10-Q 1 avnt-20220930.htm 10-Q avnt-20220930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________
FORM 10-Q
________________________________________________
(Mark One)
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2022
OR
 
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)
________________________________________________
Ohio34-1730488
(State or other jurisdiction(I.R.S. Employer Identification No.)
of incorporation or organization)
Avient Center
33587 Walker Road44012
Avon Lake, Ohio
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (440930-1000
Former name, former address and former fiscal year, if changed since last report: Not Applicable
_______________________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares, par value $.01 per shareAVNTNew York Stock Exchange
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 filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes     No

The number of the registrant’s outstanding common shares, par value $.01 per share, as of September 30, 2022 was 90,943,531.

AVIENT CORPORATION


PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Avient Corporation
Condensed Consolidated Statements of Income (Unaudited)
(In millions, except per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
 2022202120222021
Sales$823.3 $818.0 $2,606.5 $2,508.5 
Cost of sales627.9 602.4 1,895.8 1,781.2 
Gross margin195.4 215.6 710.7 727.3 
Selling and administrative expense154.8 162.8 467.8 497.7 
Operating income40.6 52.8 242.9 229.6 
Interest expense, net(37.3)(19.0)(70.4)(57.8)
Other (expense) income, net(32.3)1.6 (31.3)4.3 
(Loss) income from continuing operations before income taxes(29.0)35.4 141.2 176.1 
Income tax benefit (expense)1.2 (2.0)(41.5)(32.1)
Net (loss) income from continuing operations(27.8)33.4 99.7 144.0 
Income from discontinued operations, net of income taxes17.1 19.2 58.8 57.7 
Net (loss) income$(10.7)$52.6 $158.5 $201.7 
Net loss (income) attributable to noncontrolling interests0.4 0.3 0.1 (0.7)
Net (loss) income attributable to Avient common shareholders$(10.3)$52.9 $158.6 $201.0 
(Loss) earnings per share attributable to Avient common shareholders - Basic
Continuing operations$(0.30)$0.37 $1.09 $1.57 
Discontinued operations0.19 0.21 0.65 0.63 
Total$(0.11)$0.58 $1.74 $2.20 
(Loss) earnings per share attributable to Avient common shareholders - Diluted
Continuing operations$(0.30)$0.37 $1.08 $1.56 
Discontinued operations0.19 0.20 0.64 0.62 
Total$(0.11)$0.57 $1.72 $2.18 
Weighted-average shares used to compute earnings per common share:
Basic90.9 91.4 91.3 91.3 
Dilutive impact of share-based compensation 0.8 0.7 0.8 
Diluted90.9 92.2 92.0 92.1 
Anti-dilutive shares not included in diluted common shares outstanding1.0  0.3  
Cash dividends declared per share of common stock$0.2375 $0.2125 $0.7125 $0.6375 
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

1 AVIENT CORPORATION


Avient Corporation
Consolidated Statements of Comprehensive Income (Unaudited)
(In millions)
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2022202120222021
Net (loss) income$(10.7)$52.6 $158.5 $201.7 
Other comprehensive (loss) income, net of tax:
Translation adjustments and related hedging instruments(61.1)(29.4)(120.4)(70.9)
Cash flow hedges0.2 0.7 2.3 2.2 
Total other comprehensive loss(60.9)(28.7)(118.1)(68.7)
Total comprehensive (loss) income(71.6)23.9 40.4 133.0 
Comprehensive loss (income) attributable to noncontrolling interests0.4 0.3 0.1 (0.7)
Comprehensive (loss) income attributable to Avient common shareholders$(71.2)$24.2 $40.5 $132.3 
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

