Trinseo(TSE) - 2024 Q1 - Quarterly Report

General Information Details Trinseo PLC's Form 10-Q filing, SEC compliance, and forward-looking statement cautions Filing Details and Forward-Looking Statements This section provides the filing details for Trinseo PLC's Form 10-Q for the quarter ended March 31, 2024, including company identification, SEC filing compliance, and a cautionary note on forward-looking statements - Trinseo PLC (NYSE: TSE) filed its Quarterly Report on Form 10-Q for the period ended March 31, 2024, confirming compliance with SEC filing requirements[2][3] - The company is classified as an 'Accelerated filer' and is not a shell company[4] - Forward-looking statements are subject to inherent uncertainties and risks, including successful implementation of restructuring initiatives, raw material and energy costs, regulatory compliance, and global economic conditions[12][13] PART I — FINANCIAL INFORMATION Presents the company's unaudited condensed consolidated financial statements and related disclosures Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements of Trinseo PLC for the three months ended March 31, 2024 and 2023, including balance sheets, statements of operations, comprehensive income (loss), shareholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, accounting policies, and specific financial items Condensed Consolidated Balance Sheets Presents the company's unaudited condensed consolidated balance sheets for the period Key Balance Sheet Metrics | Metric | March 31, 2024 (Millions) | December 31, 2023 (Millions) | Change (Millions) | | :----- | :------------------------ | :--------------------------- | :---------------- | | Total Assets | $2,989.4 | $3,029.2 | $(39.8) | | Total Current Assets | $1,196.7 | $1,194.1 | $2.6 | | Cash and Cash Equivalents | $166.4 | $259.1 | $(92.7) | | Total Liabilities | $3,337.4 | $3,297.2 | $40.2 | | Total Shareholders' Equity | $(348.0) | $(268.0) | $(80.0) | | Accumulated Deficit | $(518.8) | $(443.0) | $(75.8) | Condensed Consolidated Statements of Operations Presents the company's unaudited condensed consolidated statements of operations for the period Key Operating Results | Metric | Three Months Ended March 31, 2024 (Millions) | Three Months Ended March 31, 2023 (Millions) | YoY Change (Millions) | YoY Change (%) | | :----- | :------------------------------------------- | :------------------------------------------- | :-------------------- | :------------- | | Net Sales | $904.0 | $996.3 | $(92.3) | (9.3)% | | Gross Profit | $60.6 | $37.2 | $23.4 | 62.9% | | Operating Loss | $(3.3) | $(30.2) | $26.9 | (89.1)% | | Interest Expense, net | $63.0 | $38.3 | $24.7 | 64.5% | | Loss before Income Taxes | $(70.1) | $(65.6) | $(4.5) | 6.9% | | Provision for (benefit from) Income Taxes | $5.4 | $(16.7) | $22.1 | (132.3)% | | Net Loss | $(75.5) | $(48.9) | $(26.6) | 54.4% | | Net Loss per Share—Basic | $(2.14) | $(1.40) | $(0.74) | 52.9% | Condensed Consolidated Statements of Comprehensive Income (Loss) Presents the company's unaudited condensed consolidated statements of comprehensive income (loss) Comprehensive Income (Loss) Summary | Metric | Three Months Ended March 31, 2024 (Millions) | Three Months Ended March 31, 2023 (Millions) | YoY Change (Millions) | | :----- | :------------------------------------------- | :------------------------------------------- | :-------------------- | | Net Loss | $(75.5) | $(48.9) | $(26.6) | | Cumulative Translation Adjustments | $(11.8) | $10.5 | $(22.3) | | Net Gain (Loss) on Cash Flow Hedges | $4.4 | $(7.4) | $11.8 | | Total Other Comprehensive Income (Loss), net of tax | $(7.8) | $3.4 | $(11.2) | | Comprehensive Loss | $(83.3) | $(45.5) | $(37.8) | Condensed Consolidated Statements of Shareholders' Equity Presents the company's unaudited condensed consolidated statements of shareholders' equity Shareholders' Equity Movements | Metric | Balance at Dec 31, 2023 (Millions) | Net Loss (Millions) | Other Comprehensive Loss (Millions) | Share-based Compensation (Millions) | Dividends (Millions) | Balance at Mar 31, 2024 (Millions) | | :----- | :--------------------------------- | :------------------ | :---------------------------------- | :---------------------------------- | :------------------- | :--------------------------------- | | Total Shareholders' Equity | $(268.0) | $(75.5) | $(7.8) | $3.6 | $(0.3) | $(348.0) | Condensed Consolidated Statements of Cash Flows Presents the company's unaudited condensed consolidated statements of cash flows for the period Cash Flow Summary | Cash Flow Activity | Three Months Ended March 31, 2024 (Millions) | Three Months Ended March 31, 2023 (Millions) | YoY Change (Millions) | | :----------------- | :------------------------------------------- | :------------------------------------------- | :-------------------- | | Operating Activities | $(66.2) | $45.4 | $(111.6) | | Investing Activities | $(11.0) | $(21.8) | $10.8 | | Financing Activities | $(9.2) | $(20.5) | $11.3 | | Effect of Exchange Rates on Cash | $(3.2) | $2.3 | $(5.5) | | Net Change in Cash | $(89.6) | $5.4 | $(95.0) | | Cash and Cash Equivalents—end of period | $166.4 | $217.1 | $(50.7) | Notes to Condensed Consolidated Financial Statements Provides detailed explanations and disclosures for the unaudited condensed consolidated financial statements NOTE 1—BASIS OF PRESENTATION Outlines financial statement presentation basis, including segment realignment and discontinued operations - The Feedstocks segment was eliminated effective January 1, 2024, due to the closure of styrene plants in Boehlen, Germany, and Terneuzen, the Netherlands[35] - The company realigned its reporting segments to five: Engineered Materials, Latex Binders, Plastics Solutions, Polystyrene, and Americas Styrenics[35] NOTE 2—RECENT ACCOUNTING GUIDANCE Discusses the impact of recently issued accounting standards on the financial statements - No recently issued accounting standards had a material effect on the financial statements as of March 31, 2024[36] NOTE 3—NET SALES Details net sales by segment and geographical market for the reporting period Table: Net Sales by Segment | Segment | March 31, 2024 (Millions) | March 31, 2023 (Millions) | YoY Change (Millions) | YoY Change (%) | | :------ | :------------------------ | :------------------------ | :-------------------- | :------------- | | Engineered Materials | $189.2 | $206.2 | $(17.0) | (8.2)% | | Latex Binders | $241.5 | $249.0 | $(7.5) | (3.0)% | | Plastics Solutions | $265.7 | $300.3 | $(34.6) | (11.5)% | | Polystyrene | $207.6 | $240.8 | $(33.2) | (13.8)% | | Total Net Sales | $904.0 | $996.3 | $(92.3) | (9.3)% | - Europe and the United States were the largest geographical markets, with sales of $462.5 million and $226.4 million respectively in Q1 2024[40] NOTE 4—RESTRUCTURING ACTIVITIES Summarizes ongoing restructuring plans, associated charges, and expected future impacts Table: Restructuring Charges | Restructuring Plan | Three Months Ended March 31, 2024 (Millions) | Three Months Ended March 31, 2023 (Millions) | | :----------------- | :------------------------------------------- | :------------------------------------------- | | Asset Optimization and Corporate Restructuring | $7.2 | $0.0 | | Asset Restructuring Plan | $1.4 | $7.7 | | Transformational Restructuring Program | $0.0 | $0.0 | | Total Restructuring Charges | $8.6 | $7.7 | - The Asset Optimization and Corporate Restructuring plan includes the closure of PMMA sheet plants in Bronderslev, Denmark, and Belen, New Mexico, and a PMMA extruded sheet line in Rho, Italy, as well as discontinuing styrene production at Terneuzen, Netherlands[41][42] - The Asset Restructuring Plan (approved Dec 2022) includes closure of styrene production in Boehlen, Germany, a polycarbonate production line in Stade, Germany, and a PMMA sheet manufacturing site in Matamoros, Mexico[48] - The company expects to incur incremental contract termination charges of $10.5 million and decommissioning and other charges of $0.5 million within the Plastics Solution segment, mostly by end of 2024[47] NOTE 5—INCOME TAXES Presents income tax provision, effective tax rate, and factors influencing tax expense Table: Income Tax Provision and Rate | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----- | :-------------------------------- | :-------------------------------- | | Provision