FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Financial Statements Page Management’s Report 41 Reports of Independent Registered Public Accounting Firm 42-43 Consolidated Financial Statements: Consolidated Statements of Income 44 Consolidated Statements of Comprehensive Income 45 Consolidated Balance Sheets 46 Consolidated Statements of Cash Flows 47 Consolidated Statements of Shareholders’ Equity 48 Notes to Consolidated Financial Statements 49-80 40 POLYONE CORPORATION MANAGEMENT’S REPORT The management of PolyOne Corporation is responsible for preparing the consolidated financial statements and disclosures included in this Annual Report on Form 10-K. s/ Ernst & Young LLP Cleveland, Ohio POLYONE CORPORATION 43 Consolidated Statements of Income (In millions, except per share data) 2013 2012 2011 Sales $ 3,771.2 $ 2,860.8 $ 2,709.4 Cost of sales 3,109.0 2,329.7 2,280.1 Gross margin 662.2 531.1 429.3 Selling and administrative expense 457.6 417.0 378.3 Income related to previously owned equity affiliates 26.9 23.4 152.0 Operating income 231.5 137.5 203.0 Interest expense, net (63.5) (50.8) (33.7) Debt extinguishment costs (15.8) — (0.9) Other (expense) income, net (1.2) (3.4) 0.5 Income from continuing operations, before income taxes 151.0 83.3 168.9 Income tax expense (58.1) (30.1) (15.5) Net income from continuing operations 92.9 53.2 153.4 Income from discontinued operations, net of income taxes 149.8 18.6 19.2 Net income 242.7 71.8 172.6 Net loss attributable to noncontrolling interests 1.1 0.1 — Net income attributable to PolyOne common shareholders $ 243.8 $ 71.9 $ 172.6 Earnings per share attributable to PolyOne common shareholders — basic: Continuing operations $ 0.98 $ 0.60 $ 1.66 Discontinued operations 1.57 0.21 0.21 Total $ 2.55 $ 0.81 $ 1.87 Earnings per share attributable to PolyOne common shareholders — diluted: Continuing operations $ 0.97 $ 0.59 $ 1.63 Discontinued operations 1.56 0.21 0.21 Total $ 2.53 $ 0.80 $ 1.84 Cash dividends declared per common share $ 0.26 $ 0.20 $ 0.16 Weighted-average number of common shares outstanding: Basic 95.5 89.1 92.2 Diluted 96.5 89.8 94.3 44 POLYONE CORPORATION Consolidated Statements of Comprehensive Income Net income $ 242.7 $ 71.8 $ 172.6 Other comprehensive loss: Translation adjustments (3.7) 1.1 (9.0) Amortization of prior service credits, net of tax of $6.5 - 2012 and $6.5 - 2011 — (10.9) (10.8) Total other comprehensive loss (3.7) (9.8) (19.8) Total comprehensive income 239.0 62.0 152.8 Comprehensive loss attributable to noncontrolling interests 1.1 0.1 — Comprehensive income attributable to PolyOne common shareholders $ 240.1 $ 62.1 $ 152.8 POLYONE CORPORATION 45 Consolidated Balance Sheets ASSETS Current assets: Cash and cash equivalents $ 365.2 $ 210.0 Accounts receivable, net 428.0 313.9 Inventories, net 342.5 244.4 Assets held-for-sale — 39.3 Other current assets 117.9 81.1 Total current assets 1,253.6 888.7 Property, net 646.2 385.8 Goodwill 559.0 405.5 Intangible assets, net 365.8 340.0 Other non-current assets 119.5 108.0 Total assets $ 2,944.1 $ 2,128.0 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term and current portion of long-term debt $ 12.7 $ 3.8 Accounts payable 386.9 296.1 Liabilities held-for-sale — 18.0 Accrued expenses and other liabilities 209.3 141.9 Total current liabilities 608.9 459.8 Long-term debt 976.2 703.1 Post-retirement benefits other than pensions 14.7 17.0 Pension benefits 62.6 182.8 Deferred income taxes 133.8 31.8 Other non-current liabilities 169.4 102.1 Total non-current liabilities 1,356.7 1,036.8 Shareholders’ equity Preferred stock, 40.0 shares authorized, no shares issued — — Common Shares, $0.01 par, 400.0 shares authorized, 122.2 shares issued 1.2 1.2 Additional paid-in capital 1,149.8 1,016.1 Retained earnings (deficit) 211.6 (13.0) Common shares held in treasury, at cost, 27.1 shares in 2013 and 32.7 shares