CLEVELAND, July 21, 2014 /PRNewswire/ --


    --  Adjusted earnings per share increased 38% to $0.51, marking the 19(th)
        consecutive quarter of double-digit adjusted EPS growth; GAAP EPS
        totaled $0.33 versus $0.39 in the prior year quarter
    --  Led by the Specialty Platform, all segments delivered year-over-year
        operating income gains driven by continued mix improvement and synergies
        from the Spartech acquisition
    --  Free cash flow for the quarter increased to $100 million, expanding
        capacity for further investment to drive growth

PolyOne Corporation (NYSE: POL) today reported its second quarter results. As expected and to drive earnings growth, the company continued to exit certain unprofitable products associated with the Spartech acquisition completed in March of last year. Accordingly, revenues were $1.01 billion for the second quarter of 2014, compared to $1.04 billion in the second quarter of 2013.

These actions, coupled with other ongoing initiatives to expand margins, resulted in a 38% increase in adjusted earnings per share to $0.51 for the second quarter of 2014, up from $0.37 in the second quarter of 2013. Recently announced asset realignment actions taken in Brazil led to higher restructuring costs this quarter. As a result, GAAP earnings per share totaled $0.33 for the second quarter of 2014 versus $0.39 in the second quarter of 2013.

"I am pleased to report adjusted earnings per share increased 38% to $0.51 for the second quarter representing an all-time high for PolyOne," said president and chief executive officer Robert M. Patterson. "This marks our 19(th) consecutive quarter of year-over-year double-digit adjusted EPS growth - an impressive accomplishment reflecting the power and sustainability of our strategy."

Mr. Patterson added, "Mix improvement continues to be at the heart of our transformation as our specialty businesses reached record levels of operating income and profitability for the quarter. Driven by an expanding portfolio of specialty solutions, our underlying mix of earnings has never been stronger with specialty now contributing two-thirds of our segment income."

http://photos.prnewswire.com/prnvar/20140721/128951

http://photos.prnewswire.com/prnvar/20140721/128952

"Our strong track record of converting earnings to cash continued this quarter as we generated $100 million of free cash flow," said executive vice president and chief financial officer Bradley C. Richardson.

Mr. Richardson continued, "We ended the quarter with $261.5 million in cash. This, coupled with our availability under our asset-based revolver, gives us significant capacity to invest in innovation, aggressively pursue acquisition opportunities and deliver cash to shareholders. During the quarter, we repurchased approximately 1.8 million shares at an average price of $38.15, bringing the total share buyback since early 2013 to 8.2 million shares."

Commenting on the company's outlook, Mr. Patterson said, "We are very pleased with our first half performance in 2014 and the underlying momentum and strength of our earnings growth. While our second quarter is seasonally our strongest, we expect to deliver strong year-over-year double-digit EPS expansion for the balance of 2014. With a growing pipeline of new and differentiated solutions, we are very confident in our ability to continue to create value for our customers and deliver market-beating performance for our shareholders."

About PolyOne
PolyOne Corporation, with 2013 revenues of $3.8 billion, is a premier provider of specialized polymer materials, services and solutions. The company is dedicated to serving customers in diverse industries around the globe, by creating value through collaboration, innovation and an unwavering commitment to excellence. Guided by its Core Values, Sustainability Promise and No Surprises Pledge((SM)), PolyOne is committed to its customers, employees, communities and shareholders through ethical, sustainable and fiscally responsible principles. For more information, visit www.polyone.com.

To access PolyOne's news library online, please visit www.polyone.com/news.

