10/28/2021 | Press release | Distributed by Public on 10/28/2021 04:31
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2021 | 2020 | 2021 | 2020 | |||||
Sales | $ | 1,219.8 | $ | 924.5 | $ | 3,617.3 | $ | 2,245.1 |
Operating Income | 78.7 | 33.5 | 307.2 | 124.3 | ||||
Net income from continuing operations attributable to Avient shareholders | 52.9 | 1.7 | 201.0 | 57.8 | ||||
Basic earnings per share from continuing operations attributable to Avient shareholders |
$ | 0.58 | $ | 0.02 | $ | 2.20 | $ | 0.64 |
Diluted earnings per share from continuing operations attributable to Avient shareholders |
$ | 0.57 | $ | 0.02 | $ | 2.18 | $ | 0.64 |
Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | |||||||
Reconciliation to Condensed Consolidated Statements of Income | $ | EPS | $ | EPS | ||||
Net income from continuing operations attributable to Avient shareholders | $ | 52.9 | $ | 0.57 | $ | 1.7 | $ | 0.02 |
Special items, after tax (Attachment 3) | 11.7 | 0.13 | 40.3 | 0.44 | ||||
Adjusted net income / EPS - excluding special items | $ | 64.6 | $ | 0.70 | $ | 42.0 | $ | 0.46 |
Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | |||||||
Reconciliation to Condensed Consolidated Statements of Income | $ | EPS | $ | EPS | ||||
Net income from continuing operations attributable to Avient shareholders | $ | 201.0 | $ | 2.18 | $ | 57.8 | $ | 0.64 |
Special items, after tax (Attachment 3) | 26.0 | 0.28 | 51.5 | 0.57 | ||||
Adjusted net income / EPS - excluding special items | $ | 227.0 | $ | 2.46 | $ | 109.3 | $ | 1.21 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2021 | 2020 | 2021 | 2020 | |||||
Sales | $ | 1,219.8 | $ | 924.5 | $ | 3,617.3 | $ | 2,245.1 |
Cost of sales | 964.4 | 714.3 | 2,770.8 | 1,713.7 | ||||
Gross margin | 255.4 | 210.2 | 846.5 | 531.4 | ||||
Selling and administrative expense | 176.7 | 176.7 | 539.3 | 407.1 | ||||
Operating income | 78.7 | 33.5 | 307.2 | 124.3 | ||||
Interest expense, net | (19.0) | (29.7) | (57.8) | (55.3) | ||||
Other income, net | 1.4 | 1.5 | 4.1 | 12.6 | ||||
Income from continuing operations before income taxes | 61.1 | 5.3 | 253.5 | 81.6 | ||||
Income taxes | (8.5) | (2.7) | (51.8) | (22.5) | ||||
Net income from continuing operations | 52.6 | 2.6 | 201.7 | 59.1 | ||||
Loss from discontinued operations, net of income taxes | - | - | - | (0.5) | ||||
Net income | 52.6 | 2.6 | 201.7 | 58.6 | ||||
Net loss (income) attributable to noncontrolling interests | 0.3 | (0.9) | (0.7) | (1.3) | ||||
Net income attributable to Avient common shareholders | $ | 52.9 | $ | 1.7 | $ | 201.0 | $ | 57.3 |
Earnings per share attributable to Avient common shareholders - Basic: | ||||||||
Continuing operations | $ | 0.58 | $ | 0.02 | $ | 2.20 | $ | 0.64 |
Discontinued operations | - | - | - | - | ||||
Total | $ | 0.58 | $ | 0.02 | $ | 2.20 | $ | 0.64 |
Earnings per share attributable to Avient common shareholders - Diluted: | ||||||||
Continuing operations | $ | 0.57 | $ | 0.02 | $ | 2.18 | $ | 0.64 |
Discontinued operations | - | - | - | (0.01) | ||||
Total | $ | 0.57 | $ | 0.02 | $ | 2.18 | $ | 0.63 |
