-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TZLjY19StbaMdqlnDbRXOV2Ljb6kKBlxfzEGSkzXGHZ3+biuhWDhm+5GcWG7bWmK vOQgf1/l6Ojjb734ibo+Og== 0000950123-10-029144.txt : 20100329 0000950123-10-029144.hdr.sgml : 20100329 20100329080037 ACCESSION NUMBER: 0000950123-10-029144 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20100329 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20100329 DATE AS OF CHANGE: 20100329 FILER: COMPANY DATA: COMPANY CONFORMED NAME: POLYONE CORP CENTRAL INDEX KEY: 0001122976 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS, MATERIALS, SYNTH RESINS & NONVULCAN ELASTOMERS [2821] IRS NUMBER: 341730488 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16091 FILM NUMBER: 10709247 BUSINESS ADDRESS: STREET 1: POLYONE CENTER STREET 2: 33587 WALKER ROAD CITY: AVON LAKE STATE: OH ZIP: 44012 BUSINESS PHONE: 440-930-1000 MAIL ADDRESS: STREET 1: POLYONE CENTER STREET 2: 33587 WALKER ROAD CITY: AVON LAKE STATE: OH ZIP: 44012 8-K 1 l39270e8vk.htm FORM 8-K e8vk
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (date of earliest event reported): March 29, 2010
PolyOne Corporation
(Exact Name of Registrant as Specified in Charter)
         
Ohio   1-16091   34-1730488
         
(State or Other Jurisdiction of Incorporation)   (Commission File No.)   (I.R.S. Employer Identification No.)
PolyOne Center, 33587 Walker Rd.
Avon Lake, Ohio 44012
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code:
(440) 930-1000
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

 

Item 2.02 Results of Operations and Financial Condition.
PolyOne Corporation (NYSE: POL), a premier global provider of specialized polymer materials, services and solutions, announced a new global organization structure on February 4, 2010. As a result of these changes which were effective on January 1, 2010, PolyOne will now report its results of operations in five segments:
  1.   Global Color, Additives & Inks
 
  2.   Global Specialty Engineered Materials
 
  3.   Performance Products and Solutions
 
  4.   PolyOne Distribution
 
  5.   SunBelt Joint Venture
With the exception of our SunBelt Joint Venture, each reportable segment has a president who reports to Stephen D. Newlin, our chairman, president and chief executive officer. For segment purposes, Mr. Newlin is the chief operating decision maker.
Additionally and in support of the new global organization, PolyOne will harmonize its global inventory accounting policy such that all businesses will now report on a first-in-first-out (FIFO) basis. Certain U.S. businesses previously used the last-in-first-out (LIFO) methodology. This is a change in accounting principle elected by PolyOne during the first quarter of 2010. The change in accounting principle is required to be reported through retrospective application of historical results in future quarterly and annual reports filed with the SEC to conform to current period presentation.
For informational purposes, included in Exhibit 99.1 to this Current Report on Form 8-K are historical unaudited consolidated statements of operations and business segment operations adjusted to reflect the new segment reporting structure and apply the new accounting method retrospectively.
Item 9.01. Financial Statements and Exhibits.
     (d) Exhibits.
     
Exhibit    
Number   Description
99.1
  Consolidated Statements of Operations and Business Segment Operations, as Adjusted.

 

 

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 hereunto duly authorized.
Date: March 29, 2010
         
 
  POLYONE CORPORATION
 		  
  By:   /s/ Robert M. Patterson    
    Name:   Robert M. Patterson   
    Title:   Senior Vice President and
Chief Financial Officer 		  

 

 

         
EXHIBIT INDEX
     
Exhibit    
Number   Description
99.1
  Consolidated Statements of Operations and Business Segment Operations, as Adjusted.

 

EX-99.1 2 l39270exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
PolyOne Corporation and Subsidiaries
Consolidated Statements of Operations, as Adjusted (Unaudited)
(In millions, except per share data)
                                         
    1Q09     2Q09     3Q09     4Q09     2009Y  
Sales
   $ 463.4     $ 496.5     $ 548.3     $ 552.5     $ 2,060.7  
 
                                        
Cost of sales
     412.6       415.6       442.3       468.0       1,738.5  
 
                              
Gross margin
     50.8       80.9       106.0       84.5       322.2  
Selling and administrative
     70.2       77.1       56.3       68.7       272.3  
Impairment of goodwill
     5.0       —       —       —       5.0  
Income from equity affiliates
     13.3       10.1       5.2       6.6       35.2  
 
