SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

9 Months Ended

Sep. 30, 2019

Supplemental Guarantor Financial Information [Abstract]

SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

NOTE 23. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

In October 2015, Blue Cube Spinco LLC (the Issuer) issued $720.0 million aggregate principal amount of 9.75% senior notes due October 15, 2023 (2023 Notes) and $500.0 million aggregate principal amount of 10.00% senior notes due October 15, 2025 (2025 Notes and, together with the 2023 Notes, the Notes). During 2016, the Notes were registered under the Securities Act of 1933, as amended. The Issuer was formed on March 13, 2015 as a wholly owned subsidiary of Dow and upon closing of the Acquisition became a 100% owned subsidiary of Olin (the Parent Guarantor). The Notes are fully and unconditionally guaranteed by the Parent Guarantor.

The following condensed consolidating financial information presents the condensed consolidating balance sheets as of September 30, 2019, December 31, 2018 and September 30, 2018, the related condensed consolidating statements of operations and comprehensive income (loss) for each of the three and nine months ended September 30, 2019 and 2018 and the related condensed consolidating statements of cash flows for the nine months ended September 30, 2019 and 2018 of (a) the Parent Guarantor, (b) the Issuer, (c) the non-guarantor subsidiaries, (d) elimination entries necessary to consolidate the Parent Guarantor with the Issuer and the non-guarantor subsidiaries and (e) Olin on a consolidated basis. Investments in consolidated subsidiaries are presented under the equity method of accounting.

CONDENSED CONSOLIDATING BALANCE SHEETS
September 30, 2019
(In millions)
(Unaudited)
	Parent Guarantor			Issuer		Subsidiary Non-Guarantor			Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	19.0		$	—	$	158.4		$	—		$	177.4
Receivables, net	43.4			—		807.6			(1.1		)	849.9
Intercompany receivables	—			—		2,734.8			(2,734.8		)	—
Income taxes receivable	13.4			—		5.7			(1.6		)	17.5
Inventories, net	162.1			—		538.6			—			700.7
Other current assets	222.9			—		4.1			(202.9		)	24.1
Total current assets	460.8			—		4,249.2			(2,940.4		)	1,769.6
Property, plant and equipment, net	688.8			—		2,678.2			—			3,367.0
Operating lease assets, net	47.8			—		266.8			—			314.6
Investment in subsidiaries	7,144.2			4,400.8		—			(11,545.0		)	—
Deferred income taxes	—			—		31.3			(1.0		)	30.3
Other assets	17.3			—		1,152.8			—			1,170.1
Long-term receivables—affiliates	73.4			627.0		—			(700.4		)	—
Intangible assets, net	0.3			—		461.6			—			461.9
Goodwill	—			966.3		1,152.8			—			2,119.1
Total assets	$	8,432.6		$	5,994.1	$	9,992.7		$	(15,186.8	)	$	9,232.6
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt	$	1.1		$	—	$	—		$	—		$	1.1
Accounts payable	—			—		649.8			(2.1		)	647.7
Intercompany payables	2,734.8			—		—			(2,734.8		)	—
Income taxes payable	—			—		11.4			(1.6		)	9.8
Current operating lease liabilities	7.9			—		63.3			—			71.2
Accrued liabilities	205.9			—		341.5			(200.0		)	347.4
Total current liabilities	2,949.7			—		1,066.0			(2,938.5		)	1,077.2
Long-term debt	2,135.1			1,203.9		—			—			3,339.0
Operating lease liabilities	41.1			—		207.1			—			248.2
Accrued pension liability	390.2			—		232.2			—			622.4
Deferred income taxes	2.6			7.1		506.8			(1.0		)	515.5
Long-term payables—affiliates	—			—		700.4			(700.4		)	—
Other liabilities	249.2			5.6		510.8			—			765.6
Total liabilities	5,767.9			1,216.6		3,223.3			(3,639.9		)	6,567.9
Commitments and contingencies
Shareholders’ equity:
Common stock	159.7			—		14.6			(14.6		)	159.7
Additional paid-in capital	2,128.6			4,125.7		4,808.2			(8,933.9		)	2,128.6
Accumulated other comprehensive loss	(672.7		)	—		(7.0		)	7.0			(672.7		)
Retained earnings	1,049.1			651.8		1,953.6			(2,605.4		)	1,049.1
Total shareholders’ equity	2,664.7			4,777.5		6,769.4			(11,546.9		)	2,664.7
Total liabilities and shareholders’ equity	$	8,432.6		$	5,994.1	$	9,992.7		$	(15,186.8	)	$	9,232.6

