CLEVELAND, Oct. 26, 2016 /PRNewswire/ -- PolyOne Corporation (NYSE: POL) today reported its third quarter results for 2016. GAAP earnings per share was $0.50 in both the third quarter of 2016 and the third quarter of 2015. Adjusted earnings per share increased 4% to $0.56, from $0.54 in the third quarter of 2015. Special items for the third quarter of 2016, which primarily included realignment and acquisition-related costs, resulted in a net after-tax charge of $4.7 million, or $0.06 per share (see Attachment 1). In the prior year quarter, special items, which primarily included realignment charges and a tax benefit, resulted in a net after-tax charge of $3.0 million, or $0.04 per share.

"I'm pleased we overcame challenging macro-economic conditions to deliver our 28(th) consecutive quarter of adjusted earnings per share expansion - representing seven straight years of growth," said Robert M. Patterson, chairman, president, and chief executive officer, PolyOne Corporation. "This quarter, our Specialty Engineered Materials, Performance Products & Solutions (PP&S) and Distribution segments led the way, as all three achieved year-over-year increases in operating income."

Revenue for the third quarter of 2016 rose to $844 million, compared to $842 million in the third quarter of 2015. Underlying organic sales growth, plus contributions from the company's recently acquired businesses, offset lower year-over-year selling prices in Distribution, PP&S, and Designed Structures and Solutions (DSS), due to lower hydro-carbon based raw material costs.

Bradley C. Richardson, executive vice president and chief financial officer, PolyOne Corporation, said, "Our balance sheet and cash flow remain strong, and they continue to provide us with flexibility to invest in strategic initiatives and return cash to shareholders. During the quarter we repurchased 318,000 shares of common stock and increased our Term Loan B by $100 million to fund the acquisitions of Gordon Composites and Polystrand, all while maintaining a modest leverage ratio of 2.5x net debt to adjusted EBITDA. In addition, we recently announced a 12.5% increase in our annual dividend to $0.54 - our sixth consecutive annual increase."

"Within the last year, we have acquired four excellent specialty businesses that bolstered our technology portfolio," Mr. Patterson added. "The integration and growth prospects of these businesses are on track. Feedback from our new customers has been outstanding, and I have heard first-hand they are excited to leverage the comprehensive suite of polymer solutions we offer."

"Our broad and expansive specialty solutions, coupled with exemplary service offerings such as InVisiO, IQ Design and LSS Customer First, are important competitive differentiators for us. Leveraging our unique strengths is more important now than ever with weak demand in a number of end markets and regions," Mr. Patterson said.

Commenting on the company's outlook, Mr. Patterson added, "As we discussed on our last earnings call, we expected the second half of the year to be more challenging due to an absence of macro-economic tailwinds, fallout from Brexit, and a weaker British pound to name a few, and that is what is playing out. Regardless of the factors outside our direct control, we remain focused on relentlessly executing our four-pillar strategy, collaborating with our customers, and investing in our businesses and employees."

About PolyOne

PolyOne Corporation, with 2015 revenues of $3.4 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 closure of manufacturing facilities; the timing of closings and shifts of production to new facilities related to asset realignments and any unforeseen loss of customers and/or 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 businesses into our operations, such as Gordon Composites and Polystrand, including whether such businesses will be accretive, retain the management teams of acquired businesses, and retain relationships with customers of acquired businesses; 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 and laws and regulations regarding the disposal of plastic in jurisdictions 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 September
                                     30,                                 Nine Months Ended

                                                                         September 30,
                                                                         -------------

                             2016                 2015                   2016                 2015
                             ----                 ----                   ----                 ----


    Sales                            $843.6                                     $841.6                    $2,552.1               $2,601.8

    Operating income         71.2                           69.2                            224.0             219.6

    Net income
     attributable to
     PolyOne
     shareholders            42.3                           44.5                            131.4             141.5

    Basic earnings per
     share attributable
     to PolyOne
     shareholders                     $0.50                                      $0.51                       $1.56                  $1.60

