subject to an appreciation cap of 200% of the base price. SARs have contractual terms of ten years from the date of
the grant.
The SARs were valued using a Monte Carlo simulation method as the vesting is dependent on the achievement of
certain stock price targets. The SARs have time and market-based vesting conditions but vest no earlier than their
three year graded vesting schedule. The expected term is an output from the Monte Carlo model and is derived
from employee exercise assumptions that are based on Avient historical exercise experience. The expected
volatility was determined based on the average weekly volatility for our common shares for the contractual life of the
awards. The expected dividend assumption was determined based upon Avient's dividend yield at the time of grant.
The risk-free rate of return was based on available yields on U.S. Treasury bills of the same duration as the
contractual life of the awards. Forfeitures were estimated at 3% per year based on our historical experience.
The following is a summary of the weighted average assumptions related to the grants issued during 2020, 2019
and 2018:
The Company is currently being audited by state and international taxing jurisdictions. With limited exceptions, we
are no longer subject to U.S. federal, state and international tax examinations for periods preceding 2017.
A summary of SAR activity for 2020 is presented below:
Expected volatility
Expected dividends
Expected term (in years)
Risk-free rate
Value of SARs granted
(In millions, except per share data)
Outstanding as of January 1, 2020
Granted
Exercised
Forfeited or expired
Outstanding as of December 31, 2020
Vested and exercisable as of December 31, 2020
2020
33.0%
2.57%
6.9
1.56%
$8.11
2019
40.0%
2.47%
6.6
2.78%
$10.13
2018
41.0%
1.67%
6.5
3.06%
$14.82
Weighted-
Average
Exercise Price
per Share
Weighted-
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
value
Shares
2.2 $
0.5
(0.1)
—
2.6 $
1.3 $
32.04
31.48
17.95
33.40
32.43
30.60
6.6 $
12.3
6.4 $
4.9 $
20.7
13.0
The total intrinsic value of SARs exercised during 2020, 2019 and 2018 was $1.8 million, $0.4 million and
$6.5 million, respectively. As of December 31, 2020, there was $2.6 million of total unrecognized compensation cost
related to SARs, which is expected to be recognized over the weighted average remaining vesting period of 22
months.
Restricted Stock Units
RSUs represent contingent rights to receive one common share at a future date provided certain vesting criteria are
met.
During 2020, 2019 and 2018, the total number of RSUs granted was 0.3 million, 0.2 million and 0.2 million,
respectively. In 2020, there were 0.2 million RSUs exercised. These RSUs, which generally vest on the third
anniversary of the grant date, were granted to executives and other key employees. Compensation expense is
measured on the grant date using the quoted market price of our common shares and is recognized on a straight-
line basis over the requisite service period.
As of December 31, 2020, 0.6 million RSUs remain unvested with a weighted-average grant date fair value of
$32.86. Unrecognized compensation cost for RSUs at December 31, 2020 was $7.2 million, which is expected to be
recognized over the weighted average remaining vesting period of 23 months.
AVIENT CORPORATION 63
assess end-use performance and guide product development. Our manufacturing capabilities are targeted at
meeting our customers’ demand for speed, flexibility and critical quality.
Distribution
The Distribution business distributes more than 4,000 grades of engineering and commodity grade resins, including
Avient-produced solutions, principally to the North American, Central American and Asian markets. These products
are sold to over 6,500 custom injection molders and extruders who, in turn, convert them into plastic parts that are
sold to end-users in a wide range of industries. Representing over 25 major suppliers, we offer our customers a
broad product portfolio, just-in-time delivery from multiple stocking locations and local technical support. Expansion
in Central America and Asia have bolstered Distribution's ability to serve the specialized needs of customers
globally.
Financial information by reportable segment is as follows:
Year Ended December 31, 2020 (In millions)
Customers
Sales
Sales to
External
Intersegment
Total
Sales
Operating
Income
Depreciation
and
Capital
Amortization
Expenditures
$ 1,497.0 $
5.9 $ 1,502.9 $ 180.8 $
75.1 $
644.1
1,087.4
64.7
708.8
22.9
1,110.3
94.4
69.5
$ 3,242.1 $
— $ 3,242.1 $ 189.3 $
115.0 $
Sales to
External
Intersegment
Total
Sales
Operating
Income
Depreciation
and
Capital
Amortization
Expenditures
$
998.2 $
5.6 $ 1,003.8 $ 147.4 $
42.7 $
689.6
1,172.9
56.1
745.7
19.3
1,192.2
83.7
75.4
Year Ended December 31, 2019 (In millions)
Customers
Sales
Corporate and eliminations
2.0
(81.0)
(79.0)
(149.7)
$ 2,862.7 $
— $ 2,862.7 $ 156.8 $
78.1 $
Year Ended December 31, 2018 (In millions)
Customers
Sales
Sales to
External
Intersegment
Total
Sales
Operating
Income
Depreciation
and
Capital
Amortization
Expenditures
$ 1,040.6 $
5.9 $ 1,046.5 $ 158.5 $
44.3 $
593.6
1,246.8
52.2
645.8
18.6
1,265.4
72.3
71.5
Corporate and eliminations
—
(76.7)
(76.7)
(123.7)
$ 2,881.0 $
— $ 2,881.0 $ 178.6 $
72.6 $
Color, Additives and Inks
Specialty Engineered Materials
Distribution
Total
Color, Additives and Inks
Specialty Engineered Materials
Distribution
Total
Color, Additives and Inks
Specialty Engineered Materials
Distribution
Total
30.0
0.7
9.2
29.5
0.5
5.4
23.2
0.7
4.4
30.5
14.2
1.4
17.6
63.7
21.5
23.3
1.6
21.2
67.6
22.9
25.2
0.1
8.3
56.5
Note 15 — SEGMENT INFORMATION
Operating income is the primary measure that is reported to our chief operating decision maker (CODM) for
purposes of allocating resources to the segments and assessing their performance. Operating income at the
segment level does not include: corporate general and administrative expenses that are not allocated to segments;
intersegment sales and profit eliminations; charges related to specific strategic initiatives such as the consolidation
of operations; restructuring activities, including employee separation costs resulting from personnel reduction
programs, plant closure and phase-in costs; executive separation agreements; share-based compensation costs;
asset impairments; environmental remediation costs, along with related gains from insurance recoveries, and other
liabilities for facilities no longer owned or closed in prior years; gains and losses on the divestiture of joint ventures
and equity investments; actuarial gains and losses associated with our pension and other post-retirement benefit
plans; and certain other items that are not included in the measure of segment profit or loss that is reported to and
reviewed by our CODM. These costs are included in Corporate and eliminations.
Segment assets are primarily customer receivables, inventories, net property, plant and equipment, intangible
assets and goodwill. Intersegment sales are generally accounted for at prices that approximate those for similar
transactions with unaffiliated customers. Corporate and eliminations assets and liabilities primarily include cash,
debt, pension and other employee benefits, environmental liabilities, retained assets and liabilities of discontinued
operations, and other unallocated corporate assets and liabilities. The accounting policies of each segment are
consistent with those described in Note 1, Description of Business and Summary of Significant Accounting Policies.
Avient has three reportable segments. The following is a description of each reportable segment.
Corporate and eliminations
13.6
(93.5)
(79.9)
(155.4)
Color, Additives and Inks
Color, Additives and Inks, which is an aggregation of the legacy PolyOne and Clariant MB operating segments, is a
leading provider of specialized custom color and additive concentrates in solid and liquid form for thermoplastics,
dispersions for thermosets, as well as specialty inks. Color and additive solutions include an innovative array of
colors, special effects and performance-enhancing and sustainable solutions. When combined with polymer resins,
our solutions help customers achieve differentiated specialized colors and effects targeted at the demands of
today’s highly design-oriented consumer and industrial end markets. Our additive concentrates encompass a wide
variety of performance and process enhancing characteristics and are commonly categorized by the function that
they perform, including UV light stabilization and blocking, antimicrobial, anti-static, blowing or foaming, antioxidant,
lubricant, oxygen and visible light blocking and productivity enhancement. Of growing importance is our portfolio of
additives that enable our customers to achieve their sustainability goals, including improved recyclability, reduced
energy use, light weighting, and renewable energy applications. Our colorant and additives concentrates are used in
a broad range of polymers, including those used in medical and pharmaceutical devices, food packaging, personal
care and cosmetics, transportation, building products, wire and cable markets. We also provide custom-formulated
liquid systems that meet a variety of customer needs and chemistries, including polyester, vinyl, natural rubber and
latex, polyurethane and silicone. Our offerings also include proprietary inks and latexes for diversified markets such
as recreational and athletic apparel, construction and filtration, outdoor furniture and healthcare. Our liquid polymer
coatings and additives are largely based on vinyl and are used in a variety of markets, including building and
construction, consumer, healthcare, industrial, packaging, textiles, appliances, transportation, and wire and cable.
Color, Additives and Inks has manufacturing, sales and service facilities located throughout North America, South
America, Europe, Middle East, Asia, and Africa.