in 2012 (371.0) (364.1) Accumulated other comprehensive loss (14.8) (11.1) Total PolyOne shareholders’ equity 976.8 629.1 Noncontrolling interest 1.7 2.3 Total equity 978.5 631.4 Total liabilities and equity $ 2,944.1 $ 2,128.0 46 POLYONE CORPORATION Consolidated Statements of Cash Flows Operating activities Net income $ 242.7 $ 71.8 $ 172.6 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 109.8 69.8 57.5 Deferred income tax provision 12.9 13.4 3.6 Debt extinguishment costs 15.8 — 0.9 Provision for doubtful accounts 0.2 0.3 2.0 Stock compensation expense 16.5 10.4 5.4 Gain on sale of business (223.7) — — Income related to previously owned equity affiliates (26.9) (23.4) (152.0) Changes in assets and liabilities, net of the effect of acquisitions and divestitures: Decrease in accounts receivable 26.9 1.2 7.3 Decrease (increase) in inventories 20.4 (3.0) 8.0 (Decrease) increase in accounts payable (16.6) 16.8 11.2 (Decrease) increase in pension and other post-retirement benefits (124.5) (41.7) 30.2 Increase (decrease) in accrued expenses and other assets and liabilities 55.5 (8.7) (74.2) Net cash provided by operating activities 109.0 106.9 72.5 Investing activities Capital expenditures (76.4) (57.4) (54.1) Business acquisitions, net of cash acquired (259.4) (33.8) (508.4) Proceeds from sale of businesses and other assets 275.7 18.9 140.0 Net cash used by investing activities (60.1) (72.3) (422.5) Financing activities Repayment of long-term debt (343.3) (3.0) (42.9) Premium on early extinguishment of long-term debt (4.6) — (0.9) Proceeds from long-term debt 600.0 — 297.0 Debt financing costs (13.0) — (11.5) Borrowing under credit facilities 129.0 0.8 — Repayment under credit facilities (117.5) — — Purchase of common shares for treasury (131.6) (15.9) (73.6) Exercise of stock awards 7.3 15.1 6.9 Cash dividends paid (21.5) (16.9) (11.1) Proceeds from noncontrolling interests — 2.4 — Net cash provided (used) by financing activities 104.8 (17.5) 163.9 Effect of exchange rate changes on cash 1.5 1.0 (0.1) Increase (decrease) in cash and cash equivalents 155.2 18.1 (186.2) Cash and cash equivalents at beginning of year 210.0 191.9 378.1 Cash and cash equivalents at end of year $ 365.2 $ 210.0 $ 191.9 POLYONE CORPORATION 47 Consolidated Statements of Shareholders’ Equity Common Shares Shareholders’ Equity Held in Treasury Additional Paid-in Retained Earnings (Deficit) Held in Treasury Comprehensive Income (Loss) PolyOne shareholders’ equity Non- controlling Interests equity January 1, 2011 122.2 (28.3) $ 1.2 $ 1,059.4 $ (257.5) $ (305.6) $ 18.5 $ 516.0 $ — $ 516.0 Net income 172.6 172.6 172.6 income (19.8) (19.8) (19.8) declared (14.6) (14.6) (14.6) common shares (6.0) (73.6) (73.6) (73.6) exercise of awards 0.9 (2.1) 9.8 7.7 7.7 December 31, 2011 122.2 (33.4) $ 1.2 $ 1,042.7 $ (84.9) $ (369.4) $ (1.3) $ 588.3 $ — $ 588.3 Net income (loss) 71.9 71.9 (0.1) 71.8 income (9.8) (9.8) (9.8) Noncontrolling interest activity 2.4 2.4 declared (17.8) (17.8) (17.8) common shares (1.2) (15.9) (15.9) (15.9) exercise of awards 1.9 (8.8) 21.2 12.4 12.4 December 31, 2012 122.2 (32.7) $ 1.2 $ 1,016.1 $ (13.0) $ (364.1) $ (11.1) $ 629.1 $ 2.3 $ 631.4 Net income (loss) 243.8 243.8 (1.1) 242.7 income (3.7) (3.7) (3.7) Noncontrolling interest activity 0.5 0.5 Shares issued in connection with acquisitions 10.0 136.6 117.2 253.8 253.8 declared (5.4) (19.2) (24.6) (24.6) common shares (5.0) (131.6) (131.6) (131.6) exercise of awards 0.6 2.5 7.5 10.0 10.0 December 31, 2013 122.2 (27.1) $ 1.2 $ 1,149.8 $ 211.6 $ (371.0) $ (14.8) $ 976.8 $ 1.7 $ 978.5 48 POLYONE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 — DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business specialty polymer formulations, color and additive systems, plastic sheet and packaging solutions, and enhancing additives, liquid colorants, and fluoropolymer and silicone colorants.