Forward-looking Statements

In this press release, 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. 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. Factors that could cause actual results to differ materially from those implied by these forward-looking statements include, but are not limited to: our ability to realize anticipated savings and operational benefits from the realignment of assets, including the planned closure of certain manufacturing facilities; the timing of closings and shifts of production to new facilities related to asset realignments and any unforeseen disruptions of service or quality caused by such closings and/or production shifts; separation and severance amounts that differ from original estimates, amounts for non-cash charges related to asset write-offs and accelerated depreciation realignments of property, plant and equipment, that differ from original estimates; our ability to identify and evaluate acquisition targets and consummate acquisitions; the ability to successfully integrate acquired companies into our operations, retain the management teams of acquired companies and retain relationships with customers of acquired companies including without limitations Spartech Corporation; disruptions, uncertainty or volatility in the credit markets that could adversely impact the availability of credit already arranged and the availability and cost of credit in the future; the financial condition of our customers, including the ability of customers (especially those that may be highly leveraged and those with inadequate liquidity) to maintain their credit availability; the speed and extent of an economic recovery, including the recovery of the housing market; our ability to achieve new business gains; the effect on foreign operations of currency fluctuations, tariffs and other political, economic and regulatory risks; changes in polymer consumption growth rates where we conduct business; changes in global industry capacity or in the rate at which anticipated changes in industry capacity come online; fluctuations in raw material prices, quality and supply and in energy prices and supply; production outages or material costs associated with scheduled or unscheduled maintenance programs; unanticipated developments that could occur with respect to contingencies such as litigation and environmental matters; an inability to achieve or delays in achieving or achievement of less than the anticipated financial benefit from initiatives related to working capital reductions, cost reductions and employee productivity goals; an inability to raise or sustain prices for products or services; an inability to maintain appropriate relations with unions and employees; our ability to continue to pay cash dividends; the amount and timing of repurchases of our common shares, if any; and other factors affecting our business beyond our control, including, without limitation, changes in the general economy, changes in interest rates and changes in the rate of inflation. The above list of factors is not exhaustive.

We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to consult any further disclosures we make on related subjects in our reports on Form 10-Q, 8-K and 10-K that we provide to the Securities and Exchange Commission.


                                                                                                                                                                           Attachment 1

                                                                                    PolyOne Corporation

                                                             Summary of Condensed Consolidated Statements of Income (Unaudited)

                                                                            (In millions, except per share data)


                                                      Three Months Ended                                      Six Months Ended

                                                         June 30,                                          June 30,
                                                         --------                                          --------

                                                2014                             2013                               2014                               2013
                                                ----                             ----                               ----                               ----


    Sales                                               $1,005.5                                     $1,037.6                                     $2,007.8                                     $1,838.7

    Operating income                            49.4                             80.7                              105.8                              121.2

    Net income from
     continuing
     operations
     attributable to
     PolyOne
     shareholders                               30.9                             38.6                               60.3                               49.8

    Basic earnings per
     share from
     continuing
     operations
     attributable to
     PolyOne
     shareholders                                          $0.33                                        $0.39                                        $0.64                                        $0.52

    Diluted earnings per
     share from
     continuing
     operations
     attributable to
     PolyOne
     shareholders                                          $0.33                                        $0.39                                        $0.63                                        $0.52


    Senior management uses comparisons of adjusted net income from continuing operations attributable to PolyOne shareholders and diluted earnings per share (EPS) from continuing operations attributable to
     PolyOne shareholders excluding special items to assess performance and facilitate comparability of results. Below is a reconciliation of these non-GAAP financial measures to their most directly
     comparable measures calculated and presented in accordance with U.S. GAAP (GAAP).


                              Three Months Ended            Three Months Ended

                                June 30, 2014                 June 30, 2013
                                -------------                 -------------

    Reconciliation to
     Condensed Consolidated
     Statements of Income       $               EPS           $               EPS
                              ---               ---         ---               ---


    Net income from
     continuing operations
     attributable to
     PolyOne shareholders            $30.9                          $0.33               $38.6 $0.39

    Special items, after
     tax (Attachment 3)      22.6                      0.24                      (2.2) (0.02)

    Tax adjustments (a)     (5.2)                   (0.06)                       0.2       -
                                                                                 ---

    Adjusted net income /
     EPS                             $48.3                          $0.51               $36.6 $0.37
                                     =====                          =====               ===== =====


                                                      Six Months Ended                              Six Months Ended

                                                       June 30, 2014                                 June 30, 2013
                                                       -------------                                 -------------