    Diluted earnings per
     share attributable
     to PolyOne
     shareholders                     $0.50                                      $0.50                       $1.55                  $1.58

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



                                                        Three Months Ended         Three Months Ended
                                                         September 30, 2016         September 30, 2015
                                                        ------------------         ------------------

    Reconciliation to Condensed Consolidated               $              EPS         $              EPS
    Statements of Income



    Net income attributable to PolyOne shareholders             $42.3                       $0.50            $44.5  $0.50

    Special items, after tax (Attachment 3)              4.7                  0.06                       3.0   0.04
                                                                                                       ---   ----

    Adjusted net income / EPS - excluding special items         $47.0                       $0.56            $47.5  $0.54
                                                                =====                       =====            =====  =====



                                                          Nine Months Ended          Nine Months Ended
                                                          September 30, 2016         September 30, 2015
                                                         ------------------          ------------------

    Reconciliation to Condensed Consolidated               $                EPS        $               EPS
    Statements of Income



    Net income attributable to PolyOne shareholders             $131.4                       $1.55              $141.5 $1.58

    Special items, after tax (Attachment 3)             17.0                    0.20                      (1.5) (0.01)
                                                                                                         ----   -----

    Adjusted net income / EPS - excluding special items         $148.4                       $1.75              $140.0 $1.57
                                                                ======                       =====              ====== =====



                                                                                                                                     Attachment 2

                                                                                    PolyOne Corporation

                                                                  Condensed Consolidated Statements of Income (Unaudited)

                                                                           (In millions, except per share data)


                                               Three Months Ended                                   Nine Months Ended

                                                September 30,                                   September 30,
                                                -------------                                   -------------

                                              2016                   2015                      2016                   2015
                                              ----                   ----                      ----                   ----


    Sales                                             $843.6                                          $841.6               $2,552.1               $2,601.8

    Cost of sales                            670.5                              672.5                             2,001.2    2,077.2
                                             -----                              -----                             -------    -------

    Gross margin                             173.1                              169.1                               550.9      524.6

    Selling and administrative
     expense                                 101.9                               99.9                               326.9      305.0
                                             -----                               ----                               -----      -----

    Operating income                          71.2                               69.2                               224.0      219.6

    Interest expense, net                   (15.1)                            (16.2)                             (44.3)    (48.5)

    Debt extinguishment costs                    -                                 -                              (0.4)         -

    Other (expense) income, net              (0.2)                             (1.6)                                0.2      (3.0)
                                              ----                               ----                                 ---       ----

    Income before income taxes                55.9                               51.4                               179.5      168.1

    Income tax expense                      (13.6)                             (6.9)                             (48.2)    (26.4)
                                             -----                               ----                               -----      -----

    Net income                                42.3                               44.5                               131.3      141.7

    Net loss (income)
     attributable to
     noncontrolling interests                    -                                 -                                0.1      (0.2)
                                               ---                               ---                                ---       ----

    Net income attributable to
     PolyOne common
     shareholders                                      $42.3                                           $44.5                 $131.4                 $141.5
                                                       =====                                           =====                 ======                 ======


    Earnings per common share
     attributable to PolyOne
     common shareholders -
     Basic:                                            $0.50                                           $0.51                  $1.56                  $1.60



    Earnings per common share
     attributable to PolyOne
     common shareholders -
     Diluted:                                          $0.50                                           $0.50                  $1.55                  $1.58




    Cash dividends declared per
     share of common stock                             $0.12                                           $0.10                  $0.36                  $0.30


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

    Basic                                     83.9                               87.5                                84.2       88.5

    Diluted                                   84.5                               88.4                                84.8       89.4



                                                                                                                                                                      Attachment 3

                                                                                       PolyOne Corporation

                                                                               Summary of Special Items (Unaudited)

                                                                               (In millions, except per share data)


                                                                                    Three Months Ended                         Nine Months Ended

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

                                                                                   2016                   2015                 2016                   2015
                                                                                   ----                   ----                 ----                   ----