for (benefit from) Income Taxes | $5.4 million | $(16.7) million | | Effective Income Tax Rate | (7.7)% | 25.4% | - The decrease in the effective income tax rate was driven by an increase in losses not anticipated to provide a tax benefit, due to increased valuation allowances in the United States and Switzerland[54] - The company will continue to evaluate the need for a partial or full valuation allowance against its $13.5 million net deferred tax assets in its China subsidiary due to recent losses[55] NOTE 6—EARNINGS PER SHARE Details basic and diluted earnings per share calculations and contributing factors Table: Earnings Per Share Details | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----- | :-------------------------------- | :-------------------------------- | | Net Loss | $(75.5) million | $(48.9) million | | Weighted Average Shares—Basic | 35.3 million | 35.0 million | | Net Loss per Share—Basic | $(2.14) | $(1.40) | | Net Loss per Share—Diluted | $(2.14) | $(1.40) | - Potential shares from equity-based awards were excluded from diluted EPS calculation because the company recorded a net loss, making their inclusion anti-dilutive[59] NOTE 7—INVENTORIES Provides a breakdown of inventory types and their values at period-end Table: Inventory Breakdown | Inventory Type | March 31, 2024 (Millions) | December 31, 2023 (Millions) | Change (Millions) | | :------------- | :------------------------ | :--------------------------- | :---------------- | | Finished goods | $190.2 | $162.4 | $27.8 | | Raw materials and semi-finished goods | $199.4 | $200.9 | $(1.5) | | Supplies | $41.6 | $41.4 | $0.2 | | Total | $431.2 | $404.7 | $26.5 | NOTE 8—INVESTMENTS IN UNCONSOLIDATED AFFILIATES Reports on investments in unconsolidated affiliates, including financial performance and dividends Table: Americas Styrenics Financials | Metric | Three Months Ended March 31, 2024 (Millions) | Three Months Ended March 31, 2023 (Millions) | YoY Change (Millions) | | :----- | :------------------------------------------- | :------------------------------------------- | :-------------------- | | Americas Styrenics Sales | $386.0 | $443.3 | $(57.3) | | Americas Styrenics Net Income (Loss) | $(3.7) | $37.8 | $(41.5) | | Dividends Received from Americas Styrenics | $0.0 | $20.0 | $(20.0) | - The company's investment in Americas Styrenics was $258.4 million as of March 31, 2024, an increase from $252.2 million at December 31, 2023[64] NOTE 9—GOODWILL Details goodwill balances by segment and accumulated impairment losses Table: Goodwill by Segment | Segment | Balance at Dec 31, 2023 (Millions) | Foreign Currency Impact (Millions) | Balance at Mar 31, 2024 (Millions) | | :------ | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Latex Binders | $15.4 | $(0.4) | $15.0 | | Plastics Solutions | $44.0 | $(1.0) | $43.0 | | Polystyrene | $4.4 | $(0.1) | $4.3 | | Total Goodwill | $63.8 | $(1.5) | $62.3 | - The Engineered Materials segment has accumulated impairment losses of $646.1 million as of March 31, 2024[65] NOTE 10—LONG TERM DEBT & AVAILABLE FACILITIES Outlines long-term debt instruments, liquidity, and available borrowing facilities Table: Long-Term Debt Overview | Debt Instrument | March 31, 2024 (Millions) | December 31, 2023 (Millions) | | :-------------- | :------------------------ | :--------------------------- | | 2029 Senior Notes | $436.3 | $435.9 | | 2025 Senior Notes | $114.5 | $114.4 | | 2028 Term Loan B | $716.0 | $717.1 | | 2028 Refinance Term Loans | $1,024.0 | $1,023.9 | | Total Long-Term Debt, net | $2,276.7 | $2,277.6 | - As of March 31, 2024, the company had $415.6 million in Liquidity, comprising $163.8 million in cash and cash equivalents and $251.7 million available for borrowing under the 2026 Revolving Facility ($101.7 million) and Accounts Receivable Securitization Facility ($150.0 million)[71] - The Accounts Receivable Securitization Facility's maturity date was extended to November 2025, maintaining a borrowing limit of $150.0 million[76] - The company's ability to repay the 2025 Senior Notes (maturing September 2025) is dependent on achieving forecast cash flows and maintaining minimum liquidity requirements[73] NOTE 