Avient Announces Fourth Quarter and Full Year 2022 Results

Attachment 1

 Avient Corporation

Summary of Condensed Consolidated Statements of Income (Unaudited)

(In millions, except per share data)

Three Months Ended

December 31,

Year Ended

December 31,

2022

2021

2022

2021

Sales

$       790.4

$       807.1

$    3,396.9

$    3,315.5

Operating Income

0.4

50.2

243.3

279.7

Net (loss) income from continuing operations attributable to Avient
shareholders

(17.0)

11.2

82.8

151.8

Diluted (loss) earnings per share from continuing operations attributable
to Avient shareholders

$        (0.19)

$         0.12

$         0.90

$         1.65

Senior management uses comparisons of adjusted net income from continuing operations attributable to Avient shareholders and diluted
adjusted earnings per share (EPS) from continuing operations attributable to Avient shareholders, excluding special items, to assess
performance and facilitate comparability of results. Senior management believes these measures are useful to investors because they
allow for comparison to Avient's performance in prior periods without the effect of items that, by their nature, tend to obscure Avient's
operating results due to the potential variability across periods based on timing, frequency and magnitude. Non-GAAP financial measures
have limitations as analytical tools and should not be considered in isolation from, or solely as alternatives to, financial measures prepared
in accordance with GAAP. Below is a reconciliation of these non-GAAP financial measures to their most directly comparable financial
measures calculated and presented in accordance with GAAP. See Attachment 3 for a definition and summary of special items and
Attachment 7 for a summary of pro forma adjustments associated with the APM Acquisition.

Three Months Ended

December 31,

2022

2021

Reconciliation to Condensed Consolidated Statements of Income

$

EPS⁽¹⁾ 

$

EPS⁽¹⁾ 

Net (loss) income from continuing operations attributable to Avient shareholders 

$       (17.0)

$       (0.19)

$         11.2

$         0.12

Special items, after tax (Attachment 3)

38.3

0.42

23.9

0.26

Amortization expense, after-tax

14.6

0.16

11.3

0.12

Adjusted net income / EPS

$         35.9

$         0.39

$         46.4

$         0.50

⁽¹⁾ Per share amounts may not recalculate from figures presented herein due to rounding

Year Ended

December 31,

2022

2021

Reconciliation to Condensed Consolidated Statements of Income

$

EPS⁽¹⁾ 

$

EPS⁽¹⁾ 

Net income from continuing operations attributable to Avient shareholders

$         82.8

$         0.90

$       151.8

$         1.65

Special items, after tax (Attachment 3)

116.2

1.26

50.0

0.54

Amortization expense, after-tax

49.0

0.53

44.9

0.49

Adjusted net income / EPS

$       248.0

$         2.69

$       246.7

$         2.68

⁽¹⁾ Per share amounts may not recalculate from figures presented herein due to rounding

Attachment 2

Avient Corporation

Condensed Consolidated Statements of Income (Unaudited)

(In millions, except per share data)

Three Months Ended
December 31,

Year Ended

December 31,

2022

2021

2022

2021

Sales

$        790.4

$        807.1

$    3,396.9

$    3,315.5

Cost of sales

618.4

590.5

2,514.2

2,371.7

Gross margin

172.0

216.6

882.7

943.8

Selling and administrative expense

171.6

166.4

639.4

664.1

Operating income

0.4

50.2

243.3

279.7

Interest expense, net

(49.4)

(17.5)

(119.8)

(75.2)

Other expense, net

(28.4)

(5.3)

(59.7)

(1.0)

(Loss) income from continuing operations before income taxes

(77.4)

27.4

63.8

203.5

Income tax benefit (expense)

60.8

(17.1)

19.3

(51.9)

Net (loss) income from continuing operations

(16.6)

10.3

83.1

151.6

Income from discontinued operations, net of income taxes

561.5

18.7

620.3

79.0

Net income

544.9

29.0

703.4

230.6

Net (income) loss attributable to noncontrolling interests

(0.4)

0.9

(0.3)

0.2

Net income attributable to Avient common shareholders

$        544.5

$          29.9

$        703.1

$        230.8

Earnings per share attributable to Avient common shareholders - Basic:

Continuing operations

$        (0.19)

$          0.12

$          0.91

$          1.66

Discontinued operations

6.17

0.21

6.80

0.87

Total

$          5.98

$          0.33

$          7.71

$          2.53

Earnings per share attributable to Avient common shareholders - Diluted:

Continuing operations

$        (0.19)

$          0.12

$          0.90

$          1.65

Discontinued operations

6.17

0.20

6.73

0.86

Total

$          5.98

$          0.32

$          7.63

$          2.51

Cash dividends declared per share of common stock

$      0.2475

$      0.2375

$      0.9600

$      0.8750

Weighted-average shares used to compute earnings per common share:

Basic

91.0

91.5

91.2

91.4

Diluted

91.0

92.4

92.2

92.1

Attachment 3

Avient Corporation

Summary of Special Items (Unaudited)

(In millions, except per share data)

Special items ⁽¹⁾

Three Months Ended
December 31,

Year Ended

December 31,

2022

2021

2022

2021

Cost of sales:

Restructuring costs, including accelerated depreciation

$      (21.3)

$         (6.0)

$      (31.1)

$      (14.6)

Environmental remediation costs

(0.4)

(0.5)

(24.2)

(22.9)

Reimbursement of previously incurred environmental costs

—

—

8.3

4.5

Acquisition related costs

(23.8)

0.6

(34.1)

(0.6)

Impact on cost of sales

(45.5)

(5.9)

(81.1)

(33.6)

Selling and administrative expense:

Restructuring, legal and other

(8.3)

(4.2)

(8.3)

(5.9)

Acquisition related costs

(6.1)

(1.1)

(19.3)

(8.3)

Impact on selling and administrative expense

(14.4)

(5.3)

(27.6)

(14.2)

Impact on operating income

(59.9)

(11.2)

(108.7)

(47.8)

Interest expense, net - committed financing and debt extinguishment

(16.0)

—

(26.0)

—

Mark-to-market on derivatives

—

—

(30.9)

—

   Pension and post retirement mark-to-market adjustment and other

(28.4)

(9.3)

(28.4)

(9.3)

Impact on Other expense, net

(28.4)

(9.3)

(59.3)

(9.3)

Impact on income from continuing operations before income taxes

(104.3)

(20.5)

(194.0)

(57.1)

Income tax benefit benefit/(expense) on above special items

26.8

4.1

49.4

13.0

Tax adjustments⁽²⁾

39.2

(7.5)

28.4

(5.9)

Impact of special items on net income from continuing operations

$      (38.3)

$      (23.9)

$    (116.2)

$      (50.0)

Diluted earnings per common share impact

$      (0.42)

$      (0.26)

$      (1.26)

$      (0.54)

Weighted average shares used to compute adjusted earnings per share:

Diluted

91.7

92.4

92.2

92.1

⁽¹⁾

Special items include charges related to specific strategic initiatives or financial restructuring such as: consolidation of operations;
debt extinguishment costs; costs incurred directly in relation to acquisitions or divestitures; employee separation costs resulting
from personnel reduction programs, plant realignment costs, executive separation agreements; asset impairments; settlement
gains or losses and mark-to-market adjustments associated with actuarial gains and losses on pension and other post-retirement
benefit plans; environmental remediation costs, fines, penalties and related insurance recoveries related to 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; one-time, non-recurring items; and
the effect of changes in accounting principles or other such laws or provisions affecting reported results.

⁽²⁾

Tax adjustments include the net tax benefit/(expense) from non-recurring income tax items, adjustments to uncertain tax position
reserves and deferred income tax valuation allowances.

Attachment 4

Avient Corporation

Condensed Consolidated Balance Sheets (Unaudited)

(In millions)

Year Ended

December 31,

2022

2021

ASSETS

Current assets:

Cash and cash equivalents

$                             641.1

$                          601.2

Accounts receivable, net

440.6

439.9

Inventories, net

372.7

305.8

Current assets held for sale

—

360.2

Other current assets

115.3

119.9

Total current assets

1,569.7

1,827.0

Property, net

1,049.2

672.3

Goodwill

1,671.9

1,284.8

Intangible assets, net

1,597.6

925.2

Operating lease assets, net

60.4

58.2

Non-current assets held for sale

—

22.0

Other non-current assets

136.2

207.7

Total assets

$                         6,085.0

$                       4,997.2

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term and current portion of long-term debt

$                                 2.2

$                               8.6

Accounts payable

454.4

429.5

Current operating lease obligations

17.0

21.1

Current liabilities held for sale

—

141.3

Accrued expenses and other current liabilities

395.8

340.2

Total current liabilities

869.4

940.7

Non-current liabilities:

Long-term debt

2,176.7

1,850.3

Pension and other post-retirement benefits

67.2

99.9

Deferred income taxes

342.5

100.6

Non-current operating lease obligations

40.9

37.3

Non-current liabilities held for sale

—

13.1

Other non-current liabilities

235.5

164.8

Total non-current liabilities

2,862.8

2,266.0

SHAREHOLDERS' EQUITY

Avient shareholders' equity

2,334.5

1,774.7

Noncontrolling interest

18.3

15.8

Total equity

2,352.8

1,790.5

Total liabilities and equity

$                         6,085.0

$                       4,997.2

Attachment 5

Avient Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)