    Cost of sales:

       Restructuring costs                                                                 $(0.6)                                   $(11.6)                 $(5.2)                 $(24.8)

       Environmental remediation costs                                            (2.3)                             (4.3)                         (6.1)      (7.8)

       Reimbursement of previously incurred environmental costs                       -                               2.1                            5.3         2.6

       Acquisition related adjustments                                            (2.0)                                 -                         (6.5)          -
                                                                                   ----                                ---                          ----         ---

          Impact on cost of sales                                                 (4.9)                            (13.8)                        (12.5)     (30.0)


    Selling and administrative expense:

       Employee separation and restructuring costs                                (3.3)                             (1.9)                        (11.8)      (6.7)

       Legal related and other                                                    (3.3)                             (1.9)                        (10.5)      (0.9)

       Acquisition/divestiture related costs                                      (0.5)                             (1.1)                         (1.4)      (2.3)
                                                                                   ----                               ----                           ----        ----

          Impact on selling and administrative expense                            (7.1)                             (4.9)                        (23.7)      (9.9)


          Impact on operating income                                             (12.0)                            (18.7)                        (36.2)     (39.9)


       Debt extinguishment costs                                                      -                                 -                         (0.4)          -

       Other income, net                                                              -                               0.1                            0.1         0.1
                                                                                    ---                               ---                            ---         ---

          Impact on income before income taxes                                   (12.0)                            (18.6)                        (36.5)     (39.8)

    Income tax benefit on above special items                                       4.3                                6.0                           13.2        13.7

    Tax adjustments(2)                                                              3.0                                9.6                            6.3        27.6

    Impact of special items on net income attributable to PolyOne Shareholders             $(4.7)                                    $(3.0)                $(17.0)                    $1.5
                                                                                            =====                                      =====                  ======                     ====


    Diluted earnings per common share impact                                              $(0.06)                                   $(0.04)                $(0.20)                   $0.01


    Weighted average shares used to compute adjusted earnings per share:

       Diluted                                                                     84.5                               88.4                           84.8        89.4

((1)) Special items include charges related to specific strategic initiatives or financial restructuring such as: consolidation of operations; debt extinguishment costs; costs incurred directly in relation to acquisitions or divestitures; employee separation costs resulting from personnel reduction programs, plant realignment costs, executive separation agreements; asset impairments; mark-to-market adjustments associated with actuarial gains and losses on pension and other post-retirement benefit plans; environmental remediation costs, fines, penalties and related insurance recoveries related to facilities no longer owned or closed in prior years; gains and losses on the divestiture of operating businesses, joint ventures and equity investments; gains and losses on facility or property sales or disposals; results of litigation, fines or penalties, where such litigation (or action relating to the fines or penalties) arose prior to the commencement of the performance period; one-time, non-recurring items; and the effect of changes in accounting principles or other such laws or provisions affecting reported results.

((2)) Tax adjustments include the net tax expense/benefit from one-time income tax items, the set-up or reversal of uncertain tax position reserves and deferred income tax valuation allowance adjustments.



                                                                                              Attachment 4

                                                PolyOne Corporation

                                       Condensed Consolidated Balance Sheets

                                                   (In millions)


                                                     (Unaudited)             December 31,
                                                    September 30,                    2015
                                                             2016
                                                             ----

    Assets

    Current assets:

    Cash and cash equivalents                                         $212.2                                 $279.8

    Accounts receivable, net                                418.3                           347.0

    Inventories, net                                        325.6                           287.0

    Other current assets                                     45.5                            47.0
                                                             ----                            ----

    Total current assets                                  1,001.6                           960.8

    Property, net                                           605.0                           583.5

    Goodwill                                                672.9                           597.7

    Intangible assets, net                                  370.2                           344.6

    Other non-current assets                                100.1                           108.5
                                                            -----                           -----

    Total assets                                                    $2,749.8                               $2,595.1
                                                                    ========                               ========