Specialty Engineered Materials
Specialty Engineered Materials is a leading provider of specialty and sustainable polymer formulations, services and
solutions for designers, assemblers and processors of thermoplastic materials across a wide variety of markets and
end-use applications. Our product portfolio, which we believe to be one of the most diverse in our industry, includes
specialty formulated high-performance polymer materials that are manufactured using thermoplastic resins and
elastomers, which are then combined with advanced polymer additives, reinforcement, filler, colorant and/or
biomaterial technologies. We also have what we believe is the broadest composite platform of solutions, which
include a full range of products from long glass and carbon fiber technology to thermoset and thermoplastic
composites. These solutions meet a wide variety of unique customer requirements for sustainability, in particular
light weighting. Our technical and market expertise enables us to expand the performance range and structural
properties of traditional engineering-grade thermoplastic resins to meet evolving customer needs. Specialty
Engineered Materials has manufacturing, sales and service facilities located throughout North America, Europe, and
Asia. Our product development and application reach is further enhanced by the capabilities of our Innovation
Centers in the United States, Germany and China, which produce and evaluate prototype and sample parts to help
64 AVIENT CORPORATION
Note 15 — SEGMENT INFORMATION
Operating income is the primary measure that is reported to our chief operating decision maker (CODM) for
purposes of allocating resources to the segments and assessing their performance. Operating income at the
segment level does not include: corporate general and administrative expenses that are not allocated to segments;
intersegment sales and profit eliminations; charges related to specific strategic initiatives such as the consolidation
of operations; restructuring activities, including employee separation costs resulting from personnel reduction
programs, plant closure and phase-in costs; executive separation agreements; share-based compensation costs;
asset impairments; environmental remediation costs, along with related gains from insurance recoveries, and other
liabilities for facilities no longer owned or closed in prior years; gains and losses on the divestiture of joint ventures
and equity investments; actuarial gains and losses associated with our pension and other post-retirement benefit
plans; and certain other items that are not included in the measure of segment profit or loss that is reported to and
assess end-use performance and guide product development. Our manufacturing capabilities are targeted at
meeting our customers’ demand for speed, flexibility and critical quality.
Distribution
The Distribution business distributes more than 4,000 grades of engineering and commodity grade resins, including
Avient-produced solutions, principally to the North American, Central American and Asian markets. These products
are sold to over 6,500 custom injection molders and extruders who, in turn, convert them into plastic parts that are
sold to end-users in a wide range of industries. Representing over 25 major suppliers, we offer our customers a
broad product portfolio, just-in-time delivery from multiple stocking locations and local technical support. Expansion
in Central America and Asia have bolstered Distribution's ability to serve the specialized needs of customers
globally.
reviewed by our CODM. These costs are included in Corporate and eliminations.
Financial information by reportable segment is as follows:
30.0
0.7
9.2
30.5
14.2
1.4
17.6
63.7
Segment assets are primarily customer receivables, inventories, net property, plant and equipment, intangible
assets and goodwill. Intersegment sales are generally accounted for at prices that approximate those for similar
transactions with unaffiliated customers. Corporate and eliminations assets and liabilities primarily include cash,
debt, pension and other employee benefits, environmental liabilities, retained assets and liabilities of discontinued
operations, and other unallocated corporate assets and liabilities. The accounting policies of each segment are
consistent with those described in Note 1, Description of Business and Summary of Significant Accounting Policies.
Year Ended December 31, 2020 (In millions)
Color, Additives and Inks
Specialty Engineered Materials
Distribution
Sales to
External
Customers
Intersegment
Sales
Total
Sales
Operating
Income
Depreciation
and
Amortization
Capital
Expenditures
$ 1,497.0 $
5.9 $ 1,502.9 $ 180.8 $
75.1 $
644.1
1,087.4
64.7
708.8
22.9
1,110.3
94.4
69.5
Avient has three reportable segments. The following is a description of each reportable segment.
Corporate and eliminations
13.6
(93.5)
(79.9)
(155.4)
Total
$ 3,242.1 $
— $ 3,242.1 $ 189.3 $
115.0 $
Color, Additives and Inks
Color, Additives and Inks, which is an aggregation of the legacy PolyOne and Clariant MB operating segments, is a
leading provider of specialized custom color and additive concentrates in solid and liquid form for thermoplastics,
dispersions for thermosets, as well as specialty inks. Color and additive solutions include an innovative array of
colors, special effects and performance-enhancing and sustainable solutions. When combined with polymer resins,
our solutions help customers achieve differentiated specialized colors and effects targeted at the demands of
today’s highly design-oriented consumer and industrial end markets. Our additive concentrates encompass a wide
variety of performance and process enhancing characteristics and are commonly categorized by the function that
they perform, including UV light stabilization and blocking, antimicrobial, anti-static, blowing or foaming, antioxidant,
lubricant, oxygen and visible light blocking and productivity enhancement. Of growing importance is our portfolio of
additives that enable our customers to achieve their sustainability goals, including improved recyclability, reduced
energy use, light weighting, and renewable energy applications. Our colorant and additives concentrates are used in
a broad range of polymers, including those used in medical and pharmaceutical devices, food packaging, personal
care and cosmetics, transportation, building products, wire and cable markets. We also provide custom-formulated
liquid systems that meet a variety of customer needs and chemistries, including polyester, vinyl, natural rubber and
latex, polyurethane and silicone. Our offerings also include proprietary inks and latexes for diversified markets such
as recreational and athletic apparel, construction and filtration, outdoor furniture and healthcare. Our liquid polymer
coatings and additives are largely based on vinyl and are used in a variety of markets, including building and
construction, consumer, healthcare, industrial, packaging, textiles, appliances, transportation, and wire and cable.
America, Europe, Middle East, Asia, and Africa.
Specialty Engineered Materials
Specialty Engineered Materials is a leading provider of specialty and sustainable polymer formulations, services and
solutions for designers, assemblers and processors of thermoplastic materials across a wide variety of markets and
end-use applications. Our product portfolio, which we believe to be one of the most diverse in our industry, includes
specialty formulated high-performance polymer materials that are manufactured using thermoplastic resins and
elastomers, which are then combined with advanced polymer additives, reinforcement, filler, colorant and/or
biomaterial technologies. We also have what we believe is the broadest composite platform of solutions, which
include a full range of products from long glass and carbon fiber technology to thermoset and thermoplastic
composites. These solutions meet a wide variety of unique customer requirements for sustainability, in particular
light weighting. Our technical and market expertise enables us to expand the performance range and structural
properties of traditional engineering-grade thermoplastic resins to meet evolving customer needs. Specialty
Engineered Materials has manufacturing, sales and service facilities located throughout North America, Europe, and
Asia. Our product development and application reach is further enhanced by the capabilities of our Innovation
Centers in the United States, Germany and China, which produce and evaluate prototype and sample parts to help
Year Ended December 31, 2019 (In millions)
Color, Additives and Inks
Specialty Engineered Materials
Distribution
Corporate and eliminations
Total
Sales to
External
Customers
Intersegment
Sales
Total
Sales
Operating
Income
Depreciation
and
Amortization
Capital
Expenditures
$
998.2 $
5.6 $ 1,003.8 $ 147.4 $
42.7 $
689.6
1,172.9
56.1
745.7
19.3
1,192.2
83.7
75.4
2.0
(81.0)
(79.0)
(149.7)
29.5
0.5
5.4
$ 2,862.7 $
— $ 2,862.7 $ 156.8 $
78.1 $
21.5
23.3
1.6
21.2
67.6
Color, Additives and Inks has manufacturing, sales and service facilities located throughout North America, South
Total
$ 2,881.0 $
— $ 2,881.0 $ 178.6 $
72.6 $
Year Ended December 31, 2018 (In millions)
Color, Additives and Inks
Specialty Engineered Materials
Distribution
Corporate and eliminations
Sales to
External
Customers
Intersegment
Sales
Total
Sales
Operating
Income
Depreciation
and
Amortization
Capital
Expenditures
$ 1,040.6 $
5.9 $ 1,046.5 $ 158.5 $
44.3 $
593.6
1,246.8
52.2
645.8
18.6
1,265.4
72.3
71.5
—
(76.7)
(76.7)
(123.7)
23.2
0.7
4.4
22.9
25.2
0.1
8.3
56.5
AVIENT CORPORATION 65
Our sales are primarily to customers in the United States, Canada, Mexico, Europe, South America and Asia, and
the majority of our assets are located in these same geographic areas. The following is a summary of sales and
long-lived assets based on the geographic areas where the sales originated and where the assets are located:
(In millions)
Sales:
United States
Canada
Mexico
South America
Europe
Asia
Total Sales
(In millions)
Total Assets:
Color, Additives and Inks
Specialty Engineered Materials
Distribution
Corporate and eliminations
Total
(In millions)
Property, net:
United States
Canada
Mexico
South America
Europe
Asia
Total Long lived assets
2020
2019
2018
$
1,619.7 $
107.6
236.2
51.4
729.8
497.4
1,560.4 $
140.6
261.2
27.8
556.2
316.5
1,543.1
142.2
296.5
20.0
547.4
331.8
$
3,242.1 $
2,862.7 $
2,881.0
2020
2019
3,018.7 $
728.1
244.9
878.8
4,870.5 $
1,215.8
774.0
235.6
1,047.9
3,273.3
2020
2019
261.8 $
1.4
8.9
20.1
224.5
178.2
694.9 $
220.0
0.1
5.5
6.4
98.1
77.3
407.4
$
$
$
$
Note 16 — DERIVATIVES AND HEDGING
We are exposed to market risks, such as changes in foreign currency exchange rates and interest rates. To manage
the volatility related to these exposures we may enter into various derivative transactions. We formally assess,
designate and document, as a hedge of an underlying exposure, the qualifying derivative instrument that will be
accounted for as an accounting hedge at inception. Additionally, we assess both at inception and at least quarterly
thereafter, whether the financial instruments used in the hedging transaction are effective at offsetting changes in
either the fair values or cash flows of the underlying exposures and that ongoing assessment will be done
qualitatively for highly effective relationships.