CONDENSED CONSOLIDATING BALANCE SHEETS
December 31, 2018
(In millions)
(Unaudited)
	Parent Guarantor			Issuer		Subsidiary Non-Guarantor			Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	92.0		$	—	$	86.8		$	—		$	178.8
Receivables, net	99.7			—		676.6			—			776.3
Intercompany receivables	—			—		2,558.2			(2,558.2		)	—
Income taxes receivable	2.6			—		3.3			—			5.9
Inventories, net	161.4			—		550.0			—			711.4
Other current assets	220.2			—		1.8			(187.0		)	35.0
Total current assets	575.9			—		3,876.7			(2,745.2		)	1,707.4
Property, plant and equipment, net	651.4			—		2,830.7			—			3,482.1
Investment in subsidiaries	6,943.3			4,286.9		—			(11,230.2		)	—
Deferred income taxes	7.3			—		27.4			(8.4		)	26.3
Other assets	24.3			—		1,126.1			—			1,150.4
Long-term receivables—affiliates	—			1,247.2		—			(1,247.2		)	—
Intangible assets, net	0.3			—		511.3			—			511.6
Goodwill	—			966.3		1,153.3			—			2,119.6
Total assets	$	8,202.5		$	6,500.4	$	9,525.5		$	(15,231.0	)	$	8,997.4
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt	$	0.9		$	—	$	125.0		$	—		$	125.9
Accounts payable	90.1			—		549.4			(3.0		)	636.5
Intercompany payables	2,558.2			—		—			(2,558.2		)	—
Income taxes payable	3.9			—		18.7			—			22.6
Accrued liabilities	150.3			—		367.5			(184.5		)	333.3
Total current liabilities	2,803.4			—		1,060.6			(2,745.7		)	1,118.3
Long-term debt	1,357.5			1,746.9		—			—			3,104.4
Accrued pension liability	439.1			—		235.2			—			674.3
Deferred income taxes	—			6.0		521.3			(8.4		)	518.9
Long-term payables—affiliates	469.6			—		777.6			(1,247.2		)	—
Other liabilities	300.7			5.5		443.1			—			749.3
Total liabilities	5,370.3			1,758.4		3,037.8			(4,001.3		)	6,165.2
Commitments and contingencies
Shareholders’ equity:
Common stock	165.3			—		14.6			(14.6		)	165.3
Additional paid-in capital	2,247.4			4,125.7		4,808.2			(8,933.9		)	2,247.4
Accumulated other comprehensive loss	(651.0		)	—		(6.9		)	6.9			(651.0		)
Retained earnings	1,070.5			616.3		1,671.8			(2,288.1		)	1,070.5
Total shareholders’ equity	2,832.2			4,742.0		6,487.7			(11,229.7		)	2,832.2
Total liabilities and shareholders’ equity	$	8,202.5		$	6,500.4	$	9,525.5		$	(15,231.0	)	$	8,997.4

