2024
ANNUAL
REPORT
THE CHEMOURS COMPANY
It is my privilege to write to you on behalf of our leadership team to share Chemours’ progress in 2024.
When l assumed the CEO role in March 2024, I understood that we were at a unique moment to step back,
take stock, and put Chemours on the best path forward to drive success and deliver shareholder value.
Where we are today is truly a reflection of how our renewed leadership team and our employees across
Chemours seized that opportunity to position the Company for value creation. I am proud to share our
accomplishments and our plans for the future.
ESTABLISHING OUR PATHWAY TO THRIVE STRATEGY
In July 2024, we added Shane Hostetter to our leadership team as our CFO. Shane has more than 20 years
of experience and demonstrated leadership capabilities. The renewed leadership team worked closely with
the Chemours Board of Directors throughout 2024 to review our entire business and listen to and learn
from our stakeholders.
In November, we introduced our Pathway to Thrive strategy that supports our work to unlock value for
shareholders and builds on our commitments to the customers and communities we serve. Pathway to
Thrive capitalizes on the fundamental strengths of our three business segments – Thermal & Specialized
Solutions, Titanium Technologies, and Advanced Performance Materials – as well as our talented people
and competitive differentiators in each segment. Under Pathway to Thrive, we have a clear framework and
actionable steps to create near- and long-term value centered around four pillars: Operational Excellence,
Enabling Growth, Portfolio Management, and Strengthening the Long Term.
DEAR CHEMOURS
STAKEHOLDERS,
DENISE M. DIGNAM
PRESIDENT & CHIEF EXECUTIVE OFFICER
OPERATIONAL EXCELLENCE
Manufacturing excellence as
a basis for success
Improved and standardized
operating model for
consistent execution
Continuous improvement to
adapt to changing market
>$250M cost reduction
from 2024 to 2027
STRENGTHENING
THE LONG TERM
Measurable progress on
resolving legacy liabilities in
the interest of stakeholders
Responsible manufacturing
practices
Targeted policy efforts
Recognizing criticality of
our chemistries
PORTFOLIO MANAGEMENT
Holistic portfolio analysis
focused on distinct value
creation metrics
Shift product mix to higher
value applications in growing
end markets
Optimize asset footprint
Driving shareholder value
ENABLING GROWTH
Investing smartly in selected
growth projects
Commercial effectiveness to
drive sales growth
Innovation and new product
development
>5% Sales CAGR from
2024 to 2027
PATHWAY TO THRIVE
Balanced & Disciplined Allocation To Create Shareholder Value
THE PILLARS OF OUR STRATEGY
We have taken significant steps to structure the organization around the four pillars of our strategy to
ensure a clear focus and emphasis on meeting shareholder expectations and delivering on our external
commitments. Our efforts to execute our strategy are well underway.
Beginning with our Operational Excellence pillar, we continue to target incremental run rate cost savings of
greater than $250 million across the Company through 2027 and remain on track to deliver half of these
run rate cost savings by the end of 2025.
In Enabling Growth, Chemours remains committed to investing in high-return, low-risk initiatives across our
portfolio while driving commercial effectiveness. We are prioritizing investments in attractive spaces with a
focus on data center cooling, next-generation refrigerants, semiconductor fabrication, and the development
of next-generation EV batteries, targeting a revenue CAGR of over 5% from 2024 through 2027.
Portfolio Management, our third strategic pillar, reflects our ongoing commitment to optimize our existing
businesses and assets by shifting our focus to applications in high-growth, higher-margin markets with
the goal of enhancing shareholder value. We will continue to closely evaluate all investments to ensure a
disciplined capital allocation approach aligned with our strategy.
Within our last pillar, Strengthening the Long Term, we remain focused on advocating for science-based
regulations for the manufacturing of our essential chemistries, applying the best science, analytical
methods, and data to support our responsible manufacturing practices, and ensuring that we make
measurable progress on addressing legacy liabilities.
We are confident that the key pillars of our Pathway to Thrive strategy will drive strong operational and
financial performance and ultimately position Chemours for long-term success and value creation.
POSITIONING FOR LONG-TERM SUCCESS
Driven by consistent and effective operational execution and a focus on unlocking productivity, we
delivered solid financial results in 2024 that demonstrate our positive momentum. For the full year 2024,
Chemours reported Net Sales of $5.8 billion and an Adjusted EBITDA of $786 million, with $148 million
returned to shareholders through cash dividends. Each business segment drove key priorities in line with
our Pathway to Thrive strategy.
Thermal & Specialized Solutions (TSS) continued transitioning into low global warming potential (GWP)
Opteon™ Refrigerants, including a 40% capacity expansion at our Corpus Christi site in Texas of which half
will become available in 2025. This additional capacity is essential to meet the strong customer demand
for Opteon™ as regulatory-driven low GWP adoption continues to accelerate in 2025. Our 2024 results
reflected this continued transition to low GWP refrigerants with Opteon™ delivering 14% sales growth
versus 2023, which we believe will continue to support 30% margins as we head into 2025.
Titanium Technologies (TT) remained focused on driving solid commercial performance and continued
to make strong progress against its Transformation Plan, outperforming expectations by achieving
approximately $140 million of total cost savings in 2024. We delivered stable volumes, despite the historic
drought that temporarily impacted our Altamira site and continued slower-than-expected market recovery.
Even with the challenges faced during the year, our focus on cost reduction provided for year-over-year
margin improvement.
Advanced Performance Materials (APM) benefited from our capacity expansion for Teflon™ PFA resin
production, a critical material for semiconductor manufacturing. This was a key priority for the APM
leadership team and represents an important step forward in meeting PFA demand and serving our
customers in the semiconductor market. We also continue to make strides in APM around optimizing our
portfolio and ensuring that we have an underlying asset base generating strong returns.
At the corporate level, in partnership with our Board, we fully remediated our four material weaknesses in
internal control, which were identified in connection with the Audit Committee’s internal review in early 2024.
The swift remediation of these material weaknesses was a critical priority for the entire leadership team.
The completion of this work is symbolic of the final step needed to move past the events of the prior year.
ADVANCING A WINNING CULTURE
Our values are the foundation of our culture and guide the daily actions and decisions of our people as we
execute our Pathway to Thrive strategy. In 2024, we refreshed our values through extensive conversations
and direct input from thousands of Chemours team members, ensuring that the values are plain spoken,
memorable, and directly connected to our everyday work and business performance.
γ
Safety: We are committed to protecting people and the environment.
γ
Integrity: We do what’s right.
γ
Partnership: We win through collaboration with the right internal and external partners.
γ
Ownership: We are each accountable for the Company’s success.
γ
Respect: We treat people well, include others, and value diverse perspectives.
Ultimately, it is our people that make us who we are, and our values embody a Chemours culture that allows
every team member to thrive and drives our strategy. In our values and in our operations, we put safety
first and work to ensure that every team member returns home to their families safely at the end of each
day. We are proud to provide meaningful opportunities and support for employees at all levels and from
all backgrounds, fostering both personal and professional growth through investing in their development,
health, and wellbeing. Without the safety and wellbeing of our team, nothing else matters.
LOOKING AHEAD
I want to thank our dedicated global team of 6,000 employees for the tremendous work they did in 2024.
Their resilience, commitment to our customers, and ability to execute are reflected in our results and the
progress we made, and I look at our team’s achievements with great pride.
We have set ambitious goals and there is more work to do, but we are confident in our plan and the future
for Chemours. We have great businesses, best-in-industry talent, a refreshed corporate strategy, and a
strong foundation to take Chemours forward.
Our 2025 priorities are clear. Our Board, leadership team, and teams across our operations are united
in our commitment to execute our strategy and continue our progress to drive enhanced value creation
for shareholders.
Thank you for your continued support.
Sincerely,
Denise Dignam
President & Chief Executive Officer
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-36794
The Chemours Company
(Exact Name of Registrant as Specified in Its Charter)
Delaware
46-4845564
(State or other Jurisdiction of Incorporation or Organization)
(I.R.S. Employer Identification No.)
1007 Market Street, Wilmington, Delaware 19801
(Address of Principal Executive Offices)
Registrant’s Telephone Number: (302) 773-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Exchange on Which Registered
Common Stock ($0.01 par value)
CC
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No ☒
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 (§232.405 of this chapter) 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the
correction of an error to previously issued financial statements.
☒
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ☐ No ☒
The aggregate market value of common stock held by non-affiliates of the registrant as of June 28, 2024, the last business day of the registrant’s most recently completed second
fiscal quarter, was approximately $3.4 billion. As of February 12, 2025, 149,440,788 shares of the company’s common stock, $0.01 par value, were outstanding.
Documents Incorporated by Reference
Portions of the registrant’s definitive proxy statement relating to its 2025 annual meeting of shareholders (the “2025 Proxy Statement”) are incorporated by reference
into Part III of this Annual Report on Form 10-K where indicated. The 2025 Proxy Statement will be filed with the U. S. Securities and Exchange Commission within
120 days after the end of the fiscal year to which this report relates.
1
The Chemours Company
TABLE OF CONTENTS
Page
Part I
Item 1.
Business
4
Item 1A.
Risk Factors
17
Item 1B.
Unresolved Staff Comments
37
Item 1C.
Cybersecurity
37
Item 2.
Properties
38
Item 3.
Legal Proceedings
39
Item 4.
Mine Safety Disclosures
39
Information About Our Executive Officers
40
Part II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
42
Item 6.
Reserved
43
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
44
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
74
Item 8.
Financial Statements and Supplementary Data
75
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
75
Item 9A.
Controls and Procedures
76
Item 9B.
Other Information
79
Item 9C
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
79
Part III
Item 10.
Directors, Executive Officers, and Corporate Governance
80
Item 11.
Executive Compensation
80
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
80
Item 13.
Certain Relationships and Related Transactions, and Director Independence
80
Item 14.
Principal Accounting Fees and Services
80
Part IV
Item 15.
Exhibits and Financial Statement Schedules
81
Item 16.
Form 10-K Summary
81
Signatures
85
2
Forward-looking Statements
This section and other parts of this Annual Report on Form 10-K contain forward-looking statements, within the meaning of the federal securities laws,
that involve risks and uncertainties. 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. The words “believe”, “expect”, “anticipate”, “plan”, “estimate”, “target”,
“project”, and similar expressions, among others, generally identify “forward-looking statements”, which speak only as of the date the statements were
made. The matters discussed in these forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results
to differ materially from those set forth in the forward-looking statements. Factors that could cause or contribute to these differences include, but are
not limited to, the risks, uncertainties, and other factors discussed below and within Item 1A – Risk Factors in this Annual Report on Form 10-K.
Forward-looking statements are based on certain assumptions and expectations of future events that may not be accurate or realized. Forward-looking
statements also involve risks and uncertainties, many of which are beyond our control. Important factors that may materially affect such forward-looking
statements and projections include:
•
fluctuations in energy and raw materials pricing;
•
failure to develop and market new products and applications, and optimally manage product life cycles;
•
increased competition, and increasing consolidation of our core customers;
•
significant litigation and environmental matters, including indemnifications we were required to assume and cost-sharing arrangements into
which we have entered;
•
significant or unanticipated expenses, including, but not limited to, litigation or legal settlement expenses;
•
our ability to manage and complete capital projects and/or planned expansions, including the start-up of capital projects;
•
changes in relationships with our significant customers and suppliers;
•
failure to manage process safety and product stewardship issues appropriately;
•
global economic and capital markets conditions, such as inflation, interest and currency exchange rates, and commodity prices, as well as
regulatory requirements;
•
the effects of pandemics on customer demand for our products, our manufacturing operations, our supply chain effectiveness and
efficiencies, the broader financial markets, and our financial results;
•
currency-related risks;
•
our current indebtedness and availability of borrowing facilities, including access to our revolving credit facilities;
•
business or supply disruptions and security threats, such as acts of sabotage, terrorism or war, weather events, natural disasters, and
cybersecurity incidents;
•
uncertainty regarding the availability of additional financing in the future, and the terms of such financing;
•
negative rating agency actions;
•
changes in laws and regulations or political conditions;
•
our ability to protect, defend, and enforce our intellectual property rights;
•
our ability to predict, identify, and address changes in consumer preference and demand;
•
our ability to complete potential divestitures or acquisitions and our ability to realize the expected benefits of divestitures or acquisitions if
they are completed;
•
our ability to meet our growth expectations and outlook;
•
our ability to deliver cost savings as anticipated, whether or not on the timelines proposed;
•
our ability to pay a dividend and the amount of any such dividend declared,
•
disruptions in our information technology networks and systems;
•
our ability to maintain effective internal control over financial reporting and disclosure controls and procedures; and
•
regulatory inquiries, litigation, or liabilities that may result from the matters included in the Audit Committee Internal Review.
3
This report contains sustainability-related statements based on certain assumptions as well as estimates that are subject to a high level of uncertainty,
and these statements should not necessarily be viewed as being representative of current or actual risk or performance, or forecasts of expected risk
or performance. In addition, historical, current, and forward-looking environmental and social-related statements may be based on standards for
measuring progress that are still developing, and internal controls and processes that continue to evolve. Forward-looking and other statements in this
report may also address our corporate responsibility commitments and sustainability progress, plans, and goals, and the inclusion of such statements
is not an indication that these matters are necessarily material for the purposes of complying with or reporting pursuant to the U.S. federal securities
laws and regulations, even if we use the word “material” or “materiality” in this report.
Additionally, there may be other risks and uncertainties that we are unable to identify at this time or that we do not currently expect to have a material
impact on our business. We assume no obligation to revise or update any forward-looking statement for any reason, except as required by law.
Unless the context otherwise requires, references herein to “The Chemours Company”, “Chemours”, “the Company”, “our company”, “we”, “us”, and
“our” refer to The Chemours Company and its consolidated subsidiaries. References herein to “EID” refer to EIDP, Inc., formerly known as E.I. du Pont
de Nemours and Company, which is our former parent company and is now a subsidiary of Corteva, Inc. (“Corteva”), a Delaware corporation, unless
the context otherwise requires. References herein to “DuPont” refer to DuPont de Nemours, Inc., a Delaware Corporation.
The Chemours Company
4
PART I
Item 1. BUSINESS
Overview
The Chemours Company (herein referred to as “we”, “us”, or “our”) is a leading, global provider of performance chemicals that are key inputs in end-
products and processes in a variety of industries. We deliver customized solutions with a wide range of industrial and specialty chemical products for
markets, including refrigeration and air conditioning, paints and coatings, plastics, transportation, semiconductor and consumer electronics, general
industrial, and oil and gas. Our principal products include refrigerants, titanium dioxide (“TiO2”) pigment and industrial fluoropolymer resins. We manage
and report our operating results through three principal reportable segments: Thermal & Specialized Solutions, Titanium Technologies, and Advanced
Performance Materials. Our Thermal & Specialized Solutions segment is a leading, global provider of refrigerants, thermal management solutions,
propellants, blowing agents, and specialty solvents. Our Titanium Technologies segment is a leading, global provider of TiO2 pigment, a premium white
pigment used to deliver whiteness, brightness, opacity, and protection in a variety of applications. Our Advanced Performance Materials segment is a
leading, global provider of high-end polymers and advanced materials that deliver unique attributes, including low friction coefficients, extreme
temperature resistance, weather resistance, ultraviolet and chemical resistance, and electrical insulation.
We operate 28 major production facilities located in eight countries and serve approximately 2,500 customers across a wide range of end-markets in
approximately 110 countries. Many of our commercial and industrial relationships span decades. Our customer base includes a diverse set of
companies, many of which are leaders in their respective industries. Our sales are not materially dependent on any single customer. As of December
31, 2024, no one individual customer represented more than 10% of our consolidated net sales, and one individual customer balance represented
approximately 7% of our total outstanding accounts and notes receivables balance.
We are a different kind of chemistry company. Our world-class product portfolio enables the performance and convenience of everyday products,
processes, and technologies people rely on in their daily lives, making our products and the solutions they enable both vital and essential. We are
committed to creating value for our customers and stakeholders by leveraging strengths that we use to create competitive advantage: our innovation
and technical expertise, our ability to operate complex manufacturing sites safely, our deep customer relationships based on trust and reliability, and
our talented workforce. Every day our people bring our chemistry to life, guided by five core values that form the bedrock foundation for how we
operate: (i) Safety – we are committed to protecting people and the environment; (ii) Integrity – we do what's right; (iii) Partnership – we win through
collaboration with the right internal and external partners; (iv) Ownership – we are each accountable for the Company's success; (v) Respect – we
treat people well, include others, and value diverse perspectives.
Our core values, in unison with our company vision of Trusted Chemistry, helping people live better lives and communities thrive, underpin our
commitment to our stakeholders. Our values and vision cannot be separated from our business strategy.
Our Strategy
In 2024 we refreshed and introduced our corporate strategy, Pathway to Thrive. The strategy capitalizes on the fundamental strengths of our
businesses, our incredible talent, and the competitive differentiators that make us the best owners and operators of Chemours. Pathway to Thrive
provides a clear framework to create value for shareholders centered around four pillars:
•
Operational Excellence - we run our business with a mindset of continuous improvement that allows us to adapt to changing market
dynamics and challenges. Through standardization of key processes and operating best practices, we achieve consistent execution
across our business and take unnecessary costs out.
•
Enabling Growth - we strategically invest in high-return, low risk initiatives across our portfolio, prioritizing our expansion into rapidly
growing end-markets, and concentrating on data center cooling, next generation refrigerant and semiconductor fabrication. We invest
our capital using a disciplined capital allocation program and we expect these investment activities to be funded by organic cash flow
generation and achieved cost-savings across all of our businesses.
•
Portfolio Management - we are always assessing our performance to ensure we are strategically optimizing our existing businesses and
assets. Our continued shift in focus from products to applications in higher-growth, higher-margin markets, paired with regularly revisiting
the returns of our asset base with an emphasis on the specialty components of our business, will enhance shareholder value. In addition,
we seek to evaluate the productivity and contributions of our existing asset footprint to ensure we have the optimal asset base for our
future needs.
•
Strengthening the Long Term - fortifying ourselves for the long-term means prioritizing key activities that are critical to our ability to deliver
business performance and create value. The most critical areas are resolving legacy litigation matters, fulfilling our commitment to
responsible manufacturing, and mounting successful advocacy efforts that create awareness and inform regulations and policies globally
that recognize the criticality of our chemistries.
The Chemours Company
5
Sustainability
At Chemours, our approach to Sustainability begins with our vision to deliver Trusted Chemistry that helps people live better lives and communities to
thrive. In 2018, we set forth ambitious Corporate Responsibility Commitment ("CRC") goals that we aim to achieve by 2030. These goals are designed
to promote accountability and enable us to measure and transparently report the progress and impact of our sustainability commitment. Leveraging a
robust governance framework, we are working to integrate sustainability across our organization and our business management processes. Our work
in sustainability creates value for our shareholders by protecting our right to operate, meeting the needs of our customers, and advancing our corporate
strategy, Pathway to Thrive. We understand that maintaining safe, sustainable operations has an impact on us, our communities, the environment,
and our collective future. We deliver for our customers and society by designing sustainable offerings that perform at the highest level while minimizing
impact on the environment. We are a leader in responsible manufacturing and we value partnership and collaboration to drive change. We are
committed to continue working with policymakers, our value chain, and other organizations to find solutions that meet science-based regulations and
address community needs.
Corporate History
We began operating as an independent company on July 1, 2015 (the “Separation Date”) after separating from EID (the “Separation”). The Separation
was completed pursuant to a separation agreement and other agreements with EID, including an employee matters agreement, a tax matters
agreement, a transition services agreement, and an intellectual property cross-license agreement. These agreements, along with the Memorandum of
Understanding (the “MOU”) that was entered into in January 2021, govern the relationship between us and EID following the Separation and provided
for the allocation of various assets, liabilities, rights, and obligations at the Separation Date. On August 31, 2017, EID completed a merger with The
Dow Chemical Company (“Dow”). Following their merger, EID and Dow engaged in a series of reorganization steps and, in 2019, separated into three
publicly-traded companies named Dow Inc., DuPont, and Corteva. EID is now a subsidiary of Corteva, and, at this time, any agreements related to our
Separation are between us and EID, Corteva, and DuPont. Effective January 1, 2023, E.I. du Pont de Nemours changed its name to EIDP, Inc.
Segments
In our Thermal & Specialized Solutions segment, we are a leading, global provider of refrigerants, thermal management solutions, propellants, foam
blowing agents, and specialty solvents. Our Thermal & Specialized Solutions segment has held a leading position in the refrigerants market since the
commercial introduction of FreonTM in 1930. We are currently a leader in the development of sustainable technologies like OpteonTM, one of the world’s
lowest global warming potential (“GWP”) refrigerant brands, as governments around the world pass laws and regulations that make the use of low
GWP refrigerants a requirement.
In our Titanium Technologies segment, we are a leading, global provider of TiO2 pigment. Guided by decades of innovation, we are one of the largest
global producers of TiO2 pigment, using our proprietary chloride technology, and our network of manufacturing facilities allows us to efficiently and
cost-effectively serve our global customer base. We believe our Titanium Technologies Transformation Plan (further described below), which supports
our Pathway to Thrive corporate strategy, positions us as one of the lowest-cost high-quality TiO2 pigment producers. At the same time, our unique
go-to-market strategy provides our customers with three differentiated channels to buy Ti-Pure™ TiO2. This combination of technology and commercial
innovation allows us to continue to meet our customers’ needs around the world.
In our Advanced Performance Materials segment, we are a leading, global provider of high-end polymers and advanced materials that deliver unique
attributes, including chemical inertness, thermal stability, low friction, weather and corrosion resistance, extreme temperature stability, and unique di-
electric properties. Our Advanced Performance Materials segment has a diversified offering of products that includes various specialty product
solutions, membranes, industrial resins, and coatings across our TeflonTM, VitonTM, KrytoxTM, and NafionTM brand portfolios. These product offerings
position the business to serve a breadth of markets, segments, and applications, including electronics, communications, transportation, wire and cable,
energy, oil and gas, and medical, among others, and our product offerings are fundamental to the future of clean energy and advanced electronics.
Each of our three business segments leverage our state-of-the-art R&D facility, the Chemours Discovery Hub, a 312,000-square-foot R&D center
located on the Science, Technology, and Advanced Research campus of the University of Delaware in Newark, Delaware to drive faster product
development on a global scale.
Additional information on our segments can be found in Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of
Operations and “Note 29 – Geographic and Segment Information” to the Consolidated Financial Statements.
The Chemours Company
6
Thermal & Specialized Solutions Segment
Segment Overview
Our Thermal & Specialized Solutions segment is a leading, global provider of refrigerants, thermal management solutions, propellants, foam blowing
agents, and specialty solvents. We have an industry-leading safety culture and apply world-class R&D and technical expertise to ensure that our
operations run safely and reliably, and to improve our process technology.
Our Thermal & Specialized Solutions segment has held a leading position in the fluorochemicals market since the commercial introduction of Freon™
in 1930. Since the original chlorofluorocarbons (“CFC”)-based product was introduced, Thermal & Specialized Solutions has been at the forefront of
new technology research for lower GWP and lesser ozone-depleting potential products, leading to the development of hydrochlorofluorocarbons
(“HCFC”) and hydrofluorocarbons (“HFC”). We have a leading position in HFC refrigerants under the brand name Freon™, and we are a leader in the
development of more sustainable technologies like Opteon™, a line of low GWP hydrofluoroolefin (“HFO”) refrigerants and specialty fluids, which also
have a near-zero ozone-depletion footprint. Opteon™ was initially developed in response to the European Union’s (“EU”) Mobile Air Conditioning
Directive. Today, our OpteonTM-branded portfolio of products is used in a broad range of applications, including automotive, air conditioning, commercial
refrigeration, and foam blowing agents. This patented technology offers similar functionality to current HFC products, and meets or betters currently
mandated environmental standards and, in some cases, provides energy efficiency benefits.
Our Thermal & Specialized Solutions segment led the industry in the Montreal Protocol-driven transition in 1987 from CFCs to the lesser ozone-
depleting HCFCs and non-ozone-depleting HFCs and, in 1988, committed to cease production of CFCs. Starting in the early 1990s, Thermal &
Specialized Solutions began manufacturing non-ozone-depleting HFCs. Driven by the emerging megatrends of climate change, decarbonization, and
energy efficiency, together with environmental legislation being enacted across the U.S., Europe, Latin America, and Japan, we commercialized
Opteon™ in 2016. In 2023, we announced the initial commercialization of Opteon™ 2P50 which is targeted for the first half of 2026, pending appropriate
regulatory approvals. Opteon™ 2P50 represents a critical step in positioning the Company to meet a growing challenge brought on by a new era of
data transmission driving a dramatic increase in demands for faster computing, AI capabilities, and other cutting-edge applications, all of which are
based in technologies requiring elevated cooling capacities. We will continue to invest in R&D in next generation refrigerants to drive long-term
sustainable growth with low GWP solutions to meet the increasing regulatory requirements of the industry and the needs of our customers. Growth in
our Thermal & Specialized Solutions segment is supported in part by the adoption of the American Innovation and Manufacturing Act ("AIM Act") in
the US and the EU’s Fluorinated-Gas ("F-Gas") Directive. In 2022, we announced our plan to expand our Opteon™ YF capacity at our Corpus Christi,
Texas facility by approximately 40% to help meet customer needs as they continue to transition to lower GWP refrigerants. Mechanical completion of
this expansion plan was completed in the fourth quarter of 2024.
Industry Overview and Competitors
Our Thermal & Specialized Solutions segment competes against a broad variety of global manufacturers, as well as regional manufacturers in Asia
Pacific. We have a leadership position in fluorine chemistry and materials science, a broad scope and scale of operations, market-driven applications
development capabilities, and deep customer knowledge. Key competitors for the Thermal & Specialized Solutions segment include Honeywell
International, Inc., Arkema S.A., Orbia, and Daikin Industries, Ltd, and, to a certain extent, other industrial gas producers.
Thermal & Specialized Solutions' historical demand growth has maintained alignment with broader economic trends. However, periods of intensified
demand, linked to regulatory-driven transitions from HFCs to HFOs, as recently witnessed in the EU and US, have propelled an expansion rate within
our segment surpassing GDP growth. Developed markets serve as the predominant consumers of fluorochemicals, with global middle-class growth
and rising demands for automobiles, refrigeration, and air conditioning acting as pivotal drivers for increased demand across various fluorochemical
applications.
Raw Materials
The primary raw materials required to support the Thermal & Specialized Solutions segment are fluorspar, sulfur, ethylene, chlorinated organics,
chlorine, and hydrogen fluoride. These are available in many countries and are not concentrated in any particular region. We pursue maximum
competitiveness in our global supply chains through competitive, flexible, and diversified sourcing of key raw materials. Our contracts typically include
terms that span from two to ten years. Qualified fluorspar sources have fixed contract prices or freely-negotiated, market-based pricing. We diversify
our sourcing through multiple geographic regions and suppliers to ensure a diversified and cost competitive supply.
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Sales, Marketing, and Distribution
With approximately 90 years of innovation and development in fluorine science, our technical, marketing, and sales teams around the world have deep
expertise in our products and their end-uses. We work with customers to select the appropriate solutions to meet their technical performance needs.
We sell our products through direct channels and through resellers. Sales agreements vary by product line and markets served and include both spot-
pricing arrangements and multi-year contracts with varying durations.
Our Thermal & Specialized Solutions segment maintains a large fleet of railcars, tank trucks, and containers to deliver our products and support our
supply chain needs. For the portion of the fleet that is leased, the related lease terms are usually staggered, which provides us with a competitive cost
position, as well as the ability to adjust the size of our fleet in response to changes in market conditions. A dedicated logistics team, along with external
partners, works to optimize the assignment of our transportation equipment for each product line and geographic region to maximize utilization and
flexibility of the supply chain.
Customers
Our Thermal & Specialized Solutions segment serves approximately 900 customers and distributors globally, and, in many instances, these commercial
relationships have been in place for decades. No single Thermal & Specialized Solutions customer represented more than 10% of the segment’s net
sales in 2024.
Seasonality
Thermal & Specialized Solutions’ refrigerant sales fluctuate by season, as sales in the first half of the year are generally higher than sales in the second
half of the year due to increased demand in the northern hemisphere for residential, commercial, and automotive air conditioning in the spring, which
peaks in the summer months, and then declines in the fall and winter. Mobile air conditioning demand is slightly higher in the first half of the year due
to the timing of automotive production shutdowns in the second half of the year.
Titanium Technologies Segment
Segment Overview
Our Titanium Technologies segment is a leading, global manufacturer of high-quality TiO2 pigment. This premium white pigment is used to deliver
whiteness, brightness, opacity, durability, efficiency, and protection in applications, including architectural and industrial coatings, flexible and rigid
plastic packaging, polyvinylchloride (“PVC”), laminate papers used for furniture and building materials, coated paper, and coated paperboard used for
packaging. We sell our TiO2 pigment under the Ti-Pure™ brand name. We operate three TiO2 pigment production facilities: two in the U.S. and one in
Mexico. In total, we have a TiO2 pigment nameplate capacity of approximately 1.1 million metric tons per year. In addition, our network includes a
large-scale repackaging and distribution facility in Belgium. We also operate mineral sands mining and/or separation operations in Starke, Florida,
Nahunta, Georgia, Jesup, Georgia and Offerman, Georgia.
We are one of a limited number of manufacturers operating a chloride process to produce TiO2 pigment. We believe that our proprietary chloride
technology enables us to design and operate plants at a much higher capacity than other chloride technology-based TiO2 pigment producers, uniquely
utilize a broad spectrum of titanium-bearing ore feedstocks, and deliver industry-leading batch-to-batch consistency. We believe this technology, which
is in use at all of our production facilities, provides us with the asset structure to deliver one of the industry’s lowest manufacturing cost positions. Our
R&D efforts focus on improving production processes to further improve our cost position, developing TiO2 pigment grades that help our customers
achieve optimal cost and product performance to enhance total end-user value and meeting our sustainability goals.
We sell over 20 different grades of TiO2 pigment, with each grade tailored for targeted applications. Our full portfolio of premium performance TiO2
pigment grades provide end-users with benefits beyond opacity, such as brighter colors, increased product durability and lifespan, improved efficiency
for direct and downstream customers, and the brilliant whites achievable only through chloride-manufactured pigment.
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We have operated a titanium mine in Starke, Florida since 1949. Additionally, in 2019, we acquired a titanium mine in Nahunta, Georgia, from which
we source ore feedstock to be processed at its associated mineral sands separation facility in Offerman, Georgia, and in August 2020 we commenced
mining operations at our surface mine in Jesup, Georgia to expand the flexibility and scalability of our internally sourced ore. Our mines provide us
with high-quality domestic ilmenite ore feedstock and currently supply less than 15% of our ore feedstock needs, with expansion options that could
further increase our in-sourced raw material base. Co-products of our mining operations, which comprised less than 5% of our total net sales in Titanium
Technologies during 2024, include zircon (zirconium silicate), staurolite minerals, and monazite. We are a major supplier of high-quality calcined zircon
in North America, primarily focused on the precision investment casting industry, foundry, specialty applications, and ceramics. Our staurolite blasting
abrasives are used in a variety of surface preparation applications, including steel preparation and maintenance and paint removal. We are currently
the only domestic producer of monazite, a key feed source of rare earth minerals. Our monazite is processed in the U.S., and the rare earth oxides
extracted from the monazite are used in clean energy applications, such as permanent magnets for wind generation and electric vehicle batteries.
Titanium Technologies Transformation Plan
In the third quarter of 2023, in line with our strategic priorities for creating long-term shareholder value and building on the legacy of delivering high-
quality Ti-PureTM offerings, the Titanium Technologies segment commenced certain transformation initiatives to streamline our workforce, drive
enhancements to our manufacturing processes, and optimize input costs under the Titanium Technologies Transformation Plan, which supports our
Pathway to Thrive corporate strategy, and positions us as one of the lowest-cost high-quality TiO2 pigment producers. As part of these efforts, in July
2023, we announced our decision to shut down our TiO2 manufacturing facility in Kuan Yin, Taiwan. We fully completed the shut down in the fourth
quarter of 2023 and completed decommissioning activities in the second quarter of 2024. Dismantling and removal activities are expected to be
completed in the first quarter of 2025. We made total cash payments of $48 million and $25 million associated with the Titanium Technologies
Transformation Plan during the years ended December 31, 2024 and 2023, respectively, inclusive of severance payments, decommissioning, and
other third-party fees. As a result of efforts taken under the Titanium Technologies Transformation Plan, we achieved approximately $190 million in
cost savings, of which $140 million and $50 million related to 2024 and 2023, respectively. We believe that our ongoing manufacturing optimization
efforts, streamlined workforce initiatives, and additional measures, including our recently announced chlorine supply agreement with the PCC Group
(described further below), will position us as one of the world's lowest-cost TiO2 providers and ultimately improve the earnings quality of our Titanium
Technologies segment.
Industry Overview and Competitors
Overall demand for TiO2 pigment is highly correlated to growth in the global residential housing, commercial construction, and packaging markets. We
continue to experience customers’ preference for high-quality Ti-PureTM offerings. After above-GDP trend TiO2 demand growth in 2016 and 2017, the
TiO2 pigment market contracted below the GDP trend in 2018 and 2019. In 2020, the TiO2 pigment market expanded, while global GDP contracted
during the novel coronavirus disease (“COVID-19”) pandemic. In 2021, the TiO2 pigment market again grew at greater-than-global GDP growth rates.
We saw robust demand in the first half of 2022, followed by a rapid market decline in the second half of 2022 as pigment demand declined below the
long-term GDP trend. This low demand environment continued through 2023 and 2024 as global economic uncertainties persisted. In the longer-term,
we expect global TiO2 pigment demand to continue its historical correlation with global GDP growth rates.
We estimate that the worldwide demand for TiO2 pigment in 2024 was approximately 7.3 million metric tons. Worldwide nameplate capacity in 2024
was estimated to be approximately 9.9 million metric tons. The products manufactured on this global capacity base are not fully substitutable due to
pigment quality consistency and pigment product design. As future customer demand grows, we have the ability to incrementally increase our
production capacity by approximately 15% through technology-enabled de-bottlenecking processes. We believe that unlocking this additional 15% of
capacity is in line with our stated intention to grow with our customers’ needs over the long-term.
Competition in the TiO2 pigment market is based primarily on product performance (both product design and quality consistency), supply capability,
technical service, and price. Our major competitors within premium performance pigment include Tronox Holdings plc, LB Group Co. Ltd., Venator
Materials plc, Kronos Worldwide, Inc., and INEOS AG.
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Raw Materials
The primary raw materials used in the manufacture of TiO2 pigment are titanium-bearing ores, chlorine, calcined petroleum coke, and energy. We
source titanium-bearing ores from multiple suppliers around the globe, primarily located in Australia, Africa, and Eastern Europe. We pursue a
diversified procurement strategy, with long and medium-term supply contracts, as well as spot purchases. Where possible, we qualify or purchase
multiple grades of ore from each supplier to limit our exposure to any single supplier for any single grade of ore. Our primary titanium feedstock is
chloride ilmenite, and to a lesser extent, leucoxenes, slags, and natural and synthetic rutiles. Any of our titanium-bearing ores can be consumed at any
of our operating sites, providing supply chain options in the event of supply disruptions. Historically, we have not experienced any problems renewing
such contracts for raw materials or securing our supply of titanium-bearing ores. Our increased pigment production capacity will be supported by
investments to extend our ilmenite mines and through contracts with our suppliers.
We play an active role in ore source development around the globe. Supply chain flexibility allows for ore purchase and use optimization to manage
short-term demand fluctuations and provide a long-term competitive advantage. Our process technology and ability to use lower-grade ilmenite ore
gives us the flexibility to alter our ore mix to low-cost configuration based on sales, demand, and projected ore pricing. Lastly, we have taken steps to
optimize routes for ore distribution within our manufacturing asset base and increased storage capacity at our production facilities.
Chlorine is also a key raw material input to our process. Price and availability of chlorine are subject to cyclicality and regional market dynamics. In
addition, transporting chlorine can be costly. To reduce our need to transport chlorine, we have a chlor-alkali production facility run by a third party that
is co-located at our New Johnsonville, Tennessee site. In 2024, we announced that the PCC Group plans to build and operate a chlor-alkali facility on
the grounds of our TiO2 plant in DeLisle, Mississippi and that the PCC Group and Chemours have entered into a chlorine supply agreement which is
subject to certain customary conditions precedent. The new facility will utilize state-of-the-art technology to maximize energy efficiency and provide up
to an annual nameplate capacity of 340,000 metric tons once the plant is operational. Construction is expected to begin in early 2026 with the plant
being operational in 2028.
Calcined petroleum coke is another important raw material input to our process. We source calcined petroleum coke from well-established suppliers
in North America typically under contracts that run multiple years to facilitate materials and logistics planning through the supply chain. Raw materials
distribution efficiency is enhanced through the use of bulk ocean, barge, and rail transportation modes.
Energy is a key input cost in the TiO2 pigment manufacturing process, representing approximately 10% of the production cost. We have access to
natural gas-based energy at our U.S. and Mexico TiO2 pigment production facilities and our Florida and Georgia minerals plants, supporting advantaged
energy costs given the low cost of natural gas in the U.S relative to most of the other parts of the world.
Sales, Marketing, and Distribution
We sell the majority of our products through a direct sales force. We continue to build on our commercial strategy to optimize our performance through
TiO2 market cycles while remaining closely connected to our customer needs. Our strategy establishes a commercial framework that allows us to focus
on enhancing durable, value-oriented customer relationships, while providing customers access to a predictable and reliable supply of high-quality
TiO2. Customers can purchase Ti-PureTM TiO2 either through medium- to long-term contracts or through Ti-PureTM Flex. Launched in 2019, Ti-PureTM
Flex is an innovative channel that provides customers the unique ability to purchase Ti-Pure™ TiO2 via our web-based portal, the first of its kind in the
industry. To further expand our reach beyond these sales channels, we also utilize third-party sales agents and distributors.
TiO2 pigment represents a significant raw material cost for many of our customers, and as a result, purchasing decisions are often made by our
customers’ senior management teams. TiO2 pigment, however, is only a small fraction of the cost when considering certain end-use applications,
especially in segments with larger value chain players, such as specialty coatings, plastics, and laminates applications. Our sales organization works
to develop and maintain close relationships with key decision makers in our value chain. In addition to close purchasing relationships, our sales and
technical service teams work together to develop relationships with all layers of our customers’ organizations to ensure that we meet our customers’
commercial and technical requirements. When appropriate, we collaborate closely with customers to solve formulation or application problems by
modifying product characteristics or developing new product grades.
To ensure efficient distribution, we maintain a fleet of railcars which are predominantly used for distribution of products in the U.S. and Canada and
utilize third-party truck and ocean carriers. A dedicated logistics team along with external partners continually assess and optimize the assignment of
our transportation equipment for each product line and geographic region to maximize utilization and maintain an efficient supply chain.
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Customers
Globally, we serve approximately 500 customers through our Titanium Technologies segment. In 2024, our 10 largest Titanium Technologies
customers accounted for approximately 41% of the segment’s net sales, and one Titanium Technologies customer represented over 10% of the
segment’s net sales. Our larger customers are typically served through direct sales and tend to have medium-term to long-term contracts. We serve
our small-size and mid-size customers through a combination of our direct sales and distribution network. Our direct customers in the Titanium
Technologies segment are producers of decorative coatings, automotive and industrial coatings, polyolefin master batches, PVC, engineering
polymers, laminate paper, coatings paper, and coated paperboard. We focus on developing long-term partnerships with key market participants in
each of these sectors. We also deliver a high level of technical service to satisfy our customers’ specific needs, which helps us maintain strong customer
relationships.
Seasonality
The demand for TiO2 pigment is subject to seasonality due to the influence of weather conditions and holiday seasons on some of our applications,
such as decorative coatings. As a result, our TiO2 pigment sales volume is typically highest in the second and third quarters. This pattern applies to
the entire TiO2 pigment market, but may vary by region, country, or application. The impacts of seasonality on demand for TiO2 pigment may also be
altered by economic factors, such as changes in global GDP, global supply chain and logistics issues, and other factors.
Advanced Performance Materials Segment
Segment Overview
Our Advanced Performance Materials segment draws on vast experience in fluoropolymer chemistry as a leading, global provider of performance
solutions and advanced materials that solve challenging problems in emerging technologies and deliver unique capabilities in products and applications
that people around the world use every day. The segment's diversified portfolio includes various specialty product solutions, membranes, industrial
resins, and coatings. These product offerings position the business to serve a broad range of markets, including consumer electronics, semiconductors,
digital communications, transportation, energy, oil and gas, and medical, among others.
Our products set the standard in a number of performance categories, including chemical inertness, thermal stability, low friction, weather and corrosion
resistance, and di-electric properties. These performance advantages make our polymers a material of choice, especially in complex applications and
extreme environmental conditions. Our performance solutions portfolio includes differentiated offerings such as those that are critical to many emerging
technology areas, including hydrogen production and fuel cells, emerging battery technologies, advanced semi-conductor infrastructure, 5G data
delivery, and connected electronic devices. Our advanced materials portfolio provides products which are essential to established technologies across
a diverse range of markets and applications, including consumer goods, transportation, and chemical processing.
Our Advanced Performance Materials products are sold under the brand names Teflon™, Viton™, Krytox™, and Nafion™. Teflon™ coatings, resins,
additives, and films serve as the key underpinning for a variety of industrial and commercial applications, including semiconductor infrastructure.
Viton™ fluoroelastomers are used in automotive, consumer electronics, chemical processing, oil and gas, petroleum refining and transportation, and
aircraft and aerospace applications. Our Krytox™-branded lubricants are used in a broad range of industrial applications, including bearings,
automotive friction management, and electric motors. Nafion™ membranes are critical components in chlor-alkali processing and flow batteries, as
well as the hydrogen electrolyzers and fuel cells which underpin the hydrogen economy. In 2023, we launched operations at THE Mobility F.C.
Membranes Company as a part of Chemours’ joint venture with BWT FUMATECH Mobility GmbH to elevate and accelerate the capacity to manufacture
fuel cell and humidifier membranes for mobility applications for long-term customers.
Our Advanced Performance Materials segment is focused on technology development in its key markets. We also participate in a broad array of
industry consortia and collaborate with leading academics across a variety of disciplines to drive fundamental R&D in the materials space.
The segment is well positioned to capture future growth through the combination of our unique product capabilities and market-driven product
development process. Advanced Performance Materials will benefit long-term from secular growth in clean energy and advanced electronics.
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Industry Overview and Competitors
Our Advanced Performance Materials segment competes against a broad variety of global manufacturers, as well as regional manufacturers in Asia
Pacific. We have a leadership position in fluorine chemistry and materials science, a broad scope and scale of operations, a strong applications
development competency, and deep customer knowledge. Key competitors for this segment include Daikin Industries, Ltd., 3M Company, Syensqo,
S.A., AGC Inc., and Dongyue Group Co., Ltd.
The demand for products in the economically sensitive advanced materials portfolio is tied to regulatory developments, as well as the cyclicality of key
end markets, such as industrial, chemical processing, consumer goods, and transportation, and is expected to grow in line with GDP. However, with
growing demand for cleaner and faster technologies, demand for products in the performance solutions portfolio is expected to grow at a rate faster
than GDP, driven by global middle-class growth and alignment between our market-driven product technology development process and emerging
market technologies, such as 5G, fuel cells and electrolyzers, electronics, communications, and transportation.
Raw Materials
The primary raw materials required for the Advanced Performance Materials segment are chlorinated organics, hydrogen fluoride, and vinylidene
fluoride. These are available in many countries and are not concentrated in any particular region. We pursue maximum competitiveness in our global
supply chains through competitive, flexible, and diversified sourcing of key raw materials. Our contracts typically include terms that span from two to
five years. We diversify our sourcing through multiple geographic regions and suppliers to ensure a diversified and cost competitive supply.
Sales, Marketing, and Distribution
With approximately 90 years of innovation and development in fluorine science, our technical, marketing, and sales teams around the world have deep
expertise in our products and their end-uses. We work with customers to select the appropriate fluoropolymers or other advanced performance
materials to meet their technical performance needs based on their intended performance-in-use requirements. We sell our products through direct
and indirect channels, and the duration of our selling agreements vary by product line and markets served.
Our Advanced Performance Materials segment maintains a fleet of railcars, tank trucks, containers, and totes to deliver our products and support our
supply chain needs. For the portion of the fleet that is leased, the related lease terms are usually staggered, which provides us with a competitive cost
position, as well as the ability to adjust the size of our fleet in response to changes in market conditions. We manage our fleet to ensure it is appropriately
sized to meet market demand while maintaining flexibility. A dedicated logistics team, along with external partners, works to optimize the assignment
of our transportation equipment for each product line and geographic region to maximize utilization and flexibility of the supply chain.
Customers
Our Advanced Performance Materials segment serves approximately 1,000 customers and distributors globally and, in many instances, these
commercial relationships have been in place for decades. No single Advanced Performance Materials customer represented more than 10% of the
segment’s net sales in 2024.
Seasonality
The Advanced Performance Materials segment has historically seen some seasonal effects with lower sales in the fourth quarter, with planned
maintenance activities at our own sites and at certain customers typically occurring during this period.
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Intellectual Property
Intellectual property, including trade secrets, certain patents, trademarks, copyrights, know-how, and other proprietary rights, is a critical part of
maintaining our technology leadership and competitive edge. Our business strategy is to file patent and trademark applications internationally for
proprietary new product and application development technologies, and we work actively on a global basis to create, acquire, license, protect, and
enforce our intellectual property rights. As of December 31, 2024, we owned approximately 4,050 granted patents and 1,420 pending applications in
the U.S. and internationally, as well as approximately 1,680 trademark registrations and 24 pending trademark applications in the U.S. and
internationally.
The protections afforded under our patents and trademarks vary based on country, scope of individual patent, and trademark coverage, as well as the
availability of legal remedies in each country. Our patents, in the aggregate, are believed to be of material importance to our business. However,
although certain proprietary intellectual property rights are important to our success, we do not believe that we are materially dependent on any single
patent (or group of related patents) or trademark. We believe that securing our intellectual property is critical to maintaining our technology leadership
and our competitive position, especially with respect to new technologies or the extensions of existing technologies. Our intellectual property can be a
source of incremental income through licensing arrangements.
Our Thermal & Specialized Solutions segment is a technology leader in the markets in which it participates. We maintain a large fluorochemicals patent
portfolio covering compositions, methods of making, and applications for refrigeration and air conditioning, foam expansion agents and propellants,
specialty fluids, immersion cooling, and fluorochemical recycling, among other applications. With respect to our Opteon™ refrigerants we have
composition patents covering R-1234yf having expiration dates through the end of the decade, and patents covering other aspects of our Opteon™
refrigerants including blend compositions containing R-1234yf, methods of making R-1234yf, and applications having varying expiration dates at least
into the mid-2030s. We consider our Opteon™ and Freon™ trademarks used in the Thermal & Specialized Solutions segment to be valuable assets.
Our Titanium Technologies segment relies upon proprietary knowledge, continuing technological innovation, and trade secrets to develop and maintain
our competitive position in this sector. Within this segment, we hold significant intellectual property in the form of trade secrets and patents, and, while
we believe that no single trade secret is material in relation to our combined business as a whole, we believe that our trade secrets are material in the
aggregate. Our proprietary chloride production process is an important part of our technology, and our business could be harmed if our trade secrets
are not maintained in confidence. Within our Titanium Technologies segment’s intellectual property portfolio, we consider our Ti-Pure™ trademark to
be a valuable asset. We have registered the Ti-PureTM trademark in a number of countries.
Our Advanced Performance Materials segment possesses extensive know-how and trade secrets related to manufacturing technologies for a broad
range of specialized fluoropolymers, as well as application development technology for fluoropolymers based on comprehensive knowledge of
customer applications. We hold patents relating to manufacturing for certain products with high quality, specifications and purity as required by the
electronics, communications, automotive, wire and cable, battery, fuel cell, water electrolysis, and other industries. Additionally, our Advanced
Performance Materials segment is a leader in and holds patents relating to non-fluorinated materials for use as durable water repellents for garments
and other uses. In our Advanced Performance Materials segment’s intellectual property portfolio, we consider our TeflonTM, VitonTM, NafionTM, and
KrytoxTM trademarks to be valuable assets.
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Environmental and Regulatory Matters
Information related to environmental matters is included in several areas of this Annual Report on Form 10-K, including: (i) Item 1A – Risk Factors; (ii)
Item 3 – Legal Proceedings, under the heading “Environmental Proceedings”; (iii) Item 7 – Management’s Discussion and Analysis of Financial
Condition and Results of Operations; and, (iv) “Note 3 – Summary of Significant Accounting Policies” and “Note 22 – Commitments and Contingent
Liabilities” to the Consolidated Financial Statements.
Climate Change
Our sustainability work begins with our vision to deliver Trusted Chemistry. That vision calls on us to ensure that our decisions ultimately help people
live better lives and communities thrive. We don’t embrace sustainability for the sake of it, we ensure that our work is a fully integrated part of delivering
our corporate strategy, Pathway to Thrive. Through sustainability we are actively protecting our license to operate our facilities, meeting the needs of
our customers and differentiating our portfolio, advancing the work across the four pillars of our strategy — Operational Excellence, Enabling Growth,
Portfolio Management, and Strengthening the Long-Term — to create value for our shareholders.
As part of delivering trusted chemistry, we focus on the responsible treatment of climate and water. Our 2030 goals include:
•
60% absolute reduction in Scope 1 and Scope 2 GHG emissions; and,
•
99% or more reduction of air and water process emissions of fluorinated organic chemicals ("FOCs").
In 2021, we updated our climate goals to better align our climate commitment with the Paris Accord and set us on a path to achieve net zero greenhouse
gas emissions from our operations by 2050. In 2022, we signed a commitment with the Science Based Targets initiative (“SBTi”) to establish science-
based targets for scopes 1, 2, and 3 GHG emissions. In May 2024, the SBTi approved Chemours’ near-term science-based emissions reduction
targets. This includes our existing 2030 goal of a 60% absolute reduction and a new Scope 3 target of reducing emissions by 25% per ton of product
by 2030. Beyond the progress we have made reducing our operational footprint through Scope 1 and 2 reductions, the reduction of our Scope 3
emissions will enable us to partner with our suppliers to further improve our Product Carbon Footprint by reducing upstream emissions, as well as
reduce downstream emissions through the ongoing adoption of low carbon solutions enable by Chemours innovation, like our Opteon™ portfolio of
low global warming potential refrigerants.
Making people’s lives better centers on the essentiality of our products and the critical end markets they serve. From medical applications that save
lives, to low global warming potential refrigerants, durable paints and coatings, and even semiconductor chips and clean energy technologies such as
EV batteries, Chemours chemistries power products that the world needs. We believe that climate change is an important global issue that presents
both opportunities and challenges for our company, our partners, our customers, and our communities. Climate change matters for our company are
likely to be driven by changes in physical and transition risk, such as regulations and/or public policy, and changes in technology and product demand.
Our operations and business results are increasingly subject to evolving climate-related legislation and regulations, inclusive of restrictions on GHG
emissions, cap and trade emissions trading systems, and taxes on GHG emissions, fuel, and energy, among other provisions. Such regulatory matters
have led, and are expected to continue to lead, to subsequent developments in product technology and demand. This helps guide our investment
decisions and drive growth in demand for low-carbon and energy-efficient products, manufacturing technologies, and services that facilitate adaptation
to a changing climate. Our business segments conduct market trend impact assessments, continuously evaluate opportunities for existing and new
products and are well-positioned to take advantage of opportunities that may arise from increased market demand for and/or legislation mandating or
incentivizing the use of products and technologies necessary to achieve a low-carbon economy.
In our Thermal & Specialized Solutions segment, global regulations driving the phase-down of HFCs, including the EU’s F-Gas Directive, the EU’s
Mobile Air Conditioning Directive, and the AIM Act in the US, promote the adoption and sale of our high performing Opteon™ products, which have
lower global warming potential ("GWP") and near-zero ozone-depletion footprint. Our Opteon™ portfolio has been developed to meet global regulations
while maintaining or improving performance compared to the products they replace in refrigeration and cooling applications, such as food
transportation, food and pharmaceutical/medical storage, food manufacturing and retail, automotive air conditioning, and residential and commercial
building air conditioning. We are on track to achieve, by the end of 2025, our estimated goal that our low GWP products will result in 325 million tons
of avoided emissions of carbon dioxide equivalents on a global basis.
We are a proponent of the AIM Act, that went into effect in 2022 and has begun the national phase-down of hydrofluorocarbons. We successfully
completed an improvement project to significantly reduce emissions of HFC-23 at our Louisville, Kentucky manufacturing site. The project includes the
design, custom-build and installation of proprietary technology to capture HFC-23 process emissions from the site. This project was operational as of
October 2022 and validation of performance was completed prior to an extension period granted by the U.S. Environmental Protection Agency ("EPA")
in the first quarter of 2023.
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In our Titanium Technologies business, our Ti-Pure™ Sustainability ("TS") product series, is designed to advance our customers’ sustainability goals.
The product series includes enhanced product sustainability designations—including climate impact and resource efficiency. Going forward, our
product portfolio will continue to be centered on the evolving needs of our customers.
In our Advanced Performance Materials segment, our growth prospects in fluoropolymers are also enhanced by regulation driving the increasing
demand for electric vehicles and high-performance, low-emission vehicles. Our fluoropolymers are critical to delivering high performance over a wide
range of harsh operating conditions, enhancing passenger safety, improving emission controls and fuel economy, enabling vehicle electrification and
the shift to hydrogen-powered vehicles, and improving the sustainability footprint and performance of hybrid and electric car batteries. We expect the
use of our fluoropolymers in vehicles to increase, driven by the automotive industry’s trends toward energy efficiency and clean energy due to evolving
emissions performance regulations and increasing adoption of electric vehicles. Our fluoropolymer technology supports growing market demand for
clean hydrogen generation using water electrolyzers, energy storage in flow batteries, and hydrogen conversion to power fuel cell vehicles.
As an energy and emissions intensive company, our costs of complying with complex environmental laws and regulations, as well as internal and
external voluntary programs, are significant and will continue to be significant for the foreseeable future. These laws and regulations may change and
could become more stringent over time, which could result in significant additional compliance costs, increased costs of purchased energy or other
raw materials, increased transportation costs, investments in, or restrictions on, our operations, installation or modification of GHG-emitting equipment,
or additional costs associated with GHG emissions. Additionally, significant regional or national differences in approaches to the imposition of such
regulations and restrictions could present competitive challenges or opportunities in a global marketplace. Currently, most of our global operating
facilities are required to monitor and report their GHG emissions but may or may not be subject to programs requiring trading or emission controls. The
EU Emission Trading System applies to our operating sites in that region. Furthermore, U.S. political administration could lead to changes to federal
regulation with respect to GHG emissions limits and/or other legislation that could impact our operations. By tracking and taking action to reduce our
GHG emissions footprint through energy efficiency programs, increased use of renewable energy and focused GHG emissions reduction programs,
we can decrease the potential future impact of these regulatory matters.