11—FINANCIAL INSTRUMENTS AND DERIVATIVES Describes the company's use of derivative instruments for hedging market risks - The company uses foreign exchange forward contracts to economically hedge foreign currency risk, with a notional value of $347.5 million as of March 31, 2024[78][79] - Commodity swap agreements are used to hedge natural gas price volatility, with open cash flow hedges having a notional value of approximately 462 thousand megawatt hours as of March 31, 2024[82][83] - The company expects to reclassify an approximate $9.6 million net loss from Accumulated Other Comprehensive Income (AOCI) into earnings in the next twelve months related to commodity cash flow hedges[87] NOTE 12—FAIR VALUE MEASUREMENTS Presents fair value measurements for financial instruments and nonrecurring assets Table: Derivative Financial Instruments Fair Value | Derivative Type | March 31, 2024 (Millions) | December 31, 2023 (Millions) | Change (Millions) | | :-------------- | :------------------------ | :--------------------------- | :---------------- | | Net Derivative Asset Position | $0.7 | $0.0 | $0.7 | | Net Derivative Liability Position | $(15.8) | $(27.0) | $11.2 | | Total Net Derivative Position | $(15.1) | $(27.0) | $11.9 | - The fair value of the company's debt instruments (2029 Senior Notes, 2025 Senior Notes, 2028 Term Loan B, 2028 Refinance Term Loans) was estimated at $1,871.1 million as of March 31, 2024, using Level 2 inputs[97] - Boehlen styrene monomer assets, measured at fair value on a nonrecurring basis using Level 3 inputs, remained at $3.2 million as of March 31, 2024[94] NOTE 13—COMMITMENTS AND CONTINGENCIES Details environmental matters, purchase commitments, asset retirement obligations, and litigation Environmental Matters Summarizes accrued obligations for environmental remediation and restoration costs - Accrued obligations for environmental remediation or restoration costs totaled $1.3 million as of March 31, 2024[99] Purchase Commitments Outlines raw material purchase contracts requiring minimum volumes - The company has raw material purchase contracts requiring minimum volumes at current market prices, ranging from one to four years[102] Asset Retirement Obligations Details asset retirement obligations, particularly for the Boehlen, Germany site - The asset retirement obligation for the Boehlen, Germany site was $18.1 million as of March 31, 2024, with a current portion of $8.8 million[104][105] Litigation Matters Discusses ongoing legal disputes, including class action settlements and arbitration - A class action complaint related to the Bristol Spill was preliminarily settled, with $2.7 million paid into escrow in April 2024, covered by insurance[107][108] - The company is involved in an arbitration dispute with Synthos regarding the 2021 sale of its Rubber Business, with Synthos seeking non-monetary restitution and monetary damages[111][112] NOTE 14—PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS Reports on net periodic benefit costs and expected contributions for pension plans Table: Pension Plan Net Periodic Benefit Cost | Metric | Three Months Ended March 31, 2024 (Millions) | Three Months Ended March 31, 2023 (Millions) | | :----- | :------------------------------------------- | :------------------------------------------- | | Non-U.S. Defined Benefit Pension Plans Net Periodic Benefit Cost | $3.1 | $2.6 | | U.S. Defined Benefit Pension Plans Net Periodic Benefit Cost | $0.1 | $0.2 | - The company expects to contribute approximately $6.7 million to its defined benefit plans for the remainder of 2024[118] NOTE 15—SHARE-BASED COMPENSATION Details share-based compensation expenses and unrecognized costs for various award types Table: Share-Based Compensation Expense | Award Type | Three Months Ended March 31, 2024 (Millions) | Three Months Ended March 31, 2023 (Millions) | Unrecognized Compensation Cost as of March 31, 2024 (Millions) | | :--------- | :------------------------------------------- | :------------------------------------------- | :------------------------------------------------------------- | | RSUs | $2.4 | $4.8 | $6.5 | | Options | $0.8 | $2.6 | $1.1 | | PSUs | $0.6 | $0.8 | $4.8 | | RCUs | $2.1 | $0.0 | $3.0 | | Total | $5.9 | $8.2 | N/A | - 1,074,119 Restricted Cash Units (RCUs) were awarded in Q1 2024, which are cash-settled liability instruments remeasured based on the stock price[121][124] NOTE 16—SEGMENTS AND GEOGRAPHIC INFORMATION Provides financial information by operating segment and geographic region - The company now operates under five segments: Engineered Materials, Latex Binders, Plastics Solutions, Polystyrene, and Americas Styrenics, after eliminating the Feedstocks segment[125][126] Table: Segment Adjusted EBITDA | Segment | Three Months Ended March 31, 2024 (Millions) | Three Months Ended March 31, 2023 (Millions) | YoY Change (Millions) | YoY Change (%) | | :------ | :------------------------------------------- | :------------------------------------------- | :-------------------- | :------------- | | Engineered Materials | $4.3 | $(11.7) | $16.0 | 136.8% | | Latex Binders | $25.7 | $24.0 | $1.7 | 7.1% | | Plastics Solutions | $22.7 | $23.6 | $(0.9) | (3.8)% | | Polystyrene | $12.6 | $8.9 | $3.7 | 41.6% | | Americas Styrenics | $6.1 | $17.6 | $(11.5) | (65.3)% | | Total Segment Adjusted EBITDA | $71.4 | $62.4 | $9.0 | 14.4% | - Adjusted EBITDA is defined as income from continuing operations before interest expense, net; provision for income taxes; depreciation and amortization expense; loss on extinguishment of long-term debt; asset impairment charges; gains or losses on the dispositions of businesses and assets; restructuring charges; acquisition related costs and benefits and other items[130] NOTE 17—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Details changes in accumulated other comprehensive income (loss) components Table: Accumulated Other Comprehensive Income (Loss) Components | AOCI Component | Balance as of Dec 31, 2023 (Millions) | Other Comprehensive Income (Loss) (Millions) | Reclassified to Net Income (Millions) | Balance as of Mar 31, 2024 (Millions) | | :------------- | :------------------------------------ | :------------------------------------------- | :------------------------------------ | :------------------------------------ | | Cumulative Translation Adjustments | $(141.9) | $(11.8) | $0.0 | $(153.7) | | Pension & Other Postretirement Benefit Plans, Net | $17.1 | $0.0 | $(0.4) | $16.7 | | Cash Flow Hedges, Net | $(4.8) | $0.1 | $4.3 | $(0.4) | | Total AOCI | $(129.6) | $(11.7) | $3.9 | $(137.4) | - $4.3 million net of tax from cash flow hedging items and $(0.4) million net of tax from pension and other postretirement benefit plan items were reclassified from AOCI to net income in Q1 2024[135] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Trinseo recognized a net loss of $75.5 million and Adjusted EBITDA of $45.0 million in Q1 2024, impacted by persistent demand weakness but mitigated by lower costs and restructuring - Net loss was $75.5 million and Adjusted EBITDA was $45.0 million for the three months ended March 31, 2024[138] - Sales volumes (excluding styrene-related sales) were the highest since Q3 2022 and marked the first year-over-year increase since Q1 2022[138] - The company commenced a sale process for its interest in Americas Styrenics, expected to lead to a definitive agreement in early 2025[142] - The Accounts Receivable Securitization Facility was renewed, extending its maturity to November 2025 with a $150.0 million borrowing limit[141] 2024 Year-to-Date Highlights Summarizes key financial and operational highlights for the first quarter of 2024 - Net loss of $75.5 million and Adjusted EBITDA of $45.0 million were recognized in Q1 2024[138] - Sales volumes, excluding styrene-related sales, were the highest since Q3 2022 and showed the first year-over-year increase since Q1 2022[138] - The Accounts Receivable Securitization Facility was extended to November 2025, maintaining a $150.0 million borrowing limit[141] - A sale process for the company's interest in Americas Styrenics was commenced, with a definitive agreement anticipated in early 2025[142] Results of Operations Analyzes the company's net sales, gross profit, operating loss, and net loss for the period Table: Key Operating Results Summary | Metric | Three