    Reconciliation to
     Condensed Consolidated
     Statements of Income                              $               EPS                           $               EPS
                                                     ---               ---                         ---               ---


    Net income from
     continuing operations
     attributable to
     PolyOne shareholders                                   $60.3                                          $0.63                                      $49.8  $0.52

    Special items, after
     tax (Attachment 3)                             36.7                              0.39                               15.0                           0.16

    Tax adjustments (a)                            (6.8)                           (0.07)                               0.7                              -
                                                    ----                             -----                                ---                            ---

    Adjusted net income /
     EPS                                                    $90.2                                          $0.95                                      $65.5  $0.68
                                                            =====                                          =====                                      =====  =====


    (a) Tax adjustments include the net tax expense (benefit) from one-time income tax items and deferred income tax valuation allowance adjustments.


                                                                                                                                              Attachment 2

                                                                                     PolyOne Corporation

                                                                   Condensed Consolidated Statements of Income (Unaudited)

                                                                            (In millions, except per share data)


                                                     Three Months Ended                                            Six Months Ended

                                                        June 30,                                                June 30,
                                                        --------                                                --------

                                                2014                              2013                                  2014             2013
                                                ----                              ----                                  ----             ----


    Sales                                            $1,005.5                                          $1,037.6                     $2,007.8               $1,838.7

    Cost of sales                              821.0                             833.9                               1,635.1          1,472.7
                                               -----                             -----                               -------          -------

    Gross margin                               184.5                             203.7                                 372.7            366.0

    Selling and administrative
     expense                                   135.1                             123.0                                 266.9            244.9

    Income related to
     previously owned equity
     affiliates                                    -                                -                                    -             0.1
                                                 ---                              ---                                  ---             ---

    Operating income                            49.4                              80.7                                 105.8            121.2

    Interest expense, net                     (15.7)                           (16.6)                               (31.2)          (32.2)

    Debt extinguishment costs                      -                                -                                    -          (10.6)

    Other (expense) income, net                (0.4)                            (1.2)                                (1.4)             0.2
                                                ----                              ----                                  ----              ---

    Income from continuing
     operations before income
     taxes                                      33.3                              62.9                                  73.2             78.6

    Income tax expense                         (2.6)                           (24.6)                               (13.3)          (29.3)
                                                ----                             -----                                 -----            -----

    Net income from continuing
     operations                                 30.7                              38.3                                  59.9             49.3

    Income from discontinued
     operations, net of income
     taxes                                       0.8                             142.3                                   0.8            146.4
                                                 ---                             -----                                   ---            -----

    Net income                                  31.5                             180.6                                  60.7            195.7

     Net loss attributable to
      noncontrolling interests                   0.2                               0.3                                   0.4              0.5
                                                 ---                               ---                                   ---              ---

    Net income attributable to
     PolyOne common
     shareholders                                       $31.7                                            $180.9                        $61.1                 $196.2
                                                        =====                                            ======                        =====                 ======


    Earnings per common share attributable to
     PolyOne common shareholders -Basic:

    Continuing operations                               $0.33                                             $0.39                        $0.64                  $0.52

    Discontinued operations                     0.01                              1.46                                  0.01             1.55
                                                ----                              ----                                  ----             ----

    Total                                               $0.34                                             $1.85                        $0.65                  $2.07


    Earnings per common share attributable to
     PolyOne common shareholders -Diluted:

    Continuing operations                               $0.33                                             $0.39                        $0.63                  $0.52

    Discontinued operations                     0.01                              1.44                                  0.01             1.53
                                                ----                              ----                                  ----             ----

    Total                                               $0.34                                             $1.83                        $0.64                  $2.05


    Cash dividends declared per
     share of common stock                              $0.08                                             $0.06                        $0.16                  $0.12


    Weighted-average shares used to compute
     earnings per share:

    Basic                                       93.0                              97.7                                  93.7             94.7

    Diluted                                     94.3                              99.1                                  94.9             95.8


                                                                                                                                                                                                                           Attachment 3

                                                                                                            PolyOne Corporation

                                                                                                    Summary of Special Items (Unaudited)