Net Investment Hedge
During October and December 2018, as a means of mitigating the impact of currency fluctuations on our Euro
investments in foreign entities, we executed a total of six cross currency swaps, in which we will pay fixed-rate
interest in Euros and receive fixed-rate interest in U.S. dollars with a combined notional amount of 250.0 million
Euros and which mature in March 2023. In August and September 2020, we executed an additional five cross
currency swaps, which are structured similarly to those executed in 2018. These swaps have a combined notional
amount of 677.0 million Euros, which mature in May 2025. This effectively converts a portion of our U.S. Dollar
denominated fixed-rate debt to Euro denominated fixed-rate debt. That conversion resulted in gains of $10.4 million
and $8.3 million for the years ended December 31, 2020 and 2019, respectively, which was recognized within
Interest expense, net.
We designated the swaps as net investment hedges of our net investment in our European operations and applied
the spot method to these hedges. The changes in fair value of the derivative instruments that are designated and
qualify as hedges of net investments in foreign operations are recognized within Accumulated Other Comprehensive
Income (Loss) (AOCI) to offset the changes in the values of the net investment being hedged. For the years ended
66 AVIENT CORPORATION
December 31, 2020 and 2019, a loss of $41.7 million and a gain of $9.1 million, respectively, were recognized within
translation adjustments in AOCI, net of tax.
Derivatives Designated as Cash Flow Hedging Instruments
In August 2018, we entered into two interest rate swaps with a combined notional amount of $150.0 million to
manage the variability of cash flows in the interest rate payments associated with our existing LIBOR-based interest
payments, effectively converting $150.0 million of our floating rate debt to a fixed rate. We began to receive floating
rate interest payments based upon one month U.S. dollar LIBOR and in return are obligated to pay interest at a
fixed rate of 2.732% until November 2022. The net interest payments accrued each month for these highly effective
hedges are reflected in net income as adjustments of interest expense and the remaining change in the fair value of
the derivatives is recorded as a component of AOCI. The amount of expense recognized within Interest expense,
net, associated with interest rate swaps was $3.2 million and $0.7 million for the years ending December 31, 2020
and 2019, respectively. The amount of loss recognized in AOCI, net of tax was $1.6 million and $2.5 million for the
years ended December 31, 2020 and 2019, respectively.
All of our derivative assets and liabilities measured at fair value are classified as Level 2 within the fair value
hierarchy. We determine the fair value of our derivatives based on valuation methods, which project future cash
flows and discount the future amounts present value using market based observable inputs, including interest rate
curves and foreign currency rates. The fair value of derivative financial instruments recognized in the Condensed
Consolidated Balance Sheets is as follows:
Balance Sheet Location
December 31, 2020 December 31, 2019
Cross Currency Swaps (Net Investment Hedge) Other non-current assets
Cross Currency Swaps (Net Investment Hedge) Other non-current liabilities
Interest Rate Swap (Fair Value Hedge)
Other non-current liabilities
$
$
$
— $
41.1 $
7.3 $
14.7
—
5.1
(In millions)
Assets
Liabilities
Note 17 — SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
(In millions, except per share data)
Fourth
Third
Second
First
Fourth
Third
Second
First
2020 Quarters
2019 Quarters
Sales
Gross Margin
Operating Income
Net income (loss) from continuing
operations
Net income from continuing operations
attributable to Avient Shareholders
Income (loss) from discontinued
operations, net of income taxes
Net income (loss) attributable to Avient
common shareholders
$ 997.0 $ 924.5 $
609.1 $ 711.5 $ 658.6 $ 705.3 $
748.2 $ 750.6
252.9
210.2
149.7
171.5
153.3
65.0
33.5
38.0
52.8
20.5
74.7
74.2
0.1
2.6
1.7
—
23.4
33.1
23.0
33.1
6.4
6.4
160.5
43.1
23.6
23.5
175.3
168.1
46.1
47.1
23.2
22.5
23.2
22.4
(0.2)
(0.3)
458.9
19.5
18.9
15.8
$
74.3 $
1.7 $
22.8 $ 32.8 $ 465.3 $
43.0 $
42.1 $
38.2
Earnings (loss) per share from continuing operations attributable to Avient shareholders: (1)
Basic earnings per share
Diluted earnings per share
0.81 $ 0.02 $
0.25 $ 0.38 $
0.08 $
0.31 $
0.30 $
0.29
0.81 $ 0.02 $
0.25 $ 0.38 $
0.08 $
0.30 $
0.30 $
0.29
Earnings (loss) per share from discontinued operations: (1)
Basic earnings per share
Diluted earnings per share
— $
— $
— $ — $
5.97 $
0.25 $
0.24 $
0.20
— $
— $
— $ — $
5.92 $
0.25 $
0.24 $
0.20
Total earnings (loss) per share attributable to Avient shareholders: (1)
Basic earnings per share
Diluted earnings per share
0.81 $ 0.02 $
0.25 $ 0.38 $
6.05 $
0.56 $
0.54 $
0.49
0.81 $ 0.02 $
0.25 $ 0.38 $
6.00 $
0.56 $
0.54 $
0.49
(1) Per share amounts for each quarter and the full year have been computed separately. The sum of the quarterly amounts may not equal the
annual amounts presented because of the differences in average shares outstanding during each period.
$
$
$
$
$
$
Our sales are primarily to customers in the United States, Canada, Mexico, Europe, South America and Asia, and
long-lived assets based on the geographic areas where the sales originated and where the assets are located:
the majority of our assets are located in these same geographic areas. The following is a summary of sales and
Derivatives Designated as Cash Flow Hedging Instruments
December 31, 2020 and 2019, a loss of $41.7 million and a gain of $9.1 million, respectively, were recognized within
translation adjustments in AOCI, net of tax.
(In millions)
Sales:
United States
Canada
Mexico
South America
Europe
Asia
Total Sales
(In millions)
Total Assets:
Total
(In millions)
Property, net:
United States
Canada
Mexico
Europe
Asia
South America
Color, Additives and Inks
Specialty Engineered Materials
Distribution
Corporate and eliminations
2020
2019
2018
$
1,619.7 $
1,560.4 $
1,543.1
142.2
296.5
20.0
547.4
331.8
$
3,242.1 $
2,862.7 $
2,881.0
2020
2019
$
3,018.7 $
1,215.8
107.6
236.2
51.4
729.8
497.4
728.1
244.9
878.8
1.4
8.9
20.1
224.5
178.2
140.6
261.2
27.8
556.2
316.5
774.0
235.6
1,047.9
3,273.3
0.1
5.5
6.4
98.1
77.3
407.4
$
4,870.5 $
2020
2019
$
261.8 $
220.0
In August 2018, we entered into two interest rate swaps with a combined notional amount of $150.0 million to
manage the variability of cash flows in the interest rate payments associated with our existing LIBOR-based interest
payments, effectively converting $150.0 million of our floating rate debt to a fixed rate. We began to receive floating
rate interest payments based upon one month U.S. dollar LIBOR and in return are obligated to pay interest at a
fixed rate of 2.732% until November 2022. The net interest payments accrued each month for these highly effective
hedges are reflected in net income as adjustments of interest expense and the remaining change in the fair value of
the derivatives is recorded as a component of AOCI. The amount of expense recognized within Interest expense,
net, associated with interest rate swaps was $3.2 million and $0.7 million for the years ending December 31, 2020
and 2019, respectively. The amount of loss recognized in AOCI, net of tax was $1.6 million and $2.5 million for the
years ended December 31, 2020 and 2019, respectively.
All of our derivative assets and liabilities measured at fair value are classified as Level 2 within the fair value
hierarchy. We determine the fair value of our derivatives based on valuation methods, which project future cash
flows and discount the future amounts present value using market based observable inputs, including interest rate
curves and foreign currency rates. The fair value of derivative financial instruments recognized in the Condensed
Consolidated Balance Sheets is as follows:
(In millions)
Assets
Balance Sheet Location
December 31, 2020 December 31, 2019
Cross Currency Swaps (Net Investment Hedge) Other non-current assets
Liabilities
Cross Currency Swaps (Net Investment Hedge) Other non-current liabilities
Interest Rate Swap (Fair Value Hedge)
Other non-current liabilities
$
$
$
— $
41.1 $
7.3 $
14.7
—
5.1
Note 17 — SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
(In millions, except per share data)
Fourth
Third
Second
First
Fourth
Third
Second
First
2020 Quarters
2019 Quarters
Sales
Gross Margin
Operating Income
Net income (loss) from continuing
operations
Net income from continuing operations
attributable to Avient Shareholders
Income (loss) from discontinued
operations, net of income taxes
Net income (loss) attributable to Avient
common shareholders
$ 997.0 $ 924.5 $
609.1 $ 711.5 $ 658.6 $ 705.3 $
748.2 $ 750.6
252.9
210.2
149.7
171.5
153.3
65.0
33.5
38.0
52.8
20.5
74.7
74.2
0.1
2.6
1.7
—
23.4
33.1
23.0
33.1
6.4
6.4
160.5
43.1
23.6
23.5
175.3
168.1
46.1
47.1
23.2
22.5
23.2
22.4
(0.2)
(0.3)
458.9
19.5
18.9
15.8
$
74.3 $
1.7 $
22.8 $ 32.8 $ 465.3 $
43.0 $
42.1 $
38.2
Earnings (loss) per share from continuing operations attributable to Avient shareholders: (1)
Basic earnings per share
Diluted earnings per share
$
$
0.81 $ 0.02 $
0.25 $ 0.38 $
0.08 $
0.31 $
0.30 $
0.29
0.81 $ 0.02 $
0.25 $ 0.38 $
0.08 $
0.30 $
0.30 $
0.29
Earnings (loss) per share from discontinued operations: (1)
Basic earnings per share
Diluted earnings per share
$
$
— $
— $
— $ — $
5.97 $
0.25 $
0.24 $
0.20
— $
— $
— $ — $
5.92 $
0.25 $
0.24 $
0.20
Total earnings (loss) per share attributable to Avient shareholders: (1)
Basic earnings per share
Diluted earnings per share
$
$
0.81 $ 0.02 $
0.25 $ 0.38 $
6.05 $
0.56 $
0.54 $
0.49
0.81 $ 0.02 $
0.25 $ 0.38 $
6.00 $
0.56 $
0.54 $
0.49
(1) Per share amounts for each quarter and the full year have been computed separately. The sum of the quarterly amounts may not equal the
annual amounts presented because of the differences in average shares outstanding during each period.