Human Capital
Meeting our commitment to responsible chemistry depends on our ability to create a vibrant workplace culture that attracts and retains the best and
brightest in their fields to come work at Chemours. Our success depends on our ability to attract, retain and motivate employees, and to identify and
develop high-performing talented personnel to succeed our senior management and other key roles. This success depends on creating a diverse,
inclusive, equitable and thriving workplace culture – one that holds a multiplicity of viewpoints, stems from a variety of backgrounds, and brings an
abundance of different life experiences to work. We believe our global workforce should reflect the viewpoints and diversity of the communities in which
we operate. That combination of excellence and diversity is essential to continuing our strong track record of uncovering and delivering the innovative
solutions society needs.
Diverse and Inclusive Leadership and Workforce
Our board of directors is comprised of eleven individuals with a diverse set of experiences, skills and credentials, selected for their business acumen
and ability to challenge and add value to management. Our directors have held significant leadership positions and bring a depth of experience across
a wide variety of industries, providing the Company with unique insights and fresh perspectives. Refer to Item 10 – Directors, Executive Officers, and
Corporate Governance for further information related to our board of directors. As of the date of this Annual Report on Form 10-K, management of the
Company is led by our Chief Executive Officer (“CEO”) and 7 of her direct reports, which comprise our Chemours Executive Team (“CET”). Further
information related to our CET is included under the caption “Information About Our Executive Officers” within this Part I of our Annual Report on Form
10-K.
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As of December 31, 2024, we had approximately 6,000 employees globally, nearly all of which were full-time employees. As of December 31, 2024,
we had approximately 77% of our employees in the Americas (67% of whom are in the United States), 16% in Europe, and 7% in Asia Pacific (4% are
in China). Approximately 13% of our employees are represented by unions or works councils. Management believes that its relations with employees
and labor organizations are good.
In addition to Chemours employees, our total global workforce also includes contract workers who are available to support our manufacturing sites.
Our number of contract workers varies throughout the year due to business needs and seasonal plant activities. These on-site contract workers provide
services for facility maintenance, engineering services and construction support, operations, research and logistics support, equipment service and
maintenance, custodial services, and site security services. Management believes that its relations with contract workers are good.
Corporate Responsibility Commitments ("CRC")
Chemours is committed to creating and sustaining a diverse, inclusive, and safe workplace that reflects our diverse communities in which we operate
and focuses on diversity of skills and diversity of experiences with a focus on creating a vibrant workplace culture that attracts, retains, and empowers
the best and brightest in their fields.
In support of our commitment to foster a diverse and inclusive environment where all employees can contribute, thrive and grow, we have several
Employee Resource Groups (“ERGs”): Chemours Asian Group, Chemours Black Employee Network, Chemours Latin American Resource
Organization, Chemours Pride Network, Chemours Women’s Network, Early Career Network, Chemours Veterans' Network and Chemours Native
American Employee Network. The objectives of these ERGs are to help foster a diverse, inclusive workplace by educating and building awareness
across the Company on challenges underrepresented groups often face, how to be more inclusive, supporting career development efforts, and leading
community outreach efforts. We also facilitate additional educational programs, workshops and discussions on a variety of diversity and inclusion
topics for global, regional, and local employee groups. We continue to further our CRC goals through a range of tactics. To recruit top talent and
broaden our local workforce pipeline, we virtually attended as well as attended fairs at various universities and conferences. Meanwhile, our
manufacturing sites partnered with local trade schools and community colleges to create apprenticeship opportunities and develop degree programs
that teach students the unique skills needed for a career in operations.
Ultimately, we believe that these efforts create a company culture that promotes individual differences, differences in experience and skills, a safety-
focused mentality, and talent development initiatives which result in competitive strength.
Safety
Safety is one of our five core values and is deeply engrained throughout our culture. As an industry leader in Responsible Manufacturing, we operate
our plant sites with a deep commitment to the health and safety of communities where we operate, our people, and our partners all along the value
chain.
In February 2024, the board of directors established an Environmental, Health, Safety (“EHS”) and Operations Performance committee. The committee
assists the board in overseeing the assessment and management of environmental, health, and safety risks by reviewing our programs for identifying,
assessing, managing, and mitigating such risks.
At Chemours, our talented and dedicated people are one of our biggest strengths, and ensuring we have leaders who are committed to safety and
manufacturing our products responsibly is foundational to our company's success. We believe our ability to keep our employees safe from harm and
business performance are interconnected. As a part of our safety culture, every employee feels supported and empowered to exercise "stop work
authority" and to participate openly in incident investigations which leads to operational learning focused on eliminating or reducing physical accidents.
Around the world and at every site, the way in which we work is grounded in our Safety value, always.
Professional Development
We encourage and support our employees to own their careers by taking the lead in their respective professional development journeys. We actively
support our employees in their professional development, providing multiple learning opportunities and trainings. We encourage and support employee
participation in industry associations, professional organizations and other external resources to develop their skills and experience. We also provide
our employees with the necessary tools and resources to develop and produce the next generation of innovative chemistry products, most notably,
our Chemours Discovery Hub. Given our focus on experiential learning, we leverage special projects, short-term assignments, and cross-functional
job rotations to further develop talent and support employees in meeting their professional aspirations. Semi-annual performance reviews, combined
with annual career development planning and ongoing feedback, provide support in performance and development and help our people know where
they excel and how they can improve.
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Equitable Employee Compensation
We provide a total compensation package that is targeted to be competitive with the markets in which we compete for talent, while allowing individual
employee pay to vary equitably based on performance, skills, and experience. Our compensation programs are globally aligned, and, where possible,
our total rewards plans include base salary, incentives (short- and long-term), financial, physical, and mental well-being programs, and monetary and
social recognition. We routinely review our total rewards practices in the markets in which we compete to ensure our plans allow us to recruit and retain
the diverse talent we need to be successful. We are firmly committed to paying our employees in a fair and equitable manner, regardless of race or
gender, and we have implemented global total rewards tools to promote equitable remuneration. To ensure we deliver on this commitment, we
periodically engage with independent third-party consultants to review our compensation practices and recommend pay actions.
Additionally, we believe in pay transparency. In 2023, we became transparent with our pay practices in both North America and Europe. The extent to
which we share will vary based on local country norms, but may include market position, base salary ranges, bonus and equity targets. We will continue
to strive to bring transparency to all of our employees in the near future.
Employee Attraction and Retention
We believe that our workplace culture, as reinforced by our commitment to sustainability, corporate values, professional development opportunities,
and competitive employee compensation, is critical in attaining a high offer acceptance rate and maintaining low levels of attrition, thereby enabling us
to attract talented employees and retain and recognize the benefits of our investments in our employees’ technical manufacturing capabilities, safety
acumen, and professional development. For the year ended December 31, 2024, our voluntary attrition percentage was approximately 8%.
Available Information
We are subject to the reporting requirements under the Securities Exchange Act of 1934 (the “Exchange Act”). Consequently, we are required to file
reports and information with the U.S. Securities and Exchange Commission (“SEC”), including reports on the following forms: Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a)
or 15(d) of the Exchange Act.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports are also
accessible on our website at http://www.chemours.com by clicking on the section labeled “Investor Relations”, then on “Financials” and “SEC Filings”.
These reports are made available, without charge, as soon as it is reasonably practicable after we file or furnish them electronically with the SEC at
http://www.sec.gov.
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Item 1A. RISK FACTORS
Our operations could be affected by various risks, many of which are beyond our control. Based on current information, we believe that the following
identifies the material risk factors that could affect our business, results of operations, or financial condition. Past financial performance may not be a
reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. Refer to our “Forward-
looking Statements” for more details.
Summary of Risk Factors
The following is a summary of the principal risks that could adversely affect our business, results of operations, financial condition, and cash flows.
Risks Related to Legal Matters, Environmental Sustainability, and Regulations
•
Our results of operations could be adversely affected by litigation and other commitments and contingencies;
•
We are subject to extensive environmental and health and safety laws and regulations that may result in unanticipated loss or liability
related to our current and past operations, and that may result in significant additional compliance costs or obligations, which in either
case, could reduce our profitability or liquidity;
•
In connection with our Separation, we were required to assume, and indemnify EID for, certain liabilities. As we may be required to make
payments pursuant to these indemnities or under the cost-sharing provisions of the MOU, we may need to divert cash to meet those
obligations, and our liquidity or financial results could be negatively affected. In addition, the obligations of EID to indemnify us and/or the
obligation of the DuPont Indemnitees to share costs for certain liabilities may not be sufficient to fund us against the full amount of the
applicable liabilities for which it will be allocated responsibility, and EID and/or the DuPont Indemnitees may not be able to satisfy their
obligations in the future;
•
In connection with our Separation, we were required to enter into numerous Separation-related and commercial agreements with our
former parent company, EID, which may not reflect optimal or commercially beneficial terms to us;
•
If the distribution, in connection with the Separation, together with certain related transactions, were to fail to qualify for non-recognition
treatment for U.S. federal income tax purposes, then we could be subject to significant tax and indemnification liability and stockholders
receiving our common stock in the distribution could be subject to significant tax liability;
•
As a result of the Audit Committee Internal Review that commenced in 2024, we may be exposed to civil or criminal litigation from
investors and/or regulatory entities, which may adversely affect our reputation, results of operations, financial condition, and cash flows;
and,
•
Our failure to comply with the anti-corruption laws of the U.S. and various international jurisdictions could negatively impact our reputation
and results of operations, financial condition and cash flows.
Risks Related to Our Business Performance
•
Operating as a multi-national corporation presents risks associated with global and regional economic, political and global capital market
conditions, as well as risks resulting from changes to regional regulatory requirements (including environmental standards);
•
If significant tariffs or other restrictions continue to be placed on foreign imports by the United States and related countermeasures are
taken by impacted foreign countries, our results of operations could be negatively affected:
•
The businesses in which we compete are highly competitive. If our intellectual property were compromised or copied by competitors, or
if our competitors were to develop similar or superior intellectual property or technology, our results of operations could be negatively
affected;
•
Effects of price fluctuations in energy and raw materials, our raw materials contracts, and our inability to renew such contracts, could
have a significant negative impact on our earnings;
•
Our reported results and financial condition could be adversely affected by currency exchange rates and currency devaluation could
impair our competitiveness;
•
If we are unable to innovate and successfully introduce new products, or new technologies or processes reduce the demand for our
products or the price at which we can sell products, our profitability could be adversely affected;
•
If our long-lived assets, including goodwill, become impaired, we may be required to record significant charges to earnings;
•
We could be subject to changes in our tax rates and the adoption of tax legislation or exposure to additional tax liabilities that may
adversely affect our results of operations, financial condition, and cash flows;
•
We are subject to continuing contingent tax-related liabilities of EID;
•
We are a holding company that is dependent on cash flows from our operating subsidiaries to fund our debt obligations, MOU escrow
funding requirements, capital expenditures, and ongoing operations;
•
Failure to meet some or all of our key financial and non-financial targets could negatively impact the value of our business and adversely
affect our stock price; and
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•
A pandemic, epidemic, or other outbreak of infectious disease may have a material adverse effect on our business operations, results of
operations, financial condition, and cash flows.
Risks Related to Our Operations
•
Our ability to make future strategic decisions regarding our manufacturing operations are subject to regulatory, environmental, political,
legal, and economic risks, and to a certain extent may be subject to consents or cooperation from EID under the agreements entered
into between us and EID as part of the Separation. These could adversely affect our ability to execute our future strategic decisions and
our results of operations, financial condition and cash flows;
•
Hazards associated with chemical manufacturing, storage, containment, and transportation could adversely affect our results of
operations;
•
Our results of operations and financial condition could be seriously impacted by business disruptions, including environmental, weather,
and natural disasters.
•
We participate in certain business relationships where we may be adversely impacted by the actions of the joint venture, its participants,
or other partners;
•
Our results of operations and financial condition could be seriously impacted by business disruptions and security breaches, including
cybersecurity incidents;
•
Our operations could be materially impacted in the event of a failure of our information technology infrastructure;
•
If we identify a material weakness in internal control over financial reporting, or if we fail to maintain an effective system of internal
controls, we may not be able to accurately determine our financial results or prevent fraud, either of which could have a material effect
on us; and
•
We have incurred and expect to continue to incur significant expenses related to the Audit Committee Internal Review, and any resulting
litigation.
Risks Related to Our Indebtedness
•
Our current level of indebtedness could adversely affect our financial condition or liquidity, and we could have difficulty fulfilling our
obligations under our indebtedness, which may have a material adverse effect on us;
•
Despite our current level of indebtedness, we may incur substantially more debt and enter into other transactions, which could further
exacerbate the risks to our financial condition described above;
•
We may need additional capital in the future and may not be able to obtain it on favorable terms, or at all;
•
The agreements governing our indebtedness restrict our current and future operations, particularly our ability to respond to changes or
to take certain actions;
•
Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase
significantly; and
•
Adverse developments affecting the financial markets and currency exchange rates, including events or concerns involving liquidity,
defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our business, financial
condition, results of operations, or cash flows.
General Risk Factors
•
Our stock price could become more volatile and investments could lose value;
•
We cannot guarantee the timing or amount of our dividends, if any, and/or our share repurchases, which are subject to a number of
uncertainties that may affect the price of our common stock;
•
A stockholder’s percentage of ownership in us may be diluted in the future;
•
Certain provisions in our amended and restated certificate of incorporation and amended and restated by-laws, and of Delaware law,
may prevent or delay an acquisition of us, which could decrease the trading price of the common stock;
•
Our success depends on our ability to attract and retain key employees, and to identify and develop talented personnel to succeed our
senior management and other key employees; and
•
We may experience a disruption of our business activities and our business could be adversely affected due to senior management
transitions.
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Risks Related to Legal Matters, Environmental Sustainability, and Regulations
Our results of operations could be adversely affected by litigation and other commitments and contingencies.
We face risks arising from various unasserted and asserted legal claims, investigations, and litigation matters, such as product liability claims, patent
infringement claims, anti-trust claims, and claims for third-party property damage or personal injury stemming from alleged environmental actions
(which may concern regulated or unregulated substances) or other torts. We have noted a nationwide trend in purported mass tort and class actions
against chemical manufacturers generally seeking relief, such as medical monitoring, property damages, off-site remediation, and punitive damages
arising from alleged environmental actions (which may concern regulated or unregulated substances) or other torts without claiming present personal
injuries. We also have noted a trend in public and private nuisance suits being filed on behalf of states, counties, cities, and utilities alleging harm to
the general public and damages to natural resources. Various factors or developments in these nationwide trends or in the actions could result in future
charges that could have a material adverse effect on us. We are also subject to requests for information, including those described below under “As a
result of the Audit Committee Internal Review, we may be exposed to litigation from investors and/or regulatory entities, which may adversely affect
our reputation, results of operations, financial condition, and cash flows.” An adverse outcome in any one or more of these matters could be material
to our financial results, liquidity, and/or stock price, and could adversely impact the value of any of our brands that are associated with any such
matters. As discussed below, we are a named defendant and/or cost-sharing and defending DuPont, Corteva, and EID (together, the “DuPont
Indemnitees”) in litigation related to the production and use of per- and polyfluoroalkyl substances ("PFAS"), including perfluorooctanoic acids and its
salts, including the ammonium salt (“PFOA”); hexafluoropropylene oxide dimer acid (“HFPO Dimer Acid”, sometimes referred to as “GenX” or “C3
Dimer Acid”) and other compounds; and products that are manufactured or use such compounds, including Aqueous Film Forming Foam (“AFFF”).
Chemours does not, and has never, used PFOA as a polymerization aid nor sold it as a commercial product. Prior to the Separation, the performance
chemicals segment of EID made PFOA at its Fayetteville Works site in Fayetteville, North Carolina (“Fayetteville”) and used PFOA as a polymerization
aid in the manufacture of fluoropolymers and fluoroelastomers at certain sites, including: Washington Works, Parkersburg, West Virginia; Chambers
Works, Deepwater, New Jersey ("Chambers Works"); Dordrecht Works, Netherlands; Changshu Works, China; and, Shimizu, Japan. These sites are
now owned and/or operated by Chemours.
We have received inquiries, government investigations, directives, multiple lawsuits, and other actions related to PFOA, HFPO Dimer Acid, AFFF, and
PFAS. These or other governmental inquiries or lawsuits could lead to us incurring liability for damages or other costs, a criminal or civil proceeding,
the imposition of fines and penalties, and/or other remedies, as well as restrictions on or added costs for our business operations going forward,
including in the form of restrictions on discharges at our sites, such as Fayetteville, Dordrecht Works in Dordrecht, Netherlands or otherwise. In relation
to remedies, these costs could be for both on-site and off-site issues, including additional on-site corrective action and off-site drinking water and other
programs. Additional lawsuits or inquiries also could be instituted related to these or other compounds in the future. Accordingly, the existing lawsuits
and inquiries, and any such additional litigation, relating to our existing operations, PFOA, HFPO Dimer Acid, AFFF, PFAS, or other compounds
associated with our products or operations could result in us incurring additional costs and liabilities, which may be material to our financial position
and results of operations.
In the ordinary course of business, we may make certain commitments, including representations, warranties, and indemnities relating to current and
past operations, including those related to divested businesses, and issue guarantees of third-party obligations. Additionally, we may be required to
indemnify EID with regard to liabilities allocated to, or assumed by, us under each of the separation agreement, the employee matters agreement, the
tax matters agreement, and the intellectual property cross-license agreement that were executed prior to the Separation. These indemnification
obligations to date have included defense costs associated with certain litigation matters, as well as certain damages awards, settlements, and
penalties. In January 2021, we and the DuPont Indemnitees entered into a binding Memorandum of Understanding (the “MOU”) addressing certain
PFAS matters and costs. Disputes with or among the DuPont Indemnitees and others which may arise with respect to the MOU and PFAS matters,
including disputes based on matters of law or contract interpretation, could materially adversely affect our results of operations, financial condition, and
cash flows.
Refer to "Note 22 – Commitments and Contingent Liabilities" to the Consolidated Financial Statements for further details related to these matters.
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We are subject to extensive environmental and health and safety laws and regulations that may result in unanticipated loss or liability
related to our current and past operations, and that may result in significant additional compliance costs or obligations, which in either
case, could reduce our profitability or liquidity.
Our operations and production facilities are dependent upon attainment and renewal of requisite operating permits and are subject to extensive
environmental and health and safety laws, regulations, and enforcements, proceedings or other actions at national, international, and local levels in
numerous jurisdictions, relating to pollution, protection of the environment, climate change, transporting and storing raw materials and finished products,
storing and disposing of hazardous wastes, and product content and other safety or human rights concerns. Such laws include, but are not limited to:
•
U.S.-based regulations, such as the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”, often referred
to as “Superfund”), the Resource Conservation and Recovery Act (“RCRA”) and similar state and global laws for management and
remediation of hazardous materials, the Clean Air Act (“CAA”) and Clean Water Act (“CWA”) and similar state and global laws for the
protection of air and water resources, and the Toxic Substances Control Act (“TSCA”);
•
Foreign-based chemical control regulations, such as the Registration, Evaluation, Authorization, and Restriction of Chemicals (“REACH”) in
the EU, the Chemical Substances Control Law (“CSCL”) in Japan, MEP Order No. 7 in China, and the Toxic Chemical Substance Control
Act (“TCSCA”) in Taiwan for the production and distribution of chemicals in commerce and reporting of potential adverse effects;
•
The EU Emissions Trading System and similar local and global laws for regulating GHG emissions; and,
•
Numerous local, state, federal, and foreign laws, regulations, and enforcements governing materials transport and packaging.
If we are found to be in violation of these laws, regulations, or enforcements, which may be subject to change based on legislative, scientific, or other
factors, we may incur substantial costs, including fines, damages, criminal or civil sanctions, remediation costs, reputational harm, loss of sales or
market access, or experience interruptions in our operations. Our operations and production may also be subject to changes based on increased
regulation or other changes to, or restrictions imposed by, any such additional regulations. Any operational interruptions or plant shutdowns may result
in delays in production or may cause us to incur additional costs to develop redundancies in order to avoid interruptions in our production cycles, which
could result in future asset impairments. In addition, the manner in which adopted regulations (including environmental and safety regulations) are
ultimately implemented may affect our products, the demand for and public perception of our products, the reputation of our brands, our market access,
and our results of operations. In the event of a catastrophic incident involving any of the raw materials we use or chemicals we produce, we could incur
material costs to address the consequences of such event and future reputational costs associated with any such event.
Our costs to comply with complex environmental laws and regulations, as well as internal and external voluntary programs, are significant and will
continue to be significant for the foreseeable future. These laws and regulations may change and could become more stringent over time, which could
result in significant additional compliance costs, increased costs of purchased energy or other raw materials, increased transportation costs,
investments in, or restrictions on, our operations, installation or modification of emission control equipment, or additional costs associated with
emissions control equipment. As a result of our current and historic operations, including the operations of divested businesses and certain discontinued
operations, we also expect to continue to incur costs for environmental investigation and remediation activities at a number of our current or former
sites and third-party disposal locations. However, the ultimate costs under environmental laws and the timing of these costs are difficult to accurately
predict. While we establish accruals in accordance with U.S. generally accepted accounting principles (“GAAP”), the ultimate actual costs and liabilities
may vary from the accruals because the estimates on which the accruals are based depend on a number of factors (many of which are outside of our
control), including the nature of the matter and any associated third-party claims, the complexity of the site, site geology, the nature and extent of
contamination, the type of remedy, the outcome of discussions with regulatory agencies and other Potentially Responsible Parties (“PRPs”) at multi-
party sites, and the number and financial viability of other PRPs. We also could incur significant additional costs as a result of additional contamination
that is discovered or remedial obligations imposed in the future. Refer to “Environmental Matters” within Item 7 – Management’s Discussion and
Analysis of Financial Condition and Results of Operations and “Note 22 – Commitments and Contingent Liabilities” to the Consolidated Financial
Statements for further information.
As discussed in “Note 22 – Commitments and Contingent Liabilities” to the Consolidated Financial Statements, we continue to have active dialogue
with the North Carolina Department of Environmental Quality (“NC DEQ”) and other stakeholders regarding potential remedies that are both
economically and technologically feasible to achieve the objectives of the Consent Order (“CO”) and Addendum (“Addendum”) related to the discharge
of HFPO Dimer Acid and PFAS from Fayetteville into the Cape Fear River, site surface water, groundwater, and air emissions. The Addendum
establishes the procedure to implement specified remedial measures for reducing PFAS loadings from Fayetteville to the Cape Fear River, including
construction of a barrier wall with a groundwater extraction system. The estimated liabilities of achieving the CO and Addendum objectives consist of
several components, each of which may vary significantly and may exceed the recorded reserve estimates, which could be material.
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There is also a risk that one or more of our manufacturing processes, key raw materials, or products may be found to have, or be characterized or
perceived as having, a toxicological or health-related impact on the environment or on our customers or employees or unregulated emissions, which
could potentially result in us incurring liability in connection with such characterization and the associated effects of any toxicological or health-related
impact. If such a discovery or characterization occurs, we may incur increased costs in order to comply with new regulatory requirements or as a result
of litigation. In addition, the relevant materials or products, including products of our customers incorporating our materials or products, may be recalled,
phased-out, or banned. Changes in laws, science, or regulations, or their interpretations, and our customers’ perception of such changes or
interpretations, which may or may not be supported by scientific evidence, may also affect the marketability of certain of our products.
In June 2019, the Member States Committee of the European Chemicals Agency ("ECHA") also voted to list HFPO Dimer Acid as a Substance of Very
High Concern. The vote was based on Article 57(f) – equivalent level of concern having probable serious effects to the environment. This identification
does not impose immediate regulatory restriction or obligations, but may lead to a future authorization or restriction of the substance. In September
2019, we filed an application with the EU Court of Justice for the annulment of the decision of ECHA to list HFPO Dimer Acid as a Substance of Very
High Concern. In February 2022, the General Court dismissed the annulment action and we appealed such decision. In November 2023, the EU Court
of Justice dismissed our appeal.
In May 2020, five European countries began an initiative to restrict the manufacture, placing on the market and use of PFAS in the EU. In this regulatory
process, more than 4,000 substances, including F-gases and fluoropolymers are being considered for potential broad regulatory action. On July 15,
2021, the countries submitted their restriction proposal, which informed ECHA of the intent to prepare a PFAS restriction dossier for fluorinated
substances within a defined structural formula scope, including branched fluoroalkyl groups and substances containing ether linkages, fluoropolymers
and side chain fluorinated polymers. The restriction dossier was submitted to ECHA in January 2023, and in February 2023 ECHA published a report
and supporting annexes on the restriction proposal, which includes identified concerns for in-scope PFAS and their degradation products and the
proposed restriction of a full ban with certain use-specific time-limited derogation periods. Comments were submitted from individuals and organizations
during the consultation period in 2023 and the restriction dossier will be reviewed by the ECHA Risk Assessment Committee ("RAC") and Socio-
economic Analysis Committees (“SEAC”). RAC and SEAC will focus on the different sectors that are affected and elements of the proposal, and further
meetings will be held in 2025. In November 2024, ECHA and the five European countries issued a progress update on the PFAS restriction, indicating
that alternative restriction options, besides a full ban or a ban with time-limited derogations, are being considered for uses including, but not limited to:
batteries; fuel cells; and electrolysers, and that fluoropolymers have high stakeholder interest considering availability of alternatives for certain uses
and potential socio-economic impacts of a ban. The five national authorities who prepared the proposal are also updating their initial report to address
the consultation comments, which will then be assessed by ECHA committees. The estimated earliest entry into force of restrictions is 2026, contingent
upon timely completion of the remaining steps in the EU REACH restriction process.
In January of 2024, the European Council adopted a regulation supporting the phase down of hydrofluorocarbons (“HFC”) by 2050 and multiple bans
on HFCs and hydrofluoroolefin (“HFO”) in select applications. The new regulation entered into force on March 11, 2024, and includes both reviews
and exemptions. No later than January 1, 2030, the European Commission will publish a report on the effects of the regulation and whether the bans
are upheld based on technical feasibility and socioeconomic impact of alternatives.
In March 2024, ECHA published a registration update for trifluoroacetic acid (“TFA”). This update includes a self-classification, by TFA registrants, of
Category 2 Reprotoxin. In parallel, Germany has announced its intention to submit a proposal to revise the existing harmonized (legally binding)
classification to include reprotoxicity. The proposal will go through a 60-day consultation period to collect comments from interested parties. Next,
ECHA’s RAC will review the submission and all comments and adopt an opinion, which could take up to 18 months. Based on this opinion, the
European Commission will prepare a legislative proposal in conjunction with Member State experts. If Member States and the European Parliament
do not object, the final harmonized classification will then become legally binding after a transition period. There are many variables in this process,
which could take years to complete.
The impacts of these various restrictions and regulatory measures in the EU as noted above, individually and in the aggregate, could lead to material
adverse effects on our results of operations, financial condition, and cash flows.
In October 2021, the U.S. Environmental Protection Agency (“EPA”) released its PFAS Strategic Roadmap, identifying a comprehensive approach to
addressing PFAS. The PFAS Strategic Roadmap sets timelines by which EPA plans to take specific actions through 2024, including establishing a
national primary drinking water regulation ("NPDWR") for PFOA and perfluorooctanesulfonic acid (“PFOS”) and taking Effluent Limitations Guidelines
actions to regulate PFAS discharges from industrial categories among other actions. As provided under its roadmap, EPA also released its National
PFAS Testing Strategy, under which the agency will identify and select certain PFAS compounds for which it will require manufacturers to conduct
testing pursuant to TSCA section 4. We have received various test orders and have formed consortia to jointly manage compliance with the test order
requirements. We expect to receive future test orders, however the timing of the remaining TSCA orders is not determinable at this time. Additional
costs could be incurred in connection with EPA's actions, which could be material. The draft Effluent Limitations Guidelines ("ELGs") for PFAS
manufacturers as announced in the PFAS Strategic Roadmap were not proposed in the fourth quarter of 2024 and we continue to monitor and respond
to information requests related to potential ELGs.
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Also in October 2021, EPA published a final toxicity assessment for GenX compounds that decreased the draft reference dose for GenX compounds
based on EPA’s review of new studies and analyses. On March 18, 2022, we filed a petition to EPA requesting to withdraw and correct its toxicity
assessment for GenX compounds, and this petition was denied by EPA on June 14, 2022. The next day, on June 15, 2022, EPA released health
advisories for four PFAS, including interim updated lifetime drinking water health advisories for PFOA and PFOS, and final health advisories for GenX
compounds, including HFPO Dimer Acid and another PFAS compound (PFBS). On July 13, 2022, we filed a Petition for Review of the GenX
compounds health advisory. In July 2024, the Third Circuit dismissed the Company’s petition for lack of subject matter jurisdiction, finding the health
advisory was not a final agency action.
In March 2023, EPA proposed a NPDWR to establish Maximum Contaminant Levels (MCL’s) for six PFAS, with PFOA and PFOS having MCLs as
individual compounds (each proposed as 4 parts per trillion – (“ppt”)) and four other PFAS compounds, including HFPO Dimer Acid, having a hazard
index approach limit on any mixture containing one or more of the compounds. The proposed PFAS NPDWR was subject to public comment through
May 30, 2023, and on April 10, 2024 EPA issued its final rule, which included promulgating individual MCLs for PFOA and PFOS at 4ppt and individual
MCLs for PFHxS, PFNA and HFPO-DA at 10ppt. In addition, EPA finalized a hazard index of 1 (unitless) as the MCL for any mixture of PFHxS, PFNA,
HFPO-DA and PFBS. The final rule became effective 60 days from publication in the Federal Register and the compliance date for public water systems
in the U.S. to meet the MCLs is five years from the publication date. In June 2024, Chemours, as well as other organizations including the American
Water Works Association and the American Chemistry Council, filed petitions for review of the final rule in the U.S. Court of Appeals for the D.C. Circuit.
This appeal is now being held in abeyance until April 2025 to allow EPA to review the underlying rule. Also in April 2024, EPA issued a final rule
designating PFOA and PFOS as hazardous substances under CERCLA, which has also been challenged in the same appeals court. EPA has moved
to hold this appeal also in abeyance to allow review of the underlying rule. Depending on the ultimate outcome of EPA’s actions, our estimated
environmental remediation liabilities and accrued litigation could increase to meet any new drinking water standards, which could have a material
adverse effect on our results of operations, financial condition, and cash flows.
In connection with our Separation, we were required to assume, and indemnify EID for, certain liabilities. As we may be required to make
payments pursuant to these indemnities or under the cost-sharing provisions of the MOU, we may need to divert cash to meet those
obligations, and our liquidity or financial results could be negatively affected. In addition, the obligations of EID to indemnify us and/or the
obligation of the DuPont Indemnitees to share costs for certain liabilities may not be sufficient to fund us against the full amount of the
applicable liabilities for which it will be allocated responsibility, and EID and/or the DuPont Indemnitees may not be able to satisfy their
obligations in the future.
Pursuant to the separation agreement, the employee matters agreement, the tax matters agreement, and the intellectual property cross-license
agreement we entered into with EID prior to the Separation, we were required to assume, and indemnify EID for, certain liabilities. These indemnification
obligations to date have included, among other items, defense costs associated with certain litigation matters, as well as certain damages awards,
settlement amounts, and penalties. In January 2021, we and the DuPont Indemnitees entered into a binding MOU addressing certain PFAS matters
and costs.
Disputes with the DuPont Indemnitees and others, which may arise with respect to the MOU, PFAS matters, indemnification, and/or cost-sharing
matters, including disputes based on matter of law or contract interpretation, could materially adversely affect our business, financial condition, results
of operations, and cash flows. Multiple lawsuits have been filed by third parties containing allegations that EID’s separation of Chemours was a
fraudulent transfer.
Third parties could also seek to hold us responsible for any of the liabilities of the EID businesses. EID has agreed to indemnify us for such liabilities,
but such indemnity from EID may not be sufficient to protect us against the full amount of such liabilities, and EID may not be able to fully satisfy its
indemnification obligations. Moreover, even if we ultimately succeed in recovering from EID any amounts for which we are held liable, we may be
temporarily required to bear these losses ourselves. Each of these risks could negatively affect our business, financial condition, results of operations,
and cash flows.
Refer to “Note 22 – Commitments and Contingent Liabilities” to the Consolidated Financial Statements for further information.
In connection with our Separation, we were required to enter into numerous Separation-related and commercial agreements with our former
parent company, EID, which may not reflect optimal or commercially beneficial terms to us.
Commercial agreements we entered into with EID prior to the Separation were formed in the context of the Separation while we were still a wholly-
owned subsidiary of EID. Accordingly, during the period in which the terms of those agreements were formed, we did not have an independent board
of directors or management independent of EID. Certain commercial agreements, having long terms and commercially-advantageous cancellation and
assignment rights to EID, may not include adjustments for changes in industry and market conditions. There is a risk that the pricing and other terms
under these agreements may not be commercially beneficial or able to be changed in the future. The terms relate to, among other things, the allocation
of assets, liabilities, rights, and obligations, including the provision of products and services and the sharing and operation of property, manufacturing,
office, and laboratory sites, and other commercial rights and obligations between us and EID.
The Chemours Company
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If the distribution, in connection with the Separation, together with certain related transactions, were to fail to qualify for non-recognition
treatment for U.S. federal income tax purposes, then we could be subject to significant tax and indemnification liability and stockholders
receiving our common stock in the distribution could be subject to significant tax liability.
Generally, taxes resulting from the failure of the Separation and distribution or certain related transactions to qualify for non-recognition treatment
under U.S. federal, state, and/or local tax law, and/or foreign tax law, would be imposed on EID or EID’s stockholders and, under the tax matters
agreement that we entered into with EID prior to the Separation, EID is generally obligated to indemnify us against such taxes to the extent that we
may be jointly, severally, or secondarily liable for such taxes. However, under the terms of the tax matters agreement, we are also generally responsible
for any taxes imposed on EID that arise from the failure of the distribution to qualify as tax-free for U.S. federal income tax purposes within the meaning
of Section 355 of the Internal Revenue Code (“IRC”) or the failure of such related transactions to qualify for tax-free treatment, to the extent such failure
to qualify is attributable to actions, events, or transactions relating to our or our affiliates’ stock, assets, or business, or any breach of our or our affiliates’
representations, covenants, or obligations under the tax matters agreement (or any other agreement we enter into in connection with the Separation
and distribution), the materials submitted to the U.S. Internal Revenue Service (“IRS”) or other governmental authorities in connection with the request
for the IRS Ruling or other tax rulings or the representation letter provided to counsel in connection with the tax opinion. Events triggering an
indemnification obligation under the agreement include events occurring after the distribution that cause EID to recognize a gain under Section 355(e)
of the IRC. Such tax amounts could be significant. To the extent we are responsible for any liability under the tax matters agreement, there could be a
material adverse impact on our financial condition, results of operations, and cash flows in future reporting periods.
As a result of the Audit Committee Internal Review that commenced in 2024, we may be exposed to civil and criminal litigation from investors
and/or regulatory entities, which may adversely affect our reputation, results of operations, financial condition, and cash flows.
The Audit Committee, with the assistance of outside counsel, conducted an internal review in the first quarter of 2024 in response to an anonymous
report made to the Chemours Ethics Hotline. The scope of the review included the processes for reviewing reports made to the Chemours Ethics
Hotline, our practices for managing working capital, including the related impact on metrics within our incentive plans, certain non-GAAP metrics
included in filings made with the SEC or otherwise publicly released, and related disclosures. The Audit Committee completed its planned procedures
with respect to its review and its findings determined that our then-Chief Executive Officer ("CEO"), then-Chief Financial Officer ("CFO"), and then-
Controller engaged in efforts in the fourth quarter of 2023 to delay payments to certain vendors and accelerate the collection of receivables, in part to
meet free cash flow targets that we had communicated publicly, and which also would be part of a key metric for determining incentive compensation
applicable to executive officers. The Audit Committee Internal Review determined that there was a lack of transparency with our board of directors by
the members of senior management who were engaging in these actions, and that these actions violated the Chemours Code of Ethics for the CEO,
CFO, and the Controller. As a result, these individuals are no longer with the Company. We issued Current Reports on Form 8-K related to the Audit
Committee Internal Review, including announcing the administrative leave determinations, announcing the appointment of a new CEO and Interim
CFO, and providing a general update on the review. Chemours is cooperating with requests for information by the SEC and the United States Attorney’s
Office for the Southern District of New York concerning the results of the Audit Committee Internal Review and our SEC filings and in June 2024
received a subpoena from the SEC in respect of that review. In March 2024, two putative class actions were filed in Delaware federal court against us
and former officers of the Company alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. The
complaints allege claims on behalf of proposed classes of purchasers of Chemours stock beginning February 10, 2023 and ending February 28, 2024
and seek compensatory damages and fees. In September 2024, an Amended Complaint was filed, and the Company and former officers filed a motion
to dismiss the Amended Complaint in October 2024. In April 2024, June 2024, July 2024, August 2024 and October 2024, we received seven
stockholder demands for inspection of books and records under Section 220 of the General Corporation Law of the State of Delaware and the common
law (“Section 220 Demand”), including in its purpose the investigation of possible wrongdoing, mismanagement or breach of fiduciary duties by the
Board of Directors and/or senior management in connection with the compensation of executive officers and oversight over our accounting practices.
In addition, we are aware of additional efforts by private law firms to solicit clients in regard to potential securities class action or derivative litigation.
These matters could result in us incurring additional costs and liabilities, which may be material to our results of operations, financial condition, and
cash flows.
Refer to Part II, Item 9A of this Annual Report on Form 10-K and "Note 2 – Basis of Presentation" and "Note 22 – Commitments and Contingent
Liabilities" to the Consolidated Financial Statements for further details related to these matters.
The Chemours Company
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Our failure to comply with the anti-corruption laws of the U.S. and various international jurisdictions could negatively impact our reputation
and results of operations, financial condition and cash flows.
Doing business on a global basis requires us to comply with the laws and regulations of the U.S. government and those of various international and
sub-national jurisdictions, and our failure to successfully comply with these rules and regulations may expose us to liabilities. These laws and
regulations apply to companies, individual directors, officers, employees, and agents, and may restrict our operations, trade practices, investment
decisions, and partnering activities. In particular, our international operations are subject to U.S. and foreign anti-corruption laws and regulations, such
as the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act 2010 (“Bribery Act”), and other anti-corruption laws of the various jurisdictions
in which we operate. The FCPA, the Bribery Act, and other laws prohibit us and our officers, directors, employees, and agents acting on our behalf
from corruptly offering, promising, authorizing, or providing anything of value to foreign officials for the purposes of influencing official decisions or
obtaining or retaining business or otherwise obtaining favorable treatment. Our global operations may expose us to the risk of violating, or being
accused of violating, the foregoing or other anti-corruption laws. Such violations could be punishable by criminal fines, imprisonment, civil penalties,
disgorgement of profits, injunctions, and exclusion from government contracts, as well as other remedial measures. Investigations of alleged violations
can be very expensive, disruptive, and damaging to our reputation. Although we have implemented anti-corruption policies and procedures, there can
be no guarantee that these policies, procedures, and training will effectively prevent violations by our employees or representatives in the future. In
February 2025, the U.S. presidential administration issued an executive order pausing the U.S. Department of Justice’s enforcement of the FCPA for
180 days until the attorney general issues revised FCPA enforcement guidance. Due to the changing nature of the regulatory environment and
uncertainty about the priorities and direction of the U.S. presidential administration, we cannot be certain if or how the DOJ’s enforcement of the FCPA
will change or its impact on our business. Additionally, we face a risk that our distributors and other business partners may violate the FCPA, the
Bribery Act, or similar laws or regulations. Such violations could expose us to FCPA and Bribery Act liability, and/or our reputation may potentially be
harmed by their violations and resulting sanctions and fines.
Risks Related to Our Business Performance
Operating as a multi-national corporation presents risks associated with global and regional economic, political and global capital market
conditions, as well as risks resulting from changes to regional regulatory requirements (including environmental standards).
Our business and operating results may in the future be adversely affected by global and regional economic conditions, including instability in credit
markets, declining consumer and business confidence, fluctuating commodity prices and interest rates, volatile exchange rates, and other challenges,
such as tariffs on international trade, border adjustments for certain products, strikes or labor disruptions, and a changing financial regulatory
environment that could affect the global economy. Such global and regional economic and political conditions may be further affected by physical risks
that stem from a number of root causes, including natural disasters, climate change, and/or travel-based restrictions that may be driven by geo-political
activities, military actions, terrorism, and the spread of pandemics, such as the COVID-19 pandemic. In addition, social and political concerns and
divisions in the U.S. and throughout the world, including elections and political changes in various countries, may further exacerbate economic and
geo-political risks.
Our customers may experience deterioration of their businesses, shortages in cash flows, and difficulty obtaining financing. As a result, existing or
potential customers may delay or cancel plans to purchase products and may not be able to fulfill their obligations to us in a timely fashion. Further,
suppliers could experience similar conditions, which could impact their ability to supply materials or otherwise fulfill their obligations to us. Because we
have significant international operations, there are a large number of currency transactions that result from our international sales, purchases,
investments, and borrowings. Future weakness in the global economy and failure to manage these risks could adversely affect our results of operations,
financial condition, and cash flows in future periods.
In addition to the general risks associated with operating in the global economy and political conditions, our revenue and profitability are largely
dependent on the TiO2 pigment industry and the industries that are the end-users of our refrigerants and fluoropolymers. TiO2 pigment, refrigerants,
and fluoropolymers are used in many “quality of life” products for which demand historically has been linked to global, regional, and local GDP and
discretionary spending, which can be negatively impacted by regional and world events or economic conditions. Such events, which may or may not
impact all of our businesses at the same time or to the same degree, are likely to cause a decrease in the demand for our products and, as a result,
may have an adverse effect on our results of operations and financial condition. The future profitability of our operations, and cash flows generated by
those operations, will also be affected by the available supply of our products in the market. Further, our future demand growth may be below average
global GDP growth rates if our sales into developed markets outpace our sales into emerging markets. In addition, because demand for certain of our
products is driven in part by industry needs to comply with certain environmental regulations (such as markets for refrigerants and foams with low
GWP), changes in, the elimination of, or lack of enforcement of such environmental regulations in the U.S., the EU, or other jurisdictions can also
negatively impact demand for such products and, as a result, our results of operations and financial condition.
The Chemours Company
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If significant tariffs or other restrictions continue to be placed on foreign imports by the United States and related countermeasures are
taken by impacted foreign countries, our results of operations could be negatively affected.
If significant tariffs or other restrictions continue to be placed on foreign imports and related countermeasures are taken by impacted foreign countries,
our results of operations, financial condition and cash flows may be negatively affected. For example, on February 1, 2025, the U.S. imposed a 25%
tariff on imports from Canada and Mexico, which were subsequently suspended for a period of one month, and a 10% additional tariff on imports from
China. Historically, tariffs have led to increased trade and political tensions. In response to tariffs, foreign countries have implemented retaliatory tariffs
on U.S. goods. Political tensions as a result of trade policies could reduce trade volume, investment, technological exchange and other economic
activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial
markets. If further tariffs are imposed on a broader range of imports, or if further retaliatory trade measures are taken by impacted foreign countries in
response to additional tariffs, we may be required to raise our prices or incur additional expenses, which may result in the loss of customers and our
results of operations could be negatively affected.
The businesses in which we compete are highly competitive. If our intellectual property were compromised or copied by competitors, or if
our competitors were to develop similar or superior intellectual property or technology, our results of operations could be negatively
affected.
Each of the businesses in which we operate is highly competitive. Competition in the performance chemicals industry is based on a number of factors,
such as price, product quality, and service. We face significant competition from major international and regional competitors. Some of our competitors
in the Titanium Technologies segment may have plans to expand their chloride capacity. Additionally, our Titanium Technologies business competes
with numerous regional producers, including producers in China, who have expanded their readily available production capacity. The risk of substitution
of these Chinese producers by our customers could increase as these Chinese producers expand their use of chloride production technology. Similarly,
we compete with various producers in our Thermal & Specialized Solutions and Advanced Performance Materials businesses, and the risk of
substitution of these producers by our customers could increase if these producers develop better capabilities to manufacture products similar to our
specialty products.
Intellectual property rights, including patents, trade secrets, confidential information, trademarks, and tradenames are important to our business. We
endeavor to protect our intellectual property rights in key jurisdictions in which our products are produced or used and in jurisdictions into which our
products are imported. Our success depends to a significant degree upon our ability to protect and preserve our intellectual property rights. However,
we may be unable to obtain protection for our intellectual property in key jurisdictions. Although we own and have applied for numerous patents and
trademarks throughout the world, we may have to rely on judicial enforcement of our patents and other proprietary rights. Our patents and other
intellectual property rights may expire or be challenged, invalidated, circumvented, and rendered unenforceable or otherwise compromised. A failure
to protect, defend, or enforce our intellectual property could have an adverse effect on our financial condition and results of operations. Similarly, third
parties may assert claims against us and our customers and distributors, alleging our products infringe upon third-party intellectual property rights.
We also rely upon unpatented proprietary technology, know-how, and other trade secrets to maintain our competitive position. While we maintain
policies to enter into confidentiality agreements with our employees and third parties to protect our proprietary expertise and other trade secrets, these
agreements may not be enforceable or, even if legally enforceable, we may not have adequate remedies for breaches of such agreements. We also
may not be able to readily detect breaches of such agreements. The failure of our patents or confidentiality agreements to protect our proprietary
technology, know-how, or trade secrets could result in significantly lower revenues, reduced profit margins, or loss of market share.
If we must take legal action to protect, defend, or enforce our intellectual property rights, any suits or proceedings could result in significant costs and
diversion of resources and management’s attention, and we may not prevail in any such suits or proceedings. A failure to protect, defend, or enforce
our intellectual property rights could have an adverse effect on our financial condition and results of operations.
Effects of price fluctuations in energy and raw materials, our raw materials contracts, and our inability to renew such contracts, could have
a significant negative impact on our earnings.
Our manufacturing processes consume significant amounts of raw materials and energy, the costs of which may be subject to worldwide supply and
demand factors, global trade regulations and tariffs, GHG emissions-based regulations, and other factors beyond our control. Variations in the cost of
energy, which primarily reflect market prices for oil and natural gas, and for raw materials may significantly affect our operating results from period to
period. Additionally, to the extent climate change regulations and restrictions are not stringently imposed in the countries in which our competitors
operate, our competitors could gain cost or other competitive advantages. Consolidation in the industries providing our raw materials may also have
an impact on the cost and availability of such materials. To the extent we do not have fixed price contracts with respect to specific raw materials, we
have no control over the costs of raw materials, and such costs may fluctuate widely for a variety of reasons, including changes in availability, major
capacity additions or reductions, or significant facility operating problems.
The Chemours Company
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When possible, we have purchased, and we plan to continue to purchase, raw materials, including titanium-bearing ores and fluorspar, through
negotiated medium-term or long-term contracts to minimize the impact of price fluctuations. To the extent that we have been able to achieve favorable
pricing in our existing negotiated long-term contracts, we may not be able to renew such contracts at the current prices, or at all, and this may adversely
impact our profitability and cash flows from operations. However, to the extent that the prices of the raw materials that we utilize significantly decline,
we may be bound by the terms of our existing long-term contracts and obligated to purchase such raw materials at higher prices as compared to other
market participants.
We attempt to offset the effects of higher raw materials and energy costs through selling price increases, productivity improvements, and cost reduction
programs. However, the outcome of these efforts is largely determined by existing competitive and economic conditions and may be subject to a time
delay between the increase in our raw materials costs and our ability to increase prices, which could vary significantly depending on the market served.
If we are not able to fully offset the effects of higher energy or raw materials costs, there could be a material adverse effect on our financial results.
Our reported results and financial condition could be adversely affected by currency exchange rates and currency devaluation could impair
our competitiveness.
Due to our international operations, we transact in many foreign currencies, including, but not limited to, the euro, the Mexican peso, the Chinese yuan,
the Japanese yen, and the Argentine peso. As a result, we are subject to the effects of changes in foreign currency exchange rates. During times of a
strengthening U.S. dollar, our reported net sales and operating income will be reduced because the local currency will be translated into fewer U.S.
dollars. During periods of local economic crisis, local currencies may be devalued significantly against the U.S. dollar, potentially reducing our margin.
For example, depreciation of the euro against the U.S. dollar has historically negatively impacted our results of operations. We also have certain
indebtedness and payables denominated in the euro, and, during times of a strengthening euro relative to the U.S. dollar, our overall debt obligations
and payables in U.S. dollars equivalent will increase. Additionally, the Argentine peso has devalued significantly against the U.S. dollar in recent years,
which has negatively impacted our results of operations and cash flows.
We enter into certain of our qualifying foreign currency forward contracts under a cash flow hedge program to mitigate the risks associated with
fluctuations in the euro against the U.S. dollar for forecasted U.S. dollar-denominated purchases for certain of our international subsidiaries. There can
be no assurance that any hedging action will lessen the adverse impact of a variation in currency rates. Also, actions to recover margins may result in
lower volume and a weaker competitive position, which may have an adverse effect on our profitability. For example, in our Titanium Technologies
segment, a substantial portion of our manufacturing is located in the U.S. and Mexico, while our TiO2 pigment is delivered to customers around the
world. Furthermore, our ore cost is principally denominated in U.S. dollars. Accordingly, in periods when the U.S. dollar or Mexican peso strengthen
against other local currencies, such as the euro, our costs are higher relative to some of our competitors who operate largely outside of the U.S. and
Mexico, and the benefits we realize from having lower costs associated with our manufacturing process are reduced, impacting our profitability.
If we are unable to innovate and successfully introduce new products, or new technologies or processes reduce the demand for our products
or the price at which we can sell products, our profitability could be adversely affected.
Our industries and the end-use markets into which we sell our products experience periodic technological changes and product improvements, as well
as changes in mandates on or regulation of products and services. Our future growth will depend on our ability to gauge the direction of commercial
and technological progress in key end-use markets, our ability to fund and successfully develop, manufacture, and market products in such changing
end-use markets, and our ability to adapt to changing regulations including climate change or environmental related regulations. We must continue to
develop lower-emission manufacturing technologies and identify, develop, and market innovative products or enhance existing products on a timely
basis to maintain our profit margins and our competitive position. We may be unable to develop new products or technologies, either alone or with third
parties, or license intellectual property rights from third parties on a commercially competitive basis. If we fail to keep pace with the evolving
technological innovations in our end-use markets on a competitive basis, including with respect to innovation related to the development of alternative
uses for, or application of, products developed that utilize such end-use products, our financial condition and results of operations could be adversely
affected. We cannot predict whether technological innovations will, in the future, result in a lower demand for our products or affect the competitiveness
of our business. We may be required to invest significant resources to adapt to changing technologies, markets, customer behaviors and demands,
competitive environments, and laws, regulations, or enforcements. We cannot anticipate market acceptance of new products or future products. In
addition, we may not achieve the expected benefits associated with new products developed to meet new laws, regulations, or enforcements if the
implementation of such laws, regulations, or enforcements is delayed, and we may face competition from illegal or counterfeit products in regulated
markets.
The Chemours Company
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If our long-lived assets, including goodwill, become impaired, we may be required to record significant charges to earnings.
We may be required to record a significant non-cash charge in our financial statements during the period in which any impairment of our long-lived
assets, including goodwill, or other assets is determined, negatively impacting our results of operations. We have a significant amount of long-lived
assets on our consolidated balance sheets. Under U.S. GAAP, we review our long-lived assets for impairment when events or changes in
circumstances indicate the carrying value may not be recoverable. Goodwill is tested for impairment on October 1 of each year, or more frequently if
required. Factors that may be considered a change in circumstances, indicating that the carrying value of our long-lived assets and goodwill may not
be recoverable, include, but are not limited to, changes in the industrial, economic, political, social, and physical landscapes in which we operate, a
decline in our stock price and market capitalization, reduced future cash flow estimates, changes in discount rate, as well as competition or other
factors leading to a reduction in expected long-term sales or profitability. Subsequent to December 31, 2023, after the announcement of the Audit
Committee Internal Review, we experienced significant fluctuations in our stock price. A sustained decline in our stock price in the future could indicate
the carrying value of our goodwill may not be recoverable.
In the third quarter of 2024, we concluded a triggering event was present for our Advanced Performance Materials reporting unit and associated
goodwill. As a result of the quantitative goodwill impairment analysis performed, we concluded the carrying amount of the Advanced Performance
Materials reporting unit exceeded its fair value, resulting in a non-cash goodwill impairment charge of $56 million. There can be no assurance that
future events may not result in an impairment to the Advanced Performance Materials asset group or an impairment to any of our other reporting units'
goodwill or long-lived assets.
We could be subject to changes in our tax rates and the adoption of tax legislation or exposure to additional tax liabilities that may adversely
affect our results of operations, financial condition, and cash flows.
We are subject to taxes in the U.S. and non-U.S. jurisdictions where our subsidiaries are organized. Due to economic and political conditions, tax rates
in various jurisdictions may be subject to significant change. Our future effective tax rates could be affected by and may fluctuate because of changes
in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws
or their interpretations, and taxes associated with the repatriation of our non-U.S. earnings. Our tax returns and other tax matters are subject to
examination by local tax authorities and governmental bodies. Additionally, we and our subsidiaries are engaged in intercompany transactions across
multiple tax jurisdictions. Although we believe we have clearly reflected the economics of these transactions with proper local transfer pricing
documentation in place, tax authorities could propose and sustain adjustments. We regularly assess the likelihood of an adverse outcome resulting
from these examinations to determine the adequacy of our provision for taxes. There can be no assurance as to the outcome of these examinations.
If our effective tax rates were to increase, or if the ultimate determination of the taxes owed by us is for an amount in excess of amounts previously
accrued, our operating results, financial condition, and cash flows could be adversely affected. We, and our subsidiaries, are required to file certain
tax returns and information reports with various tax authorities and government bodies. The failure to file returns or information reports could be
punishable by civil penalties as well as other remedial measures which could adversely affect our operating results, financial condition, or cash flows.
The Organization of Economic Cooperation and Development, which represents a coalition of member countries globally, is supporting changes to
numerous long-standing tax principles through its base erosion and profit shifting (“BEPS”) project. The BEPS project is focused on a number of issues,
including the shifting of profits among affiliated entities located in different tax jurisdictions and a global minimum corporate income tax under "Pillar
Two". Several jurisdictions in which we operated have enacted Pillar Two rules with an effective date of January 1, 2024. At this time we do not expect
a material impact; however, given the scope of our international operations and uncertainty surrounding the impact of future legislation, it is difficult to
assess how any changes in tax laws arising from BEPS would impact our income tax expense.