Our performance during this period has exceeded the S&P 500 Index as well as the S&P Mid Cap Chemicals Index. 45 We believe that the returns to shareholders shown in the graph above indicate that our pay-for-performance philosophy, compensation plan design and selected perforff mance measures are working, and have resulted in perforff mance that has provided increased value to our shareholders over the long-term as shown above. To attract and help retain talent Fixed base of cash compensation 18% - CEO 33% - CFO 39% - Other NEOs Base Salary Drives the achievement of key business results on an annual basis Performance- based and not guaranteed 20% - CEO 22% - CFO 22% - Other NEOs Annual Incentive Directly ties the interests of NEOs to our shareholders Helps retain key talent and a majority is performance- based and not guaranteed 62% - CEO 45% - CFO 39% - Other NEOs Long- Term Incentive Afteff r consideration of the facff tors above, the Compensation Committee made the folff lowing decisions related to base salaries forff our Named Executive Officff ers in 2016: Mr.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Financial Statements Page Management’s Report 40 Reports of Independent Registered Public Accounting Firm 41-42 Consolidated Financial Statements: Consolidated Statements of Income 43 Consolidated Statements of Comprehensive Income 44 Consolidated Balance Sheets 45 Consolidated Statements of Cash Flows 46 Consolidated Statements of Shareholders’ Equity 47 Notes to Consolidated Financial Statements 48-78 POLYONE CORPORATION 39 MANAGEMENT’S REPORT The management of PolyOne Corporation is responsible for preparing the consolidated financial statements and disclosures included in this Annual Report on Form 10-K. s/ Ernst & Young LLP Cleveland, Ohio 42 POLYONE CORPORATION Consolidated Statements of Income (In millions, except per share data) 2014 2013 2012 Sales $ 3,835.5 $ 3,771.2 $ 2,860.8 Cost of sales 3,127.6 3,109.0 2,329.7 Gross margin 707.9 662.2 531.1 Selling and administrative expense 552.8 457.6 417.0 Income related to previously owned equity affiliates — 26.9 23.4 Operating income 155.1 231.5 137.5 Interest expense, net (62.2) (63.5) (50.8) Debt extinguishment costs — (15.8) — Other expense, net (4.5) (1.2) (3.4) Income from continuing operations, before income taxes 88.4 151.0 83.3 Income tax expense (11.2) (58.1) (30.1) Net income from continuing operations 77.2 92.9 53.2 Income from discontinued operations, net of income taxes 1.2 149.8 18.6 Net income 78.4 242.7 71.8 Net loss attributable to noncontrolling interests 0.8 1.1 0.1 Net income attributable to PolyOne common shareholders $ 79.2 $ 243.8 $ 71.9 Earnings per share attributable to PolyOne common shareholders — basic: Continuing operations $ 0.85 $ 0.98 $ 0.60 Discontinued operations 0.01 1.57 0.21 Total $ 0.86 $ 2.55 $ 0.81 Earnings per share attributable to PolyOne common shareholders — diluted: Continuing operations $ 0.83 $ 0.97 $ 0.59 Discontinued operations 0.02 1.56 0.21 Total $ 0.85 $ 2.53 $ 0.80 Cash dividends declared per common share $ 0.34 $ 0.26 $ 0.20 Weighted-average number of common shares outstanding: Basic 92.3 95.5 89.1 Diluted 93.5 96.5 89.8 POLYONE CORPORATION 43 Consolidated Statements of Comprehensive Income Net income $ 78.4 $ 242.7 $ 71.8 Other comprehensive loss: Translation adjustments (27.5) (3.7) 1.1 Amortization of prior service credits, net of tax