CONDENSED CONSOLIDATING BALANCE SHEETS
September 30, 2018
(In millions)
(Unaudited)
	Parent Guarantor			Issuer		Subsidiary Non-Guarantor			Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	23.1		$	—	$	133.6		$	—		$	156.7
Receivables, net	227.8			—		781.4			—			1,009.2
Intercompany receivables	—			—		2,402.8			(2,402.8		)	—
Income taxes receivable	10.0			—		2.8			—			12.8
Inventories, net	171.2			—		553.2			—			724.4
Other current assets	211.9			—		3.6			(180.3		)	35.2
Total current assets	644.0			—		3,877.4			(2,583.1		)	1,938.3
Property, plant and equipment, net	597.6			—		2,859.1			—			3,456.7
Investment in subsidiaries	6,862.8			4,192.8		—			(11,055.6		)	—
Deferred income taxes	—			1.0		31.1			(7.3		)	24.8
Other assets	23.6			—		1,136.0			—			1,159.6
Long-term receivables—affiliates	—			1,336.2		—			(1,336.2		)	—
Intangible assets, net	0.3			—		528.0			—			528.3
Goodwill	—			966.3		1,153.3			—			2,119.6
Total assets	$	8,128.3		$	6,496.3	$	9,584.9		$	(14,982.2	)	$	9,227.3
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt	$	0.9		$	—	$	—		$	—		$	0.9
Accounts payable	72.3			—		640.9			(3.8		)	709.4
Intercompany payables	2,402.8			—		—			(2,402.8		)	—
Income taxes payable	0.4			—		21.7			—			22.1
Accrued liabilities	157.5			—		361.7			(177.9		)	341.3
Total current liabilities	2,633.9			—		1,024.3			(2,584.5		)	1,073.7
Long-term debt	1,347.6			1,808.8		180.0			—			3,336.4
Accrued pension liability	360.7			—		228.9			—			589.6
Deferred income taxes	16.1			4.1		535.7			(7.3		)	548.6
Long-term payables—affiliates	536.6			—		799.6			(1,336.2		)	—
Other liabilities	310.5			5.5		440.1			—			756.1
Total liabilities	5,205.4			1,818.4		3,208.6			(3,928.0		)	6,304.4
Commitments and contingencies
Shareholders’ equity:
Common stock	166.8			—		14.6			(14.6		)	166.8
Additional paid-in capital	2,276.9			4,125.7		4,808.2			(8,933.9		)	2,276.9
Accumulated other comprehensive loss	(571.3		)	—		(6.3		)	6.3			(571.3		)
Retained earnings	1,050.5			552.2		1,559.8			(2,112.0		)	1,050.5
Total shareholders’ equity	2,922.9			4,677.9		6,376.3			(11,054.2		)	2,922.9
Total liabilities and shareholders’ equity	$	8,128.3		$	6,496.3	$	9,584.9		$	(14,982.2	)	$	9,227.3

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
Three Months Ended September 30, 2019
(In millions)
(Unaudited)
	Parent Guarantor			Issuer			Subsidiary Non-Guarantor			Eliminations			Total
Sales	$	348.0		$	—		$	1,363.4		$	(134.8	)	$	1,576.6
Operating expenses:
Cost of goods sold	328.6			—			1,163.8			(134.8		)	1,357.6
Selling and administration	58.2			—			52.6			—			110.8
Restructuring charges	—			—			4.9			—			4.9
Other operating income	0.1			—			—			—			0.1
Operating (loss) income	(38.7		)	—			142.1			—			103.4
Equity income in subsidiaries	81.6			69.9			—			(151.5		)	—
Interest expense	30.1			31.5			4.1			(1.8		)	63.9
Interest income	1.1			—			0.9			(1.8		)	0.2
Non-operating pension income (expense)	5.5			—			(1.4		)	—			4.1
Income before taxes	19.4			38.4			137.5			(151.5		)	43.8
Income tax (benefit) provision	(24.8		)	(7.5		)	31.9			—			(0.4		)
Net income	$	44.2		$	45.9		$	105.6		$	(151.5	)	$	44.2

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
Nine Months Ended September 30, 2019
(In millions)
(Unaudited)
	Parent Guarantor			Issuer			Subsidiary Non-Guarantor			Eliminations			Total
Sales	$	1,004.8		$	—		$	4,088.4		$	(370.3	)	$	4,722.9
Operating expenses:
Cost of goods sold	942.5			—			3,596.4			(370.3		)	4,168.6
Selling and administration	157.8			—			157.0			—			314.8
Restructuring charges	1.4			—			11.3			—			12.7
Other operating (expense) income	(4.3		)	—			4.6			—			0.3
Operating (loss) income	(101.2		)	—			328.3			—			227.1
Equity income in subsidiaries	155.1			113.9			—			(269.0		)	—
Interest expense	65.8			103.3			15.8			(5.7		)	179.2
Interest income	3.7			—			2.7			(5.7		)	0.7
Non-operating pension income (expense)	16.6			—			(4.4		)	—			12.2
Other income	11.2						—						11.2
Income before taxes	19.6			10.6			310.8			(269.0		)	72.0
Income tax (benefit) provision	(46.3		)	(24.9		)	77.3			—			6.1
Net income	$	65.9		$	35.5		$	233.5		$	(269.0	)	$	65.9