AVIENT CORPORATION 67
Total Long lived assets
$
694.9 $
Note 16 — DERIVATIVES AND HEDGING
We are exposed to market risks, such as changes in foreign currency exchange rates and interest rates. To manage
the volatility related to these exposures we may enter into various derivative transactions. We formally assess,
designate and document, as a hedge of an underlying exposure, the qualifying derivative instrument that will be
accounted for as an accounting hedge at inception. Additionally, we assess both at inception and at least quarterly
thereafter, whether the financial instruments used in the hedging transaction are effective at offsetting changes in
either the fair values or cash flows of the underlying exposures and that ongoing assessment will be done
qualitatively for highly effective relationships.
Net Investment Hedge
During October and December 2018, as a means of mitigating the impact of currency fluctuations on our Euro
investments in foreign entities, we executed a total of six cross currency swaps, in which we will pay fixed-rate
interest in Euros and receive fixed-rate interest in U.S. dollars with a combined notional amount of 250.0 million
Euros and which mature in March 2023. In August and September 2020, we executed an additional five cross
currency swaps, which are structured similarly to those executed in 2018. These swaps have a combined notional
amount of 677.0 million Euros, which mature in May 2025. This effectively converts a portion of our U.S. Dollar
denominated fixed-rate debt to Euro denominated fixed-rate debt. That conversion resulted in gains of $10.4 million
and $8.3 million for the years ended December 31, 2020 and 2019, respectively, which was recognized within
Interest expense, net.
We designated the swaps as net investment hedges of our net investment in our European operations and applied
the spot method to these hedges. The changes in fair value of the derivative instruments that are designated and
qualify as hedges of net investments in foreign operations are recognized within Accumulated Other Comprehensive
Income (Loss) (AOCI) to offset the changes in the values of the net investment being hedged. For the years ended
ITEM 9B. OTHER INFORMATION
None.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure controls and procedures
Avient’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, has
evaluated the effectiveness of the design and operation of Avient’s disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2020. Based on this evaluation, the
Chief Executive Officer and the Chief Financial Officer have concluded that our disclosure controls and procedures
were effective as of December 31, 2020.
The Company completed the Clariant MB Acquisition on July 1, 2020 and has not yet included Clariant MB in its
assessment of the effectiveness of its internal control over financial reporting. The Company is currently integrating
Clariant MB into its operations, compliance programs and internal control processes. Accordingly, pursuant to the
SEC's general guidance that an assessment of a recently acquired business may be omitted from the scope of an
assessment in the year of acquisition, the scope of our assessment of the effectiveness of our disclosure controls
and procedures does not include Clariant MB. Clariant MB constituted approximately 41.6% of the Company's total
assets (inclusive of acquired intangible assets) as of December 31, 2020, and approximately 16.8% of the
Company's net sales for the year ended December 31, 2020.
Management’s Annual Report On Internal Control Over Financial Reporting
The following report is provided by management in respect of Avient’s internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act):
1. Avient’s management is responsible for establishing and maintaining adequate internal control over financial
reporting.
2. Under the supervision of and with participation of Avient’s management, including the Chief Executive Officer
and the Chief Financial Officer, we conducted an evaluation of the effectiveness of internal control over
financial reporting as of December 31, 2020 based on the guidelines established in Internal Control -
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) (2013 Framework). Management believes that the 2013 Framework is a suitable framework for its
evaluation of financial reporting because it is free from bias, permits reasonably consistent qualitative and
quantitative measurements of Avient’s internal control over financial reporting, is sufficiently complete so that
those relevant factors that would alter a conclusion about the effectiveness of Avient’s internal control over
financial reporting are not omitted and is relevant to an evaluation of internal control over financial reporting.
Management's assessment of internal control over financial reporting as of December 31, 2020 excludes
internal control over financial reporting related to Clariant MB (acquired July 1, 2020), which constituted
approximately 41.6% of the Company's total assets (inclusive of acquired intangible assets) as of December
31, 2020, and approximately 16.8% of the Company's net sales for the year ended December 31, 2020.
3. Based on the results of our evaluation, management has concluded that such internal control over financial
reporting was effective as of December 31, 2020. There were no material weaknesses in internal control over
financial reporting identified by management. The results of management's assessment were reviewed with
our Audit Committee.
4. Ernst & Young LLP, who audited the consolidated financial statements of Avient for the year ended
December 31, 2020, also issued an attestation report on Avient’s internal control over financial reporting under
Auditing Standard No. 2201 of the Public Company Accounting Oversight Board. This attestation report is set
forth on page 32 of this Annual Report on Form 10-K and is incorporated by reference into this Item 9A.
Changes in internal control over financial reporting
There were no changes in the Company’s internal control over financial reporting that occurred during the quarter
ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s
internal control over financial reporting.
Limitations in internal control over financial reporting
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
68 AVIENT CORPORATION
ITEM 9B. OTHER INFORMATION
None.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure controls and procedures
Avient’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, has
evaluated the effectiveness of the design and operation of Avient’s disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2020. Based on this evaluation, the
Chief Executive Officer and the Chief Financial Officer have concluded that our disclosure controls and procedures
were effective as of December 31, 2020.
The Company completed the Clariant MB Acquisition on July 1, 2020 and has not yet included Clariant MB in its
assessment of the effectiveness of its internal control over financial reporting. The Company is currently integrating
Clariant MB into its operations, compliance programs and internal control processes. Accordingly, pursuant to the
SEC's general guidance that an assessment of a recently acquired business may be omitted from the scope of an
assessment in the year of acquisition, the scope of our assessment of the effectiveness of our disclosure controls
and procedures does not include Clariant MB. Clariant MB constituted approximately 41.6% of the Company's total
assets (inclusive of acquired intangible assets) as of December 31, 2020, and approximately 16.8% of the
Company's net sales for the year ended December 31, 2020.
Management’s Annual Report On Internal Control Over Financial Reporting
The following report is provided by management in respect of Avient’s internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act):
1. Avient’s management is responsible for establishing and maintaining adequate internal control over financial
reporting.
2. Under the supervision of and with participation of Avient’s management, including the Chief Executive Officer
and the Chief Financial Officer, we conducted an evaluation of the effectiveness of internal control over
financial reporting as of December 31, 2020 based on the guidelines established in Internal Control -
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) (2013 Framework). Management believes that the 2013 Framework is a suitable framework for its
evaluation of financial reporting because it is free from bias, permits reasonably consistent qualitative and
quantitative measurements of Avient’s internal control over financial reporting, is sufficiently complete so that
those relevant factors that would alter a conclusion about the effectiveness of Avient’s internal control over
financial reporting are not omitted and is relevant to an evaluation of internal control over financial reporting.
Management's assessment of internal control over financial reporting as of December 31, 2020 excludes
internal control over financial reporting related to Clariant MB (acquired July 1, 2020), which constituted
approximately 41.6% of the Company's total assets (inclusive of acquired intangible assets) as of December
31, 2020, and approximately 16.8% of the Company's net sales for the year ended December 31, 2020.
3. Based on the results of our evaluation, management has concluded that such internal control over financial
reporting was effective as of December 31, 2020. There were no material weaknesses in internal control over
financial reporting identified by management. The results of management's assessment were reviewed with
our Audit Committee.
4. Ernst & Young LLP, who audited the consolidated financial statements of Avient for the year ended
December 31, 2020, also issued an attestation report on Avient’s internal control over financial reporting under
Auditing Standard No. 2201 of the Public Company Accounting Oversight Board. This attestation report is set
forth on page 32 of this Annual Report on Form 10-K and is incorporated by reference into this Item 9A.
Changes in internal control over financial reporting
There were no changes in the Company’s internal control over financial reporting that occurred during the quarter
ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s
internal control over financial reporting.
Limitations in internal control over financial reporting
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
AVIENT CORPORATION 69
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 15. EXHIBITS AND FINANACIAL STATEMENT SCHEDULES
The information regarding Avient’s directors, including the identification of the audit committee and audit committee
financial experts, is incorporated by reference to the information contained in Avient’s Proxy Statement with respect
to the 2021 Annual Meeting of Shareholders (2021 Proxy Statement). Information concerning executive officers is
contained in Part I of this Annual Report on Form 10-K under the heading “Information About Our Executive
Officers.”
The information regarding Section 16(a) beneficial ownership reporting compliance is incorporated by reference to
the material under the heading “Delinquent Section 16(a) Reports” in the 2021 Proxy Statement.
The information regarding any changes in procedures by which shareholders may recommend nominees to Avient’s
Board of Directors is incorporated by reference to the information contained in the 2021 Proxy Statement.
Avient has adopted a code of ethics that applies to its principal executive officer, principal financial officer and
principal accounting officer. Avient’s code of ethics is posted under the Corporate Governance tab of the Investor
Relations page of its website at www.avient.com. Avient will post any amendments to, or waivers of, its code of
ethics that apply to its principal executive officer, principal financial officer and principal accounting officer on its
website.