    Liabilities and Shareholders' Equity

    Current liabilities:

    Short-term and current
     portion of long-term debt                                         $19.3                                  $18.6

    Accounts payable                                        383.4                           351.6

    Accrued expenses and other
     current liabilities                                    124.8                           127.9

    Total current liabilities                               527.5                           498.1

    Non-current liabilities:

    Long-term debt                                        1,240.2                         1,128.0

    Pension and other post-
     retirement benefits                                     48.3                            77.5

    Deferred income taxes                                    30.8                            33.8

    Other non-current liabilities                           146.7                           152.5
                                                            -----                           -----

    Total non-current liabilities                         1,466.0                         1,391.8

    Shareholders' equity:

    PolyOne shareholders' equity                            755.4                           704.2

    Noncontrolling interests                                  0.9                             1.0
                                                              ---                             ---

    Total equity                                            756.3                           705.2
                                                            -----

    Total liabilities and
     shareholders' equity                                           $2,749.8                               $2,595.1
                                                                    ========                               ========



                                                                                                   Attachment 5

                                                  PolyOne Corporation

                              Condensed Consolidated Statements of Cash Flows (Unaudited)

                                                     (In millions)


                                                             Nine Months Ended

                                                             September 30,
                                                             -------------

                                                           2016                   2015
                                                           ----                   ----

    Operating Activities

    Net income                                                     $131.3                                      $141.7

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

    Depreciation and amortization                          74.7                               73.8

    Accelerated depreciation and
     fixed asset charges
     associated with restructuring
     activities                                             4.6                               16.1

    Provision for doubtful
     accounts                                               0.1                                0.1

    Debt extinguishment costs                               0.4                                  -

    Share-based compensation
     expense                                                6.5                                6.0

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

    Increase in accounts
     receivable                                          (67.4)                            (18.5)

    (Increase) decrease in
     inventories                                         (10.4)                              18.9

    Increase in accounts payable                           30.1                               15.0

    Decrease in pension and other
     post-retirement benefits                            (31.3)                            (32.1)

    Decrease in accrued expenses
     and other assets and
     liabilities -net                                    (11.8)                            (92.4)
                                                          -----                              -----

    Net cash provided by operating
     activities                                           126.8                              128.6

    Investing Activities

    Capital expenditures                                 (58.0)                            (61.6)

    Business acquisitions                               (158.3)                                 -

    Sale of and proceeds from
     other assets                                           9.8                                1.9
                                                            ---                                ---

    Net cash used by investing
     activities                                         (206.5)                            (59.7)

    Financing Activities

    Proceeds from long-term debt                          100.0                                  -

    Borrowings under credit
     facilities                                           805.9                              781.7

    Repayments under credit
     facilities                                         (806.4)                           (705.7)

    Purchase of common shares for
     treasury                                            (50.7)                           (117.8)

    Cash dividends paid                                  (30.1)                            (26.8)

    Repayment of long-term debt                           (4.4)                                 -

    Exercise of share awards                                1.0                                4.3

    Debt financing costs                                  (1.9)                                 -
                                                           ----                                ---

    Net cash provided (used) by
     financing activities                                  13.4                             (64.3)

    Effect of exchange rate
     changes on cash                                      (1.3)                             (7.5)
                                                           ----                               ----

    Decrease in cash and cash
     equivalents                                         (67.6)                             (2.9)

    Cash and cash equivalents at
     beginning of period                                  279.8                              238.6
                                                          -----                              -----

    Cash and cash equivalents at
     end of period                                                 $212.2                                      $235.7
                                                                   ======                                      ======



                                                                                                                                                                                                                                            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 in Attachment 3; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and
     certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker. These costs are included in Corporate and eliminations.