2 AVIENT CORPORATION


Avient Corporation
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited) September 30, 2022
December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents$544.4 $601.2 
Accounts receivable, net504.6 439.9 
Inventories, net441.5 305.8 
Current assets held for sale367.8 360.2 
Other current assets130.0 119.9 
Total current assets1,988.3 1,827.0 
Property, net965.4 672.3 
Goodwill1,491.0 1,284.8 
Intangible assets, net1,525.7 925.2 
Operating lease assets, net56.0 58.2 
Non-current assets held for sale 22.0 
Other non-current assets280.7 207.7 
Total assets$6,307.1 $4,997.2 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term and current portion of long-term debt$613.9 $8.6 
Accounts payable448.7 429.5 
Current operating lease obligations18.1 21.1 
Current liabilities held for sale170.3 141.3 
Accrued expenses and other current liabilities304.6 340.2 
Total current liabilities1,555.6 940.7 
Non-current liabilities:
Long-term debt2,502.9 1,850.3 
Pension and other post-retirement benefits91.6 99.9 
Deferred income taxes210.4 100.6 
Non-current operating lease obligations35.7 37.3 
Non-current liabilities held for sale 13.1 
Other non-current liabilities174.8 164.8 
Total non-current liabilities3,015.4 2,266.0 
SHAREHOLDERS' EQUITY
Avient shareholders’ equity1,720.4 1,774.7 
Noncontrolling interest15.7 15.8 
Total equity1,736.1 1,790.5 
Total liabilities and equity$6,307.1 $4,997.2 
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

3 AVIENT CORPORATION


Avient Corporation
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In millions)
 Nine Months Ended
September 30,
 20222021
Operating Activities
Net income$158.5 $201.7 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization110.3 105.8 
Accelerated depreciation 4.0 1.9 
Share-based compensation expense9.5 8.4 
Changes in assets and liabilities, net of the effect of acquisitions:
Increase in accounts receivable(66.5)(199.7)
Increase in inventories(12.5)(156.2)
Increase in accounts payable43.5 95.3 
Decrease in pension and other post-retirement benefits(15.8)(14.2)
(Decrease) increase in accrued expenses and other assets and liabilities, net(7.1)67.0 
Net cash provided by operating activities223.9 110.0 
Investing activities
Capital expenditures(55.1)(62.7)
Business acquisitions, net of cash acquired(1,426.1)(47.6)
Settlement of foreign exchange derivatives93.3  
Net cash proceeds used by other assets (2.0)
Net cash used by investing activities(1,387.9)(112.3)
Financing activities
Debt proceeds1,300.0  
Purchase of common shares for treasury(36.4)(4.2)
Cash dividends paid(65.2)(58.2)
Repayment of long-term debt(6.8)(16.5)
Payments of withholding tax on share awards(4.2)(9.1)
Debt financing costs(49.3) 
Other financing activities (3.5)
Net cash provided (used) by financing activities1,138.1 (91.5)
Effect of exchange rate changes on cash(30.9)(10.5)
Decrease in cash and cash equivalents(56.8)(104.3)
Cash and cash equivalents at beginning of year601.2 649.5 
Cash and cash equivalents at end of period$544.4 $545.2 
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