                                                                                                    (In millions, except per share data)


                                                                    Three Months Ended                              Six Months Ended

    Special items (1)                                                  June 30,                                   June 30,
                                                                       --------                                   --------

                                                                   2014                               2013                                          2014                                2013
                                                                   ----                               ----                                          ----                                ----

    Cost of sales:

       Plant phase-out costs                                              $(22.1)                                    $                   -                                        $(33.1)                                    $               -

       Reimbursement of previously incurred
        environmental costs                                           -                              14.9                                             -                               20.1

       Environmental remediation costs                            (0.9)                             (1.3)                                        (1.8)                              (3.3)

       Acquisition related costs                                      -                             (3.5)                                            -                              (7.6)
                                                                    ---                              ----                                           ---                               ----

          Impact on cost of sales                                (23.0)                              10.1                                        (34.9)                                9.2


    Selling and administrative expense:

       Employee separation and plant phase-
        out costs                                                (19.6)                             (3.1)                                       (29.7)                             (14.8)

       Unrealized gain on foreign currency
        option contracts                                              -                               0.2                                             -                                0.6

       Acquisition/divestiture related costs                      (0.5)                             (1.4)                                        (0.7)                              (6.0)

       Legal related and other                                      3.3                              (0.6)                                          2.6                               (0.5)
                                                                    ---                               ----                                           ---                                ----

          Impact on selling and administrative
           expense                                               (16.8)                             (4.9)                                       (27.8)                             (20.7)


    Gain on sale of investment in equity
     affiliates                                                       -                                 -                                            -                                0.1

          Impact on operating income                             (39.8)                               5.2                                        (62.7)                             (11.4)


       Debt extinguishment costs                                      -                                 -                                -                  (10.6)

       Bridge loan commitment fees - interest
        expense                                                       -                                 -                                -                   (1.9)

       Other income, net                                            0.5                                  -                              0.5                                   1.4
                                                                    ---                                ---                              ---                                   ---

          Impact on income from continuing
           operations before income taxes                        (39.3)                               5.2                                        (62.2)                             (22.5)

    Income tax benefit (expense) on
     special items                                                 16.7                              (3.0)                                         25.5                                 7.5

    Impact of special items on net income
     attributable to PolyOne Shareholders                                 $(22.6)                                                     $2.2                                         $(36.7)                                              $(15.0)
                                                                           ======                                                      ====                                          ======                                                ======


    Basic earnings per common share impact                                $(0.24)                                                    $0.02                                         $(0.39)                                              $(0.16)

    Diluted earnings per common share
     impact                                                               $(0.24)                                                    $0.02                                         $(0.39)                                              $(0.16)


    Weighted average shares used to compute earnings
     per share:

       Basic                                                       93.0                               97.7                                          93.7                                94.7

       Diluted                                                     94.3                               99.1                                          94.9                                95.8


    (1) Special items are a non-GAAP financial measure. Special items include charges related to specific strategic initiatives or financial restructurings such as: consolidation of operations; debt extinguishment costs;
     employee separation costs resulting from personnel reduction programs, plant phase-out costs, executive separation agreements; asset impairments; mark-to-market adjustments associated with actuarial gains and
     losses on pension and other postretirement benefit plans; environmental remediation costs, fines, penalties, remediation costs 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; unrealized gains and losses from foreign currency option contracts; one-time, non-recurring
     items; and the effect of changes in accounting principles or other such laws or provisions affecting reported results.