                                                                                                     Three Months Ended                               Nine Months Ended

                                                                                                        September 30,                                   September 30,
                                                                                                        -------------                                   -------------

                                                                                                      2016                   2015                      2016                   2015
                                                                                                      ----                   ----                      ----                   ----

    Sales:

       Color, Additives and Inks                                                                              $195.9                                          $199.9                                            $613.0                                            $625.8

       Specialty Engineered Materials                                                                146.2                              136.0                               430.5                                 417.6

       Designed Structures and Solutions                                                              97.0                              112.4                               308.8                                 343.1
                                                                                                      ----                              -----                               -----                                 -----

          Specialty Platform                                                                         439.1                              448.3                             1,352.3                               1,386.5

       Performance Products and Solutions                                                            171.3                              175.2                               510.3                                 541.4

       PolyOne Distribution                                                                          274.8                              259.5                               816.2                                 792.0

       Corporate and eliminations                                                                   (41.6)                            (41.4)                            (126.7)                              (118.1)
                                                                                                     -----                              -----                              ------                                ------

          Sales                                                                                               $843.6                                          $841.6                                          $2,552.1                                          $2,601.8
                                                                                                              ======                                          ======                                          ========                                          ========


    Gross margin:

       Color, Additives and Inks                                                                               $70.0                                           $73.4                                            $223.3                                            $226.8

       Specialty Engineered Materials                                                                 41.7                               39.6                               128.9                                 123.7

       Designed Structures and Solutions                                                               8.3                               14.3                                30.0                                  43.2

          Specialty Platform                                                                         120.0                              127.3                               382.2                                 393.7

       Performance Products and Solutions                                                             29.2                               27.2                                94.6                                  77.1

       PolyOne Distribution                                                                           29.6                               29.4                                89.8                                  87.4

       Corporate and eliminations                                                                    (5.7)                            (14.8)                             (15.7)                               (33.6)
                                                                                                      ----                              -----                               -----                                 -----

          Gross margin                                                                                        $173.1                                          $169.1                                            $550.9                                            $524.6
                                                                                                              ======                                          ======                                            ======                                            ======


    Selling and administrative expense:

       Color, Additives and Inks                                                                               $38.6                                           $38.9                                            $118.8                                            $118.9

       Specialty Engineered Materials                                                                 21.2                               19.6                                63.6                                  60.5

       Designed Structures and Solutions                                                               8.8                               10.0                                29.1                                  31.2
                                                                                                       ---                               ----                                ----                                  ----

          Specialty Platform                                                                          68.6                               68.5                               211.5                                 210.6

       Performance Products and Solutions                                                             11.2                               11.1                                35.6                                  33.2

       PolyOne Distribution                                                                           11.4                               11.8                                36.3                                  35.0

       Corporate and eliminations                                                                     10.7                                8.5                                43.5                                  26.2
                                                                                                      ----                                ---                                ----                                  ----

          Selling and administrative expense                                                                  $101.9                                           $99.9                                            $326.9                                            $305.0
                                                                                                              ======                                           =====                                            ======                                            ======


    Operating income:

       Color, Additives and Inks                                                                               $31.4                                           $34.5                                            $104.5                                            $107.9

       Specialty Engineered Materials                                                                 20.5                               20.0                                65.3                                  63.2

       Designed Structures and Solutions                                                             (0.5)                               4.3                                 0.9                                  12.0
                                                                                                      ----                                ---                                 ---                                  ----

          Specialty Platform                                                                          51.4                               58.8                               170.7                                 183.1

       Performance Products and Solutions                                                             18.0                               16.1                                59.0                                  43.9

       PolyOne Distribution                                                                           18.2                               17.6                                53.5                                  52.4

       Corporate and eliminations                                                                   (16.4)                            (23.3)                             (59.2)                               (59.8)
                                                                                                     -----                              -----                               -----                                 -----

          Operating income                                                                                     $71.2                                           $69.2                                            $224.0                                            $219.6
                                                                                                               =====                                           =====                                            ======                                            ======

