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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________

FORM 10-Q
_______________


 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
OR
 
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
 
Commission file number: 001-36272
esi-20200331_g1.jpg
Element Solutions Inc
(Exact name of Registrant as specified in its charter)
Delaware37-1744899
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  
500 East Broward Boulevard,Suite 186033394
Fort Lauderdale,Florida(Zip Code)
(Address of principal executive offices)
Registrant’s telephone number, including area code: (561) 207-9600
_______________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareESINew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes        No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes        No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.    



Large accelerated filer
Accelerated filer
Non-accelerated filer  
Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No
Number of shares of common stock outstanding at April 20, 2020: 248,752,742



TABLE OF CONTENTS


Glossary
Page
Glossary of Defined Terms
   
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 2020 and 2019
Condensed Consolidated Statements of Comprehensive (Loss) Income
Three Months Ended March 31, 2020 and 2019
Condensed Consolidated Balance Sheets
March 31, 2020 and December 31, 2019
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 2020 and 2019
Condensed Consolidated Statements of Changes in Stockholders' Equity
Three Months Ended March 31, 2020 and 2019
   
 
   
   



GLOSSARY OF DEFINED TERMS

Terms 
Definitions
Element Solutions;
We; Us; Our; the Company
Element Solutions Inc, a Delaware corporation, and, where the context requires, its subsidiaries or operating businesses.
ArystaArysta LifeScience Limited, formerly an Irish private limited company.
Arysta SaleSale of 100% of the issued and outstanding shares of common stock of Arysta and its subsidiaries to UPL on January 31, 2019 for an aggregate purchase price of $4.28 billion in cash, after post-closing adjustments.
ASUAccounting Standards Update.
BoardElement Solutions' board of directors.
Credit AgreementCredit Agreement, dated as of January 31, 2019, as amended on November 26, 2019, among, inter alia, Element Solutions and MacDermid, as borrowers, certain subsidiaries of Element Solutions and the lenders from time to time parties thereto, and Barclays Bank PLC, as administrative agent and collateral agent.
EBITDAEarnings before interest, taxes, depreciation and amortization.
ESPPElement Solutions Inc 2014 Employee Stock Purchase Plan.
Exchange ActSecurities Exchange Act of 1934, as amended.
FASBFinancial Accounting Standards Board.
GAAPU.S. Generally Accepted Accounting Principles.
MacDermidMacDermid, Incorporated, a Connecticut corporation.
NYSENew York Stock Exchange.
OEMOriginal Equipment Manufacturer.
PDHPlatform Delaware Holdings, Inc., a former subsidiary of Element Solutions.
Quarterly ReportThis quarterly report on Form 10-Q for the three months ended March 31, 2020.
RSUsRestricted stock units issued by Element Solutions from time to time under its amended and restated 2013 Incentive Compensation Plan.
SECSecurities and Exchange Commission.
Series A Preferred StockElement Solutions' 2,000,000 shares of Series A convertible preferred stock, which were converted into shares of Element Solutions' common stock on February 25, 2020, on a one-for-one basis, upon request of Mariposa Acquisition, LLC and Berggruen Holdings Ltd. and affiliates.
UPLUPL Corporation Ltd., a wholly-owned subsidiary of UPL Limited.
2019 Annual ReportElement Solutions' annual report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on February 28, 2020.
5.875% USD Notes IndentureThe indenture, dated November 24, 2017, governing the 5.875% USD Notes due 2025.
5.875% USD Notes due 2025Element Solutions' $800 million aggregate principal amount of 5.875% senior notes due 2025, denominated in U.S. dollars, issued on November 24, 2017.

