PolyOne Reduces Income Outlook for Second-Quarter 2005

June 9, 2005

  • Most business unit shipments and income tracking below earlier
    expectations; European demand continues sluggish

  • Resin and Intermediates segment outlook remains essentially unchanged

  • Company reiterates anticipated positive operating cash flow in quarter

CLEVELAND, June 9 /PRNewswire-FirstCall/ -- PolyOne Corporation
(NYSE: POL), a leading global polymer compounding and North American
distribution company, today updated its revenue and income outlook for the
second quarter that will end June 30, 2005. This action is part of PolyOne's
effort to inform investors at mid-quarter of any material changes to major
business drivers.

PolyOne anticipates that revenues from continuing operations should
increase between 2 percent and 4 percent in the second quarter compared with
the first quarter of 2005, down from expectations of the 7 percent to 10
percent increase that the Company communicated in its April 28, 2005, earnings
release. Typically, the second quarter is seasonally stronger than the first
quarter. Currently, however, the Company projects that shipments will be flat
versus first-quarter 2005, as North American customers appear to be reducing
their inventories and European demand remains sluggish.

The Company has also adjusted down by approximately $1 million its earlier
projection for the Resin and Intermediates segment's operating income, due to
less-than-anticipated polyvinyl chloride resin price increases in the market
place. PolyOne now projects that segment operating income should increase
between $6 million and $9 million in the second quarter compared with the
first quarter of 2005.

Within the Performance Plastics segment, softness in demand has made
efforts to improve product spreads (selling price less raw material costs),
much more difficult. Within the Distribution segment, shipments are expected
to be similar to first-quarter 2005 levels. In addition, PolyOne does not
expect to realize the benefit of one-time favorable items during the second
quarter, as it did in the first quarter. These items included approximately
$4 million related primarily to the settlement of legal issues and adjustments
to associated reserves.

As a result of the above factors, the Company projects that operating
income from continuing operations should improve by no more than $1 million
over first-quarter 2005. Included in this total is the anticipated
improvement in Resin and Intermediates segment operating income.

Due to worse-than-anticipated automotive sales and dynamics in North
America, the Engineered Films business' contribution to earnings of
discontinued operations is likely to be lower than earlier expected. By
contrast, the Company projects improved shipments and product spreads for the
Specialty Resins business unit. PolyOne now projects that net income from
discontinued operations should be between $6 million and $8 million in the
second quarter, which is about $1 million lower than anticipated in the April
earnings release.

Consistent with the April outlook, PolyOne anticipates that operating cash
flow in the second quarter will be positive. (Operating cash flow, as defined
by PolyOne in its April earnings release, is a non-GAAP (Generally Accepted
Accounting Principles) financial measure). Compared with the first quarter,
cash flows should benefit from higher earnings, cash distributions from equity
affiliates (no distribution was received in the first quarter) and further
working capital efficiency improvements, partially offset by higher cash
interest payments. Cash interest payments on long-term debt are paid
primarily in the second and fourth quarters.

PolyOne Second-quarter 2005 Earnings Release and Conference Call

PolyOne intends to release its second-quarter 2005 earnings after the
close of business on Thursday, July 28, 2005, and host a conference call at
9:00 a.m. Eastern time on Friday, July 29, 2005. The conference dial-in
number is 888-489-0038 (domestic) or 706-643-1611 (international), conference
topic: PolyOne Earnings Call. The replay number is 800-642-1687 (domestic) or
706-645-9291 (international). The conference ID for the replay is 9931951.
The call will be broadcast live and then via replay for two weeks on the
Company's Web site at http://www.polyone.com .

About PolyOne

PolyOne Corporation, with 2004 annual revenues of approximately
$2.2 billion, is a leading global compounding and North American distribution
company with continuing operations in thermoplastic compounds, specialty
polymer formulations, color and additive systems, and thermoplastic resin
distribution. Headquartered in northeast Ohio, PolyOne has employees at
manufacturing sites in North America, Europe, Asia and Australia, and joint
ventures in North America and South America. Information on PolyOne's
products and services can be found at http://www.polyone.com .