of $6.5 - 2012 — — (10.9) Total other comprehensive loss (27.5) (3.7) (9.8) Total comprehensive income 50.9 239.0 62.0 Comprehensive loss attributable to noncontrolling interests 0.8 1.1 0.1 Comprehensive income attributable to PolyOne common shareholders $ 51.7 $ 240.1 $ 62.1 44 POLYONE CORPORATION Consolidated Balance Sheets (In millions, except par value per share) 2014 2013 ASSETS Current assets: Cash and cash equivalents $ 238.6 $ 365.2 Accounts receivable, net 396.8 428.0 Inventories, net 309.0 342.5 Other current assets 98.3 117.9 Total current assets 1,042.7 1,253.6 Property, net 596.7 646.2 Goodwill 590.6 559.0 Intangible assets, net 362.7 365.8 Other non-current assets 118.5 119.5 Total assets $ 2,711.2 $ 2,944.1 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term and current portion of long-term debt $ 61.8 $ 12.7 Accounts payable 365.9 386.9 Accrued expenses and other liabilities 173.5 209.3 Total current liabilities 601.2 608.9 Long-term debt 962.0 976.2 Pension and other post-retirement benefits 103.7 77.3 Deferred income taxes 88.8 133.8 Other non-current liabilities 178.3 169.4 Total non-current liabilities 1,332.8 1,356.7 SHAREHOLDERS’ EQUITY Preferred stock, 40.0 shares authorized, no shares issued — — Common Shares, $0.01 par, 400.0 shares authorized, 122.2 shares issued 1.2 1.2 Additional paid-in capital 1,155.4 1,149.8 Retained earnings 259.7 211.6 Common shares held in treasury, at cost, 32.9 shares in 2014 and 27.1 shares in 2013 (597.7) (371.0) Accumulated other comprehensive loss (42.3) (14.8) Total PolyOne shareholders’ equity 776.3 976.8 Noncontrolling interest 0.9 1.7 Total equity 777.2 978.5 Total liabilities and equity $ 2,711.2 $ 2,944.1 POLYONE CORPORATION 45 Consolidated Statements of Cash Flows Operating activities Net income $ 78.4 $ 242.7 $ 71.8 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 123.9 109.8 69.8 Deferred income tax provision (45.2) 12.9 13.4 Debt extinguishment costs — 15.8 — Provision for doubtful accounts 0.4 0.2 0.3 Stock compensation expense 14.2 16.5 10.4 Gain on sale of business (1.2) (223.7) — Income related to previously owned equity affiliates — (26.9) (23.4) Changes in assets and liabilities, net of the effect of acquisitions and divestitures: Decrease in accounts receivable 24.4 26.9 1.2 Decrease (increase) in inventories 28.4 20.4 (3.0) (Decrease) increase in accounts payable (15.2) (16.6) 16.8 Increase (decrease) in pension and other post-retirement benefits 30.0 (124.5) (41.7) (Decrease) increase in accrued expenses and other assets and liabilities (29.7) 55.5 (8.7) Net cash provided by operating activities 208.4 109.0 106.9 Investing activities Capital expenditures (92.8) (76.4) (57.4) Business acquisitions, net of cash acquired (47.2) (259.4) (33.8) Proceeds from sale of businesses and other assets 28.2 275.7 18.9 Net cash used by investing activities (111.8) (60.1) (72.3) Financing activities Repayment of long-term debt (8.0) (343.3) (3.0) Premium on early extinguishment of long-term debt — (4.6) — Proceeds from long-term debt — 600.0 — Debt financing costs — (13.0) — Borrowing under credit facilities 168.6 129.0 0.8 Repayment under credit facilities (122.8) (117.5) — Purchase of common shares for treasury (233.2) (131.6) (15.9) Exercise of stock awards 6.9 7.3 15.1 Cash dividends paid (29.9) (21.5) (16.9) Proceeds from noncontrolling interests — — 2.4 Net cash (used) provided by