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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 March 31, 2024

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: 001-36473

Trinseo PLC

(Exact name of registrant as specified in its charter)

Ireland

N/A

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

440 East Swedesford Road

Suite 301

Wayne, PA 19087

(Address of Principal Executive Offices)

(610) 240-3200

(Registrant’s telephone number)

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

Accelerated filer

Non-accelerated filer

  

Smaller 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  

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading symbol

Name of Exchange on which registered

Ordinary Shares, par value $0.01 per share

TSE

New York Stock Exchange

As of May 3, 2024, there were 35,294,231 of the registrant’s ordinary shares outstanding.

 

 

 

TABLE OF CONTENTS

`

    

    

    

    

 

    

    

Page

Part I

Financial Information

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 (Unaudited)

Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 (Unaudited)

Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2024 and 2023 (Unaudited)

Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2024 and 2023 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

31 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

41 

Item 4.

Controls and Procedures

41 

Part II

Other Information

Item 1.

Legal Proceedings

41 

Item 1A.

Risk Factors

42 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

42 

Item 3.

Defaults Upon Senior Securities

42 

Item 4.

Mine Safety Disclosures

42 

Item 5.

Other Information

42 

Item 6.

Exhibits

42 

Exhibit Index

Signatures

2

Trinseo PLC

Quarterly Report on Form 10-Q

For the quarterly period ended March 31, 2024

Unless otherwise indicated or required by context, as used in this Quarterly Report on Form 10-Q (“Quarterly Report”), the term “Trinseo PLC” refers to Trinseo PLC (NYSE: TSE), a public limited company existing under the laws of Ireland, and not its subsidiaries. The terms “Trinseo”, the “Company,” “we,” “us” and “our” refer to Trinseo PLC and its consolidated subsidiaries, taken as a consolidated entity. All financial data provided in this Quarterly Report is the financial data of Trinseo PLC, unless otherwise indicated. Prior to the formation of the Company, our business was wholly owned by The Dow Chemical Company (together with other affiliates, “Dow”). The Company may distribute cash to shareholders under Irish law via dividends or distributions made from distributable profits.

Definitions of capitalized terms not defined herein appear within our Annual Report on Form 10-K for the year ended December 31, 2023 (“Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on February 23, 2024.

Cautionary Note on Forward-Looking Statements

This Quarterly Report contains, without limitation, statements concerning plans, objectives, goals, projections, forecasts, strategies, future events or performance, and underlying assumptions and other statements, which are not statements of historical facts. Forward-looking statements may be identified by the use of words like “expect,” “anticipate,” “believe,” “intend,” “forecast,” ”estimate,” “see,” “outlook,” “will,” “may,” “might,” “potential,” “likely,” “target,” “plan,” “contemplate,” “seek,” “attempt,” “should,” “could,” “would,” or expressions of similar meaning. Forward-looking statements reflect management’s evaluation of information currently available and are based on our current expectations and assumptions regarding our business, the economy, our current indebtedness and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict.

Specific factors that may cause future results to differ from those expressed by the forward-looking statements, or otherwise impact performance or other predictions of future actions have, in many but not all cases, been identified in connection with specific forward-looking statements. Factors that might cause future results to differ from those expressed by the forward-looking statements include, but are not limited to, our ability to successfully implement proposed restructuring initiatives, including the closure of certain plants and product lines, and to successfully generate cost savings and increase profitability; our ability to successfully execute our business and transformation strategy; increased costs or disruption in the supply of raw materials; increased energy costs; compliance with laws and regulations impacting our business; conditions in the global economy and capital markets; our ability to achieve our forecast cash flows and maintain covenants under our existing indebtedness; our ability to successfully investigate and remediate chemical releases on or from our sites, make related capital expenditures, reimburse third-party cleanup costs or settle potential regulatory penalties or other claims; and those discussed in our Annual Report filed with the SEC on February 23, 2024 under Part I, Item IA— “Risk Factors,” within this Quarterly Report and in other filings and furnishings made by the Company with the SEC from time to time.

As a result of these or other factors, our actual results, performance or achievements may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Therefore, we caution you against relying on these forward-looking statements. The forward-looking statements included in this Quarterly Report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Available Information

Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are available free of charge through the Investor Relations section of our website, www.trinseo.com, as soon as reasonably practicable after the reports are electronically filed or furnished with the SEC. We provide this website and information contained in or connected to it for informational purposes only. That information is not a part of this Quarterly Report.