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. You can identify these
statements by the fact that they do not relate strictly to historic or current
facts. They use words such as "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 performance.
In particular, these include statements relating to future actions;
prospective changes in raw material costs, product pricing or product demand;
future performance, including, without limitation, meeting cash flow goals,
receiving cash distributions from equity affiliates and achieving working
capital targets; results of current and anticipated market conditions and
market strategies; sales efforts; expenses; the outcome of contingencies such
as legal proceedings; and financial results. Factors that could cause actual
results to differ materially include, but are not limited to:

* the effect on foreign operations of currency fluctuations, tariffs,
nationalization, exchange controls, limitations on foreign investment
in local businesses and other political, economic and regulatory risks;

* changes in U.S., regional or world polymer consumption growth rates
affecting PolyOne's markets;

* changes in global industry capacity or in the rate at which anticipated
changes in industry capacity come online in the polyvinyl chloride
(PVC), chlor-alkali, vinyl chloride monomer (VCM) or other industries
in which PolyOne participates;

* fluctuations in raw material prices, quality and supply and in energy
prices and supply, in particular fluctuations outside the normal range
of industry cycles;

* production outages or material costs associated with scheduled or
unscheduled maintenance programs;

* costs or difficulties and delays related to the operation of joint
venture entities;

* lack of day-to-day operating control, including procurement of raw
materials, of equity or joint venture affiliates;

* partial control over investment decisions and dividend distribution
policy of the OxyVinyls partnership and other minority equity holdings
of PolyOne;

* an inability to launch new products and/or services within PolyOne's
various businesses;

* the possibility of further goodwill impairment;

* an inability to maintain any required licenses or permits;

* an inability to comply with any environmental laws and regulations;

* the cost of compliance with environmental laws and regulations,
including any increased cost of complying with new or revised laws and

* unanticipated developments that could occur with respect to
contingencies such as litigation and environmental matters, including
any developments that would require any increase in our costs and/or
reserves for such contingencies;

* an inability to achieve or delays in achieving or achievement of less
than the anticipated financial benefit from initiatives related to cost
reductions and employee productivity goals;

* a delay or inability to achieve targeted debt level reductions through
divestitures and/or other means;

* an inability to access the revolving credit facility and/or the
receivables sale facility as a result of breaching covenants due to not
achieving anticipated earnings performance or for any other reason;

* any poor performance of our pension plan assets and any obligation on
our part to fund PolyOne's pension plan;

* any delay and/or inability to bring the North American Colors and
Additives Masterbatch and the Engineered Materials product platforms to

* an inability to raise prices or sustain price increases for products;

* an inability or delay beyond December 31, 2005 in finding buyers of
discontinued operations or other non-core assets for reasonable and
acceptable terms;

* an inability to achieve anticipated earnings performance due to the
divestment of a non-core business;

* an inability to complete the sale of discontinued businesses due to
problems or delays associated with legal proceedings, regulatory
approvals and/or buyers receiving financing for the transaction or any
other reasons;

* a delay in the completion of the new manufacturing facility in Southern
China, expected to commence operations in the second quarter of 2005;

* 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.

We cannot guarantee that any forward-looking statement will be realized,
although we believe we have been prudent in our plans and assumptions.
Achievement of future results is subject to risks, uncertainties and
inaccurate assumptions. Should known or unknown risks or uncertainties
materialize, or should underlying assumptions prove inaccurate, actual results
could vary materially from those anticipated, estimated or projected.
Investors should bear this in mind as they consider forward-looking

We undertake no obligation to publicly update forward-looking statements,
whether as a result of new information, future events or otherwise. You are
advised, however, to consult any further disclosures we make on related
subjects in our reports on Form 10-Q, 8-K and 10-K provided to the Securities
and Exchange Commission. You should understand that it is not possible to
predict or identify all risk factors. Consequently, you should not consider
any list to be a complete set of all potential risks or uncertainties.
(Ref. #42905)

SOURCE PolyOne Corporation


CONTACT: Dennis Cocco, Vice President, Investor Relations &

Communications of PolyOne Corporation, +1-440-930-1538

Web site: http://www.polyone.com


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