The Specialty Platform consists of our three specialty segments: Color, Additives and Inks; Specialty Engineered Materials; and Designed Structures and Solutions. We present Specialty Platform sales, gross margin, selling and administrative expense, 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 how it may serve as a
     basis for future performance. In addition, operating income before the effect of special items is a component of PolyOne annual and long-term employee incentive plans and is used in debt covenant computations. Senior management believes these measures are useful to investors because
     they allow for comparison to PolyOne's performance in prior periods without the effect of items that, by their nature, tend to obscure PolyOne's operating results due to the potential variability across periods based on timing, frequency and magnitude. Non-GAAP financial measures
     have limitations as analytical tools and should not be considered in isolation from, or solely as alternatives to, financial measures prepared in accordance with GAAP. Below is a reconciliation of these non-GAAP financial measures to their most directly comparable financial measures
     calculated and presented in accordance with GAAP. See Attachment 3 for a definition and summary of special items.


                                                                                                                      Three Months Ended                                Nine Months Ended

                                                                                                                        September 30,                                     September 30,
                                                                                                                        -------------                                     -------------

    Reconciliation to Consolidated                                                                                    2016                    2015                      2016                    2015

    Statements of Income
                                                                                                                                                                                              ---


    Sales                                                                                                                     $843.6                                           $841.6                                           $2,552.1                                           $2,601.8


    Gross margin before special items                                                                                178.0                               182.9                                563.4                                 554.6

    Special items in gross margin (Attachment 3)                                                                     (4.9)                             (13.8)                              (12.5)                               (30.0)
                                                                                                                      ----                               -----

       Gross margin - GAAP                                                                                                    $173.1                                           $169.1                                             $550.9                                             $524.6
                                                                                                                              ======                                           ======                                             ======                                             ======


    Gross margin, before special items, as a percent of sales                                                        21.1%                              21.7%                               22.1%                                21.3%


    Operating income adjusted                                                                                         83.2                                87.9                                260.2                                 259.5

    Special items in operating income (Attachment 3)                                                                (12.0)                             (18.7)                              (36.2)                               (39.9)
                                                                                                                     -----                               -----                                -----                                 -----

       Operating income - GAAP                                                                                                 $71.2                                            $69.2                                             $224.0                                             $219.6
                                                                                                                               =====                                            =====                                             ======                                             ======


    Operating income, before special items, as a percent of sales                                                     9.9%                              10.4%                               10.2%                                10.0%

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



                                                                       Three Months Ended                                        Three Months Ended
                                                                        September 30, 2016                                       September 30, 2015
                                                                       ------------------                                        ------------------

                                                      GAAP Results           Special Items       Pre-special         GAAP Results               Special Items           Pre-special
                                                                                                   Results                                                                Results
                                                      ------------           -------------       -----------         ------------               -------------           -----------


    Income before income taxes                                       $55.9                                     $12.0                                              $67.9                         $51.4                $18.6        $70.0


    Income tax expense - GAAP                               (13.6)                             -                           (13.6)                               (6.9)                   -             (6.9)

    Income tax impact of special items (Attachment 3)            -                         (4.3)                            (4.3)                                   -               (6.0)             (6.0)

    Tax adjustments (Attachment 3)                               -                         (3.0)                            (3.0)                                   -               (9.6)             (9.6)
                                                               ---                          ----                              ----                                  ---                ----               ----

    Income tax expense                                             $(13.6)                                   $(7.3)                                           $(20.9)                       $(6.9)             $(15.6)     $(22.5)
                                                                    ======                                     =====                                             ======                         =====               ======       ======


    Effective Tax Rate                                       24.3%                                            30.8%                                     13.4%                                32.1%



                                                                        Nine Months Ended                                        Nine Months Ended
                                                                        September 30, 2016                                       September 30, 2015
                                                                       ------------------                                        ------------------

                                                      GAAP Results           Special Items        Pre-special            GAAP                 Special Items           Pre-special
                                                                                                    Results                                                             Results

                                                                                                                       Results
                                                                                                                       -------


    Income before income taxes                                      $179.5                                       $36.5                                         $216.0                          $168.1                 $39.8       $207.9