We are subject to continuing contingent tax-related liabilities of EID.
There are other significant areas where the liabilities of EID may become our obligations. For example, under the IRC and the related rules and
regulations, each corporation that was a member of EID’s consolidated tax reporting group during any taxable period or portion of any taxable period
ending on or before the effective time of the distribution is jointly and severally liable for the U.S. federal income tax liability of the entire consolidated
tax reporting group for such taxable period. In connection with the Separation and distribution, we entered into a tax matters agreement with EID that
allocates the responsibility for prior period taxes of EID’s consolidated tax reporting group between us and EID. If EID were unable to pay any prior
period taxes for which it is responsible, however, we could be required to pay the entire amount of such taxes, and such amounts could be significant.
Other provisions of federal, state, local, or foreign law may establish similar liability for other matters, including laws governing tax-qualified pension
plans, as well as other contingent liabilities.
The Chemours Company
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We are a holding company that is dependent on cash flows from our operating subsidiaries to fund our debt obligations, MOU escrow
funding requirements, capital expenditures, and ongoing operations.
All of our operations are conducted, and all of our assets are owned, by our operating companies, which are our subsidiaries. We intend to continue
to conduct our operations at the operating companies and any future subsidiaries. Consequently, our cash flows and our ability to meet our obligations,
including our debt obligations, MOU escrow funding requirements, or make cash distributions depends upon the cash flows of our operating companies
and any future subsidiaries, as well as the ability of our operating companies and any future subsidiaries to transfer funds in the form of dividends or
otherwise.
Our debt is generally the exclusive obligation of The Chemours Company and our guarantor subsidiaries, as described in “Note 20 – Debt” to the
Consolidated Financial Statements. Because a significant portion of our operations are conducted by non-guarantor subsidiaries, our cash flows and
our ability to service indebtedness, including our ability to pay the interest on our debt when due and principal of such debt at maturity, are dependent
to a large extent upon cash dividends and distributions or other transfers from such non-guarantor subsidiaries. Any payment of dividends, distributions,
loans, or advances by our non-guarantor subsidiaries to us could be subject to restrictions on dividends or repatriation of earnings under applicable
local law, monetary transfer restrictions, and foreign currency exchange regulations in the jurisdictions in which our subsidiaries operate, and any
restrictions imposed by the current and future debt instruments of our non-guarantor subsidiaries.
Our subsidiaries are separate legal entities and, except for our guarantor subsidiaries, have no obligation, contingent or otherwise, to pay any amounts
due on our debt or to make any funds available for those amounts, whether by dividends, loans, distributions, or other payments, and do not guarantee
the payment of interest on, or principal of, our debt. Any right that we have to receive any assets of any of our subsidiaries that are not guarantors
upon the liquidation or reorganization of any such subsidiary, and the consequent right of holders of the outstanding notes to realize proceeds from
the sale of their assets, will be structurally subordinated to the claims of that subsidiary’s creditors, including trade creditors and holders of debt issued
by that subsidiary.
The ability of our operating companies and any future subsidiaries to make any payments to us depends on their earnings, the terms of their
indebtedness, including the terms of any credit facilities, and legal restrictions regarding the transfer of funds.
Failure to meet some or all of our key financial and non-financial targets could negatively impact the value of our business and adversely
affect our stock price.
From time to time, we may announce certain key financial and non-financial targets that are expected to serve as benchmarks for our performance or
for our liquidity for a given time period, including goals for our future net sales growth, adjusted earnings before interest, taxes, depreciation, and
amortization, adjusted earnings per share, free cash flows, return on invested capital, net leverage ratio, corporate responsibility commitments, and/or
sustainability commitments. Our failure to meet one or more of these key targets may negatively impact our results of operations, stock price, and
stockholder returns. The factors influencing our ability to meet these key targets include, but are not limited to, changes in the global economic
environment, changes in our competitive landscape, including our relationships with new or existing customers, our ability to introduce new products,
applications, or technologies, our undertaking of an acquisition, joint venture, or other strategic arrangement, the outcome of any new or existing
litigation, our failure to comply with new or existing laws or regulations, and other factors described within this Item 1A – Risk Factors, many of which
are beyond our control.
A pandemic, epidemic, or other outbreak of infectious disease may have a material adverse effect on our business operations, results of
operations, financial condition, and cash flows.
Our operational and financial condition may be negatively impacted by the widespread outbreak of any illnesses or communicable diseases, as well
as any associated public health crises that may ensue, such as the COVID-19 pandemic. To minimize transmission, social and economic restrictions
have been or may be imposed in the U.S. and abroad, including travel bans, quarantines, restrictions on public gatherings, shelter-in-place orders,
and/or safer-at-home orders. These restrictions, while necessary and important for public health, can have negative implications for our business and
the U.S. and global economies.
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The widespread outbreak of any illness or communicable disease could result in a significant health crisis that adversely affects local and global
economies and financial markets. The effects of any significant health crisis have the potential to have a material adverse impact on our business
operations, results of operations, financial condition, and cash flows, and may also exacerbate our other risks, as described within this Item 1A – Risk
Factors, any of which could have a material effect on us, including among other things, risks associated with our indebtedness, such as available
capacity and compliance with debt covenants, risks related to the adequacy of our cash flows and earnings or other conditions which may affect our
liquidity, and risks related to our ongoing ability to pay dividends and repurchase common stock.
Risks Related to Our Operations
Our ability to make future strategic decisions regarding our manufacturing operations are subject to regulatory, environmental, political,
legal, and economic risks, and to a certain extent may be subject to consents or cooperation from EID under the agreements entered into
between us and EID as part of the Separation. These could adversely affect our ability to execute our future strategic decisions and our
results of operations, financial condition and cash flows.
One of the ways we may improve our business is through the expansion or improvement of our facilities. Construction of additions or modifications to
facilities involves numerous regulatory, environmental, political, legal, and economic uncertainties that are beyond our control and are subject to various
start-up risks and consent to operate. Difficulties in obtaining and maintaining any of the requisite licenses, permits, and authorizations from
governmental or regulatory authorities could increase the total cost, delay, jeopardize, prevent the construction or opening of such facilities, or cause
shutdowns of such facilities. Our expansion or improvement projects may also require the expenditure of significant amounts of capital, and financing
may not be available on economically acceptable terms, or at all. As a result, these projects may not be completed on schedule, at the budgeted cost,
or at all, which may adversely affect our results of operations, financial condition, and cash flows. Moreover, our revenue may not increase immediately
upon the expenditure of funds on a particular project or may be negatively impacted by regulatory or other developments relating to the chemicals we
use or manufacture. As a result, we may not be able to realize our expected investment return, which could also adversely affect our results of
operations, financial condition, and cash flows.
We periodically assess our manufacturing operations in order to manufacture and distribute our products in the most efficient manner and to minimize
the potential impacts of climate-related physical risks on our operations. Based on our assessments, we may make strategic decisions regarding our
manufacturing operations, such as capital improvements to modernize certain units and/or improve structural resilience, move manufacturing or
distribution capabilities from one plant or facility to another plant or facility, discontinue manufacturing or distributing certain products, or close or divest
all or part of a manufacturing plant or facility, some of which have significant shared services and lease agreements with EID. These agreements may
adversely impact our ability to make these strategic decisions regarding our manufacturing operations. Further, if such agreements are terminated or
revised, we would have to assess and potentially adjust our manufacturing operations, the closure or divestiture of all or part of a manufacturing plant
or facility that could result in future charges that could be significant.
Hazards associated with chemical manufacturing, storage, containment, and transportation could adversely affect our results of operations.
There are hazards associated with chemical manufacturing and the related storage, containment, and transportation of raw materials, products, and
wastes, and the safety of our employees and communities. These hazards could lead to an interruption or suspension of operations and have an
adverse effect on the productivity and profitability of a particular manufacturing facility or on us as a whole, which could result in potential impairments
of assets. While we endeavor to provide adequate protection for the safety of our employees and the safe-handling of these materials, issues could
be created by various events, including unforeseen accidents or defects, natural disasters, severe weather events, acts of sabotage, employees
malfeasance, military actions, terrorism, and performance by third parties, including tenants at certain of our manufacturing facilities, and, as a result,
we could face the following potential hazards, among others:
•
piping and storage tank leaks and ruptures;
•
mechanical failure;
•
employee exposure to hazardous substances;
•
fires and explosions; and,
•
chemical spills and other discharges or releases of toxic or hazardous substances or gases.
These hazards may cause personal injury and loss of life, damage to property, contamination of the environment, and damage to natural resources,
which could lead to government fines and penalties, remedial obligations, work stoppage injunctions, claims and lawsuits by injured persons, damage
to our public reputation and brands, loss of sales and market access, customer dissatisfaction, and diminished product acceptance. If such actions are
determined adversely to us or there is an associated economic impact to our business, we may have inadequate insurance or cash flows to offset any
associated costs. Such outcomes could adversely affect our financial condition, results of operations and cash flows.
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Our results of operations and financial condition could be seriously impacted by business disruptions, including environmental, weather,
and natural disasters.
We and certain of our customers and suppliers have experienced business and/or supply chain disruptions, plant downtime, power outages, and other
disruptions, caused by, among other things, environmental and natural disaster incidents. The nature of our business dictates that we maintain
significant concentrations of physical assets, many of which are large users of water, in geographic locations which may be vulnerable to the impacts
of climate change, including weather or geological events or natural disasters, such as, but not limited to, hurricanes, earthquakes, flood, prolonged
droughts or wild fires (whether as a result of climate change or otherwise), significant changes in storm patterns and intensities, water shortages,
increasing atmospheric and water temperatures, and rising sea levels. Such events could also seriously harm our operations, as well as the operations
of our customers and suppliers, and accordingly, we continue to study the long-term implications of changing climate parameters on plant siting,
operational issues, and water availability. For example, in June 2024, we had to temporarily pause production at our Altamira TiO2 manufacturing
facility in Mexico for approximately three weeks due to severe drought conditions. We may experience similar type disruptions in the future, which
could have a material negative impact on our business, results of operations, financial condition, and cash flows in the future.
Preparedness plans pertaining to the physical aspects of our business have been developed with detailed actions needed in the event of unforeseen
events or severe weather. We also engineer our facilities to better withstand these events and hold insurance coverage to protect against losses from
physical damages and related business interruptions. These measures have historically been in place, and such activities and associated costs are
driven by normal operational preparedness. However, there can be no assurance that such measures will be effective for a particular event that we
may experience.
We participate in certain business relationships where we may be adversely impacted by the actions of the joint venture, its participants, or
other partners.
We have investments in and commitments to certain unconsolidated joint ventures with unrelated parties. If the business relationships or their
participants do not honor their obligations, or perform the way we expected them to, we may be required to expend additional resources or suffer
losses, which could be significant. In addition, because we generally do not control these business relationships, our investments may be illiquid and
we may not always agree with our partners on major decisions. Disputes between us and partners may result in litigation or arbitration that could
increase our expenses and distract our management team.
Our results of operations and financial condition could be seriously impacted by business disruptions and security breaches, including
cybersecurity incidents.
We and certain of our customers and suppliers have experienced business and/or supply chain disruptions, plant downtime, power outages, and/or
information technology system and network disruptions. These types of disruptions may be caused by, among other things, acts of sabotage, employee
error or other actions, geo-political activity, military actions, and terrorism (including cyberterrorism). Although none of the aforementioned disruptions
and/or events has materially impacted us to date, we may experience similar type disruptions in the future, which could have a material negative impact
on our business, results of operations, financial condition, and cash flows in the future.
Failure to effectively prevent, detect, and recover from security breaches, including attacks on information technology and infrastructure by hackers,
viruses, breaches due to employee error or other actions, or other disruptions, could result in misuse of our assets, business disruptions, loss of
property including trade secrets and confidential business information, legal claims or proceedings, reporting errors, processing inefficiencies, negative
media attention, loss of sales, and interference with regulatory compliance. Such risks are particularly relevant in consideration of remote working
arrangements utilized by our workforce where practicable. Like most major corporations, we have been, and expect to be, the target of industrial
espionage, including cyberattacks, from time to time. We have determined that these attacks have resulted, and could result in the future, in
unauthorized parties gaining access to certain confidential business information, and have included the obtaining of trade secrets and proprietary
information related to the chloride manufacturing process for TiO2 pigment by third parties. Although we do not believe that we have experienced any
material losses to date related to these breaches, there can be no assurance that we will not suffer any such losses in the future. We actively manage
the risks within our control that could lead to business disruptions and security breaches. As these threats continue to evolve, particularly around
cybersecurity, we may be required to expend significant resources to enhance our control environment, processes, practices, and other protective
measures. Despite these efforts, such events could materially adversely affect our business, financial condition, or results of operations.
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Our information technology is provided by a combination of internal and external services and service providers, and we rely on information technology
in many aspects of our business, including internal and external communications, and the management of our accounting, finance, and supply chain
functions. Further, our business involves the use, storage, and transmission of information about customers, suppliers, and employees. As we become
more dependent on information technology to conduct our business, and as the number and sophistication of cyberattacks increases, the risks
associated with cybersecurity, information security, and data privacy also increases. In response to such risks, we provide our employees with cyber
and information security training on a periodic and an annual basis. We have a comprehensive approach to cyber security which includes a robust
cyber security education program focused on cyber risk and prevention measures, using online situational awareness training and continuous phishing
simulations. Failure to maintain effective internal control over our information technology and infrastructure could materially adversely affect our
business, financial condition, or results of operations, and/or have a material adverse impact on our stock price.
Preparedness plans pertaining to the cyber-related aspects of our business have been developed with detailed actions needed in the event of
unforeseen events. These measures have historically been in place, and such activities and associated costs are driven by normal operational
preparedness. However, there can be no assurance that such measures will be effective for a particular event that we may experience.
Our operations could be materially impacted in the event of a failure of our information technology infrastructure.
We currently use an enterprise resource planning (“ERP”) software platform that is no longer supported; however, we pay for extended, customer-
specific support, which is costly. We are currently evaluating our options to upgrade or replace our existing platform. Any systems failure, accident, or
security breach could result in significant costs or disruptions to our operations, which could have a material adverse effect on our business. Further,
such improvements and upgrades or replacements are often complex, costly, and time-consuming. We may also experience challenges integrating
any new ERP software platform with our existing technology systems, or may uncover problems with our existing technology systems. Any attempt to
upgrade or implement a replacement could result in outages, a disruption to our operations, and our ability to serve our customers.
If we identify a material weakness in internal control over financial reporting, or if we fail to maintain an effective system of internal controls,
we may not be able to accurately determine our financial results or prevent fraud, either of which could have a material effect on us.
Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. Section 404 of the Sarbanes-Oxley
Act of 2002 requires us to evaluate and report on our internal control over financial reporting. We cannot be certain that we will be successful in
maintaining adequate internal control over our financial reporting and financial processes in the future. We may in the future discover areas of our
internal controls that need improvement. Furthermore, to the extent our business grows or significantly changes, our internal controls may become
more complex, and we could require significantly more resources to ensure our internal controls remain effective. As discussed further in Part II, Item
9A of this Annual Report on Form 10-K, in 2023 we identified certain material weaknesses in our internal control over financial reporting, all of which
have been remediated as of December 31, 2024. If we identify material weaknesses in the future, it could negatively impact our operations or the
market value of our common stock. Additionally, the existence of any material weakness may require management to devote significant time and incur
significant expense to remediate any such material weaknesses and management may not be able to remediate any such material weaknesses in a
timely manner.
We have incurred and expect to continue to incur significant expenses related to the Audit Committee Internal Review and the remediation
of the material weaknesses in our internal control over financial reporting.
We have devoted substantial internal and external resources towards the Audit Committee Internal Review and expect to continue to devote substantial
resources towards the implementation of enhanced procedures and controls over deficiencies and the remediation of material weaknesses in our
internal control over financial reporting. Because of these efforts, we have incurred and expect that we will continue to incur significant fees and
expenses for legal, accounting, financial and other consulting and professional services, as well as the implementation and maintenance of systems
and processes that will need to be updated, supplemented or replaced. Additionally, we have indemnification and expense advancement obligations
pursuant to our bylaws and indemnification agreements with respect to certain current and former members of senior management and our directors.
In connection with the Audit Committee Internal Review, we have received requests from former members of senior management under such
indemnification agreements and our bylaws to provide advances of funds for legal fees and other expenses, and we expect additional requests in
connection with the Audit Committee Internal Review and any future related litigation, which could be significant. We have taken several remediation
efforts in response to the Audit Committee Internal Review. However, there can be no assurance that these steps and future steps will be successful.
To the extent these steps are unsuccessful or incomplete, or we identify additional matters requiring remediation, we may be required to devote
significant additional time and expense to additional remediation efforts. The incurrence of significant additional expenses or the requirement that
management devote substantial time to these efforts could reduce the time otherwise available to execute on our business strategies and could have
a material adverse effect on our results of operations, financial condition, and cash flows.
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Risks Related to Our Indebtedness
Our current level of indebtedness could adversely affect our financial condition or liquidity, and we could have difficulty fulfilling our
obligations under our indebtedness, which may have a material adverse effect on us.
As of December 31, 2024, we had approximately $4.1 billion of indebtedness. At December 31, 2024, together with the guarantors, we had
approximately $1.5 billion of indebtedness outstanding under our senior secured credit facilities, and a net $640 million of revolving credit facility
(“Revolving Credit Facility”) availability after letters of credit, which would be senior secured indebtedness, if drawn (collectively, the “Senior Secured
Credit Facilities”). Our current level of indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect
of our indebtedness. The level of our indebtedness could have other important consequences on our business, including:
•
making it more difficult for us to satisfy our obligations with respect to indebtedness;
•
increasing our vulnerability to adverse changes in general economic, industry, and competitive conditions;
•
requiring us to dedicate a significant portion of our cash flows from operations to make principal and interest payments on our indebtedness,
thereby reducing the availability of our cash flows to fund working capital and other general corporate purposes;
•
limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
•
restricting us from capitalizing on business opportunities;
•
placing us at a competitive disadvantage compared to our competitors that have less debt;
•
limiting our ability to borrow additional funds for working capital, acquisitions, debt service requirements, execution of our business strategy,
or other general corporate purposes;
•
requiring us to provide additional credit support, such as letters of credit or other financial guarantees, to our customers, suppliers, or
regulators, thereby limiting our availability of funds under our Revolving Credit Facility;
•
limiting our ability to enter into certain commercial arrangements because of concerns of counterparty risks; and,
•
limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors that
have less debt.
The occurrence of any one or more of these circumstances could have a material adverse effect on us.
Our ability to make scheduled payments on and to refinance our indebtedness, including on our outstanding notes, depends on and is subject to our
financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business, and other factors
(many of which are beyond our control), including the availability of financing in the international banking and capital markets. We cannot be certain
that our business will generate sufficient cash flows from operations or that future borrowings will be available to us in an amount sufficient to enable
us to service our debt, including the outstanding notes, to refinance our debt, or to fund our other liquidity needs.
If we are unable to meet our debt service obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our
debt, including the outstanding notes. Failure to successfully restructure or refinance our debt could cause us to default on our debt obligations and
would impair our liquidity. Our ability to restructure or refinance our debt will depend on the condition of the capital markets, which is outside of our
control, and our financial condition at such time. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply
with more onerous covenants that could further restrict our business operations.
Moreover, in the event of a default of our debt service obligations, if not cured or waived, the holders of the applicable indebtedness, including holders
of our outstanding notes and the Senior Secured Credit Facilities, could elect to declare all the funds borrowed to be due and payable, together with
accrued and unpaid interest. Our assets or cash flows may not be sufficient to fully repay borrowings under our outstanding debt instruments if
accelerated upon an event of default. First, a default in our debt service obligations in respect of the outstanding notes would result in a cross-default
under the Senior Secured Credit Facilities. The foregoing would permit the lenders under the Revolving Credit Facility to terminate their commitments
thereunder and cease making further loans, and would allow the lenders under the Senior Secured Credit Facilities to declare all loans immediately
due and payable and to institute foreclosure proceedings against their collateral. Second, any event of default or declaration of acceleration under the
Senior Secured Credit Facilities or certain other agreements relating to our outstanding indebtedness could also result in an event of default under the
indenture governing the outstanding notes, and any event of default or declaration of acceleration under any other of our outstanding indebtedness
may also contain a cross-default provision. Any such default, event of default if not cured or waived, or declaration of acceleration could force us into
bankruptcy, reorganization, insolvency, or liquidation.
Refer to “Note 20 – Debt” to the Consolidated Financial Statements for further discussion related to our indebtedness.
The Chemours Company
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Despite our current level of indebtedness, we may incur substantially more debt and enter into other transactions, which could further
exacerbate the risks to our financial condition described above.
Notwithstanding our current level of indebtedness, we may incur significant additional indebtedness and related interest expense in the future, including
additional secured indebtedness (including the $900 million maximum capacity under the Revolving Credit Facility) that would be effectively senior to
our outstanding notes. Although the indenture that governs the outstanding notes and the credit agreement that governs the Senior Secured Credit
Facilities contain restrictions on our ability to incur additional indebtedness and to enter into certain types of other transactions, these restrictions are
subject to a number of significant qualifications and exceptions. Additional indebtedness incurred in compliance with these restrictions, including
additional secured indebtedness, could be substantial. These restrictions also do not prevent us from incurring obligations, such as trade payables,
that do not constitute indebtedness as defined under our debt instruments. To the extent such new debt is added to our current debt levels, the
substantial leverage risks described in the immediately preceding risk factor would increase.
We may need additional capital in the future and may not be able to obtain it on favorable terms, or at all.
Our industry is capital intensive, and we may require additional capital in the future to finance our growth and development, implement further marketing
and sales activities, fund ongoing R&D activities, make investments driven by environmental compliance, and meet general working capital needs.
Our capital requirements will depend on many factors, including acceptance of and demand for our products, the extent to which we invest in new
technology and R&D projects, and the status and timing of these developments, as well as the general availability of capital from debt and/or equity
markets. However, debt or equity financing may not be available to us on terms we find acceptable, if at all. If we are unable to raise additional capital
when needed, our financial condition could be materially and adversely affected.
Additionally, our failure to maintain the credit ratings on our debt securities, including the outstanding notes, could negatively affect our ability to access
capital and could increase our interest expense on future indebtedness. We expect the credit rating agencies to periodically review our capital structure
and the quality and stability of our earnings, including environmental, social and governance-related impacts. Deterioration in our capital structure or
the quality and stability of our earnings could result in a downgrade of our overall credit ratings and our debt securities. On June 3, 2024, Moody’s
affirmed our Ba3 rating with stable outlook. On April 17, 2024, S&P Global affirmed our BB- credit rating with negative outlook. These negative rating
agency actions could constrain the capital available to us, reduce or eliminate available borrowing to us, and could limit our access to and/or increase
the cost of funding our operations. If, as a result, our ability to access capital when needed becomes constrained, our interest costs could increase,
which could have material adverse effect on our results of operations, financial condition, and cash flows.
The agreements governing our indebtedness restrict our current and future operations, particularly our ability to respond to changes or to
take certain actions.
The agreements governing our indebtedness, including the outstanding notes, contain, and the agreements governing future indebtedness and future
debt securities may contain, significant restrictive covenants and, in the case of the Revolving Credit Facility, financial maintenance and negative
covenants that will limit our operations, including our ability to engage in activities that may be in our long-term best interests. These restrictive
covenants may limit us, and our restricted subsidiaries, from taking, or give rights to the holders of our indebtedness in the event of, the following
actions:
•
incurring additional indebtedness and guaranteeing indebtedness and other obligations;
•
paying dividends or making other distributions in respect of, or repurchasing or redeeming, our capital stock;
•
making acquisitions or other investments;
•
prepaying, redeeming, or repurchasing certain indebtedness;
•
selling or otherwise disposing of assets;
•
selling stock of our subsidiaries;
•
incurring liens;
•
entering into transactions with affiliates;
•
entering into agreements restricting our subsidiaries’ ability to pay dividends;
•
entering into transactions that result in a change of control of us; and,
•
consolidating, merging, or selling all or substantially all of our assets.
Our failure to comply with those covenants could result in an event of default that, if not cured or waived, could result in the acceleration of some or all
of our indebtedness, which could lead us to bankruptcy, reorganization, or insolvency.
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Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase
significantly.
Our borrowings under the Senior Secured Credit Facilities are at variable rates and expose us to interest rate risk. As a result, if interest rates increase,
our debt service obligations under the Senior Secured Credit Facilities or other variable rate debt would increase, even though the amount borrowed
would remain the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease.
We may use, from time to time, derivative instruments to mitigate interest rate risk. However, there is no guarantee that derivative contracts may be
available to us and/or if such contracts will provide the desired results. As of December 31, 2024, we had approximately $1.5 billion of our outstanding
debt under the Senior Secured Credit Facilities at variable interest rates, which resulted in interest expense of $127 million.
Refer to “Note 26 – Financial Instruments” to the Consolidated Financial Statements for further details regarding our interest rate swaps designated
as a cash flow hedge.
Adverse developments affecting the financial markets and currency exchange rates, including events or concerns involving liquidity,
defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our business, financial
condition, results of operations or cash flows.
While we do not foresee any concerns around our liquidity, events involving limited liquidity, defaults, non-performance or other adverse developments
that affect financial institutions, transactional counterparties or the financial services industry generally, or concerns about any events of these kinds
or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. Although we assess our banking and customer
relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance
our current and future business operations could be significantly impaired by factors that affect us, the financial services industry or economy in general.
These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of
financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial markets, or concerns or negative expectations about
the prospects for companies in the financial services industry.
In addition, investor, regulatory, or other concerns regarding the U.S. or international financial systems could result in less favorable commercial
financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and
liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline in available funding or access to
our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill
our other obligations or result in breaches of our contractual obligations. Any of these impacts, or any other impacts resulting from the factors described
above or other related or similar factors not described above, could have material adverse impacts on our liquidity and our business, results of
operations, financial condition, and cash flows.
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General Risk Factors
Our stock price could become more volatile and investments could lose value.
The market price for our common stock may be affected by a number of factors, including, but not limited to:
•
our quarterly or annual earnings, or those of other companies in our industry;
•
actual or anticipated fluctuations in our operating results;
•
changes in earnings estimates by securities analysts or our ability to meet those estimates or our earnings guidance;
•
anticipated or actual outcomes or resolutions of legal or other contingencies;
•
internal factors, such as the Audit Committee Internal Review, unplanned changes in senior management, and material weaknesses in
internal control over financial reporting;
•
the operating and stock price performance of other comparable companies;
•
a change in our dividend or stock repurchase activities;
•
changes in applicable rules and regulations and the reputation of our business;
•
the announcement of new products by us or our competitors;
•
overall market fluctuations and domestic and worldwide economic conditions; and,
•
other factors described within this Item 1A – Risk Factors, and elsewhere within this Annual Report on Form 10-K.
A significant drop or rise in our stock price could expose us to costly and time-consuming litigation and may lead to an increase in shareholder activism
and could adversely affect our relationship with shareholders, including employees receiving stock-based compensation, which could result in
substantial costs and divert management’s attention and resources, resulting in an adverse effect on our business. See also “As a result of the Audit
Committee Internal Review, we may be exposed to litigation from investors and/or regulatory entities, which may adversely affect our reputation, results
of operations, financial condition, and cash flows” for a discussion of recent requests for information and potential private litigation.
We cannot guarantee the timing or amount of our dividends, if any, and/or our share repurchases, which are subject to a number of
uncertainties that may affect the price of our common stock.
The declaration, payment, and amount of any dividends, and/or the decision to purchase common stock under our share repurchase programs, are
subject to the sole discretion of our board of directors and, in the context of our capital allocation strategy, will depend upon many factors, including
our financial condition, operating results, cash flows, and relevant prospects, our capital requirements and access to capital markets, covenants
associated with certain of our debt obligations, legal requirements, and other factors that our board of directors may deem relevant, and there can be
no assurances that we will continue to pay a dividend or repurchase our common shares in the future.
The reduction or elimination of our dividends or share repurchase programs could adversely affect the price of our common stock. Additionally, any
repurchases of our common stock will reduce the amount of our common stock outstanding. There can be no assurances that any share repurchase
activity will increase stockholder value due to market fluctuations in the price of our common stock, which may reduce the price of our common stock
to levels below the repurchase price. Although our share repurchase programs are designed to enhance long-term shareholder value, short-term
fluctuations in the market price of our common stock could reduce the program’s overall effectiveness.
A stockholder’s percentage of ownership in us may be diluted in the future.
A stockholder’s percentage ownership in our common stock may be diluted because of equity issuances for acquisitions, capital market transactions,
or otherwise, including, without limitation, equity awards that we may be granting to our directors, officers, and employees. Such issuances may have
a dilutive effect on our earnings per share, which could adversely affect the market price of our common stock.
In addition, our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes
or series of preferred stock having such designation, powers, preferences, and relative participating, optional, and other special rights, including
preferences over our common stock with respect to dividends and distributions, as our board of directors generally may determine. The terms of one
or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. For example, we could grant the
holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or to veto specified
transactions. Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the
residual value of our common stock.
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Certain provisions in our amended and restated certificate of incorporation and amended and restated by-laws, and of Delaware law, may
prevent or delay an acquisition of us, which could decrease the trading price of the common stock.
Our amended and restated certificate of incorporation and amended and restated by-laws contain, and Delaware law contains, provisions that are
intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids unacceptably expensive to the bidder
and to encourage prospective acquirers to negotiate with our board of directors rather than to attempt a hostile takeover. These provisions include,
among others:
•
the inability of our stockholders to act by written consent;
•
the limited ability of our stockholders to call a special meeting;
•
rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings;
•
the right of our board of directors to issue preferred stock without stockholder approval;
•
the ability of our directors, and not stockholders, to fill vacancies (including those resulting from an enlargement of the board of directors) on
our board of directors; and,
•
the requirement that stockholders holding at least 80% of our voting stock are required to amend certain provisions in our amended and
restated certificate of incorporation and our amended and restated by-laws.
In addition, we are subject to Section 203 of the Delaware General Corporations Law (“DGCL”). Section 203 of the DGCL provides that, subject to
limited exceptions, persons that (without prior board of directors approval) acquire, or are affiliated with a person that acquires, more than 15% of the
outstanding voting stock of a Delaware corporation shall not engage in any business combination with that corporation, including by merger,
consolidation, or acquisitions of additional shares, for a three-year period following the date on which that person or its affiliate becomes the holder of
more than 15% of the corporation’s outstanding voting stock.
We believe these provisions will protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate
with our board of directors and by providing our board of directors with more time to assess any acquisition proposal. These provisions are not intended
to make us immune from takeovers. However, these provisions will apply even if an acquisition proposal or offer may be considered beneficial by some
stockholders and could delay or prevent an acquisition that our board of directors determines is not in our and/or our stockholders’ best interests.
These provisions may also prevent or discourage attempts to remove and replace incumbent directors.
Several of the agreements that we have entered into with EID require EID’s consent to any assignment by us of our rights and obligations, or a change
of control of us, under the agreements. The consent rights set forth in these agreements might discourage, delay, or prevent a change of control that
a stockholder may consider favorable.
Our success depends on our ability to attract and retain key employees, and to identify and develop talented personnel to succeed our
senior management and other key employees.
Our success depends on the performance of our key employees, including our senior management team, which is currently led by a new Chief
Executive Officer. If we are unable to identify, attract, retain, and develop a talented, diverse set of leaders, whether due to technical, geographical,
social, or other differences, our results of operations, financial condition, and cash flows could be adversely affected. Further, if we are unable to
effectively plan for the succession of our senior management team, our results of operations, financial condition, and cash flows could be adversely
affected, as we may be unable to realize our business strategy. While our ongoing personnel practices identify a succession process for our key
employees, we cannot guarantee the effectiveness of this process, the continuity of highly-qualified individuals serving in all of our key positions at
particular moments in time, and/or the completeness of any knowledge transfer at the time of succession, including its impacts on our general
operations and on our internal control over our financial reporting.
The Chemours Company
37
We may experience a disruption of our business activities and our business could be adversely affected due to senior management
transitions.
We have had several unplanned senior management changes recently, including our then-Chief Executive Officer, then-Chief Financial Officer, and
then-Controller being placed on administrative leave in February 2024, and the appointment of our current Chief Executive Officer and Chief Financial
Officer. Leadership transitions and management changes can be difficult to manage, particularly if they are unplanned, inherently cause some loss of
institutional knowledge and may cause uncertainties or a disruption to our business or increase the likelihood of turnover in key officers and employees.
Our ability to execute our business strategies may be impacted by the uncertainty associated with these transitions and the time and attention of our
board of directors and management may be required to dedicate to management transitions could disrupt our business. These factors could have a
material adverse effect on our results of operations, financial condition, and cash flows.
Item 1B. UNRESOLVED STAFF COMMENTS
None.
Item 1C. CYBERSECURITY
Chemours recognizes the critical importance of maintaining a cybersecurity program to provide a secure and reliable computing environment protecting
our information, systems and assets and to enable our digital transformation goals. Our cyber and information security program (the “Program”) is
based upon standards published by the National Institute of Standards and Technology (“NIST”) in their Cybersecurity Framework. The goals of our
Program are:
•
identifying, preventing, and mitigating cybersecurity threats to the Company;
•
preserving the confidentiality, security, and availability of the information that we collect and store to use in our business;
•
protecting our intellectual property;
•
maintaining the confidence of our customers, business partners and other stakeholders; and
•
providing appropriate public disclosure of cybersecurity risks and incidents, when required.
The Chief Information Security Officer (“CISO”) is the Chemours executive principally responsible for managing and maintaining the Program, is
accountable for managing risk, ensuring that the organization’s security posture is aligned with its business objectives, and providing timely updates
to senior management on such efforts. The CISO reports to the Chief Information Officer. The current CISO has more than seven years with Chemours
and over 25 years of total cyber and information security experience with multiple companies across both the private and public sector in CISO and
other information security roles.
The CISO manages and is supported by a global team of risk managers, cyber defenders, architects, and engineers with the knowledge and experience
to carry out day-to-day cybersecurity operations. They are also supported by third parties who provide threat intelligence, global infrastructure
monitoring, and threat detection and response to cyber events. In addition, our Corporate Security team, a part of the Legal organization, has open
lines of communication with various Federal, State and International law enforcement agencies to gain access to the latest cyber situational awareness.
We assess third-party cybersecurity controls through a cybersecurity questionnaire and include information security and privacy addendums to our
contracts, where applicable. We also require that our vendors and other third parties report cybersecurity incidents to us so that we can assess the
impact of the incident on us.
We educate our employees and contractors annually on cyber risks and prevention, monthly using online situational awareness training, active
employee engagement, and ongoing phishing simulations.
The CISO has an incident response plan designed to address potential cybersecurity incidents and notify appropriate leadership while determining the
material impact through a cyber sub-committee of management’s Disclosure Committee. The plan also includes implementing long-term strategies for
recovery and prevention of future incidents.
A key part of our strategy for managing risks from cybersecurity threats is the ongoing assessment and testing of our processes and practices through
auditing, assessments, tabletop exercises, threat modeling, and other exercises focused on evaluating the effectiveness of the Program.
The Chemours Company
38
The board of directors is responsible for oversight of our Enterprise Risk Management process ("ERM") and is informed of the risks associated with
cybersecurity through periodic ERM updates. The Board has also delegated oversight of the cybersecurity and information security programs and
processes for assessing, identifying and managing material risks from cybersecurity threats to the Audit Committee. The Audit Committee regularly
meets with the CISO to review and discuss cybersecurity risks, the status of ongoing cyber initiatives and strategies, incident reports and learnings,
as well as key performance indicators. The results of any cyber risk assessments, audits, and reviews are reported to the Audit Committee and,
ultimately, the board of directors, and we adjust our cybersecurity policies, standards, processes and practices as necessary based on the information
provided by the assessments, audits and reviews.
Although our Risk Factors include further details about the cybersecurity risks we face, we believe that risks from prior cybersecurity threats, including
any previous cybersecurity incidents, have not materially affected our business to date. We can provide no assurance that there will not be incidents
in the future or that they will not materially affect us, including our business strategy, results of operations, or financial condition.
Item 2. PROPERTIES
Our Production Facilities and Technical Centers
Our corporate headquarters is located in Wilmington, Delaware, and we maintain a global network of production facilities and technical centers located
in cost-effective and strategic locations. We also use contract manufacturing and joint venture partners in order to provide regional access or to lower
manufacturing costs, as appropriate.
The following chart sets forth our production facilities at December 31, 2024.
Production Facilities
Region
Thermal & Specialized
Solutions
Titanium Technologies
Advanced Performance
Materials
Shared Locations
North America
Corpus Christi, Texas
El Dorado, Arkansas (1)
LaPorte, Texas (1)
Louisville, Kentucky (1)
DeLisle, Mississippi
New Johnsonville, Tennessee
Jesup, Georgia (Mine) (1)
Nahunta, Georgia (Mine) (1)
Offerman, Georgia (Mineral
Separation)
Starke, Florida (Mine & Mineral
Separation)
Deepwater, New Jersey
Elkton, Maryland (1)
Fayetteville, North Carolina
Louisville, Kentucky
Parlin, New Jersey (1)
Washington, West Virginia
Belle, West Virginia (3)
Europe, the Middle East, and
Africa
Mechelen, Belgium
Villers St. Paul, France (1)
Dordrecht, Netherlands (4)
Latin America
Barueri, Brazil (1)
Manaus, Brazil (1)
Monterrey, Mexico (1)
Altamira, Mexico
Asia Pacific
Chiba, Japan (2)
Shimizu, Japan (2)
Sichuan, China (2)
Changshu, China (2) (4)
(1)
Site is leased from a third party.
(2)
Site with joint venture equity affiliates.
(3)
Shared site between the Thermal & Specialized Solutions and Other segments.
(4)
Shared site between the Thermal & Specialized Solutions and Advanced Performance Materials segments.
We have technical centers and R&D facilities located at a number of our production facilities. We also maintain stand-alone technical centers to serve
our customers and provide technical support.
The Chemours Company
39
The following chart sets forth our stand-alone technical centers at December 31, 2024.
Technical Centers
Region
Thermal & Specialized
Solutions
Titanium Technologies
Advanced Performance
Materials
Shared Locations
North America
Newark, Delaware (1) (4)
Wilmington, Delaware (1) (3)
Europe, the Middle East, and
Africa
Kallo, Belgium (1)
Meyrin, Switzerland (1) (3)
Latin America
Mexico City, Mexico (1)
Asia Pacific
Shimizu, Japan (2)
Shanghai, China (1) (4)
(1)
Site is leased from a third party.
(2)
Site with joint venture equity affiliates.
(3)
Shared site between the Thermal & Specialized Solutions and Advanced Performance Materials segments.
(4)
Shared site between the Thermal & Specialized Solutions, Titanium Technologies, and Advanced Performance Materials segments.
Our plants and equipment are maintained in good operating condition. We believe that we have sufficient production capacity for our primary products
to meet demand in 2025. Our properties are primarily owned by us; however, certain properties are leased, as noted in the preceding tables.
We recognize that the security and safety of our operations are critical to our employees and communities, as well as our future. Physical security
measures have been combined with process safety measures, administrative procedures, and emergency response preparedness into an integrated
security plan. We conduct vulnerability assessments at our operating facilities in the U.S., as well as high-priority sites worldwide, and as a result,
identify and implement the appropriate measures to protect these facilities from physical and cyberattacks. We also maintain preparedness plans that
detail actions needed to recover from acute severe weather events, natural disasters, or other events that could disrupt our business. We engineer our
facilities to better withstand these events and hold insurance coverage to protect against losses from physical damages and business interruptions.
These measures have historically been in place, and these activities and associated costs are driven by normal operational preparedness.
Item 3. LEGAL PROCEEDINGS
We are subject to various legal proceedings, including, but not limited to, product liability, intellectual property, personal injury, commercial, contractual,
employment, governmental, environmental and regulatory, anti-trust, and other such matters that arise in the ordinary course of business. In addition,
we, by virtue of our status as a subsidiary of EID prior to the Separation, are subject to or required under the Separation-related agreements executed
prior to the Separation to indemnify EID against various pending legal proceedings. Discussion of all legal and environmental proceedings is
incorporated by reference from Part II, Item 8, "Note 22 - Commitments and Contingent Liabilities” of this document, and should be considered an
integral part of Part I, Item 3, “Legal Proceedings.”
Item 4. MINE SAFETY DISCLOSURES
Information regarding mine safety and other regulatory actions at our surface mines and/or mineral sands separation facilities in Starke, Florida, Jesup,
Georgia, Nahunta, Georgia, and Offerman, Georgia, are included in Exhibit 95 to this Annual Report on Form 10-K.
The Chemours Company
40
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The following list sets forth our executive officers and a summary of their professional experience.
Denise Dignam, age 59, serves as our President and Chief Executive Officer. Ms. Dignam was appointed Chief Executive Officer in March 2024. Ms.
Dignam joined Chemours in 2015 and has served as our President – Titanium Technologies, from 2023 to 2024; President – Advanced Performance
Materials from 2021 to 2023; Vice President of Global Operations – Fluoroproducts, from 2019 to 2021; Global Senior Business Director –
Fluoropolymers, from 2016 to 2019; and North American Business Director – Diversified Technologies and Industrial Resins, from 2015 to 2016.
Previously, she worked at EID in various roles, including Director of Global Supply Chain – Fluoroproducts, from 2013 to 2014; Global Business
Manager of Sulfur Products, from 2009 to 2013; and Global Sales Manager of Clean Technologies from 2007 to 2009. Ms. Dignam joined EID in 1988
as a design engineer.
Shane Hostetter, age 43, serves as our Chief Financial Officer. Mr. Hostetter was appointed to this role in July 2024. Prior to joining Chemours, Mr.
Hostetter served as Executive Vice President, Chief Financial Officer of Quaker Chemical Corporation ("Quaker Houghton") since March 2023, and
also served as Chief Accounting Officer from October 2023 to January 2024. Mr. Hostetter previously served as Quaker Houghton's Senior Vice
President, Chief Financial Officer from April 2021 through February 2023. Prior to that role, he served as Vice President, Finance and Chief Accounting
Officer from August 2019 until April 2021, and Global Controller and Principal Accounting Officer from September 2014 until July 2019. Prior to Quaker
Houghton, Mr. Hostetter held several financial leadership roles at Pulse Electronics Corporation. Mr. Hostetter began his career at
PricewaterhouseCoopers LLP ("PwC") within the assurance practice.
Joseph T. Martinko, age 57, serves as our President – Thermal & Specialized Solutions. Mr. Martinko was appointed to this role in July 2023. Mr.
Martinko joined Chemours in 2015 and served as Global Business and Marketing Director – Opteon™ products from 2015 to 2019 and Senior Business
Director, Americas, from 2019 to 2023. Previously, Mr. Martinko worked at EID in various roles in the fluorochemicals business including North America
General Manager and various Global sales, business and marketing roles in Fluoroproducts. Mr. Martinko joined EID in 1995 and had Safety, Health
and Environmental and Operations responsibility for several manufacturing units at EID's Chambers Works Facility.
Gerardo Familiar, age 49, serves as our President – Advanced Performance Materials. Mr. Familiar was appointed to this role in March 2023. Mr.
Familiar joined Chemours in 2015 and has served as our General Manager - Chemours Hydrogen Venture from 2022 to 2023; Senior Director of TSS
Global Strategy, Marketing, and Regulatory Affairs from 2020 to 2022; Director of Investor Relations from 2019 to 2020; Global Business Director and
President - Chemours Mexico from 2016 to 2019; and Global Business Director - Coatings from 2015 to 2016. Previously, he worked at EID in various
roles, including Global Business Manager from 2014 to 2015; and Business & Marketing Manager North America - APM & TSS from 2013 to 2014.
Mr. Familiar joined EID in 2002 as a Sales and Marketing Leader - Mexico and Central America. Prior to joining EID, Mr. Familiar was a Senior
Consultant at PwC from 2000 to 2002; and a Business Consultant at Decide MX from 1995 to 1999.
Diane I. Picho, age 64, serves as our Interim President - Titanium Technologies. Ms. Picho was appointed to this role in March 2024. Ms. Picho has
been appointed to serve as our Chief Enterprise Enablement Officer, with an effective date of March 3, 2025. Ms. Picho joined Chemours in 2015 and
has served as Vice President of Human Resources and Chief of Staff for Titanium Technologies from 2023 to 2024; Vice President of Commercial
Operations for the Chemours Advanced Performance Materials business from 2022 to 2023; Senior Director of Commercial Operations for the
Chemours Advanced Performance Materials business from 2020-2021; Senior Director of Global Strategy & Business Operating Systems for
Chemours Fluoroproducts from 2017 to 2019; and Global Business Productivity Director for Chemours Fluoroproducts from 2015 to 2016. Prior to
joining Chemours, Ms. Picho worked at EID in various roles including, North America Regional Business & Market Director for DuPont Chemicals &
Fluoroproducts from 2013 to 2015; and Global Business Manager for Fluorochemicals Refrigerants from 2007 to 2012. Ms. Picho joined EID in 1983
as an R&D Engineer.
Kristine Wellman, age 55, serves as our Senior Vice President, General Counsel and Corporate Secretary. Ms. Wellman was appointed Senior Vice
President, General Counsel & Corporate Secretary in October 2022. Ms. Wellman joined Chemours in December 2014 and has held several positions
within the Company throughout her tenure. Ms. Wellman served as Associate General Counsel and Assistant Corporate Secretary from July 2015
through February 2019, and a Vice President from March 2018 through February 2019. Ms. Wellman joined business operations for the Fluoroproducts
business in March 2019, serving as Plant Manager, Chambers Works, from March 2019 through November 2020. From December 2020 through
November 2021, Ms. Wellman served as Vice President, Advanced Performance Materials, Sustainability. She next was appointed to Vice President,
Strategic Planning until September 30, 2022. Prior to joining Chemours, Ms. Wellman held legal leadership positions at several financial institutions,
including Senior Vice President and Chief Counsel, Capital One, from February 2012 through November 2014, General Counsel ING Bank, fsb, a U.S.
subsidiary of ING Group, N.V., from August 2010 through February 2012, and positions of increasing responsibility within the legal department of
Branch Banking & Trust Company (BBT) from June 2006 through July 2010, including Senior Vice President and Deputy General Counsel, July 2008
through July 2010. In 1995, Ms. Wellman began her legal career in private practice focusing on M&A, corporate and securities law, and corporate
governance.
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41
Damián Gumpel, age 50, has been appointed to join Chemours and will serve as the President - Titanium Technologies, with an effective date of
March 3, 2025. Previously, he worked at Olin Corporation from 2015 to 2025, where he most recently served as Vice President, Corporate Strategy,
helping define new corporate strategy and executing several M&A transactions. Mr. Gumpel previously held positions as President of Olin’s Epoxy and
Chlor Alkali Products & Vinyls divisions. Mr. Gumpel also worked at The Dow Chemical Company from 2009 to 2015, where he held several commercial
positions, and Accenture from 1998 to 2007.
Brian Shay, age 52 serves as our Interim Chief Human Resources Officer. Mr. Shay was appointed to this role in September 2024. Mr. Shay joined
Chemours in 2020 and has served in several Human Resources leadership roles including Vice President, Total Rewards, Human Resources Business
Partner, and Human Resources Vice President with responsibility for Compensation & Benefits, Operations, and Talent & Culture. Prior to joining
Chemours, Mr. Shay worked at PwC from 1997 to 2003, and SAP from 2003 to 2020, where he held positions of increasing responsibility within human
resources.
Alvenia Scarborough, age 51, serves as our Senior Vice President, Corporate Communications and Chief Brand Officer. Ms. Scarborough was
appointed to this role in October 2020, after serving as Senior Director of Corporate Communications and Brand Marketing since July 2015. Prior to
Chemours, Ms. Scarborough held a variety of corporate communications and marketing communications positions with increasing responsibility across
brand development, corporate reputation, media relations, employee communications, and digital marketing. Ms. Scarborough brings over two decades
of communications experience with leading multinational companies, including: EID, where she served as the Corporate Leader, Brand Management,
Protection and Licensing from 2013 to 2015 and Global Director, Business Communications from 2011 to 2013; Newell Rubbermaid, where she served
as the Director, Business Communications and Brand Marketing, Global Technology Brands from 2009 to 2010; and Kodak Alaris, where she served
as Director of Marketing & Communications, Consumer Imaging from 2000 to 2009, where she spent several years as a product management
commercial leader. Ms. Scarborough’s unique experience and modern approach to communications have resulted in multiple industry awards and
recognition for breakthrough social media and advertising campaigns.
The Chemours Company
42
PART II
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY
SECURITIES
Market for Registrant’s Common Equity and Related Stockholder Matters
Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol, “CC”. The number of record holders of our common stock
was 34,180 at February 12, 2025. Holders of our common stock are entitled to receive dividends when they are declared by our board of directors,
and dividends are generally declared and paid on a quarterly basis. Our stock transfer agent and registrar is Computershare Trust Company, N.A.
Unregistered Sales of Equity Securities
None.
Issuer Purchases of Equity Securities
2022 Share Repurchase Program
On April 27, 2022, our board of directors approved a share repurchase program authorizing the purchase of shares of our issued and outstanding
common stock in an aggregate amount not to exceed $750 million, plus any associated fees or costs in connection with our share repurchase activity
(the “2022 Share Repurchase Program”). Under the 2022 Share Repurchase Program, shares of our common stock can be purchased in the open
market from time to time, subject to management’s discretion, as well as general business and market conditions. Our 2022 Share Repurchase
Program became effective on April 27, 2022 and is scheduled to continue through the earlier of its expiration on December 31, 2025 or the completion
of repurchases up to the approved amount. The program may be suspended or discontinued at any time.
Through December 31, 2024, we purchased a cumulative 10,342,722 shares of our issued and outstanding common stock under the 2022 Share
Repurchase Program, which amounted to $309 million at an average share price of $29.90 per share. There were no share repurchases under the
2022 Share Repurchase Program for the three months and year ended December 31, 2024. The aggregate amount of our common stock that remained
available for purchase under the 2022 Share Repurchase Program at December 31, 2024 was $441 million, though we do not anticipate repurchases
under the 2022 Share Repurchase Program.
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43
Stock Performance Graph
The following graph presents the five-year cumulative total stockholder returns for our common stock through December 31, 2024 compared with the
Standard & Poor’s (“S&P”) MidCap 400 and the S&P MidCap 400 Chemical indices.
The graph assumes that the values of our common stock, the S&P MidCap 400 index, and the S&P MidCap 400 Chemical index were each $100 on
December 31, 2019, and that all dividends were reinvested.
Item 6. RESERVED
$-
$50
$100
$150
$200
$250
$300
12/31/2019
6/30/2020
12/31/2020
6/30/2021
12/31/2021
6/30/2022
12/31/2022
6/30/2023
12/31/2023
6/30/2024
12/31/2024
Total Stockholder Returns
The Chemours Company
S&P MidCap 400
S&P MidCap 400 Chemical
The Chemours Company
44
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) supplements the Consolidated Financial
Statements and the related notes thereto included elsewhere herein to help provide an understanding of our financial condition, changes in our financial
condition, and the results of our operations for the periods presented. For the year ended December 31, 2022, and changes from the year ended
December 31, 2022 to the year ended December 31, 2023, management’s discussion and analysis pertaining to our financial condition, changes in
our financial condition, and the results of our operations have been omitted from this MD&A and may be found in Item 7 – Management’s Discussion
and Analysis of Financial Condition and Results of Operations as included in our Annual Report on Form 10-K for the year ended December 31, 2023.
This MD&A should be read in conjunction with the Consolidated Financial Statements and the related notes thereto included elsewhere in this Annual
Report on Form 10-K.
Our forward-looking statements are based on certain assumptions and expectations of future events that may not be accurate or realized. These
statements, as well as our historical performance, are not guarantees of future performance. Forward-looking statements also involve risks and
uncertainties that are beyond our control. Additionally, there may be other risks and uncertainties that we are unable to identify at this time or that we
do not currently expect to have a material impact on our business. Factors that could cause or contribute to these differences include, but are not
limited to, the risks, uncertainties, and other factors discussed within Item 1A – Risk Factors in this Annual Report on Form 10-K.
Overview
We are a leading, global provider of performance chemicals that are key inputs in end-products and processes in a variety of industries. We deliver
customized solutions with a wide range of industrial and specialty chemical products for markets, including refrigeration and air conditioning, paints
and coatings, plastics, transportation, semiconductor and consumer electronics, general industrial, and oil and gas. Our principal products include
refrigerants, titanium dioxide ("TiO2") pigment and industrial fluoropolymer resins. We manage and report our operating results through three principal
reportable segments: Thermal & Specialized Solutions, Titanium Technologies, and Advanced Performance Materials. Our Thermal & Specialized
Solutions segment is a leading, global provider of refrigerants, thermal management solutions, propellants, blowing agents, and specialty solvents.
Our Titanium Technologies segment is a leading, global provider of TiO2 pigment, a premium white pigment used to deliver whiteness, brightness,
opacity, and protection in a variety of applications. Our Advanced Performance Materials segment is a leading, global provider of high-end polymers
and advanced materials that deliver unique attributes, including low friction coefficients, extreme temperature resistance, weather resistance, ultraviolet
and chemical resistance, and electrical insulation. Our Performance Chemicals and Intermediates business is presented under Other Segment.
Recent Developments
Senior Unsecured Notes Due January 2033
In November 2024, we issued a $600 million aggregate principal amount of 8.000% senior unsecured notes due January 2033 (the "2033 Notes"). We
received proceeds of $591 million, net of underwriting fees and other expenses of $9 million, which are deferred and amortized to interest expense
over the term of the 2033 Notes. The net proceeds from the 2033 Notes were used in part to purchase or redeem, as applicable, the euro-denominated
4.000% senior notes of €441 due May 2026.
Further, concurrently with the offering of the 2033 Notes, we entered into a cross-currency swap to effectively convert the $600 million of the 2033
Notes into a euro-denominated borrowing of €567 million at prevailing euro interest rates, effectively converting the 8.000 USD rate to a fixed Euro
rate of 6.160%. The cross-currency swap matures on January 15, 2030.
Senior Secured Credit Facilities Due August 2028
In November and December 2024, we completed the first and second amendments to the Credit Agreement, which repriced our Tranche B-3 U.S.
Dollar-denominated and Euro-denominated Term Loans, respectively, under its senior secured term loan facility due in August 2028. The First
Amendment reduces the applicable margin in respect of our senior secured U.S. dollar-denominated term loan facility from, at our election, adjusted
Term SOFR + 3.50% to adjusted Term SOFR + 3.00%, or adjusted base rate plus 2.50% to adjusted base rate plus 2.00%. The Second Amendment
reduces the applicable margin in respect of our Euro-denominated term loan facility from adjusted EURIBOR + 4.00% to adjusted EURIBOR + 3.25%.