ITEM 11. EXECUTIVE COMPENSATION
The information regarding executive officer and director compensation is incorporated by reference to the
information contained in the 2021 Proxy Statement.
The information regarding compensation committee interlocks and insider participation and the compensation
committee report is incorporated by reference to the information contained in the 2021 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
SHAREHOLDER MATTERS
Number of securities to be
issued upon exercise of
outstanding options, warrants
and rights (1)
Weighted-average exercise
price of outstanding options,
warrants and rights
Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (a))(2)
Plan category
(a)
Equity compensation plans
approved by security
holders
Equity compensation plans
not approved by security
holders
2,548,083
—
(b)
$32.43
—
(c)
3,060,250
—
PART IV
(a)(1) Financial Statements:
The following consolidated financial statements of Avient Corporation are included in Item 8:
Consolidated Statements of Income for the years ended December 31, 2020, 2019 and 2018
Consolidated Statements of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018
Consolidated Balance Sheets at December 31, 2020 and 2019
Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2020, 2019 and 2018
Notes to Consolidated Financial Statements
All other schedules for which provision is made in Regulation S-X of the SEC are not required under the related
instructions or are inapplicable and, therefore, have been omitted.
(a)(3) Exhibits:
Exhibit No.
Exhibit Description
2.1†
2.2†
2.3†
3.1**
3.2**
4.1
4.2
4.3
10.1
10.2
10.3
10.4
10.5
10.6
Equity Purchase Agreement dated June 29, 2017, by and among PolyOne Corporation, PolyOne Designed Structures
and Solutions LLC and NLIN Plastics, LLC (incorporated by reference to Exhibit 2.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2017, SEC File No. 1-16091)
Asset Purchase Agreement, dated August 16, 2019, by and among PolyOne Corporation and SK Echo Group S.à r.l.
(incorporated by reference to Exhibit 2.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2019, SEC File no. 1-16091)
Share Purchase Agreement, dated December 19, 2019, by and between PolyOne Corporation and Clariant AG
(incorporated by reference to Exhibit 2.3 to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, SEC File No. 1-16091).
Amended and Restated Articles of Incorporation of Avient Corporation (as amended through June 30, 2020)
Amended and Restated Code of Regulations, effective June 30, 2020
Indenture, dated February 28, 2013, between PolyOne Corporation and Wells Fargo Bank, National Association, as
trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 5, 2013,
SEC File No. 1-16091)
File No. 1-16091)
Indenture, dated May 13, 2020, between PolyOne Corporation and U.S. Bank National Association, as trustee
(incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on May 15, 2020, SEC
Description of Securities (incorporated by reference to Exhibit 4.2 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2019, SEC File No. 1-16091).
Third Amended and Restated Credit Agreement, dated June 28, 2019, by and among PolyOne Corporation, the
subsidiaries of PolyOne Corporation party thereto, Wells Fargo Capital Finance, LLC, as administrative agent, and the
various lenders and other agents party thereto (incorporated by reference to Exhibit 10.2 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2019, SEC File No. 1-16091.
Credit Agreement, dated November 12, 2015, by and among PolyOne Corporation, as borrower, Citibank, N.A., as
administrative agent, each of Citigroup Global Markets Inc., Wells Fargo Securities LLC, Goldman, Sachs & Co.,
HSBC Securities (USA) Inc. and Morgan Stanley & Co. LLC, as joint-lead arrangers and joint-book managers,
Jefferies Finance LLC, KeyBanc Capital Markets Inc. and SunTrust Robinson Humphrey, Inc., as co-managers, and
several other commercial lending institutions that are parties thereto (incorporated by reference to Exhibit 10.6 to the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, SEC File No. 1-16091)
Amendment Agreement No. 1 to the Credit Agreement, dated as of June 15, 2016, among the Company, certain
subsidiaries of the Company, Citibank, N.A., as administrative agent, and the additional lender party thereto
(incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended
June 30. 2016, SEC File No. 16091)
Amendment Agreement No. 2, dated August 3, 2016, by and among PolyOne Corporation, the subsidiaries of
PolyOne Corporation party thereto, Citibank, N.A, as administrative agent, and the lenders party thereto (incorporated
by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 5, 2016, SEC File No.
1-16091)
Amendment Agreement No. 3, dated January 24, 2017, by and among PolyOne Corporation, the subsidiaries of
PolyOne Corporation party thereto, Citibank, N.A., as administrative agent, and the lenders party thereto (incorporated
by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017,
SEC File No. 1-16091)
Amendment Agreement No. 4, dated August 15, 2017, by and among PolyOne Corporation, the subsidiaries of
PolyOne Corporation party thereto, Citibank, N.A., as administrative agent, and the lenders party thereto (incorporated
by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30,
2017, SEC File No. 1-16091)
The information regarding security ownership of certain beneficial owners is incorporated by reference to the
information contained in the 2021 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information regarding certain relationships and related transactions and director independence is incorporated
by reference to the information contained in the 2021 Proxy Statement.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information regarding fees paid to and services provided by Avient’s independent registered public accounting firm
and the pre-approval policies and procedures of the audit committee is incorporated by reference to the information
contained in the 2021 Proxy Statement.
70 AVIENT CORPORATION
Total
(1) This amount represents shares underlying SAR awards that have been previously granted but not yet exercised.
(2) In addition to options, warrants and rights, the Avient Corporation 2020 Equity and Incentive Compensation Plan (the 2020
EICP) authorizes the issuance of restricted stock, restricted stock units, performance shares and awards to Non-Employee
Directors. This amount represents shares remaining available for future awards under the EICP. The 2020 EICP limits the
total number of shares that may be issued as one or more of these types of awards to 3.1 million.
2,548,083
3,060,250
$32.43
PART III
Officers.”
PART IV
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 15. EXHIBITS AND FINANACIAL STATEMENT SCHEDULES
The information regarding Avient’s directors, including the identification of the audit committee and audit committee
(a)(1) Financial Statements:
financial experts, is incorporated by reference to the information contained in Avient’s Proxy Statement with respect
to the 2021 Annual Meeting of Shareholders (2021 Proxy Statement). Information concerning executive officers is
The following consolidated financial statements of Avient Corporation are included in Item 8:
contained in Part I of this Annual Report on Form 10-K under the heading “Information About Our Executive
Consolidated Statements of Income for the years ended December 31, 2020, 2019 and 2018
The information regarding Section 16(a) beneficial ownership reporting compliance is incorporated by reference to
the material under the heading “Delinquent Section 16(a) Reports” in the 2021 Proxy Statement.
The information regarding any changes in procedures by which shareholders may recommend nominees to Avient’s
Consolidated Statements of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018
Consolidated Balance Sheets at December 31, 2020 and 2019
Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018
Board of Directors is incorporated by reference to the information contained in the 2021 Proxy Statement.
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2020, 2019 and 2018
Avient has adopted a code of ethics that applies to its principal executive officer, principal financial officer and
Notes to Consolidated Financial Statements
principal accounting officer. Avient’s code of ethics is posted under the Corporate Governance tab of the Investor
Relations page of its website at www.avient.com. Avient will post any amendments to, or waivers of, its code of
ethics that apply to its principal executive officer, principal financial officer and principal accounting officer on its
All other schedules for which provision is made in Regulation S-X of the SEC are not required under the related
instructions or are inapplicable and, therefore, have been omitted.
(a)(3) Exhibits:
The information regarding executive officer and director compensation is incorporated by reference to the
Exhibit No.
Exhibit Description
2.1†
2.2†
2.3†
3.1**
3.2**
4.1
4.2
4.3
10.1
10.2
10.3
10.4
10.5
10.6
Equity Purchase Agreement dated June 29, 2017, by and among PolyOne Corporation, PolyOne Designed Structures
and Solutions LLC and NLIN Plastics, LLC (incorporated by reference to Exhibit 2.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2017, SEC File No. 1-16091)
Asset Purchase Agreement, dated August 16, 2019, by and among PolyOne Corporation and SK Echo Group S.à r.l.
(incorporated by reference to Exhibit 2.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2019, SEC File no. 1-16091)
Share Purchase Agreement, dated December 19, 2019, by and between PolyOne Corporation and Clariant AG
(incorporated by reference to Exhibit 2.3 to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, SEC File No. 1-16091).
Amended and Restated Articles of Incorporation of Avient Corporation (as amended through June 30, 2020)
Amended and Restated Code of Regulations, effective June 30, 2020
Indenture, dated February 28, 2013, between PolyOne Corporation and Wells Fargo Bank, National Association, as
trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 5, 2013,
SEC File No. 1-16091)
Indenture, dated May 13, 2020, between PolyOne Corporation and U.S. Bank National Association, as trustee
(incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on May 15, 2020, SEC
File No. 1-16091)
Description of Securities (incorporated by reference to Exhibit 4.2 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2019, SEC File No. 1-16091).
Third Amended and Restated Credit Agreement, dated June 28, 2019, by and among PolyOne Corporation, the
subsidiaries of PolyOne Corporation party thereto, Wells Fargo Capital Finance, LLC, as administrative agent, and the
various lenders and other agents party thereto (incorporated by reference to Exhibit 10.2 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2019, SEC File No. 1-16091.