Months Ended March 31, 2024 (Millions) | Three Months Ended March 31, 2023 (Millions) | YoY Change (Millions) | YoY Change (%) | | :----- | :------------------------------------------- | :------------------------------------------- | :-------------------- | :------------- | | Net Sales | $904.0 | $996.3 | $(92.3) | (9)% | | Cost of Sales | $843.4 | $959.1 | $(115.7) | (12)% | | Gross Profit | $60.6 | $37.2 | $23.4 | 73% | | Selling, General and Administrative Expenses | $70.1 | $84.7 | $(14.6) | (17)% | | Operating Loss | $(3.3) | $(30.2) | $26.9 | (89)% | | Interest Expense, net | $63.0 | $38.3 | $24.7 | 64% | | Net Loss | $(75.5) | $(48.9) | $(26.6) | 54% | - Net sales decreased 9% due to a 7% decrease from lower selling prices (pass-through of raw material costs, weak polystyrene and ABS markets) and a 3% decrease from lower sales volumes (Terneuzen styrene facility closure), partially offset by 1% favorable foreign exchange rates[147] - Gross profit increased 73% primarily due to prior year unfavorable impacts from natural gas hedges and fixed cost under absorption[149] - Equity in earnings of unconsolidated affiliate (Americas Styrenics) decreased by $11.4 million due to a planned turnaround at its largest styrene production facility[151] - The increase in interest expense, net, of $24.7 million (64%) was primarily due to higher market interest rates on variable rate debt, specifically the 2028 Refinance Loans[153] Selected Segment Information Provides a breakdown of net sales and Adjusted EBITDA by operating segment Table: Segment Net Sales and Adjusted EBITDA | Segment | Net Sales (Q1 2024, Millions) | Net Sales (Q1 2023, Millions) | Adjusted EBITDA (Q1 2024, Millions) | Adjusted EBITDA (Q1 2023, Millions) | Adjusted EBITDA % Change | | :------ | :---------------------------- | :---------------------------- | :---------------------------------- | :---------------------------------- | :----------------------- | | Engineered Materials | $189.2 | $206.2 | $4.3 | $(11.7) | 137% | | Latex Binders | $241.5 | $249.0 | $25.7 | $24.0 | 7% | | Plastics Solutions | $265.7 | $300.3 | $22.7 | $23.6 | (4)% | | Polystyrene | $207.6 | $240.8 | $12.6 | $8.9 | 42% | | Americas Styrenics | N/A | N/A | $6.1 | $17.6 | (65)% | - Engineered Materials Adjusted EBITDA increased by $16.0 million (137%) due to higher margins from MMA and lower fixed costs[165] - Polystyrene Adjusted EBITDA increased by $3.7 million (42%) due to a favorable net timing variance and lower fixed costs following the Terneuzen plant closure[175] - Americas Styrenics Adjusted EBITDA decreased by 65% due to a planned turnaround at its largest styrene production facility[178] Non-GAAP Performance Measures Reconciles non-GAAP financial measures, including Adjusted EBITDA, to GAAP equivalents - Adjusted EBITDA is defined as income from continuing operations before interest, taxes, depreciation, amortization, loss on debt extinguishment, asset impairment, gains/losses on dispositions, restructuring charges, acquisition costs, and other items[180] Table: Adjusted EBITDA Reconciliation | Metric | Three Months Ended March 31, 2024 (Millions) | Three Months Ended March 31, 2023 (Millions) | YoY Change (Millions) | YoY Change (%) | | :----- | :------------------------------------------- | :------------------------------------------- | :-------------------- | :------------- | | Net Loss | $(75.5) | $(48.9) | $(26.6) | 54.4% | | EBITDA | $37.9 | $28.7 | $9.2 | 32.1% | | Adjusted EBITDA | $45.0 | $36.3 | $8.7 | 24.0% | - Adjusted EBITDA addbacks for Q1 2024 included $9.4 million in restructuring and other charges and $1.3 million in other items, offset by a $(3.6) million net gain on disposition of businesses and assets[183][184] Liquidity and Capital Resources Assesses the company's cash flows, liquidity position, and capital structure Table: Cash Flow Activities | Cash Flow Activity | Three Months Ended March 31, 2024 (Millions) | Three Months Ended March 31, 2023 (Millions) | YoY Change (Millions) | | :----------------- | :------------------------------------------- | :------------------------------------------- | :-------------------- | | Net cash provided by (used