financing activities (218.4) 104.8 (17.5) Effect of exchange rate changes on cash (4.8) 1.5 1.0 (Decrease) increase in cash and cash equivalents (126.6) 155.2 18.1 Cash and cash equivalents at beginning of year 365.2 210.0 191.9 Cash and cash equivalents at end of year $ 238.6 $ 365.2 $ 210.0 46 POLYONE CORPORATION Consolidated Statements of Shareholders’ Equity Common Shares Shareholders’ Equity Held in Treasury Additional Paid-in Retained Earnings (Deficit) Held in Treasury Comprehensive (Loss) PolyOne shareholders’ equity Non- controlling Interests equity January 1, 2012 122.2 (33.4) $ 1.2 $ 1,042.7 $ (84.9) $ (369.4) $ (1.3) $ 588.3 — $ 588.3 Net income (loss) 71.9 71.9 (0.1) 71.8 income (loss) (9.8) (9.8) (9.8) Noncontrolling interest activity 2.4 2.4 declared (17.8) (17.8) (17.8) common shares (1.2) (15.9) (15.9) (15.9) exercise of awards 1.9 (8.8) 21.2 12.4 12.4 December 31, 2012 122.2 (32.7) $ 1.2 $ 1,016.1 $ (13.0) $ (364.1) $ (11.1) $ 629.1 $ 2.3 $ 631.4 Net income (loss) 243.8 243.8 (1.1) 242.7 income (loss) (3.7) (3.7) (3.7) Noncontrolling interest activity 0.5 0.5 Shares issued in connection with acquisitions 10.0 136.6 117.2 253.8 253.8 declared (5.4) (19.2) (24.6) (24.6) common shares (5.0) (131.6) (131.6) (131.6) exercise of awards 0.6 2.5 7.5 10.0 10.0 December 31, 2013 122.2 (27.1) $ 1.2 $ 1,149.8 $ 211.6 $ (371.0) $ (14.8) $ 976.8 $ 1.7 $ 978.5 Net income (loss) 79.2 79.2 (0.8) 78.4 income (loss) (27.5) (27.5) (27.5) declared (31.1) (31.1) (31.1) common shares (6.3) (233.2) (233.2) (233.2) exercise of awards 0.5 5.6 6.5 12.1 12.1 December 31, 2014 122.2 (32.9) $ 1.2 $ 1,155.4 $ 259.7 $ (597.7) $ (42.3) $ 776.3 $ 0.9 $ 777.2 POLYONE CORPORATION 47 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 — DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business specialty polymer formulations, color and additive systems, plastic sheet and packaging solutions, and enhancing additives, liquid colorants, and fluoropolymer and silicone colorants.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Financial Statement Page Management’s Report 41 Reports of Independent Registered Public Accounting Firm 42-43 Consolidated Financial Statements: Consolidated Statements of Income 44 Consolidated Statements of Comprehensive Income 45 Consolidated Balance Sheets 46 Consolidated Statements of Cash Flows 47 Consolidated Statements of Shareholders’ Equity 48 Notes to Consolidated Financial Statements 49-79 40 POLYONE CORPORATION MANAGEMENT’S REPORT The management of PolyOne Corporation is responsible for preparing the consolidated financial statements and disclosures included in this Annual Report on Form 10-K. s/ Ernst & Young LLP Cleveland, Ohio POLYONE CORPORATION 43 Consolidated Statements of Income (In millions, except per share data) 2015 2014 2013 Sales $ 3,377.6 $ 3,835.5 $ 3,771.2 Cost of sales 2,696.1 3,127.6 3,109.0 Gross margin 681.5 707.9 662.2 Selling and administrative expense 430.6 552.8 457.6 Income related to previously owned equity affiliates — — 26.9 Operating income 250.9 155.1 231.5 Interest expense, net (64.1) (62.2) (63.5) Debt extinguishment costs (16.4) — (15.8) Other expense, net (2.7) (4.5) (1.2) Income from continuing operations, before income taxes 167.7 88.4 151.0 Income tax expense (23.0) (11.2) (58.1) Net income from continuing operations 144.7 77.2 92.9 Income from discontinued operations, net of income taxes — 1.2 