3

PART I —FINANCIAL INFORMATION

Item 1. Financial Statements

TRINSEO PLC

Condensed Consolidated Balance Sheets

(In millions, except per share data)

(Unaudited)

March 31, 

December 31, 

    

2024

2023

Assets

    

    

Current assets

Cash and cash equivalents

$

166.4

$

259.1

Accounts receivable, net of allowance for doubtful accounts (March 31, 2024: $6.6; December 31, 2023: $6.7)

556.5

490.8

Inventories

 

431.2

 

404.7

Other current assets

 

42.6

 

39.5

Total current assets

 

1,196.7

 

1,194.1

Investments in unconsolidated affiliate

 

258.4

 

252.2

Property, plant and equipment, net of accumulated depreciation (March 31, 2024: $775.9; December 31, 2023: $778.2)

 

624.2

643.7

Other assets

Goodwill

 

62.3

 

63.8

Other intangible assets, net

 

668.3

 

693.9

Right-of-use assets - operating, net

60.7

65.3

Deferred income tax assets

 

46.6

 

44.3

Deferred charges and other assets

 

72.2

 

71.9

Total other assets

 

910.1

 

939.2

Total assets

$

2,989.4

$

3,029.2

Liabilities and shareholders’ equity

Current liabilities

Short-term borrowings and current portion of long-term debt

$

21.1

$

20.9

Accounts payable

 

478.9

 

449.7

Current lease liabilities - operating

15.5

16.3

Income taxes payable

 

13.8

 

10.9

Accrued expenses and other current liabilities

 

202.7

 

174.8

Total current liabilities

 

732.0

 

672.6

Noncurrent liabilities

Long-term debt, net of unamortized deferred financing fees

 

2,276.7

 

2,277.6

Noncurrent lease liabilities - operating

47.5

51.7

Deferred income tax liabilities

 

41.2

 

43.5

Other noncurrent obligations

 

240.0

 

251.8

Total noncurrent liabilities

 

2,605.4

 

2,624.6

Commitments and contingencies (Note 13)

Shareholders’ equity

Ordinary shares, $0.01 nominal value, 4,000.0 shares authorized (March 31, 2024: 39.4 shares issued and 35.3 shares outstanding; December 31, 2023: 39.4 shares issued and 35.2 shares outstanding)

0.4

0.4

Preferred shares, €0.01 nominal value, 1,000.0 shares authorized (no shares issued or outstanding)

Deferred ordinary shares, 1.00 nominal value, 0.025 shares authorized (March 31, 2024: 0.025 shares issued and outstanding; December 31, 2023: 0.025 shares issued and outstanding)

Additional paid-in-capital

 

507.8

 

504.2

Treasury shares, at cost (March 31, 2024: 4.1 shares; December 31, 2023: 4.1 shares)

(200.0)

(200.0)

Accumulated deficit

 

(518.8)

 

(443.0)

Accumulated other comprehensive loss

 

(137.4)

 

(129.6)

Total shareholders’ equity

 

(348.0)

 

(268.0)

Total liabilities and shareholders’ equity

$

2,989.4

$

3,029.2

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

TRINSEO PLC

Condensed Consolidated Statements of Operations

(In millions, except per share data)

(Unaudited)

Three Months Ended

March 31, 

 

2024

    

2023

    

 

Net sales

$

904.0

    

$

996.3

Cost of sales

 

843.4

 

959.1

Gross profit

 

60.6

 

37.2

Selling, general and administrative expenses

 

70.1

 

84.7

Equity in earnings of unconsolidated affiliate

 

6.2

 

17.6

Impairment and other charges

0.3

Operating loss

 

(3.3)

 

(30.2)

Interest expense, net

 

63.0

 

38.3

Other expense (income), net

3.8

(2.9)

Loss before income taxes

 

(70.1)

 

(65.6)

Provision for (benefit from) income taxes

 

5.4

 

(16.7)

Net loss

$

(75.5)

$

(48.9)

Weighted average shares‒basic

35.3

35.0

Net loss per share‒basic

$

(2.14)

