AVIENT CORP MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

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Our business

We are a premier provider of specialized and sustainable material solutions that
transform customer challenges into opportunities, bringing new products to life
for a better world. Our products include specialty engineered materials,
advanced composites, color and additive systems and polymer distribution. We are
also a highly specialized developer and manufacturer of performance enhancing
additives, liquid colorants, and fluoropolymer and silicone colorants.
Headquartered in Avon Lake, Ohio, we have employees at sales, manufacturing and
distribution facilities across the globe. We provide value to our customers
through our ability to link our knowledge of polymers and formulation technology
with our manufacturing and supply chain capabilities to provide value-added
solutions to designers, assemblers and processors of plastics. When used in this
Quarterly Report on Form 10-Q, the terms "we," "us," "our," "Avient" and the
"Company" mean Avient Corporation, formerly known as PolyOne Corporation, and
its consolidated subsidiaries.

Highlights and Executive Summary

A summary of Avenir’s revenue, operating profit, net profit and net profit attributable to Avenir ordinary shareholders follows:

                                                            Three Months Ended
                                                                March 31,
(In millions)                                              2022           2021
Sales                                                   $ 1,293.8      $ 1,162.3
Operating income                                            128.6          120.4

Net income                                              $    84.5      $    79.7

Net income attributable to Avenir ordinary shareholders $84.2 $79.3


Trends and Developments

COVID-19

We have continued to closely monitor the impact of the COVID-19 pandemic on all
aspects of our business, including how it has impacted our employees, customers,
supply chain and distribution network. Although we are unable to predict the
ultimate impact of the COVID-19 outbreak at this time, the pandemic has in the
past adversely affected, and could in the future adversely affect our business.
While we concluded there were no indicators of impairment as of March 31, 2022,
any significant sustained adverse change in financial results or macroeconomic
conditions could result in future impairments of long-lived assets. The extent
to which our operations may continue to be impacted by the COVID-19 pandemic
will depend largely on future developments, which are highly uncertain and
cannot be accurately predicted, including new information which may emerge
concerning the severity of the outbreak and actions by government authorities to
contain the outbreak or treat its impact.

Acquiring Magna Colors

On July 1, 2021, the Company completed its acquisition of Magna Colours, a
market leader in sustainable, water-based inks technology for the textile screen
printing industry, for the purchase price of $47.6 million, net of cash
acquired. The results of the Magna Colours business are reported in the Color,
Additives and Inks segment. The preliminary purchase price allocation resulted
in intangible assets of $27.5 million and goodwill of $22.0 million, partially
offset by net liabilities assumed. Goodwill is not deductible for tax purposes.
The intangible assets that have been acquired are being amortized over a period
of 10 to 20 years.

Dyneema Acquisition

On April 19, 2022, we entered into a signing protocol (the Signing Protocol)
with Koninklijke DSM N.V., a public limited liability company incorporated under
the laws of the Netherlands (DSM). Pursuant to the terms of the Signing
Protocol, after completion of the consultation process with the relevant Dutch
works council, Avient and DSM will enter into a Sale and Purchase Agreement (the
Purchase Agreement) pursuant to which we will, among other things, acquire from
DSM (a) all of the equity of DSM Protective Materials International B.V., a
private limited liability company organized under the laws of the Netherlands,
DSM Protective Materials B.V., a private limited liability company organized
under the laws of the Netherlands, and DSM Protective Materials LLC, a Delaware
limited liability company, and (b) certain other assets related to DSM's
protective materials business (including the

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Dyneema© Trademark) (these equity and assets together, the Dyneema Business) (such as the acquisition of the Dyneema Business, the Dyneema Acquisition).

Pursuant to the terms of the Purchase Agreement, we have agreed to acquire the
Dyneema Business for an aggregate purchase price of €1.38 billion, subject to
certain customary adjustments for a European "locked box" transaction (the
Purchase Price). Certain Purchase Price payments are Euro-denominated and are
subject to change based on fluctuations in the Euro-USD exchange rate. In
addition to the consultation process with the Dutch works council, the closing
of the Dyneema Acquisition will be subject to the satisfaction or waiver of
customary and other conditions, including the receipt of required regulatory
approvals.

Along with our intention to acquire the Dyneema business, we plan to explore a potential sale of our distribution business.