                                                                                              Attachment 4

                                                 PolyOne Corporation

                                        Condensed Consolidated Balance Sheets

                                                    (In millions)


                                                     (Unaudited)              December 31,
                                                    June 30, 2014                     2013
                                                    -------------                     ----

    Assets

    Current assets:

    Cash and cash equivalents                                          $261.5                                $365.2

    Accounts receivable, net                                501.3                       428.0

    Inventories, net                                        315.7                       342.5

    Other current assets                                    100.5                       117.9
                                                            -----                       -----

    Total current assets                                  1,179.0                     1,253.6

    Property, net                                           612.3                       646.2

    Goodwill                                                568.9                       559.0

    Intangible assets, net                                  354.5                       365.8

    Other non-current assets                                132.0                       119.5
                                                            -----                       -----

    Total assets                                                     $2,846.7                              $2,944.1
                                                                     ========                              ========


    Liabilities and Shareholders' Equity

    Current liabilities:

    Short-term and current
     portion of long-term debt                                          $12.7                                 $12.7

    Accounts payable                                        422.5                       386.9

    Accrued expenses and other
     liabilities                                            170.8                       209.3

    Total current liabilities                               606.0                       608.9

    Non-current liabilities:

    Long-term debt                                          967.9                       976.2

    Pension and other post-
     retirement benefits                                     63.7                        77.3

    Deferred income taxes                                   113.7                       133.8

    Other non-current liabilities                           182.4                       169.4
                                                            -----                       -----

    Total non-current liabilities                         1,327.7                     1,356.7

    Shareholders' equity:

    PolyOne shareholders' equity                            911.7                       976.8

    Noncontrolling interests                                  1.3                         1.7
                                                              ---                         ---

    Total equity                                            913.0                       978.5
                                                            -----

    Total liabilities and
     shareholders' equity                                            $2,846.7                              $2,944.1
                                                                     ========                              ========


                                                                                                   Attachment 5

                                                  PolyOne Corporation

                              Condensed Consolidated Statements of Cash Flows (Unaudited)

                                                     (In millions)


                                                             Six Months Ended

                                                               June 30,
                                                               --------

                                                           2014                               2013
                                                           ----                               ----

    Operating Activities

    Net income                                                      $60.7                                      $195.7

    Adjustments to reconcile net income to net
     cash provided (used) by operating
     activities:

    Depreciation and amortization                          72.2                               45.8

    Debt extinguishment costs                                 -                              10.6

    Provision for doubtful
     accounts                                               0.3                                  -

    Stock based compensation
     expense                                               10.1                               10.1

    Gain on sale of business                              (0.8)                           (223.6)

    Change in assets and liabilities, net of
     effect of acquisitions and divestitures:

    Increase in accounts
     receivable                                          (74.0)                            (70.6)

    Decrease (increase) in
     inventories                                           23.4                              (3.9)

    Increase in accounts payable                           35.9                               15.5

    Decrease in pension and other
     post-retirement benefits                            (21.1)                            (65.7)

    (Decrease) increase in accrued
     expenses and other assets and
     liabilities -net                                    (62.9)                              60.9
                                                          -----                               ----

    Net cash provided (used) by
     operating activities                                  43.8                             (25.2)

    Investing Activities

    Capital expenditures                                 (38.0)                            (26.7)

    Business acquisitions, net of
     cash acquired                                            -                           (259.4)

    Proceeds from sale of equity
     affiliate and other assets                            27.3                              274.1
                                                           ----                              -----

    Net cash used by investing
     activities                                          (10.7)                            (12.0)

    Financing Activities

    Repayment of long-term debt                           (8.0)                           (297.0)

    Proceeds from long-term debt                              -                             600.0

    Debt financing costs                                      -                            (13.0)

    Borrowings under credit
     facilities                                            20.9                              125.0

    Repayments under credit
     facilities                                          (20.9)                           (117.5)

    Purchase of common shares                           (119.9)                            (71.2)

    Exercise of stock awards                                6.3                                3.3

    Cash dividends paid                                  (15.1)                             (9.9)
                                                          -----                               ----

    Net cash (used) provided by
     financing activities                               (136.7)                             219.7

    Effect of exchange rate
     changes on cash                                      (0.1)                             (0.1)
                                                           ----                               ----

    (Decrease) increase in cash
     and cash equivalents                               (103.7)                             182.4

    Cash and cash equivalents at
     beginning of period                                  365.2                              210.0
                                                          -----                              -----

    Cash and cash equivalents at
     end of period                                                 $261.5                                      $392.4
                                                                   ======                                      ======