$

(1.40)

Weighted average shares‒diluted

 

35.3

 

35.0

Net loss per share‒diluted:

$

(2.14)

$

(1.40)

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

TRINSEO PLC

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In millions)

(Unaudited)

Three Months Ended

March 31, 

    

2024

    

2023

Net loss

    

$

(75.5)

    

$

(48.9)

    

Other comprehensive income (loss), net of tax:

Cumulative translation adjustments (net of tax of $0.0 and $0.0)

(11.8)

 

10.5

Net gain (loss) on cash flow hedges (net of tax of $(1.7) and $(2.5))

4.4

(7.4)

Pension and other postretirement benefit plans:

Amounts reclassified from accumulated other comprehensive income (loss)

(0.4)

0.3

Total other comprehensive income (loss), net of tax

 

(7.8)

 

3.4

Comprehensive loss

$

(83.3)

$

(45.5)

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

TRINSEO PLC

Condensed Consolidated Statements of Shareholders’ Equity

(In millions, except per share data)

(Unaudited)

    

Shares

    

Shareholders' Equity

  

Ordinary Shares Outstanding

Treasury Shares

Deferred Ordinary Shares

  

Ordinary Shares

Deferred Ordinary Shares

Additional
Paid-In Capital

  

Treasury Shares

  

Accumulated Other Comprehensive Income Loss

  

Retained Earnings (Accumulated Deficit)

  

Total

Balance at December 31, 2023

 

35.2

4.1

$

0.4

$

$

504.2

$

(200.0)

$

(129.6)

$

(443.0)

$

(268.0)

Net loss

 

(75.5)

 

(75.5)

Other comprehensive loss

 

(7.8)

 

(7.8)

Share-based compensation activity

 

0.1

3.6

 

3.6

Dividends on ordinary shares ($0.01 per share)

(0.3)

(0.3)

Balance at March 31, 2024

 

35.3

4.1

$

0.4

$

$

507.8

$

(200.0)

$

(137.4)

$

(518.8)

$

(348.0)

Balance at December 31, 2022

 

35.1

4.1

$

0.4

$

$

486.7

$

(200.0)

$

(131.3)

$

264.5

$

420.3

Net loss

 

 

 

 

 

 

(48.9)

 

(48.9)

Other comprehensive income

 

 

 

 

 

3.4

 

 

3.4

Share-based compensation activity

 

0.1

 

 

6.6

 

 

 

 

6.6

Dividends on ordinary shares ($0.14 per share)

(5.2)

(5.2)

Balance at March 31, 2023

 

35.2

4.1

$

0.4

$

$

493.3

$

(200.0)

$

(127.9)

$

210.4

$

376.2

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

TRINSEO PLC

Condensed Consolidated Statements of Cash Flows

(In millions)

(Unaudited)

Three Months Ended

March 31, 

    

2024

    

2023

Cash flows from operating activities

    

    

    

    

    

Net loss

$

(75.5)

$

(48.9)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities

Depreciation and amortization

 

45.0

 

56.0

Amortization of deferred financing fees and issuance discount

 

3.7

 

2.3

Deferred income tax benefit

 

(3.8)

 

(16.6)

Share-based compensation expense

 

5.9

 

8.2

Earnings of unconsolidated affiliate, net of dividends

 

(6.2)

 

2.4

Unrealized net (gain) loss on foreign exchange forward contracts

 

(5.0)

 

1.5

Unrealized net loss on commodity economic swap contracts

2.4

5.8

Gain on sale of other assets

 

(3.6)

Impairment charges or write-offs

 

0.3

Changes in assets and liabilities

Accounts receivable

 

(72.6)

 

(29.2)

Inventories

 

(31.2)

 

55.1

Accounts payable and other current liabilities

 

80.3

 

26.5

Income taxes payable

 

2.9

 

(7.0)

Other assets, net

 

6.3

 

3.8

Other liabilities, net

 

(14.8)

 

(14.8)

Cash provided by (used in) operating activities

(66.2)

45.4

Cash flows from investing activities

Capital expenditures

 

(15.7)

 

(21.8)

Proceeds from the sale of other assets

 

4.7

 

Cash used in investing activities

(11.0)

(21.8)