4 AVIENT CORPORATION


Avient Corporation
Consolidated Statements of Shareholders' Equity (Unaudited)
(In millions)
 Common SharesShareholders’ Equity
Common
Shares
Common
Shares Held
in Treasury
Common
Shares
Additional
Paid-in
Capital
Retained EarningsCommon
Shares Held
in Treasury
Accumulated
Other
Comprehensive
(Loss) Income
Total Avient shareholders' equityNon-controlling InterestsTotal equity
Balance at January 1, 2022122.2 (30.6)$1.2 $1,511.8 $1,208.0 $(900.7)$(45.6)$1,774.7 $15.8 $1,790.5 
Net income— — — — 84.2 — — 84.2 0.3 84.5 
Other comprehensive loss— — — — — — (7.9)(7.9)— (7.9)
Cash dividends declared — — — — (21.7)— — (21.7)— (21.7)
Repurchase of common shares— (0.3)— — — (15.8)— (15.8)— (15.8)
Share-based compensation and exercise of awards— 0.1 — (2.2)— 1.9 — (0.3)— (0.3)
Balance at March 31, 2022122.2 (30.8)$1.2 $1,509.6 $1,270.5 $(914.6)$(53.5)$1,813.2 $16.1 $1,829.3 
Net income— — — — 84.7 — — 84.7  84.7 
Other comprehensive loss— — — — — — (49.3)(49.3)— (49.3)
Cash dividends declared— — — — (21.7)— — (21.7)— (21.7)
Repurchase of common shares— (0.5)— — — (20.6)— (20.6)— (20.6)
Share-based compensation and exercise of awards— — — 3.4 —  — 3.4 — 3.4 
Balance at June 30, 2022122.2 (31.3)$1.2 $1,513.0 $1,333.5 $(935.2)$(102.8)$1,809.7 $16.1 $1,825.8 
Net loss— — — — (10.3)— — (10.3)(0.4)(10.7)
Other comprehensive loss— — — — — — (60.9)(60.9)— (60.9)
Cash dividends declared — — — — (21.6)— — (21.6)— (21.6)
Share-based compensation and exercise of awards— — — 3.4 — 0.1 — 3.5 — 3.5 
Balance at September 30, 2022122.2 (31.3)1.2 $1,516.4 $1,301.6 $(935.1)$(163.7)$1,720.4 $15.7 $1,736.1 






5 AVIENT CORPORATION


 Common SharesShareholders’ Equity
Common
Shares
Common
Shares  Held
in Treasury
Common
Shares
Additional
Paid-in
Capital
Retained EarningsCommon
Shares  Held
in Treasury
Accumulated
Other
Comprehensive
(Loss) Income
Total Avient shareholders' equityNon-controlling InterestsTotal equity
Balance at January 1, 2021122.2 (30.8)$1.2 $1,513.3 $1,057.4 $(901.2)$26.4 $1,697.1 $14.6 $1,711.7 
Net income— — — — 79.3 — — 79.3 0.4 79.7 
Other comprehensive loss— — — — — — (50.2)(50.2)— (50.2)
Cash dividends declared — — — — (19.5)— — (19.5)— (19.5)
Repurchase of common shares— (0.1)— — — (4.2)— (4.2)— (4.2)
Share-based compensation and exercise of awards— 0.1 — 2.9 — 1.6 — 4.5 — 4.5 
Balance at March 31, 2021122.2 (30.8)$1.2 $1,516.2 $1,117.2 $(903.8)$(23.8)$1,707.0 $15.0 $1,722.0 
Net income— — — — 68.8 — — 68.8 0.6 69.4 
Other comprehensive income— — — — — — 10.2 10.2 — 10.2 
Noncontrolling interest activity— — — — — — — — 2.6 2.6 
Cash dividends declared — — — — (19.4)— — (19.4)— (19.4)
Share-based compensation and exercise of awards—  — 1.0 — 0.6 — 1.6 — 1.6 
Other— — $—  — — —    
Balance at June 30, 2021122.2 (30.8)$1.2 $1,517.2 $1,166.6 $(903.2)$(13.6)$1,768.2 $18.2 $1,786.4 
Net income— — — — 52.9 — — 52.9 (0.3)52.6 
Other comprehensive loss— — — — — — (28.7)(28.7)— (28.7)
Noncontrolling interest activity— — — — — — — — (1.3)(1.3)
Cash dividends declared — — — — (19.6)— — (19.6)— (19.6)
Share-based compensation and exercise of awards— 0.1 — (3.2)— 1.6 — (1.6)— (1.6)
Other— — — (2.4)— — — (2.4)— (2.4)
Balance at September 30, 2021122.2 (30.7)$1.2 $1,511.6 $1,199.9 $(901.6)$(42.3)$1,768.8 $16.6 $1,785.4 
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.