                              
Operating income (loss)
     (11.1 )     13.9       54.9       22.4       80.1  
Interest expense, net
     (8.8 )     (8.8 )     (8.5 )     (8.2 )     (34.3 )
Other expense, net
     (6.6 )     (0.7 )     (1.2 )     (1.1 )     (9.6 )
 
                              
Income (loss) before income taxes
     (26.5 )     4.4       45.2       13.1       36.2  
Income tax benefit (expense)
     8.8       (6.3 )     3.1       7.7       13.3  
 
                              
Net income (loss)
   $ (17.7 )   $ (1.9 )   $ 48.3     $ 20.8     $ 49.5  
 
                              
 
                                        
Basic earnings (loss) per common share
   $ (0.19 )   $ (0.02 )   $ 0.52     $ 0.22     $ 0.54  
Diluted earnings (loss) per common share
   $ (0.19 )   $ (0.02 )   $ 0.51     $ 0.22     $ 0.53  
 
                                        
Weighted average shares used to compute earnings (loss) per share:
                                        
Basic
     92.2       92.4       92.4       92.5       92.4  
Diluted
     92.2       93.5       93.9       94.4       93.4  
                                         
    1Q08     2Q08     3Q08     4Q08     2008Y  
Sales
   $ 713.7     $ 748.1     $ 735.1     $ 541.8     $ 2,738.7  
 
                                        
Cost of sales
     627.5       655.8       663.1       500.3       2,446.7  
 
                              
Gross margin
     86.2       92.3       72.0       41.5       292.0  
Selling and administrative
     72.9       75.0       69.7       69.5       287.1  
Impairment of goodwill
     —       —       —       170.0       170.0  
Income from equity affiliates
     8.1       10.5       5.8       6.8       31.2  
 
                              
Operating income (loss)
     21.4       27.8       8.1       (191.2 )     (133.9 )
Interest expense, net
     (8.4 )     (9.8 )     (9.7 )     (9.3 )     (37.2 )
Other expense, net
     (2.0 )     (0.7 )     —       (1.9 )     (4.6 )
 
                              
Income (loss) before income taxes
     11.0       17.3       (1.6 )     (202.4 )     (175.7 )
Income tax benefit (expense)
     (3.7 )     (6.1 )     0.3       (75.0 )     (84.5 )
 
                              
Net income (loss)
   $ 7.3     $ 11.2     $ (1.3 )   $ (277.4 )   $ (260.2 )
 
                              
 
                                        
Basic and diluted earnings (loss) per common share:
   $ 0.08     $ 0.12     $ (0.01 )   $ (3.01 )   $ (2.81 )
 
                                        
Weighted average shares used to compute earnings (loss) per share:
                                        
Basic
     92.9       93.0       92.9       92.1       92.7  
Diluted
     93.3       93.8       92.9       92.1       92.7  

1

 

Exhibit 99.1 (continued)
Consolidated Statements of Operations, as Adjusted (Unaudited)
(In millions, except per share data)
                                         
    1Q07     2Q07     3Q07     4Q07     2007Y  
Sales
   $ 657.8     $ 688.8     $ 664.8     $ 631.3     $ 2,642.7  
 
                                        
Cost of sales
     575.6       602.1       630.6       563.5       2,371.8  
 
                              
Gross margin
     82.2       86.7       34.2       67.8       270.9  
Selling and administrative
     64.1       68.5       65.3       56.9       254.8  
Income (loss) from equity affiliates
     6.5       (1.6 )     11.7       11.1       27.7  
 
                              
Operating income (loss)
     24.6       16.6       (19.4 )     22.0       43.8  
Interest expense, net
     (14.4 )     (15.1 )     (10.3 )     (7.1 )     (46.9 )
Premium on early extinguishment of debt
     —       (5.3 )     (7.5 )     —       (12.8 )
Other expense, net
     (0.9 )     (1.8 )     (1.8 )     (2.1 )     (6.6 )
 
                              
Income (loss) before income taxes
     9.3       (5.6 )     (39.0 )     12.8       (22.5 )
Income tax benefit (expense)
     (2.8 )     2.8       43.9       (3.6 )     40.3  
 
                              
Net income (loss)
   $ 6.5     $ (2.8 )   $ 4.9     $ 9.2     $ 17.8  
 
                              
 
                                        
Basic and diluted earnings (loss) per common share:
   $ 0.07     $ (0.03 )   $ 0.05     $ 0.10     $ 0.19  
 
                                        
Weighted average shares used to compute earnings (loss) per share:
                                        
Basic
     92.6       92.8       92.8       92.9       92.8  
Diluted
     93.0       92.8       93.3       93.2       93.1  
                                         
