Performance Shares
Performance share awards are denominated in shares of our stock and are paid half in cash and half in stock. Payouts for performance share awards are based on two criteria: (1) % of the award is based on Olin’s total shareholder returns (TSR) over the applicable -year performance cycle in relation to the TSR over the same period among a portfolio of public companies which are selected in concert with outside compensation consultants and (2) % of the award is based on Olin’s net income over the applicable -year performance cycle in relation to the net income goal for such period as set by the Compensation Committee of Olin’s Board of Directors. The expense associated with performance shares is recorded based on our estimate of our performance relative to the respective target. If an employee leaves the company before the end of the performance cycle, the performance shares may be prorated based on the number of months of the performance cycle worked and are settled in cash instead of half in cash and half in stock when the three-year performance cycle is completed.
The fair value of each performance share award based on net income was estimated on the date of grant, using the current stock price.
% | | | % | | Expected volatility of Olin common stock | | % | | | % |
| Expected average volatility of peer companies | | % | | | % |
| Average correlation coefficient of peer companies | | | |
| Expected life (years) | | | |
| Grant date fair value (TSR-based award) | $ | | | $ | |
| Grant date fair value (net income-based award) | $ | | | $ | |
| Performance share awards granted | | | |
The risk-free interest rate was based on zero coupon U.S. Treasury securities rates for the expected life of the performance share awards. The expected volatility of Olin common stock and peer companies was based on historical stock price movements, as we believe that historical experience is the best available indicator of the expected volatility. The average correlation coefficient of peer companies was determined based on historical trends of Olin’s common stock price compared to the peer companies. Expected life of the performance share award grant was based on historical exercise and cancellation patterns, as we believe that historical experience is the best estimate of future exercise patterns.
and , respectively, at a weighted average grant date fair value per share of $ and $, respectively. The fair value of each restricted stock unit was estimated on the date of grant using the current stock price. The awards typically vest ratably, on an annual basis, over three years, but not less than one year. Stock Options
at a weighted-average grant date fair value per option of $ and a weighted-average exercise price of $. The fair value of each stock option granted, which typically vests ratably over three years, but not less than one year, was estimated on the date of grant, using the Black-Scholes option-pricing model.
billion authorization (the 2024 Repurchase Authorization). The Board of Directors previously authorized share repurchases with a $ billion authorization on July 28, 2022 (the 2022 Repurchase Authorization). The 2024 Repurchase Authorization and 2022 Repurchase Authorization will terminate upon the purchase of $ billion and $ billion of common stock, respectively. For the three months ended March 31, 2025 and 2024, million and million shares, respectively, of common stock were repurchased and retired at a total value of $ million and $ million, respectively. As of March 31, 2025, million shares of common stock have been repurchased and retired at a total value of $ million under the 2022 Repurchase Authorization program, and $ million of common stock remained authorized to be repurchased under the program. As of March 31, 2025, there have been repurchases under the 2024 Repurchase Authorization program and $ billion remained available.
We issued less than million and million shares representing stock options exercised for the three months ended March 31, 2025 and 2024, respectively, with a total value of $ million and $ million, respectively.
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Cost of goods sold included reclassification adjustments for realized gains and losses on derivative contracts from accumulated other comprehensive loss.
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| 199.9 | | | $ | 94.7 | |
For the three months ended March 31, 2025, we paid debt issuance costs of $12.0 million associated with the 2033 Notes and 2025 Senior Credit Facility.
For the three months ended March 31, 2025 and 2024, 0.7 million and 2.0 million shares, respectively, of common stock were repurchased and retired at a total value of $20.2 million and $105.4 million, respectively.
We issued less than 0.1 million and 0.8 million shares representing stock options exercised for the three months ended March 31, 2025 and 2024, respectively, with a total value of $1.9 million and $19.8 million, respectively. For the three months ended March 31, 2024, we withheld and paid $10.5 million for employee taxes on share-based payment arrangements.
The percent of total debt to total capitalization increased to 59.8% as of March 31, 2025 from 58.0% as of December 31, 2024, primarily as a result of a higher level of debt outstanding.
In the first quarter of 2025 and 2024, we paid a quarterly dividend of $0.20 per share. Dividends paid for the three months ended March 31, 2025 and 2024, were $23.0 million and $23.9 million, respectively. On May 1, 2025, our Board of Directors declared a dividend of $0.20 per share on our common stock, payable on June 13, 2025, to shareholders of record on May 15, 2025.