There are no changes to the maturity of the Tranche B-3 U.S. dollar term loan or the Tranche B-3 Euro term loan following these repricing activities,
and all other terms are substantially unchanged.
The Chemours Company
45
Results of Operations and Business Highlights
Results of Operations
The following table sets forth our results of operations for the years ended December 31, 2024 and 2023.
Year Ended December 31,
(Dollars in millions, except per share amounts)
2024
2023
Net sales
$
5,782
$
6,078
Cost of goods sold
4,631
4,772
Gross profit
1,151
1,306
Selling, general, and administrative expense
585
1,290
Research and development expense
109
108
Restructuring, asset-related, and other charges
60
153
Goodwill impairment charge
56
—
Total other operating expenses
810
1,551
Equity in earnings of affiliates
43
45
Interest expense, net
(264)
(208)
Loss on extinguishment of debt
(1)
(1)
Other income, net
8
91
Income (loss) before income taxes
127
(318)
Provision for (benefit from) income taxes
41
(81)
Net income (loss)
86
(237)
Less: Net income attributable to non-controlling interests
—
1
Net income (loss) attributable to Chemours
$
86
$
(238)
Per share data
Basic earnings (loss) per share of common stock
$
0.58
$
(1.60)
Diluted earnings (loss) per share of common stock
0.57
(1.60)
Net Sales
The following table sets forth the impacts of price, volume, currency, and portfolio changes on our net sales for the year ended December 31, 2024.
Change in net sales from prior period
Year Ended December 31, 2024
Price
(4)%
Volume
—%
Currency
—%
Portfolio
(1)%
Total change in net sales
(5)%
Our net sales decreased by $296 million (or 5%) to $5.8 billion for the year ended December 31, 2024, compared with net sales of $6.1 billion for the
same period in 2023. The decrease in our net sales for the year ended December 31, 2024 was primarily attributable to a decrease in price of 4%.
Price declined across all of our reportable segments. Portfolio change driven by the sale of our Glycolic Acid business in 2023 added a 1% headwind
to our net sales.
The drivers of these changes for each of our reportable segments are discussed further under the “Segment Reviews” section within this MD&A.
The Chemours Company
46
Cost of Goods Sold
Our cost of goods sold (“COGS”) decreased by $141 million (or 3%) to $4.6 billion for the year ended December 31, 2024, compared with COGS of
$4.8 billion for the same period in 2023. The decrease in COGS for the year ended December 31, 2024 was primarily attributable to lower sales
volume. For the year ended December 31, 2023, COGS included a $40 million charge relating to certain raw materials and stores inventories written
off related to the Kuan Yin, Taiwan plant shutdown.
Selling, General, and Administrative Expense
Our selling, general, and administrative (“SG&A”) expense decreased by $705 million (or 55%) to $585 million for the year ended December 31, 2024,
compared with SG&A expense of $1.3 billion for the same period in 2023. The decrease in our SG&A expense was primarily attributable to the litigation-
related charges of $592 million recorded in the year ended December 31, 2023 related to our portion of the U.S. public water system settlement
agreement, along with the benefits recorded for insurance recoveries of $20 million during the year ended December 31, 2024. The decrease in our
SG&A expense for the year ended December 31, 2024 was partially offset by $27 million of costs incurred related to the Audit Committee internal
review process, along with third-party costs related to the Titanium Technologies Transformation Plan.
Research and Development Expense
Our research and development (“R&D”) expense was relatively flat at $109 million for the year ended December 31, 2024, compared with R&D expense
of $108 million for the year ended December 31, 2023.
Restructuring, Asset-related, and Other Charges
Our restructuring, asset-related, and other charges decreased by $93 million (or 61%) to $60 million for the year ended December 31, 2024, compared
with $153 million for the same period in 2023.
For the year ended December 31, 2024, our restructuring, asset-related, and other charges were primarily attributable to $27 million of non-cash asset-
related charges, $20 million of employee separation charges and $3 million of other charges related to the 2024 Restructuring Program initialed in the
third quarter of 2024. In addition, for the year ended December 31, 2024, charges included $11 million of decommissioning and other charges related
to the Titanium Technologies Transformation Plan.
For the year ended December 31, 2023, our restructuring, asset-related, and other charges were primarily attributable to $126 million of charges
related to the Titanium Technologies Transformation Plan, consisting of $78 million of asset-related charges, employee separation charges of $21
million, $17 million of contract termination costs, and $10 million of decommissioning and other charges. In addition, for the year ended December 31,
2023, charges included $16 million resulting from our decision to abandon the implementation of a new enterprise resource planning ("ERP") software
platform, $8 million asset impairment following the shutdown of a production line at our El Dorado site, and $4 million related to our 2023 severance
program.
Goodwill Impairment Charge
In the third quarter of 2024, we concluded a triggering event was present for our Advanced Performance Materials reporting unit and associated
goodwill. As a result of the quantitative goodwill impairment analysis performed, we concluded the carrying amount of the Advanced Performance
Materials reporting unit exceeded its fair value. As a result of this analysis, we recognized a goodwill impairment charge of $56 million related to the
Advanced Performance Materials reporting unit for the year ended December 31, 2024. For the year ended December 31, 2023, there was no goodwill
impairment charge. Refer to "Critical Accounting Policies and Estimates within this Item 7 – Management's Discussion and Analysis of Financial
Condition and Results of Operations as well as "Note 15 – Goodwill and Other Intangible Assets, Net" to the Consolidated Financial Statements in this
Annual Report on Form 10-K for further details.
Equity in Earnings of Affiliates
Our equity in earnings of affiliates decreased by $2 million (or 4%) to $43 million for the year ended December 31, 2024, compared with equity in
earnings of affiliates of $45 million for the same period in 2023. The decrease in our equity in earnings of affiliates for the year ended December 31,
2024 was primarily attributable to lower demand in the region where our investees operate.
The Chemours Company
47
Interest Expense, Net
Our interest expense, net increased by $56 million (or 27%) to $264 million for the year ended December 31, 2024, compared with interest expense,
net of $208 million for the same period in 2023. The increase in our interest expense, net for the year ended December 31, 2024 was primarily
attributable to higher interest rates on our variable rate debt, higher debt principal following issuance of new term loans in August 2023 and the 2033
Notes in November 2024.
Loss on Extinguishment of Debt
For the year ended December 31, 2024, we recognized a net loss on extinguishment of debt of $1 million in connection with the redemption of the
euro-denominated 4.000% senior notes due May 2026.
For the year ended December 31, 2023, we recognized a net loss on extinguishment of debt of $1 million in connection with the refinancing of the
tranche B-2 term loans in August 2023 under an amended and restated credit agreement.
Other Income, Net
Our other income, net decreased by $83 million (or 91%) to $8 million for the year ended December 31, 2024, compared with other income, net of $91
million for the same period in 2023. Our other income, net for the year ended December 31, 2023 includes a net pre-tax gain on sale of $106 million
associated with the sale of the Glycolic Acid business. The decrease in our other income, net was partially offset by favorable changes in net exchange
gains and losses.
Provision for (Benefit from) Income Taxes
We recognized a provision for income taxes of $41 million and a benefit from income taxes of $81 million for the years ended December 31, 2024 and
2023, respectively. Our provision for (benefit from) income taxes represented effective tax rates of 32% and 25% for the years ended December 31,
2024 and 2023, respectively.
The $41 million provision for income taxes for the year ended December 31, 2024 was primarily attributable to our geographic mix of earnings, a $10
million income tax expense associated with the filing of the US Tax return partially offset by a $7 million income tax benefit for the generation of U.S.
research and development tax credits and by $9 million of income tax benefit related to the 2024 Restructuring Program. The impact of the enactment
of the Organization for Economic Co-operation and Development Global Anti-Base Erosion Model Rules (“Pillar Two”) is included in our provision for
the year ended December 31, 2024; however, the impact is not material.
For the year ended December 31, 2023, the benefit from income taxes was primarily attributable to the net pre-tax loss during the year driven by
decreased profitability and certain discrete items in 2023. In 2023, we recorded a $131 million income tax benefit associated with various legal matters,
along with a $22 million income tax benefit associated with the Kuan Yin, Taiwan shutdown, inclusive of a $13 million valuation allowance recorded on
certain deferred tax assets of one of our Taiwanese subsidiaries and a $13 million benefit associated with a ruling received from Swiss tax authorities
in the fourth quarter of 2023. This income tax benefit was offset by $26 million of income tax expense associated with the Glycolic Acid Transaction
that occurred in 2023.
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Segment Reviews
We operate through three principal reportable segments, which were organized based on their similar economic characteristics, the nature of products
and production processes, end-use markets, channels of distribution, and regulatory environments: Thermal & Specialized Solutions, Titanium
Technologies, and Advanced Performance Materials. Other Segment includes our Performance Chemicals and Intermediates business.
Adjusted earnings before interest, taxes, depreciation, and amortization ("Adjusted EBITDA") is the primary measure of segment profitability used by
our Chief Operating Decision Maker ("CODM") and is defined as income (loss) before income taxes, excluding the following:
•
interest expense, depreciation, and amortization;
•
non-operating pension and other post-retirement employee benefit costs, which represents the non-service component of net periodic
pension (income) costs;
•
exchange (gains) losses included in other income, net;
•
restructuring, asset-related, and other charges;
•
(gains) losses on sales of assets and businesses; and,
•
other items not considered indicative of our ongoing operational performance and expected to occur infrequently, including certain litigation
related and environmental charges and Qualified Spend reimbursable by DuPont and/or Corteva as part of our cost-sharing agreement under
the terms of the Memorandum of Understanding (“MOU”) that were previously excluded from Adjusted EBITDA.
A reconciliation of Segment Adjusted EBITDA to our consolidated income (loss) before income taxes for the years ended December 31, 2024 and
2023 is included in “Note 29 – Geographic and Segment Information” to the Consolidated Financial Statements.
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Thermal & Specialized Solutions
The following table sets forth the net sales, Adjusted EBITDA, and Adjusted EBITDA margin amounts for our Thermal & Specialized Solutions segment
for the years ended December 31, 2024 and 2023.
Year Ended December 31,
(Dollars in millions)
2024
2023
Segment net sales
$
1,830
$
1,851
Adjusted EBITDA
576
685
Adjusted EBITDA margin
31%
37%
The following table sets forth the impacts of price, volume, currency, and portfolio changes on our Thermal & Specialized Solutions segment’s net
sales for the year ended December 31, 2024.
Change in segment net sales from prior period
Year Ended December 31, 2024
Price
(3)%
Volume
2%
Currency
—%
Portfolio
—%
Total change in segment net sales
(1)%
Segment Net Sales
Our Thermal & Specialized Solutions segment’s net sales decreased by $21 million (or 1%) to $1.8 billion for the year ended December 31, 2024,
compared with segment net sales of $1.9 billion for the same period in 2023. The decrease in segment net sales for the year ended December 31,
2024 was primarily attributable to a decrease in price of 3%, partially offset by an increase in volume of 2%. The decrease in price was primarily related
to softer FreonTM Refrigerant portfolio pricing due to elevated hydrofluorocarbon ("HFC") market inventory levels, The decrease in price was primarily
offset by stronger OpteonTM Refrigerants portfolio pricing. The increase in volume was primarily attributable to higher demand within the OpteonTM
Refrigerants portfolio as a result of continued stationary and automotive end-market adoption, partially offset by declines in the FreonTM Refrigerant
portfolio in connection with the step downs under the AIM Act and EU F-Gas regulation. Currency was flat for the year ended December 31, 2024
when compared to the prior year.
Adjusted EBITDA and Adjusted EBITDA Margin
Segment Adjusted EBITDA decreased by $109 million (or 16%) to $576 million and Segment Adjusted EBITDA margin decreased by approximately
600 basis points to 31% for the year ended December 31, 2024, compared with Segment Adjusted EBITDA of $685 million and Segment Adjusted
EBITDA margin of 37% for the same period in 2023. The decreases in Segment Adjusted EBITDA and Adjusted EBITDA margin for the year ended
December 31, 2024 were primarily attributable to the aforementioned decrease in price related to the FreonTM Refrigerants portfolio, increased costs
related to near-term quota allowances, lower fixed cost absorption, higher input costs associated with purchasing non-Corpus based low GWP
refrigerant, and decreases in volumes within the FreonTM Refrigerants portfolio, partially offset by higher demand within the OpteonTM Refrigerants
portfolio as a result of continued stationary and automotive end-market adoption.
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Titanium Technologies
The following table sets forth the net sales, Adjusted EBITDA, and Adjusted EBITDA margin amounts for our Titanium Technologies segment for the
years ended December 31, 2024 and 2023.
Year Ended December 31,
(Dollars in millions)
2024
2023
Segment net sales
$
2,572
$
2,680
Adjusted EBITDA
312
290
Adjusted EBITDA margin
12%
11%
The following table sets forth the impacts of price, volume, currency, and portfolio changes on our Titanium Technologies segment’s net sales for the
year ended December 31, 2024.
Change in segment net sales from prior period
Year Ended December 31, 2024
Price
(5)%
Volume
1%
Currency
—%
Portfolio
—%
Total change in segment net sales
(4)%
Segment Net Sales
Our Titanium Technologies segment’s net sales decreased by $108 million (or 4%) to $2.6 billion for the year ended December 31, 2024, compared
with segment net sales of $2.7 billion for the same period in 2023. The decrease in segment net sales for the year ended December 31, 2024 was
primarily attributable to a 5% price decrease, partially offset by a 1% volume increase despite unplanned downtime at our Altamira, Mexico
manufacturing site due to extreme drought in the region.
Adjusted EBITDA and Adjusted EBITDA Margin
Segment Adjusted EBITDA increased by $22 million (or 8%) to $312 million and Segment Adjusted EBITDA margin increased by approximately 100
basis points to 12% for the year ended December 31, 2024, compared with Segment Adjusted EBITDA of $290 million and Segment Adjusted EBITDA
margin of 11% for the same period in 2023. The increases in Adjusted EBITDA and Segment Adjusted EBITDA margin were primarily driven by cost
savings realized from the Titanium Technologies Transformation Plan, partially offset by the aforementioned decrease in price and the unplanned
weather-related downtime at our Altamira, Mexico manufacturing site as mentioned above. The downtime resulted in a negative cost impact of $26
million across the second and third quarters of 2024, after which there were no further cost impacts.
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51
Advanced Performance Materials
The following table sets forth the net sales, Adjusted EBITDA, and Adjusted EBITDA margin amounts for our Advanced Performance Materials segment
for the years ended December 31, 2024 and 2023.
Year Ended December 31,
(Dollars in millions)
2024
2023
Segment net sales
$
1,326
$
1,462
Adjusted EBITDA
161
273
Adjusted EBITDA margin
12%
19%
The following table sets forth the impacts of price, volume, currency, and portfolio changes on our Advanced Performance Materials segment’s net
sales for the year ended December 31, 2024.
Change in segment net sales from prior period
Year Ended December 31, 2024
Price
(5)%
Volume
(3)%
Currency
(1)%
Portfolio
—%
Total change in segment net sales
(9)%
Segment Net Sales
Our Advanced Performance Materials segment’s net sales decreased by $136 million (or 9%) to $1.3 billion for the year ended December 31, 2024,
compared with segment net sales of $1.5 billion for the same period in 2023. The decrease in segment net sales for the year ended December 31,
2024 was primarily attributable to a decrease in price of 5%, a decrease in volumes of 3% and unfavorable currency movements which added a 1%
headwind to the segment's net sales. Volumes decreased primarily due to weaker demand in the hydrogen market and lower volumes in more
economically sensitive end markets. The decrease in price was primarily due to softer market dynamics and product mix.
Adjusted EBITDA and Adjusted EBITDA Margin
Segment Adjusted EBITDA decreased by $112 million (or 41%) to $161 million and Segment Adjusted EBITDA margin decreased by approximately
700 basis points to 12% for the year ended December 31, 2024, compared with Segment Adjusted EBITDA of $273 million and Segment Adjusted
EBITDA margin of 19% for the year ended December 31, 2023. The decreases in Segment Adjusted EBITDA and Segment Adjusted EBITDA margin
for the year ended December 31, 2024 were primarily attributable to the aforementioned decreases in price and currency, along with lower volumes
driving lower fixed cost absorption.
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52
Corporate and Unallocated Items
In addition to our reportable segments, we assign certain costs to “Corporate expenses”, which is presented separately in the segment reconciliation
table below and in “Note 29 – Geographic and Segment Information” to the Consolidated Financial Statements. Corporate expenses include certain
legacy-related legal and environmental expenses, stock-based compensation expenses and other corporate costs, but excludes segment unallocated
items (described below).
Corporate expenses increased by $43 million (or 20%) to $255 million for the year ended December 31, 2024, compared with Corporate expenses of
$212 million for the year ended December 31, 2023. The increase in Corporate expenses for the year ended December 31, 2024 was primarily
attributable to costs associated with addressing material weaknesses in internal controls over financial reporting and the implementation of
recommendations stemming from the Audit Committee Internal Review in 2024, along with an increase in certain legacy-related legal expenses (net
of applicable MOU benefit).
Unallocated items are those items excluded from the determination of Segment Adjusted EBITDA measure used by our CODM as described in the
segment overview section of this MD&A and further described below as well as in “Note 29 – Geographic and Segment Information” to the Consolidated
Financial Statements.
The following table sets forth our corporate and unallocated items for the years ended December 31, 2024 and 2023.
Year Ended December 31,
(Dollars in millions)
2024
2023
Corporate expenses
$
(255)
$
(212)
Unallocated items:
Interest expense, net
(264)
(208)
Depreciation and amortization
(301)
(307)
Non-operating pension and other post-retirement employee benefit income
3
—
Exchange losses, net (Note 8 to the Consolidated Financial Statements)
(9)
(38)
Restructuring, asset-related, and other charges (Note 7 to the Consolidated Financial
Statements)
(58)
(153)
Goodwill impairment charge (Note 15 to the Consolidated Financial Statements)
(56)
—
Inventory write-offs (1)
—
(40)
Loss on extinguishment of debt
(1)
(1)
Gain on sales of assets and businesses, net (Note 4 to the Consolidated Financial
Statements)
3
110
Transaction costs (2)
(18)
(16)
Qualified spend recovery (3)
26
54
Litigation-related charges (4)
15
(764)
Environmental charges (5)
(15)
(9)
Corporate expenses and unallocated items
$
(930)
$
(1,584)
(1)
Inventory write-offs for the year ended December 31, 2023 represents write-off of certain raw materials and stores inventories from the Kuan Yin, Taiwan plant closure, which
was not allocated in the measurement of Titanium Technologies segment profitability used by the CODM.
(2)
In 2024, transaction costs includes $16 million of third-party costs related to the Titanium Technologies Transformation Plan, which was not allocated in the measurement of
Titanium Technologies segment profitability used by the CODM. In 2023, transaction costs includes $7 million of costs associated with the Senior Secured Credit Facilities,
which is discussed in further detail in "Note 20 – Debt", and $9 million of third-party costs related to the Titanium Technologies Transformation Plan.
(3)
Qualified spend recovery represents costs and expenses that were previously excluded from the determination of Segment Adjusted EBITDA, reimbursable by DuPont and/or
Corteva as part of our cost-sharing agreement under the terms of the MOU. Terms of the MOU are discussed in further detail in "Note 22 – Commitments and Contingent
Liabilities".
(4)
Litigation-related charges pertains to litigation settlements, PFOA drinking water treatment accruals, and other related legal fees. For the year ended December 31, 2024,
litigation-related charges primarily includes $44 million of benefit from insurance recoveries, along with the $29 million accrual associated with the Ohio MDL. For the year
ended December 31, 2023, litigation-related charges includes the $592 million accrual related to the United States Public Water System Class Action Suit Settlement plus
$24 million of third-party legal fees directly related to the settlement, $55 million of charges related to the our portion of Chemours, DuPont, Corteva, EID and the State of
Ohio's agreement entered into in November 2023, $13 million related to our portion of the supplemental payment to the State of Delaware, $76 million for other PFAS litigation
matters, and $4 million of other litigation matters.
(5)
Environmental charges pertains to management’s assessment of estimated liabilities associated with certain non-recurring environmental remediation expenses at various
sites. For the year ended December 31, 2024, environmental charges primarily includes off-site remediation costs at Dordrecht Works. Refer to “Note 22 – Commitments and
Contingent Liabilities” for further details.
The Chemours Company
53
Liquidity and Capital Resources
Our primary sources of liquidity are cash generated from operations and available cash. We also periodically utilize various financing facilities, including
our receivables securitization facility and supply chain financing arrangements with third-party financial institutions to provide working capital flexibility.
Additionally, we have access to incremental liquidity, if needed, through borrowings under our debt financing arrangements, which includes borrowing
capacity under our Revolving Credit Facility. We expect the liquidity from these sources will provide adequate funds to support the cash needs of our
businesses through at least the end of February 2026.
At December 31, 2024, we had total unrestricted cash and cash equivalents of $713 million, of which $404 million is held by our foreign subsidiaries.
The availability under our Revolving Credit Facility as of December 31, 2024 was $640 million, net of $56 million in outstanding letters of credit, and is
subject to compliance with certain covenants, including those related to the last twelve months of our consolidated earnings before interest, taxes,
depreciation, and amortization ("EBITDA") and senior secured net debt, both of which are defined under the Credit Agreement. At December 31, 2024,
our availability under the Revolving Credit Facility decreased compared to prior periods due to a decline in our trailing twelve-month EBITDA. At
December 31, 2024, we were in compliance with the applicable covenants under the Credit Agreement. Our debt financing arrangements are described
in further detail in “Note 20 – Debt” to the Consolidated Financial Statements. Our Revolving Credit Facility matures in October 2026.
Subject to approval by our board of directors, we may raise additional capital or borrowings from time to time, or seek to refinance our existing debt.
There can be no assurances that future capital or borrowings will be available to us, and the cost and availability of new capital or borrowings could be
materially impacted by market conditions. Our borrowing costs can be impacted by short- and long-term debt ratings assigned by nationally recognized
ratings agencies. On June 3, 2024, Moody's affirmed our Ba3 rating with stable outlook. On April 17, 2024, S&P Global affirmed out BB- credit rating
with negative outlook. Our debt ratings could constrain the capital available to us and could limit our access to and/or increase the cost of funding our
operation. Further, the decision to refinance our existing debt is based on a number of factors, many of which are beyond our control, including general
market conditions and our ability to refinance on attractive terms at any given point in time. Any attempts to raise additional capital or borrowings or
refinance our existing debt could cause us to incur significant charges, including an increase in interest expense as a result of higher interest rates on
any new or refinanced borrowings.
In the ordinary course of business, we engage in normal and customary working capital management actions. Ordinary course working capital
management actions may include managing the timing of payables or receivables where permitted in accordance with the payment terms, utilizing
supply chain financing arrangements, and utilizing the accounts receivable securitization facility described in “Note 20 – Debt” to the Consolidated
Financial Statements, among other actions, where appropriate and deemed to be in our commercial interest. Additionally, in the normal course of
business, from time to time, we agree with our customers and, or, our suppliers, to a swap of terms, which can result in collecting from customers or
paying suppliers earlier in one period in exchange for later in another period.
As disclosed in "Note 2 – Basis of Presentation" to the Consolidated Financial Statements, the Audit Committee, conducted with the assistance of
independent outside counsel, an internal review, and determined, among other things, that former members of senior management engaged in efforts
in the fourth quarter of 2023 to delay payments of up to approximately $100 million, primarily to certain vendors that were originally due to be paid in
the fourth quarter of 2023 until the first quarter of 2024; and to accelerate the collection of up to approximately $260 million of receivables into the
fourth quarter of 2023 that were originally not due to be received until the first quarter of 2024. The Audit Committee’s review also determined that
similar actions, though to a lesser extent, were taken in the fourth quarter of 2022, resulting in a delay of up to approximately $40 million of payments
to vendors that were originally due to be paid in the fourth quarter of 2022 until the first quarter of 2023 and the acceleration of the collection of up to
approximately $175 million of receivables into the fourth quarter of 2022 that were originally not due to be received until the first quarter of 2023.
These working capital timing actions favorably impacted operating cash flows in the fourth quarters of 2023 and 2022 and had correspondingly adverse
impacts on operating cash flows in the first quarters of 2024 and 2023. In the year ended December 31, 2024, we incurred a net $633 million usage of
cash in operating activities, which included accounts and notes receivable and accounts payable uses of cash of $152 million and $9 million,
respectively, as well as the release of $592 million of cash and cash equivalents that were deposited in the qualified settlement fund per the terms of
the U.S. public water system settlement agreement following Final Judgment, as defined in the U.S. public water system settlement agreement. In the
year ended December 31, 2023, cash provided by operating activities was $556 million, which included accounts and notes receivable and accounts
payable uses of cash of $10 million and $72 million, respectively. Refer below and to the "Cash Flows" section for further details of the changes in
operating cash flows in the year ended December 31, 2024 compared to the year ended December 31, 2023.
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54
While we have historically generated operating cash flows through various past industry and economic cycles, we do have a historical pattern of
seasonality with a working capital use of cash in the first half of the year, primarily driven by seasonal accounts receivable timing and, to a lesser
extent, inventory builds, and a working capital source of cash in the second half of the year, as we sell product from inventory and collect receivables
from customers. We expect working capital outflows in the first half of 2025 for the same historical reasons, as well as the settlement of higher levels
of accounts payable as of December 31, 2024, due principally to the timing of higher purchases in the fourth quarter of 2024 for plant maintenance
activity. We currently anticipate that we will remain in compliance with applicable covenants under the Credit Agreement through at least February
2026.
Throughout the year, we utilize supply chain financing arrangements with several third-party financial institutions to manage our working capital needs
and enhance liquidity. We also participate in certain customers’ supply chain financing and other early pay programs as a routine source of working
capital. During the years ended December 31, 2024 and 2023, we utilized various customer facilitated supply chain financing facilities to accelerate
the collection of $337 million and $457 million, respectively, of our accounts receivable, incurring a discount amount of $4 million and $7 million,
respectively, for both periods. These actions included the acceleration of collection of $169 million and $156 million of our accounts receivable during
the fourth quarter of 2024 and 2023, respectively, which based on contractual terms would have otherwise been collected in the first quarter of 2025
and 2024, respectively. See “Note 11 – Accounts and Notes Receivable, Net” to the Consolidated Financial Statements for further details regarding
our supplier financing programs.
In November 2024, we issued $600 million aggregate principal amount of 8.000% senior unsecured notes due January 2033 (the "2033 Notes"). The
net proceeds of the Offering were used to redeem all of our outstanding euro-denominated 4.000% Senior Notes due 2026, which was approximately
€441 million (USD $463 million), plus accrued and unpaid interest to, but excluding, the date of redemption, and the remainder of the net proceeds for
general corporate purposes.
In November and December 2024, we completed the first and second amendments to the Credit Agreement, which repriced our Tranche B-3 U.S.
Dollar-denominated and Euro-denominated Term Loans, respectively, under its senior secured term loan facility due in August 2028. The First
Amendment reduces the applicable margin in respect of our senior secured U.S. dollar-denominated term loan facility from, at our election, adjusted
Term SOFR + 3.50% to adjusted Term SOFR + 3.00%, or adjusted base rate plus 2.50% to adjusted base rate plus 2.00%. The Second Amendment
reduces the applicable margin in respect of our Euro-denominated term loan facility from adjusted EURIBOR + 4.00% to adjusted EURIBOR + 3.25%.
There are no changes to the maturity of the Tranche B-3 U.S. dollar term loan or the Tranche B-3 Euro term loan following these repricing activities,
and all other terms are substantially unchanged.
Further, concurrently with the offering of the senior unsecured notes due January 2033, we entered into a cross-currency swap to effectively convert
the $600 million of the senior unsecured notes due January 2033 into a euro-denominated borrowing of €567 million at prevailing euro interest rates.
The cross-currency swap matures on January 15, 2030. The cross-currency swap executed on the 2033 notes effectively converts our 8.000% USD
rate to a fixed Euro rate of 6.160%.
Thereby, as a result of the recent debt activity as mentioned above, the anticipated annual interest expense is expected to increase approximately $10
million. For further details, see “Note 20 – Debt” to the Consolidated Financial Statements.
A substantial majority of the $404 million of unrestricted cash and cash equivalents held by our foreign subsidiaries at December 31, 2024, is available
for local operations or is readily convertible into currencies used in our worldwide operations, including the U.S. dollar. We are subject to restrictions
imposed by the local governments in certain jurisdictions where we operate, which impose certain limitations on our ability to exchange currencies,
repatriate earnings or capital, or create cross-border cash pooling arrangements. During the year ended December 31, 2024, we received
approximately $500 million of net cash in the U.S. through intercompany loans and dividends. We believe we have the ability to fund U.S. operations
cash requirements for working capital, dividends, investments, and other financing requirements through a mixture of repatriations, intercompany
loans, and other actions. For further information related to our income tax positions, refer to “Note 9 – Income Taxes” to the Consolidated Financial
Statements.
In addition, we monitor the third-party depository institutions that hold our cash and cash equivalents. We diversify our cash and cash equivalents
among counterparties to minimize exposure to any one of these entities.
The Chemours Company
55
Over the course of the next 12 months and beyond, we anticipate making significant cash payments for known contractual and other obligations, which
we expect to fund through cash generated from operations, available cash (including the current portion of restricted cash), receivables securitization,
and our existing debt financing arrangements. As of December 31, 2024, such obligations include:
•
Principal and interest obligations on long-term debt – We are required to make quarterly principal payments related to our Dollar Term
Loan, with the balance due at maturity. Principal payments are also due at maturity for our 5.375% senior unsecured notes due May 2027,
the 5.750% senior unsecured notes due November 2028, the 4.625% senior unsecured notes due November 2029, and the 8.000% senior
unsecured notes due January 2033 (collectively, the “Notes”). The earliest maturity date of our outstanding debt is scheduled in 2027. We
anticipate that our scheduled debt principal maturities will be approximately $11 million, $11 million, $505 million, $2,239 million and $620
million for the years ended December 31, 2025, 2026, 2027, 2028, and 2029, respectively. For additional detail, refer to “Note 20 – Debt” to
the Consolidated Financial Statements. Our interest obligations under our Senior Secured Credit Facilities may be paid monthly or quarterly,
and our interest obligations in connection with the Notes (except for the 2033 Notes on which interest is paid semi-annually in arrears on
January 15 and July 15 each year) are paid semi-annually in arrears on May 15 and November 15 of each year. We anticipate that our
scheduled interest payments will be approximately $232 million, $242 million, $227 million, $175 million and $65 million for the years ended
December 31, 2025, 2026, 2027, 2028, and 2029, respectively, subject to changes in variable interest rates.
•
Operating and finance leases – We lease certain office space, laboratory space, equipment, railcars, tanks, barges and warehouses. The
majority of our leases are operating leases, and the remaining terms on our total lease population varies, extending up to 22 years. We
anticipate that our lease payments will be approximately $82 million, $68 million, $50 million, $40 million and $30 million for the years ended
December 31, 2025, 2026, 2027, 2028 and 2029, respectively. For a schedule of our lease payments for the next five years and thereafter,
refer to “Note 14 – Leases” to the Consolidated Financial Statements.
•
Purchase obligations – As part of our normal, recurring operations, we enter into enforceable and legally-binding agreements to purchase
goods and/or services that specify fixed or minimum quantities, fixed minimum or variable price provisions, and the approximate timing of
the agreement. These agreements primarily pertain to our purchases of raw materials and utilities costs and may span multiple years. Based
upon our currently executed agreements, we anticipate that our contractually obligated cash payments for raw materials and utilities will be
approximately $459 million, $345 million, $208 million, $131 million and $131 million for the years ended December 31, 2025, 2026, 2027,
2028 and 2029, respectively. Renewal, modification, or execution of additional agreements for future purchasing obligations may increase
or decrease these amounts in future years.
•
Environmental remediation – We, due to the terms of our Separation-related agreements with EID, are subject to contingencies pursuant
to environmental laws and regulations that in the future may require further action to correct the effects on the environment of prior disposal
practices or releases of chemical substances, which are attributable to EID’s activities before our spin-off. Much of this liability results from
Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), Resource Conservation and Recovery Act
("RCRA"), and similar federal, state, local, and foreign laws. These laws may require us to undertake certain investigative, remediation, and
restoration activities at sites where we conduct or EID once conducted operations or at sites where waste generated by us was disposed. At
December 31, 2024, our consolidated balance sheets include $571 million for environmental remediation liabilities, of which $115 million
was classified as current, and a portion is subject to recovery under the MOU. Of the current environmental liabilities of $115 million, $68
million relates to Fayetteville. Pursuant to the binding MOU that we entered into with DuPont, Corteva, and EID in January 2021, costs related
to potential future legacy PFAS liabilities arising out of pre-July 1, 2015 conduct will subject to the cost-sharing arrangement, where we bear
half of the cost of such future potential legacy PFAS liabilities and DuPont and Corteva will collectively bear the other half of the cost of such
future potential legacy PFAS liabilities up to an aggregate $4 billion, of which approximately $2.0 billion is available after consideration of the
funding of the payment to the State of Ohio and supplemental payment to the State of Delaware (discussed below). Refer to the
“Environmental Matters” section within this MD&A for the anticipated environmental remediation payments over the next three years. Refer
to “Note 22 – Commitments and Contingent Liabilities” to the Consolidated Financial Statements for further discussion of the MOU and
Qualified Spend.
The Chemours Company
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•
PFAS escrow funding requirements – Pursuant to the binding MOU that we entered into with DuPont, Corteva, and EID in January 2021,
the parties have agreed to establish an escrow account in order to support and manage the payments for potential future legacy PFAS
liabilities. In September 2023, we entered into a supplemental agreement to the binding MOU with DuPont, Corteva, and EID, whereby the
parties agreed to i) release funds held in escrow to fund, in part, the qualified settlement fund per the terms of the U.S. public water system
settlement agreement, ii) waive the escrow funding obligation of each party due no later than September 30, 2023 and iii) waive the escrow
funding obligation due no later than September 30, 2024 under certain conditions as agreed to by the parties. The parties agreed to fund the
payments due by September 30, 2024, and we funded $50 million into the escrow account on September 30, 2024. As such, at December
31, 2024 and 2023, we had $50 million and $0 million deposited into the escrow account, respectively. The next escrow payment of $50
million is expected to be made on or before September 30, 2025 and on or before September 30 of each subsequent year through and
including 2028. Additionally, if on December 31, 2028, the balance of the escrow account (including interest) is less than $700 million, the
balance of the escrow is to be restored to such amount, with Chemours making 50% of the deposits and DuPont and Corteva together
making 50% of the deposits. Such payments will be made in a series of five consecutive annual equal installments commencing on
September 30, 2029 pursuant to the escrow account replenishment terms as set forth in the MOU. Refer to “Note 22 – Commitments and
Contingent Liabilities” to the Consolidated Financial Statements for further discussion.
•
Other legal settlements - In addition to the legal items noted above, we have other legal settlements that we expect to pay within the next
12 months and beyond. In November 2023, we, DuPont, Corteva, and EID entered into a settlement agreement with the State of Ohio to
settle claims, including for environmental releases or sales of products containing PFAS or other known contaminants. Our share of this
settlement is $55 million, representing our portion of the contribution consistent with the MOU entered into among the parties in January
2021. Following the settlement agreement with the State of Ohio and pursuant to the terms of the settlement agreement with the State of
Delaware entered into in 2021, we will also contribute our portion, $13 million, of a supplemental payment owed to the State of Delaware
and expect to pay these amounts in 2025. We have accrued litigation of $208 million at December 31, 2024, which is inclusive of the
settlement agreements with Ohio and Delaware, of which $112 million is classified as current. Refer to “Note 22 – Commitments and
Contingent Liabilities” to the Consolidated Financial Statements for further discussion.
•
Purchases of property, plant, and equipment – As further discussed under the “Capital Expenditures” section within this MD&A, our
operations are capital intensive, requiring ongoing investment to upgrade or enhance existing operations and to meet environmental and
operational regulations. For the years ended December 31, 2024 and 2023, our purchases of property, plant, and equipment amounted to
$360 million and $370 million, respectively. For the year ending December 31, 2025, we expect that our capital expenditures will be between
$250 million and $300 million.
During 2024, we have begun taking actions aimed at improving near-term liquidity through targeted spending control measures. We have also focused
on improving working capital through agreeing with vendors on longer standard accounts payable payment terms. We expect these measures will
have a positive impact on operating cash flow and working capital levels during 2025.
We continue to believe our sources of liquidity are sufficient to fund our planned operations and to meet our principal, interest, dividend, income taxes,
and contractual obligations through at least the end of February 2026. Our capital allocation strategy is consistent with our core values and our CRC
goals and seeks to: (i) focus investments in growth initiatives to enhance our portfolio; (ii) improve our leverage profile; (iii) responsibly resolve
contingent legal and/or accrued environmental liabilities on terms and bases deemed to be in the best interest of the Company and its stakeholders;
and (iv) return cash to shareholders through regular quarterly dividends. Specific to our objective to return cash to shareholders, in recent quarters, we
have previously announced quarterly dividends of $0.25 per share, amounting to approximately $150 million per year, and, on February 14, 2025, we
announced our quarterly cash dividend of $0.25 per share for the first quarter of 2025. Under our 2022 Share Repurchase Program, as further discussed
in Item 5 – Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities and in "Note 23 – Equity"
in this Annual Report on Form 10-K, we have remaining authority to repurchase $441 million of our outstanding common stock, though we do not
anticipate additional repurchases under the 2022 Share Repurchase Plan.
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Cash Flows
The following table sets forth a summary of the net cash provided by (used for) our operating, investing, and financing activities for the years ended
December 31, 2024 and 2023.
Year Ended December 31,
(Dollars in millions)
2024
2023
Cash (used for) provided by operating activities
$
(633)
$
556
Cash used for investing activities
(353)
(229)
Cash (used for) provided by financing activities
(36)
172
Operating Activities
We used $633 million in cash flows for our operating activities for the year ended December 31, 2024. Comparatively, we generated $556 million in
cash flows from our operating activities during the year ended December 31, 2023. The increase in our operating cash outflows for the year ended
December 31, 2024 was primarily attributable to the release of the $592 million of restricted cash and cash equivalents deposited in the qualified
settlement fund per the terms of the U.S. public water settlement agreement following Final Judgment, as defined in the U.S. public water settlement
agreement, the unwinding of 2023 year end net working capital actions (discussed further in the "Liquidity and Capital Resources" section above) and
lower earnings in 2024.
Investing Activities
We used $353 million in cash flows from our investing activities during the year ended December 31, 2024. Our investing cash outflows were primarily
attributable to purchases of property, plant, and equipment amounting to $360 million. For further information related to the capital projects driving our
year-over-year decrease in purchases of property, plant, and equipment, refer to the “Capital Expenditures” section within this MD&A.
We used $229 million in cash flows from our investing activities during the year ended December 31, 2023. Our investing cash outflows were primarily
attributable to purchases of property, plant, and equipment amounting to $370 million, primarily in growth capital expenditures in our Advanced
Performance Materials and Thermal & Specialized Solutions segments, partially offset by cash proceeds of $138 million related to the Glycolic Acid
Transaction.
Financing Activities
We used $36 million in cash flows from our financing activities during the year ended December 31, 2024. Our financing cash outflows were primarily
attributable to $148 million of cash dividends, partially offset by $116 million of net proceeds received, following the repayment of the 2026 Euro Notes,
in connection with the issuance of the 8.000% senior unsecured notes due January 2033, as further discussed in “Note 20 – Debt” to the Consolidated
Financial Statements.
We generated $172 million in cash for our financing activities during the year ended December 31, 2023, which were primarily attributable to $367
million of net proceeds received in connection with the issuance of the Term Loans. Our cash flows from financing activities also includes $26 million
of proceeds received from a customer's financing facility in December 2023 in advance of us meeting revenue recognition criteria with that customer
and $9 million of net proceeds received in connection with one of our supplier financing programs, both of which are classified as financing activities
based on the characteristics of the transactions. We also used cash for capital allocation activities, resulting in $69 million in purchases of our issued
and outstanding common stock under our 2022 Share Repurchase Program and $149 million of cash dividends.
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Current Assets
The following table sets forth the components of our current assets at December 31, 2024 and 2023.
December 31,
(Dollars in millions)
2024
2023
Cash and cash equivalents
$
713
$
1,203
Restricted cash and restricted cash equivalents
—
604
Accounts and notes receivable, net
770
610
Inventories
1,472
1,352
Prepaid expenses and other
71
66
Total current assets
$
3,026
$
3,835
Restricted cash and restricted cash equivalents decreased by $604 million (or 100%) to $0 million at December 31, 2024, compared with restricted
cash and restricted cash equivalents of $604 million at December 31, 2023. The decrease in our restricted cash and restricted cash equivalents was
primarily attributable to the release of cash and cash equivalents deposited in the qualified settlement fund per the terms of the U.S. public water
system settlement agreement following Final Judgment, as defined in the U.S. public water system settlement agreement. This matter is further
discussed in "Note 22 – Commitments and Contingent Liabilities" to the Consolidated Financial Statements in this Annual Report on Form 10-K.
Our accounts and notes receivable, net increased by $160 million (or 26%) to $770 million at December 31, 2024, compared with accounts and notes
receivable, net of $610 million at December 31, 2023. The increase in our accounts and notes receivable, net at December 31, 2024 was primarily
attributable to the acceleration of receivables collection in the fourth quarter of 2023 that were originally not due to be received until the first quarter of
2024.
Our inventories increased by $120 million (or 9%) to $1.5 billion at December 31, 2024, compared with inventories of $1.4 billion at December 31,
2023. The increase in our inventories at December 31, 2024 was primarily attributable to higher inventories within our Titanium Technologies business
in line with seasonal demand patterns and higher inventories within our Thermal & Specialized Solutions business in advance of plant maintenance
activity in the fourth quarter of 2024.
Our prepaid expenses and other assets increased by $5 million (or 8%) to $71 million at December 31, 2024, compared with prepaid expenses and
other assets of $66 million at December 31, 2023. The increase in our prepaid expenses and other current assets at December 31, 2024 was primarily
attributable to higher prepaid income taxes.
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Current Liabilities
The following table sets forth the components of our current liabilities at December 31, 2024 and 2023.
December 31,
(Dollars in millions)
2024
2023
Accounts payable
$
1,142
$
1,159
Compensation and other employee-related costs
99
89
Short-term and current maturities of long-term debt
54
51
Current environmental remediation
115
129
Other accrued liabilities (1)
393
1,058
Total current liabilities
$
1,803
$
2,486
(1)
At December 31, 2023, other accrued liabilities includes $592 million for the United States Public Water System Settlement. Refer to "Note 22 – Commitments and Contingent
Liabilities" to the Consolidated Financial Statements in this Annual Report on Form 10-K for further details.
Our accounts payable decreased by $17 million (or 1%) to $1.1 billion at December 31, 2024, compared with accounts payable of $1.2 billion at
December 31, 2023. The decrease in our accounts payable at December 31, 2024 was primarily attributable to the timing of vendor payments in the
first quarter of 2024, resulting from efforts to delay payments to certain vendors in the fourth quarter of 2023, partially offset by higher purchases in the
fourth quarter of 2024 for plant maintenance activity.
Our compensation and other employee-related costs increased by $10 million (or 11%) to $99 million at December 31, 2024 compared with
compensation and other employee-related costs of $89 million at December 31, 2023. The increase in our compensation and other employee-related
costs at December 31, 2024 was primarily attributable to higher accruals for employee benefits and performance-related compensation in line with the
expected payout.
Our current environmental remediation decreased by $14 million (or 11%) to $115 million at December 31, 2024, compared with current environmental
remediation of $129 million at December 31, 2023. The decrease in our current environmental remediation at December 31, 2024 was primarily
attributable to lower environmental remediation accruals at the USS Lead Superfund site following completion of the remaining obligations under the
2021 Record of Decision and Statement of Work. Refer to "Note 22 – Commitments and Contingent Liabilities" to the Consolidated Financial Statements
in this Annual Report on Form 10-K for further information.
Our other accrued liabilities decreased by $665 million (or 63%) to $393 million at December 31, 2024, compared with other accrued liabilities of $1.1
billion at December 31, 2023. The decrease in our other accrued liabilities at December 31, 2024 was primarily attributable to the derecognition of the
accrued liabilities related to the U.S. public water system settlement agreement following Final Judgment, as defined in the U.S. public water system
settlement agreement. This matter is further discussed in "Note 22 – Commitments and Contingent Liabilities" to the Consolidated Financial Statements
in this Annual Report on Form 10-K.
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Credit Facilities and Notes
Refer to “Note 20 – Debt” to the Consolidated Financial Statements for a discussion of our credit facilities and notes.
Guarantor Financial Information
The following disclosures set forth summarized financial information and alternative disclosures in accordance with Rule 13-01 of Regulation S-X
(“Rule 13-01”). These disclosures have been made in connection with certain subsidiaries' guarantees of the 5.375% senior unsecured notes due May
2027 (the “Registered Notes”), which are registered under the Securities Act of 1933, as amended. Each series of the Registered Notes was issued
by The Chemours Company (the “Parent Issuer”), and was fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by
the existing and future domestic subsidiaries of the Parent Issuer (together, the “Guarantor Subsidiaries”), subject to certain conditions as set forth in
“Note 20 – Debt” to the Consolidated Financial Statements. The assets, liabilities, and operations of the Guarantor Subsidiaries primarily consist of
those attributable to The Chemours Company FC, LLC, our primary operating subsidiary in the United States, as well as certain U.S.-based operating
subsidiaries included in Exhibit 22 to this Annual Report on Form 10-K. Each of the Guarantor Subsidiaries is 100% owned by the Company. None of
our other subsidiaries, either direct or indirect, guarantee the Registered Notes (together, the “Non-Guarantor Subsidiaries”). Pursuant to the indentures
governing the Registered Notes, the Guarantor Subsidiaries will be automatically released from those guarantees upon the occurrence of certain
customary release provisions.
Our summarized financial information is presented on a combined basis, consisting of the Parent Issuer and Guarantor Subsidiaries (collectively, the
“Obligor Group”), in accordance with the requirements under Rule 13-01, and is presented after the elimination of: (i) intercompany transactions and
balances among the Parent Issuer and Guarantor Subsidiaries, and (ii) equity in earnings from and investments in the Non-Guarantor Subsidiaries.
(Dollars in millions)
Year Ended December 31, 2024
Net sales (1)
$
3,998
Gross profit
593
Income before income taxes
51
Net income
74
Net income attributable to Chemours
74
(1)
Net sales includes intercompany sales to the Non-Guarantor Subsidiaries.
December 31,
(Dollars in millions)
2024
2023
Assets
Current assets (1,2,3)
$
1,510
$
2,013
Long-term assets (4)
3,285
3,302
Liabilities
Current liabilities (2)
$
1,563
$
2,121
Long-term liabilities
4,995
4,931
(1)
Current assets includes $308 million and $395 million of cash and cash equivalents at December 31, 2024 and 2023, respectively. Current assets at December 31, 2023 also
includes $603 million of restricted cash and restricted cash equivalents related to qualified settlement funds under the U.S. public water system class action suit settlement.
(2)
Current assets includes $365 million and $256 million of intercompany accounts receivable from the Non-Guarantor Subsidiaries at December 31, 2024 and 2023, respectively.
Current liabilities includes $367 million and $285 million of intercompany accounts payable to the Non-Guarantor Subsidiaries at December 31, 2024 and 2023, respectively.
(3)
As of December 31, 2024 and 2023, $112 million and $87 million of accounts receivable generated by the Obligor Group, respectively, remained outstanding with one of the
Non-Guarantor Subsidiaries under the Securitization Facility.
(4)
Long-term assets at December 31, 2024 includes $50 million of restricted cash and restricted cash equivalents related to an escrow account as per the terms of the MOU.
Long-term assets at December 31, 2023 also includes $144 million of intercompany notes receivable from the Non-Guarantor Subsidiaries.
There are no significant restrictions that may affect the ability of the Guarantor Subsidiaries in guaranteeing the Parent Issuer’s obligations under our
debt financing arrangements. While the Non-Guarantor Subsidiaries do not guarantee the Parent Issuer’s obligations under our debt financing
arrangements, we may, from time to time, repatriate post-2017 earnings from certain of these subsidiaries to meet our financing obligations, as well.
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61
Supplier Financing
We maintain supply chain finance programs with several financial institutions. The available capacity under these programs can vary at any point in
time based on the outstanding obligations with each financial institution. We also participate in certain customers’ supply chain financing and other
early pay programs as a routine source of working capital. See "Note 18 – Accounts Payable" and "Note 20 – Debt" to the Consolidated Financial
Statements for further details regarding supplier financing programs.
Off-Balance Sheet Arrangements
Information with respect to guarantees, including our securitization program, are included in "Note 20 – Debt" to the Consolidated Financial
Statements. Historically, we have not made any payments to satisfy guarantee obligations; however, we believe we have the financial resources to
satisfy these guarantees in the event required.
Capital Expenditures
Our operations are capital intensive, requiring ongoing investment to upgrade or enhance existing operations and to meet environmental and
operational regulations. Our capital requirements have consisted, and are expected to continue to consist, primarily of:
•
investments in our existing facilities to help support the introduction of new products, expand capacity, and grow our business;
•
ongoing capital expenditures, such as those required to maintain equipment reliability, maintain the integrity and safety of our manufacturing
sites, comply with environmental regulations, and meet our Corporate Responsibility Commitments; and,
•
investments in projects to reduce future operating costs and enhance productivity.
The following table sets forth our ongoing and expansion capital expenditures, including certain environmental capital expenditures, for the years
ended December 31, 2024 and 2023.
Year Ended December 31,
(Dollars in millions)
2024
2023
Thermal & Specialized Solutions
$
168
$
75
Titanium Technologies
55
83
Advanced Performance Materials
122
193
Other Segment
5
7
Corporate
10
12
Total purchases of property, plant, and equipment
$
360
$
370
Our capital expenditures decreased by $10 million (or 3%) to $360 million for the year ended December 31, 2024, compared with capital expenditures
of $370 million for the same period in 2023. The decrease in our capital expenditures for the year ended December 31, 2024 was primarily attributable
to a decrease in capital expenditures in Advanced Performance Materials following completion of capital investments related to PFA capacity
expansion, partially offset by an increase in capital expenditures in Thermal & Specialized Solutions related to OpteonTM capacity expansion.
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Critical Accounting Policies and Estimates
Our significant accounting policies are more fully described in “Note 3 – Summary of Significant Accounting Policies” to the Consolidated Financial
Statements. Management believes that the application of these policies on a consistent basis enables us to provide the users of our financial statements
with useful and reliable information about our operating results and financial condition.
The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires
management to make estimates and assumptions that affect the reported amounts, including, but not limited to, receivable and inventory valuations,
impairment of tangible and intangible assets, long-term employee benefit obligations, income taxes, restructuring liabilities, environmental matters,
and litigation. Management’s estimates are based on historical experience, facts, and circumstances available at the time, and various other
assumptions that are believed to be reasonable. We review these matters and reflect changes in estimates as appropriate. Management believes that
the following represents some of the more critical judgment areas in the application of our accounting policies, which could have a material effect on
our financial position, results of operations, or cash flows.
Provision for (Benefit from) Income Taxes
The provision for (benefit from) income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach,
deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid.
The provision for (benefit from) income taxes represents income taxes paid or payable for the current year, plus the change in deferred taxes during
the year. Deferred taxes result from differences between the financial and tax bases of our assets and liabilities and are adjusted for changes in tax
rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more-likely-than-not that a
tax benefit will not be realized. In evaluating the ability to realize deferred tax assets, we rely on, in order of increasing subjectivity, taxable income in
prior carryback years, the future reversals of existing taxable temporary differences, tax planning strategies, and forecasted taxable income using
historical and projected future operating results.
The breadth of our operations and the global complexity of tax regulations require assessments of uncertainties and judgments in estimating the taxes
that we will ultimately pay. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions,
outcomes of tax litigation, and resolutions of disputes arising from federal, state, and international tax audits in the normal course of business. A liability
for unrecognized tax benefits is recorded when management concludes that the likelihood of sustaining such positions upon examination by taxing
authorities is less than more-likely-than-not. It is our policy to include accrued interest related to unrecognized income tax positions and income tax-
related penalties in the provision for (benefit from) income taxes.
We account for the tax impacts of new provisions based on interpretation of existing statutory law, including proposed regulations issued by the U.S.
Treasury, the IRS, and other authorities. While there can be no assurances as to the effect of any final regulations on our provision for (benefit from)
income taxes, we will continue to evaluate the impacts as any issued regulations become final and adjust our estimates, as appropriate.
Refer to “Note 9 – Income Taxes” to the Consolidated Financial Statements for further information related to our income tax positions.
Long-lived Assets
We evaluate the carrying value of our long-lived assets to be held and used when events or changes in circumstances indicate that the carrying value
of an asset may not be recoverable. For the purposes of recognition or measurement of an impairment charge, the assessment is performed on the
asset or asset group at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and
liabilities. To determine the level at which the assessment is performed, we consider factors such as revenue dependency, shared costs, and the
extent of vertical integration. The carrying value of a long-lived asset is considered impaired when the total projected undiscounted cash flows from
the use and eventual disposition of the asset or asset group are separately identifiable and are less than its carrying value. In that event, a loss is
recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. The fair value methodology used is an
estimate of fair market value, which is made based on prices of similar assets or other valuation methodologies, including present value techniques.
Long-lived assets to be disposed of other than by sale are classified as held for use until their disposal. Long-lived assets to be disposed of by sale
are classified as held for sale and are reported at the lower of their carrying amount or fair market value, less the estimated costs to sell. Depreciation
and amortization are ceased for a disposal group upon it being classified as held for sale.
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The testing for potential impairment of these assets is significantly dependent on numerous assumptions and reflects management’s best estimates
at a particular point in time. The dynamic economic environments in which our segments operate, and key economic and business assumptions with
respect to projected selling prices, market growth, and inflation rates, can significantly impact the outcome of our impairment tests. Estimates based
on these assumptions may differ significantly from actual results. Changes in the factors and assumptions used in assessing potential impairments
can have a significant impact on the existence and magnitude of impairments, as well as the time in which such impairments are recognized. In
addition, we continually review our diverse portfolio of assets to ensure that they are achieving their greatest potential and are aligned with our growth
strategy. Strategic decisions involving a particular group of assets may trigger an assessment of the recoverability of the related assets. Such an
assessment could result in impairment losses. For the year ended December 31, 2024, we recorded non-cash asset-related charges of $27 million
primarily related to the write off of certain operating assets and associated construction-in-progress and other assets with no future intended use, as
part of strategic footprint transformation initiatives within the Advanced Performance Materials business. For the year ended December 31, 2023, we
recorded a pre-tax asset impairment charge of $78 million related to the shut down our TiO2 manufacturing facility in Kuan Yin, Taiwan. Additionally,
for the year ended December 31, 2023 we recorded a pre-tax asset-related impairment of $8 million resulting from the shutdown of a production line
at our El Dorado site. Refer to “Note 7 – Restructuring, Asset-related, and Other Charges” to the Consolidated Financial Statements for further details
related to these charges.