    1Q06     2Q06     3Q06     4Q06     2006Y  
Sales
   $ 674.6     $ 686.4     $ 666.2     $ 595.2     $ 2,622.4  
 
                                        
Cost of sales
     598.9       601.0       600.7       535.0       2,335.6  
 
                              
Gross margin
     75.7       85.4       65.5       60.2       286.8  
Selling and administrative
     54.2       54.9       56.2       56.6       221.9  
Income from equity affiliates
     38.8       31.6       30.0       11.6       112.0  
 
                              
Operating income
     60.3       62.1       39.3       15.2       176.9  
Interest expense, net
     (16.1 )     (16.0 )     (15.1 )     (15.9 )     (63.1 )
Premium on early extinguishment of debt
     —       (1.2 )     —       (3.2 )     (4.4 )
Other expense, net
     (1.2 )     (1.5 )     (0.2 )     0.1       (2.8 )
 
                              
Income (loss) before income taxes and discontinued operations
     43.0       43.4       24.0       (3.8 )     106.6  
Income tax benefit (expense)
     (1.7 )     (2.4 )     (1.5 )     (2.9 )     (8.5 )
 
                              
Income (loss) from continuing operations
     41.3       41.0       22.5       (6.7 )     98.1  
Loss from discontinued operations and loss on sale, net of income taxes
     (2.1 )     —       —       (0.6 )     (2.7 )
 
                              
Net income (loss)
   $ 39.2     $ 41.0     $ 22.5     $ (7.3 )   $ 95.4  
 
                              
 
                                        
Basic earnings (loss) per common share:
                                        
From continuing operations
   $ 0.45     $ 0.44     $ 0.24     $ (0.07 )   $ 1.06  
Net income
   $ 0.43     $ 0.44     $ 0.24     $ (0.08 )   $ 1.03  
 
                                        
Diluted earnings (loss) per common share:
                                        
From continuing operations
   $ 0.45     $ 0.44     $ 0.24     $ (0.07 )   $ 1.06  
Net income
   $ 0.42     $ 0.44     $ 0.24     $ (0.08 )   $ 1.03  
 
                                        
Weighted average shares used to compute earnings per share:
                                        
Basic
     92.1       92.4       92.5       92.5       92.4  
Diluted
     92.5       93.0       93.0       93.0       92.8  

2

 

Exhibit 99.1 (continued)
Business Segment and Platform Operations, as Adjusted (Unaudited)
(In millions)
Gross margin, selling and administration, and operating income at the segment level does not include: special items as defined on page 7; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker. These costs are included in Corporate and eliminations.
                                         
Business Segments   1Q09     2Q09     3Q09     4Q09     2009Y  
Sales:
                                        
Global Specialty Engineered Materials
   $ 86.6     $ 96.2     $ 107.3     $ 112.8     $ 402.9  
Global Color, Additives and Inks
     103.7       118.1       122.9       115.1       459.8  
 
                              
Specialty Platform
     190.3       214.3       230.2       227.9       862.7  
Performance Products and Solutions
     158.8       170.3       180.9       157.7       667.7  
PolyOne Distribution
     136.9       135.1       163.1       190.0       625.1  
Corporate and eliminations
     (22.6 )     (23.2 )     (25.9 )     (23.1 )     (94.8 )
 
                              
Sales
   $ 463.4     $ 496.5     $ 548.3     $ 552.5     $ 2,060.7  
 
                              
 
                                        
Gross margin:
                                        
Global Specialty Engineered Materials
   $ 14.8     $ 21.6     $ 25.1     $ 25.4     $ 86.9  
Global Color, Additives and Inks
     20.3       26.9       30.5       27.7       105.4  
 
                              
Specialty Platform
     35.1       48.5       55.6       53.1       192.3  
Performance Products and Solutions
     12.8       23.6       25.7       19.4       81.5  
PolyOne Distribution
     13.8       13.3       16.6       18.5       62.2  
Corporate and eliminations
     (10.9 )     (4.5 )     8.1       (6.5 )     (13.8 )
 
                              
Gross margin
   $ 50.8     $ 80.9     $ 106.0     $ 84.5     $ 322.2  
 
                              
 
                                        
Selling and administrative:
                                        
Global Specialty Engineered Materials
   $ (15.8 )   $ (15.5 )   $ (16.8 )   $ (17.5 )   $ (65.6 )
Global Color, Additives and Inks
     (19.2 )     (20.4 )     (21.2 )     (20.7 )     (81.5 )
 