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
Three Months Ended September 30, 2018
(In millions)
(Unaudited)
	Parent Guarantor			Issuer			Subsidiary Non-Guarantor			Eliminations			Total
Sales	$	360.9		$	—		$	1,621.7		$	(110.2	)	$	1,872.4
Operating expenses:
Cost of goods sold	208.3			—			1,343.6			(110.2		)	1,441.7
Selling and administration	51.4			—			59.4			—			110.8
Restructuring charges	—			—			3.3			—			3.3
Acquisition-related costs	0.4			—			—			—			0.4
Other operating (expense) income	(3.5		)	—			1.8			—			(1.7		)
Operating income	97.3			—			217.2			—			314.5
Earnings of non-consolidated affiliates	0.4			—			—			—			0.4
Equity income in subsidiaries	122.2			85.2			—			(207.4		)	—
Interest expense	17.3			37.3			6.1			(1.5		)	59.2
Interest income	1.8			—			—			(1.5		)	0.3
Non-operating pension income (expense)	6.5			—			(1.1		)	—			5.4
Income before taxes	210.9			47.9			210.0			(207.4		)	261.4
Income tax provision (benefit)	15.8			(9.1		)	59.6			—			66.3
Net income	$	195.1		$	57.0		$	150.4		$	(207.4	)	$	195.1

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
Nine Months Ended September 30, 2018
(In millions)
(Unaudited)
	Parent Guarantor			Issuer			Subsidiary Non-Guarantor			Eliminations			Total
Sales	$	1,083.1		$	—		$	4,554.6		$	(326.6	)	$	5,311.1
Operating expenses:
Cost of goods sold	853.2			—			3,904.5			(326.6		)	4,431.1
Selling and administration	151.7			—			169.9			—			321.6
Restructuring charges	—			—			13.7			—			13.7
Acquisition-related costs	1.0			—			—			—			1.0
Other operating (expense) income	(0.9		)	—			7.3			—			6.4
Operating income	76.3			—			473.8			—			550.1
Losses of non-consolidated affiliates	(20.2		)	—			—			—			(20.2		)
Equity income in subsidiaries	249.1			195.5			—			(444.6		)	—
Interest expense	52.4			116.4			19.6			(4.4		)	184.0
Interest income	4.7			—			0.8			(4.4		)	1.1
Non-operating pension income (expense)	19.9			—			(3.7		)	—			16.2
Income before taxes	277.4			79.1			451.3			(444.6		)	363.2
Income tax provision (benefit)	2.8			(28.2		)	114.0			—			88.6
Net income	$	274.6		$	107.3		$	337.3		$	(444.6	)	$	274.6

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Three Months Ended September 30, 2019
(In millions)
(Unaudited)
	Parent Guarantor			Issuer		Subsidiary Non-Guarantor			Eliminations			Total
Net income	$	44.2		$	45.9	$	105.6		$	(151.5	)	$	44.2
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net	—			—		(15.7		)	—			(15.7		)
Unrealized losses on derivative contracts, net	(2.5		)	—		—			—			(2.5		)
Amortization of prior service costs and actuarial losses, net	4.9			—		1.0			—			5.9
Total other comprehensive income (loss), net of tax	2.4			—		(14.7		)	—			(12.3		)
Comprehensive income	$	46.6		$	45.9	$	90.9		$	(151.5	)	$	31.9

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Nine Months Ended September 30, 2019
(In millions)
(Unaudited)
	Parent Guarantor			Issuer		Subsidiary Non-Guarantor			Eliminations			Total
Net income	$	65.9		$	35.5	$	233.5		$	(269.0	)	$	65.9
Other comprehensive loss, net of tax:
Foreign currency translation adjustments, net	—			—		(20.7		)	—			(20.7		)
Unrealized losses on derivative contracts, net	(17.9		)	—		—			—			(17.9		)
Amortization of prior service costs and actuarial losses, net	14.8			—		2.1			—			16.9
Total other comprehensive loss, net of tax	(3.1		)	—		(18.6		)	—			(21.7		)
Comprehensive income	$	62.8		$	35.5	$	214.9		$	(269.0	)	$	44.2