Cash flows from financing activities

Deferred financing fees

 

0.4

 

Short-term borrowings, net

 

(3.7)

 

(2.7)

Dividends paid

(0.6)

(11.8)

Proceeds from exercise of option awards

0.1

Withholding taxes paid on restricted share units

(1.3)

Acquisition-related contingent consideration payment

(0.7)

(1.2)

Repurchases and repayments of long-term debt

(4.6)

(3.6)

Proceeds from Accounts Receivable Securitization Facility

 

30.0

 

Repayments of Accounts Receivable Securitization Facility

 

(30.0)

 

Cash used in financing activities

 

(9.2)

 

(20.5)

Effect of exchange rates on cash

 

(3.2)

 

2.3

Net change in cash, cash equivalents, and restricted cash

 

(89.6)

 

5.4

Cash, cash equivalents, and restricted cash—beginning of period

 

261.1

 

211.7

Cash, cash equivalents, and restricted cash—end of period

$

171.5

$

217.1

Less: Restricted cash

5.1

Cash and cash equivalents—end of period

$

166.4

$

217.1

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

TRINSEO PLC

Notes to Condensed Consolidated Financial Statements

(Dollars in millions, unless otherwise stated)

(Unaudited)

NOTE 1—BASIS OF PRESENTATION

The unaudited interim condensed consolidated financial statements of Trinseo PLC and its subsidiaries (the “Company”) as of and for the periods ended March 31, 2024 and 2023 were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect all adjustments, consisting only of normal recurring adjustments, which, in the opinion of management, are considered necessary for the fair statement of the results for the periods presented. Because they cover interim periods, the statements and related notes to the financial statements do not include all disclosures normally provided in annual financial statements, and therefore, these statements should be read in conjunction with the 2023 audited consolidated financial statements included within the Company’s Annual Report on Form 10-K (“Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on February 23, 2024. The Company’s condensed consolidated financial statements presented herein reflect the latest estimates and assumptions made by management that affect the reported amounts and related disclosures as of and for the period ended March 31, 2024. However, actual results could differ from these estimates and assumptions.

The December 31, 2023 condensed consolidated balance sheet data presented herein was derived from the Company’s December 31, 2023 audited consolidated financial statements, but does not include all disclosures required by GAAP for annual periods.

Effective January 1, 2024, the Company’s Feedstocks segment, which included the Company’s production and procurement of styrene monomer outside of North America, was eliminated as a result of the closures of the styrene plants located in Boehlen, Germany and Terneuzen, the Netherlands under an asset restructuring plan. As a result, the Company realigned its reporting segments to reflect the new model under which the business is managed with five segments, all of which remain unchanged from the Company’s prior six segment segmentation: Engineered Materials, Latex Binders, Plastics Solutions, Polystyrene, and Americas Styrenics. Therefore, certain prior year information has been adjusted to show the historical results of the Feedstocks segment within the segments that consumed styrene monomer in their end products, Latex Binders, Plastics Solutions and Polystyrene. Refer to Notes 3, 4 and 16 for further information. Throughout this Quarterly Report, unless otherwise indicated, amounts and activity are presented on a continuing operations basis.

NOTE 2—RECENT ACCOUNTING GUIDANCE

As of March 31, 2024, there was no recently issued accounting standards which would have a material effect on the Company’s condensed consolidated financial statements.

9

NOTE 3—NET SALES

Refer to the Annual Report for information on the Company's accounting policies and further background related to its net sales.

The following table provides disclosure of net sales to external customers by primary geographical market (based on the location where sales originated), by segment for the three months ended March 31, 2024 and 2023. Prior period balances in this table have been reclassified to reflect the elimination of the Feedstocks reportable segment effective January 1, 2024. Refer to Note 16 for further information.