    Income tax expense - GAAP                               (48.2)                              -                        (48.2)                              (26.4)                    -              (26.4)

    Income tax impact of special items (Attachment 3)            -                         (13.2)                        (13.2)                                   -               (13.7)              (13.7)

    Tax adjustments (Attachment 3)                               -                          (6.3)                         (6.3)                                   -               (27.6)              (27.6)
                                                               ---                           ----                           ----                                  ---                -----                -----

    Income tax expense                                             $(48.2)                                    $(19.5)                                       $(67.7)                        $(26.4)              $(41.3)     $(67.7)
                                                                    ======                                      ======                                         ======                          ======                ======       ======


    Effective Tax Rate                                       26.9%                                              31.3%                                 15.7%                                  32.6%



                                                                                                                                                                                                                                    Attachment 8

                                                                                                                 PolyOne Corporation

                                                                                              Reconciliation of Non-GAAP Financial Measures (Unaudited)

                                                                                                                    (In millions)


    Senior management has defined Adjusted EBITDA as net income, prepared in accordance with GAAP, adjusted for interest, taxes, depreciation, amortization and special items. Adjusted EBITDA is a non-GAAP financial measurement used by management to enhance the
     understanding of our operating results. We provide Adjusted EBITDA because we believe that investors and securities analysts will find Adjusted EBITDA to be a useful measure for evaluating our operating performance. Adjusted EBITDA should not be considered as an
     alternative to net income as a measure of operating results in accordance with GAAP. Below is a reconciliation of Adjusted EBITDA to the most directly comparable financial measure calculated and presented in accordance with GAAP. See Attachment 3 for a definition and
     summary of special items.



                                                                                                    Three Months Ended                Nine Months Ended                Trailing Twelve Months

                                                                                                    December 31, 2015                 September 30, 2016                Ended September 30, 2016
                                                                                                    -----------------                 ------------------               ------------------------

    Net income                                                                                                                 $3.0                                                         $131.3                                                           $134.3

    Income tax (benefit) expense                                                                                 (3.4)                                          48.2                                         44.8

    (Loss) income before income taxes                                                                            (0.4)                                         179.5                                        179.1


    Interest expense, net                                                                                         15.6                                           44.3                                         59.9

    Depreciation and amortization                                                                                 25.9                                           78.0                                        103.9

    Special items, impact on (loss) income                                                                        47.8                                           36.5                                         84.3
      before income taxes (Attachment 3)

    Accelerated depreciation included in                                                                         (1.6)                                         (3.3)                                       (4.9)
      special items


    Adjusted EBITDA(3)                                                                                                        $87.3                                                         $335.0                                                           $422.3
                                                                                                                              =====                                                         ======                                                           ======

((3)) Adjusted EBITDA does not include the pro forma impact of acquired businesses for the trailing twelve months ended September 30, 2016.

Senior management has defined Net Debt as total debt outstanding less cash and cash equivalents. We provide Net Debt because we believe that it is more representative of our financial position given the amount of cash and cash equivalents held by PolyOne. Below is a reconciliation of Net Debt to the most directly comparable financial measures calculated and presented in accordance with GAAP.



                                                  September 30,
                                                  2016
                                                 --------------

    Short-term and current
     portion of long-term debt                                        $19.3

    Long-term debt                                      1,240.2

    Total Debt                                          1,259.5

    Less: Cash and cash
     equivalents                                        (212.2)

    Net Debt                                                       $1,047.3
                                                                   ========

Below is Net Debt to Adjusted EBITDA for the trailing twelve months. Senior management believes that investors and securities analysts find this leverage ratio useful for evaluating our ability to pay off debt and for comparing this measure with that of similar companies that have different capital structures.



                                           Trailing
                                            Twelve
                                            Months

                                             Ended
                                           September
                                           30, 2016
                                           ---------

    Net Debt /Adjusted
     EBITDA                                      2.5

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/polyone-announces-third-quarter-2016-results-300351507.html

SOURCE PolyOne Corporation