149.8 Net income 144.7 78.4 242.7 Net (income) loss attributable to noncontrolling interests (0.1) 0.8 1.1 Net income attributable to PolyOne common shareholders $ 144.6 $ 79.2 $ 243.8 Earnings per share attributable to PolyOne common shareholders — basic: Continuing operations $ 1.65 $ 0.85 $ 0.98 Discontinued operations — 0.01 1.57 Total $ 1.65 $ 0.86 $ 2.55 Earnings per share attributable to PolyOne common shareholders — diluted: Continuing operations $ 1.63 $ 0.83 $ 0.97 Discontinued operations — 0.02 1.56 Total $ 1.63 $ 0.85 $ 2.53 Cash dividends declared per common share $ 0.42 $ 0.34 $ 0.26 Weighted-average number of common shares outstanding: Basic 87.8 92.3 95.5 Diluted 88.7 93.5 96.5 44 POLYONE CORPORATION Consolidated Statements of Comprehensive Income Net income $ 144.7 $ 78.4 $ 242.7 Other comprehensive loss: Translation adjustments (29.1) (27.5) (3.7) Unrealized gain on available-for-sale securities 0.1 — — Total other comprehensive loss (29.0) (27.5) (3.7) Total comprehensive income 115.7 50.9 239.0 Comprehensive (income) loss attributable to noncontrolling interests (0.1) 0.8 1.1 Comprehensive income attributable to PolyOne common shareholders $ 115.6 $ 51.7 $ 240.1 POLYONE CORPORATION 45 Consolidated Balance Sheets (In millions, except par value per share) 2015 2014 ASSETS Current assets: Cash and cash equivalents $ 279.8 $ 238.6 Accounts receivable, net 347.0 396.8 Inventories, net 287.0 309.0 Other current assets 47.0 54.0 Total current assets 960.8 998.4 Property, net 583.5 596.7 Goodwill 597.7 590.6 Intangible assets, net 344.6 362.7 Other non-current assets 108.5 117.9 Total assets $ 2,595.1 $ 2,666.3 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term and current portion of long-term debt $ 18.6 $ 61.7 Accounts payable 351.6 365.9 Accrued expenses and other liabilities 127.9 172.9 Total current liabilities 498.1 600.5 Long-term debt 1,128.0 948.9 Pension and other post-retirement benefits 77.5 103.7 Deferred income taxes 33.8 57.7 Other non-current liabilities 152.5 178.3 Total non-current liabilities 1,391.8 1,288.6 SHAREHOLDERS’ EQUITY Preferred stock, 40.0 shares authorized, no shares issued — — Common Shares, $0.01 par, 400.0 shares authorized, 122.2 shares issued 1.2 1.2 Additional paid-in capital 1,155.6 1,155.4 Retained earnings 367.1 259.7 Common shares held in treasury, at cost, 36.9 shares in 2015 and 32.9 shares in 2014 (748.4) (597.7) Accumulated other comprehensive loss (71.3) (42.3) Total PolyOne shareholders’ equity 704.2 776.3 Noncontrolling interest 1.0 0.9 Total equity 705.2 777.2 Total liabilities and equity $ 2,595.1 $ 2,666.3 46 POLYONE CORPORATION Consolidated Statements of Cash Flows Operating activities Net income $ 144.7 $ 78.4 $ 242.7 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 98.1 100.8 97.1 Accelerated depreciation and fixed asset charges associated with restructuring activities 17.6 33.0 13.6 Deferred income tax (benefit) expense (27.4) (45.2) 12.9 Debt extinguishment costs 16.4 — 15.8 Share-based compensation expense 9.1 14.2 16.5 Gain on sale of business — (1.2) (223.7) Income related to previously owned equity affiliates — — (26.9) Changes in assets and liabilities, net of the effect of acquisitions and divestitures: Decrease in accounts receivable 42.6 24.4 26.9 Decrease in inventories 21.4 28.4 20.4 Decrease in accounts payable (8.3) (15.2) (16.6) (Decrease) increase in pension and other