Results of Operations - The three months ended March 31, 2022 compared to three
months ended March 31, 2021:

                                                                       Three Months Ended March 31,             Variances - Favorable (Unfavorable)
                                                                                                                                              %
(Dollars in millions, except per share data)                              2022                  2021                 Change                Change
Sales                                                              $       1,293.8          $ 1,162.3          $         131.5                11.3  %
Cost of sales                                                              1,000.1              859.9                   (140.2)              (16.3) %
Gross margin                                                                 293.7              302.4                     (8.7)               (2.9) %
Selling and administrative expense                                           165.1              182.0                     16.9                 9.3  %

Operating income                                                             128.6              120.4                      8.2                 6.8  %
Interest expense, net                                                        (16.9)             (19.3)                     2.4                12.4  %

Other (expense) income, net                                                   (0.6)               1.5                     (2.1)              nm
Income before income taxes                                                   111.1              102.6                      8.5                 8.3  %
Income tax expense                                                           (26.6)             (22.9)                    (3.7)              (16.2) %

Net income                                                                    84.5               79.7                      4.8                 6.0  %
Net income attributable to noncontrolling interests                           (0.3)              (0.4)                     0.1               nm
Net income attributable to Avient common shareholders              $          84.2          $    79.3          $           4.9                 6.2  %

Earnings per share attributable to Avenir ordinary shareholders – Basic

                                                              $        

0.92 $0.87

Earnings (loss) per share attributable to Avient common
shareholders - Diluted                                             $          0.91          $    0.86


nm - not meaningful

Sales

Sales increased $131.5 million in the three months ended March 31, 2022 compared
to the three months ended March 31, 2021 as a result of price increases
associated with raw material inflation, growth in the healthcare and consumer
end market and certain composite applications. These increases offset demand
conditions in China as a result of the recent COVID lockdowns and in Europe as a
result of the ongoing war in Ukraine, as well as weaker foreign exchange rates
primarily from the Euro.

Cost of sales

As a percentage of sales, cost of sales increased from 74.0% to 77.3% in the three months ended March 31, 2021 for March 31, 2022primarily due to raw material inflation, higher wages and logistics costs, and lower insurance recoveries on previously incurred environmental remediation costs.

Selling and administrative expenses

Selling and administrative expenses decreased $16.9 million in the three months ended March 31, 2022 compared to the three months ended March 31, 2021mainly due to a weaker exchange rate and lower incentives to pay.



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Interest expense, net

Interest expense, net decreased $2.4 million in the three months ended March 31,
2022 compared to the three months ended March 31, 2021 due to additional cross
currency swaps entered into in 2021 (See Note 11, Derivatives and Hedging for
details).

Income taxes

During the three months ended March 31, 2022, the Company's effective tax rate
was 23.9% versus 22.3% for the three months ended March 31, 2021. The income tax
rate increase is primarily due to the higher tax effects of state income taxes,
GILTI tax and less of a favorable foreign tax rate differential.

SEGMENT INFORMATION

Avient has three reportable segments: (1) Color, Additives and Inks; (2)
Specialty Engineered Materials; and (3) Distribution. Operating income is the
primary measure that is reported to our chief operating decision maker (CODM)
for purposes of allocating resources to the segments and assessing their
performance. Operating income at the segment level does not include: corporate
general and administrative expenses that are not allocated to segments;
intersegment sales and profit eliminations; charges related to specific
strategic initiatives such as the consolidation of operations; restructuring
activities, including employee separation costs resulting from personnel
reduction programs, plant closure and phase-in costs; executive separation
agreements; share-based compensation costs; asset impairments; environmental
remediation costs, along with related gains from insurance recoveries, and other
liabilities for facilities no longer owned or closed in prior years; gains and
losses on the divestiture of joint ventures and equity investments; actuarial
gains and losses associated with our pension and other post-retirement benefit
plans; and certain other items that are not included in the measure of segment
profit or loss that is reported to and reviewed by our CODM. These costs are
included in Corporate and eliminations.


Sales and Operating Income – Three Months Ended March 31, 2022 compared to the three months ended March 31, 2021:

                                                                                                                 Variances - Favorable
                                                                 Three Months Ended March 31,                        (Unfavorable)
(Dollars in millions)                                               2022                  2021                Change               %  Change
Sales:
Color, Additives and Inks                                    $        649.5           $   609.3          $        40.2                   6.6  %
Specialty Engineered Materials                                        244.7               216.5                   28.2                  13.0  %
Distribution                                                          432.9               362.7                   70.2                  19.4  %
Corporate and eliminations                                            (33.3)              (26.2)                  (7.1)                (27.1) %
Total Sales                                                  $      1,293.8           $ 1,162.3          $       131.5                  11.3  %

Operating income:
Color, Additives and Inks                                    $         94.5           $    88.8          $         5.7                   6.4  %
Specialty Engineered Materials                                         39.7                34.2                    5.5                  16.1  %
Distribution                                                           24.2                24.0                    0.2                   0.8  %
Corporate and eliminations                                            (29.8)              (26.6)                  (3.2)                (12.0) %
Total Operating Income                                       $        128.6           $   120.4          $         8.2                   6.8  %

Operating income as a percentage of sales:
Color, Additives and Inks                                              14.5   %            14.6  %                (0.1)         % points
Specialty Engineered Materials                                         16.2   %            15.8  %                 0.4          % points
Distribution                                                            5.6   %             6.6  %                (1.0)         % points
Total                                                                   9.9   %            10.4  %                (0.5)         % points







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Colour, additives and inks

Sales increased $40.2 million in the three months ended March 31, 2022 compared
to the three months ended March 31, 2021 due to higher selling prices across all
regions and end markets. Demand conditions in the Americas remained strong,
particularly in healthcare, which was offset by slowdowns in China as a result
of the recent COVID lockdowns and in Europe as a result of the ongoing war in
Ukraine.