i

GLOSSARY OF DEFINED TERMS
Forward-Looking Statements
This Quarterly Report contains forward-looking statements that can be identified by words such as "expect," "anticipate," "project," "will," "should," "believe," "intend," "plan," "assume," "estimate," "predict," "seek," "continue," "outlook," "may," "might," "aim," "can have," "likely," "potential," "target," "hope," "goal" or "priority" and variations of such words and similar expressions. Many of the forward-looking statements include, but are not limited to, statements, beliefs, projections and expectations regarding our business and management strategies; share repurchases; cost containment and cost savings; the impact of new accounting standards and accounting changes; our dividend policy; the effects of global economic conditions; the extent of the impact of the coronavirus (COVID-19) outbreak on our business and stock price; our hedging activities; timing and outcome of environmental and legal matters; goodwill and other intangible assets; impairments; price volatility and cost environment; liquidity, cash flows and capital resources; funding sources; capital expenditures; debt and debt leverage ratio; off-balance sheet arrangements and contractual obligations; general views about future operating results; expected returns to stockholders; risk management programs; future prospects; and other events or developments that we expect or anticipate will occur in the future.
Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. These statements are not guarantees of future performance and our actual results may differ materially from the results contemplated by these statements. A discussion of such risks and uncertainties includes, without limitation, the risks set forth in Part II, Item 1A, Risk Factors, of this Quarterly Report and in Part I, Item 1A, Risk Factors, of our 2019 Annual Report. Any forward-looking statement is based only on information currently available and speaks only as of the date on which it is made. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Please consult any further disclosures on related subjects in our SEC filings.
Non-GAAP Financial Measures
This Quarterly Report contains non-GAAP financial measures, such as Adjusted EBITDA and operating results on a constant currency and organic basis. Non-GAAP financial measures should not be considered in isolation from, as a substitute for, or superior to, performance measures calculated in accordance with GAAP. For definitions of these non-GAAP financial measures and additional information on why they are presented, their respective limitations and reconciliations to their most comparable applicable GAAP measures, see "Non-GAAP Financial Measures" in the Management's Discussion and Analysis of Financial Condition and Results of Operations section in Part I, Item 2, and Note 14, Segment Information, to the unaudited Condensed Consolidated Financial Statements, both included in this Quarterly Report.

ii



PART I. FINANCIAL INFORMATION


Item 1. Condensed Consolidated Financial Statements
 
ELEMENT SOLUTIONS INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(dollars in millions, except per share amounts)

Three Months Ended March 31,
 20202019
Net sales$452.6  $459.8  
Cost of sales255.3  261.5  
Gross profit197.3  198.3  
Operating expenses:   
Selling, technical, general and administrative125.2  142.4  
Research and development17.5  10.8  
Total operating expenses142.7  153.2  
Operating profit54.6  45.1  
Other (expense) income:      
Interest expense, net(16.7) (38.1) 
Foreign exchange (loss) gain(25.8) 27.1  
Other income (expense), net0.4  (48.0) 
Total other expense(42.1) (59.0) 
Income (loss) before income taxes and non-controlling interests12.5  (13.9) 
Income tax (expense) benefit(4.1) 10.4  
Net income (loss) from continuing operations8.4  (3.5) 
Income from discontinued operations, net of tax0.2  27.4  
Net income8.6  23.9  
Net income attributable to non-controlling interests  (0.7) 
Net income attributable to common stockholders$8.6  $23.2  
Earnings (loss) per share  
Basic from continuing operations$0.03  $(0.02) 
Basic from discontinued operations  0.11  
Basic attributable to common stockholders$0.03  $0.09  
Diluted from continuing operations$0.03  $(0.02) 
Diluted from discontinued operations  0.11  
Diluted attributable to common stockholders$0.03  $0.09  
Weighted average common shares outstanding 
Basic250.3  268.2  
Diluted252.0  268.2  

See accompanying notes to the Condensed Consolidated Financial Statements
1


ELEMENT SOLUTIONS INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Unaudited)
(dollars in millions)
 
Three Months Ended March 31,
 20202019
Net income$8.6  $23.9  
      
Other comprehensive (loss) income
Foreign currency translation:
Other comprehensive (loss) income before reclassifications(23.6) 94.2  
Reclassifications  479.8  
Total foreign currency translation adjustments(23.6) 574.0  
Pension and post-retirement plans:
Other comprehensive (loss) income before reclassifications, net of tax expense (benefit) of $0.5 and $0.0 for the three months ended March 31, 2020 and 2019, respectively
(0.5)   
Reclassifications, net of tax expense (benefit) of $0.0 for the three months ended March 31, 2020 and 2019, respectively
  (2.1) 
Total pension and post-retirement plans(0.5) (2.1) 
Derivative financial instruments:
Other comprehensive (loss) income before reclassifications, net of tax expense (benefit) of $0.0 and $(2.4) for the three months ended March 31, 2020 and 2019, respectively
(32.0) (9.2) 
Reclassifications, net of tax expense (benefit) of $0.0 and $(1.4) for the three months ended March 31, 2020 and 2019, respectively
1.6  (5.7) 
Total unrealized loss arising on qualified hedging derivatives(30.4) (14.9) 
Other comprehensive (loss) income(54.5) 557.0  
Comprehensive (loss) income (45.9) 580.9  
Comprehensive income attributable to the non-controlling interests  (40.2) 
Comprehensive (loss) income attributable to common stockholders$(45.9) $540.7  
 