                              
Specialty Platform
     (35.0 )     (35.9 )     (38.0 )     (38.2 )     (147.1 )
Performance Products and Solutions
     (12.4 )     (13.0 )     (13.4 )     (11.7 )     (50.5 )
PolyOne Distribution
     (8.9 )     (9.4 )     (10.1 )     (9.0 )     (37.4 )
SunBelt Joint Venture
     (1.1 )     (1.0 )     (1.0 )     (1.1 )     (4.2 )
Corporate and eliminations
     (12.8 )     (17.8 )     6.2       (8.7 )     (33.1 )
 
                              
Selling and administrative
   $ (70.2 )   $ (77.1 )   $ (56.3 )   $ (68.7 )   $ (272.3 )
 
                              
 
                                        
Operating income (loss):
                                        
Global Specialty Engineered Materials
   $ (1.0 )   $ 6.1     $ 8.3     $ 7.9     $ 21.3  
Global Color, Additives and Inks
     1.6       7.0       9.8       7.7       26.1  
 
                              
Specialty Platform
     0.6       13.1       18.1       15.6       47.4  
Performance Products and Solutions
     0.4       11.2       12.2       7.7       31.5  
PolyOne Distribution
     4.9       3.9       6.5       9.5       24.8  
SunBelt Joint Venture
     11.7       8.0       3.8       2.0       25.5  
Corporate and eliminations
     (28.7 )     (22.3 )     14.3       (12.4 )     (49.1 )
 
                              
Operating income (loss)
   $ (11.1 )   $ 13.9     $ 54.9     $ 22.4     $ 80.1  
 
                              
 
                                        
Effect of change in accounting principle on gross margin and operating income (loss):
                                        
Global Specialty Engineered Materials
   $ 0.1     $ (0.9 )   $ (0.9 )   $ (1.4 )   $ (3.1 )
Global Color, Additives and Inks
     —       (0.6 )     (0.5 )     (1.4 )     (2.5 )
 
                              
Specialty Platform
     0.1       (1.5 )     (1.4 )     (2.8 )     (5.6 )
Performance Products and Solutions
     (8.3 )     (3.5 )     0.2       (0.4 )     (12.0 )
PolyOne Distribution
     —       —       —       —       —  
SunBelt Joint Venture
     —       —       —       —       —  
Corporate and eliminations
     (0.2 )     (0.4 )     (0.1 )     —       (0.7 )
 
                              
Effect of change in accounting principle on gross margin and operating income (loss)
   $ (8.4 )   $ (5.4 )   $ (1.3 )   $ (3.2 )   $ (18.3 )
 
                              
Specialty Platform consists of our two specialty businesses: Global Specialty Engineered Materials; and Global Color, Additives and Inks. We present Specialty Platform sales, gross margin, selling and administration, and operating income because management believes that this is useful information to investors in highlighting our collective progress in advancing our specialization strategy.

3

 

Exhibit 99.1 (continued)
Business Segment and Platform Operations, as Adjusted (Unaudited)
(In millions)
Gross margin, selling and administration, and operating income at the segment level does not include: special items as defined on page 7; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker. These costs are included in Corporate and eliminations.
                                         
Business Segments   1Q08     2Q08     3Q08     4Q08     2008Y  
Sales:
                                        
Global Specialty Engineered Materials
   $ 140.7     $ 141.6     $ 134.2     $ 97.5     $ 514.0  
Global Color, Additives and Inks
     147.4       158.6       145.7       102.6       554.3  
 
                              
Specialty Platform
     288.1       300.2       279.9       200.1       1,068.3  
Performance Products and Solutions
     259.3       273.7       274.4       194.0       1,001.4  
PolyOne Distribution
     201.1       208.2       214.7       172.7       796.7  
Corporate and eliminations
     (34.8 )     (34.0 )     (33.9 )     (25.0 )     (127.7 )
 
                              
Sales
   $ 713.7     $ 748.1     $ 735.1     $ 541.8     $ 2,738.7  
 
                              
 
                                        
Gross margin:
                                        
Global Specialty Engineered Materials
   $ 21.0     $ 23.6     $ 21.3     $ 13.6     $ 79.5  
Global Color, Additives and Inks
     29.4       32.6       28.1       19.0       109.1  
 
                              
Specialty Platform
     50.4       56.2       49.4       32.6       188.6  
Performance Products and Solutions
     23.6       21.3       24.0       13.4       82.3  
PolyOne Distribution
     17.2       18.1       22.2       15.6       73.1  
Corporate and eliminations
     (5.0 )     (3.3 )     (23.6 )     (20.1 )     (52.0 )
 
                              
Gross margin
   $ 86.2     $ 92.3     $ 72.0     $ 41.5     $ 292.0  
 
                              
 