6 AVIENT CORPORATION



Avient Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 — BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Form 10-Q instructions and in the opinion of management contain all adjustments, including those that are normal, recurring and necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. These interim financial statements should be read in conjunction with the financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2021 of Avient Corporation. When used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “Avient” and the “Company” mean Avient Corporation and its consolidated subsidiaries.
Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be attained in subsequent periods or for the year ending December 31, 2022. Historical information has been retrospectively adjusted to reflect the classification of discontinued operations. Discontinued operations are further discussed in Note 3, Discontinued Operations.
Accounting Standards Not Yet Adopted
Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (ASU 2020-04), 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 rates 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 and does not expect any material impact to our consolidated financial statements and disclosures.
Note 2 — BUSINESS COMBINATIONS
On September 1, 2022, the Company completed the acquisition of the DSM Protective Materials business, including the Dyneema® brand, the World's Strongest Fiber™. The Dyneema® brand ultra-light specialty fiber is stronger than steel and is used in demanding applications such as ballistic personal protection, marine and sustainable infrastructure, renewable energy, industrial protection and outdoor sports. The acquired business is collectively referred to as Avient Protective Materials and APM, and the acquisition is referred to as the APM Acquisition. The APM Acquisition enhances Avient's material offerings of composites and engineered fibers.
Total consideration paid by the Company to complete the APM Acquisition was $1.4 billion, net of cash acquired. Avient (i) incurred $575.0 million of borrowings under a new Senior Secured Term Loan due 2029 and (ii) issued $725.0 million aggregate principal of 7.125% Senior Notes due 2030 to finance a portion of the APM Acquisition. For additional details relating to the financing, refer to Note 8, Financing Arrangements.
The APM Acquisition is being accounted for under the acquisition method of accounting in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 805. As of September 30, 2022, the purchase accounting for the APM Acquisition is preliminary and purchase price allocation adjustments will be made throughout the end of the Company's 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.








7 AVIENT CORPORATION





The preliminary purchase price allocation is as follows:
(in millions)September 1, 2022
Cash and cash equivalents$50.7 
Accounts receivable52.2
Inventories136.2
Other current assets2.0
Property361.9
Intangible assets
Indefinite-lived trade names254.9
Customer relationships198.7
Patents, technology, and other275.1
Goodwill277.1
Other non-current assets12.3
Accounts payable32.2
Current operating lease obligations1.2
Accrued expenses and other current liabilities11.7
Deferred tax liability86.1
Non-current operating lease obligations5.0
Other non-current liabilities8.1
Total purchase price consideration$1,476.8 
Definite-lived intangible assets that have been acquired have a preliminary useful life range of 16 to 20 years. Goodwill of $277.1 million resulting from the acquisition was recorded to the Specialty Engineered Materials segment. The goodwill recognized is primarily attributable to intangible assets that do not qualify for separate recognition and the deferred tax impact of applying purchase accounting. We expect a portion of goodwill to be deductible for tax purposes.
The amount of sales and loss from continuing operations before income taxes of APM since the acquisition date included in the Condensed Consolidated Statements of Income as of September 30, 2022 were $32.3 million and $7.0 million, respectively. The loss from continuing operations before income taxes includes $10.6 million of expense related to inventory step-up from the preliminary purchase price allocation, which is recorded in Cost of sales. Had the APM Acquisition occurred on January 1, 2021, sales and income from continuing operations before income taxes on a pro forma basis would have been as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Sales$884.0$912.1$2,863.1$2,810.1
(Loss) income from continuing operations before income taxes(9.8)21.0 146.8 72.4 
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 APM Acquisition occurred on January 1, 2021. These unaudited pro forma results do not represent financial results realized, nor are they intended to be a projection of future results.