During the third quarter of 2024, we reviewed recently released third-party industry projections, which for hydrogen now reflect lower end-market
demand, as well as slower market growth through 2030 and a more uncertain long-term growth trajectory beyond 2030. In response to these negative
market outlook developments, as well as increased commercial headwinds due to limited cyclical end-market recovery and competitive intensity, we
have revised our financial projections for the Advanced Performance Materials business which includes reductions to its investment plans, including
putting our previously announced capacity expansion for NafionTM ion exchange materials at our Villers St. Paul, France facility on long-term hold until
the market conditions improve and require further polymer capacity expansion. We concluded that these market developments, as well as our revised
financial projections to reflect these events, represented a triggering event for our Advanced Performance Materials reporting unit and associated
goodwill, as well as the related asset group, during the third quarter of 2024. As a result of this conclusion, we completed an interim impairment
assessment as of August 31, 2024 for its Advanced Performance Materials reporting unit and the related asset group. We concluded that the
undiscounted cash flows exceeded the carrying value of the long-lived assets, and that an impairment did not exist.
Notwithstanding the results of our trigger-based interim impairment assessment during the third quarter of 2024, further negative market developments,
notably as it relates to the hydrogen market or future strategic decisions involving a particular group of assets, may trigger an assessment of the
recoverability of the related assets and such an assessment could result in future impairment losses.
Goodwill
The excess of the purchase price over the estimated fair value of the net assets acquired in a business combination, including any identified intangible
assets, is recorded as goodwill. We test our goodwill for impairment at least annually on October 1; however, these tests are performed more frequently
when events or changes in circumstances indicate that the asset may be impaired. Goodwill is evaluated for impairment at the reporting unit level,
which is an operating segment or one level below an operating segment. A reporting unit is the level at which discrete financial information is available
and reviewed by business management on a regular basis. An impairment exists when the carrying value of a reporting unit exceeds its fair value. The
amount of impairment loss recognized in the consolidated statements of operations is equal to the excess of a reporting unit’s carrying value over its
fair value, which is limited to the total amount of goodwill allocated to the reporting unit.
The fair values of our reporting units were determined by using a combination of income-based and/or market-based valuation techniques. These
valuation models incorporated a number of assumptions and judgments surrounding general market and economic conditions, short- and long-term
revenue growth rates, gross margins, and prospective financial information surrounding future cash flows of the reporting units. Projections are based
on internal forecasts of future business performance and are based on growth assumptions. Discount rate and market multiple assumptions were
determined based on relevant peer companies in the chemicals sector.
As described further in "Note 15 – Goodwill and Other Intangible Assets, Net" to the Consolidated Financial Statements, we concluded that a triggering
event was present for our Advanced Performance Materials reporting unit during the third quarter of 2024. As a result of the interim quantitative goodwill
impairment analysis performed, we concluded that the carrying amount of the Advanced Performance Materials reporting unit exceeded its fair value
resulting in a non-cash goodwill impairment charge of $56 million, which is recorded within “Goodwill impairment charge” on the Consolidated
Statements of Operations for the year ended December 31, 2024. After this impairment charge, as of December 31, 2024, goodwill for the Advanced
Performance Materials reporting unit was $0 million.
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As of October 1, 2024, we performed our annual goodwill impairment tests for the Thermal & Specialized Solutions and Titanium Technologies reporting
units. Based upon the results of our annual goodwill impairment tests, no further impairments to the carrying value of goodwill were necessary during
the year ended December 31, 2024. For our Thermal & Specialized Solutions and Titanium Technologies reporting units, a qualitative assessment
was performed in 2024, that indicated it is not more likely than not that the fair value of the reporting unit was less than the carrying value.
As of October 1, 2023, the date of the most recent quantitative impairment test for our Titanium Technologies reporting unit, the estimated fair value
was 67% higher than the carrying value of the reporting unit. As of October 1, 2022, the date of the most recent quantitative impairment test for our
Thermal & Specialized Solutions reporting unit, the estimated fair value was 335% higher than the carrying value of the reporting unit.
Employee Benefits
The amounts recognized in our consolidated financial statements related to pension and other long-term employee benefits plans are determined from
actuarial valuations. Inherent in these valuations are assumptions including, but not limited to, the expected returns on plan assets, discount rates at
which liabilities are expected to be settled, rates of increase in future compensation levels, and mortality rates. These assumptions are updated annually
and are disclosed in “Note 27 – Long-term Employee Benefits” to the Consolidated Financial Statements. In accordance with GAAP, actual results that
differed from the assumptions are accumulated and amortized over future periods and, therefore, affect expense recognized and obligations recorded
in future periods.
We use discount rates that are developed by matching the expected cash flows of each benefit plan to various yield curves constructed from a portfolio
of high-quality, fixed income instruments provided by the plan’s actuary as of the measurement date. As of December 31, 2024, the weighted-average
discount rate was 3.3%.
The expected long-term rates of return on plan assets are determined by performing a detailed analysis of historical and expected returns based on
the strategic asset allocation of the underlying asset class applicable to each country. We also consider our historical experience with the pension
funds’ asset performance. The expected long-term rates of return on plan assets are assumptions and not what is expected to be earned in any one
particular year. The weighted-average long-term rates of return on plan assets assumptions used for determining our net periodic pension cost for
2024 was 4.9%.
A 50 basis point increase in the discount rate would result in a decrease of $3 million to the net periodic benefit cost for 2025, while a 50 basis point
decrease in the discount rate would result in an increase of approximately $3 million. A 50 basis point increase in the expected return on plan assets
assumption would result in a decrease of approximately $2 million to the net periodic benefit cost for 2025, while a 50 basis point decrease in the
expected return on plan assets assumption would result in an increase of approximately $2 million.
Litigation
Litigation liabilities and expenditures included in our consolidated financial statements include litigation matters that are liabilities of EID and its
subsidiaries, which we may be required to indemnify pursuant to the Separation-related agreements executed prior to the Separation. Disputes between
us and EID may arise with respect to indemnification of these matters, including disputes based on matters of law or contract interpretation. If, and to
the extent these disputes arise, they could materially adversely affect our results of operations. We are also involved in various claims and legal
proceedings. We regularly review the status of each significant matter and assess its potential financial exposure. If the potential loss from any claim
or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. When a material
loss contingency is reasonably possible, but not probable, we do not record a liability, but instead disclose the nature of the matter and an estimate of
the loss or range of loss, to the extent such estimate can be made. Significant judgment is required in both the determination of probability and whether
an exposure is reasonably estimable. Our judgments are subjective based on the status of the legal or regulatory proceedings, the merits of our
defenses and consultation with in-house and outside legal counsel. Because of uncertainties related to these matters, accruals are based on the best
information available at the time of the filing of this Annual Report on Form 10-K. As additional information becomes available, we reassess the potential
liability related to pending claims and litigation and may revise our estimates accordingly. Due to the inherent uncertainties of the legal and regulatory
process in the multiple jurisdictions in which we operate, our judgments may be materially different than the actual outcomes. Legal costs such as
outside counsel fees and expenses are charged to expense in the period services are rendered. Refer to "Note 22 – Commitments and Contingent
Liabilities" to the Consolidated Financial Statements in this Annual Report on Form 10-K for further information.
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Environmental Liabilities and Expenditures
We accrue for environmental remediation costs when it is probable that a liability has been incurred and a reasonable estimate of the liability can be
made. Where the available information is sufficient to estimate the amount of liability, that estimate has been used. Where the information is only
sufficient to establish a range of probable liability, and no point within the range is more likely than any other, the lower end of the range has been
used. Estimated liabilities are determined based on existing remediation laws and technologies and our planned remedial responses, which are derived
from environmental studies, sampling, testing, and analyses. Inherent uncertainties exist in such evaluations, primarily due to unknown environmental
conditions, changing governmental regulations regarding liability, and emerging remediation technologies. These liabilities are adjusted periodically as
remediation efforts progress and as additional technology, regulatory, and legal information become available.
Environmental liabilities and expenditures include claims for matters that are liabilities of EID and its subsidiaries, which we may be required to
indemnify pursuant to the Separation-related agreements. These accrued liabilities are undiscounted and do not include claims against third parties.
Costs related to environmental remediation are charged to expense in the period that the associated liability is accrued. Other environmental costs are
also charged to expense in the period incurred, unless they increase the value of the property or reduce or prevent contamination from future operations,
in which case they are capitalized and amortized.
Recent Accounting Pronouncements
Refer to “Note 3 – Summary of Significant Accounting Policies” to the Consolidated Financial Statements for a discussion about recent accounting
pronouncements.
Environmental Matters
Consistent with our values and our Environment, Health, Safety, and Corporate Responsibility policy, we are committed to preventing releases to the
environment at our manufacturing sites to keep our people and communities safe, and to be good stewards of the environment. We are also subject
to environmental laws and regulations relating to the protection of the environment. We believe that, as a general matter, our policies, standards, and
procedures are properly designed to prevent unreasonable risk of harm to people and the environment, and that our handling, manufacture, use, and
disposal of hazardous substances are in accordance with applicable environmental laws and regulations.
Environmental Expenditures
We incur costs for pollution abatement activities, including waste collection and disposal, installation and maintenance of air pollution controls and
wastewater treatment, emissions testing and monitoring, and obtaining permits. Annual expenses charged to current operations include environmental
operating costs and increases in remediation accruals, if any, during the period reported.
Our environmental remediation expenditures are subject to considerable uncertainty and may fluctuate significantly. Capital expenditures associated
with ongoing operations are expected to be required over the next decade for treatment, storage, and disposal facilities for solid and hazardous waste
and for the protection of air and water resources. Considerable uncertainty remains regarding estimates for our future capital and remediation
expenditures as regulatory requirements across various jurisdictions where we operate continue to evolve.
For the years ended December 31, 2024 and 2023, we spent $18 million and $30 million, respectively, on environmental capital projects that were
either required by law or necessary to meet our internal environmental objectives.
We expect our future capital expenditures for environmental matters will continue to vary, based on the success of our deployed solutions, changes in
our operations, technological advancements, developments in environmental requirements, and stakeholder expectations.
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Environmental Remediation
In large part, because of past operations, operations of predecessor companies, or past disposal practices, we, like many other similar companies,
have clean-up responsibilities and associated remediation costs, and are subject to claims by other parties, including claims for matters that are
liabilities of EID and its subsidiaries that we may be required to indemnify pursuant to the Separation-related agreements executed prior to the
Separation.
Our environmental liabilities include estimated costs, including certain accruable costs associated with on-site capital projects. The accruable costs
relate to a number of sites for which it is probable that environmental remediation will be required, whether or not subject to enforcement activities, as
well as those obligations that result from environmental laws such as CERCLA, RCRA, and similar federal, state, local, and foreign laws. These laws
may require certain investigative, remediation, and restoration activities at sites where we conduct or EID once conducted operations or at sites where
our generated waste was disposed. At December 31, 2024 and 2023, our consolidated balance sheets include environmental remediation liabilities of
$571 million and $590 million, respectively, relating to these matters, which, as discussed in further detail below, include $351 million and $383 million,
respectively, for Fayetteville.
The following table sets forth the activities related to our environmental remediation liabilities for the years ended December 31, 2024 and 2023.
December 31,
(Dollars in millions)
2024
2023
Balance at January 1,
$
590
$
668
Increase in remediation accruals
70
66
Remediation payments (1)
(89)
(144)
Balance at December 31,
$
571
$
590
(1)
Remediation payments do not include Qualified Spend that we have been reimbursed for by DuPont and/or Corteva as part of our cost-sharing agreement under the terms of
the MOU.
The following table sets forth our environmental remediation liabilities by site category.
(Dollars in millions)
December 31, 2024
December 31, 2023
Site Category
Number of Sites
Remediation
Accrual
Number of Sites
Remediation
Accrual
Chemours-owned
21
$
507
21
$
512
Multi-party Superfund/non-owned (1)
88
64
87
78
Closed or settled
104
—
104
—
Total sites
213
$
571
212
$
590
(1)
Sites not owned by Chemours, including sites previously owned by EID or Chemours, where remediation obligations are imposed by environmental remediation laws, such as
CERCLA, RCRA, or similar state laws.
As part of our legacy as a former subsidiary of EID, we are cleaning-up historical impacts to soil and groundwater that have occurred in the past at the
21 sites that we own. These Chemours-owned sites make up approximately 89% of our environmental remediation liabilities at December 31, 2024.
We were also assigned numerous clean-up obligations from EID, which pertain to 88 sites previously owned by EID and/or us, as well as sites that we
or EID never owned or operated. We are meeting our obligations to clean up those sites. The majority of these non-owned sites are multi-party
Superfund sites that we, through EID, have been notified of potential liability under CERCLA, RCRA, or similar state laws and which, in some cases,
may represent a small fraction of the total waste that was allegedly disposed of at a site. These sites represent approximately 11% of our environmental
remediation liabilities at December 31, 2024. Included in the 88 sites are 38 inactive sites for which there has been no known investigation, clean-up,
or monitoring activity, and no remediation obligation is imposed or required; as such, no remediation liabilities are recorded.
The remaining 104 sites, which are Superfund sites and other sites not owned by us, are either already closed or settled, or sites for which we do not
believe we have clean-up responsibility based on current information.
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The following graph sets forth the number of remediation sites by site clean-up phase and our environmental remediation liabilities by site clean-up
phase as of December 31, 2024 and 2023.
(1) Number of sites does not include the 38 and 37 inactive sites for which there has been no known investigation, clean-up, or monitoring
activities as of December 31, 2024 and 2023, respectively.
(2) Dollars in millions.
(3) As of December 31, 2024 and 2023, Active Remediation included $351 million and $383 million, respectively, for on-site remediation and
off-site groundwater remediation at Fayetteville.
As remediation efforts progress, sites move from the investigation phase (“Investigation”) to the active clean-up phase (“Active Remediation”), and as
construction is completed at Active Remediation sites, those sites move to the operation, maintenance, and monitoring (“OM&M”), or closure phase.
As final clean-up activities for some significant sites are completed over the next several years, we expect our annual expenses related to these active
sites to decline over time. The time frame for a site to go through all phases of remediation (Investigation and Active Remediation) may take about 15
to 20 years, followed by several years of OM&M activities. Remediation activities, including OM&M activities, vary substantially in duration and cost
from site to site. These activities, and their associated costs, depend on the mix of unique site characteristics, evolving remediation technologies, and
diverse regulatory requirements, as well as the presence or absence of other Potentially Responsible Parties (“PRPs”). In addition, for claims that we
may be required to indemnify EID pursuant to the Separation-related agreements, we and EID may have limited available information for certain sites
or are in the early stages of discussions with regulators. For these sites, there may be considerable variability between the clean-up activities that are
currently being undertaken or planned and the ultimate actions that could be required. Therefore, considerable uncertainty exists with respect to
environmental remediation costs, and, under adverse changes in circumstances, we currently estimate the potential liabilities may range up to
approximately $720 million above the amount accrued at December 31, 2024. This estimate is not intended to reflect an assessment of our maximum
potential liability. The estimated liabilities are determined based on existing remediation laws and technologies and our planned remedial responses,
which are derived from environmental studies, sampling, testing, and analyses. Inherent uncertainties exist in such evaluations, primarily due to
unknown environmental conditions, changing governmental regulations regarding liability, and emerging remediation technologies. We will continue to
evaluate as new or additional information becomes available in the determination of our environmental remediation liability.
14
18
39
104
13
17
41
104
$48
$461
$62
$-
$44
$481
$65
$-
$-
$100
$200
$300
$400
$500
0
100
200
300
400
500
Investigation Active Remediation (3)
OM&M
Closed
Investigation Active Remediation (3)
OM&M
Closed
Environmental Remediation Liabilities (2)
Number of Sites (1)
Remediation Sites by Phase
Series2
Environmental Remediation Liabilities
As of December 31, 2023
As of December 31, 2024
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In general, uncertainty is greatest and the range of potential liability is widest in the Investigation phase, narrowing over time as regulatory agencies
approve site remedial plans. As a result, uncertainty is reduced, and sites ultimately move into OM&M, as needed. As more sites advance from
Investigation to Active Remediation to OM&M or closure, the upper end of the range of potential liability is expected to decrease over time. Some
remediation sites will achieve site closure and will require no further action to protect people and the environment and comply with laws and regulations.
At certain sites, we expect that there will continue to be some level of remediation activity due to ongoing OM&M of remedial systems. In addition,
portfolio changes, such as an acquisition or divestiture, or notification as a PRP for a multi-party Superfund site, could result in additional remediation
activity and potentially additional accrual.
Management does not believe that any loss, in excess of amounts accrued, related to remediation activities at any individual site will have a material
impact on our financial position or cash flows for any given year, as such obligation can be satisfied or settled over many years.
Significant Environmental Remediation Sites
While there are many remediation sites that contribute to our total accrued environmental remediation liabilities at December 31, 2024 and 2023, the
following table sets forth the liabilities of the six sites that are deemed the most significant, together with the aggregate liabilities for all other sites.
December 31,
(Dollars in millions)
2024
2023
Chambers Works, Deepwater, New Jersey
$
31
$
30
Dordrecht Works, Netherlands (1)
28
4
Fayetteville Works, Fayetteville, North Carolina
351
383
Pompton Lakes, New Jersey
41
41
USS Lead, East Chicago, Indiana (2)
—
12
Washington Works, West Virginia
25
22
All other sites
95
98
Total environmental remediation
$
571
$
590
(1)
As of December 31, 2024, environmental remediation at Dordrecht Works primarily relates to the remediation plan to be implemented as part of the letter of intent described
further within “Note 22 – Commitments and Contingent Liabilities” to the Consolidated Financial Statements. An initial estimate of this liability was included in Accrued Litigation
at December 31, 2023 and reclassified to Accrued Environmental Remediation at December 31, 2024.
(2)
USS Lead, East Chicago, Indiana: Although USS Lead, East Chicago, Indiana has a $0 balance as of December 31, 2024, we continue to include this remediation site in the
table above due to the accrued environmental remediation liabilities associated with it as of December 31, 2023 for comparable purposes.
The six sites listed above represent 83% of our total accrued environmental remediation liabilities at both December 31, 2024 and 2023, respectively.
For these six sites, we expect to spend, in the aggregate, $164 million over the next three years. For all other sites, we expect to spend $60 million
over the next three years.
Chambers Works, Deepwater, New Jersey (“Chambers Works”)
The Chambers Works complex is located on the eastern shore of the Delaware River in Deepwater, Salem County, New Jersey. The site comprises
the former Carneys Point Works in the northern area and the Chambers Works manufacturing area in the southern area. Site operations began in
1892 when the former Carneys Point smokeless gunpowder plant was constructed at the northern end of Carneys Point. Site operations began in the
manufacturing area around 1914 and included the manufacture of dyes, aromatics, elastomers, chlorofluorocarbons, and tetraethyl lead. We continue
to manufacture a variety of fluoropolymers and finished products at Chambers Works. In addition, two tenants operate processes at Chambers Works.
As a result of over 100 years of continuous industrial activity, site soils and groundwater have been impacted by chemical releases.
In response to identified groundwater contamination, a groundwater interceptor well system (“IWS”) was installed in 1970, which was designed to
contain contaminated groundwater and restrict off-site migration. Additional remediation is being completed under a federal RCRA Corrective Action
permit. The site has been studied extensively over the years, and more than 25 remedial actions have been completed to date and engineering and
institutional controls put in place to ensure protection of people and the environment. In 2017, a site perimeter sheet pile barrier intended to more
efficiently contain groundwater was completed.
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Remaining work beyond continued operation of the IWS and groundwater monitoring includes completion of various targeted studies on site and in
adjacent water bodies to close investigation data gaps, as well as selection and implementation of final remedies under RCRA Corrective Action for
various solid waste management units and areas of concern not yet addressed through interim measures. Discussions are ongoing with the U.S.
Environmental Protection Agency (the "EPA") and the New Jersey Department of Environmental Protection (the “NJ DEP”) relating to such remaining
work as well as the scope of remedial programs and investigation relating to the Chambers Works site historic industrial activity as well as ongoing
remedial programs, which could have a material adverse impact on our results of operations, financial position or cash flows for any given year.
Dordrecht Works, Dordrecht, Netherlands
The Dordrecht Works complex is located on the southern shore of River Beneden Merwede about 3 kilometers northeast of the city Dordrecht,
Netherlands. The facility encompasses 136 acres purchased by EID in 1959. The site is located in a mixed commercial and industrial area with
residential communities to the south and north across the river. Site operations began in the early 1960’s and included nylon, filaments, and
engineering polymers. Fluoropolymer manufacturing began in 1967. In July 2015, upon separation from EID, we became owner of the Dordrecht Works
complex.
The site has implemented a number of environmental investigations at the request of local (Netherlands) regulatory agencies. In the early 1980’s, the
first major environmental assessment of soil and groundwater at the site was conducted. In 1984, a sitewide groundwater containment system was
installed to prevent off-site migration and establish hydraulic protection to the deeper groundwater aquifer. Collected groundwater containing
chlorinated organics, PFOA and other PFAS compounds is treated using vapor and solid phase granular activated carbon. The pump and treat system
is monitored regularly to maintain effective containment and treatment operation with documentation of results submitted annually to the regulatory
agency.
As further discussed in “Note 22 – Commitments and Contingent Liabilities” to the Consolidated Financial Statements, the Company and the
municipalities of Dordrecht, Papendrecht, Sliedrecht and Molenlanden signed a Letter of Intent ("LOI") that includes the implementation of a specific
remediation plan for the restoration of restricted vegetables in certain areas of those municipalities to be funded by Chemours, sampling and developing
a program to address the Merwelanden recreational lake, and further settlement discussions. An estimate of this liability was included in Accrued
Litigation at December 31, 2023 and was reclassified to Accrued Environmental Remediation as of December 31, 2024 based on the remediation plan
to be implemented as part of the LOI.
In the fourth quarter of 2024, we received comments from the Municipality of Dordrecht and the Province of South Holland on a Plan of Action for
Vegetable Gardens ("Plan of Action") in the municipalities and approval for the pilot stage of the plan. The Plan of Action provides for replacement of
soil impacted with PFOA above certain levels to remove RIVM documented consumption restrictions as well as providing for alternative irrigation water,
if necessary, as determined by PFOA levels. Accruals related to the Plan of Action were increased $15 million in the fourth quarter of 2024 based on
the comments on the plan, approval of the pilot, the number of residences potentially participating and estimates received. Further, we are in continued
legal discussion with the four municipalities (Dordrecht, Papendrecht, Sliedrecht and Molenlanden) related to a fund to cover certain other expenditures
aimed at environmental-related activities. An estimate of the litigation liability cannot be determined as of December 31, 2024. Management believes
that it is probable that we could incur losses related to these PFAS matters in excess of amounts accrued, but any such losses, which could be material
to results of operations, financial position, or cash flows are not estimable at this time due to various reasons, including, among others, that some
matters are in their early stages and that there are significant factual issues to be resolved.
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The Dordrecht Works facility discharges, through outfalls at the site, wastewater and stormwater pursuant to permits issued by the applicable local
authorities, including the DCMR Environmental Protection Agency ("DCMR”). As the regulatory landscape has evolved in the Netherlands over the last
years, there is increased focus on PFAS compounds discharged under the site’s existing permits, including compounds that were previously discharged
at undetected levels, and the site has been ordered to meet certain limits for these discharges or be subject to conditional fines. We regularly carry out
analyses of its wastewater to assess compliance with current emission limits as well as detect other contaminants as analysis methods develop. We
identified the presence of certain compounds based upon new analysis methods and reported these to DCMR and in December 2023 submitted an
application under normal permitting practice for a discharge requirement based on limited information for these compounds. We have continued to
engage with regulatory authorities on the application, including providing additional data and information in November 2024. In January 2025, we
submitted a revised permit application. We will continue to engage with the regulatory authorities on this matter.
In December 2024, DCMR indicated an intention to impose a conditional fine of up to €3.7 million per violation for one of the compounds for which we
have objected. In January 2025, we responded to this intention, including that such intention is not consistent with normal permitting practice. In
February 2025, DCMR responded to us indicating it will impose the conditional fine, after a two-month grace period. We have taken and continue to
take actions to reduce discharges. We are evaluating DCMR's recent response and all available legal actions and recourse available to us. We have
not recorded a liability for this matter at December 31, 2024 as the conditional fine is not effective at this time and will only be imposed after the two-
month grace period, if, at that time, we fail to comply with the discharge limits for the compound. We do not believe the above matter will have a
material impact on our financial position, results of operation or cash flows.
In addition, in March 2022, the public prosecutor in The Netherlands has raised a matter related to an alleged infraction of Regulation (EU) 517/2014.
Due to a reporting error, our Dordrecht Works facility exceeded its allocated or transferred quota of hydrofluorocarbons within the European market
over several years. We implemented improvements to our reporting procedures and operated within the allocated quota. We paid a fine in the fourth
quarter of 2022. On October 31, 2024, we received a request from the Dutch ILT agency to amend our F-gas reporting for certain years to reflect HFCs
produced and consumed or destroyed at the Dordrecht Works facility. The agency asserts that under Regulation (EU) 2024/573, which repealed and
replaced Regulation 517/2014 in February 2024, such compounds are subject to the F-gas quota system. In November 2024, we made minor
amendments to its F-gas reporting for the above years and consulted with the Dutch ILT agency and EU Commission on the above. In February 2025,
the Company received an intention for the ILT to collect a penalty of €1 million based on the consideration that HFC-23 imported or acquired on the
market and added to the production process rather than directly sent for destruction is quota consuming. The Company is reviewing the ILT intention.
Based on available information, we do not believe the above matter will have a material impact on our financial position, results of operation or cash
flows.
Fayetteville Works, Fayetteville, North Carolina
Fayetteville is located southeast of the City of Fayetteville in Cumberland and Bladen counties, North Carolina. The facility encompasses approximately
2,200 acres, which were purchased by EID in 1970, and are bounded to the east by the Cape Fear River and to the west by North Carolina Highway
87. Currently, we manufacture fluorinated monomers, fluorinated vinyl ethers, NafionTM membranes and dispersions, and polymerization aids at the
site. A former manufacturing area, which was sold in 1992, produced nylon strapping and elastomeric tape. EID sold its Butacite® and SentryGlas®
manufacturing units to Kuraray America, Inc. in September 2014. In July 2015, upon our Separation from EID, we became the owner of the Fayetteville
land assets along with fluoromonomers, Nafion™ membranes, and the related polymerization aid manufacturing units. A polyvinyl fluoride resin
manufacturing unit remained with EID.
Beginning in 1996, several stages of site investigation were conducted under oversight by NC DEQ, as required by the facility's hazardous waste
permit. In addition, the site has voluntarily agreed to agency requests for additional investigations of the potential release of PFAS beginning with
“PFOA” (collectively, perfluorooctanoic acids and its salts, including the ammonium salt) in 2006. As a result of detection of GenX in on-site groundwater
wells during our investigations in 2017, NC DEQ issued a Notice of Violation (“NOV”) in September 2017 alleging violations of North Carolina water
quality statutes and requiring further response. Since that time, and in response to three additional NOVs issued by NC DEQ and pursuant to the
Consent Order ("CO"), (as discussed below), we have worked cooperatively with the agency to investigate and address releases of PFAS to on-site
and off-site groundwater and surface water.
As discussed in “Note 22 – Commitments and Contingent Liabilities” to the Consolidated Financial Statements, we, along with NC DEQ and Cape Fear
River Watch (“CFRW”), a non-profit organization, have filed a final CO that comprehensively addressed various issues, NOVs, and court filings made
by NC DEQ regarding Fayetteville and resolved litigations filed by NC DEQ and CFRW. In connection with the CO, a thermal oxidizer (“TO”) became
fully operational at the site in December 2019 to reduce aerial PFAS emissions from Fayetteville. The CO requires us to provide permanent replacement
drinking water supplies, via connection to public water supply, whole building filtration units and/or reverse osmosis units, to qualifying surrounding
residents, businesses, schools, and public buildings with private drinking water wells.
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In 2020, we, along with NC DEQ and CFRW, reached agreement on the terms of an addendum to the CO (the “Addendum”). The Addendum
establishes the procedure to implement specified remedial measures for reducing PFAS loadings from Fayetteville to the Cape Fear River, including
construction of a barrier wall with groundwater extraction system to be completed by March 15, 2023, or an extended date in accordance with the
Addendum. In June 2023, we completed the construction of the barrier wall with a groundwater extraction and treatment system in accordance with
the requirements under the CO. In October 2023, we submitted the engineer's certification confirming that the barrier wall was constructed and
documented to be in conformance with the accepted design.
Further discussion related to Fayetteville is included under the heading “Fayetteville Works, Fayetteville, North Carolina” in “Note 22 – Commitments
and Contingent Liabilities” to the Consolidated Financial Statements.
Pompton Lakes, New Jersey
During the 20th century, blasting caps, fuses, and related materials were manufactured at Pompton Lakes, Passaic County, New Jersey. Operating
activities at the site were ceased in the mid-1990s. The primary contaminants in the soil and sediments are lead and mercury. Groundwater
contaminants include volatile organic compounds. Under the authority of EPA and NJ DEP, remedial actions at the site are focused on investigating
and cleaning-up the area. Groundwater monitoring at the site is ongoing, and we have installed and continue to install vapor mitigation systems at
residences within the groundwater plume. In addition, we are further assessing groundwater conditions. In September 2015, EPA issued a modification
to the site’s RCRA permit that requires us to dredge mercury contamination from a 36-acre area of the lake and remove sediment from two other areas
of the lake near the shoreline. The remediation activities commenced when permits and implementation plans were approved in May 2016, and work
on the lake dredging project is now complete. In April 2019, we submitted a revised Corrective Measures Study (“CMS”) proposing actions to address
on-site soils impacted from past operations that exceed applicable clean-up criteria. We received comments on the CMS from EPA and NJ DEP in
March 2020, and we responded to their comments in June 2020 and continue to seek resolution with EPA.
U.S. Smelter and Lead Refinery, Inc., East Chicago, Indiana
The U.S. Smelter and Lead Refinery, Inc. (“USS Lead”) Superfund site is located in the Calumet neighborhood of East Chicago, Lake County, Indiana.
The site includes the former USS Lead facility along with nearby commercial, municipal, and residential areas. The primary compounds of interest are
lead and arsenic which may be found in soils within the impacted area. The EPA is directing and organizing remediation on this site, and we are one
of a number of parties working cooperatively with EPA on the safe and timely completion of this work. EID’s former East Chicago manufacturing facility
was located adjacent to the site, and EID assigned responsibility for the site to us in the Separation Agreement.
The USS Lead Superfund site was listed on the National Priorities List in 2009. To facilitate negotiations with PRPs, EPA divided the residential part
of the USS Lead Superfund site into three zones, referred to as Zone 1, Zone 2, and Zone 3. The division into three zones resulted in Atlantic Richfield
Co. (“Atlantic Richfield”) and EID entering into an agreement in 2014 with EPA and the State of Indiana to reimburse EPA’s costs to implement clean-
up in Zone 1 and Zone 3. In March 2017, we and three other parties – Atlantic Richfield, EID, and the U.S. Metals Refining Co. (“U.S. Metals”) –
entered into an administrative order on consent to reimburse EPA’s costs to clean-up a portion of Zone 2. In March 2018, EPA issued a Unilateral
Administrative Order for the remainder of the Zone 2 work to five parties, including us, Atlantic Richfield, EID, U.S. Metals, and USS Lead Muller Group,
and these parties entered into an interim allocation agreement to perform that work. As of the end of 2019, the required work in Zone 3 had been
completed, and Zone 2 was completed by the end of 2021. The determination of a final allocation for Zone 2 and/or the other Zones is ongoing, and
additional PRPs may be identified.
The environmental accrual for USS Lead includes completion of the remaining obligations under the 2012 Record of Decision (“ROD”) and Statement
of Work, which principally encompasses completion of Zone 1. The EPA released a proposed amendment to the 2012 ROD (the “ROD Amendment”)
for a portion of Zone 1 in December 2018 (following its August 2018 Feasibility Study Addendum), with its recommended option based on future
residential use. The EPA’s ROD Amendment for modified Zone 1 was released in March 2020, and selects as the preferred remedy one which requires
a clean-up to residential standards based on the current applicable residential zoning. The ROD Amendment for modified Zone 1 also sets forth a
selected contingent remedy which requires clean-up to commercial/industrial standards if the future land use becomes commercial/industrial. In
November 2019, a Letter of Intent was executed by the City of East Chicago, Indiana and Industrial Development Advantage, LLC ("IDA"), relating to
modified Zone 1 development, and EPA has indicated that it is “more likely” that future land use in this area will be commercial/industrial and not
residential.
In 2021, we resolved the claims asserted by EPA related to past indirect costs associated with the 2012 ROD as amended, and the 2014 agreement
entered into with EPA and the State of Indiana. In September 2022, EPA confirmed the selection of remedial actions for modified Zone 1 and provided
notice to all relevant parties, including IDA, to cause the agreements between EPA, DOJ, the State of Indiana, us and other PRPs to become effective.
We expect that our future costs relating to the USS Lead site will be contingent on implementation of these agreements, resolution of EPA’s costs as
well as any final allocation between PRPs.
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Washington Works, Parkersburg, West Virginia (“Washington Works”)
The Washington Works complex is located on the eastern shore of the Ohio River south of Parkersburg, West Virginia. The facility encompasses
approximately 400 acres, which were purchased by EID in the late 1940’s. Other nearby land parcels purchased by EID included Blennerhassett
Island, and three separate properties where West Virginia Department of Environmental Protection ("WV DEP") permitted landfills were operated. Site
operations began in 1948 and included the manufacture of nylon, filaments, and acrylics. In 1949, fluoropolymer manufacturing began, and in 1959,
polyoxymethylene production was started. Landfill operations occurred from the 1960’s through the early 2000’s when all three were closed according
to WV DEP approved closure plans. Beginning in 2014, EID no longer used PFOA as a polymerization aid to manufacture some fluoropolymer resins
at Washington Works.
In July 2015, upon our separation from EID, we became the owner of the Washington Works complex. The site has implemented environmental
investigations, including Verification Investigation in 1992 and RCRA Facility Investigation ("RFI") in 1999 pursuant to corrective action requirements
of its RCRA Part B and HSWA Permit under EPA and the West Virginia Department of Natural Resources oversight. The RFI was approved in 2012
and a CMS was completed in 2015 that recommended certain remedial actions, including capping of the former on-site landfill and ponds, which had
already been completed, sitewide groundwater hydraulic control, drinking water supply well treatment via granular activated carbon, and long-term
groundwater monitoring. These actions were memorialized in a RCRA final remedy implementation plan approved by the agencies in 2018 and
integrated into the updated RCRA permit in August 2020.
The remedial actions required by the RCRA final remedy implementation plan have been completed or are part of routine operations, maintenance
and monitoring. Landfill post closure care includes systems to treat surface water, leachate or groundwater, landfill cover or cap maintenance,
monitoring and reporting. Additionally, upgrades to the Local landfill cover are being developed. In December 2023, we entered into a voluntary
Administrative Order on Consent with EPA under RCRA 3012(a) requiring monitoring, testing, analysis and reporting to complete a more
comprehensive environmental assessment and site conceptual model of compounds found in soil and water at and around our manufacturing facility.
This agreement is not based on any allegations of non-compliance and it builds on the significant research Chemours and its predecessor have already
done to advance knowledge of older legacy compounds around the site. Accruals related to these remedial actions were $25 million and $22 million
as of December 31, 2024 and 2023, respectively.
Chemours Washington Works discharges, through outfalls at the site, wastewater and stormwater pursuant to a NPDES permit issued by the WV
DEP. In connection with actions being taken by us to comply with certain NPDES effluent limits, including for PFOA and hexafluoropropylene oxide
dimer acid, we submitted a permit modification to WV DEP relating to groundwater abatement for certain process water used at the facility, a
temperature reduction project and realigning discharge flows to certain outfalls. In July 2021, EPA provided a specific objection to the draft modification
based on Clean Water Act (“CWA”) regulations and requirements. In August 2021, WV DEP issued a National Pollutant Discharge Elimination System
("NPDES") permits modification to provide for the start-up of an abatement unit at the facility and to extend compliance dates for certain limits to
December 2021 due to delays from the COVID-19 pandemic. In September 2021, WV DEP issued a further NPDES modification, including for the
operation of an abatement unit from the site’s Ranney Well, and the site is taking additional actions to reduce PFAS discharges associated with wet
weather flows and continuing to assess future stormwater discharges and permitting. In April 2023, we agreed to an Administrative Order on Consent
("AOC") with EPA that includes additional sampling as well as a compliance analysis and implementation of actions to address PFOA and
hexafluoropropylene oxide dimer acid (“HFPO Dimer Acid”) discharge exceedances that occurred following the outfall limits for these compounds that
came into effect in January 2022. In August, 2023 we submitted an Alternatives Analysis and Implementation Plan ("AA&IP") consistent with the
Administrative Order on Consent. In December 2024, EPA issued comments on the AA&IP, accepting certain provisions and rejecting other provisions
of the plan. In December 2024, we submitted a revised NPDES permit application which includes abatement and other practices to substantially
address the discharge exceedances subject to the AOC. We expect to make future capital and other operating related expenditures at Washington
Works in connection with the AOC and permit application. Additionally, effective September 1, 2024, a separate NDPES permit allows discharge of
treated wastewater and non-contact cooling water from a new perfluoroalkoxy (PFA) processing line with an expiration date of July 2025 and allowing
or a one-year renewal. In December 2024, the West Virginia Rivers Coalition filed a complaint under the Clean Water Act in West Virginia federal court
alleging past and ongoing exceedances of certain effluent discharge limits, including those for PFOA and HFPO-DA, under the NPDES permit held by
the Chemours Washington Works facility.
Further, pursuant to an Order on Consent ("OC"), entered into by EID with EPA since 2006, we provide alternate drinking water supplies, via granular
activated carbon ("GAC") treatment or other approved supply, to residential well owners and local public drinking water systems near the Washington
Works complex whose PFOA concentration exceeds 70 parts per trillion. We also provide regular sampling and GAC change outs activities as per OC
requirements. Accruals related to this matter were $17 million and $16 million as of December 31, 2024 and 2023, respectively, and were included in
Accrued Litigation liability (see additional discussions under "Leach Settlement" in “Note 22 – Commitments and Contingent Liabilities” to the
Consolidated Financial Statements).
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New Jersey Department of Environmental Protection Directives and Litigation
In March 2019, NJ DEP issued two Directives, one being a state-wide PFAS Directive, and filed four lawsuits against us and other defendants, including
allegations relating to clean-up and removal costs at four sites including Chambers Works. In December 2021, a consolidated order was entered in
the lawsuits granting, in part, and denying, in part a motion to dismiss or strike parts of the Second Amended Complaints. In January 2022, NJ DEP
filed a motion for a preliminary injunction requiring EID and us to establish a remediation funding source (“RFS”) in the amount of $943 million for
Chambers Works, the majority of which is for non-PFAS remediation items. Further discussion related to these matters is included in “Note 22 –
Commitments and Contingent Liabilities” to the Consolidated Financial Statements.
PFOA
See our discussion under the heading “PFOA” in “Note 22 – Commitments and Contingent Liabilities” to the Consolidated Financial Statements.
GenX
In June 2019, the Member States Committee of the European Chemicals Agency (“ECHA”) voted to list HFPO Dimer Acid as a Substance of Very
High Concern. The vote was based on Article 57(f) – equivalent level of concern having probable serious effects to the environment. This identification
does not impose immediate regulatory restriction or obligations, but may lead to a future authorization or restriction of the substance. On September
24, 2019, we filed an application with the EU Court of Justice for the annulment of the decision of ECHA to list HFPO Dimer Acid as a Substance of
Very High Concern. In February 2022, the General Court dismissed the annulment action and we have appealed such decision. In November 2023,
the EU Court of Justice dismissed our appeal.
PFAS
Refer to our discussion under the heading "PFAS" in “Note 22 – Commitments and Contingent Liabilities” to the Consolidated Financial Statements.
In May 2020, ECHA announced that five Member States (Germany, the Netherlands, Norway, Sweden, and Denmark) launched a call for evidence to
inform a PFAS restriction proposal to restrict the manufacture, placing on the market and use of PFAS in the EU. In this regulatory process, more than
4,000 substances, including fluorinated-gases ("F-gases") and fluoropolymers are being considered as part of this broad regulatory action. Companies
producing or using PFAS, as well as selling mixture or products containing PFAS, were invited to provide input. This call for evidence closed July 31,
2020. Thousands of substances meet the definition of PFAS as outlined in the call for evidence. This very broad definition covers substances with a
variety of physical and chemical properties, health and environmental profiles, uses, and benefits. We submitted information on the substances covered
by the call for evidence to the Member State competent authority for Germany, which is the Federal Institute for Occupational Safety and Health
(“BAuA”). On July 15, 2021, the countries submitted their restriction proposal, which informs ECHA of the intent to prepare a PFAS restriction dossier
for fluorinated substances within a defined structural formula scope, including branched fluoroalkyl groups and substances containing ether linkages,
fluoropolymers and side chain fluorinated polymers. The restriction dossier was submitted to ECHA in January 2023, and in February 2023 ECHA
published a report and supporting annexes on the restriction proposal, which includes identified concerns for in-scope PFAS and their degradation
products and the proposed restriction of a full ban with certain use-specific time-limited derogation periods. Comments were submitted from individuals
and organizations during the consultation period in 2023 and the restriction dossier will be reviewed by the ECHA Risk Assessment Committee ("RAC")
and Socio-economic Analysis Committees (“SEAC”). RAC and SEAC will focus on the different sectors that may be affected and elements of the
proposal, and further meetings will be held in 2025. In November 2024, ECHA and the five European countries issued a progress update on the PFAS
restriction, indicating that alternative restriction options, besides a full ban or a ban with time-limited derogations, are being considered for uses
including, but not limited to: batteries; fuel cells; and electrolysers, and that fluoropolymers have high stakeholder interest considering availability of
alternatives for certain uses and potential socio-economic impacts of a ban. The five national authorities who prepared the proposal are also updating
their initial report to address the consultation comments, which will then be assessed by the ECHA committees. The estimated earliest entry into force
of restrictions is 2026, contingent upon timely completion of the remaining steps in the EU Registration, Evaluation, Authorization, and Restriction of
Chemicals (“REACH”) restriction process.
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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to changes in foreign currency exchange rates because of our global operations. As a result, we have assets, liabilities, and cash
flows denominated in a variety of foreign currencies. We also have variable rate indebtedness, which subjects us to interest rate risk. Additionally, we
are also exposed to changes in the prices of certain commodities that we use in production. Changes in these rates and commodity prices may have
an impact on our future cash flows and earnings. We manage these risks through our normal operating and financing activities and, when deemed
appropriate, through the use of derivative financial instruments. We do not enter into derivative financial instruments for trading or speculative purposes.
By using derivative financial instruments, we are subject to credit and market risk. The fair values of the derivative financial instruments are determined
by using valuation models whose inputs are derived using market observable inputs, and reflect the asset or liability position as of the end of each
reporting period. When the fair value of a derivative contract is positive, the counterparty owes us, thus creating a receivable risk for us. We are
exposed to counterparty credit risk in the event of non-performance by counterparties to our derivative agreements. We minimize counterparty credit
(or repayment) risk by entering into transactions with major financial institutions of investment grade credit ratings.
Our risk management programs and the underlying exposures are closely correlated, such that the potential loss in value for the risk management
portfolio described above would be largely offset by the changes in the value of the underlying exposures. Refer to “Note 26 – Financial Instruments”
to the Consolidated Financial Statements for further information.
Foreign Currency Risks
We enter into foreign currency forward contracts to minimize the volatility in our earnings related to foreign exchange gains and losses resulting from
remeasuring our monetary assets and liabilities that are denominated in non-functional currencies, and any gains and losses from the foreign currency
forward contracts are intended to be offset by any gains or losses from the remeasurement of the underlying monetary assets and liabilities. These
derivatives are stand-alone and, except as described below, have not been designated as a hedge. At December 31, 2024, we had 11 foreign currency
forward contracts outstanding with an aggregate gross notional U.S. dollar equivalent of $196 million, the fair value of which amounted to less than $1
million. At December 31, 2023, we had 12 foreign currency forward contracts outstanding with an aggregate gross notional U.S. dollar equivalent of
$252 million, the fair value of which amounted to less than negative $1 million. We recognized a net gain of $5 million, a net loss of $7 million and a
net gain of $2 million for the years ended December 31, 2024, 2023 and 2022, respectively, within other income, net related to our non-designated
foreign currency forward contracts.
We enter into certain qualifying foreign currency forward contracts under a cash flow hedge program to mitigate the risks associated with fluctuations
in the euro against the U.S. dollar for forecasted U.S. dollar-denominated inventory purchases in certain of our international subsidiaries that use the
euro as their functional currency. At December 31, 2024, we had 173 foreign currency forward contracts outstanding under our cash flow hedge
program with an aggregate notional U.S. dollar equivalent of $178 million, the fair value of which amounted to $7 million. At December 31, 2023, we
had 176 foreign currency forward contracts outstanding under our cash flow hedge program with an aggregate notional U.S. dollar equivalent of $203
million, the fair value of which amounted to negative $2 million. We recognized a pre-tax gain of $7 million, a pre-tax loss of $2 million, and a pre-tax
gain of $17 million for the years ended December 31, 2024, 2023, and 2022, respectively, within accumulated other comprehensive loss. For the years
ended December 31, 2024, 2023 and 2022, $1 million, $5 million and $19 million of gain was reclassified to the cost of goods sold from accumulated
other comprehensive loss, respectively.
We designated our euro-denominated debt as a hedge of our net investment in certain of our international subsidiaries that use the euro as their
functional currency in order to reduce the volatility in stockholders’ equity caused by changes in foreign currency exchange rates of the euro with
respect to the U.S. dollar. We recognized a pre-tax gain of $47 million, a pre-tax loss $27 million, and pre-tax gain of $53 million for the years ended
December 31, 2024, 2023 and 2022, respectively, on our net investment hedge within accumulated other comprehensive loss.
Concurrently with the offering of the senior unsecured notes due January 2033, we entered into a cross-currency swap to effectively convert $600
million of the senior unsecured notes due January 2033 into a euro-denominated borrowing of €567 million at prevailing euro interest rates, the fair
value of which amounted to $5 million at December 31, 2024. The foreign currency swap qualifies and has been designated as a net investment hedge
of our foreign currency exchange rate exposure of the net investments of certain of our euro-denominated subsidiaries. We recognized pre-tax gain of
$5 million for the year ended December 31, 2024 on its cross-currency swap within accumulated other comprehensive loss. No amount was reclassified
from accumulated other comprehensive loss for our cross-currency swap for the year ended December 31, 2024.
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Interest Rate Risk
We entered into interest rate swaps, to mitigate the volatility in our cash payments for interest due to fluctuations in the Secured Overnight Financing
Rate ("SOFR"), as is applicable to the portion of our senior secured term loan facility denominated in U.S. dollars. At December 31, 2024, we had two
interest rate swaps outstanding under our cash flow hedge program with an aggregate notional U.S. dollar equivalent of $300 million, the fair value of
which amounted to negative $3 million. At December 31, 2023, we had two interest rate swaps outstanding under our cash flow hedge program with
an aggregate notional U.S. dollar equivalent of $300 million, the fair value of which amounted to negative $7 million. We recognized a pre-tax gain of
$9 million, a pre-tax loss of $6 million, and a pre-tax gain of $8 million for the years ended December 31, 2024, 2023 and 2022 within accumulated
other comprehensive loss, respectively. For the years ended December 31, 2024, 2023 and 2022, $1 million, $4 million and $5 million of gain was
reclassified to interest expense, net from accumulated other comprehensive loss, respectively.
Concentration of Credit Risk
Our sales are not materially dependent on any single customer. At December 31, 2024, one individual customer balance represented approximately
7% of our total outstanding accounts and notes receivable balance. At December 31, 2023, no one individual customer balance represented more
than 5% of our total outstanding accounts and notes receivable balance. Any credit risk associated with our accounts and notes receivable balance is
representative of the geographic, industry, and customer diversity associated with our global businesses. As a result of our customer base being widely
dispersed, we do not believe our exposure to credit-related losses related to our business as of December 31, 2024 and 2023 was material.
We also maintain strong credit controls in evaluating and granting customer credit. As a result, we may require that customers provide some type of
financial guarantee in certain circumstances. The length of terms for customer credit varies by industry and region.
Commodities Risk
A portion of our products and raw materials are commodities whose prices fluctuate as market supply and demand fundamentals change. Accordingly,
product margins and the level of our profitability tend to fluctuate with changes in the business cycle. We try to protect against such instability through
various business strategies. These include provisions in sales contracts allowing us to pass on higher raw materials costs through timely price increases
and formula price contracts to transfer or share commodity price risk. We did not have any commodity derivative financial instruments in place as of
December 31, 2024 and 2023.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data required by this Item 8 – Financial Statements and Supplementary Data is incorporated by reference
herein as set forth in Item 15(a)(1) – Consolidated Financial Statements.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
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Item 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to provide reasonable assurance that the information required to be disclosed in our reports
filed or submitted under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized, and reported
within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission ("SEC"). These controls and procedures also
provide reasonable assurance that information required to be disclosed in such reports is accumulated and communicated to management, including
our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), to allow timely decisions regarding required disclosures.
Our CEO and CFO, together with management, conducted an evaluation of the effectiveness of our disclosure controls and procedures as defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, the CEO and CFO have concluded that these disclosure controls
and procedures are effective at the reasonable assurance level as of December 31, 2024.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-
15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:
(i)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the Company;
(ii)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance
with authorization of management and directors of the Company; and,
(iii)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, uses, or dispositions of the
Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 using the criteria set
forth in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(“COSO Framework”).
Management completed an evaluation of our internal control over financial reporting and concluded that our internal control over financial reporting
was effective as of December 31, 2024.
The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by PricewaterhouseCoopers LLP, an
independent registered public accounting firm, as stated in their report which appears in Part IV, Item 15 of this Annual Report on Form 10-K starting
on page F-2.
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Previously Identified Material Weaknesses
Management previously disclosed in our 2023 Annual Report and our Quarterly Reports in 2024 the following control deficiencies that constituted
material weaknesses in our internal control over financial reporting:
We did not design and maintain an effective control environment as senior management failed to set an appropriate tone at the top resulting in a
material weakness. Specifically, among other things, there was a lack of transparency with the Company’s board of directors by former senior
management regarding efforts to delay payments to certain vendors and to accelerate the collection of receivables, and that these individuals engaged
in these efforts in part to meet free cash flow targets that the Company had communicated publicly, and which also would be a part of a key metric for
determining incentive compensation applicable to both executive officers and to employees. As a result, it was concluded that former senior
management violated the Company’s “Code of Ethics applicable to the Chief Executive Officer, the Chief Financial Officer, and the Controller”. The
ineffective control environment contributed to the following additional material weaknesses.
We did not design and maintain effective controls related to the information and communication component of the COSO Framework, and principles
of internally communicating information, including objectives and responsibilities for internal control, necessary to support the functioning of internal
control. Specifically, the Company did not design and maintain effective controls to ensure appropriate communication between certain functions within
the Company, including (i) the identification and communication of certain contractual arrangements and (ii) communication of business developments
which impact key assumptions used in the goodwill impairment assessment. This material weakness related to information and communication
contributed to an additional material weakness in that we did not design and maintain effective controls regarding the evaluation and escalation of
reports made through the Chemours Ethics Hotline, including controls regarding the escalation of certain reports to the General Counsel and Chair of
the Audit Committee.
Additionally, we did not design and maintain effective controls to prevent or timely detect unauthorized changes to our vendor master files in order to
prevent unauthorized cash disbursements.
Remediation of Previously Identified Material Weaknesses
We established a Project Management Office (“PMO”) to monitor progress towards remediation and also engaged external legal, accounting, financial
and other consulting, and professional services firms to assist senior management in the development and execution of a comprehensive remediation
program. Management developed a comprehensive workplan for remediation of the material weaknesses, described in the detail below.
As previously disclosed in Item 4 of the Company’s Form 10-Q as of September 30, 2024, the Company implemented remediation measures and had
sufficient time to test the operating effectiveness and remediated the material weaknesses identified in the Company’s internal control over financial
reporting related to ethics and compliance reporting and vendor master files.
Material Weaknesses Remediated as of December 31, 2024:
Tone at the Top
With respect to designing and maintaining effective controls related to setting an appropriate tone at the top, as a result of the findings of the Audit
Committee’s Internal Review, the Company reassessed and redesigned certain elements of its processes and procedures and has taken certain
actions in the following areas: executive leadership actions and removal; enhancement of tone at the top; enterprise-wide values articulation and
training reinforcement; and Board of Directors involvement/initiatives. On February 28, 2024, our board of directors placed former President and Chief
Executive Officer, former Senior Vice President and Chief Financial Officer and Vice President, Controller and Principal Accounting Officer on
administrative leave. On February 28, 2024, our board of directors appointed Denise Dignam as Interim Chief Executive Officer and Matthew Abbott
as Interim Chief Financial Officer (principal financial and accounting officer), and subsequently appointed Denise Dignam as President and Chief
Executive Officer on March 22, 2024. On June 5, 2024, the Company announced it had appointed Shane Hostetter as Chief Financial Officer (principal
financial and accounting officer), effective July 1, 2024. On July 25, 2024, the Company announced it had appointed David Will as Chief Accounting
Officer and Controller (principal accounting officer), effective August 12, 2024. Additionally, the Company made other new appointments to senior
management to set an appropriate tone at the top environment.
During 2024, senior leadership has held multiple all employee meetings, including holding global town halls immediately following the issuance of the
Company's 2023 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Additionally, senior leadership has disseminated company-wide
and team-specific communications to explain the material weaknesses, extract key learnings for leaders, and emphasize our commitment to our core
values, specifically integrity. During 2024, the Company executed a refresh of our corporate values and continued to disseminate company-wide and
team-specific communications to emphasize our commitment to our core values. The Company adopted a working capital policy, which included
quarterly reporting to the Audit Committee of the Board of Directors on present working capital strategies and the results of those strategies.