See accompanying notes to the Condensed Consolidated Financial Statements
2


ELEMENT SOLUTIONS INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(dollars in millions)
March 31,December 31,
 20202019
Assets  
Cash and cash equivalents$497.4  $190.1  
Accounts receivable, net of allowance for doubtful accounts of $10.9 and $8.8 at March 31, 2020 and December 31, 2019, respectively
354.1  363.9  
Inventories213.1  199.6  
Prepaid expenses21.0  18.3  
Other current assets53.0  50.3  
Current assets of discontinued operations9.2  11.2  
Total current assets1,147.8  833.4  
Property, plant and equipment, net256.7  264.8  
Goodwill2,127.2  2,179.6  
Intangible assets, net894.5  944.4  
Other assets130.7  95.7  
Non-current assets of discontinued operations6.6  6.5  
Total assets$4,563.5  $4,324.4  
Liabilities and stockholders' equity      
Accounts payable$101.8  $96.8  
Current installments of long-term debt and revolving credit facilities327.7  7.8  
Accrued expenses and other current liabilities156.3  155.1  
Current liabilities of discontinued operations17.3  34.1  
Total current liabilities603.1  293.8  
Debt1,512.2  1,513.2  
Pension and post-retirement benefits49.6  50.8  
Deferred income taxes115.1  119.6  
Other liabilities142.1  127.7  
Total liabilities2,422.1  2,105.1  
Commitments and contingencies (Note 11)
Stockholders' Equity      
Preferred stock - Series A    
Common stock: 400.0 shares authorized (2020: 260.9 shares issued; 2019: 258.4 shares issued)
2.6  2.6  
Additional paid-in capital4,117.1  4,114.2  
Treasury stock (2020: 12.2 shares; 2019: 8.3 shares)
(113.9) (78.9) 
Accumulated deficit(1,527.9) (1,536.5) 
Accumulated other comprehensive loss(334.9) (280.5) 
Total stockholders' equity2,143.0  2,220.9  
Non-controlling interests(1.6) (1.6) 
Total equity2,141.4  2,219.3  
Total liabilities and stockholders' equity$4,563.5  $4,324.4  

See accompanying notes to the Condensed Consolidated Financial Statements
3


ELEMENT SOLUTIONS INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(dollars in millions)
Three Months Ended March 31,
 20202019
Cash flows from operating activities:      
Net income$8.6  $23.9  
Net income from discontinued operations, net of tax0.2  27.4  
Net income (loss) from continuing operations8.4  (3.5) 
Reconciliation of net income (loss) from continuing operations to net cash flows provided by (used in) operating activities:      
Depreciation and amortization39.9  38.7  
Deferred income taxes(2.4) (2.0) 
Foreign exchange loss (gain)24.5  (33.0) 
Other, net10.8  75.4  
Changes in assets and liabilities, net of acquisitions:
Accounts receivable(2.6) 2.8  
Inventories(19.0) (14.3) 
Accounts payable8.9  9.5  
Accrued expenses(6.2) (67.3) 
Prepaid expenses and other current assets(4.4) (4.6) 
Other assets and liabilities3.3  (33.7) 
Net cash flows provided by (used in) operating activities of continuing operations61.2  (32.0) 
Cash flows from investing activities:      
Capital expenditures(10.5) (6.7) 
Proceeds from Arysta Sale (net of cash $148.7 million)
  4,192.3  
Other, net(5.9) 8.5  
Net cash flows (used in) provided by investing activities of continuing operations(16.4) 4,194.1  
Cash flows from financing activities:      
Debt proceeds, net of discount  749.1  
Repayments of borrowings(2.0) (4,601.0) 
Change in lines of credit, net320.0  95.3  
Repurchases of common stock(33.1) (433.6) 
Payment of financing fees  (39.5) 
Other, net(1.5) (10.8) 
Net cash flows provided by (used in) financing activities of continuing operations283.4  (4,240.5) 
Cash flows from discontinued operations:
Net cash flows used in operating activities of discontinued operations(14.7) (115.9) 
Net cash flows used in investing activities of discontinued operations  (5.0) 
Net cash flows provided by financing activities of discontinued operations  4.8  
Net cash flows used in discontinued operations(14.7) (116.1) 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(6.2) 9.4  
Net increase (decrease) in cash, cash equivalents and restricted cash307.3  (185.1) 
Cash, cash equivalents and restricted cash at beginning of period (1)
190.1  415.5  
Cash, cash equivalents and restricted cash at end of period
$497.4  $230.4  
(1) Includes cash, cash equivalents and restricted cash of discontinued operations of $0.0 million and $181.9 million at December 31, 2019 and 2018, respectively.