The payment of cash dividends is subject to the discretion of our Board of Directors and will be determined in light of then-current conditions, including our earnings, our operations, our financial condition, our capital requirements and other factors deemed relevant by our Board of Directors. In the future, our Board of Directors may change our dividend policy, including the frequency or amount of any dividend, in light of then-existing conditions.
Liquidity and Other Financing Arrangements
Our principal sources of liquidity are from cash and cash equivalents, cash flow from operations and borrowings under our 2025 Revolving Credit Facility and our 2024 Receivables Financing Agreement (as defined below). Additionally, we believe that we have access to the high-yield debt and equity markets.
On March 14, 2025, Olin issued $600.0 million aggregate principal amount of 6.625% senior notes due April 1, 2033 (2033 Notes), in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended. Interest on the 2033 Notes began accruing from March 14, 2025 and is paid semi-annually beginning on October 1, 2025.
On March 14, 2025, Olin entered into a $1,850.0 million senior credit facility (2025 Senior Credit Facility), which increased the borrowing limit of our existing $1,550.0 million senior credit facility (2022 Senior Credit Facility) by $300.0 million and extended the maturity date from October 11, 2027 to March 14, 2030. The 2025 Senior Credit Facility includes a term loan facility with aggregate commitments of $650.0 million (2025 Term Loan Facility) and a revolving credit facility with aggregate commitments of $1,200.0 million (2025 Revolving Credit Facility).
The 2025 Term Loan Facility replaced Olin’s existing $350.0 million term loan facility (2022 Term Loan Facility, and collectively with the new 2025 Term Loan Facility, the Term Loan Facilities). The 2025 Term Loan Facility requires principal amortization payments beginning on June 30, 2025 at a rate of 0.625% per quarter through March 31, 2027, increasing to 1.250% per quarter thereafter until maturity and was fully drawn on the closing date.
The 2025 Revolving Credit Facility replaced Olin’s existing $1,200.0 million revolving credit facility (2022 Revolving Credit Facility, and collectively with the new 2025 Revolving Credit Facility, the Revolving Credit Facilities). The 2025 Revolving Credit Facility includes a $100.0 million letter of credit subfacility. At March 31, 2025, we had $1,124.6 million available under our 2025 Revolving Credit Facility because we had $75.0 million million borrowed under the facility and issued $0.4 million of letters of credit.
Proceeds from the 2033 Notes, together with borrowings under the 2025 Senior Credit Facility, were used to redeem the $108.6 million 2025 Notes, redeem the $500.0 million 2027 Notes, refinance the existing 2022 Senior Credit Facility, comprised of $505.0 million of borrowings under the 2022 Revolving Credit Facility and $332.5 million of borrowings under the 2022 Term Loan Facility, and pay related fees and expenses.
We were in compliance with all covenants and restrictions under all our outstanding credit agreements as of March 31, 2025, and no event of default had occurred that would permit the lenders under our outstanding credit agreements to accelerate the debt if not cured. In the future, our ability to generate sufficient operating cash flows, among other factors, will determine the amounts available to be borrowed under these facilities. As a result of our restrictive covenant related to the net leverage ratio, the maximum additional borrowings available to us could be limited in the future. The limitation, if an amendment or waiver from our lenders is not obtained, could restrict our ability to borrow the maximum amounts available under the 2025 Senior Revolving Credit Facility and the 2024 Receivables Financing Agreement (defined below). As of March 31, 2025, there were no covenants or other restrictions that limited our ability to borrow.
On November 20, 2024, we entered into a $500.0 million receivables financing agreement (2024 Receivables Financing Agreement) which increased the borrowing limit of our existing $425.0 million receivables financing agreement (2022 Receivables Financing Agreement) by $75.0 million and extended the maturity date from October 14, 2025 to November 19, 2027 (collectively, the “Receivables Financing Agreements”).
Under the Receivables Financing Agreements, our eligible trade receivables are used for collateralized borrowings and continue to be serviced by us. In addition, the Receivables Financing Agreement incorporates the net leverage ratio covenant that is contained in the 2025 Senior Credit Facility. As of March 31, 2025, December 31, 2024 and March 31, 2024, we had $461.0 million, $475.0 million and $332.4 million, respectively, drawn under the 2024 and 2022 Receivables Financing Agreements. As of March 31, 2025, $631.0 million of our trade receivables were pledged as collateral and we had $39.0 million of additional borrowing capacity under the 2024 Receivables Financing Agreement.