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During the quarter ended March 31, 2024, the Company provided updated training on internal control over financial reporting and requirements under
the Sarbanes-Oxley Act of 2002, including training courses on applicable federal securities laws for senior management, and training courses on ethics
for finance professionals. The Company completed a company-wide ethics & compliance survey to inform us of our continued efforts in advancing our
culture of ethics and compliance. Further, during the quarter ended September 30, 2024, the Company reinforced its expectation of ethical business
practices via the annual, company-wide ethics & compliance training to educate executives and employees on our code of conduct, certify compliance,
and outline the specific behaviors expected to fulfill our integrity core value. Additionally, the Compensation Committee has revised key metrics used
in the determination of executive and employees' incentive compensation starting in 2024, to move away from working capital metrics and to use
updated cash flow metrics to include average monthly outcomes over the performance period rather than being measured at a fiscal year end.
During the quarter ended December 31, 2024, the Company monitored the effectiveness of the efforts taken related to tone at the top during the year
through periodic pulse surveys to the organization.
Through the efforts described above, the Company was able to implement its plan during 2024 to remediate the previously identified material weakness
related to tone at the top and determine that the tone at the top was operating effectively as of December 31, 2024.
Information and Communication
With respect to designing and maintaining effective controls related to the information and communication component of the COSO Framework, the
Company has enhanced its policies, procedures, workflows, and training as it relates to the controls over information and communication sharing, in
addition to the broader based tone at the top enhancements discussed above. The Company enhanced our controls, policies, procedures, and training
as it relates to timely and accurate communication and information sharing across multiple functions and the Controller’s organization, including
enhancing key controls concerning information communicated and used in determining the accounting for significant transactions, contracting, and
business developments which impact key assumptions used in the goodwill impairment assessment.
The Company provided additional training for employees and members of management, specifically in accounting, finance, business units and legal,
to ensure that relevant information is appropriately communicated to personnel involved in the preparation of our consolidated financial statements or
related disclosures. Additionally, trainings were conducted for employees regarding the importance of the Company establishing and maintaining
effective internal control over financial reporting and disclosure controls and procedures, for information to be appropriately communicated to all
relevant personnel involved in the preparation of our financial statements and disclosures.
During the quarter ended March 31, 2024, the Company enhanced our internal management representation letter process which serves as a
mechanism for internal information sharing and supports, in part, our CEO’s and CFO’s certifications and accuracy of our financial statements. The
Company has also provided mandatory training to respondents to facilitate the receipt of complete and accurate information. The Company enhanced
our Disclosure Committee process to include further representation on the Committee across the organization and increase the frequency of Disclosure
Committee meetings.
Additionally, the Company enhanced our policies and protocols related to working capital management practices, including enhancing our
communication of working capital management practices to our board of directors. The Company also enhanced our process around the verification
of physical assets including enhancing communication of changes in the existence, operating status or impairment assessment of physical assets.
As of December 31, 2024, the remediation measures described above have been implemented and we have had sufficient time to validate the operating
effectiveness and remediate the material weakness noted above and, as such, the material weakness identified in the Company’s internal control over
financial reporting related to information and communication has been remediated.
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Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2024 that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. OTHER INFORMATION
None of the Company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading
arrangement during the Company's fiscal quarter ended December 31, 2024.
Item 9C. DISCLOSURE REGARDING FOREIGN JURSIDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Except for information concerning executive officers, which is included in Part I of this Annual Report on Form 10-K under the caption “Information
About Our Executive Officers”, the information about our directors required by this Item 10 – Directors, Executive Officers, and Corporate Governance
is contained under the caption “Proposal 1 – Election of Directors” in the 2025 Proxy Statement, which we anticipate filing with the SEC within 120
days after the end of the fiscal year to which this report relates, and is incorporated herein by reference.
Information regarding our Audit Committee and our code of ethics is contained in the 2025 Proxy Statement under the captions “Corporate Governance”
and “Board Structure and Committee Composition” and is incorporated herein by reference.
We have adopted an insider trading policy that governs the purchase, sale, and/or other transactions of our securities by our directors, officers and
employees and the Company itself. A copy of our insider trading policy is filed as Exhibit 19 to this Annual Report on Form 10-K.
Item 11. EXECUTIVE COMPENSATION
The information required by this Item 11 – Executive Compensation is contained in the 2025 Proxy Statement under the captions “Executive
Compensation”, “Director Compensation”, and “Compensation and Leadership Development Committee” and is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters and
not otherwise set forth below is contained in the 2025 Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and
Management” and is incorporated herein by reference.
Securities authorized for issuance under equity compensation plans
(Shares in thousands)
December 31, 2024
Plan Category
Number of Securities to be
Issued Upon Exercise of
Outstanding Options,
Warrants, and Rights
(1)
Weighted-average Exercise
Price of Outstanding Options,
Warrants, and Rights
(2)
Number of Securities
Remaining Available for Future
Issuance Under Equity
Compensation Plans
(3)
Equity compensation plans approved by security holders
4,480
$
26.79
9,500
(1)
Includes the approximate number of outstanding stock options, restricted stock units (“RSUs”), performance share units (“PSUs”), and performance stock options ("PSOs").
(2)
Represents the weighted-average exercise price of outstanding stock options and PSOs only. RSUs and PSUs do not have associated exercise prices.
(3)
Reflects the approximate shares available for issuance pursuant to The Chemours Company 2017 Equity and Incentive Plan (the “Equity Plan”), which was approved by our
stockholders in 2017 and replaces The Chemours Company Equity and Incentive Plan. On April 28, 2021, stockholders approved an amendment and restatements of the
Equity Plan to increase the number of shares reserved for issuance by 3,050,000. Following the amendment and restatement, the maximum number of shares of stock reserved
for the grant or settlement of awards under the Equity Plan is 22,050,000.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this Item 13 – Certain Relationships and Related Transactions, and Director Independence is contained in the 2025 Proxy
Statement under the captions “Director Independence” and “Certain Relationships and Transactions” and is incorporated herein by reference.
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this Item 14 – Principal Accounting Fees and Services is contained in the 2025 Proxy Statement under the captions
“Proposal 3 – Ratification of Selection of Independent Registered Public Accounting Firm”, “Fees Paid to Independent Registered Public Accounting
Firm”, and “Audit Committee’s Pre-Approval Policies and Procedures” and is incorporated herein by reference.
The Chemours Company
81
PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1) Consolidated Financial Statements
Refer to the “Index to the Consolidated Financial Statements” commencing on page F-1 of this Annual Report on Form 10-K.
The report of our independent registered public accounting firm with respect to the above-referenced financial statements and their report on internal
control over financial reporting is included on page F-2. Their consent appears as Exhibit 23 of this Form 10-K.
(a)(2) Financial Statement Schedule
Schedules not listed herein have been omitted because they are not required, not applicable, or the required information is otherwise included in the
consolidated financial statements or notes thereto.
(a)(3) Exhibits
Refer to the “Exhibit Index” beginning on page 82 of this Annual Report on Form 10-K.
Item 16. FORM 10-K SUMMARY
None.
The Chemours Company
82
EXHIBIT INDEX
Exhibit
Number
Description
2.1
Separation Agreement by and between E. I. du Pont de Nemours and Company and the Chemours Company (incorporated by reference to Exhibit 2 to the Company’s Current
Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on July 1, 2015).
2.1(1)
Amendment No. 1, dated August 24, 2017, to the Separation Agreement, dated as of July 1, 2015, by and between E. I. du Pont de Nemours and Company and The Chemours
Company (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on August 25,
2017).
2.2
Purchase and Sale Agreement, dated as of July 26, 2021, by and between The Chemours Company and Manchester Acquisition Sub LLC (incorporated by reference to
Exhibit 2.1 to the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on July 26, 2021).
3.1
Company’s Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, as filed with the U.S.
Securities and Exchange Commission on July 1, 2015).
3.2
Company’s Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and
Exchange Commission on July 1, 2015).
4.1
Indenture (for senior debt securities), dated as of May 23, 2017, by and between The Chemours Company and U.S. Bank National Association, as trustee (incorporated by
reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 23, 2017).
4.1(1)
First Supplemental Indenture, dated as of May 23, 2017, by and among The Chemours Company, the guarantors named therein and U.S. Bank National Association, as
trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 23, 2017).
4.1(2)
Second Supplemental Indenture, dated as of June 6, 2018, among The Chemours Company, the Guarantors named therein, U.S. Bank National Association, as trustee,
Elavon Financial Services DAC, UK Branch, as paying agent, and Elavon Financial Services DAC, as registrar and transfer agent (incorporated by reference to Exhibit 4.1 to
the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on June 6, 2018).
4.1(3)
Specimen 5.375% Senior Note due 2027 (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange
Commission on May 23, 2017).
4.1(4)
Specimen 4.000% Senior Note Due 2026 (included in Exhibit 4.2(2)).
4.2
Indenture, dated as of November 27, 2020, between The Chemours Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to
the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on November 27, 2020).
4.2(1)
First Supplemental Indenture, dated as of November 27, 2020, among The Chemours Company, the guarantors named therein, and U.S. Bank National Association, as
trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on November
27, 2020).
4.2(2)
Second Supplemental Indenture, dated as of August 18, 2021, among The Chemours Company, the guarantors party thereto and U.S. Bank National Association, as trustee
(incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on August 18, 2021).
4.2(3)
Third Supplemental Indenture, dated as of November 27, 2024, among The Chemours Company, the guarantors party thereto and Deutsche Bank Trust Company
Americas, as trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on
November 27, 2024).
4.2(4)
Specimen 5.750% Senior Notes Due 2028 (included in Exhibit 4.2(1)).
4.2(5)
Specimen 4.625% Senior Notes Due 2029 (included in Exhibit 4.2(2)).
4.2(6)
Specimen 8.000% Senior Notes Due 2033 (included in Exhibit 4.2(3)).
4.2(7)
Instrument of Resignation, Appointment and Acceptance, dated as of August 1, 2022, between the Chemours Company, U.S. Bank National Association, as Retiring
Trustee, and Deutsche Bank Trust Company Americas, as Successor Trustee (incorporated by reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q, as
filed with the U.S. Securities and Exchange Commission on October 26, 2022).
4.3
Description of common stock (incorporated by reference to Exhibit 4.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019).
10.1
Second Amended and Restated Transition Services Agreement by and between E. I. du Pont de Nemours and Company and The Chemours Company (incorporated by
reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on July 1, 2015).
10.2
Tax Matters Agreement by and between E. I. du Pont de Nemours and Company and The Chemours Company (incorporated by reference to Exhibit 10.2 to the Company’s
Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on July 1, 2015).
10.3
Employee Matters Agreement by and between E. I. du Pont de Nemours and Company and The Chemours Company (incorporated by reference to Exhibit 10.3 to the
Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on July 1, 2015).
10.4
Third Amended and Restated Intellectual Property Cross-License Agreement by and among E. I. du Pont de Nemours and Company, The Chemours Company FC and The
Chemours Company TT, LLC (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange
Commission on July 1, 2015).
10.14
Amendment and Restatement Agreement, dated as of August 18, 2023, among The Chemours Company, the Lenders and Issuing Banks party thereto and JPMorgan Chase
Bank, N.A., as Administrative Agent. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange
Commission on August 23, 2023).
10.15
Amendment No. 1, dated as of November 29, 2024, among The Chemours Company, the other Loan Parties, and the Lenders party thereto and JPMorgan Chase Bank, N.A.,
as Administrative Agent, to the Second Amended and Restated Credit Agreement dated as of August 18, 2023.
10.16
Amendment No. 2, dated as of December 13, 2024, among The Chemours Company, the other Loan Parties, and the Lenders party thereto and JPMorgan Chase Bank, N.A.,
as Administrative Agent, to the Second Amended and Restated Credit Agreement dated as of August 18, 2023.
The Chemours Company
83
Exhibit
Number
Description
10.17*
The Chemours Company Equity and Incentive Plan (incorporated by reference to Exhibit 4.1 to the Company’s Form S-8 (File No. 333-205391, as filed with the U.S. Securities
and Exchange Commission on July 1, 2015).
10.18*
The Chemours Company Retirement Savings Restoration Plan (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K, as filed with the U.S.
Securities and Exchange Commission on July 1, 2015).
10.19*
The Chemours Company Management Deferred Compensation Plan (incorporated by reference to Exhibit 4.1 to the Company’s Form S-8 (File No. 333-205393), as filed with
the U.S. Securities and Exchange Commission on July 1, 2015).
10.20(1)*
The Chemours Company Stock Accumulation and Deferred Compensation Plan for Directors (incorporated by reference to Exhibit 4.1 to the Company’s Form S-8 (File No.
333-205392), as filed with the U.S. Securities and Exchange Commission on July 1, 2015).
10.20(2)*
The Chemours Company Stock Accumulation and Deferred Compensation Plan for Directors (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on
Form 10-Q, as filed with the U.S. Securities and Exchange Commission on May 4, 2018).
10.21*
The Chemours Company Senior Executive Severance Plan (incorporated by reference to Exhibit 10.20 to the company’s Amendment No. 3 to Form 10, as filed with the U.S.
Securities and Exchange Commission on May 13, 2015).
10.22*
Form of Option Award Terms under the Company’s Equity and Incentive Plan (incorporated by reference to Exhibit 10.21 to the company’s Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2015).
10.23*
Form of Restricted Stock Unit Terms under the Company’s Equity and Incentive Plan (incorporated by reference to Exhibit 10.22 to the company’s Quarterly Report on Form
10-Q for the quarterly period ended June 30, 2015).
10.24*
Form of Stock Appreciation Right Terms under the Company’s Equity and Incentive Plan (incorporated by reference to Exhibit 10.23 to the company’s Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 2015).
10.25(1)*
Form of Restricted Stock Unit Terms for Non-Employee Directors under the Company’s Equity Incentive Plan (incorporated by reference to Exhibit 10.24 to the company’s
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015).
10.25(2)*
Form of Deferred Stock Unit Terms for Non-Employee Directors under the Company’s Equity and Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s
Quarterly Report on Form 10-Q, as filed with the U.S. Securities and Exchange Commission on May 4, 2018).
10.26*
Form of Performance-Based Restricted Stock Unit Terms for August 2015 (incorporated by reference to Exhibit 10.25 to the company’s Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 2015).
10.27*
Form of Performance Share Unit Award Terms under the Company’s Equity and Incentive Plan (incorporated by reference to Exhibit 10.26 to the company’s Annual Report
on Form 10-K for the year ended December 31, 2015).
10.28*
Form of Cash Performance Award Terms under the Company’s Equity and Incentive Plan (incorporated by reference to Exhibit 10.27 to the company’s Annual Report on
Form 10-K for the year ended December 31, 2015).
10.29*
Form of Indemnification Agreement for officers and directors (incorporated by reference to Exhibit 10.28 to the company’s Annual Report on Form 10-K for the year ended
December 31, 2015).
10.30
Letter Agreement dated January 28, 2016 by and between The Chemours Company and E. I. du Pont de Nemours and Company (incorporated by reference to Item 10.2 to
the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on February 23, 2016).
10.31*
Form of Option Award Terms under the Company’s Equity Incentive Plan for grantees located in the U.S. (incorporated by reference to Exhibit 10.31 to the Company’s Annual
Report on Form 10-K for the year ended December 31, 2016).
10.32*
Form of Option Award Terms under the Company’s Equity Incentive Plan for grantees located outside the U.S. (incorporated by reference to Exhibit 10.32 to the Company’s
Annual Report on Form 10-K for the year ended December 31, 2016).
10.33*
Form of Award Terms of Time-Vested Restricted Stock Units under the Company’s Equity Incentive Plan for grantees located in the U.S. (incorporated by reference to Exhibit
10.33 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016).
10.34*
Form of Award Terms of Time-Vested Restricted Stock Units under the Company’s Equity Incentive Plan for grantees located outside the U.S. (incorporated by reference to
Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016).
10.35*
Form of Award Terms of Performance Share Units under the Company’s Equity Incentive Plan (incorporated by reference to Exhibit 10.35 to the Company’s Annual Report
on Form 10-K for the year ended December 31, 2016).
10.36*
The Chemours Company 2017 Equity and Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the U.S.
Securities and Exchange Commission on May 1, 2017).
10.37
Memorandum of Understanding, dated January 22, 2021, by and among The Chemours Company, Corteva, Inc., E. I. du Pont de Nemours and Company and DuPont de
Nemours, Inc. (f/k/a DowDuPont Inc.) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange
Commission on January 22, 2021).
10.38*
Separation Agreement and Release between E. Bryan Snell and the Company effective March 1, 2021, dated March 1, 2021 (incorporated by reference in Exhibit 10.1 to the
Company’s Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on March 2, 2021).
10.39*
Employment Transition Agreement between Mark Vergnano and the Company, dated as of June 2, 2021 (incorporated by reference to Exhibit 10.1 to the Company’s Current
Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on June 3, 2021).
10.40
Settlement Agreement, Limited Release, Waiver and Covenant Not to Sue, dated July 13, 2021, by and among The Chemours Company, Corteva, Inc., E.I. du Pont De
Nemours and Company, DuPont de Nemours, Inc, and the State of Delaware (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as
filed with the U.S. Securities and Exchange Commission on July 13, 2021).
The Chemours Company
84
Exhibit
Number
Description
10.41(1)*
Special Employment and Separation Agreement and Release between David C. Shelton and the Company, dated as of August 19, 2022 (incorporated by reference to Exhibit
10.1 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on August 19, 2022).
10.41(2)*
Amendment to the Special Employment and Separation Agreement and Release between David C. Shelton and the Company, dated as of December 19, 2023. (incorporated
by reference to Exhibit 10.41(2) to the Company's Annual Report on Form 10-K for the year ended December 31, 2023).
10.42
Settlement Agreement, dated June 30 2023, by and among The Chemours Company, The Chemours Company FC, LLC, DuPont de Nemours, Inc., Corteva Inc. and E. I. du
Pont de Nemours and Company n/k/a EIDP, Inc. and representatives of certain U.S. public water systems as set out therein (incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on June 30, 2023).
10.43*
Special Employment and Separation Agreement and Release between Susan Kelliher and the Company, dated as of September 25, 2023 (incorporated by reference to Exhibit
10.43 to the Company's Annual Report on Form 10-K for the year ended December 31, 2023).
10.44*
Separation and Release Agreement, dated as of March 22, 2024, by and between The Chemours Company and Mark E. Newman (incorporated by reference to Exhibit 10.1
to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on March 25, 2024).
10.45*
Separation and Release Agreement, dated as of April 23, 2024, by and between The Chemours Company and Jonathan S. Lock (incorporated by reference to Exhibit 10.1 to
the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on April 25, 2024).
19
Insider Trading Policy
21
Subsidiaries of the Registrant.
22
List of Guarantor Subsidiaries.
23
Consent of Independent Registered Public Accounting Firm.
31.1
Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Executive Officer.
31.2
Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Financial Officer.
32.1
Section 1350 Certification of the Company’s Principal Executive Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange
Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
32.2
Section 1350 Certification of the Company’s Principal Financial Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange
Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
95
Mine Safety Disclosures.
97
Incentive-Based Compensation Clawback Policy for Executive Officers (incorporated by reference to Exhibit 97 to the Company's Annual Report on Form 10-K for the year
ended December 31, 2023).
101.INS
XBRL Instance Document.
101.SCH
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.
104
The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which has been formatted in Inline XBRL and included within Exhibit
101.
* Management contract or compensatory plan or arrangement.
The Chemours Company
85
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
THE CHEMOURS COMPANY
(Registrant)
Date:
February 18, 2025
By:
/s/ Shane Hostetter
Shane Hostetter
Senior Vice President, Chief Financial Officer
(As Duly Authorized Officer and Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated:
Signature
Title(s)
Date
/s/ Denise Dignam
President, Chief Executive Officer, and Director
February 18, 2025
Denise Dignam
(Principal Executive Officer)
/s/ Shane Hostetter
Senior Vice President, Chief Financial Officer
February 18, 2025
Shane Hostetter
(Principal Financial Officer)
/s/ David Will
Vice President and Controller
February 18, 2025
David Will
(Principal Accounting Officer)
/s/ Dawn L. Farrell
Chairperson of the Board
February 18, 2025
Dawn L. Farrell
/s/ Curtis V. Anastasio
Director
February 18, 2025
Curtis V. Anastasio
/s/ Alister Cowan
Director
February 18, 2025
Alister Cowan
/s/ Mary B. Cranston
Director
February 18, 2025
Mary B. Cranston
/s/ Pamela Fletcher
Director
February 18, 2025
Pamela Fletcher
/s/ Erin N. Kane
Director
February 18, 2025
Erin N. Kane
/s/ Joseph D. Kava
Director
February 18, 2025
Joseph D. Kava
/s/ Sean D. Keohane
Director
February 18, 2025
Sean D. Keohane
/s/ Guillaume Pepy
Director
February 18, 2025
Guillaume Pepy
/s/ Livingston Satterthwaite
Director
February 18, 2025
Livingston Satterthwaite
F-1
The Chemours Company
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 238)
F-2
Consolidated Statements of Operations for the years ended December 31, 2024, 2023, and 2022
F-5
Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2024, 2023, and 2022
F-6
Consolidated Balance Sheets at December 31, 2024 and 2023
F-7
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, 2023, and 2022
F-8
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023, and 2022
F-9
Notes to the Consolidated Financial Statements
F-10
F-2
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of The Chemours Company
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of The Chemours Company and its subsidiaries (the “Company”) as of December
31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive (loss) income, of stockholders' equity and of cash flows
for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial
statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as
of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31,
2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control -
Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial
reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control
over Financial Reporting appearing under Item 9A.Our responsibility is to express opinions on the Company’s consolidated financial statements and
on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and
whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated
financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on
a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our
audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s
internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have
a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
F-3
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were
communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated
financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters
below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Evaluation of Per- and Polyfluoroalkyl Substances (PFAS) Environmental Remediation Liabilities
As described in Notes 3 and 22 to the consolidated financial statements, the Company’s environmental remediation liabilities for future environmental
expenditures were $571 million as of December 31, 2024, the majority of which related to PFAS matters. Management accrues for environmental
remediation matters when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Where the
available information is only sufficient to establish a range of probable liability, and no point within the range is more likely than any other, the lower
end of the range has been used. Estimated liabilities are determined based on existing remediation laws and technologies and the Company’s
estimated cost to perform the planned remedial response and the time period over which remediation activities will occur, which are derived from
environmental studies, sampling, testing, and analyses. From time to time, management may engage third parties (“management’s specialists”) to
assist in obtaining and/or evaluating relevant data and assumptions when estimating the Company’s remediation liabilities. The liabilities, which are
undiscounted, are adjusted periodically as remediation efforts progress and as additional technological, regulatory, and legal information becomes
available. Costs related to environmental remediation are charged to expense in the period that the associated liability is accrued and are reflected as
a component of the cost of goods sold for on-site remediation costs or as a component of selling, general, and administrative expense for off-site
remediation costs. Other environmental costs are also charged to expense in the period incurred, unless they extend the useful life of the property,
increase the property’s capacity, and/or reduce or prevent contamination from future operations, in which case they are capitalized and amortized.
The principal considerations for our determination that performing procedures relating to PFAS environmental remediation liabilities is a critical audit
matter are (i) the significant judgment by management, including the use of management’s specialists, in estimating the environmental remediation
liabilities; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions
related to estimated cost to perform the planned remedial response and the time period over which remediation activities will occur; and (iii) the audit
effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated
financial statements. These procedures included testing the effectiveness of controls relating to management’s process to estimate PFAS
environmental remediation liabilities, including controls related to the monitoring of the recorded liability as compared to remedial activities required by
regulatory authorities and/or planned by the Company, as well as the related financial statement disclosures. These procedures also included, among
others, associated with the Company’s planned remediation activities for certain sites, (i) testing management’s process for estimating the
environmental remediation liabilities; (ii) testing the reasonableness of management’s significant assumptions related to estimated cost to perform the
planned remedial response and the time period over which remediation will occur; (iii) evaluating the appropriateness of management’s methods for
estimating the environmental remediation liabilities; (iv) testing the completeness and accuracy of underlying data provided by management; (v)
obtaining and evaluating responses to letters of audit inquiry from external legal counsel; and (vi) evaluating the sufficiency of the Company’s
disclosures related to the matters. Evaluating the reasonableness of management’s assumptions related to (i) estimated cost to perform the planned
remedial response involved comparing the cost estimates developed by management to third party evidence, as well as comparing actual and historical
costs used to develop the estimates, as applicable, and (ii) the time period over which the remediation will occur involved comparing the Company’s
planned remediation activities to those communicated to regulatory authorities and to those commonly observed in conducting remediation. The work
of management’s specialists was used in performing certain procedures to evaluate the reasonableness of certain data used in estimating costs for
certain remedial activities. As a basis for using this work, the specialists’ qualifications were understood and the Company’s relationship with the
specialists was assessed. The procedures performed also included evaluation of the methods and assumptions used by the specialists, tests of the
completeness and accuracy of certain data used by the specialists, and an evaluation of the specialists’ findings. Professionals with specialized skills
and knowledge were used to assist in evaluating the appropriateness of management’s methods for estimating the environmental remediation liabilities
and the reasonableness of the significant assumptions related to estimated cost to perform the planned remedial responses and the time period over
which remediation will occur.
F-4
PFAS - Accrued Litigation Liabilities and Disclosures
As described in Notes 3 and 22 to the consolidated financial statements, the Company’s accrued litigation liabilities was $208 million as of December
31, 2024, of which $121 million relates to PFAS-related legal matters. These liabilities represent management’s estimate of probable loss for PFAS-
related litigation matters. Management accrues for litigation matters when it is probable that a liability has been incurred and the amount of the liability
can be reasonably estimated. Where the available information is only sufficient to establish a range of probable liability, and no point within the range
is more likely than any other, the lower end of the range has been used. When a material loss contingency is reasonably possible, but not probable,
the Company does not record a liability, but instead discloses the nature of the matter and an estimate of the loss or range of loss, to the extent such
estimate can be made. Significant judgment is required in both the determination of probability and whether a loss or range of loss is reasonably
estimable. The Company’s judgments are subjective based on the status of the legal or regulatory proceedings, the merits of the Company’s defenses
and consultation with in-house and outside legal counsel. Because of substantial uncertainties related to these matters, accruals are based on the
best information available each period, including, among others, mediation, settlement discussions or agreements. Litigation-related liabilities and
expenditures include legal matters that are liabilities of E.I. DuPont de Nemours and Company (“EID”) and its subsidiaries, which Chemours may be
required to indemnify pursuant to the separation-related agreements executed prior to the separation with EID on July 1, 2015. Because litigation is
subject to significant uncertainties, and adverse rulings, judgments or other outcomes could occur in the future, it is reasonably possible that the
Company could incur losses substantially in excess of accrued liabilities or with respect to matters for which no liability has been accrued because
losses are not currently probable and reasonably estimable.
The principal considerations for our determination that performing procedures relating to PFAS accrued litigation liabilities and disclosures is a critical
audit matter are (i) the significant judgment by management when (a) assessing whether a loss is reasonably possible or probable, (b) assessing
whether the loss or range of loss can be reasonably estimated, and (c) developing the estimated loss for each PFAS-related litigation matter; and (ii)
a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s assessment
of the liabilities and disclosures related to PFAS litigation matters.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated
financial statements. These procedures included testing the effectiveness of controls relating to management’s assessment of the liabilities related to
PFAS accrued litigation, including controls over determining whether a loss is reasonably possible or probable and whether the loss or range of loss
can be reasonably estimated, as well as the related financial statement disclosures. These procedures also included, among others, (i) obtaining and
evaluating the status of significant known and potential litigation and settlement activity based on inquiry of internal legal counsel, as well as external
legal counsel, when deemed necessary; (ii) obtaining and evaluating relevant PFAS-related judgments, court filings and orders, memorandums of
understanding, letters of intent and settlement agreements; (iii) evaluating the reasonableness of management’s assessment regarding whether an
unfavorable outcome is reasonably possible or probable and reasonably estimable; and (iv) evaluating the sufficiency of the Company’s disclosures
related to PFAS-related litigation matters.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 18, 2025
We have served as the Company’s auditor since 2014.
See accompanying notes to the consolidated financial statements.
F-5
The Chemours Company
Consolidated Statements of Operations
(Dollars in millions, except per share amounts)
Year Ended December 31,
2024
2023
2022
Net sales
$
5,782
$
6,078
$
6,831
Cost of goods sold
4,631
4,772
5,215
Gross profit
1,151
1,306
1,616
Selling, general, and administrative expense
585
1,290
710
Research and development expense
109
108
118
Restructuring, asset-related, and other charges
60
153
16
Goodwill impairment charge
56
—
—
Total other operating expenses
810
1,551
844
Equity in earnings of affiliates
43
45
55
Interest expense, net
(264)
(208)
(163)
(Loss) gain on extinguishment of debt
(1)
(1)
7
Other income, net
8
91
70
Income (loss) before income taxes
127
(318)
741
Provision for (benefit from) income taxes
41
(81)
163
Net income (loss)
86
(237)
578
Less: Net income attributable to non-controlling interests
—
1
—
Net income (loss) attributable to Chemours
$
86
$
(238)
$
578
Per share data
Basic earnings (loss) per share of common stock
$
0.58
$
(1.60)
$
3.72
Diluted earnings (loss) per share of common stock
0.57
(1.60)
3.65
See accompanying notes to the consolidated financial statements.
F-6
The Chemours Company
Consolidated Statements of Comprehensive (Loss) Income
(Dollars in millions)
Year Ended December 31,
2024
2023
2022
Pre-tax
Tax
After-tax
Pre-tax
Tax
After-tax
Pre-tax
Tax
After-tax
Net income (loss)
$
86
$
(237 )
$
578
Other comprehensive income (loss):
Hedging activities:
Unrealized gain (loss) on net
investment hedge
$
52
$
(13 )
39
$
(27 )
$
8
(19 )
$
53
$
(13 )
40
Unrealized gain (loss) on cash
flow hedge
16
(3 )
13
(8 )
2
(6 )
25
(4 )
21
Reclassifications to net income -
cash flow hedge
(2 )
1
(1 )
(9 )
1
(8 )
(24 )
4
(20 )
Hedging activities, net
66
(15 )
51
(44 )
11
(33 )
54
(13 )
41
Cumulative translation adjustment
(180 )
—
(180 )
94
—
94
(32 )
—
(32 )
Defined benefit plans:
Additions to accumulated other
comprehensive income (loss):
Net gain (loss)
35
(9 )
26
(4 )
1
(3 )
(2 )
1
(1 )
Prior service benefit
1
—
1
—
—
—
2
—
2
Curtailment gain
2
—
2
11
(1 )
10
—
—
—
Effect of foreign exchange
rates
4
—
4
(3 )
—
(3 )
7
—
7
Reclassifications to net income:
Amortization of actuarial loss
8
(2 )
6
9
(1 )
8
8
(2 )
6
Amortization of prior service
gain
(2 )
—
(2 )
(3 )
—
(3 )
(2 )
—
(2 )
Curtailment/settlement gain
(1 )
—
(1 )
(1 )
—
(1 )
—
—
—
Defined benefit plans, net
$
47
$
(11 )
36
$
9
$
(1 )
8
$
13
$
(1 )
12
Other comprehensive (loss) income
(93 )
69
21
Comprehensive (loss) income
(7 )
(168 )
599
Less: Comprehensive income
attributable to non-controlling interests
—
1
—
Comprehensive (loss) income
attributable to Chemours
$
(7 )
$
(169 )
$
599
See accompanying notes to the consolidated financial statements.
F-7
The Chemours Company
Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
713
$
1,203
Restricted cash and restricted cash equivalents
—
604
Accounts and notes receivable, net
770
610
Inventories
1,472
1,352
Prepaid expenses and other
71
66
Total current assets
3,026
3,835
Property, plant, and equipment
9,572
9,412
Less: Accumulated depreciation
(6,389)
(6,196)
Property, plant, and equipment, net
3,183
3,216
Operating lease right-of-use assets
258
260
Goodwill
46
102
Other intangible assets, net
3
3
Investments in affiliates
152
158
Restricted cash and restricted cash equivalents
50
—
Other assets
797
677
Total assets
$
7,515
$
8,251
Liabilities
Current liabilities:
Accounts payable
$
1,142
$
1,159
Compensation and other employee-related cost
99
89
Short-term and current maturities of long-term debt
54
51
Current environmental remediation
115
129
Other accrued liabilities
393
1,058
Total current liabilities
1,803
2,486
Long-term debt, net
4,054
3,987
Operating lease liabilities
194
206
Long-term environmental remediation
456
461
Deferred income taxes
35
44
Other liabilities
368
328
Total liabilities
6,910
7,512
Commitments and contingent liabilities
Equity
Common stock (par value $0.01 per share; 810,000,000 shares authorized;
198,300,033 shares issued and 149,428,431 shares outstanding at December 31, 2024;
197,519,784 shares issued and 148,587,397 shares outstanding at December 31, 2023)
2
2
Treasury stock, at cost (48,871,602 shares at December 31, 2024; 48,932,387 shares at
December 31, 2023)
(1,804)
(1,806)
Additional paid-in capital
1,055
1,033
Retained earnings
1,718
1,782
Accumulated other comprehensive loss
(367)
(274)
Total Chemours stockholders’ equity
604
737
Non-controlling interests
1
2
Total equity
605
739
Total liabilities and equity
$
7,515
$
8,251
See accompanying notes to the consolidated financial statements.
F-8
The Chemours Company
Consolidated Statements of Stockholders’ Equity
(Dollars in millions, except per share amounts)
Common Stock
Treasury Stock
Additional
Retained
Accumulated
Other
Comprehensive
Non-controlling
Shares
Amount
Shares
Amount
Paid-in Capital
Earnings
(Loss) Income
Interests
Total Equity
Balance at January 1, 2022
191,860,159
$
2
30,813,427
$
(1,247 )
$
944
$
1,746
$
(364 )
$
1
$
1,082
Common stock issued -
compensation plans
474,730
—
—
—
—
—
—
—
—
Exercise of stock options
3,040,921
—
—
—
51
—
—
—
51
Purchases of treasury stock, at
cost
—
—
16,058,353
(492 )
—
—
—
—
(492 )
Stock-based compensation
expense
—
—
—
1
27
—
—
—
28
Cancellation of unissued stock
awards withheld to cover taxes
—
—
—
—
(6 )
—
—
—
(6 )
Net income
—
—
—
—
—
578
—
—
578
Dividends declared on common
shares ($1.00 per share)
—
—
—
—
—
(154 )
—
—
(154 )
Dividends to non-controlling
interests
—
—
—
—
—
—
—
(1 )
(1 )
Other comprehensive income
—
—
—
—
—
—
21
—
21
Balance at December 31, 2022
195,375,810
2
46,871,780
(1,738 )
1,016
2,170
(343 )
—
1,107
Common stock issued -
compensation plans
990,745
—
(47,801 )
1
(1 )
(1 )
—
—
(1 )
Exercise of stock options
1,153,229
—
—
—
19
—
—
—
19
Purchases of treasury stock, at
cost
—
—
2,108,408
(69 )
—
(69 )
Stock-based compensation
expense
—
—
—
—
18
—
—
—
18
Cancellation of unissued stock
awards withheld to cover taxes
—
—
—
—
(19 )
—
—
—
(19 )
Net (loss) income
—
—
—
—
—
(238 )
—
1
(237 )
Dividends declared on common
shares ($1.00 per share)
—
—
—
—
—
(149 )
—
—
(149 )
Contributions by non-controlling
interests
—
—
—
—
—
—
—
1
1
Other comprehensive income
—
—
—
—
—
—
69
—
69
Balance at December 31, 2023
197,519,784
2
48,932,387
(1,806 )
1,033
1,782
(274 )
2
739
Common stock issued -
compensation plans
327,627
—
(60,785 )
2
1
(2 )
—
—
1
Exercise of stock options
452,622
—
—
—
9
—
—
—
9
Stock-based compensation
expense
—
—
—
—
15
—
—
—
15
Cancellation of unissued stock
awards withheld to cover taxes
—
—
—
—
(3 )
—
—
—
(3 )
Net income
—
—
—
—
—
86
—
—
86
Dividends declared on common
shares ($1.00 per share)
—
—
—
—
—
(148 )
—
—
(148 )
Dividends to non-controlling
interests
—
—
—
—
—
—
—
(1 )
(1 )
Other comprehensive loss
—
—
—
—
—
—
(93 )
—
(93 )
Balance at December 31, 2024
198,300,033
$
2
48,871,602
$
(1,804 )
$
1,055
$
1,718
$
(367 )
$
1
$
605
See accompanying notes to the consolidated financial statements.
F-9
The Chemours Company
Consolidated Statements of Cash Flows
(Dollars in millions)
Year Ended December 31,
2024
2023
2022
Cash flows from operating activities
Net income (loss)
$
86
$
(237 )
$
578
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization
301
307
291
Gain on sales of assets and businesses, net
(3 )
(110 )
(21 )
Equity in earnings of affiliates, net
(1 )
11
(22 )
Loss (gain) on extinguishment of debt
1
1
(7 )
Amortization of debt issuance costs and issue discounts
12
9
9
Deferred tax (benefit) provision
(27 )
(158 )
20
Asset-related charges
27
95
5
Stock-based compensation expense
15
18
27
Net periodic pension cost
6
9
9
Defined benefit plan contributions
(12 )
(10 )
(10 )
Other operating charges and credits, net
(42 )
1
(21 )
Goodwill impairment
56
—
—
Decrease (increase) in operating assets:
Accounts and notes receivable, net
(152 )
(10 )
91
Inventories and other current operating assets
(146 )
58
(294 )
Other non-current operating assets
(98 )
—
(96 )
(Decrease) increase in operating liabilities:
Accounts payable
(9 )
(72 )
105
Other current operating liabilities
(660 )
642
(47 )
Non-current operating liabilities
13
2
138
Cash (used for) provided by operating activities
(633 )
556
755
Cash flows from investing activities
Purchases of property, plant, and equipment
(360 )
(370 )
(307 )
Proceeds from sales of assets and businesses, net of cash divested
3
143
33
Foreign exchange contract settlements, net
2
(8 )
3
Other investing activities
2
6
(13 )
Cash used for investing activities
(353 )
(229 )
(284 )
Cash flows from financing activities
Proceeds from issuance of debt, net
606
648
—
Debt repayments
(490 )
(280 )
(68 )
Payments of debt issuance costs
(9 )
(4 )
(1 )
Payments on finance leases
(12 )
(11 )
(11 )
Proceeds from supplier financing programs
93
123
105
Payments to supplier financing program
(102 )
(87 )
(106 )
Purchases of treasury stock, at cost
—
(69 )
(495 )
Proceeds from exercised stock options
9
19
51
Payments related to tax withheld on vested stock awards
(3 )
(19 )
(6 )
Payments of dividends to the Company's common shareholders
(148 )
(149 )
(154 )
(Distributions to) cash received from non-controlling interest shareholders
(1 )
1
(1 )
Other financing activities
21
—
—
Cash (used for) provided by financing activities
(36 )
172
(686 )
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents
(22 )
4
(32 )
(Decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents
(1,044 )
503
(247 )
Cash, cash equivalents, restricted cash, and restricted cash equivalents at January 1,
1,807
1,304
1,551
Cash, cash equivalents, restricted cash, and restricted cash equivalents at December 31,
$
763
$
1,807
$
1,304
Supplemental cash flows information
Cash paid during the year for:
Interest, net of amounts capitalized
$
267
$
223
$
164
Income taxes, net of refunds
73
54
131
Non-cash investing and financing activities:
Purchases of property, plant, and equipment included in accounts payable
$
88
$
82
$
79
Treasury stock repurchased, not settled
—
—
1
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-10
Note 1. Background and Description of the Business
The Chemours Company (“Chemours”, or the “Company”) is a leading, global provider of performance chemicals that are key inputs in end-products
and processes in a variety of industries. The Company delivers customized solutions with a wide range of industrial and specialty chemical products
for markets, including coatings, plastics, refrigeration and air conditioning, transportation, semiconductor and consumer electronics, general industrial,
and oil and gas. The Company’s principal products include refrigerants, titanium dioxide (“TiO2”) pigment and industrial fluoropolymer resins. Chemours
manages and reports its operating results through its three principal reportable segments: Thermal & Specialized Solutions, Titanium Technologies,
and Advanced Performance Materials. The Thermal & Specialized Solutions segment is a leading, global provider of refrigerants, thermal management
solutions, propellants, blowing agents, and specialty solvents. The Titanium Technologies segment is a leading, global provider of TiO2 pigment, a
premium white pigment used to deliver whiteness, brightness, opacity, durability, efficiency and protection across a variety of applications. The
Advanced Performance Materials segment is a leading, global provider of high-end polymers and advanced materials that deliver unique attributes,
including low friction coefficients, extreme temperature resistance, weather resistance, ultraviolet and chemical resistance, and electrical insulation.
The Other Segment includes the Performance Chemicals and Intermediates business.
Chemours has manufacturing facilities, sales centers, administrative offices, and warehouses located throughout the world. Chemours’ operations are
primarily located in the U.S., Canada, Mexico, Brazil, the Netherlands, Belgium, China, Japan, Switzerland, Singapore, Hong Kong, India, and France.
At December 31, 2024, the Company operated 28 major production facilities globally, of which eight were dedicated to Thermal & Specialized Solutions,
seven were dedicated to Titanium Technologies, and 10 were dedicated to Advanced Performance Materials, and three supported multiple segments.
Chemours began operating as an independent company on July 1, 2015 (the “Separation Date”) after separating from E.I. DuPont de Nemours and
Company (“EID”) (the “Separation”). The Separation was completed pursuant to a separation agreement and other agreements with EID, including an
employee matters agreement, a tax matters agreement, a transition services agreement, and an intellectual property cross-license agreement. These
agreements govern the relationship between Chemours and EID following the Separation and provided for the allocation of various assets, liabilities,
rights, and obligations at the Separation Date. On August 31, 2017, EID completed a merger with The Dow Chemical Company (“Dow”). Following
their merger, EID and Dow engaged in a series of reorganization steps and, in 2019, separated into three publicly-traded companies named Dow Inc.,
DuPont de Nemours, Inc. (“DuPont”), and Corteva, Inc. (“Corteva”). Effective January 1, 2023, EID changed its name to EIDP, Inc..
Unless the context otherwise requires, references herein to “The Chemours Company”, “Chemours”, “the Company”, “our Company”, “we”, “us”, and
“our” refer to The Chemours Company and its consolidated subsidiaries. References herein to “EID” refer to EIDP, Inc., formerly known as EID, which
is Chemours’ former parent company and is now a subsidiary of Corteva.
Note 2. Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).
In the opinion of management, all adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation of the
Company’s financial position and results of operations have been included for the periods presented herein. The notes that follow are an integral part
of the Company’s consolidated financial statements.
Certain prior period amounts have been reclassified to conform to the current period presentation, the effect of which was not material to the Company’s
consolidated financial statements.
Revision of Previously Issued Financial Statements
Certain prior period amounts on the consolidated statements of income, reflected in the tables below, have been revised to correct for immaterial
errors, as described below.
During the financial close process for the fourth quarter of 2024, the Company identified certain immaterial errors impacting previously issued financial
statements beginning as of January 1, 2022, and subsequent quarterly reporting periods through September 30, 2024. Specifically, the Company
identified errors related to the income statement presentation of byproduct revenue sales, which were incorrectly accounted for as a contra cost of
goods sold. The Company previously determined at adoption that misclassification of these transactions was not material.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-11
The Company assessed the materiality of these errors on prior period consolidated financial statements in accordance with the Securities and
Exchange Commission ("SEC") Staff Accounting Bulletin No. 99, "Materiality", codified in ASC 250, Accounting Changes and Error Corrections ("ASC
250"). Based on this assessment, management concluded that the error correction is not material to any previously presented interim or annual financial
statements. The impact of the revisions to the quarterly periods ended March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, June
30, 2024 and September 30, 2024 are presented in "Note 30 – Unaudited Quarterly Financial Information".
Revised Consolidated Statements of Income
Year ended December 31, 2022
As reported
Revision
As revised
Net sales
$
6,794
$
37
$
6,831
Cost of goods sold
$
5,178
$
37
$
5,215
Gross profit
$
1,616
$
—
$
1,616
Year ended December 31, 2023
As reported
Revision
As revised
Net sales
$
6,027
$
51
$
6,078
Cost of goods sold
$
4,721
$
51
$
4,772
Gross profit
$
1,306
$
—
$
1,306
Audit Committee Internal Review
On February 29, 2024, the Company announced that it needed additional time to complete its 2023 year-end reporting process, including its review of
internal control over financial reporting as of December 31, 2023, and for the Audit Committee of the Board of Directors (the “Audit Committee”) to
complete a related internal review (the “Audit Committee Internal Review”). The scope of the Audit Committee Internal Review included, among other
things, reviewing (i) the process for reviewing reports made to the Chemours Ethics Hotline; (ii) the Company’s practice for managing working capital,
including the related impact on metrics within the Company’s incentive plans; and (iii) certain non-GAAP metrics included in filings made with the
Securities and Exchange Commission or otherwise publicly released, and related disclosures.
The Audit Committee has completed its planned procedures with respect to the Internal Review and determined, among other things, based on the
review conducted with the assistance of independent outside counsel, that:
•
the Company's then-Chief Executive Officer, then-Chief Financial Officer, and then-Controller engaged in efforts in the fourth quarter of
2023 to delay payments to certain vendors that were originally due to be paid in the fourth quarter of 2023 until the first quarter of 2024,
and to accelerate the collection of receivables into the fourth quarter of 2023 that were originally not due to be received until the first
quarter of 2024;
•
these individuals engaged in these efforts in part to meet free cash flow targets that the Company had communicated publicly, and which
also would be part of a key metric for determining incentive compensation applicable to executive officers; and
•
there was a lack of transparency with the Company’s Board of Directors by the members of former senior management who were placed
on administrative leave with respect to these actions.
Further discussion related to the Audit Committee Internal Review is included under the heading "Securities Related Litigation and Requests for
Information Arising From Audit Committee Internal Review, and Related Indemnification Agreements" within "Note 22 – Commitments and Contingent
Liabilities".
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-12
Insurance Recoveries
The Consolidated Statements of Operations for the year ended December 31, 2024 include a pre-tax benefit of $20 for insurance proceeds within
selling, general and administrative expenses, net of third-party legal expenses of $6. In December 2024, Chemours and EIDP agreed to a 50/50
distribution of then-available funds within the previously established joint escrow account, with Chemours receiving $20, representing a release of
previously recorded restricted cash. The Company recorded $20 in cash and cash equivalents at December 31, 2024 representing its interest in the
escrow account established for these insurance proceeds.
The proceeds were recovered over a period of more than four years beginning in the second quarter 2020. Of the amounts recorded in the Consolidated
Statement of Operations for the year ended December 31, 2024, $13 relates to amounts collected prior to January 1, 2024. The Company assessed
the materiality of these out-of-period adjustments on current and prior period consolidated financial statements in accordance with the Securities and
Exchange Commission (“SEC”) Staff Accounting Bulletin No. 99, “Materiality,” codified in ASC 250, Accounting Changes and Error Corrections (“ASC
250”). Based on this assessment, management concluded that the amounts are not material to any previously presented interim or annual financial
statements, or the current annual financial statements.
Liquidity
The Company believes it has sufficient liquidity, through future cash flows from operations, unrestricted cash on hand and availability under its revolving
credit facility to timely settle its current liabilities through at least the end of February 2026, however, an adverse resolution of one or more legal or
environmental matters could have a material adverse effect on the Company's liquidity.
As disclosed in "Note 22 – Commitments and Contingent Liabilities", the Company and certain of its subsidiaries are subject to various lawsuits, claims,
assessments, government investigations, regulatory proceedings and other legal proceedings with respect to product liability, intellectual property,
personal injury, commercial, contractual, employment, regulatory, environmental, anti-trust, and other such matters that arise in the ordinary course of
business in multiple jurisdictions. The Company’s ability to timely settle its long term liabilities in the event such liabilities become current as a result
of an adverse resolution of a legal matter will depend on its ability to generate sufficient future operating cash flows, resolve legal and environmental
matters under acceptable terms and conditions and refinance its revolving credit facility and other long term debt on acceptable terms and conditions.
At December 31, 2024, the Company has $713 of unrestricted cash and cash equivalents, of which $404 is maintained at foreign subsidiaries. The
Company anticipates generating additional positive cash flows from operations in 2025. The Company has $1,803 of current liabilities as of December
31, 2024. The Company also has $640 of availability under its revolving credit facility at December 31, 2024. The revolving credit facility contains terms
that impact its capacity based in part on the Company’s twelve-month trailing EBITDA, as defined. The revolving credit facility matures on October 7,
2026. It is the Company’s intent to extend the maturity of the revolving credit facility, however, there is no assurance the Company will be able to
extend the facility on acceptable terms and conditions, if at all. Accordingly, there are risks and uncertainties with respect to the Company’s ability to
achieve its liquidity objectives.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-13
Note 3. Summary of Significant Accounting Policies
Preparation of Financial Statements
The consolidated financial statements have been prepared in conformity with GAAP, which requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial
statements, and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical
experiences, facts, and circumstances available at the time and various other assumptions that management believes are reasonable. Actual results
could differ from those estimates.
Principles of Consolidation
The consolidated financial statements include the accounts of Chemours and its subsidiaries, as well as entities in which a controlling interest is
maintained. For those consolidated subsidiaries in which the Company’s ownership is less than 100%, the outside shareholders’ interests are shown
as non-controlling interests. Investments in companies in which Chemours, directly or indirectly, owns 20% to 50% of the voting stock, or has the ability
to exercise significant influence over the operating and financial policies of the investee, are accounted for using the equity method of accounting. As
a result, Chemours’ share of the earnings or losses of such equity affiliates is included in the consolidated statements of operations, and Chemours’
share of such equity affiliates’ equity is included in the consolidated balance sheets.
The Company assesses the requirements related to the consolidation of any variable interest entity (“VIE”), including a qualitative assessment of power
and economics that considers which entity has the power to direct the activities that most significantly impact the VIE’s economic performance, and
has the right to receive any benefits or the obligation to absorb any losses of the VIE. No such VIE was consolidated by the Company for the periods
presented.
All intercompany accounts and transactions were eliminated in the preparation of the accompanying consolidated financial statements.
Revenue Recognition
Chemours recognizes revenue using a five-step model, resulting in revenue being recognized as performance obligations within a contract have been
satisfied. The steps within that model include: (i) identifying the existence of a contract with a customer; (ii) identifying the performance obligations
within the contract; (iii) determining the contract’s transaction price; (iv) allocating the transaction price to the contract’s performance obligations; and,
(v) recognizing revenue as the contract’s performance obligations are satisfied. A contract with a customer exists when: (i) the Company enters into
an enforceable agreement that defines each party’s rights regarding the goods or services to be transferred, and the related payment terms; (ii) the
agreement has commercial substance; and, (iii) it is probable that the Company will collect the consideration to which it is entitled in the exchange. A
performance obligation is a promise in a contract to transfer a distinct good or service, or a series of distinct goods or services, to a customer. The
transaction price is the customary amount of consideration that the Company expects to be entitled to in exchange for a transfer of the promised goods
or services to a customer, excluding any amounts collected by the Company on behalf of third parties (e.g., sales and use taxes). Judgment is required
to apply the principles-based, five-step model for revenue recognition. Management is required to make certain estimates and assumptions about the
Company’s contracts with its customers, including, among others, the nature and extent of its performance obligations, its transaction price amounts
and any allocations thereof, the critical events which constitute satisfaction of its performance obligations, and when control of any promised goods or
services is transferred to its customers.
The Company’s revenue from contracts with customers is reflected in the consolidated statements of operations as net sales, the vast majority of which
represents product sales that consist of a single performance obligation. Product sales to customers are made under a purchase order (“PO”), or in
certain cases, in accordance with the terms of a master services agreement (“MSA”) or similar arrangement, which documents the rights and obligations
of each party to the contract. When a customer submits a PO for product or requests product under an MSA, a contract for a specific quantity of distinct
goods at a specified price is created, and the Company’s performance obligation under the contract is satisfied when control of the product is transferred
to the customer, which is indicated by shipment of the product and the transfer of title and the risk of loss to the customer. Revenue is recognized on
consignment sales when control transfers to the customer, generally at the point of customer usage of the product. The transaction price for product
sales is generally the amount specified in the PO or in the request under an MSA; however, as is common in Chemours’ industry, the Company offers
variable consideration in the form of rebates, volume discounts, early payment discounts, pricing based on formulas or indices, price matching, and
guarantees to certain customers. Such amounts are included in the Company’s estimated transaction price using either the expected value method or
the most-likely amount, depending on the nature of the variable consideration included in the contract. The Company regularly assesses its customers’
creditworthiness, and product sales are made based on established credit limits. Payment terms for the Company’s invoices are typically less than 90
days.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-14
The Company also licenses the right to access certain of its trademarks to customers under specified terms and conditions in certain arrangements,
which is recognized as a component of net sales in the consolidated statements of operations. Under such arrangements, the Company may receive
a royalty payment for a trademark license that is entered into on a stand-alone basis or incorporated into an overall product sales arrangement. Royalty
income is generally based on customer sales and recognized under the sales-based exception as the customer sale occurs. When minimum
guaranteed royalty amounts are included in the transaction price, the Company recognizes royalty income ratably over the license period for the
minimum amount. When there is no consideration specified for the use of the Company’s trademark, the entire transaction price is recognized in
connection with the transfer of control of product. Royalty income resulting from the right to use the Company’s technology is considered outside the
scope of revenue recognition under GAAP as it is not a part of the Company’s ongoing major or central activities, and is recognized as a component
of other income, net in the consolidated statements of operations in accordance with agreed-upon terms at the point or points in time that performance
obligations are satisfied.
Consistent with the fact that the vast majority of the Company’s payment terms are less than 90 days from the point at which control of the promised
goods or services is transferred, no adjustments have been made for the effects of a significant financing component. Additionally, the Company has
elected to recognize the incremental costs associated with obtaining contracts as an expense when incurred if the amortization period of the assets
that the Company would have recognized is one year or less. Amounts billed to customers for shipping and handling fees are considered a fulfillment
cost and are included in net sales, and the costs incurred by the Company for the delivery of goods are classified as a component of the cost of goods
sold in the consolidated statements of operations.
Research and Development Expense
Research and development (“R&D”) costs are expensed as incurred. R&D expenses include costs (primarily consisting of employee costs, materials,
contract services, research agreements, and other external spend) relating to the discovery and development of new products, enhancement of existing
products, and regulatory approval of new and existing products.
Provision for (Benefit from) Income Taxes
The provision for (benefit from) income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach,
deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid.