 See accompanying notes to the Condensed Consolidated Financial Statements
4


ELEMENT SOLUTIONS INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
(dollars in millions, except share amounts)
Three Months Ended March 31, 2020Preferred StockCommon StockAdditional
Paid-in
Capital
Treasury StockAccumulated
Deficit
Accumulated Other Comprehensive (Loss) IncomeTotal
Stockholders'
Equity
Non-
controlling Interests
Total Equity
SharesAmountSharesAmountSharesAmount
Balance at December 31, 20192,000,000  $  258,428,333  $2.6  $4,114.2  8,277,198  $(78.9) $(1,536.5) $(280.5) $2,220.9  $(1.6) $2,219.3  
Net income—  —  —  —  —  —  —  8.6  —  8.6  —  8.6  
Other comprehensive loss, net of taxes—  —  —  —  —  —  —  —  (54.4) (54.4) —  (54.4) 
Exercise/ vesting of share based compensation—  —  475,987  —  0.2  162,333  (1.9) —  —  (1.7) —  (1.7) 
Issuance of common stock under ESPP—  —  28,689  —  0.3  —  —  —  —  0.3  —  0.3  
Preferred stock conversion(2,000,000) —  2,000,000  —  —  —  —  —  —  —  —  —  
Repurchases of common stock—  —  —  —  —  3,742,488  (33.1) —  —  (33.1) —  (33.1) 
Equity compensation expense—  —  —  —  2.4  —  —  —  —  2.4  —  2.4  
Balance at March 31, 2020  $  260,933,009  $2.6  $4,117.1  12,182,019  $(113.9) $(1,527.9) $(334.9) $2,143.0  $(1.6) $2,141.4  

Three Months Ended March 31, 2019Preferred StockCommon StockAdditional
Paid-in
Capital
Treasury StockAccumulated
Deficit
Accumulated Other Comprehensive (Loss) IncomeTotal
Stockholders'
Equity
Non-
controlling Interests
Total Equity
SharesAmountSharesAmountSharesAmount
Balance at December 31, 20182,000,000  $  289,316,170  $2.9  $4,062.1  341,967  $(3.5) $(1,195.4) $(756.9) $2,109.2  $71.9  $2,181.1  
Net income—  —  —  —  —  —  —  23.2  —  23.2  0.7  23.9  
Other comprehensive income, net of taxes—  —  —  —  —  —  —  —  67.4  67.4  —  67.4  
Arysta Sale—  —  —  —  (5.7) —  —  —  463.3  457.6  (46.6) 411.0  
Exercise/ vesting of share based compensation—  —  1,592,815  —  —  170,989  (1.9) —  —  (1.9) —  (1.9) 
Conversion of shares of common stock of PDH into common stock—  —  4,019,710  0.1  41.1  —  —  —  (13.9) 27.3  (27.3) —  
Issuance of common stock under ESPP—  —  26,398  —  0.3  —  —  —  —  0.3  —  0.3  
Repurchases of common stock—  —  (37,000,000) (0.4) —  —  —  (433.3) —  (433.7) —  (433.7) 
Equity compensation expense—  —  —  —  7.3  —  —  —  —  7.3  —  7.3  
Changes in non-controlling interests—  —  —  —  —  —  —  —  —  —  (0.2) (0.2) 
Balance at March 31, 20192,000,000  $  257,955,093  $2.6  $4,105.1  512,956  $(5.4) $(1,605.5) $(240.1) $2,256.7  $(1.5) $2,255.2  

See accompanying notes to the Condensed Consolidated Financial Statements


5


ELEMENT SOLUTIONS INC AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)