in) Operating activities | $(66.2) | $45.4 | $(111.6) | | Net cash used in Investing activities | $(11.0) | $(21.8) | $10.8 | | Net cash used in Financing activities | $(9.2) | $(20.5) | $11.3 | | Free Cash Flow | $(81.9) | $23.6 | $(105.5) | - As of March 31, 2024, Liquidity was $415.6 million, consisting of $163.8 million cash and cash equivalents, and $251.7 million available from the 2026 Revolving Facility and Accounts Receivable Securitization Facility[199] - Total outstanding indebtedness was $2,341.4 million as of March 31, 2024, with working capital at $464.7 million[199] - The company's ability to meet liquidity needs and repay the 2025 Senior Notes (maturing September 2025) is contingent on achieving forecast cash flows and maintaining minimum liquidity covenants[215] Critical Accounting Policies and Estimates Reviews significant accounting policies and estimates that require management judgment - No material revisions to significant or critical accounting policies and estimates were made during the quarter ended March 31, 2024[221] Off-Balance Sheet Arrangements Discloses any off-balance sheet arrangements impacting the company's financial position - The company does not have any off-balance sheet arrangements[223] Recent Accounting Pronouncements Identifies and discusses the impact of new accounting standards - No material impact from recent accounting pronouncements was identified for the quarter ended March 31, 2024[225] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's exposure to market risks, including changes in interest rates, foreign currency exchange rates, and commodity prices, remained consistent with the information provided in its Annual Report, with no material changes - No material changes in exposure to market risks (interest rates, foreign currency, commodity prices) were reported compared to the Annual Report[226] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2024 - Disclosure controls and procedures were deemed effective as of March 31, 2024[227] - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2024[228] PART II — OTHER INFORMATION Includes legal proceedings, risk factors, equity sales, defaults, and other disclosures Item 1. Legal Proceedings Details legal claims and material developments affecting the company - Information on new and material legal proceedings for the quarter ended March 31, 2024, is provided in Note 13 to the condensed consolidated financial statements[230] Item 1A. Risk Factors Highlights significant risks and uncertainties impacting the company's business and financial results - Readers should consider risk factors from the Annual Report and material updates provided in this Quarterly Report[231][232] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Reports on equity security sales not registered under the Securities Act and use of proceeds - A $200.0 million share repurchase program, authorized in September 2022, expired after 18 months[233] - No share repurchases were made during the three months ended March 31, 2024[233] Item 3. Defaults Upon Senior Securities Discloses any defaults on senior securities during the reporting period - No defaults upon senior securities were reported[234] Item 4. Mine Safety Disclosures States the applicability of mine safety disclosures to the company's operations - Mine Safety Disclosures are not applicable[235] Item 5. Other Information Provides other material information not covered elsewhere in the report - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during Q1 2024[236] Item 6. Exhibits Refers to the Exhibit Index for a list of documents filed as exhibits to the Form 10-Q - The Exhibit Index provides a list of documents filed as exhibits[237] Exhibit Index Lists all exhibits filed with the Form 10-Q, including organizational documents and certifications - The Exhibit Index includes the Memorandum and Articles of Association, Indentures, various award agreements (RSU, PSU, Option, RCU), and CEO/CFO certifications[240] Signatures Confirms the official signing of the report by authorized company officers - The report was signed by Frank Bozich (President, CEO) and David Stasse (EVP, CFO) on May 9, 2024[243]