                                        
Selling and administrative:
                                        
Global Specialty Engineered Materials
   $ (15.7 )   $ (16.5 )   $ (15.7 )   $ (14.3 )   $ (62.2 )
Global Color, Additives and Inks
     (22.5 )     (22.9 )     (20.4 )     (19.0 )     (84.8 )
 
                              
Specialty Platform
     (38.2 )     (39.4 )     (36.1 )     (33.3 )     (147.0 )
Performance Products and Solutions
     (12.7 )     (13.9 )     (11.3 )     (12.4 )     (50.3 )
PolyOne Distribution
     (11.7 )     (11.1 )     (12.8 )     (9.4 )     (45.0 )
SunBelt Joint Venture
     (1.3 )     (0.7 )     (0.5 )     (1.4 )     (3.9 )
Corporate and eliminations
     (9.0 )     (9.9 )     (9.0 )     (13.0 )     (40.9 )
 
                              
Selling and administrative
   $ (72.9 )   $ (75.0 )   $ (69.7 )   $ (69.5 )   $ (287.1 )
 
                              
Operating income (loss):
                                        
Global Specialty Engineered Materials
   $ 5.3     $ 7.1     $ 5.6     $ (0.7 )   $ 17.3  
Global Color, Additives and Inks
     7.8       10.6       8.6       0.8       27.8  
 
                              
Specialty Platform
     13.1       17.7       14.2       0.1       45.1  
Performance Products and Solutions
     10.9       7.6       12.2       1.2       31.9  
PolyOne Distribution
     5.5       7.0       9.4       6.2       28.1  
SunBelt Joint Venture
     5.9       8.7       9.6       4.4       28.6  
Corporate and eliminations
     (14.0 )     (13.2 )     (37.3 )     (203.1 )     (267.6 )
 
                              
Operating income (loss)
   $ 21.4     $ 27.8     $ 8.1     $ (191.2 )   $ (133.9 )
 
                              
 
                                        
Effect of change in accounting principle on gross margin and operating income (loss):
                                        
Global Specialty Engineered Materials
   $ (0.3 )   $ 0.4     $ —     $ (0.9 )   $ (0.8 )
Global Color, Additives and Inks
     (0.1 )     0.2       (0.1 )     (0.9 )     (0.9 )
 
                              
Specialty Platform
     (0.4 )     0.6       (0.1 )     (1.8 )     (1.7 )
Performance Products and Solutions
     2.6       2.3       6.9       (14.8 )     (3.0 )
PolyOne Distribution
     —       —       —       —       —  
SunBelt Joint Venture
     —       —       —       —       —  
Corporate and eliminations
     (0.9 )     0.9       —       0.1       0.1  
 
                              
Effect of change in accounting principle on gross margin and operating income (loss)
   $ 1.3     $ 3.8     $ 6.8     $ (16.5 )   $ (4.6 )
 
                              
Specialty Platform consists of our two specialty businesses: Global Specialty Engineered Materials; and Global Color, Additives and Inks. We present Specialty Platform sales, gross margin, selling and administration, and operating income because management believes that this is useful information to investors in highlighting our collective progress in advancing our specialization strategy.

4

 

Exhibit 99.1 (continued)
Business Segment and Platform Operations, as Adjusted (Unaudited)
(In millions)
Gross margin, selling and administration, and operating income at the segment level does not include: special items as defined on page 7; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker. These costs are included in Corporate and eliminations.
                                         
Business Segments   1Q07     2Q07     3Q07     4Q07     2007Y  
Sales:
                                        
Global Specialty Engineered Materials
   $ 95.3     $ 97.3     $ 97.4     $ 94.4     $ 384.4  
Global Color, Additives and Inks
     140.9       144.9       140.5       134.2       560.5  
 
                              
Specialty Platform
     236.2       242.2       237.9       228.6       944.9  
Performance Products and Solutions
     273.2       293.0       274.5       246.1       1,086.8  
PolyOne Distribution
     184.4       190.1       185.8       184.0       744.3  
Corporate and eliminations
     (36.0 )     (36.5 )     (33.4 )     (27.4 )     (133.3 )
 
                              
Sales
   $ 657.8     $ 688.8     $ 664.8     $ 631.3     $ 2,642.7  
 
                              
 
                                        
Gross margin:
                                        
Global Specialty Engineered Materials
   $ 10.2     $ 12.1     $ 11.5     $ 11.0     $ 44.8  
Global Color, Additives and Inks
     25.7       28.1       26.5       24.3       104.6  
 