Cash dividends declared per share of common stock | $ | 0.2125 | $ | 0.2025 | $ | 0.6375 | $ | 0.6075 |
Weighted-average shares used to compute earnings per common share: | ||||||||
Basic | 91.4 | 91.5 | 91.3 | 89.7 | ||||
Diluted | 92.2 | 91.9 | 92.1 | 90.7 |
Special items (1)
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2021 | 2020 | 2021 | 2020 | |||||
Cost of sales:
|
||||||||
Restructuring costs, including accelerated depreciation and amortization
|
$ | (5.3) | $ | (1.3) | $ | (8.6) | $ | (2.5) |
Environmental remediation costs
|
(9.4) | (15.8) | (22.4) | (19.3) | ||||
Reimbursement of previously incurred environmental costs
|
- | - | 4.5 | 8.7 | ||||
Acquisition related costs
|
(2.6) | (10.5) | (1.2) | (10.5) | ||||
Impact on cost of sales
|
(17.3) | (27.6) | (27.7) | (23.6) | ||||
Selling and administrative expense: | ||||||||
Restructuring, legal and other
|
- | (4.2) | (1.7) | (9.5) | ||||
Acquisition earn-out adjustments
|
- | (1.5) | - | (2.5) | ||||
Acquisition related costs
|
(2.7) | (7.1) | (7.2) | (23.5) | ||||
Impact on selling and administrative expense
|
(2.7) | (12.8) | (8.9) | (35.5) | ||||
Impact on operating income
|
(20.0) | (40.4) | (36.6) | (59.1) | ||||
Costs related to committed financing in interest expense, net | - | (9.6) | - | (10.1) | ||||
Other income, net
|
0.1 | - | 0.1 | 0.3 | ||||
Pension settlement gain and mark-to-market adjustment
|
- | - | - | 6.9 | ||||
Impact on income from continuing operations before income taxes
|
(19.9) | (50.0) | (36.5) | (62.0) | ||||
Income tax benefit on above special items
|
4.6 | 12.7 | 8.9 | 15.4 | ||||
Tax adjustments(2)
|
3.6 | (3.0) | 1.6 | (4.9) | ||||
Impact of special items on net income from continuing operations attributable to Avient Shareholders
|
$ | (11.7) | $ | (40.3) | $ | (26.0) | $ | (51.5) |
Diluted earnings per common share impact | $ | (0.13) | $ | (0.44) | $ | (0.28) | $ | (0.57) |
Weighted average shares used to compute adjusted earnings per share:
|
||||||||
Diluted | 92.2 | 91.9 | 92.1 | 90.7 |
(Unaudited)
September 30, 2021
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December 31, 2020 |
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ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ | 545.2 | $ | 649.5 |
Accounts receivable, net | 703.0 | 516.6 | ||
Inventories, net | 477.2 | 327.5 | ||
Other current assets | 123.5 | 108.5 | ||
Total current assets | 1,848.9 | 1,602.1 | ||
Property, net | 669.6 | 694.9 | ||
Goodwill | 1,293.9 | 1,308.1 | ||
Intangible assets, net | 948.4 | 1,008.5 | ||
Operating lease assets, net | 81.6 | 80.9 | ||
Other non-current assets | 168.6 | 176.0 | ||
Total assets | $ | 5,011.0 | $ | 4,870.5 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Short-term and current portion of long-term debt | $ | 8.7 | $ | 18.6 |
Accounts payable | 557.7 | 471.7 | ||
Current operating lease obligations | 24.1 | 25.1 | ||
Accrued expenses and other current liabilities | 371.3 | 285.6 | ||
Total current liabilities | 961.8 | 801.0 | ||
Non-current liabilities: | ||||