                                                                                                                                                                                               Attachment 6

                                                                                              PolyOne Corporation

                                                                              Business Segment and Platform Operations (Unaudited)

                                                                                                 (In millions)


    Operating income at the segment level does not include: special items as defined on 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                                       Six Months Ended

                                                                June 30,                                                June 30,
                                                                --------                                                --------

                                                     2014                                 2013                                  2014                                  2013
                                                     ----                                 ----                                  ----                                  ----

    Sales:

       Global Color, Additives
        and Inks                                               $228.7                                            $229.4                                            $448.3                                            $434.7

       Global Specialty
        Engineered Materials                        157.8                                158.8                                 315.2                                 311.7

       Designed Structures and
        Solutions                                   164.0                                198.9                                 337.6                                 240.4
                                                    -----                                -----                                 -----                                 -----

          Specialty Platform                        550.5                                587.1                               1,101.1                                 986.8

       Performance Products and
        Solutions                                   211.2                                210.3                                 418.8                                 376.9

       PolyOne Distribution                         287.0                                275.1                                 571.1                                 543.1

       Corporate and
        eliminations                               (43.2)                              (34.9)                               (83.2)                               (68.1)
                                                    -----                                -----                                 -----                                 -----

          Sales                                              $1,005.5                                          $1,037.6                                          $2,007.8                                          $1,838.7
                                                             ========                                          ========                                          ========                                          ========


    Gross margin:

       Global Color, Additives
        and Inks                                                $81.7                                             $75.2                                            $156.6                                            $142.9

       Global Specialty
        Engineered Materials                         43.5                                 39.0                                  86.1                                  78.2

       Designed Structures and
        Solutions                                    26.3                                 25.5                                  52.5                                  30.7

          Specialty Platform                        151.5                                139.7                                 295.2                                 251.8

       Performance Products and
        Solutions                                    29.0                                 26.9                                  57.0                                  50.9

       PolyOne Distribution                          28.8                                 28.1                                  58.6                                  56.3

       Corporate and
        eliminations                               (24.8)                                 9.0                                (38.1)                                  7.0
                                                    -----                                  ---                                 -----                                   ---

          Gross margin                                         $184.5                                            $203.7                                            $372.7                                            $366.0
                                                               ======                                            ======                                            ======                                            ======


    Selling and administrative expense:

       Global Color, Additives
        and Inks                                                $44.0                                             $44.3                                             $88.5                                             $87.8

       Global Specialty
        Engineered Materials                         24.6                                 24.0                                  48.9                                  47.4

       Designed Structures and
        Solutions                                    13.4                                 16.5                                  28.4                                  20.2
                                                     ----                                 ----                                  ----                                  ----

          Specialty Platform                         82.0                                 84.8                                 165.8                                 155.4

       Performance Products and
        Solutions                                    11.4                                 11.6                                  23.4                                  22.0

       PolyOne Distribution                          11.5                                 11.2                                  24.1                                  23.2

       Corporate and
        eliminations                                 30.2                                 15.4                                  53.6                                  44.3
                                                     ----                                 ----                                  ----                                  ----

          Selling and
           administrative expense                              $135.1                                            $123.0                                            $266.9                                            $244.9
                                                               ======                                            ======                                            ======                                            ======


    Operating income:

       Global Color, Additives
        and Inks                                                $37.7                                             $30.9                                             $68.1                                             $55.1

       Global Specialty
        Engineered Materials                         18.9                                 15.0                                  37.2                                  30.8

       Designed Structures and
        Solutions                                    12.9                                  9.0                                  24.1                                  10.5
                                                     ----                                  ---                                  ----                                  ----

          Specialty Platform                         69.5                                 54.9                                 129.4                                  96.4

       Performance Products and
        Solutions                                    17.6                                 15.3                                  33.6                                  28.9

       PolyOne Distribution                          17.3                                 16.9                                  34.5                                  33.1

       Corporate and
        eliminations                               (55.0)                               (6.4)                               (91.7)                               (37.2)
                                                    -----                                 ----                                 -----                                 -----

          Operating income                                      $49.4                                             $80.7                                            $105.8                                            $121.2
                                                                =====                                             =====                                            ======                                            ======


    Specialty Platform consists of our three specialty segments: Global Specialty Engineered Materials; Global Color, Additives and Inks; and Designed Structures and Solutions. We present Specialty Platform sales, gross margin,
     selling and administration, and operating income because management believes that this is useful information to investors by highlighting our collective progress in advancing our specialization strategy.