The provision for (benefit from) income taxes represents income taxes paid or payable for the current year, plus the change in deferred taxes during
the year. Deferred taxes result from differences between the financial and tax bases of Chemours’ assets and liabilities and are adjusted for changes
in tax rates and tax laws when changes are enacted. The Company’s deferred tax assets and liabilities are presented on a net basis by jurisdictional
filing group. Net deferred tax assets are presented as a component of other assets, while net deferred tax liabilities are presented as a component of
deferred income taxes on the Company’s consolidated balance sheets. Valuation allowances are recorded to reduce deferred tax assets when it is
more-likely-than-not that a tax benefit will not be realized.
Chemours recognizes income tax positions that meet the more-likely-than-not threshold and accrues any interest related to unrecognized income tax
positions in the provision for (benefit from) income taxes in the consolidated statements of operations. The Company also recognizes income tax-
related penalties in the provision for (benefit from) income taxes.
Earnings Per Share
Chemours presents both basic earnings per share and diluted earnings per share. Basic earnings per share excludes dilution and is computed by
dividing the total net income (loss) attributable to Chemours by the weighted-average number of shares outstanding for the period. Diluted earnings
per share reflects the dilution that could occur if the Company’s outstanding stock-based compensation awards, including any unvested restricted
shares, were vested and exercised, thereby resulting in the issuance of common stock as determined under the treasury stock method. In periods
where the Company incurs a net loss, stock-based compensation awards are excluded from the calculation of earnings per share as their inclusion
would have an anti-dilutive effect.
Cash and Cash Equivalents
Cash and cash equivalents generally include cash, time deposits, or highly liquid investments with maturities of three months or less at the time of
acquisition.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-15
Restricted Cash and Restricted Cash Equivalents
The Company classifies cash and cash equivalents that are legally or contractually restricted for withdrawal or usage as restricted cash and restricted
cash equivalents. Restricted cash and restricted cash equivalents are classified as a current or non-current asset based on the nature and timing when
the cash is expected to be used, and carried at cost plus interest accrued, which approximates fair value.
At December 31, 2024, the Company's restricted cash and restricted cash equivalents includes cash and cash equivalents deposited in an escrow
account as per the terms of the Company's Memorandum of Understanding ("MOU") agreement. At December 31, 2023, the Company's restricted
cash and restricted cash equivalents principally relates to cash and cash equivalents deposited in the Water District Settlement Fund per the terms of
the U.S. public water system Settlement Agreement pending final approval. See "Note 22 – Commitments and Contingent Liabilities" for further details
on the MOU and Water District Settlement Fund.
Accounts and Notes Receivable and Allowance for Doubtful Accounts
Accounts and notes receivables are recognized net of an allowance for doubtful accounts. The allowance for doubtful accounts reflects the best
estimate of losses inherent in Chemours’ accounts and notes receivable portfolio, which is determined by assessing expected credit losses on the
basis of historical experience, specific allowances for known troubled accounts, and other available evidence. Accounts and notes receivable are
written off when management determines that they are uncollectible.
Inventories
Chemours’ inventories are valued at the lower of cost or market or net realizable value, where applicable. Cost of inventories held at substantially all
U.S. locations are determined using the last-in, first-out (“LIFO”) method, while cost of inventories held outside the U.S. are determined using the
average cost method. The elements of cost in inventories include raw materials, direct labor, and manufacturing overhead. Stores and supplies are
valued at the lower of cost or net realizable value, and cost is generally determined by the average cost method.
Property, Plant, and Equipment
Property, plant, and equipment is carried at cost and is depreciated using the straight-line method. Substantially all equipment and buildings are
depreciated over useful lives ranging from 15 to 25 years. Capitalizable costs associated with computer software for internal use are amortized on a
straight-line basis over five to seven years. When assets are surrendered, retired, sold, or otherwise disposed of, their gross carrying values and
related accumulated depreciation are removed from the consolidated balance sheets and are included in the determination of any gain or loss on such
disposals.
Repair and maintenance costs that materially add to the value of the asset or prolong its useful life are capitalized and depreciated based on their
extension to the asset’s useful life. Capitalized repair and maintenance costs are recorded on the consolidated balance sheets as a component of
other assets.
Impairment of Long-lived Assets
Chemours evaluates the carrying value of its long-lived assets to be held and used when events or changes in circumstances indicate the carrying
value may not be recoverable. For the purposes of recognition or measurement of an impairment charge, the assessment is performed on the asset
or asset group at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.
To determine the level at which the assessment is performed, Chemours considers factors such as revenue dependency, shared costs, and the extent
of vertical integration. The carrying value of a long-lived asset is considered impaired when the total projected undiscounted cash flows from the use
and eventual disposition of the asset or asset group are separately identifiable and are less than its carrying value. In that event, a loss is recognized
based on the amount by which the carrying value exceeds the fair value of the long-lived asset. The fair value methodology used is an estimate of fair
market value, which is made based on prices of similar assets or other valuation methodologies, including present value techniques. Long-lived assets
to be disposed of by means other than sale are classified as held for use until their disposal. Long-lived assets to be disposed of by sale are classified
as held for sale and are reported at the lower of carrying amount or fair market value, less the estimated cost to sell. Depreciation and amortization
are discontinued for any long-lived assets classified as held for sale.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-16
Leases
The Company’s lease assets and lease liabilities are recognized on the lease commencement date in an amount that represents the present value of
future lease payments. Operating leases are included in operating lease right-of-use assets, other accrued liabilities, and operating lease liabilities on
the Company’s consolidated balance sheets. Finance leases are included in property, plant, and equipment, net, short-term and current maturities of
long-term debt, and long-term debt, net, on the Company’s consolidated balance sheets. The Company’s incremental borrowing rate, which is based
on information available at the adoption date of January 1, 2019 for existing leases and the commencement date for leases commencing after the
adoption date, is used to determine the present value of lease payments. The Company combines lease components with non-lease components for
most classes of assets, except for certain manufacturing facilities or when the non-lease component is significant to the lease component.
The Company does not recognize leases with an initial term of 12 months or less on its consolidated balance sheets and will recognize those lease
payments in the consolidated statements of operations on a straight-line basis over the lease term. Certain leases contain variable payments which
are based on usage or operating costs, such as utilities and maintenance. These payments are not included in the measurement of the right-of-use
asset or lease liability due to the uncertainty of the payment amount and are recorded as lease expense in the period incurred. Leases with the options
to extend their term or terminate early are reflected in the lease term when it is reasonably certain that the Company will exercise such options.
Goodwill and Other Intangible Assets
The excess of the purchase price over the estimated fair value of the net assets acquired in a business combination, including any identified intangible
assets, is recorded as goodwill. Chemours tests its goodwill for impairment at least annually on October 1; however, these tests are performed more
frequently when events or changes in circumstances indicate that the asset may be impaired. Goodwill is evaluated for impairment at the reporting unit
level, which is defined as an operating segment, or one level below an operating segment. A reporting unit is the level at which discrete financial
information is available and reviewed by business management on a regular basis. An impairment exists when the carrying value of a reporting unit
exceeds its fair value. The amount of impairment loss recognized in the consolidated statements of operations is equal to the excess of a reporting
unit’s carrying value over its fair value, which is limited to the total amount of goodwill allocated to the reporting unit.
Chemours has the option to first qualitatively assess whether it is more-likely-than-not that an impairment exists for a reporting unit. Such qualitative
factors include, among other things, prevailing macroeconomic conditions, industry and market conditions, changes in costs associated with raw
materials, labor, or other inputs, the Company’s overall financial performance, and certain other entity-specific events that impact Chemours’ reporting
units. When performing a quantitative test, the Company weights the results of an income-based valuation technique, the discounted cash flows
method, and a market-based valuation technique, the guideline public companies method, to determine its reporting units’ fair values.
Definite-lived intangible assets, such as purchased and licensed technology, patents, trademarks, customer lists and allowance units are amortized
over their estimated useful lives, generally for periods ranging up to 20 years. The reasonableness of the useful lives of these assets is periodically
evaluated.
Investments in Affiliates
The Company uses the equity method of accounting for its investments in and earnings of affiliates. The Company considers whether the fair value of
any of its equity method investments has declined below their carrying value whenever adverse events or changes in circumstances indicate that
recorded values may not be recoverable. If the Company considers any such decline to be other than temporary, based on various factors, a write-
down would be recorded to the estimated fair value.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-17
Environmental Liabilities and Expenditures
Chemours accrues for environmental remediation matters when it is probable that a liability has been incurred and the amount of the liability can be
reasonably estimated. Where the available information is only sufficient to establish a range of probable liability, and no point within the range is more
likely than any other, the lower end of the range has been used.
Estimated liabilities are determined based on existing remediation laws and technologies and the Company’s estimated cost to perform the planned
remedial responses and the time period over which remediation activities will occur, which are derived from environmental studies, sampling, testing,
and analyses. Inherent uncertainties exist in such evaluations, primarily due to unknown environmental conditions, changing governmental regulations
regarding liability, and emerging remediation technologies. These liabilities, which are undiscounted, are adjusted periodically as remediation efforts
progress and as additional technological, regulatory, and legal information becomes available.
Environmental liabilities and expenditures include claims for matters that are liabilities of EID and its subsidiaries, which Chemours may be required to
indemnify pursuant to the Separation-related agreements executed prior to the Separation. These accrued liabilities are undiscounted and do not
include claims against third parties.
Costs related to environmental remediation are charged to expense in the period that the associated liability is accrued and are reflected as a
component of the cost of goods sold for on-site remediation costs or as a component of selling, general, and administrative expense for off-site
remediation costs in the consolidated statements of operations. Other environmental costs are also charged to expense in the period incurred, unless
they extend the useful life of the property, increase the property’s capacity, and/or reduce or prevent contamination from future operations, in which
case they are capitalized and amortized. Pursuant to the binding MOU entered into between Chemours, DuPont, Corteva, and EID, as further discussed
in “Note 22 – Commitments and Contingent Liabilities”, costs specific to potential future legacy per- and polyfluoroalkyl substances (“PFAS”) liabilities
are subject to a cost-sharing arrangement between the parties. Any recoveries of Qualified Spend (as further described in “Note 22 – Commitments
and Contingent Liabilities” and as defined in the MOU) from DuPont and/or Corteva under the cost-sharing arrangement will be recognized as an offset
to the Company’s cost of goods sold or selling, general, and administrative expense, as applicable, when realizable. Any Qualified Spend incurred by
DuPont and/or Corteva under the cost-sharing arrangement will be recognized in the Company’s cost of goods sold or selling, general, and
administrative expense, as applicable, when the amounts of such costs are probable and estimable.
Asset Retirement Obligations
Chemours records its asset retirement obligations at their fair value at the time the liability is incurred. Fair value is measured using the expected future
cash outflows discounted at Chemours’ credit-adjusted, risk-free interest rate, which is considered to be a Level 3 input within the fair value hierarchy.
Accretion expense is recognized as an operating expense within the cost of goods sold in the consolidated statements of operations, using the credit-
adjusted, risk-free interest rate in effect when the liability was recognized. The associated asset retirement costs are capitalized as part of the carrying
amount of the long-lived asset and are depreciated over the estimated remaining useful life of the asset, generally for periods ranging from two to 75
years.
Insurance
Chemours insures for certain risks where permitted by law or regulation, including workers’ compensation, vehicle liability, and employee-related
benefits. Liabilities associated with these risks are estimated in part by considering any historical claims experience, demographic factors, and other
actuarial assumptions. For certain other risks, the Company uses a combination of third-party insurance and self-insurance, reflecting its
comprehensive review of relevant risks. A receivable for an insurance recovery is generally recognized when the loss has occurred and collection is
considered probable.
Litigation
Chemours accrues for litigation matters when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated.
Where the available information is only sufficient to establish a range of probable liability, and no point within the range is more likely than any other,
the lower end of the range has been used. When a material loss contingency is reasonably possible, but not probable, the Company does not record
a liability, but instead discloses the nature of the matter and an estimate of the loss or range of loss, to the extent such estimate can be made. Litigation-
related liabilities and expenditures included in the consolidated financial statements include legal matters that are liabilities of EID and its subsidiaries,
which Chemours may be required to indemnify pursuant to the Separation-related agreements executed prior to the Separation. Legal costs, such as
outside counsel fees and expenses, are charged to expense in the period that services are rendered.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-18
Treasury Stock
Chemours accounts for repurchases of the Company’s common stock as treasury stock using the cost method, whereby the entire cost of the acquired
common stock is recorded as treasury stock. The cost of treasury stock re-issued is determined using the first-in, first-out (“FIFO”) method.
Stock-based Compensation
Chemours’ stock-based compensation consists of stock options, restricted stock units (“RSUs”), performance share units (“PSUs”), and performance
stock options ("PSOs") awarded to employees and non-employee directors. Stock options, PSUs and PSOs are measured at their fair value on the
grant date or date of modification, as applicable. RSUs are measured at the stock price on the grant date or date of modification, as applicable. The
Company recognizes compensation expense on a straight-line basis over the requisite service and/or performance period, as applicable. Forfeitures
of awards are accounted as a reduction in stock-based compensation expense in the period such awards are forfeited.
Financial Instruments
In the ordinary course of business, Chemours enters into contractual arrangements to reduce its exposure to foreign currency and interest rate risks.
The Company has established a financial risk management program, which includes distinct risk management instruments: (i) foreign currency forward
contracts, which are used to minimize the volatility in the Company’s earnings related to foreign exchange gains and losses resulting from remeasuring
its monetary assets and liabilities that are denominated in non-functional currencies; (ii) foreign currency forward contracts, which are used to mitigate
the risks associated with fluctuations in the euro against the U.S. dollar for forecasted U.S. dollar-denominated inventory purchases in certain of the
Company’s international subsidiaries that use the euro as their functional currency; (iii) interest rate swaps, which are used to mitigate the volatility in
the Company’s cash payments for interest due to fluctuations in Secured Overnight Financing Rate ("SOFR"), as is applicable to the portion of the
Company’s senior secured term loan facility denominated in U.S. dollars; and (iv) euro-denominated debt and cross-currency swaps, both of which
are used to reduce the volatility in stockholders’ equity caused by changes in foreign currency exchange rates of the euro with respect to the U.S.
dollar for certain of its international subsidiaries that use the euro as their functional currency. The Company’s financial risk management program
reflects varying levels of exposure coverage and time horizons based on an assessment of risk. The program operates within Chemours’ financial risk
management policies and guidelines, and the Company does not enter into derivative financial instruments for trading or speculative purposes.
The Company’s foreign currency forward contracts that are used as a net monetary assets and liabilities hedge are not part of a cash flow hedge
program or a fair value hedge program, and have not been designated as a hedge. For these instruments, all gains and losses resulting from the
revaluation of derivative assets and liabilities are recognized in other income, net in the consolidated statements of operations during the period in
which they occur, and any such gains or losses are intended to be offset by any gains or losses on the underlying asset or liability. For the Company’s
foreign currency forward contracts that have been designated under a cash flow hedge program, all gains and losses resulting from the revaluation of
the derivative instruments are recognized as a component of accumulated other comprehensive loss on the consolidated balance sheets during the
period in which they occur, and are reclassified to the cost of goods sold in the consolidated statements of operations during the period in which the
underlying transactions affect earnings, or when it becomes probable that the forecasted transactions will not occur. For the Company’s interest rate
swaps that have been designated under a cash flow hedge program, all gains and losses resulting from the revaluation of the derivative instruments
are recognized as a component of accumulated other comprehensive loss on the consolidated balance sheets during the period in which they occur,
and are reclassified to interest expense, net in the consolidated statements of operations during the period in which the underlying transaction affects
earnings. For the Company’s euro-denominated debt instruments and cross-currency swap, which are designated as net investment hedges, changes
due to remeasurement are included in accumulated other comprehensive loss on the consolidated balance sheets. Chemours’ uses the spot method
to evaluate the effectiveness of its net investment hedges.
Financial instruments are reported on a gross basis on the consolidated balance sheets.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-19
Foreign Currency Translation
Chemours identifies its separate and distinct foreign entities and groups them into two categories: (i) extensions of the parent (U.S. dollar functional
currency); and, (ii) self-contained (local functional currency). If a foreign entity does not align with either category, factors are evaluated, and a judgment
is made to determine the functional currency. Chemours changes the functional currency of its separate and distinct foreign entities only when
significant changes in economic facts and circumstances clearly indicate that the functional currency has changed.
During the periods covered by the consolidated financial statements, part of Chemours’ business operated within foreign entities. For foreign entities
where the U.S. dollar is the functional currency, all foreign currency-denominated asset and liability amounts are remeasured into U.S. dollars at end-
of-period exchange rates, with the exception of inventories, prepaid expenses, property, plant, and equipment, goodwill, and other intangible assets.
These aforementioned assets are remeasured at historical exchange rates. Foreign currency-denominated revenue and expense amounts are
measured at exchange rates in effect during the period, with the exception of expenses related to any balance sheet amounts remeasured at historical
exchange rates. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included
in other income, net in the consolidated statements of operations in the period in which they occurred.
For foreign entities where the local currency is the functional currency, assets and liabilities denominated in local currencies are translated into U.S.
dollars at end-of-period exchange rates, and the resulting translation adjustments are reported as a component of accumulated other comprehensive
loss on the consolidated balance sheets. Assets and liabilities denominated in currencies other than the functional currency are remeasured into the
functional currency prior to translation into U.S. dollars, and the resulting exchange gains or losses are included in other income, net in the consolidated
statements of operations in the period in which they occurred. Revenues and expenses are translated into U.S. dollars at average exchange rates in
effect during the period.
Defined Benefit Plans
Chemours has defined benefit plans covering certain of its employees outside of the U.S. The benefits of these plans, which primarily relate to pension,
are accrued over the employees’ service periods. The Company uses actuarial methods and assumptions in the valuation of its defined benefit
obligations and the determination of any net periodic pension income or expense. Any differences between actual and expected results, or changes
in the value of defined benefit obligations and plan assets, if any, are not recognized in earnings as they occur. Rather, they are systematically
recognized over subsequent periods.
Fair Value Measurement
Fair value is defined as the exit price, the price that would be received to sell an asset or transfer a liability in an orderly transaction between market
participants at the measurement date. Under the accounting for fair value measurements and disclosures, a fair value hierarchy was established to
prioritize the valuation inputs used to measure fair value. The hierarchy gives highest priority to unadjusted, quoted prices in active markets for identical
assets and liabilities (i.e., Level 1 measurements) and lowest priority to unobservable inputs (i.e., Level 3 measurements). A financial instrument’s level
within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
Chemours applies the following valuation hierarchy in measuring the fair values of its assets and liabilities:
•
Level 1 – Quoted prices in active markets for identical assets and liabilities;
•
Level 2 – Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar
items in markets that are not active, inputs other than quoted prices that are observable, such as interest rate and yield curves, and market-
corroborated inputs); and,
•
Level 3 – Unobservable inputs for the asset or liability, which are valued based on management’s estimates of assumptions that market
participants would use in pricing the asset or liability.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-20
Assets and Liabilities Held for Sale
The Company classifies long-lived assets or disposal groups as held for sale in the period when the following held for sale criteria are met: (i) the
Company commits to a plan to sell; (ii) the long-lived asset or disposal group is available for immediate sale in its present condition subject only to
terms that are usual and customary for sales of such long-lived assets or disposal groups; (iii) an active program to locate a buyer and other actions
required to complete the plan to sell have been initiated; (iv) the sale is probable within one year; (v) the asset or disposal group is being actively
marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) it is unlikely that significant changes to the plan will be made
or that the plan will be withdrawn. Long-lived assets and disposal groups classified as held for sale are measured at the lower of their carrying amount
or fair value less costs to sell. The Company ceases depreciation and amortization for a disposal group upon it being classified as held for sale.
Recent Accounting Pronouncements
Accounting Guidance Issued and Not Yet Adopted
Joint Venture Formations
In August 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-05, Business Combinations - Joint Venture Formations, which
requires joint ventures to initially measure its assets and liabilities at fair value on the formation date. The guidance will be effective prospectively to all
joint ventures formed on or after January 1, 2025, with early adoption permitted. The Company will adopt the guidance and apply the provisions of
ASU 2023-05 to joint ventures formed on or after January 1, 2025.
Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced
disclosure around the effective tax rate reconciliation, along with incremental disclosure around income taxes paid and certain income statement-
related disclosures. The guidance will be effective prospectively for fiscal years beginning after December 15, 2024, with early adoption permitted. The
Company plans to adopt the guidance and include required enhanced disclosures in its consolidated financial statements beginning in the year ending
December 31, 2025.
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures,
which requires more detailed disclosures of certain categories of expenses such as inventory purchases, employee compensation and depreciation
that are components of existing expense captions presented on the face of the income statement. The guidance will be effective for fiscal years
beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Companies have the option to apply
the guidance either on a retrospective or prospective basis, and early adoption is permitted. The Company is currently evaluating the impacts the
adoption of this standard will have on its consolidated financial statements.
Recently Adopted Accounting Guidance
Improvements to Reportable Segment Disclosures
In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures, which requires incremental disclosures related
to a public entity's reportable segments, including the disclosure of significant segment expense categories and amounts for each reportable segment.
This guidance is effective for the Company for the year beginning January 1, 2024, with early adoption permitted. The amendments should be applied
retrospectively to all prior periods presented in the financial statements. The Company adopted ASU 2023-07 on December 31, 2024 and included
enhanced disclosure of significant segment expense categories and amounts within "Note 29 – Geographic and Segment Information", the effect of
which did not have an impact on its financial position, results of operations, or cash flows.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-21
Note 4. Acquisitions and Divestitures
Divestitures
In June 2023, the Company entered into a definitive agreement with PureTech Scientific Inc. to sell the Company's Glycolic Acid business, included in
the Company's Other Segment, for cash consideration of approximately $137 (the “Glycolic Acid Transaction”). The Company completed the sale on
August 1, 2023, and received net cash proceeds of $138. Upon completion of the Glycolic Acid Transaction, the Company also recorded a net pre-tax
gain on sale of $106 in other income, net in the Consolidated Statements of Operations.
In December 2021, the Company entered into an agreement to sell land related to the Beaumont former operating site for cash consideration of
approximately $17 (the “Beaumont Transaction”). The Company completed the land sale on May 24, 2022 and received net cash proceeds of $17. In
January 2022, the Company entered into a stock agreement to sell certain of its wholly-owned subsidiaries and the remaining assets at its former
Aniline business facilities in Pascagoula, Mississippi (the “Pascagoula Transaction”). The Company completed the sale on June 9, 2022 and received
net cash proceeds of $16. Upon completion of the Beaumont Transaction and the Pascagoula Transaction, the Company recorded a net pre-tax gain
of $5 and $18, respectively, in other income, net in the Consolidated Statements of Operations during the year ended December 31, 2022.
Cash proceeds received were reflected in the "Cash flows from investing activities" section of the Consolidated Statements of Cash Flows.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-22
Note 5. Net Sales
As described further in "Note 2 – Basis of Presentation", certain prior period amounts reflected in the tables below have been revised to correct for
immaterial errors pertaining to income statement presentation of byproduct revenue sales.
Disaggregation of Net Sales
The following table sets forth a disaggregation of the Company’s net sales by geographic region and segment for the years ended December 31, 2024,
2023 and 2022.
Year Ended December 31,
2024
2023
2022
Net sales by geographic region (1)
North America:
Thermal & Specialized Solutions
$
1,029
$
1,076
$
996
Titanium Technologies
1,026
1,054
1,285
Advanced Performance Materials
499
556
632
Other Segment
35
59
71
Total North America
2,589
2,745
2,984
Asia Pacific:
Thermal & Specialized Solutions
200
192
178
Titanium Technologies
657
704
928
Advanced Performance Materials
518
554
657
Other Segment
11
12
24
Total Asia Pacific
1,386
1,462
1,787
Europe, the Middle East, and Africa:
Thermal & Specialized Solutions
362
369
320
Titanium Technologies
511
519
695
Advanced Performance Materials
258
297
283
Other Segment
7
12
17
Total Europe, the Middle East, and Africa
1,138
1,197
1,315
Latin America (2):
Thermal & Specialized Solutions
239
214
208
Titanium Technologies
378
403
472
Advanced Performance Materials
51
55
61
Other Segment
1
2
4
Total Latin America
669
674
745
Total net sales
$
5,782
$
6,078
$
6,831
(1)
Net sales are attributed to countries based on customer location.
(2)
Latin America includes Mexico.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-23
The following table sets forth a disaggregation of the Company’s net sales by product group and segment for the years ended December 31, 2024,
2023 and 2022. Certain prior period amounts have been recast in order to conform with current presentation of Thermal & Specialized Solutions net
sales disaggregation.
Year Ended December 31,
2024
2023
2022
Net sales by product group and segment
OpteonTM refrigerants
$
810
$
710
$
597
FreonTM refrigerants
614
722
750
Foam, propellants, and other
406
419
355
Total Thermal & Specialized Solutions
1,830
1,851
1,702
Titanium dioxide and other minerals
2,572
2,680
3,380
Total Titanium Technologies
2,572
2,680
3,380
Advanced materials
808
916
1,140
Performance solutions
518
546
493
Total Advanced Performance Materials
1,326
1,462
1,633
Performance chemicals and intermediates
54
85
116
Total Other Segment
54
85
116
Total net sales
$
5,782
$
6,078
$
6,831
Substantially all of the Company’s net sales are derived from goods and services transferred at a point in time. The Company’s net sales from trademark
licensing royalties were not significant for the years ended December 31, 2024, 2023 and 2022.
Contract Balances
The Company’s assets and liabilities from contracts with customers constitute accounts receivable - trade, deferred revenue, and customer rebates.
An amount for accounts receivable - trade is recorded when the right to consideration under a contract becomes unconditional. An amount for deferred
revenue is recorded when consideration is received prior to the conclusion that a contract exists, or when a customer transfers consideration prior to
the Company satisfying its performance obligations under a contract. Customer rebates represent an expected refund liability to a customer based on
a contract. In contracts with customers where a rebate is offered, it is generally applied retroactively based on the achievement of a certain sales
threshold. As revenue is recognized, the Company estimates whether or not the sales threshold will be achieved to determine the amount of variable
consideration to include in the transaction price.
The following table sets forth the Company’s contract balances from contracts with customers at December 31, 2024 and 2023.
December 31,
2024
2023
Contract assets:
Accounts receivable - trade, net (Note 11)
$
619
$
509
Contract liabilities:
Deferred revenue
$
11
$
16
Customer rebates (Note 19)
70
78
Changes in the Company’s deferred revenue balances resulting from additions for advance payments and deductions for amounts recognized in net
sales during the year ended December 31, 2024 were not significant. Changes in the Company’s deferred revenue balances during the year ended
December 31, 2023 were due to prepaid ore sales. For the years ended December 31, 2024 and 2023, the amount of net sales recognized from
performance obligations satisfied in prior periods (e.g., due to changes in transaction price) was not significant.
There were no material contract asset balances or capitalized costs associated with obtaining or fulfilling customer contracts as of December 31, 2024
and 2023.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-24
Remaining Performance Obligations
Certain of the Company’s master services agreements or other arrangements contain take-or-pay clauses, whereby customers are required to
purchase a fixed minimum quantity of product during a specified period, or pay the Company for such orders, even if not requested by the customer.
The Company considers these take-or-pay clauses to be an enforceable contract, and as such, the legally-enforceable minimum amounts under such
an arrangement are considered to be outstanding performance obligations on contracts with an original expected duration greater than one year. At
December 31, 2024, Chemours had $272 of remaining performance obligations. The Company expects to recognize approximately 41% of its
remaining performance obligations as revenue in 2025, approximately 30% as revenue in 2026, and approximately 29% in revenue for 2027. The
Company applies the allowable practical expedient and does not include remaining performance obligations that have original expected durations of
one year or less, or amounts for variable consideration allocated to wholly-unsatisfied performance obligations or wholly-unsatisfied distinct goods that
form part of a single performance obligation, if any. Amounts for contract renewals that are not yet exercised by December 31, 2024 are also excluded.
Note 6. Research and Development Expense
The following table sets forth the Company’s R&D expense by segment and Corporate for the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Thermal & Specialized Solutions
$
29
$
25
$
25
Titanium Technologies
28
32
34
Advanced Performance Materials
50
48
54
Other Segment
1
1
1
Corporate
1
2
4
Total research and development expense
$
109
$
108
$
118
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-25
Note 7. Restructuring, Asset-related, and Other Charges
The following table sets forth the components of the Company’s restructuring, asset-related, and other charges by segment for the years ended
December 31, 2024, 2023 and 2022.
Thermal &
Specialized
Solutions
Titanium
Technologies
Advanced
Performance
Materials
Other Segment
Corporate
Total
Year Ended December 31, 2024
Employee separation charges:
2024 Restructuring Program
$
—
$
—
$
14
$
—
$
6
$
20
Titanium Technologies Transformation Plan
—
(1)
—
—
—
(1)
2023 Restructuring Program
—
—
—
—
—
—
Total employee separation charges
—
(1)
14
—
6
19
Decommissioning and other charges:
2024 Restructuring Program
—
—
3
—
—
3
Titanium Technologies Transformation Plan
—
11
—
—
—
11
Total Decommissioning and other charges
—
11
3
—
—
14
Total restructuring and other charges
—
10
17
—
6
33
Asset-related charges:
2024 Restructuring Program
—
—
27
—
—
27
Total asset-related charges
—
—
27
—
—
27
Total restructuring, asset-related, and other
charges
$
—
$
10
$
44
$
—
$
6
$
60
Thermal &
Specialized
Solutions
Titanium
Technologies
Advanced
Performance
Materials
Other Segment
Corporate
Total
Year Ended December 31, 2023
Employee separation charges:
Titanium Technologies Transformation Plan
$
—
$
21
$
—
$
—
$
—
$
21
2023 Restructuring Program
—
—
3
—
1
4
2022 Restructuring Programs
1
—
(1)
—
(1)
(1)
ERP Implementation Abandonment Charges
—
—
—
—
1
1
Total employee separation charges
1
21
2
—
1
25
Decommissioning and other charges:
Titanium Technologies Transformation Plan
—
27
—
—
—
27
ERP Implementation Abandonment Charges
—
—
—
—
4
4
Total Decommissioning and other charges
—
27
—
—
4
31
Total restructuring and other charges
1
48
2
—
5
56
Asset-related charges:
Titanium Technologies Transformation Plan
77
—
—
1
78
ERP Implementation Abandonment Charges
—
—
—
—
11
11
Other asset-related charges
8
—
—
—
—
8
Total asset-related charges
8
77
—
—
12
97
Total restructuring, asset-related, and other
charges
$
9
$
125
$
2
$
—
$
17
$
153
Thermal &
Specialized
Solutions
Titanium
Technologies
Advanced
Performance
Materials
Other Segment
Corporate
Total
Year Ended December 31, 2022
Employee separation charges
$
1
$
1
$
3
$
—
$
4
$
9
Decommissioning and other charges
—
—
—
2
—
2
Total restructuring and other charges
1
1
3
2
4
11
Asset-related charges
—
5
—
—
—
5
Total restructuring, asset-related, and other
charges
$
1
$
6
$
3
$
2
$
4
$
16
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-26
2024 Restructuring Program
In the third quarter of 2024, management initiated certain transformation initiatives principally within the Advanced Performance Materials business
and certain Corporate functions to capture operational and commercial synergies and cost optimization. As part of these efforts, during the third quarter
of 2024, the Company initiated additional cost savings programs that were largely attributable to further aligning the cost structure of the Company’s
businesses and corporate functions with its financial objectives. As a result, during the year ended December 31, 2024, the Company recorded charges
of $50, consisting of non-cash asset related charges of $27, employee separation charges of $20 and other charges of $3. The associated severance
payments began in the third quarter of 2024 and are expected to be substantially completed by the second half of 2025. The $27 of asset related
charges are based on decisions related to the write off of certain operating assets and associated construction-in-progress and other assets with no
future intended use, as part of a strategic asset footprint transformation analysis within the Advanced Performance Materials business. The Company
also expects to incur decommissioning and other charges of approximately $3 through 2026 which will be recognized as period costs as incurred.
Titanium Technologies Transformation Plan
On July 27, 2023, the Company announced the closure of its manufacturing site in Kuan Yin, Taiwan effective August 1, 2023, following the Company’s
Board of Directors approval on July 26, 2023. The Company began shutting down production and started decommissioning the plant during the third
quarter of 2023 and fully completed the shut-down during the fourth quarter of 2023. Decommissioning activities were completed in the second quarter
of 2024 and dismantling began thereafter. Dismantling and removal activities are expected to be completed by the first quarter of 2025.
During the year ended December 31, 2024, the Company recorded of $11 of decommissioning, dismantling and other charges related to Kuan Yin,
inclusive of a reduction in certain contract termination costs. Through December 31, 2024, the Company has recorded charges of approximately $130
consisting of asset-related impairments of $78, employee separation costs of $14, contract termination costs of $14 and decommissioning and other
charges of $24. The associated severance payments were started in the fourth quarter 2023 and are expected to be substantially completed in the
first quarter of 2025. For the year ended December 31, 2023, the Company also recorded $40 related to the write off of certain raw materials and
stores inventories that can no longer be utilized following the production shutdown. This amount is recorded in Cost of Goods Sold in the Consolidated
Statement of Operations.
As part of the Titanium Technologies Transformation Plan, following the plant closure, the segment also initiated an organizational redesign to further
align its cost structure with its financial objectives. As a result, cumulative employee separation charges of $6 were recorded from inception through
December 31, 2024. The employee separation and related payments were substantially completed in the fourth quarter of 2024. During the year ended
December 31, 2024, the Company made total cash payments of $48 associated with the Titanium Technologies Transformation Plan, inclusive of
severance payments, decommissioning, and other third-party fees.
2023 Restructuring Program
In addition to the Titanium Technologies plans, in 2023, management also initiated additional severance programs to further align the cost structure of
the Company’s businesses and corporate functions with its financial objectives. From inception through December 31, 2024, the Company has
recorded cumulative employee separation charges of $4. The severance costs were recognized as follows: $3 in Advanced Performance Materials
and $1 in Corporate. The program and related severance payments were substantially completed in the third quarter of 2024.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-27
2022 Restructuring Program
Management initiated a severance program in 2022 that was largely attributable to aligning the cost structure of the Company’s businesses and
corporate functions with its strategic and financial objectives. From inception through December 31, 2024, the cumulative amount incurred for the
Company's 2022 restructuring program amounted to $8 and the related payments were substantially completed in the fourth quarter of 2023.
Enterprise Resource Planning ("ERP") Implementation Abandonment Charges
During the first quarter of 2023, the Company decided to abandon its implementation of a new ERP software platform and recorded the following
charges: $11 write-off of previously deferred software development costs determined to have no alternative use, $4 related to contract termination
charges, and $1 of employee separation charges. Employee severance payments related to this charge were completed during the first quarter of
2024.
Plant and Product Line Closures
Thermal & Specialized Solutions
In the year ended December 31, 2023, the Company recorded an asset-related impairment of $8 resulting from the shutdown of a production line at
the Company's El Dorado site.
Other Asset-related Charges
Titanium Technologies
In the year ended December 31, 2022, the Company recorded asset-related charges of $5 resulting from the conflict between Russia and Ukraine and
the Company's decision to suspend its business with Russian entities.
The following table sets forth the change in the Company’s employee separation-related liabilities associated with its restructuring programs for the
years ended December 31, 2024 and 2023.
2024
Restructuring
Program
Titanium
Technologies
Transformation
Plan
2023
Restructuring
Program
2022
Restructuring
Program
ERP
Implementation
Abandonment
Total
Balance at January 1, 2023
$
—
$
—
$
—
$
6
$
—
$
6
Charges to income
—
21
4
(1)
1
25
Payments
—
(11)
—
(5)
(1)
(17)
Balance at December 31, 2023
—
10
4
—
—
14
Charges to income
20
(1)
—
—
—
19
Payments
(8)
(8)
(4)
—
—
(20)
Balance at December 31, 2024
$
12
$
1
$
—
$
—
$
—
$
13
With respect to the $14 of contract termination liabilities associated with the Titanium Technologies Transformation Plan, the Company paid $10 during
the year and as such, at December 31, 2024 the Company had $4 remaining as an outstanding liability. There were no other significant outstanding
liabilities related to the Company’s decommissioning and other restructuring-related charges at December 31, 2024 and 2023.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-28
Note 8. Other Income, Net
The following table sets forth the components of the Company’s other income, net for the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Leasing, contract services, and miscellaneous income (1)
$
5
$
11
$
53
Royalty income (2)
6
8
6
Gain on sales of assets and businesses, net (3)
3
110
21
Exchange losses, net (4)
(9)
(38)
(15)
Non-operating pension and other post-retirement employee benefit income
(5)
3
—
5
Total other income, net
$
8
$
91
$
70
(1)
For the year ended December 31, 2022, miscellaneous income includes proceeds from a settlement of a patent infringement matter relating to certain copolymer patents
associated with the Company’s Advanced Performance Materials segment.
(2)
Royalty income is primarily from technology licensing.
(3)
For the year ended December 31, 2023, gain on sale of assets and businesses, net includes pre-tax gain on sale of $106 related to the Glycolic Acid Transaction. For the year
ended December 31, 2022, gain on sale of assets and businesses, net includes pre-tax gain on sale of $5 to the Beaumont Transaction and $18 related to the Pascagoula
Transaction. Refer to "Note 4 – Acquisitions and Divestitures" for further details.
(4)
Exchange (losses), net includes gains and losses on the Company’s foreign currency forward contracts that have not been designated as a cash flow hedge.
(5)
Non-operating pension and other post-retirement employee benefit income represents the non-service cost component of net periodic pension income.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-29
Note 9. Income Taxes
The following table sets forth the components of the Company’s provision for (benefit from) income taxes for the years ended December 31, 2024,
2023 and 2022.
Year Ended December 31,
2024
2023
2022
Current tax expense (benefit):
U.S. federal
$
6
$
25
$
83
U.S. state and local
—
(5)
13
International
62
57
47
Total current tax expense
68
77
143
Deferred tax (benefit) expense:
U.S. federal
(11)
(112)
8
U.S. state and local
(10)
(24)
(2)
International
(6)
(22)
14
Total deferred tax (benefit) expense
(27)
(158)
20
Total provision for (benefit from) income taxes
$
41
$
(81)
$
163
The following table sets forth the components of the Company’s deferred tax assets and liabilities at December 31, 2024 and 2023.
December 31,
2024
2023
Deferred tax assets:
Environmental and other liabilities
$
188
$
196
Employee related and benefit items
48
41
Other assets and accrual liabilities
140
133
Intangible Assets
124
155
Tax attribute carryforwards
234
200
Operating lease liability
60
63
Total deferred tax assets
794
788
Less: Valuation allowance
(134)
(165)
Total deferred tax assets, net
660
623
Deferred tax liabilities:
Property, plant, and equipment and intangible assets
(279)
(240)
LIFO inventories
(14)
(8)
Operating lease asset
(63)
(63)
Other liabilities
(48)
(53)
Total deferred tax liabilities
(404)
(364)
Deferred tax assets, net
$
256
$
259
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-30
The following table sets forth an analysis of the Company’s effective tax rates for the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
$
%
$
%
$
%
Statutory U.S. federal income tax rate
$
27
21.0%
$
(67)
21.0%
$
156
21.0%
State income taxes, net of federal benefit
(10)
(7.9)%
(28)
8.8%
7
1.0%
Lower effective tax rate on international operations, net
(6)
(4.7)%
55
(17.3)%
(16)
(2.2)%
Basis difference in intangible assets, net
(1)
(0.8)%
(12)
3.8%
—
—%
Tax exempt income
—
—%
(24)
7.5%
—
—%
Non - deductible expenses
13
10.3%
11
(3.4)%
1
0.1%
Goodwill
12
9.5%
—
—%
—
—%
Depletion
(4)
(3.1)%
(4)
1.3%
(6)
(0.8)%
Exchange gains
(6)
(4.7)%
(16)
5.0%
(8)
(1.1)%
Provision to return and other adjustments
16
12.7%
(6)
1.9%
(2)
(0.3)%
Valuation allowance
—
—%
15
(4.7)%
4
0.5%
Executive compensation limitation
1
0.8%
9
(2.8)%
3
0.5%
Stock-based compensation
(1)
(0.8)%
(13)
4.1%
(9)
(1.2)%
R&D credit
(7)
(5.5)%
(8)
2.5%
(7)
(0.9)%
Uncertain tax positions
5
3.9%
7
(2.2)%
36
4.9%
Other, net
2
1.6%
—
—%
4
0.5%
Total effective tax rate
$
41
32.3%
$
(81)
25.5%
$
163
22.0%
In 2023, the Company received a ruling from the Swiss tax authorities which resulted in the recognition of a deferred tax asset related to intangibles
and an accompanying valuation allowance. The current year movement of this ruling continues to be presented net of the valuation allowance in the
effective tax rate reconciliation above.
The following table sets forth the Company’s income (loss) before income taxes for its U.S. and international operations for the years ended December
31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
U.S. operations (including exports)
$
(199)
$
(638)
$
217
International operations
326
320
524
Income (loss) before income taxes
$
127
$
(318)
$
741
Management asserts that it is indefinitely reinvested with respect to all undistributed earnings prior to 2018 and, therefore, has not recorded deferred
tax liabilities with respect to those earnings. Beginning in 2018, management determined that the Company’s earnings from certain foreign subsidiaries
are not indefinitely reinvested and presumed such earnings will be distributed to the U.S. At December 31, 2024 and 2023, deferred tax liabilities for
the foreign subsidiaries that are not indefinitely reinvested were not material to the Company’s consolidated financial statements. At December 31,
2024, the amount of indefinitely reinvested unremitted earnings was approximately $522. The potential tax implications of the repatriation of unremitted
earnings are driven by the facts at the time of distribution; however, the incremental cost to repatriate earnings is expected to be primarily related to
withholding taxes and is not expected to be material.
The Company reviews its tax return positions, taking into account the progress of audits by various taxing jurisdictions and other changes in relevant
facts and circumstances evident at each balance sheet date. At December 31, 2024, the Company recognized net tax expense of $6 related to
uncertain tax positions specific to transfer pricing and the treatment of discrete intercompany transactions. The Company maintains its as filed tax
positions are appropriate and supportable.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-31
Under the tax laws of various jurisdictions in which the Company operates, deductions or credits that cannot be fully utilized for tax purposes during
the current year may be carried forward or back, subject to statutory limitations, to reduce taxable income or taxes payable in future or prior years. At
December 31, 2024, the Company’s state net operating losses amounted to $22, which substantially expire between 2027 and 2043. The Company
has foreign net operating losses of $41, which have various expiration dates between 2029 through 2044, as well as unlimited carryforward periods,
and $19 of certain foreign tax credits, which expire between 2029 and 2034.
Each year, Chemours and/or its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and non-U.S. jurisdictions.
The following table sets forth the Company’s significant jurisdictions’ tax returns that are subject to examination by their respective taxing authorities
for the open years listed.
Jurisdiction
Open Years
China
2019 through 2024
India
2016 through 2024
Mexico
2019 through 2024
Netherlands
2023 through 2024
Singapore
2019 through 2024
Switzerland
2019 through 2024
Taiwan
2023 through 2024
U.S.
2017 through 2024
Positions challenged by the taxing authorities may be settled or appealed by Chemours and/or EID in accordance with the tax matters agreement. As
a result, income tax uncertainties are recognized in the Company’s consolidated financial statements in accordance with accounting for income taxes,
when applicable.
The following table sets forth the change in the Company’s unrecognized tax benefits for the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Balance at January 1,
$
73
$
65
$
5
Gross amounts of increases and decreases in unrecognized tax benefits
as a result of adjustments to tax provisions taken during the prior period
—
2
54
Gross amounts of increases and decreases in unrecognized tax benefits
as a result of tax positions taken during the current period
9
6
6
Reduction to unrecognized tax benefits as a result of a lapse of the
applicable statute of limitations
—
—
—
Balance at December 31,
$
82
$
73
$
65
Total unrecognized tax benefits, if recognized, that would impact the
effective tax rate
$
54
$
48
$
42
Total amount of interest and penalties recognized in the consolidated
statements of operations
5
4
4
Total amount of interest and penalties recognized in the consolidated
balance sheets
13
8
4
As of December 31, 2024, the total amount of unrecognized tax benefits was $82, of which $54 was recorded in other liabilities and $28 was recorded
as an offset to deferred tax assets. These unrecognized tax benefits primarily relate to transfer pricing matters and the treatment of discrete
intercompany transactions. In addition, accruals of $13 have been recorded for penalties and interest, as of December 31, 2024, in other liabilities.
These liabilities at December 31, 2024 were reduced by $38 for offsetting benefits from the corresponding effects of potential transfer pricing
adjustments included in other assets.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-32
The following table sets forth a rollforward of the Company’s deferred tax asset valuation allowance for the years ended December 31, 2024, 2023
and 2022.
Year Ended December 31,
2024
2023
2022
Balance at January 1,
$
165
$
12
$
8
Charges to income tax expense
1
153
4
Reduction of valuation allowance
(32)
—
—
Balance at December 31,
$
134
$
165
$
12
For the years ended December 31, 2024, 2023, and 2022 the Company recorded $(31), $153, and $4 of valuation allowance, respectively. For the
year ended December 31, 2024, the net change in valuation allowance was a $31 decrease primarily related to deferred tax assets of its Taiwan and
Switzerland subsidiaries, which are now considered realizable.
For the year ended December 31, 2023 there was a plant closure in Taiwan during the third quarter of 2023, the Company recorded an income tax
expense of $13 related to the recognition of a valuation allowance on the deferred tax assets of one of its Taiwan subsidiaries. The Company has
evaluated all available positive and negative evidence, including the reversal of certain deferred liabilities, as well as the future projections of profitability
for the plant shutdown. As a result, the Company determined that a majority of its deferred tax assets related to the Taiwanese subsidiary are not more
likely than not to be realized and accordingly recorded a valuation allowance against those deferred tax assets. In addition, the Company recorded
income tax expense of $138 related to the valuation allowance on certain deferred tax assets in its Switzerland subsidiaries. This directly relates to a
deferred tax asset recorded in 2023 in conjunction with a Swiss ruling received in the fourth quarter. The valuation allowance was recorded specifically
due to the limitations in the realizability and deductibility of the new deferred tax asset related to intangible assets and has no further impact to the
remaining deferred tax assets of Switzerland subsidiaries. The remaining valuation allowance recorded was related to certain foreign tax credits and
state net operating losses. For the year ended December 31, 2022, the Company recorded a valuation allowance of $3 against certain foreign tax
credits, as well as $1 of valuation allowance on state net operating losses.
Note 10. Earnings Per Share of Common Stock
The following table sets forth the reconciliations of the numerators and denominators of the Company’s basic and diluted earnings (loss) per share
calculations for the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Numerator:
Net income (loss) attributable to Chemours
$
86
$
(238)
$
578
Denominator:
Weighted-average number of common shares
outstanding - basic
149,494,462
148,912,397
155,359,361
Dilutive effect of the Company’s employee
compensation plans (1)
677,827
—
2,943,646
Weighted-average number of common shares
outstanding - diluted
150,172,289
148,912,397
158,303,007
Basic earnings (loss) per share of common stock (2)
$
0.58
$
(1.60)
$
3.72
Diluted earnings (loss) per share of common stock (1) (2)
0.57
(1.60)
3.65
(1)
In periods where the Company incurs a net loss, the impact of potentially dilutive securities is excluded from the calculation of EPS, as their inclusion would have an anti-dilutive
effect. As such, with respect to the measure of diluted EPS, the impact of 1,584,958 potentially dilutive securities is excluded from the calculation for the year ended December
31, 2023.
(2)
Figures may not recalculate exactly due to rounding. Basic and diluted earnings (loss) per share are calculated based on unrounded numbers.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-33
The following table sets forth the average number of stock options and performance stock options that were out of the money and, therefore, were not
included in the Company’s diluted earnings (loss) per share calculations for the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Average number of stock options
2,246,602
1,444,099
1,077,922
Note 11. Accounts and Notes Receivable, Net
The following table sets forth the components of the Company’s accounts and notes receivable, net at December 31, 2024 and 2023.
December 31,
2024
2023
Accounts receivable - trade, net (1)
$
619
$
509
VAT, GST, and other taxes (2)
114
81
Other receivables (3)
37
20
Total accounts and notes receivable, net
$
770
$
610
(1)
Accounts receivable - trade, net includes trade notes receivable of $1 and less than $1 and is net of allowances for doubtful accounts of $2 and $2 at December 31, 2024 and
2023, respectively. Such allowances are equal to the estimated uncollectible amounts.
(2)
Value added tax (“VAT”) and goods and services tax (“GST”) for various jurisdictions.
(3)
Other receivables consist of derivative instruments, advances, and other deposits including receivables under the terms of the MOU. For details of the MOU, see “Note 22 –
Commitments and Contingent Liabilities”.
Accounts and notes receivable are carried at amounts that approximate fair value. Bad debt expense amounted to $8, $3 and $9 for the years ended
December 31, 2024, 2023 and 2022, respectively.
The following table sets forth the change in the Company's allowance for doubtful accounts for the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Balance at January 1,
$
2
$
10
$
5
Additions charged to expenses
8
3
9
Deductions from reserves (1)
(8)
(11)
(4)
Balance at December 31,
$
2
$
2
$
10
(1)
Include bad debt write-offs of less than $1 for each of the years ended December 31, 2024, 2023 and 2022, respectively.
Customer Vendor Financing Facilities
The Company participates in several financing facilities maintained by our customers. These facilities allow the Company to monetize certain
receivables prior to their due date. The Company receives a discounted amount from the financial institution which varies depending on the timing of
the payment from the financing institution in relation to the invoice due date from the customer. The Company classifies cash received from the financial
institutions as an operating cash flow. For one transaction in 2023, the Company received $26 from a financial institution prior to the recognition of
revenue from the customer. For that advance, the Company classified the proceeds as a financing cash inflow under the caption “Proceeds from
supplier financing programs” on the Consolidated Statement of Cash Flows for the year ended December 31, 2023. As of December 31, 2023, all
revenue recognition requirements related to this transaction had been satisfied.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-34
Note 12. Inventories
The following table sets forth the components of the Company’s inventories at December 31, 2024 and 2023.
December 31,
2024
2023
Finished products
$
889
$
770
Semi-finished products
271
255
Raw materials, stores, and supplies
688
709
Inventories before LIFO adjustment
1,848
1,734
Less: Adjustment of inventories to LIFO basis
(376)
(382)
Total inventories
$
1,472
$
1,352
Inventory values, before LIFO adjustment, are generally determined by the average cost method, which approximates current cost. Inventories are
valued under the LIFO method at substantially all of the Company’s U.S. locations, which comprised $900 and $920 (or 49% and 53%, respectively)
of inventories before the LIFO adjustments at December 31, 2024 and 2023, respectively. The remainder of the Company’s inventory held in
international locations and certain U.S. locations is valued under the average cost method.
Note 13. Property, Plant, and Equipment, Net
The following table sets forth the components of the Company’s property, plant, and equipment, net at December 31, 2024 and 2023.
December 31,
2024
2023
Equipment
$
7,911
$
7,652
Buildings
1,133
1,180
Construction-in-progress
404
450
Land
88
94
Mineral rights
36
36
Property, plant, and equipment
9,572
9,412
Less: Accumulated depreciation
(6,389)
(6,196)
Total property, plant, and equipment, net
$
3,183
$
3,216
Property, plant, and equipment, net included gross assets under finance leases of $97 and $100 at December 31, 2024 and 2023, respectively.
Interest expense capitalized as part of property, plant, and equipment, net amounted to $10, $7, and $7 for the years ended December 31, 2024, 2023
and 2022, respectively.
Depreciation expense amounted to $301, $297, and $286 for the years ended December 31, 2024, 2023 and 2022, respectively.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-35
Note 14. Leases
The Company leases certain office space, laboratory space, equipment, railcars, tanks, barges and warehouses. Lease expense is recognized over
the term of these leases on a straight-line basis. The Company’s leases have remaining terms of up to 22 years. Some leases of equipment contain
immaterial amounts of residual value guarantees. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets.
The following table sets forth the Company’s lease assets and lease liabilities and their balance sheet locations at December 31, 2024 and 2023.
December 31,
Balance Sheet Location
2024
2023
Lease assets:
Operating lease right-of-use assets
Operating lease right-of-use assets
$
258
$
260
Finance lease assets
Property, plant, and equipment, net (Note 13)
48
61
Total lease assets
$
306
$
321
Lease liabilities:
Current:
Operating lease liabilities
Other accrued liabilities (Note 19)
$
53
$
55
Finance lease liabilities
Short-term and current maturities of long-term
debt (Note 20)
13
12
Total current lease liabilities
66
67
Non-current:
Operating lease liabilities
Operating lease liabilities
194
206
Finance lease liabilities
Long-term debt, net (Note 20)
33
46
Total non-current lease liabilities
227
252
Total lease liabilities
$
293
$
319
The following table sets forth the components of the Company’s lease cost for the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Operating lease cost
$
61
$
63
$
51
Short-term lease cost
14
7
4
Variable lease cost
19
18
16
Finance lease cost:
Amortization of lease assets
9
9
8
Interest on lease liabilities
3
3
4
Total lease cost
$
106
$
100
$
83
The following table sets forth the cash flows related to the Company’s leases for the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$
69
$
70
$
56
Operating cash flows from finance leases
3
3
4
Financing cash flows from finance leases
12
11
11
Non-cash lease liabilities activity:
Leased assets obtained in exchange for new operating lease liabilities
$
38
$
66
$
65
Leased assets obtained in exchange for new finance lease liabilities
7
—
—
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-36
The following table sets forth the weighted-average terms and weighted-average discount rates for the Company’s leases at December 31, 2024 and
2023.
December 31,
2024
2023
Weighted-average remaining lease term (years):
Operating leases
8.3
8.9
Finance leases
4.5
4.6
Weighted-average discount rate:
Operating leases
6.09%
5.89%
Finance leases
5.67%
5.42%
The following table sets forth the Company’s lease liabilities’ maturities for the next five years and thereafter.
Operating Leases
Finance Leases
Total
2025
$
66
$
16
$
82
2026
57
11
68
2027
41
9
50
2028
31
9
40
2029
26
4
30
Thereafter
85
3
88
Total lease payments
306
52
358
Less: Imputed interest
59
6
65
Present value of lease liabilities
$
247
$
46
$
293
The Chemours Discovery Hub
In October 2017, Chemours executed a build-to-suit lease agreement to construct a new 312,000-square-foot R&D facility located in the Science,
Technology, and Advanced Research campus of the University of Delaware in Newark, Delaware (“Chemours Discovery Hub”). Chemours was
deemed to be the owner for accounting purposes during construction of the facility. Construction was completed in the fourth quarter of 2019, and,
upon its completion, Chemours evaluated whether a sale occurred for purposes of sale-leaseback accounting treatment. The Company determined
that this transaction did not qualify for sale-leaseback accounting, and, as a result, the leasing arrangement is considered to be a financing transaction.