At March 31, 2025, we had total letters of credit of $161.5 million outstanding, of which $0.4 million were issued under our 2025 Revolving Credit Facility. The letters of credit were used to support certain long-term debt obligations, workers compensation insurance policies, plant closure and post-closure obligations, international payment obligations and international pension funding requirements.
Our current debt structure is used to fund our business operations. As of March 31, 2025, we had long-term borrowings, including the current installment, of $3,035.8 million, of which $1,271.9 million were at variable rates. Included within long-term borrowings on the condensed balance sheets were deferred debt issuance costs of $20.7 million as of March 31, 2025.
We believe, based on current and projected levels of cash flow from our operations, together with our cash and cash equivalents on hand and the availability to borrow under our 2025 Revolving Credit Facility and 2024 Receivables Financing Agreement, we have sufficient liquidity to meet our short-term and long-term needs, to make required payments of interest on our debt, fund our operating needs, working capital and our capital expenditure requirements, and comply with the financial ratios in our debt agreements.
On December 11, 2024, our Board of Directors approved a share repurchase program with a $1.3 billion authorization (the 2024 Repurchase Authorization). The Board of Directors previously authorized share repurchases with a $2.0 billion authorization on July 28, 2022 (the 2022 Repurchase Authorization). The 2024 Repurchase Authorization and 2022 Repurchase Authorization will terminate upon the purchase of $1.3 billion and $2.0 billion of common stock, respectively.
For the three months ended March 31, 2025, 0.7 million shares of common stock were repurchased and retired at a total value of $20.2 million. As of March 31, 2025, a cumulative total of 25.8 million shares were repurchased and retired at a total value of $1,321.1 million under the 2022 Repurchase Authorization program, and $1,978.9 million of common stock remained authorized to be repurchased under the 2022 and 2024 Repurchase Authorization programs.
We have registered an undetermined number of securities with the SEC, so that, from time-to-time we may issue debt securities, preferred stock and/or common stock and associated warrants in the public market under that registration statement.
Credit Ratings
We receive ratings from three independent credit rating agencies: Fitch Ratings (Fitch), Moody's Investor Service (Moody's) and Standard & Poor's (S&P). The following table summarizes our credit ratings as of March 31, 2025:
| | | | | | | | | | | | | | |
| Credit Rating Agency | | Long-term Rating | | Outlook |
| Fitch Ratings | | BBB- | | Stable |
| Moody’s Investors Service | | Ba1 | | Stable |
| Standard & Poor’s | | BB+ | | Stable |
On March 12, 2025, Fitch affirmed Olin’s BBB- rating and stable outlook. On August 8, 2024, S&P affirmed Olin’s BB+ rating and revised its outlook from positive to stable. On June 24, 2024, Moody’s affirmed Olin’s Ba1 rating and stable outlook.
Contractual Obligations
Purchasing commitments are utilized in our normal course of business for our projected needs. We have supply contracts with various third parties for certain raw materials including ethylene, electricity, propylene and benzene. These agreements are maintained through long-term cost based contracts that provide us with a reliable supply of key raw materials. There have been no material changes in our contractual obligations and commitments as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, other than those which occur in the ordinary course of business.
New Accounting Pronouncements
Discussion of new accounting pronouncements can be referred to under Item 1, within Note 2, “Recent Accounting Pronouncements.”
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk in the normal course of our business operations due to our purchases of certain commodities, our ongoing investing and financing activities and our operations that use foreign currencies. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. We have established policies and procedures governing our management of market risks and the use of financial instruments to manage exposure to such risks.
Energy costs, including electricity and natural gas, and certain raw materials used in our production processes are subject to price volatility. Depending on market conditions, we may enter into futures contracts, forward contracts, commodity swaps and put and call option contracts in order to reduce the impact of commodity price fluctuations. As of March 31, 2025, we maintained open positions on commodity contracts with a notional value totaling $153.4 million ($204.5 million at December 31, 2024, and $239.9 million at March 31, 2024). Assuming a hypothetical 10% increase in commodity prices which are currently hedged, as of March 31, 2025, we would experience a $15.3 million ($20.5 million at December 31, 2024 and $24.0 million at March 31, 2024) increase in our cost of inventory purchased, which would be substantially offset by a corresponding increase in the value of related hedging instruments.