Long-term debt | 1,851.0 | 1,854.0 | ||
Pension and other post-retirement benefits | 111.0 | 115.0 | ||
Non-current operating lease obligations | 57.7 | 56.0 | ||
Other non-current liabilities | 244.1 | 332.8 | ||
Total non-current liabilities | 2,263.8 | 2,357.8 | ||
SHAREHOLDERS' EQUITY | ||||
Avient shareholders' equity | 1,768.8 | 1,697.1 | ||
Noncontrolling interest | 16.6 | 14.6 | ||
Total equity | 1,785.4 | 1,711.7 | ||
Total liabilities and equity | $ | 5,011.0 | $ | 4,870.5 |
Nine Months Ended September 30, |
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2021 | 2020 | |||
Operating Activities | ||||
Net income | $ | 201.7 | $ | 58.6 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 105.8 | 74.8 | ||
Accelerated depreciation and amortization | 1.9 | 2.5 | ||
Share-based compensation expense | 8.4 | 7.1 | ||
Changes in assets and liabilities, net of the effect of acquisitions: | ||||
Increase in accounts receivable | (199.7) | (12.7) | ||
(Increase) decrease in inventories | (156.2) | 53.0 | ||
Increase in accounts payable | 95.3 | 21.3 | ||
Decrease in pension and other post-retirement benefits | (14.2) | (14.4) | ||
Increase in post-acquisition earnout liabilities | - | 2.5 | ||
Increase in accrued expenses and other assets and liabilities, net | 67.0 | 56.1 | ||
Taxes paid on gain on divestiture | - | (142.0) | ||
Payment of post-acquisition date earnout liability | - | (38.1) | ||
Net cash provided by operating activities | 110.0 | 68.7 | ||
Investing activities | ||||
Capital expenditures | (62.7) | (38.6) | ||
Business acquisitions, net of cash acquired | (47.6) | (1,342.7) | ||
Net proceeds from divestiture | - | 7.1 | ||
Other investing activities | (2.0) | 5.2 | ||
Net cash used by investing activities | (112.3) | (1,369.0) | ||
Financing activities | ||||
Debt offering proceeds | - | 650.0 | ||
Purchase of common shares for treasury | (4.2) | (13.6) | ||
Cash dividends paid | (58.2) | (52.8) | ||
Repayment of long-term debt | (16.5) | (6.0) | ||
Payments of withholding tax on share awards | (9.1) | (1.9) | ||
Debt financing costs | - | (9.5) | ||
Equity offering proceeds, net of underwriting discount and issuance costs | - | 496.1 | ||
Payment of acquisition date earnout liability | - | (50.8) | ||
Other financing activities | (3.5) | - | ||
Net cash (used) provided by financing activities | (91.5) | 1,011.5 | ||
Effect of exchange rate changes on cash | (10.5) | 1.4 | ||
Decrease in cash and cash equivalents | (104.3) | (287.4) | ||
Cash and cash equivalents at beginning of year | 649.5 | 864.7 | ||
Cash and cash equivalents at end of period | $ | 545.2 | $ | 577.3 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2021 | 2020 | 2021 | 2020 | |||||
Sales: | ||||||||
Color, Additives and Inks | $ | 586.6 | $ | 493.8 | $ | 1,820.3 | $ | 977.1 |
Specialty Engineered Materials | 233.6 | 174.1 | 690.7 | 518.2 | ||||
Distribution | 438.8 | 276.9 | 1,205.9 | 805.2 | ||||
Corporate and eliminations | (39.2) | (20.3) | (99.6) | (55.4) | ||||
Sales | $ | 1,219.8 | $ | 924.5 | $ | 3,617.3 | $ | 2,245.1 |