                              
Specialty Platform
     35.9       40.2       38.0       35.3       149.4  
Performance Products and Solutions
     32.7       33.3       29.7       18.7       114.4  
PolyOne Distribution
     14.7       15.8       14.8       15.4       60.7  
Resin and Intermediates
     0.8       (0.2 )     —       —       0.6  
Corporate and eliminations
     (1.9 )     (2.4 )     (48.3 )     (1.6 )     (54.2 )
 
                              
Gross margin
   $ 82.2     $ 86.7     $ 34.2     $ 67.8     $ 270.9  
 
                              
 
                                        
Selling and administrative:
                                        
Global Specialty Engineered Materials
   $ (10.0 )   $ (10.0 )   $ (9.7 )   $ (10.5 )   $ (40.2 )
Global Color, Additives and Inks
     (21.0 )     (21.0 )     (19.9 )     (20.7 )     (82.6 )
 
                              
Specialty Platform
     (31.0 )     (31.0 )     (29.6 )     (31.2 )     (122.8 )
Performance Products and Solutions
     (13.2 )     (12.5 )     (11.3 )     (11.5 )     (48.5 )
PolyOne Distribution
     (10.1 )     (9.3 )     (9.5 )     (9.7 )     (38.6 )
Resin and Intermediates
     (2.2 )     (1.0 )     (1.4 )     (2.0 )     (6.6 )
Corporate and eliminations
     (7.6 )     (14.7 )     (13.5 )     (2.5 )     (38.3 )
 
                              
Selling and administrative
   $ (64.1 )   $ (68.5 )   $ (65.3 )   $ (56.9 )   $ (254.8 )
 
                              
 
                                        
Operating income (loss):
                                        
Global Specialty Engineered Materials
   $ 0.2     $ 2.1     $ 1.8     $ 0.5     $ 4.6  
Global Color, Additives and Inks
     5.4       8.0       7.4       4.5       25.3  
 
                              
Specialty Platform
     5.6       10.1       9.2       5.0       29.9  
Performance Products and Solutions
     19.6       21.0       18.4       7.4       66.4  
PolyOne Distribution
     4.6       6.5       5.3       5.7       22.1  
Resin and Intermediates
     4.3       12.0       11.2       7.3       34.8  
Corporate and eliminations
     (9.5 )     (33.0 )     (63.5 )     (3.4 )     (109.4 )
 
                              
Operating income (loss)
   $ 24.6     $ 16.6     $ (19.4 )   $ 22.0     $ 43.8  
 
                              
 
Effect of change in accounting principle on gross margin and operating income (loss):
                                        
Global Specialty Engineered Materials
   $ (0.1 )   $ 0.2     $ (0.3 )   $ 0.2     $ —  
Global Color, Additives and Inks
     0.7       (0.2 )     (0.2 )     (0.3 )     —  
 
                              
Specialty Platform
     0.6       —       (0.5 )     (0.1 )     —  
Performance Products and Solutions
     (2.4 )     2.4       5.8       3.1       8.9  
PolyOne Distribution
     —       —       —       —       —  
Resin and Intermediates
     —       —       —       —       —  
Corporate and eliminations
     (0.1 )     1.8       (1.1 )     0.4       1.0  
 
                              
Effect of change in accounting principle on gross margin and operating income (loss)
   $ (1.9 )   $ 4.2     $ 4.2     $ 3.4     $ 9.9  
 
                              
Specialty Platform consists of our two specialty businesses: Global Specialty Engineered Materials; and Global Color, Additives and Inks. We present Specialty Platform sales, gross margin, selling and administration, and operating income because management believes that this is useful information to investors in highlighting our collective progress in advancing our specialization strategy.

5

 

Exhibit 99.1 (continued)
Business Segment and Platform Operations, as Adjusted (Unaudited)
(In millions)
Gross margin, selling and administration, and operating income at the segment level does not include: special items as defined on page 7; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker. These costs are included in Corporate and eliminations.
                                         
Business Segments   1Q06     2Q06     3Q06     4Q06     2006Y  
Sales:
                                        
Global Specialty Engineered Materials
   $ 81.3     $ 89.8     $ 89.0     $ 85.2     $ 345.3  
Global Color, Additives and Inks
     134.7       137.1       134.9       125.1       531.8  
 
                              
Specialty Platform
     216.0       226.9       223.9       210.3       877.1  
Performance Products and Solutions
     303.9       311.7       301.2       249.4       1,166.2  
PolyOne Distribution
     194.1       189.7       182.1       166.9       732.8  
Corporate and eliminations
     (39.4 )     (41.9 )     (41.0 )     (31.4 )     (153.7 )
 