Engineered

Latex

Plastics

 

Three Months Ended

Materials

Binders

Solutions

Polystyrene

Total

 

March 31, 2024

United States

$

94.7

$

65.3

$

66.4

$

$

226.4

Europe

 

75.3

 

109.3

 

142.8

 

135.1

 

462.5

Asia-Pacific

 

16.8

 

65.7

 

29.1

 

72.5

 

184.1

Rest of World

 

2.4

 

1.2

 

27.4

 

 

31.0

Total

$

189.2

$

241.5

$

265.7

$

207.6

$

904.0

March 31, 2023

United States

$

110.9

$

67.6

$

72.3

$

$

250.8

Europe

 

73.5

 

129.0

 

172.1

 

170.2

 

544.8

Asia-Pacific

 

18.9

 

50.7

 

27.8

 

70.6

168.0

Rest of World

 

2.9

 

1.7

 

28.1

 

 

32.7

Total

$

206.2

$

249.0

$

300.3

$

240.8

$

996.3

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NOTE 4—RESTRUCTURING ACTIVITIES

Refer to the Annual Report for further details regarding the Company’s previously announced restructuring activities included in the tables below. Restructuring charges are included within “Selling, general and administrative expenses” in the condensed consolidated statements of operations.

The following table provides detail of the Company’s restructuring charges for the three months ended March 31, 2024 and 2023:

Three Months Ended

Cumulative

March 31, 

Life-to-date

2024

    

2023

Charges

    

Segment

Asset Optimization and Corporate Restructuring(1)

Engineered Materials:

Accelerated depreciation

$

$

$

9.3

Engineered Materials

Employee termination benefits

1.2

Engineered Materials

Decommissioning and other

1.1

3.7

Engineered Materials

Plastics Solutions(5):

Accelerated depreciation

$

$

$

19.6

Plastics Solutions

Employee termination benefits

(0.7)

4.7

Plastics Solutions

Contract terminations

3.8

6.3

Plastics Solutions

Decommissioning and other

1.8

6.8

Plastics Solutions

Corporate:

Employee termination benefits

$

1.2

$

$

10.0

N/A(2)

Asset Optimization and Corporate Restructuring Subtotal

$

7.2

$

$

61.6

Asset Restructuring Plan(3)

Plastics Solutions(5):

Accelerated depreciation

$

$

0.9

$

27.4

Plastics Solutions(6)

Employee termination benefits

(0.2)

3.7

Plastics Solutions(6)

Contract terminations

1.7

2.5

10.0

Plastics Solutions(6)

Decommissioning and other

0.3

0.5

4.5

Plastics Solutions(6)

Plastics Solutions:

Accelerated depreciation

$

$

$

1.4

Plastics Solutions

Employee termination benefits

(0.6)

(0.4)

2.4

Plastics Solutions

Decommissioning and other

0.7

1.9

Plastics Solutions

Engineered Materials:

Accelerated depreciation

$

$

3.1

$

6.3

Engineered Materials

Employee termination benefits

2.7

Engineered Materials

Decommissioning and other

0.6

1.3

Engineered Materials

Asset Restructuring Plan Subtotal

$

1.4

$

7.7

$

61.6

Transformational Restructuring Program(4)

Employee termination benefits

$

$

$

6.7

Transformational Restructuring Program Subtotal

$

$

$

6.7

N/A(2)

Total Restructuring Charges

$

8.6

$

7.7

(1)On August 23, 2023, the Company announced a restructuring plan to optimize its polymethyl methacrylates (“PMMA”) sheet network, primarily in Europe, consolidate manufacturing operations and certain other workforce reductions to streamline its general & administrative network. The Asset Optimization and Corporate Restructuring plan includes closure of certain plants and product lines, including (i) closure of manufacturing operations at the Company’s PMMA cast sheets plant in Bronderslev, Denmark, (ii) closure of manufacturing operations at the Company’s batch polyester tray casting plant in Belen, New Mexico, and (iii) closure of its PMMA extruded sheet production line at its Rho, Italy plant.

11

On October 26, 2023, the management team of the Company, with authorization from the Company’s Board of Directors, approved additional actions to discontinue styrene production at the Company’s Terneuzen, the Netherlands plant, decommission the styrene plant assets, as well as related workforce reductions.

During the three months ended March 31, 2024, the Company incurred employee termination benefit charges, net of $0.5 million. The majority of these charges are expected to be paid through second quarter of 2025. The Company also incurred decommissioning and other charges of $2.9 million, as well as contract termination charges of $3.8 million.

The Company expects to incur contract termination charges of $4.8 million and an incremental $16.2 million of decommissioning and other charges through the end of 2025.