Gross margin: | ||||||||
Color, Additives and Inks | $ | 172.1 | $ | 155.0 | $ | 563.0 | $ | 320.1 |
Specialty Engineered Materials | 63.1 | 53.4 | 197.4 | 148.5 | ||||
Distribution | 39.9 | 30.8 | 119.3 | 91.6 | ||||
Corporate and eliminations | (19.7) | (29.0) | (33.2) | (28.8) | ||||
Gross margin | $ | 255.4 | $ | 210.2 | $ | 846.5 | $ | 531.4 |
Selling and administrative expense: | ||||||||
Color, Additives and Inks | $ | 105.3 | $ | 104.5 | $ | 321.1 | $ | 196.8 |
Specialty Engineered Materials | 31.4 | 28.7 | 94.2 | 84.5 | ||||
Distribution | 16.1 | 13.3 | 47.8 | 40.1 | ||||
Corporate and eliminations | 23.9 | 30.2 | 76.2 | 85.7 | ||||
Selling and administrative expense | $ | 176.7 | $ | 176.7 | $ | 539.3 | $ | 407.1 |
Operating income: | ||||||||
Color, Additives and Inks | $ | 66.8 | $ | 50.5 | $ | 241.9 | $ | 123.3 |
Specialty Engineered Materials | 31.7 | 24.7 | 103.2 | 64.0 | ||||
Distribution | 23.8 | 17.5 | 71.5 | 51.5 | ||||
Corporate and eliminations | (43.6) | (59.2) | (109.4) | (114.5) | ||||
Operating income | $ | 78.7 | $ | 33.5 | $ | 307.2 | $ | 124.3 |
Earnings before interest, taxes, depreciation and amortization (EBITDA):
|
||||||||
Color, Additives and Inks | $ | 93.4 | $ | 76.8 | $ | 321.1 | $ | 171.3 |
Specialty Engineered Materials | 39.6 | 32.2 | 127.0 | 86.7 | ||||
Distribution | 24.0 | 17.7 | 72.1 | 51.9 | ||||
Corporate and eliminations | (41.5) | (56.7) | (105.3) | (108.3) | ||||
Other income, net | 1.4 | 1.5 | 4.1 | 12.6 | ||||
EBITDA | $ | 116.9 | $ | 71.5 | $ | 419.0 | $ | 214.2 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
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Reconciliation to Consolidated Statements of Income | 2021 | 2020 | 2021 | 2020 | ||||
Sales | $ | 1,219.8 | $ | 924.5 | $ | 3,617.3 | $ | 2,245.1 |
Gross margin - GAAP | 255.4 | 210.2 | 846.5 | 531.4 | ||||
Special items in gross margin (Attachment 3) | 17.3 | 27.6 | 27.7 | 23.6 | ||||
Adjusted gross margin | $ | 272.7 | $ | 237.8 | $ | 874.2 | $ | 555.0 |
Adjusted gross margin as a percent of sales | 22.4 | % | 25.7 | % | 24.2 | % | 24.7 | % |
Operating income - GAAP | 78.7 | 33.5 | 307.2 | 124.3 | ||||
Special items in operating income (Attachment 3) | 20.0 | 40.4 | 36.6 | 59.1 | ||||
Adjusted operating income | $ | 98.7 | $ | 73.9 | $ | 343.8 | $ | 183.4 |
Adjusted operating income as a percent of sales | 8.1 | % | 8.0 | % | 9.5 | % | 8.2 | % |
Three Months Ended September 30, | ||||||||||||
2021 | 2020 | |||||||||||
GAAP Results | Special Items | Adjusted Results | GAAP Results | Special Items | Adjusted Results | |||||||
Income from continuing operations before income taxes |
$ | 61.1 | $ | 19.9 | $ | 81.0 | $ | 5.3 | $ | 50.0 | $ | 55.3 |
Income tax expense - GAAP | (8.5) | - | (8.5) | (2.7) | - | (2.7) | ||||||
Income tax impact of special items (Attachment 3) | - | (4.6) | (4.6) | - | (12.7) | (12.7) | ||||||
Tax adjustments (Attachment 3) | - | (3.6) | (3.6) | - | 3.0 | 3.0 | ||||||
Income tax (expense) benefit | $ | (8.5) | $ | (8.2) | $ | (16.7) | $ | (2.7) | $ | (9.7) | $ | (12.4) |