                                                                                                                                                                                                    Attachment 7

                                                                                                 PolyOne 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 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. See Attachment 3 for a
     definition of special items.


                                                     Three Months Ended                              Six Months Ended

                                                          June 30,                                       June 30,
                                                          --------                                       --------

    Reconciliation to
     Consolidated
     Statements of Income                           2014                                   2013                                    2014                                  2013
                                                    ----                                   ----                                    ----                                  ----


    Sales                                                   $1,005.5                                            $1,037.6                                            $2,007.8                                            $1,838.7


    Gross margin before
     special items                                 207.5                                  193.6                                   407.6                                 356.8

    Special items in gross
     margin (Attachment 3)                        (23.0)                                  10.1                                  (34.9)                                  9.2
                                                   -----                                   ----                                   -----                                   ---

       Gross margin - GAAP                                    $184.5                                              $203.7                                              $372.7                                              $366.0
                                                              ======                                              ======                                              ======                                              ======


    Gross margin before
     special items as a
     percent of sales                              20.6%                                 18.7%                                  20.3%                                19.4%


    Operating income
     adjusted                                       89.2                                   75.5                                   168.5                                 132.6

    Special items in
     operating income
     (Attachment 3)                               (39.8)                                   5.2                                  (62.7)                               (11.4)
                                                   -----                                    ---                                   -----                                 -----

       Operating income -GAAP                                  $49.4                                               $80.7                                              $105.8                                              $121.2
                                                               =====                                               =====                                              ======                                              ======


    Operating income before
     special items as a
     percent of sales                               8.9%                                  7.3%                                   8.4%                                 7.2%


    Senior management uses the "Mix Shift Highlights Specialty Transformation" graph to show PolyOne's progression toward its specialty targets.


    Specialty Platform % of
     Operating Income                              2005Y*     2008Y*       2010Y*        2013Y     Q2 2014Y
                                                    -----      -----       -----         -----     --------

    Global Color, Additives
     and Inks                                                    $4.3                                  $28.1                                 $37.7                            $104.0   $68.1

    Global Specialty
     Engineered Materials                               0.4                     17.6                     49.7                        57.2                     37.2

    Designed Structures and
     Solutions                                            -                       -                       -                       33.4                     24.1

    Specialty Platform                                           $4.7                                  $45.7                                 $87.4                            $194.6  $129.4

    Performance Products and
     Solutions                                         75.7                     31.3                     54.0                        56.0                     33.6

    Distribution                                       19.5                     28.1                     42.0                        63.3                     34.5

    Joint ventures                                     91.9                     28.6                     18.9                           -                       -

    Corporate and eliminations                       (51.5)                 (425.1)                  (27.7)                     (82.4)                  (91.7)
                                                      -----                   ------                    -----                       -----                    -----

    Operating income (loss)                                    $140.3                               $(291.4)                               $174.6                            $231.5  $105.8

    Less: Corporate and
     special items                                     51.5                    425.1                     27.7                        82.4                     91.7

    Operating income excluding
     Corporate and special
     items                                                     $191.8                                 $133.7                                $202.3                            $313.9  $197.5
                                                               ======                                 ======                                ======                            ======  ======

    Specialty platform
     operating mix percentage                            2%                     34%                     43%                        62%                     66%


    * Historical results are shown as presented in prior filings and have not been updated to reflect subsequent changes in accounting principal or discontinued operations.

Photo - http://photos.prnewswire.com/prnh/20140721/128951

Photo - http://photos.prnewswire.com/prnh/20140721/128952

SOURCE PolyOne Corporation