In March 2024, the Company entered into two separate agreements to sell its land, buildings and equipment in Bronderslev, Denmark and Belen, New Mexico for gross cash consideration of approximately $4.7 million. As of March 31, 2024, the cash proceeds of $2.9 million were received into the Company’s restricted cash account to be released upon completion of final regulatory documentation. The Company recorded pre-tax gain on sales of $3.6 million during the three ended March 31, 2024, which was recorded within “Selling, general and administrative expenses” in the condensed consolidated statements of operations.

(2)Reflects certain employee termination benefit charges associated with streamlining internal general & administrative network. As these employee termination benefit charges were identified as a corporate-related activity, the charges related to this portion of the Asset Optimization and Corporate Restructuring plan were not allocated to a specific segment, but rather included within corporate unallocated.
(3)In December 2022, the Company announced an asset restructuring plan designed to reduce costs, improve profitability, reduce exposure to cyclical markets and elevated natural gas prices, and address market overcapacity. The asset restructuring plan includes (i) closure of manufacturing operations at the styrene production facility in Boehlen, Germany, (ii) closure of one of its production lines at the Stade, Germany polycarbonate plant, and (iii) closure of the PMMA sheet manufacturing site in Matamoros, Mexico. The program is expected to be substantially completed by 2026.

In connection with this restructuring plan, during the three months ended March 31, 2024 and 2023, the Company incurred employee termination benefit charges, net of $(0.6) million and $(0.6) million, respectively, contract termination charges of $1.7 million and $2.5 million, respectively, and decommissioning and other charges of $0.3 million and $1.8 million, respectively. The Company incurred accelerated depreciation charges of $4.0 million during the three months ended March 31, 2023.

The Company expects to incur incremental contract termination charges of $10.5 million, decommissioning and other charges of $0.5 million, as well as a limited amount of incremental employee termination benefit charges within the Plastics Solution segment, the majority of which is expected to be paid by the end of 2024.

(4)In May 2021, the Company approved a transformational restructuring program associated with the Company’s strategic initiatives. The transformational restructuring program was completed as of December 31, 2023. As this was identified as a corporate-related activity, the charges related to this restructuring program were not allocated to a specific segment, but rather included within corporate unallocated.
(5)As of January 2024, the Feedstocks segment was eliminated as a result of the closures of the styrene plants located in Boehlen, Germany and Terneuzen, the Netherlands under an asset restructuring plan. Prior period balances in this table have been reclassified to reflect the elimination of the Feedstocks reportable segment effective January 1, 2024. Asset Optimization charges relate to Terneuzen plant shutdown and Asset Restructuring Plan charges relate to the shutdown of Boehlen site. These charges were previously recognized under Feedstocks segment but will be allocated to Plastics Solutions segment starting January 1, 2024 and onward.
(6)Prior period balances in this table have been reclassified to reflect the elimination of the Feedstocks reportable segment effective January 1, 2024. For the three months ended March 31, 2023, Latex Binders was allocated $0.1 million of accelerated depreciation, $0.4 million of contract termination costs, $0.1 million decommissioning and other charges; Plastics Solutions was allocated $0.2 million of accelerated depreciation, $(0.1) million employee termination benefits, $0.6 million of contract termination costs, $0.1 million decommissioning and other charges; and Polystyrene was allocated $0.6 million of accelerated depreciation, $(0.1) million employee termination benefits, $1.5 million of contract termination costs, $0.3 million decommissioning and other charges.

Refer to Note 13 for further information regarding the asset retirement obligation. The following table provides a

12

roll forward of the other liability balances associated with the Company’s restructuring activities as of March 31, 2024. Employee termination benefits and contract termination charges are primarily recorded within “Accrued expenses and other current liabilities” in the condensed consolidated balance sheets.

    

Balance at

    

    

    

Balance at

 

    

December 31, 2023

    

Expenses 

    

Deductions(1)

    

March 31, 2024

  

Employee termination benefits

$

16.7

$

(0.4)

$

(4.2)

$

12.1

Contract terminations

 

 

5.5

 

(5.5)

 

Decommissioning and other

2.9

(2.9)

Total

$

16.7

$

8.0

$

(12.6)

$

12.1

(1)Primarily includes payments made against the existing accrual, as well as immaterial impacts of foreign currency remeasurement.