post-retirement benefits (24.6) 30.0 (124.5) (Decrease) increase in accrued expenses and other assets and liabilities - net (62.4) (39.2) 54.8 Net cash provided by operating activities 227.2 208.4 109.0 Investing activities Capital expenditures (91.2) (92.8) (76.4) Business acquisitions, net of cash acquired (18.3) (47.2) (259.4) Proceeds from sale of businesses and other assets 3.0 28.2 275.7 Net cash used by investing activities (106.5) (111.8) (60.1) Financing activities Repayment of long-term debt (365.3) (8.0) (343.3) Premium on early extinguishment of long-term debt (13.4) — (4.6) Net proceeds from long-term debt 547.3 — 600.0 Debt financing costs (6.0) — (13.0) Borrowing under credit facilities 891.3 168.6 129.0 Repayment under credit facilities (936.8) (122.8) (117.5) Purchase of common shares for treasury (156.1) (233.2) (131.6) Exercise of stock awards 4.3 6.9 7.3 Cash dividends paid (35.7) (29.9) (21.5) Net cash (used) provided by financing activities (70.4) (218.4) 104.8 Effect of exchange rate changes on cash (9.1) (4.8) 1.5 Increase (decrease) in cash and cash equivalents 41.2 (126.6) 155.2 Cash and cash equivalents at beginning of year 238.6 365.2 210.0 Cash and cash equivalents at end of year $ 279.8 $ 238.6 $ 365.2 POLYONE CORPORATION 47 Consolidated Statements of Shareholders’ Equity Common Shares Shareholders’ Equity Held in Treasury Additional Paid-in Retained Earnings (Deficit) Held in Treasury Comprehensive Loss PolyOne shareholders’ equity Non- controlling Interests equity Balance at January 1, 2013 122.2 (32.7) $ 1.2 $ 1,016.1 $ (13.0) $ (364.1) $ (11.1) $ 629.1 2.3 $ 631.4 Net income (loss) 243.8 243.8 (1.1) 242.7 loss (3.7) (3.7) (3.7) Noncontrolling interest activity 0.5 0.5 Shares issued in connection with acquisitions 10.0 136.6 117.2 253.8 253.8 declared (5.4) (19.2) (24.6) (24.6) common shares (5.0) (131.6) (131.6) (131.6) exercise of awards 0.6 2.5 7.5 10.0 10.0 2013 122.2 (27.1) $ 1.2 $ 1,149.8 $ 211.6 $ (371.0) $ (14.8) $ 976.8 $ 1.7 $ 978.5 Net income (loss) 79.2 79.2 (0.8) 78.4 loss (27.5) (27.5) (27.5) declared (31.1) (31.1) (31.1) common shares (6.3) (233.2) (233.2) (233.2) exercise of awards 0.5 5.6 6.5 12.1 12.1 2014 122.2 (32.9) $ 1.2 $ 1,155.4 $ 259.7 $ (597.7) $ (42.3) $ 776.3 $ 0.9 $ 777.2 Net income 144.6 144.6 0.1 144.7 loss (29.0) (29.0) (29.0) declared (37.2) (37.2) (37.2) common shares (4.5) (156.1) (156.1) (156.1) exercise of awards 0.5 0.2 5.4 5.6 5.6 2015 122.2 (36.9) $ 1.2 $ 1,155.6 $ 367.1 $ (748.4) $ (71.3) $ 704.2 $ 1.0 $ 705.2 48 POLYONE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 — DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business specialty polymer formulations, color and additive systems, plastic sheet and packaging solutions, and enhancing additives, liquid colorants, and fluoropolymer and silicone colorants.

For example, 45 energy savings projects last year will result in an approximate 2,250 MWh/yr reduction of energy. As of December 31, 2018, letters of credit under the credit line were immaterial and borrowings were $10.7 million with a weighted average annual interest POLYONE CORPORATION 45 POLYONE CORPORATION46 rate of 3.35%.

We recognized a pre-tax charge of $9.6 million and a $26.4 million pre-tax gain in the fourth quarter of 2010 and 2009, respectively. 45 We have several pension plans; however, as of December 31, 2011, only certain foreign plans accrue benefits.