Credit Agreement, dated November 12, 2015, by and among PolyOne Corporation, as borrower, Citibank, N.A., as
administrative agent, each of Citigroup Global Markets Inc., Wells Fargo Securities LLC, Goldman, Sachs & Co.,
HSBC Securities (USA) Inc. and Morgan Stanley & Co. LLC, as joint-lead arrangers and joint-book managers,
Jefferies Finance LLC, KeyBanc Capital Markets Inc. and SunTrust Robinson Humphrey, Inc., as co-managers, and
several other commercial lending institutions that are parties thereto (incorporated by reference to Exhibit 10.6 to the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, SEC File No. 1-16091)
Amendment Agreement No. 1 to the Credit Agreement, dated as of June 15, 2016, among the Company, certain
subsidiaries of the Company, Citibank, N.A., as administrative agent, and the additional lender party thereto
(incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended
June 30. 2016, SEC File No. 16091)
Amendment Agreement No. 2, dated August 3, 2016, by and among PolyOne Corporation, the subsidiaries of
PolyOne Corporation party thereto, Citibank, N.A, as administrative agent, and the lenders party thereto (incorporated
by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 5, 2016, SEC File No.
1-16091)
Amendment Agreement No. 3, dated January 24, 2017, by and among PolyOne Corporation, the subsidiaries of
PolyOne Corporation party thereto, Citibank, N.A., as administrative agent, and the lenders party thereto (incorporated
by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017,
SEC File No. 1-16091)
Amendment Agreement No. 4, dated August 15, 2017, by and among PolyOne Corporation, the subsidiaries of
PolyOne Corporation party thereto, Citibank, N.A., as administrative agent, and the lenders party thereto (incorporated
by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30,
2017, SEC File No. 1-16091)
AVIENT CORPORATION 71
website.
ITEM 11. EXECUTIVE COMPENSATION
information contained in the 2021 Proxy Statement.
The information regarding compensation committee interlocks and insider participation and the compensation
committee report is incorporated by reference to the information contained in the 2021 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
SHAREHOLDER MATTERS
Number of securities to be
issued upon exercise of
outstanding options, warrants
and rights (1)
Weighted-average exercise
price of outstanding options,
warrants and rights
Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (a))(2)
Plan category
(a)
Equity compensation plans
approved by security
holders
Equity compensation plans
not approved by security
holders
Total
2,548,083
—
2,548,083
(b)
$32.43
—
$32.43
(c)
3,060,250
—
3,060,250
(1) This amount represents shares underlying SAR awards that have been previously granted but not yet exercised.
(2) In addition to options, warrants and rights, the Avient Corporation 2020 Equity and Incentive Compensation Plan (the 2020
EICP) authorizes the issuance of restricted stock, restricted stock units, performance shares and awards to Non-Employee
Directors. This amount represents shares remaining available for future awards under the EICP. The 2020 EICP limits the
total number of shares that may be issued as one or more of these types of awards to 3.1 million.
The information regarding security ownership of certain beneficial owners is incorporated by reference to the
information contained in the 2021 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information regarding certain relationships and related transactions and director independence is incorporated
by reference to the information contained in the 2021 Proxy Statement.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information regarding fees paid to and services provided by Avient’s independent registered public accounting firm
and the pre-approval policies and procedures of the audit committee is incorporated by reference to the information
contained in the 2021 Proxy Statement.
21.1**
23.1**
31.1**
31.2**
32.1**
32.2**
101 .INS**
101 .SCH**
101 .CAL**
101 .LAB**
101 .PRE**
101 .DEF**
104
Consent of Independent Registered Public Accounting Firm - Ernst & Young LLP
Certification of Robert M. Patterson, Chairman, President and Chief Executive Officer, pursuant to SEC
Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Jamie A. Beggs, Senior Vice President and Chief Financial Officer, pursuant to SEC Rules 13a-14(a)
and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification pursuant to 18 U.S.C. § 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as
signed by Robert M. Patterson, Chairman, President and Chief Executive Officer
Certification pursuant to 18 U.S.C. § 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as
signed by Jamie A. Beggs, Senior Vice President and Chief Financial Officer
Inline XBRL Instance Document
Inline XBRL Taxonomy Extension Schema Document
Inline XBRL Taxonomy Extension Calculation Linkbase Document
Inline XBRL Taxonomy Extension Label Linkbase Document
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Inline XBRL Taxonomy Definition Linkbase Document
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
+
Indicates management contract or compensatory plan, contract or arrangement in which one or more directors or executive officers of the
Registrant may be participants
†
Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be provided to the Securities and
Exchange Commission upon request.
10.7
10.8
10.9+
10.10+
10.11+
10.12+
10.13+
10.14+
10.15+
10.16+**
10.17+
10.18
10.19+
10.20+
10.21+
10.22+
10.23+
10.24+
10.25+**
Amendment Agreement No. 5, dated April 11, 2018, by and among PolyOne Corporation, the subsidiaries of PolyOne
Corporation party thereto, Citibank, N.A., as administrative agent, and the lenders party thereto (incorporated by
reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, SEC
File No. 1-16091)
Exhibit No.
Exhibit Description
Subsidiaries of the Company
Amendment Agreement No. 6, dated November 9, 2018, by and among PolyOne Corporation, the subsidiaries of
PolyOne Corporation party thereto, Citibank, N.A, as administrative agent, and the lenders party thereto (incorporated
by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 13, 2018, SEC File No.
1-16091)
Form of 2011 Award Agreement under the 2010 Equity and Performance Incentive Plan (incorporated by reference to
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, SEC File No.
1-16091)
Amended and Restated Avient Corporation 2010 Equity and Performance Incentive Plan (incorporated by reference to
Appendix B to the Company’s definitive proxy statement on Schedule 14A filed on April 3, 2015, SEC File No.
1-16091)
First Amendment to the Avient Supplemental Retirement Benefit Plan (As Amended and Restated Effective January 1,
2014), dated as of March 16, 2016; Amendment No. 2 to the Avient Supplemental Retirement Benefit Plan (As
Amended and Restated Effective January 1, 2014), dated as of December 19, 2018; and Amendment No. 3 to the
Avient Supplemental Retirement Benefit Plan (As Amended and Restated Effective January 1, 2014), dated as of April
18, 2019 (incorporated by reference to Exhibit 4.5 to the Company's Registration Statement on Form S-8, filed on May
6, 2019, SEC File No. 333-231236)
Avient 2017 Equity and Incentive Compensation Plan (incorporated by reference to Appendix B to the Company's
definitive proxy statement on Schedule 14A filed on March 31, 2017, SEC File No. 1-16091)
Amended and Restated Deferred Compensation Plan for Non-Employee Directors (as amended and restated effective
May 20, 2014) (incorporated by reference to Exhibit 10.7 of the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2014, SEC File No. 1-16091)
Form of Management Continuity Agreement for Executive Officers prior to 2011 (incorporated by reference to
Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, SEC File
No. 1-16091)
Form of Management Continuity Agreement for Executive Officers after 2011 (incorporated by reference to Exhibit
10.12 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, SEC File No.
1-16091)
Schedule of Executive Officers with Management Continuity Agreements
**
Filed herewith.
Avient Supplemental Retirement Benefit Plan (As Amended and Restated Effective January 1, 2014) (incorporated by
reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2013, SEC file No. 1-16091)
Assumption of Liabilities and Indemnification Agreement, dated March 1, 1993, amended and restated by Amended
and Restated Assumption of Liabilities and Indemnification Agreement, dated April 27, 1993 (incorporated by
reference to Exhibit 10.14 to The Geon Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, SEC File No. 1-11804)
Executive Severance Plan, as amended and restated effective May 15, 2014 (incorporated by reference to
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, SEC File
No. 1-16091)
Form of 2012 Award Agreement under the Avient Corporation 2010 Equity and Performance Incentive Plan, as
amended (incorporated by reference to Exhibit 10.38 to the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2012, SEC File No. 1-16091)
Form of 2013 Award Agreement under the Avient Corporation 2010 Equity and Performance Incentive Plan, as
amended (incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2013, SEC File No. 1-16091)
Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed on July 5, 2006, SEC File No. 1-16091)
Form of 2014 Award Agreement under the Avient Corporation 2010 Equity and Performance Incentive Plan, as
amended (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter
ended June 30, 2014, SEC File No. 1-16091)
Avient Corporation 2020 Equity and Incentive Compensation Plan (incorporated by reference to Appendix B to the
Company’s definitive proxy statement on Schedule 14A filed on March 30, 2020, SEC File No. 1-16091).
Form of 2021 Award Agreement under the Avient Corporation 2020 Equity and Incentive Compensation Plan
ITEM 16. FORM 10-K SUMMARY
None.
72 AVIENT CORPORATION
Exhibit No.
Exhibit Description
21.1**
23.1**
31.1**
31.2**
32.1**
32.2**
101 .INS**
101 .SCH**
101 .CAL**
101 .LAB**
101 .PRE**
101 .DEF**
104
Subsidiaries of the Company
Consent of Independent Registered Public Accounting Firm - Ernst & Young LLP
Certification of Robert M. Patterson, Chairman, President and Chief Executive Officer, pursuant to SEC
Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Jamie A. Beggs, Senior Vice President and Chief Financial Officer, pursuant to SEC Rules 13a-14(a)
and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification pursuant to 18 U.S.C. § 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as
signed by Robert M. Patterson, Chairman, President and Chief Executive Officer
Certification pursuant to 18 U.S.C. § 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as
signed by Jamie A. Beggs, Senior Vice President and Chief Financial Officer
Inline XBRL Instance Document
Inline XBRL Taxonomy Extension Schema Document
Inline XBRL Taxonomy Extension Calculation Linkbase Document
Inline XBRL Taxonomy Extension Label Linkbase Document
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Inline XBRL Taxonomy Definition Linkbase Document
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
+
†
Indicates management contract or compensatory plan, contract or arrangement in which one or more directors or executive officers of the
Registrant may be participants
Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be provided to the Securities and
Exchange Commission upon request.