8 AVIENT CORPORATION


Pro forma income from continuing operations before income taxes during the nine months ended September 30, 2021 includes expense related to inventory step-up from the preliminary purchase price allocation. The pro forma income from continuing operations before income taxes gives further effect to intangible amortization from the preliminary purchase price allocation and increased interest expense resulting from borrowings under the Senior Secured Term Loan due 2029 and the issuance of the 7.125% Senior Notes due 2030 to fund the APM Acquisition.
Costs incurred in connection with the APM Acquisition were $8.1 million and $12.7 million in the three and nine months ended September 30, 2022, respectively. These fees were charged to Selling and Administrative expense on the Condensed Consolidated Statements of Income.
On July 1, 2021, the Company completed its acquisition of Magna Colours Ltd. (Magna Colours), a market leader in sustainable, water-based inks technology for the textile screen printing industry, for the purchase price of $47.6 million, net of cash acquired. The results of the Magna Colours business are reported in the Color, Additives and Inks segment. The purchase price allocation is complete and resulted in intangible assets of $27.5 million and goodwill of $22.0 million, partially offset by net liabilities assumed. Goodwill is not deductible for tax purposes. The intangible assets that have been acquired are being amortized over a period of 10 to 20 years.

Note 3 — DISCONTINUED OPERATIONS
On August 11, 2022, Avient entered into a definitive asset purchase agreement (the "Purchase Agreement") with an affiliate of H.I.G. Capital, (the "Purchaser"), to sell its Distribution business. Pursuant to the terms of the Purchase Agreement, the Purchaser has agreed to acquire the Company's Distribution business for $950.0 million in cash, subject to a customary working capital adjustment.
Avient has classified its Distribution business assets and liabilities as held-for-sale for all periods presented in the accompanying Condensed Consolidated Balance Sheets and has classified its operating results as discontinued operations in the accompanying Condensed Consolidated Statements of Income for all periods presented. Previously, the Distribution business was a separate reportable segment.
The following table summarizes the major line items constituting pretax income of discontinued operations associated with the Distribution business segment for the three and nine months ended September 30, 2022 and 2021:
Three Months Ended September 30,Nine Months Ended September 30,
(in millions)2022202120222021
Sales$398.6 $401.8 $1,211.6 $1,108.9 
Cost of sales355.4 362.0 1,085.9 989.6 
Selling and administrative expense18.2 13.9 44.9 41.6 
Other (expense) income(0.9)(0.2)(1.0)(0.3)
Income before income taxes24.1 25.7 79.8 77.4 
Income tax expense(7.0)(6.5)(21.0)(19.7)
Income from discontinued operations, net of taxes$17.1 19.2 58.8 57.7 
The effective tax rate for discontinued operations was 28.9% and 25.3% for the three months ended September 30, 2022 and 2021, respectively, and 26.3% and 25.5% for the nine months ended September 30, 2022 and 2021, respectively. The tax rate is above the US federal rate of 21% primarily due to state and local taxes along with the impacts of global intangible low-taxed income (GILTI) tax.








9 AVIENT CORPORATION






The following table summarizes the major classes of assets and liabilities of the Distribution business that were classified as held for sale in the consolidated balance sheets as of September 30, 2022 and December 31, 2021:
(In millions)September 30, 2022December 31, 2021
Assets held-for-sale:
Accounts receivable, net $211.9 $202.4 
Inventories, net132.4 155.3 
Property, net3.5 3.9 
Goodwill1.6 1.6 
Other assets18.4 19.0 
Total assets held-for-sale$367.8 $382.2 
Liabilities held-for-sale:
Accounts payable$145.3 $124.4 
Other liabilities25.0 30.0 
Total liabilities held-for-sale$170.3 $154.4 
September 30, 2022December 31, 2021
Assets held-for-sale:
Current$367.8 $360.2 
Non-current$ $22.0 
Liabilities held-for-sale:
Current$170.3 $141.3 
Non-current$ $13.1 
As of September 30, 2022, the Distribution business met the held for sale criteria, and the sale is expected to be completed in the fourth quarter of 2022. As a result, all assets and liabilities are reflected as current.