We transact business in various foreign currencies other than the USD which exposes us to movements in exchange rates which may impact revenue and expenses, assets and liabilities and cash flows. Our significant foreign currency exposure is denominated with European currencies, primarily the Euro, although exposures also exist in other currencies of Asia Pacific, Latin America, Middle East and Africa. For all derivative positions, we evaluated the effects of a 10% shift in exchange rates between those currencies and the USD, holding all other assumptions constant. Unfavorable currency movements of 10% would negatively affect the fair values of the derivatives held to hedge currency exposures by $12.3 million. These unfavorable changes would generally have been offset by favorable changes in the values of the underlying exposures.
We are exposed to changes in interest rates primarily as a result of our investing and financing activities. Our current debt structure is used to fund business operations, and commitments from banks under our 2025 Revolving Credit Facility and our 2024 Receivables Financing Agreement are additional sources of liquidity. As of March 31, 2025, December 31, 2024 and March 31, 2024, we had long-term borrowings, including current installments and finance lease obligations, of $3,035.8 million, $2,842.2 million and $2,765.7 million, respectively, of which $1,271.9 million, $1,063.4 million and $988.4 million at March 31, 2025, December 31, 2024 and March 31, 2024, respectively, were issued at variable rates. Included within long-term borrowings on the condensed balance sheets were deferred debt issuance costs and unamortized bond original issue discount.
Assuming no changes in the $1,271.9 million of variable-rate debt levels from March 31, 2025, we estimate that a hypothetical change of 100-basis points in the secured overnight financing rate (SOFR) would impact annual interest expense by $12.7 million.
If the actual changes in commodities, foreign currency, or interest pricing is substantially different than expected, the net impact of commodity risk, foreign currency risk, or interest rate risk on our cash flow may be materially different than that disclosed above.
We do not enter into any derivative financial instruments for speculative purposes.
ITEM 4. CONTROLS AND PROCEDURES
Our Chief Executive Officer and our Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2025. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective to ensure that information Olin is required to disclose in the reports that it files or submits with the SEC under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and to ensure that information we are required to disclose in such reports is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
There have been no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q includes forward-looking statements. These statements relate to analyses and other information that are based on management’s beliefs, certain assumptions made by management, forecasts of future results, and current expectations, estimates and projections about the markets and economy in which we and our various segments operate. The statements contained in this quarterly report on Form 10-Q that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties.
We have used the words “anticipate,” “intend,” “may,” “expect,” “believe,” “should,” “plan,” “outlook,” “project,” “estimate,” “forecast,” “optimistic,” “target,” and variations of such words and similar expressions in this quarterly report to identify such forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the Company’s intent to repurchase, from time to time, the Company’s common stock. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise. The payment of cash dividends is subject to the discretion of our Board of Directors and will be determined in light of then-current conditions, including our earnings, our operations, our financial conditions, our capital requirements and other factors deemed relevant by our Board of Directors. In the future, our Board of Directors may change our dividend policy, including the frequency or amount of any dividend, in light of then-existing conditions.
The risks, uncertainties and assumptions involved in our forward-looking statements, many of which are discussed in more detail in our filings with the SEC, including without limitation the “Risk Factors” section of our Annual Report on Form
10-K for the year ended December 31, 2024, and our Quarterly Reports on Form 10-Q and other reports furnished or filed with the SEC, include, but are not limited to, the following:
Business, Industry and Operational Risks
•sensitivity to economic, business and market conditions in the United States and overseas, including economic instability or a downturn in the sectors served by us;
•declines in average selling prices for our products and the supply/demand balance for our products, including the impact of excess industry capacity or an imbalance in demand for our chlor alkali products;
•unsuccessful execution of our operating model, which prioritizes Electrochemical Unit (ECU) margins over sales volumes;
•failure to control costs and inflation impacts or failure to achieve targeted cost reductions;
•our reliance on a limited number of suppliers for specified feedstock and services and our reliance on third-party transportation;
•availability of and/or higher-than-expected costs of raw material, energy, transportation, and/or logistics;
•the occurrence of unexpected manufacturing interruptions and outages, including those occurring as a result of labor disruptions and production hazards;
•exposure to physical risks associated with climate-related events or increased severity and frequency of severe weather events;
•the failure or an interruption, including cyber-attacks, of our information technology systems;
•risks associated with our international sales and operations, including economic, political or regulatory changes;
•failure to identify, attract, develop, retain and motivate qualified employees throughout the organization and ability to manage executive officer and other key senior management transitions;
•our inability to complete future acquisitions or joint venture transactions or successfully integrate them into our business;
•adverse conditions in the credit and capital markets, limiting or preventing our ability to borrow or raise capital;
•weak industry conditions affecting our ability to comply with the financial maintenance covenants in our senior credit facility;
•our indebtedness and debt service obligations;
•the effects of any declines in global equity markets on asset values and any declines in interest rates or other significant assumptions used to value the liabilities in, and funding of, our pension plans;
•our long-range plan assumptions not being realized causing a non-cash impairment charge of long-lived assets;
Legal, Environmental and Regulatory Risks
•changes in, or failure to comply with, legislation or government regulations or policies, including changes regarding our ability to manufacture or use certain products and changes within the international markets in which we operate;
•new regulations or public policy changes regarding the transportation of hazardous chemicals and the security of chemical manufacturing facilities;
•unexpected outcomes from legal or regulatory claims and proceedings;
•costs and other expenditures in excess of those projected for environmental investigation and remediation or other legal proceedings;
•various risks associated with our Lake City U.S. Army Ammunition Plant contract and performance under other governmental contracts; and
•failure to effectively manage environmental, social and governance (ESG) issues and related regulations, including climate change and sustainability.
