COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Note 11 — COMMITMENTS AND CONTINGENCIES

We have been notified by federal and state environmental agencies and by private parties that we may be a potentially responsible party (PRP) in connection with the environmental investigation and remediation of certain sites. While government agencies frequently assert that PRPs are jointly and severally liable at these sites, in our experience, the interim and final allocations of liability costs are generally made based on the relative contribution of waste. We may also initiate corrective and preventive environmental projects of our own to support safe and lawful activities at our operations. We believe that compliance with current governmental regulations at all levels will not have a material adverse effect on our financial position, results of operations or cash flows.

In September 2007, the United States District Court for the Western District of Kentucky (Court) in the case of Westlake Vinyls, Inc. v. Goodrich Corporation, et al., held that Avient must pay the remediation costs at the former Goodrich Corporation Calvert City facility (now largely owned and operated by Westlake Vinyls, Inc. (Westlake Vinyls)), together with certain defense costs of Goodrich Corporation. The rulings also provided that Avient can seek indemnification for contamination attributable to Westlake Vinyls. Following the rulings, the parties to the litigation agreed to settle all claims regarding past environmental costs incurred at the site. The settlement agreement provides a mechanism to pursue allocation of future remediation costs at the Calvert City site to Westlake Vinyls.

The environmental obligation at the site arose as a result of an agreement between The B.F. Goodrich Company (n/k/a Goodrich Corporation) and our predecessor, The Geon Company, at the time of the initial public offering in 1993. Under the agreement, The Geon Company agreed to indemnify Goodrich Corporation for certain environmental costs at the site. Neither Avient nor The Geon Company ever operated the facility.

Since 2009, Avient, along with respondents Westlake Vinyls and Goodrich Corporation, has worked with the United States Environmental Protection Agency (USEPA) to address the remedial activities at the site. The USEPA issued its Record of Decision (ROD) in September 2018. In April 2019, the respondents signed an Administrative Settlement Agreement and Order on Consent with the USEPA to conduct the remedial actions at the site. In February 2020, three companies signed the agreed Consent Decree and remedial action Work Plan, which received Federal Court approval in January 2021.

In 2023, the Company recognized charges of $20.6 million associated with the completion of certain remedial action activities at the site. Further, the Company received construction bids based on an interim design for the largest component of remedial action at Calvert City, the construction of a barrier wall around the site, which began in 2024. These construction cost updates resulted in an additional charge of $36.2 million in 2023. In 2024, the Company finalized the design and construction estimates for one phase of the barrier wall, as well as an updated remedial action timeline at the site, which resulted in charges of $19.8 million. Construction of the initial barrier wall section began in 2024 and was substantially complete as of December 31, 2024. The remaining wall designs and construction are expected to be completed in phases between 2025 and 2028. As the Company completes further design work and begins construction on the remaining sections of the barrier wall, the Company will update its accrual, which was $137.7 million as of December 31, 2024 for any new information as it becomes available.

Total environmental accruals of $146.0 million and $157.2 million are reflected within Accrued expenses and other current liabilities and Other non-current liabilities in our Consolidated Balance Sheets as of December 31, 2024 and December 31, 2023, respectively. These undiscounted accruals represent our best estimate of probable future costs that we can reasonably estimate, based upon currently available information and technology and how the remedy will be implemented. It is reasonably possible that we could incur additional costs in excess of the amount accrued, which could be material to our Consolidated Statements of Income. However, such additional costs cannot currently be estimated as they are dependent upon the results of future testing and findings during the execution of remedial design and remedial action, changes in the Calvert City construction timeline, changes in regulations, technology development, new information, newly discovered conditions and other factors that are not currently known.

The following table details the changes in the environmental accrued liabilities:


(In millions)	2024		2023		2022
Balance at beginning of the year	$	157.2	$	118.3	$	124.5
Environmental expenses	35.0		69.6		24.1
Net cash payments	(46.1)		(30.7)		(30.2)
Currency translation and other	(0.1)		—		(0.1)
Balance at the end of year	$	146.0	$	157.2	$	118.3

The environmental expenses noted in the table above, primarily related to the ongoing remedial action at Calvert City, are included in Cost of sales within the Consolidated Statements of Income.

In 2024, Avient recognized a gain of $34.7 million associated with insurance recoveries for previously incurred losses at the Calvert City site. This gain is included in Cost of sales within the Consolidated Statements of Income. We received $0.7 million of cash associated with these insurance recoveries in the fourth quarter of 2024, while $34.0 million is expected to be received in the first quarter of 2025. Further insurance recoveries related to remedial activities at the Calvert City site are expected to be immaterial. We received insurance recoveries of $1.7 million and $8.3 million in 2023 and 2022, respectively.

Avient is subject to a broad range of claims, administrative and legal proceedings such as lawsuits that relate to contractual allegations, tax audits, product claims, personal injuries, and employment related matters. Although it is not possible to predict with certainty the outcome or cost of these matters, the Company believes our current reserves are appropriate and these matters will not have a material adverse effect on the consolidated financial statements.