Effective Tax Rate(1)
|
14.1 | % | 20.8 | % | 51.9 | % | 22.7 | % |
Nine Months Ended September 30, | ||||||||||||
2021 | 2020 | |||||||||||
GAAP Results | Special Items | Adjusted Results | GAAP Results | Special Items | Adjusted Results | |||||||
Income from continuing operations before income taxes |
$ | 253.5 | $ | 36.5 | $ | 290.0 | $ | 81.6 | $ | 62.0 | $ | 143.6 |
Income tax expense - GAAP | (51.8) | - | (51.8) | (22.5) | - | (22.5) | ||||||
Income tax impact of special items (Attachment 3) | - | (8.9) | (8.9) | - | (15.4) | (15.4) | ||||||
Tax adjustments (Attachment 3) | - | (1.6) | (1.6) | - | 4.9 | 4.9 | ||||||
Income tax (expense) benefit | $ | (51.8) | $ | (10.5) | $ | (62.3) | $ | (22.5) | $ | (10.5) | $ | (33.0) |
Effective Tax Rate(1)
|
20.5 | % | 21.5 | % | 27.6 | % | 23.0 | % |
Reconciliation of Pro Forma Adjusted Earnings per Share: |
Nine Months Ended September 30, 2020 |
Year Ended December 31, 2020 | ||
Net income from continuing operations attributable to Avient shareholders | $ | 57.8 | $ | 132.0 |
Special items, after tax | 42.0 | 24.8 | ||
Adjusted net income from continuing operations excluding special items | 99.8 | 156.8 | ||
Clariant MB pro forma adjustments to net income from continuing operations(2)
|
20.7 | 20.7 | ||
Pro forma adjusted net income from continuing operations attributable to Avient shareholders | $ | 120.5 | $ | 177.5 |
Weighted average diluted shares | 90.7 | 90.6 | ||
Pro forma impact to diluted shares from January 2020 equity offering(2)
|
2.9 | 1.5 | ||
Pro forma weighted average diluted shares | 93.6 | 92.1 | ||
Adjusted EPS - excluding special items pro forma for Clariant MB acquisition | $ | 1.29 | $ | 1.93 |
Three Months Ended June 30, 2020 |
Nine Months Ended September 30, 2020 |
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Reconciliation of Pro Forma Adjusted Earnings per Share: | Avient | Special Items | Adjusted Avient |
Clariant MB
Pro Forma Adjustments(2)
|
Pro Forma Adjusted Avient | |||||
Sales | $ | 2,245.1 | $ | - | $ | 2,245.1 | $ | 540.5 | $ | 2,785.6 |
Operating income | $ | 124.3 | $ | 59.1 | $ | 183.4 | $ | 45.0 | $ | 228.4 |
Interest expense, net | (55.3) | - | (55.3) | (18.1) | (73.4) | |||||
Pension settlement gain and mark-to-market adjustment | - | (6.9) | (6.9) | - | (6.9) | |||||
Other income, net | 12.6 | 0.3 | 12.9 | - | 12.9 | |||||
Income taxes | (22.5) | (10.5) | (33.0) | (6.2) | (39.2) | |||||
Net income attributable to noncontrolling interests | (1.3) | - | (1.3) | - | (1.3) | |||||
Net income from continuing operations attributable to Avient shareholders | $ | 57.8 | $ | 42.0 | $ | 99.8 | $ | 20.7 | $ | 120.5 |
Weighted average diluted shares | 90.7 | |||||||||
Impact to diluted shares from January 2020 equity offering | 2.9 | |||||||||
Pro forma weighted average diluted shares | 93.6 | |||||||||
Pro forma adjusted EPS | $ | 1.29 |
Reconciliation of EBITDA by Segment |
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||
2021 | 2020 | 2021 | 2020 | |||||
Operating income: | ||||||||