                              
Sales
   $ 674.6     $ 686.4     $ 666.2     $ 595.2     $ 2,622.4  
 
                              
 
                                        
Gross margin:
                                        
Global Specialty Engineered Materials
   $ 9.7     $ 12.7     $ 11.1     $ 8.3     $ 41.8  
Global Color, Additives and Inks
     23.5       20.5       21.1       19.2       84.3  
 
                              
Specialty Platform
     33.2       33.2       32.2       27.5       126.1  
Performance Products and Solutions
     28.4       36.9       26.9       21.6       113.8  
PolyOne Distribution
     15.9       15.0       14.3       12.4       57.6  
Resin and Intermediates
     —       (0.4 )     0.3       0.1       —  
Corporate and eliminations
     (1.8 )     0.7       (8.2 )     (1.4 )     (10.7 )
 
                              
Gross margin
   $ 75.7     $ 85.4     $ 65.5     $ 60.2     $ 286.8  
 
                              
 
                                        
Selling and administrative:
                                        
Global Specialty Engineered Materials
   $ (9.5 )   $ (9.7 )   $ (10.0 )   $ (10.0 )   $ (39.2 )
Global Color, Additives and Inks
     (18.8 )     (19.0 )     (19.9 )     (20.5 )     (78.2 )
 
                              
Specialty Platform
     (28.3 )     (28.7 )     (29.9 )     (30.5 )     (117.4 )
Performance Products and Solutions
     (11.7 )     (12.9 )     (12.4 )     (13.7 )     (50.7 )
PolyOne Distribution
     (9.7 )     (9.9 )     (10.0 )     (8.8 )     (38.4 )
Resin and Intermediates
     (1.1 )     (0.7 )     (1.2 )     (1.1 )     (4.1 )
Corporate and eliminations
     (3.4 )     (2.7 )     (2.7 )     (2.5 )     (11.3 )
 
                              
Selling and administrative
   $ (54.2 )   $ (54.9 )   $ (56.2 )   $ (56.6 )   $ (221.9 )
 
                              
 
                                        
Operating income (loss):
                                        
Global Specialty Engineered Materials
   $ 0.7     $ 3.5     $ 1.6     $ (1.7 )   $ 4.1  
Global Color, Additives and Inks
     5.6       2.5       1.9       (0.4 )     9.6  
 
                              
Specialty Platform
     6.3       6.0       3.5       (2.1 )     13.7  
Performance Products and Solutions
     16.7       24.0       14.5       7.9       63.1  
PolyOne Distribution
     6.2       5.1       4.3       3.6       19.2  
Resin and Intermediates
     36.3       29.0       27.9       9.7       102.9  
Corporate and eliminations
     (5.2 )     (2.0 )     (10.9 )     (3.9 )     (22.0 )
 
                              
Operating income (loss)
   $ 60.3     $ 62.1     $ 39.3     $ 15.2     $ 176.9  
 
                              
 
                                        
Effect of change in accounting principle on gross margin and operating income (loss):
                                        
Global Specialty Engineered Materials
   $ (0.3 )   $ 0.1     $ 0.2     $ (0.3 )   $ (0.3 )
Global Color, Additives and Inks
     1.1       (1.0 )     0.2       (0.4 )     (0.1 )
 
                              
Specialty Platform
     0.8       (0.9 )     0.4       (0.7 )     (0.4 )
Performance Products and Solutions
     (4.8 )     (0.9 )     0.5       (5.1 )     (10.3 )
PolyOne Distribution
     —       —       —       —       —  
Resin and Intermediates
     —       —       —       —       —  
Corporate and eliminations
     (3.7 )     0.3       2.0       (1.6 )     (3.0 )
 
                              
Effect of change in accounting principle on gross margin and operating income (loss)
   $ (7.7 )   $ (1.5 )   $ 2.9     $ (7.4 )   $ (13.7 )
 
                              
Specialty Platform consists of our two specialty businesses: Global Specialty Engineered Materials; and Global Color, Additives and Inks. We present Specialty Platform sales, gross margin, selling and administration, and operating income because management believes that this is useful information to investors in highlighting our collective progress in advancing our specialization strategy.