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Three Months Ended September 30, 2018
(In millions)
(Unaudited)
	Parent Guarantor			Issuer		Subsidiary Non-Guarantor			Eliminations			Total
Net income	$	195.1		$	57.0	$	150.4		$	(207.4	)	$	195.1
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net	—			—		(2.0		)	—			(2.0		)
Unrealized losses on derivative contracts, net	(3.6		)	—		—			—			(3.6		)
Amortization of prior service costs and actuarial losses, net	6.6			—		0.9			—			7.5
Total other comprehensive income (loss), net of tax	3.0			—		(1.1		)	—			1.9
Comprehensive income	$	198.1		$	57.0	$	149.3		$	(207.4	)	$	197.0

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Nine Months Ended September 30, 2018
(In millions)
(Unaudited)
	Parent Guarantor			Issuer		Subsidiary Non-Guarantor			Eliminations			Total
Net income	$	274.6		$	107.3	$	337.3		$	(444.6	)	$	274.6
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net	—			—		(15.7		)	—			(15.7		)
Unrealized losses on derivative contracts, net	(6.1		)	—		—			—			(6.1		)
Amortization of prior service costs and actuarial losses, net	19.7			—		1.3			—			21.0
Total other comprehensive income (loss), net of tax	13.6			—		(14.4		)	—			(0.8		)
Comprehensive income	$	288.2		$	107.3	$	322.9		$	(444.6	)	$	273.8

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2019
(In millions)
(Unaudited)
	Parent Guarantor			Issuer			Subsidiary Non-Guarantor			Eliminations		Total
Net operating activities	$	63.5		$	—		$	353.1		$	—	$	416.6
Investing Activities
Capital expenditures	(115.4		)	—			(156.4		)	—		(271.8		)
Proceeds from disposition of non-consolidated affiliate	20.0			—			—			—		20.0
Net investing activities	(95.4		)	—			(156.4		)	—		(251.8		)
Financing Activities
Long-term debt:
Borrowings	800.0			—			25.0			—		825.0
Repayments	(51.1		)	(543.0		)	(150.0		)	—		(744.1		)
Common stock repurchased and retired	(135.6		)	—			—			—		(135.6		)
Stock options exercised	1.5			—			—			—		1.5
Dividends paid	(98.5		)	—			—			—		(98.5		)
Debt issuance costs	(14.4		)	—			—			—		(14.4		)
Intercompany financing activities	(543.0		)	543.0			—			—		—
Net financing activities	(41.1		)	—			(125.0		)	—		(166.1		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(0.1		)	—		(0.1		)
Net (decrease) increase in cash and cash equivalents	(73.0		)	—			71.6			—		(1.4		)
Cash and cash equivalents, beginning of period	92.0			—			86.8			—		178.8
Cash and cash equivalents, end of period	$	19.0		$	—		$	158.4		$	—	$	177.4

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2018
(In millions)
(Unaudited)
	Parent Guarantor			Issuer			Subsidiary Non-Guarantor			Eliminations			Total
Net operating activities	$	287.9		$	—		$	298.4		$	—		$	586.3
Investing Activities
Capital expenditures	(110.5		)	—			(164.0		)	—			(274.5		)
Proceeds from disposition of property, plant and equipment	—			—			2.9			—			2.9
Distributions from consolidated subsidiaries, net	95.0			95.0			—			(190.0		)	—
Net investing activities	(15.5		)	95.0			(161.1		)	(190.0		)	(271.6		)
Financing Activities
Long-term debt:
Borrowings	550.0			—			20.0			—			570.0
Repayments	(20.6		)	(713.4		)	(89.7		)	—			(823.7		)
Common stock repurchased and retired	(16.8		)	—			—			—			(16.8		)
Stock options exercised	3.2			—			—			—			3.2
Dividends paid	(100.3		)	(95.0		)	(95.0		)	190.0			(100.3		)
Debt issuance costs	(8.5		)	—			—			—			(8.5		)
Intercompany financing activities	(713.4		)	713.4			—			—			—
Net financing activities	(306.4		)	(95.0		)	(164.7		)	190.0			(376.1		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(0.3		)	—			(0.3		)
Net decrease in cash and cash equivalents	(34.0		)	—			(27.7		)	—			(61.7		)
Cash and cash equivalents, beginning of period	57.1			—			161.3			—			218.4
Cash and cash equivalents, end of period	$	23.1		$	—		$	133.6		$	—		$	156.7