10 AVIENT CORPORATION



Note 4 — GOODWILL AND INTANGIBLE ASSETS
Goodwill as of September 30, 2022 and December 31, 2021 and changes in the carrying amount of goodwill by segment were as follows:
(In millions)Specialty Engineered MaterialsColor, Additives and InksTotal
Balance at December 31, 2021$236.3 $1,048.5 $1,284.8 
Acquisition of businesses277.1  277.1 
Currency translation(13.1)(57.8)(70.9)
Balance at September 30, 2022$500.3 $990.7 $1,491.0 

Indefinite and finite-lived intangible assets consisted of the following:
 As of September 30, 2022
(In millions)Acquisition CostAccumulated AmortizationCurrency TranslationNet
Customer relationships$705.9 $(156.0)$(25.4)$524.5 
Patents, technology and other841.8 (158.2)(42.1)641.5 
Indefinite-lived trade names368.0 — (8.3)359.7 
Total$1,915.7 $(314.2)$(75.8)$1,525.7 

 As of December 31, 2021
(In millions)Acquisition CostAccumulated AmortizationCurrency TranslationNet
Customer relationships$507.2 $(135.4)$6.0 $377.8 
Patents, technology and other566.7 (134.3)1.8 434.2 
Indefinite-lived trade names113.2 —  113.2 
Total$1,187.1 $(269.7)$7.8 $925.2 

Note 5 — INVENTORIES, NET
Components of Inventories, net are as follows:
(In millions)As of September 30, 2022As of December 31, 2021
Finished products$197.8 $90.0 
Work in process25.6 21.2 
Raw materials and supplies218.1 194.6 
Inventories, net$441.5 $305.8 

Note 6 — PROPERTY, NET
Components of Property, net are as follows:
(In millions)As of September 30, 2022As of December 31, 2021
Land and land improvements$80.9 $91.5 
Buildings382.2 348.1 
Machinery and equipment1,272.8 965.4 
Property, gross1,735.9 1,405.0 
Less accumulated depreciation(770.5)(732.7)
Property, net$965.4 $672.3 


11 AVIENT CORPORATION


Note 7 — INCOME TAXES
During the three months ended September 30, 2022, the effective tax rate benefit from continuing operations of 4.1% was below the U.S. federal statutory rate of 21.0%. The tax rate benefit relates to a pretax loss as well as state income tax benefits, prior year favorable U.S. return-to-provision adjustments and the U.S. research and development tax credit. These favorable items were partially offset by foreign withholding tax liabilities accrued associated with the future repatriation of certain foreign earnings, global intangible low-taxed income (GILTI) tax, certain non-deductible expenses and an increase in valuation allowances.
During the nine months ended September 30, 2022, the Company’s effective tax rate from continuing operations of 29.4% was above the U.S. federal statutory rate of 21.0% primarily due to foreign withholding tax liabilities accrued associated with the future repatriation of certain foreign earnings, GILTI tax, certain non-deductible expenses and an increase in valuation allowances. These unfavorable items were partially offset by prior year favorable U.S. return-to-provision adjustments and the U.S. research and development tax credit.
During the three and nine months ended September 30, 2021, the Company's effective tax rates from continuing operations of 5.7% and 18.2%, respectively, were below the U.S. federal statutory rate of 21.0% primarily due to higher U.S. foreign-derived intangible income (FDII) tax benefits, favorable prior year U.S. return-to-provision adjustments and U.S. research and development tax credit. These favorable items were partially offset by foreign withholding tax liabilities accrued associated with the repatriation of certain foreign earnings and GILTI tax.
Note 8 — FINANCING ARRANGEMENTS
Debt consists of the following instruments:
As of September 30, 2022 (in millions)Principal AmountUnamortized discount and debt issuance costNet DebtWeighted average interest rate
Senior secured revolving credit facility due 2026$ $ $  %
Senior secured term loan due 2026606.6 4.9 601.7 2.95 %
Senior secured term loan due 2029575.0 28.2 546.8 5.51 %
5.25% senior notes due 2023
600.0 0.5 599.5 5.25 %
5.75% senior notes due 2025
650.0