Operating income increased $5.7 million in the three months ended March 31, 2022
compared to the three months ended March 31, 2021 due to aforementioned price
increases associated with raw material inflation, lower selling, general, and
administrative expenses driven by synergies from prior acquisitions and lower
incentives. These benefits were partially offset by weaker foreign exchange
rates, wage inflation, higher supply chain costs, and demand conditions in China
and Europe.

Specialty engineered materials

Sales increased $28.2 million in the three months ended March 31, 2022 compared
to the three months ended March 31, 2021 due to higher selling prices across all
regions and end markets. Gains in the healthcare end market and growth in
certain composite applications more than offset lower demand in China and
transportation applications.

Operating income increased $5.5 million in the three months ended March 31, 2022
as compared to the three months ended March 31, 2021 due to aforementioned sales
increases. These benefits were partially offset by wage inflation and higher
supply chain costs.

Distribution

Sales increased $70.2 million within three months March 31, 2022 compared to the three months ended March 31, 2021driven by the increase in average selling prices which compensated for the drop in demand.

Operating income in the three months ended March 31, 2022 was flat compared to
the three months ended March 31, 2021 as margins were slightly compressed from
higher cost inventory.

Corporate and Eliminations

Costs increased $3.2 million, or 12%, in the three months ended March 31, 2022
as compared to the three months ended March 31, 2021 due to higher environmental
remediation costs and lower insurance recoveries on previously incurred
environmental costs.

Cash and capital resources

Our objective is to finance our business through operating cash flow and an
appropriate mix of debt and equity. By laddering the maturity structure, we
avoid concentrations of debt maturities, reducing liquidity risk. We may from
time to time seek to retire or purchase our outstanding debt with cash and/or
exchanges for equity securities, in open market purchases, privately negotiated
transactions or otherwise. We may also seek to repurchase our outstanding common
shares. Such repurchases, if any, will depend on prevailing market conditions,
our liquidity requirements, contractual restrictions and other factors. The
amounts involved have been and may continue to be material.

The following table summarizes our liquidity as of March 31, 2022 and
December 31, 2021:

(In millions)                    As of March 31, 2022       As of December 31, 2021
Cash and cash equivalents       $               562.6      $                  601.2
Revolving credit availability                   464.4                         485.5
Liquidity                       $             1,027.0      $                1,086.7


From March 31, 2022approximately 66% of the Company’s cash and cash equivalents resided outside United States.

In connection with the Dyneema Acquisition, on April 19, 2022, we entered into a
Commitment Letter with Morgan Stanley Senior Funding, Inc. and J.P. Morgan (the
Commitment Parties), pursuant to which the Commitment Parties will commit to
providing us with a $640.0 million senior secured term loan facility and a
$900.0 million senior unsecured bridge loan (the Bridge Facility) for purposes
of funding the Dyneema Acquisition. The commitment is subject to various
conditions, including the execution of definitive documentation and other
customary closing conditions. We currently intend to issue new senior unsecured
notes in lieu of borrowing under the Bridge Facility.

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Expected sources of cash needed to satisfy cash requirements for the remainder
of 2022 outside of the Dyneema Acquisition include our cash on hand, cash from
operations and available liquidity under our revolving credit facility, if
needed. Outside of the Dyneema Acquisition, expected uses of cash for the
remainder of 2022 include interest payments, cash taxes, dividend payments,
share repurchases, environmental remediation costs, capital expenditures, and
debt repayment.

Cash Flows

The following describes the significant components of cash flows from operating,
investing and financing activities for the three months ended March 31, 2022 and
2021.

Operating Activities - In the three months ended March 31, 2022, net cash
provided by operating activities was $18.9 million as compared to $3.6 million
for the three months ended March 31, 2021, driven by increased earnings in 2022
and lower comparative investment in working capital.

Investing activities – Net cash used by investing activities during the three months ended March 31, 2022 of $13.3 million reflects capital expenditures.

Net cash used by investing activities during the three months ended March 31, 2021 of $18.5 million primarily reflects capital expenditures of $16.5 million.