All of our forward-looking statements should be considered in light of these factors. In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the accuracy of our forward-looking statements.
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Discussion of legal matters and contingencies can be referred to under Item 1, within Note 18, “Commitments and Contingencies.”
ITEM 1A. RISK FACTORS
Not Applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a) Not Applicable.
(b) Not Applicable.
(c) Issuer Purchases of Equity Securities
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Period | | Total Number of Shares (or Units) Purchased(1) | | Average Price Paid per Share (or Unit)(2) | | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | | Maximum Dollar Value of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | |
| January 1-31, 2025 | | 294,406 | | | $ | 33.99 | | | 294,406 | | | | |
| February 1-28, 2025 | | 355,465 | | | $ | 28.15 | | | 355,465 | | | | |
| March 1-31, 2025 | | — | | | $ | — | | | — | | | | |
| Total | | | | | | | | $ | 1,978,918,912 | | (1) |
(1)On December 11, 2024, our Board of Directors authorized a share repurchase program for the purchase of shares of common stock at an aggregate price of up to $1.3 billion (the 2024 Repurchase Authorization). This program will terminate upon the purchase of $1.3 billion of common stock. On July 28, 2022, our Board of Directors authorized a share repurchase program for the purchase of shares of common stock at an aggregate price of up to $2.0 billion (the 2022 Repurchase Authorization). This program will terminate upon the purchase of $2.0 billion of common stock. Through March 31, 2025, 25.8 shares of common stock had been repurchased and retired at a total value of $1,321.1 million under the 2022 Repurchase Authorization program, and $1,978.9 million of common stock remained available for purchase under the 2022 and 2024 Repurchase Authorization programs.
(2)Average price paid per share includes transaction costs including commissions and fees paid to acquire the shares and excludes costs accrued associated with 1% excise tax on the fair market value of stock repurchases.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
(a) Not Applicable.
(b) Not Applicable.
(c) During the three months ended March 31, 2025, no director or officer of Olin adopted, terminated or modified a ‘Rule 10b5-1 trading arrangement’ or ‘non-Rule 10b5-1 trading arrangement,’ as each term is defined in Item 408(a) of Regulation S-K.
ITEM 6. EXHIBITS
| | | | | | | | |
| Exhibit | | Exhibit Description |
| 4.1 | | |
| 31.1 | | |
| 31.2 | | |
| 32 | | |
| 101.INS | | XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the XBRL document) |
| 101.SCH | | XBRL Taxonomy Extension Schema Document |
| 101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | | XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | | Cover Page Interactive Data File (embedded in the Exhibit 101 Interactive Data Files) |
* Previously filed as indicated and incorporated herein by reference. Exhibits incorporated by reference are located in SEC file No. 1-1070 unless otherwise indicated.
† Indicated management contract or compensatory arrangement.
SIGNATURES
Pursuant to the requirements 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.
| | | | | | | | |
| | OLIN CORPORATION |
| | (Registrant) |
| | | |
| | By: | /s/ Todd A. Slater |
| | Senior Vice President and Chief Financial Officer (Authorized Officer) |
Date: May 2, 2025
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