6

 

Exhibit 99.1 (continued)
Reconciliation of Non-GAAP Financial Measures, as Adjusted (Unaudited)
(In millions, except per share data)
Senior management uses gross margin before special items and operating income before special items to assess performance and allocate resources because senior management believes that these measures are useful in understanding current profitability levels and that current levels may serve as a base for future performance. In addition, operating income before the effect of special items is a component of various PolyOne annual and long-term employee incentive plans and is used in debt covenant computations. Below is a reconciliation of non-GAAP financial measures to the most directly comparable measures calculated and presented in accordance with GAAP.
Senior management uses net income before special items to assess performance and allocate resources because senior management believes that these measures are useful in understanding current profitability levels and that current levels may serve as a base for future performance. Below is a reconciliation of non-GAAP financial measures to the most directly comparable measures calculated and presented in accordance with GAAP.
                                         
    1Q09     2Q09     3Q09     4Q09     2009Y  
Reconciliation to Consolidated Statements of Operations
                                        
Sales
   $ 463.4     $ 496.5     $ 548.3     $ 552.5     $ 2,060.7  
 
                                        
Gross margin before special items
     62.1       85.2       98.0       89.1       334.4  
Special items in gross margin
     (11.3 )     (4.3 )     8.0       (4.6 )     (12.2 )
 
                              
Gross margin
   $ 50.8     $ 80.9     $ 106.0     $ 84.5     $ 322.2  
 
                              
 
                                        
Gross margin before special items as a percent of sales
     13.4 %     17.2 %     17.9 %     16.1 %     16.2 %
 
                                        
Operating income before special items
     5.5       18.5       27.4       24.3       75.7  
Special items in operating income
     (16.6 )     (4.6 )     27.5       (1.9 )     4.4  
 
                              
Operating income (loss)
   $ (11.1 )   $ 13.9     $ 54.9     $ 22.4     $ 80.1  
 
                              
 
                                        
Net income (loss)
   $ (17.7 )   $ (1.9 )   $ 48.3     $ 20.8     $ 49.5  
Special items (1), after tax
     10.5       3.1       (17.7 )     0.8       (3.3 )
Tax adjustments (2)
     (1.6 )     7.3       (18.0 )     (10.8 )     (23.1 )
 
                              
 
   $ (8.8 )   $ 8.5     $ 12.6     $ 10.8     $ 23.1  
 
                              
 
                                        
Earnings (loss) per share excluding special items and tax adjustments:
                                        
Basic
   $ (0.10 )   $ 0.09     $ 0.14     $ 0.12     $ 0.25  
Diluted
   $ (0.10 )   $ 0.09     $ 0.13     $ 0.11     $ 0.25  
                                         
    1Q08     2Q08     3Q08     4Q08     2008Y  
Reconciliation to Consolidated Statements of Operations
                                        
Sales
   $ 713.7     $ 748.1     $ 735.1     $ 541.8     $ 2,738.7  
 
                                        
Gross margin before special items
     87.8       95.0       93.9       60.2       336.9  
Special items in gross margin
     (1.6 )     (2.7 )     (21.9 )     (18.7 )     (44.9 )
 
                              
Gross margin
   $ 86.2     $ 92.3     $ 72.0     $ 41.5     $ 292.0  
 
                              
 
                                        
Gross margin before special items as a percent of sales
     12.3 %     12.7 %     12.8 %     11.1 %     12.3 %
 
                                        
Operating income before special items
     23.0       31.6       34.8       6.7       96.1  
Special items in operating income
     (1.6 )     (3.8 )     (26.7 )     (197.9 )     (230.0 )
 
                              
Operating income (loss)
   $ 21.4     $ 27.8     $ 8.1     $ (191.2 )   $ (133.9 )
 
                              
 
                                        
Net income (loss)
   $ 7.3     $ 11.2     $ (1.3 )   $ (277.4 )   $ (260.2 )
Special items (1), after tax
     1.0       2.5       17.7       185.0       206.2  
Tax adjustments (2)
     —       —       —       88.9       88.9  
 
                              
 
   $ 8.3     $ 13.7     $ 16.4     $ (3.5 )   $ 34.9  
 
                              
Basic and diluted earnings per share excluding special items and tax adjustments
   $ 0.09     $ 0.15     $ 0.18     $ (0.04 )   $ 0.38  
 
(1)   Special items is a non-GAAP financial measure. Special items include charges related to specific strategic initiatives or financial restructurings such as: consolidation of operations; employee separation costs resulting from personnel reduction programs, plant phaseout costs, executive separation agreements; asset impairments; environmental remediation costs, fines or penalties for facilities no longer owned or closed in prior years; gains and losses on the divestiture of operating businesses, joint ventures and equity investments; gains and losses on facility or property sales or disposals; results of litigation, fines or penalties, where such litigation (or action relating to the fines or penalties) arose prior to the commencement of the performance period; and the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results or the effect of adverse determinations by regulatory agencies relating to accounting principles or treatment.
 
(2)   Net tax (benefit) loss from one-time foreign and domestic income tax items and deferred income tax valuation allowance adjustments on deferred tax assets

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