Color, Additives and Inks | $ | 66.8 | $ | 50.5 | $ | 241.9 | $ | 123.3 |
Specialty Engineered Materials | 31.7 | 24.7 | 103.2 | 64.0 | ||||
Distribution | 23.8 | 17.5 | 71.5 | 51.5 | ||||
Corporate and eliminations | (43.6) | (59.2) | (109.4) | (114.5) | ||||
Operating income | $ | 78.7 | $ | 33.5 | $ | 307.2 | $ | 124.3 |
Items below OI in Corporate: | ||||||||
Other income, net | $ | 1.4 | $ | 1.5 | $ | 4.1 | $ | 12.6 |
Depreciation & amortization: | ||||||||
Color, Additives and Inks | $ | 26.6 | $ | 26.3 | $ | 79.2 | $ | 48.0 |
Specialty Engineered Materials | 7.9 | 7.5 | 23.8 | 22.7 | ||||
Distribution | 0.2 | 0.2 | 0.6 | 0.4 | ||||
Corporate and eliminations | 2.1 | 2.5 | 4.1 | 6.2 | ||||
Depreciation & Amortization | $ | 36.8 | $ | 36.5 | $ | 107.7 | $ | 77.3 |
EBITDA: | ||||||||
Color, Additives and Inks | $ | 93.4 | $ | 76.8 | $ | 321.1 | $ | 171.3 |
Specialty Engineered Materials | 39.6 | 32.2 | 127.0 | 86.7 | ||||
Distribution | 24.0 | 17.7 | 72.1 | 51.9 | ||||
Corporate and eliminations | (41.5) | (56.7) | (105.3) | (108.3) | ||||
EBITDA | $ | 116.9 | $ | 71.5 | $ | 419.0 | $ | 214.2 |
EBITDA as a % of Sales: | ||||||||
Color, Additives and Inks | 15.9 | % | 15.6 | % | 17.6 | % | 17.5 | % |
Specialty Engineered Materials | 17.0 | % | 18.5 | % | 18.4 | % | 16.7 | % |
Distribution | 5.5 | % | 6.4 | % | 6.0 | % | 6.4 | % |
Reconciliation of Pro Forma EBITDA - Color, Additives and Inks |
Nine Months Ended September 30, 2020 |
|
Sales: | ||
Color, Additives and Inks | $ | 977.1 |
Clariant MB pro forma adjustments(2)
|
540.5 | |
Pro forma sales | $ | 1,517.6 |
Operating income: | ||
Color, Additives and Inks | $ | 123.3 |
Clariant MB pro forma adjustments(2)
|
45.0 | |
Pro forma operating income | $ | 168.3 |
Depreciation & amortization: | ||
Color, Additives and Inks | $ | 48.0 |
Clariant MB pro forma adjustments(2)
|
30.1 | |
Pro forma depreciation & amortization | $ | 78.1 |
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA):
|
||
Color, Additives and Inks | $ | 171.3 |
Clariant MB pro forma adjustments(2)
|
75.1 | |
Pro forma EBITDA | $ | 246.4 |
Pro forma EBITDA as a % of Sales | 16.2 | % |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
Reconciliation to EBITDA and Pro Forma Adjusted EBITDA: | 2021 | 2020 | 2021 | 2020 | ||||
Net income from continuing operations - GAAP | $ | 52.6 | $ | 2.6 | $ | 201.7 | $ | 59.1 |
Income tax expense | 8.5 | 2.7 | 51.8 | 22.5 | ||||
Interest expense | 19.0 | 29.7 | 57.8 | 55.3 | ||||
Depreciation and amortization from continuing operations | 36.8 | 36.5 | 107.7 | 77.3 | ||||
EBITDA | $ | 116.9 | $ | 71.5 | $ | 419.0 | $ | 214.2 |
Special items, before tax | 19.9 | 50.0 | 36.5 | 62.0 | ||||
Interest expense included in special items | - | (9.6) | - | (10.1) | ||||
Depreciation and amortization included in special items | (0.9) | (1.3) | (0.1) | (2.5) | ||||
Adjusted EBITDA | $ | 135.9 | $ | 110.6 | $ | 455.4 | $ | 263.6 |
Clariant MB pro forma adjustments(2)
|
- | - | - | 75.1 | ||||
Pro forma adjusted EBITDA | $ | 135.9 | $ | 110.6 | $ | 455.4 | $ | 338.7 |