Schedule of Executive Officers with Management Continuity Agreements
**
Filed herewith.
ITEM 16. FORM 10-K SUMMARY
None.
10.7
10.8
10.9+
10.10+
10.11+
10.12+
10.13+
10.14+
10.15+
10.16+**
10.17+
10.18
10.19+
10.20+
10.21+
10.22+
10.23+
10.24+
10.25+**
Amendment Agreement No. 5, dated April 11, 2018, by and among PolyOne Corporation, the subsidiaries of PolyOne
Corporation party thereto, Citibank, N.A., as administrative agent, and the lenders party thereto (incorporated by
reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, SEC
File No. 1-16091)
Amendment Agreement No. 6, dated November 9, 2018, by and among PolyOne Corporation, the subsidiaries of
PolyOne Corporation party thereto, Citibank, N.A, as administrative agent, and the lenders party thereto (incorporated
by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 13, 2018, SEC File No.
1-16091)
1-16091)
1-16091)
Form of 2011 Award Agreement under the 2010 Equity and Performance Incentive Plan (incorporated by reference to
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, SEC File No.
Amended and Restated Avient Corporation 2010 Equity and Performance Incentive Plan (incorporated by reference to
Appendix B to the Company’s definitive proxy statement on Schedule 14A filed on April 3, 2015, SEC File No.
First Amendment to the Avient Supplemental Retirement Benefit Plan (As Amended and Restated Effective January 1,
2014), dated as of March 16, 2016; Amendment No. 2 to the Avient Supplemental Retirement Benefit Plan (As
Amended and Restated Effective January 1, 2014), dated as of December 19, 2018; and Amendment No. 3 to the
Avient Supplemental Retirement Benefit Plan (As Amended and Restated Effective January 1, 2014), dated as of April
18, 2019 (incorporated by reference to Exhibit 4.5 to the Company's Registration Statement on Form S-8, filed on May
6, 2019, SEC File No. 333-231236)
Avient 2017 Equity and Incentive Compensation Plan (incorporated by reference to Appendix B to the Company's
definitive proxy statement on Schedule 14A filed on March 31, 2017, SEC File No. 1-16091)
Amended and Restated Deferred Compensation Plan for Non-Employee Directors (as amended and restated effective
May 20, 2014) (incorporated by reference to Exhibit 10.7 of the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2014, SEC File No. 1-16091)
Form of Management Continuity Agreement for Executive Officers prior to 2011 (incorporated by reference to
Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, SEC File
Form of Management Continuity Agreement for Executive Officers after 2011 (incorporated by reference to Exhibit
10.12 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, SEC File No.
No. 1-16091)
1-16091)
Avient Supplemental Retirement Benefit Plan (As Amended and Restated Effective January 1, 2014) (incorporated by
reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2013, SEC file No. 1-16091)
Assumption of Liabilities and Indemnification Agreement, dated March 1, 1993, amended and restated by Amended
and Restated Assumption of Liabilities and Indemnification Agreement, dated April 27, 1993 (incorporated by
reference to Exhibit 10.14 to The Geon Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, SEC File No. 1-11804)
Executive Severance Plan, as amended and restated effective May 15, 2014 (incorporated by reference to
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, SEC File
No. 1-16091)
Form of 2012 Award Agreement under the Avient Corporation 2010 Equity and Performance Incentive Plan, as
amended (incorporated by reference to Exhibit 10.38 to the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2012, SEC File No. 1-16091)
Form of 2013 Award Agreement under the Avient Corporation 2010 Equity and Performance Incentive Plan, as
amended (incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2013, SEC File No. 1-16091)
Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed on July 5, 2006, SEC File No. 1-16091)
Form of 2014 Award Agreement under the Avient Corporation 2010 Equity and Performance Incentive Plan, as
amended (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter
ended June 30, 2014, SEC File No. 1-16091)
Avient Corporation 2020 Equity and Incentive Compensation Plan (incorporated by reference to Appendix B to the
Company’s definitive proxy statement on Schedule 14A filed on March 30, 2020, SEC File No. 1-16091).
Form of 2021 Award Agreement under the Avient Corporation 2020 Equity and Incentive Compensation Plan
AVIENT CORPORATION 73
I, Robert M. Patterson, certify that:
1. I have reviewed this Annual Report on Form 10-K of Avient Corporation;
CERTIFICATION
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
/s/ Robert M. Patterson
Robert M. Patterson
Chairman, President and Chief Executive Officer
February 25, 2021
AVIENT CORPORATION
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Exhibit 31.1
AVIENT CORPORATION
February 25, 2021
BY:
/S/ JAMIE A. BEGGS
by this report;
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities indicated and on the dates indicated.
Jamie A. Beggs
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Signature and Title
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
February 25, 2021
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
February 25, 2021
Director
Director
Director
Director
Director
Director
Director
Director
Director
February 25, 2021
February 25, 2021
February 25, 2021
February 25, 2021
February 25, 2021
February 25, 2021
February 25, 2021
February 25, 2021
February 25, 2021
/S/ ROBERT M. PATTERSON
Robert M. Patterson
/S/ JAMIE A. BEGGS
Jamie A. Beggs
/S/ ROBERT E. ABERNATHY
Robert E. Abernathy
/S/ RICHARD H. FEARON
Richard H. Fearon
/S/ GREGORY J. GOFF
Gregory J. Goff
/S/ WILLIAM R. JELLISON
William R. Jellison
/S/ SANDRA BEACH LIN
Sandra Beach Lin
/S/ KIM ANN MINK
Kim Ann Mink
/S/ KERRY J. PREETE
Kerry J. Preete
/S/ PATRICIA VERDUIN
Patricia Verduin
/S/ WILLIAM A. WULFSOHN
William A. Wulfsohn
74 AVIENT CORPORATION
SIGNATURES
Exhibit 31.1
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AVIENT CORPORATION
February 25, 2021
BY:
/S/ JAMIE A. BEGGS
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities indicated and on the dates indicated.
Jamie A. Beggs
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Signature and Title
Chairman, President and Chief Executive Officer
February 25, 2021
(Principal Executive Officer)
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
February 25, 2021
/S/ ROBERT M. PATTERSON
Robert M. Patterson
/S/ JAMIE A. BEGGS
Jamie A. Beggs
/S/ ROBERT E. ABERNATHY
Robert E. Abernathy
/S/ RICHARD H. FEARON
Richard H. Fearon
/S/ GREGORY J. GOFF
Gregory J. Goff
/S/ WILLIAM R. JELLISON
William R. Jellison
/S/ SANDRA BEACH LIN
Sandra Beach Lin
/S/ KIM ANN MINK
Kim Ann Mink
/S/ KERRY J. PREETE
Kerry J. Preete
/S/ PATRICIA VERDUIN
Patricia Verduin
/S/ WILLIAM A. WULFSOHN
William A. Wulfsohn
Director
Director
Director
Director
Director
Director
Director
Director
Director
February 25, 2021
February 25, 2021
February 25, 2021
February 25, 2021
February 25, 2021
February 25, 2021
February 25, 2021
February 25, 2021
February 25, 2021
I, Robert M. Patterson, certify that:
1. I have reviewed this Annual Report on Form 10-K of Avient Corporation;
CERTIFICATION
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
/s/ Robert M. Patterson
Robert M. Patterson
Chairman, President and Chief Executive Officer
February 25, 2021
AVIENT CORPORATION
I, Jamie A. Beggs, certify that:
1. I have reviewed this Annual Report on Form 10-K of Avient Corporation;
CERTIFICATION
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;
In connection with the Annual Report on Form 10-K of Avient Corporation (the “Company”) for the year ended December 31, 2020, as filed with
the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert M. Patterson, Chairman, President and Chief Executive
Officer of the Company, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that,
Exhibit 31.2
Exhibit 32.1
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
/s/ Jamie A. Beggs
Jamie A. Beggs
Senior Vice President and Chief Financial Officer
February 25, 2021
AVIENT CORPORATION
to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company as of the dates and for the periods expressed in the Report.
/s/ Robert M. Patterson
Robert M. Patterson
Chairman, President and Chief Executive Officer
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate
February 25, 2021
disclosure document.
AVIENT CORPORATION
I, Jamie A. Beggs, certify that:
1. I have reviewed this Annual Report on Form 10-K of Avient Corporation;
CERTIFICATION
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
In connection with the Annual Report on Form 10-K of Avient Corporation (the “Company”) for the year ended December 31, 2020, as filed with
the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert M. Patterson, Chairman, President and Chief Executive
Officer of the Company, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that,
to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company as of the dates and for the periods expressed in the Report.
Exhibit 31.2
Exhibit 32.1
February 25, 2021
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate
disclosure document.
/s/ Robert M. Patterson
Robert M. Patterson
Chairman, President and Chief Executive Officer
AVIENT CORPORATION
15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
/s/ Jamie A. Beggs
Jamie A. Beggs
Senior Vice President and Chief Financial Officer
February 25, 2021
AVIENT CORPORATION
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.2
In connection with the Annual Report on Form 10-K of Avient Corporation (the “Company”) for the year ended December 31, 2020, as filed with
the Securities and Exchange Commission on the date hereof (the “Report”), I, Jamie A. Beggs, Senior Vice President and Chief Financial Officer
of the Company, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my
knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company as of the dates and for the periods expressed in the Report.
February 25, 2021
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate
disclosure document.