Year Ended

December 31,

2022

2021

Operating activities

Net income

$              703.4

$              230.6

Adjustments to reconcile net income to net cash provided by operating activities:

Gain on sale of business, net of tax expense

(550.1)

—

Depreciation and amortization

157.6

144.2

Accelerated depreciation

5.5

1.7

Amortization of inventory step-up

34.4

1.5

Deferred income tax expense (benefit)

0.5

(27.3)

Share-based compensation expense

13.2

11.2

Changes in assets and liabilities, net of the effect of acquisitions:

Decrease (increase) in accounts receivable

32.6

(143.1)

Decrease (increase) in inventories

14.0

(141.0)

Increase in accounts payable

10.7

95.3

Increase (decrease) in pension and other post-retirement benefits

7.1

(10.9)

Taxes paid on gain on divestiture

(2.8)

—

(Decrease) increase in accrued expenses and other assets and liabilities, net

(27.7)

71.6

Net cash provided by operating activities

398.4

233.8

Investing activities

Capital expenditures

(105.5)

(100.6)

Business acquisitions, net of cash acquired

(1,426.1)

(47.6)

Settlement of foreign exchange derivatives

93.3

—

Proceeds from divestiture

928.2

—

Other investing activities

6.1

(2.0)

Net cash used by investing activities

(504.0)

(150.2)

Financing activities

Debt offering proceeds

1,300.0

—

Purchase of common shares for treasury

(36.4)

(4.2)

Cash dividends paid

(86.8)

(77.7)

Repayment of long-term debt

(956.8)

(18.5)

Payments on withholding tax on share awards

(4.3)

(10.7)

Debt financing costs

(49.3)

—

Other financing activities

—

(3.5)

Net cash provided (used) by financing activities

166.4

(114.6)

Effect of exchange rate changes on cash

(20.9)

(17.3)

Increase (decrease) in cash and cash equivalents

39.9

(48.3)

Cash and cash equivalents at beginning of year

601.2

649.5

Cash and cash equivalents at end of year

$              641.1

$              601.2

Attachment 6

Avient Corporation

Business Segment Operations (Unaudited)

(In millions)

Operating income at the segment level does not include: special items as defined in Attachment 3; 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.

Three Months Ended
December 31,

Year Ended

December 31,

2022

2021

2022

2021

Sales:

   Color, Additives and Inks

$               490.8

$               581.3

$            2,355.0

$            2,401.6

   Specialty Engineered Materials

300.8

226.3

1,044.4

911.6

   Corporate

(1.2)

(0.5)

(2.5)

2.3

      Sales

$               790.4

$               807.1

$            3,396.9

$            3,315.5

Gross margin:

   Color, Additives and Inks

$               134.5

$               164.5

$               681.3

$               727.5

   Specialty Engineered Materials

82.4

58.3

283.7

250.9

   Corporate

(44.9)

(6.2)

(82.3)

(34.6)

      Gross margin

$               172.0

$               216.6

$               882.7

$               943.8

Selling and administrative expense:

   Color, Additives and Inks

$                 90.2

$               103.3

$               380.3

$               424.4

   Specialty Engineered Materials

47.2

31.2

143.6

125.4

   Corporate

34.2

31.9

115.5

114.3

      Selling and administrative expense

$               171.6

$               166.4

$               639.4

$               664.1

Operating income:

   Color, Additives and Inks

$                 44.3

$                 61.2

$               301.0

$               303.1

   Specialty Engineered Materials

35.2

27.1

140.1

125.5

   Corporate

(79.1)

(38.1)

(197.8)

(148.9)

      Operating income

$                    0.4

$                 50.2

$               243.3

$               279.7

Attachment 7

Avient Corporation

Reconciliation of Non-GAAP Financial Measures (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 how it may serve as a basis for future performance. In addition, operating income before the effect of special items is
a component of Avient annual and long-term employee incentive plans and is used in debt covenant computations. Senior
management believes these measures are useful to investors because they allow for comparison to Avient's performance in prior
periods without the effect of items that, by their nature, tend to obscure Avient's operating results due to the potential variability
across periods based on timing, frequency and magnitude. Non-GAAP financial measures have limitations as analytical tools and
should not be considered in isolation from, or solely as alternatives to, financial measures prepared in accordance with GAAP.
Below is a reconciliation of these non-GAAP financial measures to their most directly comparable financial measures calculated
and presented in accordance with GAAP. See Attachment 3 for a definition and summary of special items.