Financing Activities - Net cash used by financing activities for the three
months ended March 31, 2022 of $43.8 million primarily reflects $21.7 million of
dividends paid, repayment of debt of $2.4 million, repurchases of our
outstanding common shares of $15.8 million, and the payment of withholding tax
on share awards of $3.9 million.

Net cash provided by financing activities for the three months ended March 31,
2021 of $29.1 million primarily reflects $19.5 million of dividends paid,
repurchases of our outstanding common shares of $4.2 million, and the payment of
withholding tax on share awards of $3.1 million.

Debt

As of March 31, 2022, our principal amount of debt totaled $1,870.8 million.
Aggregate maturities of the principal amount of debt for the current year, next
four years and thereafter, are as follows:

(In millions)
2022                       $     6.0
2023                           608.6
2024                             8.6
2025                           658.7
2026                             6.9
Thereafter                     582.0
Aggregate maturities       $ 1,870.8



As of March 31, 2022, we were in compliance with all financial and restrictive
covenants pertaining to our debt. For additional information regarding our debt,
please see Note 8, Financing Arrangements to the accompanying condensed
consolidated financial statements.

Derivatives and hedging

We are exposed to market risks, such as changes in foreign currency exchange
rates and interest rates. To manage the volatility related to these exposures we
may enter into various derivative transactions. For additional information
regarding our derivative instruments, please see Note 11, Derivatives and
Hedging and Note 12, Subsequent Events to the accompanying condensed
consolidated financial statements.

Material cash needs

We have future obligations under various contracts relating to debt and interest
payments, operating leases, pension and post-retirement benefit plans and
purchase obligations. During the three months ended March 31, 2022, there were
no material changes to these obligations as reported in our Annual Report on
Form 10-K for the year ended December 31, 2021.



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CAUTION ABOUT FORWARD-LOOKING STATEMENTS

In this Quarterly Report on Form 10-Q, statements that are not reported
financial results or other historical information are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements give current expectations or forecasts of
future events and are not guarantees of future performance. They are based on
management's expectations that involve a number of business risks and
uncertainties, any of which could cause actual results to differ materially from
those expressed in or implied by the forward-looking statements. You can
identify these statements by the fact that they do not relate strictly to
historic or current facts. They use words such as "will," "anticipate,"
"estimate," "expect," "project," "intend," "plan," "believe" and other words and
terms of similar meaning in connection with any discussion of future operating
or financial condition, performance and/or sales. In particular, these include
statements relating to future actions; prospective changes in raw material
costs, product pricing or product demand; future performance; estimated capital
expenditures; results of current and anticipated market conditions and market
strategies; sales efforts; expenses; the outcome of contingencies such as legal
proceedings and environmental liabilities; and financial results. Factors that
could cause actual results to differ materially from those implied by these
forward-looking statements include, but are not limited to:

•disruptions, uncertainty or volatility in credit markets which could adversely impact the availability of credit already arranged and the availability and cost of credit in the future;

•the effect on foreign operations of fluctuations in currencies, prices and other political, economic and regulatory risks;

• the current and potential future impact of the COVID-19 pandemic on our business, results of operations, financial condition or cash flows, including without limitation any supply chain issues and logistics;

• changes in polymer consumption growth rates and plastics laws and regulations in the jurisdictions where we operate;

•fluctuations in the prices, quality and supply of raw materials, and in the prices and supply of energy;

•production stoppages or material costs associated with scheduled or unscheduled maintenance programs;

• unforeseen developments that may arise with respect to contingencies such as litigation and environmental matters;

• our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends;

•failures of information systems and cyberattacks;

•amounts for cash and non-cash charges related to restructuring plans that may
differ from original estimates, including because of timing changes associated
with the underlying actions;

•any material adverse change in the Dyneema business;

•our ability to achieve the strategic and other objectives relating to the
Dyneema Acquisition, including any expected synergies, and the possible sale of
the Distribution business segment; and

• other factors described in our annual report on Form 10-K for the year ended
December 31, 2021 under Section 1A, “Risk Factors”.

We cannot guarantee that any forward-looking statement will be realized,
although we believe we have been prudent in our plans and assumptions.
Achievement of future results is subject to risks, uncertainties and
assumptions. Should known or unknown risks or uncertainties materialize, or
should underlying assumptions prove inaccurate, actual results could vary
materially from those anticipated, estimated or projected. Investors should bear
this in mind as they consider forward-looking statements. We undertake no
obligation to publicly update forward-looking statements, whether as a result of
new information, future events or otherwise, except as otherwise required by
law. You are advised, however, to consult any further disclosures we make on
related subjects in our reports on Forms 10-Q, 8-K and 10-K filed with the
Securities and Exchange Commission. You should understand that it is not
possible to predict or identify all risk factors. Consequently, you should not
consider any such list to be a complete set of all potential risks or
uncertainties.

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