/s/ Jamie A. Beggs
Jamie A. Beggs
Senior Vice President and Chief Financial Officer
AVIENT CORPORATION
THIS PAGE INTENTIONALLY LEFT BLANK
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.2
In connection with the Annual Report on Form 10-K of Avient Corporation (the “Company”) for the year ended December 31, 2020, as filed with
the Securities and Exchange Commission on the date hereof (the “Report”), I, Jamie A. Beggs, Senior Vice President and Chief Financial Officer
of the Company, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my
knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company as of the dates and for the periods expressed in the Report.
/s/ Jamie A. Beggs
Jamie A. Beggs
Senior Vice President and Chief Financial Officer
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate
February 25, 2021
disclosure document.
AVIENT CORPORATION
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THIS PAGE INTENTIONALLY LEFT BLANK
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THIS PAGE IS NOT PART OF AVIENT’S FORM 10-K FILING
Avient Stock Performance
The following is a graph that compares the cumulative total shareholder returns for Avient’s common shares, the S&P 500 index and the
S&P Mid Cap Chemicals index, with dividends assumed to be reinvested when received. The graph assumes the investing of $100 from
December 31, 2015 through December 31, 2020. The S&P Mid Cap Chemicals index includes a broad range of chemical manufacturers.
Because of the relationship of Avient’s business within the chemical industry, comparison with this broader index is appropriate.
STOCK EXCHANGE LISTING
FINANCIAL INFORMATION
Avient's Common Stock is listed on the New York Stock Exchange, Symbol: AVNT
Security analysts and representatives of financial institutions are invited to contact:
SHAREHOLDER INQUIRIES
If you have any questions concerning your account as a shareholder, name or address
changes, inquiries regarding stock certificates, or if you need tax information regarding your
account, please contact our transfer agent:
Joe Di Salvo
Vice President, Treasurer and Investor Relations
Phone: 440-930-1921
Email: giuseppe.disalvo@avient.com
Equiniti Trust Company
1110 Centre Pointe Curve, Suite 101
Mendota Heights, MN 55120-4100
Phone: 1-855-598-2615
or 1-651-450-4064
www.shareowneronline.com
AUDITORS
Ernst & Young LLP
950 Main Ave., Suite 1800
Cleveland, OH 44113
INTERNET ACCESS
Additional information about Avient, including current and historic copies of Annual
Reports on Form 10-K and other reports filed with the Securities and Exchange
Commission, is available online at www.avient.com or free of charge from:
Information on Avient’s products and services, news releases, corporate governance,
EDGAR filings, Reports on Forms 10-K and 10-Q, etc. as well as an electronic version of
this annual report, are available on the Internet at www.avient.com.
Investor Relations
Avient Corporation
33587 Walker Road
Avon Lake, Ohio 44012
Phone: 440-930-1000
ANNUAL MEETING
The annual meeting of shareholders of Avient will be held virtually on May 13, 2021 at
9:00 a.m. The meeting notice and proxy materials were mailed to shareholders with
this annual report. Avient urges all shareholders to vote their proxies so that they can
participate in the decisions at the annual meeting.
THIS PAGE IS NOT PART OF POLYONE’S FORM 10-K FILING
THIS PAGE IS NOT PART OF POLYONE’S FORM 10-K FILING
THIS PAGE IS NOT PART OF AVIENT’S FORM 10-K FILING
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(Dollars in millions, except for per share data)
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 as defined in our quarterly earnings releases, to assess performance and facilitate comparability of results.
Avient acquired the Clariant Masterbatch business (CMB) on July 1, 2020 (the “Acquisition Date”). To provide comparable
financial results, the Company references “pro forma” financial metrics, which include the business results of CMB for periods
prior to the Acquisition Date. Management believes this provides comparability of the performance of the combined businesses.
Senior management believes the measures described above 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. The presentation of these non-GAAP
measures is not intended to be considered in isolation from, as a substitute for, or as superior to, the financial information
prepared and presented in accordance with U.S. GAAP. 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.
The presentation of these measures may be different from non-GAAP financial measures used by other companies.
A reconciliation of these measures to their most directly comparable GAAP measures is provided in the tables below.
Reconciliation of Pro Forma Adjusted Earnings per Share:
Year Ended
December 31,
2020
2019
Net income from continuing operations attributable to Avient shareholders
$
132.0
$
Special items, after tax
Adjusted net income from continuing operations excluding special items
Clariant MB pro forma adjustments to net income from continuing operations(1)
24.8
156.8
20.7
75.5
55.8
131.3
30.4
Pro forma adjusted net income from continuing operations attributable to Avient shareholders
$
177.5
$
161.7
Weighted average diluted shares
Pro forma impact to diluted shares from January 2020 equity offering
Pro forma weighted average diluted shares
90.6
1.5
92.1
77.7
15.3
93.0
Pro forma adjusted EPS - excluding special items pro forma for Clariant MB acquisition
$
1.93
$
1.74
(1) Pro forma adjustments for the periods prior to the acquisition date (July 1, 2020) and to give effects to the financing for the acquisition
Free cash flow, defined as cash provided by operating activities excluding items associated with acquisitions and divestitures,
less capital expenditures, is considered a non-GAAP financial measure. Management believes, however, that free cash flow,
which measures our ability to generate additional cash from our business operations, is an important financial measure for use
in evaluating the company's financial performance. Free cash flow should be considered in addition to, rather than as a
substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a
measure of our liquidity.
Free Cash Flow Calculation
Cash provided (used) by operating activities
Capital expenditures
Free Cash Flow
Payment of post-acquisition date earnout liability
Taxes paid on gain on divestiture
Adjusted Free Cash Flow
Year Ended
December 31, 2020
$
$
221.6
(63.7)
157.9
38.1
142.0
338.0
1
Our Sustainability
Guiding Principle and
Four Cornerstones
To enable our customers’
innovation and sustainability
goals through world-class
products and services.
VISION AND STRATEGY
Our Vision
At Avient, we create specialized and sustainable
material solutions that transform customer challenges
into opportunities, bringing new products to life for a
better world.
Operational
Excellence
Commercial
Excellence
Associates
Specialization
Globalization
Our Strategy
Specialization
to our customers.
Globalization
Differentiates us through unique value-creating offerings
Positions us to serve our customers consistently,
everywhere in the world.
Operational Excellence
Empowers us to respond to the voice of the customer
with relentless continuous improvement.
Commercial Excellence
Governs our activities in the marketplace to deliver
extraordinary value to our customers.
7253_CVRc1.pdf 2
LEADERSHIP
CORPORATE OFFICERS
BOARD OF DIRECTORS
ROBERT M. PATTERSON
Chairman, President and Chief Executive Officer
JAMIE A. BEGGS
Senior Vice President, Chief Financial Officer
GIUSEPPE Di SALVO
Vice President, Treasurer and Investor Relations
CATHY K. DODD
Senior Vice President, President of Distribution
MICHAEL A. GARR ATT
Senior Vice President, President of Color, Additives and Inks, EMEA
JUSTIN M. HESS
Vice President, Corporate Controller
AVERY L. JOHNSON
Vice President, Tax
HOLGER KRONIMUS
Vice President, Europe, General Manager, Engineered Materials, Europe
LISA K. KUNKLE
Senior Vice President, General Counsel and Secretary
M. JOHN MIDEA, JR.
Senior Vice President, Global Operations and Process Improvement
WOON KEAT MOH
Senior Vice President, President of Color, Additives and Inks,
Americas and Asia
CHRISTOPHER L. PEDERSON
Senior Vice President, President of Specialty Engineered Materials
JENNIFER N. PRUGH
Vice President, Marketing
JOEL R ATHBUN
Senior Vice President, Mergers and Acquisitions
JOÃO JOSÉ SAN MARTIN NETO
Senior Vice President, Chief Human Resources Officer
THOMAS TAYLOR
Vice President, Global Sourcing and Logistics
Corporate Officers as of December 31, 2020
ROBERT M. PATTERSON
Chairman, President and Chief Executive Officer, Avient Corporation
Committee: 3
RICHARD H. FEARON
Lead Director, Avient Corporation
Retired Vice Chairman and Chief Financial and Planning Officer, Eaton
Committees: 2, 4*
ROBERT E. ABERNATHY
Retired Chairman and Chief Executive Officer, Halyard Health, Inc.
Committees: 1, 2
GREGORY J. GOFF
Former Chairman, President and Chief Executive Officer, Andeavor
Committees: 3*, 4
WILLIAM R. JELLISON
Retired Vice President, Chief Financial Officer, Stryker Corporation
Committees: 1*, 3
SANDR A B. LIN
Retired President, Chief Executive Officer and Director, Calisolar Inc.
(now Silicor Materials Inc.)
Committees: 1, 4
KIM ANN MINK, Ph.D.
Former Chairman, President and Chief Executive Officer,
Innophos Holdings, Inc.
Committees: 1, 3
KERRY J. PREETE
Retired Executive Vice President, Chief Strategy Officer,
Monsanto Company
Committees: 2*, 4
PATRICIA D. VERDUIN, Ph.D.
Chief Technology Officer, Colgate-Palmolive Company
Committees: 3, 4
WILLIAM A. WULFSOHN
Former Chairman and Chief Executive Officer, Ashland Global Holdings, Inc.
Committees: 1, 2
COMMITTEES
1. Audit
2. Compensation
3. Environmental, Health and Safety
4. Governance and Corporate Responsibility
* Denotes Chairperson
0
2
W
O
M
B Y 2
0
2
%
0
20202020
N O N
B
E
S
D
R
O A
Challenge Accepted.
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
0
AVIENT.COM
7253_CVRc1.pdf 1
Creating A World-Class,
Sustainable Organization
ANNUAL REPORT 2020