Three Months Ended
December 31,

Year Ended

December 31,

Reconciliation to Consolidated Statements of Income

2022

2021

2022

2021

Sales

$      790.4

$      807.1

$   3,396.9

$   3,315.5

Gross margin - GAAP

172.0

216.6

882.7

943.8

Special items in gross margin (Attachment 3)

45.5

5.9

81.1

33.6

Adjusted Gross margin

$      217.5

$      222.5

$      963.8

$      977.4

Adjusted Gross margin as a percent of sales

27.5 %

27.6 %

28.4 %

29.5 %

Operating income - GAAP

0.4

50.2

243.3

279.7

Special items in operating income (Attachment 3)

59.9

11.2

108.7

47.8

Adjusted Operating income

$         60.3

$         61.4

$      352.0

$      327.5

Adjusted Operating income as a percent of sales

7.6 %

7.6 %

10.4 %

9.9 %

The table below reconciles pre-special income tax expense and the pre-special effective tax rate to their most comparable US
GAAP figures.

Three Months Ended

December 31,

2022

2021

GAAP
Results

Special
Items

Adjusted
Results

GAAP
Results

Special
Items

Adjusted
Results

(Loss) income from continuing operations before income 
taxes

$  (77.4)

$   104.3

$   26.9

$   27.4

$       20.5

$   47.9

Income tax benefit (expense) - GAAP

60.8

—

60.8

(17.1)

—

(17.1)

Income tax impact of special items (Attachment 3)

—

(26.8)

(26.8)

—

(4.1)

(4.1)

Tax adjustments (Attachment 3)

—

(39.2)

(39.2)

—

7.5

7.5

Income tax benefit (expense)

$  60.8

$    (66.0)

$    (5.2)

$ (17.1)

$         3.4

$ (13.7)

Effective Tax Rate⁽¹⁾

78.5 %

19.6 %

62.4 %

28.6 %

⁽¹⁾ Rates may not recalculate from figures presented herein due to rounding

Year Ended

December 31,

2022

2021

GAAP
Results

Special
Items

Adjusted
Results

GAAP
Results

Special
Items

Adjusted
Results

Income from continuing operations before income 
taxes

$  63.8

$   194.0

$ 257.8

$ 203.5

$       57.1

$ 260.6

Income tax benefit (expense) - GAAP

19.3

—

19.3

(51.9)

—

(51.9)

Income tax impact of special items (Attachment 3)

—

(49.4)

(49.4)

—

(13.0)

(13.0)

Tax adjustments (Attachment 3)

—

(28.4)

(28.4)

—

5.9

5.9

Income tax expense

$  19.3

$    (77.8)

$ (58.5)

$ (51.9)

$       (7.1)

$ (59.0)

Effective Tax Rate⁽¹⁾

(30.2) %

22.7 %

25.5 %

22.7 %

⁽¹⁾ Rates may not recalculate from figures presented herein due to rounding

Three Months Ended

Year Ended

Reconciliation of Pro Forma Adjusted Earnings per Share

December 31, 2022

Net (loss) income from continuing operations attributable to Avient shareholders

$                            (17.0)

$                          82.8

Special items, after tax (Attachment 3)

38.3

116.2

Amortization expense, after-tax (Attachment 1)

14.6

49.0

Adjusted net income from continuing operations excluding special items

35.9

248.0

APM pro forma adjustments to net income from continuing operations*

2.5

13.6

APM amortization expense, after tax*

—

19.1

Pro forma adjusted net income from continuing operations attributable to Avient
shareholders

$                             38.4

$                        280.7

Weighted average diluted shares

91.7

92.2

Pro forma adjusted EPS - excluding special items

$                             0.42

$                          3.04

* Pro forma adjustment for January - August 2022 APM results (period before Avient ownership) including the impacts of debt
financing and prepayments on net income from continuing operations.

Reconciliation of Pro Forma Net Debt

December 31,
2022

Short-term and current portion of long term debt

$                             2.2

Total long-term debt, net

2,176.7

Unamortized discount and debt issuance cost

37.4

Total debt

$                      2,216.3

Cash

(641.1)

Net taxes due from sale of business

105.0

Adjusted cash

$                       (536.1)

Net debt

$                     1,680.2

Free Cash Flow Calculation

December 31,
2022 

Cash provided by operating activities

398.4

Capital expenditures

(105.5)

Free cash flow

$                         292.9

Reconciliation to EBITDA and Adjusted EBITDA

Year Ended

December 31, 2022

Net (loss) income from continuing operations – GAAP

$                           83.1

Income tax (benefit) expense

(19.3)

Interest expense

119.8

Depreciation and amortization from continuing operations

162.5

EBITDA

$                         346.1

Special items, before income tax

194.0

Interest expense included in special items

(26.0)

Depreciation and amortization included in special items

(5.5)

APM pro forma adjustments - 8 months 2022*

83.1

Adjusted EBITDA 

$                         591.7

* Pro forma adjustment for January - August 2022 APM results (period before Avient ownership).