1. BACKGROUND AND BASIS OF PRESENTATION
Background
Element Solutions was incorporated in Delaware in January 2014 and its shares of common stock, par value $0.01 per share, trade on the NYSE under the ticker symbol “ESI.”
Element Solutions is a leading global specialty chemicals company whose businesses supply a broad range of solutions that enhance the performance of products people use every day. Developed in multi-step technological processes, the innovative solutions of the Company's businesses enable customers' manufacturing processes in several key industries, including electronic circuitry, semiconductor, communications infrastructure, automotive systems, industrial surface finishing, consumer packaging and offshore energy. Element Solutions delivers its products to customers through its sales and service workforce, regional distributors and manufacturing representatives.
Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP. In the opinion of management, these unaudited Condensed Consolidated Financial Statements reflect all adjustments that are normal, recurring and necessary for a fair statement of the Company's financial position, results of operations and cash flows for interim periods, but are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2020. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the related notes thereto included in the Company’s 2019 Annual Report.
The process of preparing the Company’s unaudited Condensed Consolidated Financial Statements requires the use of estimates and judgments that affect the reported amount of assets, liabilities, net sales and expenses. These estimates and judgments are based on historical experience, future expectations and other factors as well as assumptions the Company believes to be reasonable under the circumstances. These estimates and judgments are reviewed on an ongoing basis and revised as necessary. Actual amounts may differ materially from these estimates.
Certain other prior year amounts have been reclassified to conform to the current year’s presentation.
2. RECENT ACCOUNTING PRONOUNCEMENTS
Recently Issued Accounting Pronouncements Not Yet Adopted
Income Taxes (Topic 740) - In December 2019, the FASB issued ASU No. 2019-12, "Simplifying the Accounting for Income Taxes," which removes certain exceptions related to the approach for intraperiod tax allocation, the recognition of deferred tax liabilities for outside basis differences and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance is generally effective as of January 1, 2021, with early adoption permitted. The Company is evaluating the impact of the new guidance on the Condensed Consolidated Financial Statements.
3. DISCONTINUED OPERATIONS
The Arysta Sale was completed on January 31, 2019 for net cash proceeds of $4.28 billion, after certain post-closing adjustments relating to, among other things, cash, indebtedness and working capital, as finalized with UPL on May 17, 2019.
In connection with the Arysta Sale, the Company agreed to retain certain liabilities associated with legal and tax proceedings, primarily related to an Arysta subsidiary in Brazil. The Company does not expect to incur any material losses as a result of these proceedings. However, the resolutions of these matters may take several years and, to the extent not covered by insurance, may adversely impact the Company's financial position or results of operations. The Company may record an additional gain or loss in the future as it settles certain remaining tax assets and liabilities associated with the Arysta Sale.
6


ELEMENT SOLUTIONS INC AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)


The following table details the components comprising net income from the Company's discontinued operations attributable to common stockholders:
 Three Months Ended March 31,
 (dollars in millions)2020
2019 (1)
Net sales$  $65.3  
Cost of sales  (45.5) 
Selling, technical, general and administrative  (36.6) 
Research and development  (4.6) 
Gain on Arysta Sale  21.3  
Operating loss  (0.1) 
Other, net(0.7) 9.3  
(Loss) income from discontinued operations, before income taxes(0.7) 9.2  
Income tax benefit 0.9  18.2  
Income from discontinued operations, net of tax0.2  27.4  
Net income from discontinued operations attributable to the non-controlling interests  (0.1) 
Net income from discontinued operations attributable to common stockholders$0.2  $27.3  
(1) Includes activity through January 31, 2019, when the Arysta Sale was completed, and certain post-closing adjustments relating to, among
other things, cash, indebtedness and working capital as of the closing date.
The carrying value of major classes of assets and liabilities related to the Company's discontinued operations were as follows:
March 31,December 31,
 (dollars in millions)20202019
Assets
Other current assets$9.2  

$11.2  
Other assets6.6  6.5  
Liabilities
Accrued expenses and other current liabilities17.3  34.1  

4. INVENTORIES
The major components of inventory, on a net basis, were as follows: 
 (dollars in millions)March 31, 2020December 31, 2019
Finished goods$127.1  $118.5  
Work in process23.3  22.6  
Raw materials and supplies62.7  58.5  
Total inventories$213.1  $199.6  

7


ELEMENT SOLUTIONS INC AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)


5. PROPERTY, PLANT AND EQUIPMENT
The major components of property, plant and equipment were as follows:
 (dollars in millions)March 31, 2020December 31, 2019
Land and leasehold improvements$66.5  $68.6  
Buildings and improvements113.5  113.5  
Machinery, equipment, fixtures and software216.4  220.0  
Construction in process19.3  16.0  
Total property, plant and equipment415.7  418.1  
Accumulated depreciation(159.0) (153.3) 
Property, plant and equipment, net$256.7  $264.8  
For the three months ended March 31, 2020 and 2019, the Company recorded depreciation expense of $10.5 million and $10.3 million, respectively.
6. GOODWILL AND INTANGIBLE ASSETS
Goodwill
The changes in the carrying amount of goodwill were as follows:
 (dollars in millions)ElectronicsIndustrial & SpecialtyTotal
Balance at December 31, 2019$1,223.4  $956.2  (1) $2,179.6  
Foreign currency translation(19.7) (