At completion of the construction, the build-to-suit lease liability was reclassified as a financing obligation within long-term debt, net, and the build-to-
suit lease asset was capitalized in property, plant and equipment, net. At December 31, 2024 and 2023, a financing obligation of $90 and $92,
respectively, and property, plant, and equipment of $76 and $80, respectively, are recorded on the Company’s consolidated balance sheet.
The following table sets forth the Company’s minimum future payments due for the next five years and thereafter related to the Chemours Discovery
Hub financing obligation.
2025
$
7
2026
7
2027
7
2028
7
2029
7
Thereafter
122
Total lease payments
157
Less: Imputed interest
(67)
Present value of financing obligation
$
90
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-37
Note 15. Goodwill and Other Intangible Assets, Net
Goodwill
The following table sets forth the changes in the carrying amount of the Company’s goodwill by segment for the years ended December 31, 2024 and
2023.
Thermal &
Specialized
Solutions
Titanium
Technologies
Advanced
Performance
Materials
Other
Segment
Total
Balance at January 1, 2023
$
33
$
13
$
56
$
—
$
102
Balance at December 31, 2023
33
13
56
—
102
Goodwill impairment
—
—
(56)
—
(56)
Balance at December 31, 2024
$
33
$
13
$
—
$
—
$
46
Chemours consists of four operating segments: Thermal & Specialized Solutions, Titanium Technologies, Advanced Performance Materials, and
Performance Chemicals and Intermediates (included in Other Segment). The Company defines its reporting units as operating units or one level below
its operating segments. In 2024 and 2023, the Company had three reporting units for goodwill testing, which align with the Company's operating
segments: Thermal & Specialized Solutions, Titanium Technologies, and Advanced Performance Materials. The Company completes its annual
goodwill impairment test on October 1 each year, or more frequently if triggering events indicate a possible impairment. The Company continually
evaluates financial performance, economic conditions and other recent developments in assessing if a triggering event indicates that the carrying
values of goodwill or long-lived assets are impaired.
The total accumulated impairment losses included in the Company’s goodwill balance at December 31, 2024 and 2023 amounted to $56 and $0,
respectively.
During the third quarter of 2024, the Company reviewed recently released third-party industry projections, which for hydrogen reflected lower end-
market demand as well as slower market growth through 2030 and a more uncertain long-term growth trajectory beyond 2030. In response to these
negative market outlook developments as well as increased commercial headwinds due to limited cyclical end-markets recovery and competitive
intensity, the Company has revised its financial projections for the Advanced Performance Materials business which includes reductions to its
investment plans. The Company concluded that these market developments, as well as the Company's revised financial projections to reflect these
events, represented a triggering event for the Company's Advanced Performance Materials reporting unit and associated goodwill, as well as the
related asset group, during the third quarter of 2024. As a result of this conclusion, the Company completed an interim impairment assessment as of
August 31, 2024 for its Advanced Performance Materials reporting unit and the related asset group.
The Company concluded that the undiscounted cash flows exceeded the carrying value of the long-lived assets, and that an impairment did not exist.
In completing an interim quantitative goodwill impairment test, the Company compared the reporting unit's fair value to its carrying value in order to
determine if an impairment charge was warranted. The fair value of the Company's Advanced Performance Materials reporting unit was determined
by using a combination of discounted cash flow models (a form of the income approach) and the guideline public company method (a form of the
market approach). These valuation models incorporated a number of assumptions and judgments surrounding general market and economic conditions
and internal forecasts of future business performance that are based on short- and long-term revenue growth rates, EBITDA margins and prospective
financial information surrounding the future cash flows of the reporting unit. Discount rate and market multiple assumptions were determined based on
relevant peer companies in the chemicals sector. As a result of the analysis performed, the Company concluded that the carrying amount of the
Advanced Performance Materials reporting unit exceeded its fair value resulting in a non-cash goodwill impairment charge of $56, which is recorded
within “Goodwill impairment charge” on the Consolidated Statements of Operations for the year ended December 31, 2024.
No further goodwill impairments were recorded for the years ended December 31, 2024 and 2023, as the fair values of the Company's other reporting
units that carry goodwill exceeded each respective reporting unit's carrying amount on October 1, 2024 and 2023.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-38
Other Intangible Assets, Net
The following table sets forth the gross carrying amounts and accumulated amortization of the Company’s other intangible assets by major class at
December 31, 2024 and 2023.
December 31, 2024
December 31, 2023
Cost
Accumulated
Amortization
Net
Cost
Accumulated
Amortization
Net
Allowance units (1)
$
8
$
(5)
$
3
$
13
$
(10)
$
3
Customer lists
2
(2)
—
2
(2)
—
Customer relationships
22
(22)
—
22
(22)
—
Patents
13
(13)
—
13
(13)
—
Purchased and licensed technology
3
(3)
—
3
(3)
—
Other
11
(11)
—
10
(10)
—
Total other intangible assets
$
59
$
(56)
$
3
$
63
$
(60)
$
3
(1)
Allowance units represent rights purchased for the production and/or importation of regulated materials.
The aggregate pre-tax amortization expense for definite-lived intangible assets was less than $1, $10, and $5 for the years ended December 31, 2024,
2023 and 2022, respectively. Less than $1 of pre-tax amortization expense is estimated annually for 2025, 2026, 2027, 2028, and 2029. Definite-lived
intangible assets are amortized over their estimated useful lives, generally for periods ranging up to 20 years. The reasonableness of the useful lives
of these assets is periodically evaluated. The Company does not have any indefinite-lived intangible assets.
Note 16. Investments in Affiliates
The Company holds investments in companies where it, directly or indirectly, owns 20% to 50% of the voting stock, or has the ability to exercise
significant influence over the operating and financial policies of the investee.
The following table sets forth the jurisdiction, carrying value, and ownership percentages of the Company’s investments in affiliates at December 31,
2024 and 2023.
December 31, 2024
December 31, 2023
Investee
Jurisdiction
Carrying Value
Ownership
Carrying Value
Ownership
Chemours-Mitsui Fluorochemicals Company, Ltd.
Japan
$
79
50.0%
$
82
50.0%
The Chemours Chenguang Fluoromaterials Company Limited
China
33
50.0%
33
50.0%
Changshu 3F Zhonghao New Chemical Materials Co., Ltd.
China
40
10.0%
43
10.0%
$
152
$
158
The following table sets forth the changes in the Company’s investments in affiliates for the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Balance at January 1,
$
158
$
175
$
169
Equity in earnings of affiliates
43
45
55
Dividends
(37)
(49)
(33)
Currency translation and other
(12)
(13)
(16)
Balance at December 31,
$
152
$
158
$
175
The Company engages in transactions with its equity method investees in the ordinary course of business. For the years ended December 31, 2024,
2023 and 2022, net sales to the Company’s equity method investees amounted to $127, $144, and $193, respectively, and purchases from the
Company’s equity method investees amounted to $295, $221, and $218, respectively.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-39
Note 17. Other Assets
The following table sets forth the components of the Company’s other assets at December 31, 2024 and 2023.
December 31,
2024
2023
Capitalized repair and maintenance costs
$
315
$
230
Pension assets (1)
97
57
Deferred income taxes
291
303
Miscellaneous (2)
94
87
Total other assets
$
797
$
677
(1)
Pension assets represents the funded status of certain of the Company’s long-term employee benefit plans.
(2)
Miscellaneous includes corresponding income tax benefits related to uncertain tax positions on transfer pricing (see "Note 9 – Income Taxes").
Note 18. Accounts Payable
The following table sets forth the components of the Company’s accounts payable at December 31, 2024 and 2023.
December 31,
2024
2023
Trade payables
$
1,120
$
1,134
VAT and other payables
22
25
Total accounts payable
$
1,142
$
1,159
Supplier Financing
The Company maintains supply chain finance programs with several financial institutions. The programs allow its suppliers to sell their receivables to
one of the participating financial institutions at the discretion of both parties on terms that are negotiated between the supplier and the respective
financial institution. Pursuant to their agreement with a financial institution, certain suppliers may elect to be paid early at their discretion. The key terms
of the supplier invoice, including the amounts due and scheduled payment dates, are not impacted by its suppliers' decisions to sell their receivables
under the programs. For the Company's supplier financing program obligations classified as accounts payable, the Company agrees to pay the financial
institution on those sold invoices on the original invoice due date. The Company also maintains a supplier finance program whose obligations are
classified as short-term debt based on an extension of payment terms past the original invoice due date. There are no assets pledged or other forms
of guarantees associated with these programs. The Company or the financial institution may terminate the program upon at least 30 days' notice.
The outstanding payment obligations at December 31, 2024 and 2023 were $180 and $197, respectively. At December 31, 2024 and 2023, $162 and
$170 are in Accounts Payable in the Consolidated Balance Sheets, while $18 and $27 are included in Short-term and current maturities of long-term
debt in the Consolidated Financial Statements.
The following table sets forth the changes in Company's outstanding payment obligations by balance sheet location for the years ended December 31,
2024 and 2023.
Accounts Payable
Short-Term Debt
Total
Balance at January 1, 2023
$
164
$
18
$
182
Invoices confirmed during the year
471
96
567
Confirmed invoices paid during the year
(465)
(87)
(552)
Balance at December 31, 2023
170
27
197
Invoices confirmed during the year
450
93
543
Confirmed invoices paid during the year
(458)
(102)
(560)
Balance at December 31, 2024
$
162
$
18
$
180
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-40
Note 19. Other Accrued Liabilities
The following table sets forth the components of the Company’s other accrued liabilities at December 31, 2024 and 2023.
December 31,
2024
2023
Accrued litigation (1)
$
112
$
713
Asset retirement obligations (2)
8
18
Income taxes
22
28
Customer rebates
70
78
Accrued interest
18
18
Operating lease liabilities (3)
53
55
Miscellaneous (4)
110
148
Total other accrued liabilities
$
393
$
1,058
(1)
At December 31, 2024 and 2023, accrued litigation includes $68 for settlements with the State of Ohio and the State of Delaware. At December 31, 2024, accrued litigation
also includes an accrual related to the Ohio MDL of $14. At December 31, 2023, accrued litigation also includes $592 for the United States Public Water System Settlement.
Refer to "Note 22 – Commitments and Contingent Liabilities" for further details.
(2)
Represents the current portion of asset retirement obligations (see “Note 22 – Commitments and Contingent Liabilities”).
(3)
Represents the current portion of operating lease liabilities (see “Note 14 – Leases”).
(4)
Miscellaneous primarily includes accruals related to utility expenses, property taxes, a workers compensation indemnification liability and other miscellaneous expenses.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-41
Note 20. Debt
The following table sets forth the components of the Company’s debt at December 31, 2024 and 2023.
December 31,
2024
2023
Senior secured term loans:
Tranche B-3 U.S. dollar term loan due August 2028
$
1,056
$
1,067
Tranche B-3 euro term loan due August 2028
(€415 at December 31, 2024 and €415 at December 31, 2023)
432
457
Senior unsecured notes:
4.000% due May 2026
(€0 at December 31, 2024 and €441 at December 31, 2023)
—
485
5.375% due May 2027
495
495
5.750% due November 2028
783
783
4.625% due November 2029
620
620
8.000% due January 2033
600
—
Finance lease liabilities
46
58
Financing obligation (1)
90
92
Supplier financing obligation (2)
18
27
Other
11
—
Total debt principal
4,151
4,084
Less: Unamortized issue discounts
(19)
(25)
Less: Unamortized debt issuance costs
(24)
(21)
Less: Short-term and current maturities of long-term debt
(54)
(51)
Long-term debt, net
$
4,054
$
3,987
(1)
At December 31, 2024 and 2023, financing obligation relates to the financed portion of the Chemours Discovery Hub. Refer to “Note 14 – Leases” for further details.
(2)
At December 31, 2024 and 2023, supplier financing obligation relates to a supplier financing program whose obligations, based on their characteristics, are classified within
short-term debt and current maturities of long-term debt. Refer to “Note 18 – Accounts Payable” for further details.
Senior Secured Credit Facilities
On August 18, 2023, the Company entered into an amendment and restatement credit agreement (the "Credit Agreement”) that provides for a $900
senior secured revolving credit facility (the “Revolving Credit Facility”) and five-year senior secured term loans (the "Senior Secured Term Loan Facility",
collectively, the “Senior Secured Credit Facilities”).
The Senior Secured Term Loan Facility provides for a Tranche B-3 class of term loans, denominated in U.S. dollars, in an aggregate principal amount
of $1,070 (the “Dollar Term Loan”) and a class of Tranche B-3 class term loans, denominated in euros, in an aggregate principal amount of €415 (the
“Euro Term Loan”) (collectively, the “Term Loans”). The Company received proceeds of $367, net of original issue discount and bank fees of $32. The
proceeds of the Term Loans were primarily used to prepay, in full, all outstanding amounts under the previous April 2018 Credit Agreement, which
amounted to $764 for the previous dollar term loan and €333 for the previous euro term loan, fees and expenses related therewith, and to fund the
Water District Settlement Fund per the terms of the U.S. public water system Settlement Agreement pending final approval (see "Note 22 –
Commitments and Contingent Liabilities"). Following the first amendment to the Credit Agreement, which was entered into on November 29, 2024, the
Dollar Term Loan bears a variable interest rate equal to, at the election of the Company, adjusted Term SOFR plus 3.00%, subject to an adjusted
SOFR floor of 0.50%, or adjusted base rate, plus 2.00%, subject to a base rate floor of 1.00%. Following the second amendment to the Credit
Agreement, which was entered into on December 13, 2024, the Euro Term Loan bears a variable interest rate equal to adjusted Euro Interbank Offered
Rate ("EURIBOR") plus 3.25%, subject to an adjusted EURIBOR floor of 0.0%. The Term Loans will mature on August 18, 2028, and are subject to
acceleration in certain circumstances.
At December 31, 2024, the effective interest rates on the Dollar Term Loan and the Euro Term Loan were 7.4% and 6.1%, respectively. For the years
ended December 31, 2024, 2023 and 2022, the Company made term loan repayments of $11, $9 and $13 on its Term Loans, respectively.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-42
Borrowings made under the Revolving Credit Facility may be used for working capital and other general corporate purchases and other transactions
not prohibited by the Credit Agreement. The Revolving Credit Facility bears a variable interest rate range based on the Company’s total net leverage
ratio, as defined in the Credit Agreement, between (i) a 0.25% and a 1.00% spread for adjusted base rate loans, and (ii) a 1.25% and a 2.00% spread
for SOFR and EURIBOR loans. In addition, the Company is required to pay a commitment fee on the average daily unused amount of the Revolving
Credit Facility within an interest rate range based on its total net leverage ratio, between 0.10% and 0.25%. At December 31, 2024, commitment fees
on the Revolving Credit Facility were assessed at a rate of 0.25% per annum. The Revolving Credit Facility will mature on October 7, 2026, subject to
acceleration in certain circumstances. There were no borrowings under the Revolving Credit Facility at December 31, 2024 and 2023. Issued and
outstanding letters of credit under the Revolving Credit Facility amounted to $56 and $48 at December 31, 2024 and 2023, respectively.
Under the Credit Agreement, solely with respect to the Revolving Credit Facility, the Company is required to not exceed a maximum senior secured
net leverage ratio of 2.00 to 1.00 in any period of four consecutive fiscal quarters through the date of maturity. In addition, the Term Loans contain
customary affirmative and negative covenants that, among other things, limit or restrict the Company’s and its subsidiaries’ ability, subject to certain
exceptions, to incur additional indebtedness or liens, pay dividends, and engage in certain transactions, including mergers, acquisitions, asset sales,
or investments, outside of specified carve-outs. The Credit Agreement also contains customary representations and warranties and events of default.
The obligations under the Senior Secured Credit Facilities are guaranteed on a senior secured basis by all of the Company’s material, wholly-owned
domestic subsidiaries, subject to certain agreed upon exceptions. The obligations under the Senior Secured Credit Facilities are also, subject to certain
agreed upon exceptions, secured by a first priority lien on substantially all of the Company’s assets and substantially all of the assets of the Company’s
material, wholly-owned domestic subsidiaries, including 100% of the stock of certain of the Company’s domestic subsidiaries and 65% of the stock of
certain of the Company’s foreign subsidiaries.
Senior Unsecured Notes
Senior Unsecured Notes Due May 2026
On June 6, 2018, the Company issued an aggregate principal amount of €450 4.000% senior unsecured notes due May 2026, denominated in euros
(the “2026 Euro Notes”). The 2026 Euro Notes required payment of principal at maturity and payments of interest semi-annually in cash and in arrears
on May 15 and November 15 of each year. The net proceeds from the 2026 Euro Notes, together with cash on hand, were used to purchase or redeem,
as the case may be, the previously outstanding euro notes due May 2023 and a $250 aggregate principal amount of the 6.625% senior unsecured
notes due May 2023, denominated in U.S. dollars (the “2023 Dollar Notes”) pursuant to a tender offer and the redemption, as well as pay for any fees
and expenses in connection therewith. The Company purchased or redeemed, as applicable, all of its outstanding 2026 Euro Notes of €441 during the
year ended December 31, 2024.
Senior Unsecured Notes Due May 2027
On May 23, 2017, the Company issued a $500 aggregate principal amount of 5.375% senior unsecured notes due May 2027 (the “2027 Notes”). The
2027 Notes require payment of principal at maturity and interest semi-annually in cash and in arrears on May 15 and November 15 of each year. The
Company received proceeds of $489, net of an original issue discount of $5 and underwriting fees and other related expenses of $6, which are deferred
and amortized to interest expense using the effective interest method over the term of the 2027 Notes. A portion of the net proceeds from the 2027
Notes was used to pay the $335 of the First MDL Settlement, as discussed in “Note 22 – Commitments and Contingent Liabilities”. The remaining
proceeds from the 2027 Notes were available for general corporate purposes.
The 2027 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured unsubordinated basis by each of the Company’s
existing and future direct and indirect domestic restricted subsidiaries that (i) incurs or guarantees indebtedness under the Senior Secured Credit
Facilities, or (ii) guarantees certain other indebtedness of the Company or any guarantor in an aggregate principal amount in excess of $100. The
guarantees of the 2027 Notes will rank equally with all other senior indebtedness of the guarantors. The 2027 Notes rank equally in right of payment
to all of the Company’s existing and future unsecured unsubordinated debt and are senior in right of payment to all of its existing and future debt that
is by its terms expressly subordinated in right of payment to the 2027 Notes. The 2027 Notes are subordinated to indebtedness under the Senior
Secured Credit Facilities, as well as any future secured debt to the extent of the value of the assets securing such debt, and structurally subordinated
to the liabilities of any non-guarantor subsidiaries.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-43
Pursuant to the terms of the indenture governing the 2027 Notes, the Company is obligated to offer to purchase the 2027 Notes at a price of 101% of
the principal amount, together with accrued and unpaid interest, if any, up to, but not including, the date of purchase, upon the occurrence of certain
change of control events. The Company may redeem the 2027 Notes, in whole or in part, at an amount equal to 100% of the aggregate principal
amount plus a specified “make-whole” premium and accrued and unpaid interest, if any, to the date of purchase prior to February 15, 2027. The
Company may also redeem some or all of the 2027 Notes by means other than a redemption, including tender offer and open market repurchases.
Senior Unsecured Notes Due November 2028
On November 27, 2020, the Company issued an $800 aggregate principal amount of 5.750% senior unsecured notes due November 2028 (the “2028
Notes”) in an offering that was exempt from the registration requirements of the Securities Act. The 2028 Notes require payment of principal at maturity
and interest semi-annually in cash and in arrears on May 15 and November 15 of each year. The Company received proceeds of $790, net of
underwriting fees and other related expenses of $10, which are deferred and amortized to interest expense using the effective interest method over
the term of the 2028 Notes. The net proceeds from the 2028 Notes were used, together with cash on hand, to purchase or redeem, as applicable, the
remaining $908 aggregate principal amount of the 2023 Dollar Notes.
The 2028 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured unsubordinated basis by each of the Company’s
existing and future direct and indirect domestic restricted subsidiaries that (i) incurs or guarantees indebtedness under the Senior Secured Credit
Facilities, or (ii) guarantees certain other indebtedness of the Company or any guarantor in an aggregate principal amount in excess of $100. The
guarantees of the 2028 Notes will rank equally with all other senior indebtedness of the guarantors. The 2028 Notes rank equally in right of payment
to all of the Company’s existing and future unsecured unsubordinated debt and are senior in right of payment to all of its existing and future debt that
is by its terms expressly subordinated in right of payment to the 2028 Notes. The 2028 Notes are subordinated to indebtedness under the Senior
Secured Credit Facilities, as well as any future secured debt to the extent of the value of the assets securing such debt, and structurally subordinated
to the liabilities of any non-guarantor subsidiaries.
Pursuant to the terms of the indenture governing the 2028 Notes, the Company is obligated to offer to purchase the 2028 Notes at a price of 101% of
the principal amount, together with accrued and unpaid interest, if any, up to, but not including, the date of purchase, upon the occurrence of certain
change of control events. Prior to November 15, 2023, the Company may redeem the 2028 Notes (i) in whole or in part, at an amount equal to 100%
of the aggregate principal amount plus a specified “make-whole” premium and accrued and unpaid interest, if any, to the date of purchase, and (ii) on
one or more occasions, up to 35% of the aggregate principal amount of the notes, with the net cash proceeds of one or more equity offerings at a price
equal to 105.750% of the principal amounts of such notes, plus accrued and unpaid interest, if any, up to, but excluding, the redemption date. On or
after November 15, 2023, the Company may redeem the 2028 Notes at specified redemption prices. The Company may also redeem some or all of
the 2028 Notes by means other than a redemption, including tender offer and open market repurchases.
Senior Unsecured Notes Due November 2029
On August 18, 2021, the Company issued a $650 aggregate principal amount of 4.625% senior unsecured notes due November 2029 (the “2029
Notes”) in an offering that was exempt from the registration requirements of the Securities Act. The 2029 Notes require payment of principal at maturity
and interest semi-annually in cash and in arrears on May 15 and November 15 of each year. The Company received proceeds of $642, net of
underwriting fees and other related expenses of $8, which are deferred and amortized to interest expense using the effective interest method over the
term of the 2029 Notes. The net proceeds from the 2029 Notes were used, together with cash on hand, to purchase or redeem, as applicable, the
$750 aggregate principal of the 7.000% senior unsecured notes due May 2025 (the "2025 Notes").
The 2029 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured unsubordinated basis by each of the Company’s
existing and future direct and indirect domestic restricted subsidiaries that (i) incurs or guarantees indebtedness under the Senior Secured Credit
Facilities, or (ii) guarantees certain other indebtedness of the Company or any guarantor in an aggregate principal amount in excess of $100. The
guarantees of the 2029 Notes will rank equally with all other senior indebtedness of the guarantors. The 2029 Notes rank equally in right of payment
to all of the Company’s existing and future unsecured unsubordinated debt and are senior in right of payment to all of its existing and future debt that
is by its terms expressly subordinated in right of payment to the 2029 Notes. The 2029 Notes are subordinated to indebtedness under the Senior
Secured Credit Facilities, as well as any future secured debt to the extent of the value of the assets securing such debt, and structurally subordinated
to the liabilities of any non-guarantor subsidiaries.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-44
Pursuant to the terms of the indenture governing the 2029 Notes, the Company is obligated to offer to purchase the 2029 Notes at a price of 101% of
the principal amount, together with accrued and unpaid interest, if any, up to, but not including, the date of purchase, upon the occurrence of certain
change of control events. Prior to November 15, 2024, the Company may redeem the 2029 Notes (i) in whole or in part, at an amount equal to 100%
of the aggregate principal amount plus a specified “make-whole” premium and accrued and unpaid interest, if any, up to, but excluding the redemption
date, and (ii) on one or more occasions, up to 35% of the aggregate principal amount of the notes, with the net cash proceeds of one or more equity
offerings at a price equal to 104.625% of the principal amounts of such notes, plus accrued and unpaid interest, if any, up to, but excluding, the
redemption date. On or after November 15, 2024, the Company may redeem the 2029 Notes at specified redemption prices. The Company may also
redeem some or all of the 2029 Notes by means other than a redemption, including tender offer and open market repurchases.
Senior Unsecured Notes Due January 2033
On November 27, 2024, the Company issued a $600 aggregate principal amount of 8.000% senior unsecured notes due January 2033 (the "2033
Notes") in an offering that was exempt from the registration requirements of the Securities Act. The Company received proceeds of $591, net of
underwriting fees and other related expenses of $9, which are deferred and amortized to interest expense using the effective interest method over the
term of the 2033 Notes. The net proceeds from the 2033 Notes were used in part to purchase or redeem, as applicable, the €441 aggregate principal
of the 2026 Euro Notes. The remaining proceeds from the 2033 Notes are available for general corporate purposes.
The 2033 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured unsubordinated basis by each of the Company’s
existing and future direct and indirect domestic restricted subsidiaries that (i) incurs or guarantees indebtedness under the Senior Secured Credit
Facilities, or (ii) guarantees certain other indebtedness of the Company or any guarantor in an aggregate principal amount in excess of $150. The
guarantees of the 2033 Notes will rank equally with all other senior indebtedness of the guarantors. The 2033 Notes rank equally in right of payment
to all of the Company’s existing and future unsecured unsubordinated debt and are senior in right of payment to all of its existing and future debt that
is by its terms expressly subordinated in right of payment to the 2033 Notes. The 2033 Notes are subordinated to indebtedness under the Senior
Secured Credit Facilities, as well as any future secured debt to the extent of the value of the assets securing such debt, and structurally subordinated
to the liabilities of any non-guarantor subsidiaries.
Pursuant to the terms of the indenture governing the 2033 Notes, the Company is obligated to offer to purchase the 2033 Notes at a price of 101% of
the principal amount, together with accrued and unpaid interest, if any, up to, but not including, the date of purchase, upon the occurrence of certain
change of control events. Prior to January 15, 2028, the Company may redeem the 2033 Notes (i) in whole or in part, at an amount equal to 100% of
the aggregate principal amount plus a specified “make-whole” premium and accrued and unpaid interest, if any, up to, but excluding the redemption
date, and (ii) on one or more occasions, up to 40% of the aggregate principal amount of the notes, with the net cash proceeds of one or more equity
offerings at a price equal to 108% of the principal amounts of such notes, plus accrued and unpaid interest, if any, up to, but excluding, the redemption
date. On or after January 15, 2028, the Company may redeem the 2033 Notes at specified redemption prices. The Company may also redeem some
or all of the 2033 Notes by means other than a redemption, including tender offer and open market repurchases.
Note Repurchases
During the year ended December 31, 2022, the Company repurchased through open market transactions, an aggregate principal of $62 of its senior
unsecured notes for cash payment of $54. The Company recorded a gain of $7 in "(Loss) gain on extinguishment of debt" in the consolidated statements
of operations, net of $1 in charges related to the write-off of deferred financing costs associated with the extinguished debt.
Accounts Receivable Securitization Facility
The Company, through a wholly-owned special purpose entity (“SPE”), executed an agreement with a bank for an accounts receivable securitization
facility (“Securitization Facility”) for the purpose of enhancing the Company’s liquidity (the “Receivables Purchase Agreement”), as amended from time
to time. Under the Securitization Facility, certain of the Company’s subsidiaries sell their accounts receivable to the SPE, which is a non-guarantor
subsidiary. In turn, the SPE may transfer undivided ownership interests in such receivables to the bank in exchange for cash. The bank has a first
priority security interest in all receivables held by the SPE, and the SPE has not granted a security interest to anyone else. Pursuant to the Receivables
Purchase Agreement, as amended, the Company no longer maintains effective control over the transferred receivables, and therefore accounts for
these transfers as sales of receivables. Under the Securitization Facility, prior to March 2023, the SPE may sell at any time certain receivables and
request investments and letter of credit up to a total of $150 until the earlier of March 6, 2024 or another event that constitutes a "Termination Date"
under the Receivables Purchase Agreement, as amended.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-45
On March 23, 2023, the Company, through the SPE, amended its Receivables Purchase Agreement to, among other things, increase the facility limit
under the arrangement from $150 to $175, replace the interest rate benchmark from LIBOR to SOFR, add a conduit purchaser, and extend the term
of the Receivables Purchase Agreement, such that the SPE may sell certain receivables and request investments and letter of credit until the earlier
of March 31, 2025 or another event that constitutes a "Termination Date" under the Receivables Purchase Agreement.
Cash received from collections of sold receivables is used to fund additional purchases of receivables at 100% of face value on a revolving basis, not
to exceed the facility limit, which is the aggregate purchase limit. For the years ended December 31, 2024 and 2023, the Company received $1,436
and $1,448, respectively, of cash collections on receivables sold under the Receivables Purchase Agreement, following which it sold and derecognized
$1,425 and $1,433 respectively, of incremental accounts receivable. The Company maintains continuing involvement as it acts as the servicer for the
sold receivables and guarantees payment to the bank. As collateral against the sold receivables, the SPE maintains a certain level of unsold
receivables, which amounted to $112 and $87 at December 31, 2024 and 2023, respectively. During each of the years ended December 31, 2024,
2023 and 2022, the Company incurred $3 of fees associated with the Securitization Facility. Costs associated with the sales of receivables are reflected
in the Company’s consolidated statements of operations for the periods in which the sales occur.
Other
During the year ended December 31, 2024, the Company entered into a financing arrangement, by which an external financing company funded
certain of the Company's annual insurance premiums for $21. During the year ended December 31, 2024, the Company made principal payments of
$10 to the financing company, and the remaining $11 is to be repaid within the next twelve months.
Maturities
The following table sets forth the Company’s debt principal maturities for the next five years and thereafter.
Senior
Debt
Finance
Lease
Liabilities
Financing
Obligation
Supplier
Financing
Obligation
Other
Total
2025
$
11
$
16
$
7
$
18
$
11
$
63
2026
11
11
7
—
—
29
2027
505
9
7
—
—
521
2028
2,239
9
7
—
—
2,255
2029
620
4
7
—
—
631
Thereafter
600
3
122
—
—
725
Total payments
3,986
52
157
18
11
4,224
Less: Imputed interest
—
(6)
(67)
—
—
(73)
Total principal maturities on debt
$
3,986
$
46
$
90
$
18
$
11
$
4,151
The Company has required quarterly principal payments related to the Dollar Term Loan equivalent to 1.00% per annum through June 2028, with the
balance due at maturity. Also, on an annual basis, the Company is required to make additional principal payments depending on leverage levels, as
defined in the Credit Agreement, equivalent to up to 50% of excess cash flows based on certain leverage targets with step-downs to 25% and 0% as
actual leverage decreases to below a 3.50 to 1.00 leverage target. The Company was not required to make additional principal payments in 2024.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-46
Debt Fair Value
The following table sets forth the estimated fair values of the Company’s senior debt issues, which are based on quotes received from third-party
brokers, and are classified as Level 2 financial instruments in the fair value hierarchy.
December 31, 2024
December 31, 2023
Carrying Value
Fair Value
Carrying Value
Fair Value
Senior secured term loans:
Tranche B-3 U.S. dollar term loan due August 2028
$
1,056
$
1,065
$
1,067
$
1,068
Tranche B-3 euro term loan due August 2028
(€415 at December 31, 2024 and €415 at December 31,
2023)
432
439
457
451
Senior unsecured notes:
4.000% due May 2026
(€0 at December 31, 2024 and €441 at December 31,
2023)
—
—
485
480
5.375% due May 2027
495
477
495
485
5.750% due November 2028
783
728
783
745
4.625% due November 2029
620
538
620
547
8.000% due January 2033
600
587
—
—
Total senior debt principal
3,986
$
3,834
3,907
$
3,776
Less: Unamortized issue discounts
(19)
(25)
Less: Unamortized debt issuance costs
(24)
(21)
Total senior debt, net
$
3,943
$
3,861
Note 21. Other Liabilities
The following table sets forth the components of the Company’s other liabilities at December 31, 2024 and 2023.
December 31,
2024
2023
Employee-related costs (1)
$
65
$
75
Accrued litigation (2)
96
73
Asset retirement obligations (2)
93
67
Miscellaneous (3)
114
113
Total other liabilities
$
368
$
328
(1)
Employee-related costs primarily represents liabilities associated with the Company’s long-term employee benefit plans.
(2)
Represents the long-term portions of accrued litigation and asset retirement obligations (see “Note 22 – Commitments and Contingent Liabilities”).
(3)
Miscellaneous primarily includes accrued indemnification liabilities of $25 and $30 at December 31, 2024 and 2023, respectively. Miscellaneous also includes long-term income
tax liabilities from uncertain tax positions at December 31, 2024 and 2023 (see "Note 9 – Income Taxes").
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-47
Note 22. Commitments and Contingent Liabilities
Asset Retirement Obligations
Chemours has recorded asset retirement obligations, which are primarily related to closure, reclamation, and removal for mining operations relative to
the extraction of titanium ore and other saleable minerals in the Titanium Technologies segment; and cap, cover, and post-closure maintenance of
landfills in all segments.
The following table sets forth the activity in the Company’s asset retirement obligations for the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Balance at January 1,
$
85
$
83
$
76
Increase in estimated cash outflows
24
1
2
Accretion expense
(6)
3
10
Settlements and payments
(2)
(2)
(5)
Balance at December 31,
$
101
$
85
$
83
Current portion
$
8
$
18
$
10
Non-current portion
93
67
73
Litigation Overview
The Company and certain of its subsidiaries, from time to time, are subject to various lawsuits, claims, assessments, government investigations,
regulatory proceedings and other legal proceedings with respect to product liability, intellectual property, personal injury, commercial, contractual,
employment, regulatory, environmental, anti-trust, and other such matters that arise in the ordinary course of business in multiple jurisdictions. Any
determination in such a proceeding that the Company’s operations or activities are not, or were not, in compliance with applicable laws or regulations
could result in the imposition of fines, civil or criminal penalties, and equitable remedies, including disgorgement, temporary or permanent suspension
of operations or debarment or injunctive relief. In addition, Chemours, by virtue of its status as a subsidiary of EID prior to its separation on July 1,
2015 ("the Separation"), is subject to or required under the Separation-related agreements executed prior to the Separation to indemnify EID against
various pending legal proceedings. The Company vigorously defends such lawsuits, claims, assessments, government investigations and other legal
proceedings, whether raised against itself or under its indemnity obligation. Disputes between Chemours and EID may arise regarding indemnification
matters, including disputes based on matters of law or contract interpretation. Should such disputes arise, they could materially adversely affect the
Company.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-48
When making determinations about recording liabilities related to legal proceedings or unasserted claims that are probable of assertion, the Company
complies with the requirements of ASC 450, Contingencies, and related guidance. If the potential loss from any claim or legal proceeding is considered
probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. Where there is an estimated range of
probable loss and an amount within the range of loss appears at the time to be a better estimate than any other amount within the range, the Company
accrues a liability for that specific amount. When no amount within an estimated range of probable loss is a better estimate than any other amount, the
Company accrues a liability for the minimum amount in the range. When a material loss contingency is reasonably possible, but not probable, the
Company does not accrue a liability, but instead discloses the nature of the matter and an estimate of the loss or range of loss, to the extent such
estimate can be made. Significant judgment is required in both the determination of probability and whether a loss or range of loss is reasonably
estimable. The Company’s judgments are subjective based on the status of the legal or regulatory proceedings, the merits of the Company’s defenses
and consultation with in-house and outside legal counsel. Because of substantial uncertainties related to these matters, accruals are based on the
best information available each period, including, among others, mediation, settlement discussions or agreements. As a matter progresses, the
Company may receive information, through plaintiff demands, through discovery, in the form of reports of purported experts, or in the context of
settlement or mediation discussions that purport to quantify an amount of alleged damages, but with which the Company may not agree. Furthermore,
settlement discussions are complex and often involve potential amounts, scope and terms, which can be monetary and non-monetary, that one or
more parties may not consider reasonable under the circumstances or indicative of the merits or potential outcome of any court proceeding with respect
to the underlying claims. Such information may or may not lead the Company to determine that it is able to make a reasonable estimate as to a probable
loss or range of loss in connection with a matter. As additional information becomes available, the Company reassesses the potential liability related
to pending claims and litigation and may revise its estimates accordingly. Due to the inherent uncertainties of the legal and regulatory process in the
multiple jurisdictions in the United States and internationally, management’s judgments may be materially different than the actual outcomes. The
Company's ability to assess outcomes and make reasonable estimates of potential losses is further influenced by the fact that a resolution of one or
more matters may impact the resolution of other similar matters in terms of timing, amount of liability, or both. Legal costs such as outside counsel
fees and expenses are charged to expense in the period services are rendered.
Unless otherwise stated, the Company is unable to reasonably estimate the possible loss or a range of loss for the matters described below, potentially
based on one or more of the following reasons: actual or potential plaintiffs have not claimed an amount of monetary damages or the amounts are
unsupportable or exaggerated, the matters are in early stages, there is uncertainty as to the outcome of pending appeals or motions, there are
significant factual issues to be resolved, the proceedings involve multiple defendants or potential defendants whose share of any potential responsibility
has not been determined. Because litigation is subject to significant uncertainties, and adverse rulings, judgments or other outcomes could occur in
the future, it is reasonably possible that the Company could incur losses substantially in excess of accrued liabilities or with respect to matters for which
no liability has been accrued because losses are not currently probable and reasonably estimable.
Management believes the Company’s accounting treatment and disclosure for the matters discussed below are appropriate based on the facts and
circumstances for each matter, which are discussed in further detail below.
The following table sets forth the components of the Company’s accrued litigation at December 31, 2024 and 2023.
December 31,
2024
2023
Asbestos
$
61
$
39
PFAS (1):
PFOA (2)
40
26
Other PFAS matters (3)
81
712
All other matters
26
9
Total accrued litigation
$
208
$
786
(1)
The Company is a named defendant and/or cost-sharing and defending DuPont, Corteva, and EID (together, the “DuPont Indemnitees”) in litigation related to the production
and use of per- and polyfluoroalkyl substances (“PFAS”), including perfluorooctanoic acids and its salts, including the ammonium salt (“PFOA”); hexafluoropropylene oxide
dimer acid (“HFPO Dimer Acid”, sometimes referred to as “GenX” or “C3 Dimer Acid”) and other compounds; and products that are manufactured or use such compounds,
including Aqueous Film Forming Foam (“AFFF”).
(2)
PFOA includes matters under the "PFOA" section within this “Note 22 – Commitments and Contingent Liabilities”.
(3)
Other PFAS matters includes matters under the "PFAS" section within this “Note 22 – Commitments and Contingent Liabilities”.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-49
The following table sets forth the current and long-term components of the Company’s accrued litigation and their balance sheet locations at December
31, 2024 and 2023.
December 31,
Balance Sheet Location
2024
2023
Accrued Litigation:
Current accrued litigation
Other accrued liabilities (Note 19)
$
112
$
713
Long-term accrued litigation
Other liabilities (Note 21)
96
73
Total accrued litigation
$
208
$
786
Memorandum of Understanding (the “MOU”) with DuPont, Corteva and EID
In January 2021, Chemours, DuPont, Corteva, and EID, a subsidiary of Corteva, entered into a binding MOU, reflecting the parties’ agreement to share
potential future legacy liabilities relating to per- and polyfluoroalkyl substances ("PFAS") arising out of pre-July 1, 2015 conduct (i.e., “Indemnifiable
Losses”, as defined in the separation agreement, dated as of June 26, 2015, as amended, between EID and Chemours (the “Separation Agreement”))
until the earlier to occur of: (i) December 31, 2040; (ii) the day on which the aggregate amount of Qualified Spend is equal to $4,000; or, (iii) a termination
in accordance with the terms of the MOU (e.g., non-performance of the escrow funding requirements pursuant to the MOU by any party). As defined
in the MOU, Qualified Spend includes:
•
All Indemnifiable Losses (as defined in the Separation Agreement), including punitive damages, to the extent relating to, arising out of, by
reason of, or otherwise in connection with PFAS Liabilities as defined in the MOU (including any mutually agreed-upon settlements);
•
Any costs or amounts to abate, remediate, financially assure, defend, settle, or otherwise pay for all pre-July 1, 2015 PFAS Liabilities or
exposure, regardless of when those liabilities are manifested; includes Natural Resources Damages claims associated with PFAS Liabilities;
•
Fines and/or penalties from governmental agencies for legacy EID PFAS emissions or discharges prior to the spin-off; and,
•
Site-Related GenX Claims as defined in the MOU.
The parties have agreed that, during the term of the cost-sharing arrangement, Chemours will bear half of the cost of such future potential legacy
PFAS liabilities, and DuPont and Corteva will collectively bear the other half of the cost of such future potential legacy PFAS liabilities up to an
aggregate $4,000, of which approximately $2,000 is available after consideration of the funding of the payment to the State of Ohio and supplemental
payment to the State of Delaware. Any recoveries of Qualified Spend from DuPont and/or Corteva under the cost-sharing arrangement will be
recognized as an offset to the Company’s cost of goods sold or selling, general, and administrative expense, as applicable, when realizable. Any
Qualified Spend incurred by DuPont and/or Corteva under the cost-sharing arrangement will be recognized in the Company’s cost of goods sold or
selling, general, and administrative expense, as applicable, when the amounts of such costs are probable and estimable or expensed as incurred with
respect to period costs, such as legal expenses. During the years ended December 31, 2024 and 2023, the Company incurred expenditures subject
to reimbursement of cost-sharing as Qualified Spend under the MOU of approximately $109 and $148, respectively, excluding litigation-related
settlements. During the years ended December 31, 2024 and 2023, the Company received $47 and $88, respectively, of recovery from DuPont and
Corteva.
After the term of this arrangement, Chemours’ indemnification obligations under the Separation Agreement would continue unchanged, subject in each
case to certain exceptions set out in the MOU. Pursuant to the terms of the MOU, the parties have agreed to release certain claims regarding Chemours’
Delaware lawsuit and confidential arbitration (concerning the indemnification of specified liabilities that EID assigned to Chemours in its spin-off),
including that Chemours has released any claim set forth in the complaint filed in the Delaware lawsuit, any other similar claims arising out of or
resulting from the facts recited by Chemours in the complaint or the process and manner in which EID structured or conducted the spin-off, and any
other claims that challenge the spin-off or the assumption of Chemours Liabilities (as defined in the Separation Agreement) by Chemours and the
allocation thereof, subject in each case to certain exceptions set out in the MOU. The parties have further agreed not to bring any future, additional
claims regarding the Separation Agreement or the MOU outside of arbitration.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-50
As part of the MOU, the parties established an escrow account to support and manage the payments for potential future PFAS liabilities. The MOU
provides that: (i) no later than each of September 30, 2021 and September 30, 2022, Chemours shall deposit $100 into an escrow account and DuPont
and Corteva shall together deposit $100 in the aggregate into an escrow account, and (ii) no later than September 30 of each subsequent year through
and including 2028, Chemours shall deposit $50 into an escrow account and DuPont and Corteva shall together deposit $50 in the aggregate into an
escrow account. Subject to the terms and conditions set forth in the MOU, each party may be permitted to defer funding in any year. Additionally, if on
December 31, 2028, the balance of the escrow account (including interest) is less than $700, Chemours will make 50% of the deposits and DuPont
and Corteva together will make 50% of the deposits necessary to restore the balance of the escrow account to $700. Such payments will be made in
a series of five consecutive annual equal installments commencing on September 30, 2029 pursuant to the escrow account replenishment terms as
set forth in the MOU. Any funds that remain in escrow at termination of the MOU will revert to the party that deposited them. As such, future payments
made by the Company into the escrow account will remain an asset of Chemours, and such payments will be reflected as a transfer to restricted cash
and restricted cash equivalents on its consolidated balance sheets. As per the terms of the MOU, the Company deposited $100 into the escrow account
in September 2022 and in 2021, which was recognized as restricted cash and restricted cash equivalents on its consolidated balance sheets at
December 31, 2023. No withdrawals are permitted from the escrow account before January 2026, except for funding mutually agreed-upon third-party
settlements in excess of $125. Starting in January 2026, withdrawals may be made from the escrow account to fund Qualified Spend if the parties’
aggregate Qualified Spend in that particular year is greater than $200. Starting in January 2031, the amounts in the escrow account can be used to
fund any Qualified Spend. Future payments from the escrow account for potential future PFAS liabilities will be reflected on the Company’s consolidated
statement of cash flows at that point in time. During 2023, $209 was drawn by Chemours from the escrow account to fund a portion of the U.S public
water system class action suit settlement, which remained in escrow in a qualified settlement and is recognized as restricted cash and restricted cash
equivalents on the Company's consolidated balance sheets at December 31, 2023. With the Effective date of such settlement being reached, Chemours
no longer maintains its reversionary interest to the underlying restricted funds within the Water District Settlement Fund and, as such, the restricted
cash and cash equivalents and the associated accrued liabilities were derecognized in the second quarter of 2024. Further discussion related to the
U.S public water system class action suit settlement is included under the heading “United States Public Water System Class Action Suit Settlement
and Related Opt-Outs” within this “Note 22 – Commitments and Contingent Liabilities”.
In September 2023, the parties entered into a supplemental agreement to the MOU, whereby the parties agreed to (i) release the funds held in escrow
to fund, in part, the Water District Settlement Fund (discussed further below), (ii) waive the escrow funding obligation of each party due no later than
September 30, 2023, and (iii) with respect to the escrow funding obligation due no later than September 30, 2024, waive the obligation of each of the
parties under certain conditions as agreed to by the parties. The parties agreed to fund the payments due by September 30, 2024, and the Company
funded $50 into the escrow account on September 30, 2024. As such, at December 31, 2024 and December 31, 2023, the Company had $50 and $0
deposited into the escrow account, respectively, which is recognized as restricted cash and restricted cash equivalents on its consolidated balance
sheets.
The parties have also sought insurance coverage for certain claims relating to PFAS matters, including claims in the AFFF MDL. In July 2024, a $45
settlement agreement was reached amongst the parties with one of the insurance carriers. Per agreement with the parties, the Company will receive
approximately $23 of the settlement as it will be allocated amongst the parties in accordance with the percentage contribution in the Public Water
System Class Action Settlement. Accordingly, during the year ended December 31, 2024, the Company recognized a $23 gain within selling, general,
and administrative expense in the Consolidated Statements of Operations.
The parties will cooperate in good faith to enter into additional agreements reflecting the terms set forth in the MOU.
Asbestos
In the Separation, EID assigned its asbestos docket to Chemours. At both December 31, 2024 and 2023, there were approximately 800 lawsuits
pending against EID alleging personal injury from exposure to asbestos, respectively. These cases are pending in state and federal court in numerous
jurisdictions in the U.S. and are individually set for trial. A small number of cases are pending outside of the U.S. Most of the actions were brought by
contractors who worked at sites between the 1950s and the 1990s. A small number of cases involve similar allegations by EID employees or household
members of contractors or EID employees. Finally, certain lawsuits allege personal injury as a result of exposure to EID products.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-51
With limited exception, the Company previously rejected EID’s demand for indemnity and defense of asbestos and product liability matters arising from
an EID subsidiary, Sporting Goods Properties, Inc., (“SGPI”). EID brought an arbitration proceeding on this issue and in November 2024, the Company
and EID reached an agreement in principle and adjourned the arbitration. We expect to finalize the settlement agreement in the first quarter of 2025.
Per the terms of the agreement in principle, the Company will assume approximately 20 current SGPI asbestos cases as well as all future SGPI
asbestos and product liability claims. The agreement in principle also includes that the Company is entitled to insurance recoveries where applicable
under certain existing insurance policies as well as potential cost sharing between the parties for certain cases.
At December 31, 2024 and 2023, Chemours had accruals of $61 and $39 related to these matters, respectively. Asbestos reserves recorded include
estimated losses for current claims as well as an estimate of losses for future claims, except for the SGPI asbestos and product liability claims. Because
of the limited history of SGPI asbestos and product liability claims, the Company has concluded that it is not able to reasonably estimate probable
losses for future claims for these matters at this time.
Benzene
In the Separation, EID assigned its benzene docket to Chemours. At December 31, 2024 and 2023, there were 22 and 20 cases pending, respectively,
against EID alleging benzene-related illnesses, respectively. These cases consist of premises matters involving contractors and deceased former
employees who claim exposure to benzene while working at EID sites primarily in the 1960s through the 1980s, and product liability claims based on
alleged exposure to benzene found in trace amounts in aromatic hydrocarbon solvents used to manufacture EID products such as paints, thinners,
and reducers.
Management believes that a loss is reasonably possible as to the docket as a whole; however, given the evaluation of each benzene matter is highly
fact-driven and impacted by disease, exposure, and other factors, a range of such losses cannot be reasonably estimated at this time.
In May 2021, the Company and EID filed suit in Delaware state court against multiple insurance companies for breach of their contractual obligations
to indemnify Chemours and EID against liabilities, costs and losses relating to benzene litigation which are covered under liability insurance policies
purchased by EID during the period 1967 to 1986. EID and Chemours are seeking payment of all costs and settlement amounts for past and future
benzene cases falling under those policies. The outcome of this matter is not expected to have a material impact on Chemours’ results of operations
or financial position. Over the course of the litigation, settlements have been negotiated with all of the insurers and Chemours and EIDP established a
joint escrow account. In December 2024, Chemours and EIDP agreed to a 50/50 distribution of then-available escrow account funds with Chemours
receiving $20, representing a release of previously recorded restricted cash.
PFOA
Chemours does not, and has never, used “PFOA” (collectively, perfluorooctanoic acids and its salts, including the ammonium salt) as a polymerization
aid nor sold it as a commercial product. Prior to the Separation, the performance chemicals segment of EID made PFOA at its Fayetteville Works site
in Fayetteville, North Carolina (“Fayetteville”) and used PFOA as a polymerization aid in the manufacture of fluoropolymers and fluoroelastomers at
certain sites, including: Washington Works, Parkersburg, West Virginia; Chambers Works, Deepwater, New Jersey ("Chambers Works"); Dordrecht
Works, Netherlands; Changshu Works, China; and, Shimizu, Japan. These sites are now owned and/or operated by Chemours.
At December 31, 2024 and 2023, Chemours maintained an accrual of $40 and $26, respectively, related to PFOA matters under the Leach Settlement
(discussed below), EID’s obligations under agreements with the U.S. Environmental Protection Agency (the “EPA”), and voluntary commitments to the
New Jersey Department of Environmental Protection (the “NJ DEP”). These obligations and voluntary commitments include surveying, sampling, and
testing drinking water in and around certain Company sites, and offering treatment or an alternative supply of drinking water if tests indicate the
presence of PFOA in drinking water at or greater than the applicable levels. The Company will continue to work with EPA, NJ DEP and other authorities
regarding the extent of work that may be required with respect to these matters.
Leach Settlement
In 2004, EID settled a class action captioned Leach v. DuPont, filed in West Virginia state court, alleging that approximately 80,000 residents living
near the Washington Works facility had suffered, or may suffer, deleterious health effects from exposure to PFOA in drinking water. Among the
settlement terms, EID funded a series of health studies by an independent science panel of experts (“C8 Science Panel”) to evaluate available scientific
evidence on whether any probable link exists, as defined in the settlement agreement, between exposure to PFOA and disease.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-52
The C8 Science Panel found probable links, as defined in the settlement agreement, between exposure to PFOA and pregnancy-induced hypertension,
including preeclampsia, kidney cancer, testicular cancer, thyroid disease, ulcerative colitis, and diagnosed high cholesterol. Under the terms of the
settlement, EID is obligated to fund up to $235 for a medical monitoring program for eligible class members and pay the administrative costs associated
with the program, including class counsel fees. The court-appointed Director of Medical Monitoring implemented the program, and testing is ongoing
with associated payments to service providers disbursed from an escrow account which the Company replenishes pursuant to the settlement
agreement. Through December 31, 2024, approximately $2 has been disbursed from escrow related to medical monitoring. While it is reasonably
possible that the Company will incur additional costs related to the medical monitoring program, such costs cannot be reasonably estimated due to
uncertainties surrounding the level of participation by eligible class members and the scope of testing.
In addition, under the Leach settlement agreement, EID must continue to provide water treatment designed to reduce the level of PFOA in water to six
area water districts and private well users. At Separation, this obligation was assigned to Chemours, and is included in the $40 and $26 accrued at
December 31, 2024 and 2023, respectively.
PFOA Leach Class Personal Injury
Further, under the Leach settlement, class members may pursue personal injury claims against EID only for those diseases for which the C8 Science
Panel determined a probable link exists. Approximately 3,500 lawsuits were subsequently filed in various federal and state courts in Ohio and West
Virginia and consolidated in multi-district litigation (“MDL”) in Ohio federal court. These were resolved in March 2017 when EID entered into an
agreement settling all MDL cases and claims, including all filed and unfiled personal injury cases and claims that were part of the plaintiffs’ counsel’s
claims inventory, as well as cases tried to a jury verdict (the “First MDL Settlement”) for $670.7 in cash, with half paid by Chemours, and half paid by
EID.
Concurrently with the First MDL Settlement, EID and Chemours agreed to a limited sharing of potential future PFOA costs (i.e. “Indemnifiable Losses”,
as defined in the Separation Agreement between EID and Chemours) for a period of five years. The cost-sharing agreement entered concurrently with
the First MDL Settlement has been superseded by the binding MOU addressing certain PFAS matters and costs. For more information on this matter
refer to “Memorandum of Understanding (the “MOU”) with DuPont, Corteva and EID” within this “Note 22 – Commitments and Contingent Liabilities”.
While all MDL lawsuits were dismissed or resolved through the First MDL Settlement, the First MDL Settlement did not resolve PFOA personal injury
claims of plaintiffs who did not have cases or claims in the MDL or personal injury claims based on diseases first diagnosed after February 11, 2017.
Approximately 96 plaintiffs filed matters after the First MDL Settlement. In January 2021, EID and Chemours entered into settlement agreements with
counsel representing these plaintiffs, providing for a settlement of all but one of the 96 then filed and pending cases, as well as additional pre-suit
claims, under which those cases and claims of settling plaintiffs were resolved for approximately $83 (the “Second MDL Settlement”). Chemours
contributed approximately $29, and DuPont and Corteva each contributed approximately $27 to the Second MDL Settlement.
The single matter not included in the Second MDL Settlement was a testicular cancer case tried in March 2020 to a verdict of $40 in compensatory
and emotional distress damages and $10 in loss of consortium damages. The jury found that EID’s conduct did not warrant punitive damages. In March
2021, the trial court issued post-trial rulings which reduced the consortium damages to $0.25. The Company paid its share from the verdict in this
matter in November 2023 after all of EID’s appeals process from United States Court of Appeals to the United States Supreme Court were denied.
In December 2022, the Judicial Panel on Multi-District Litigation (JPML) declined to close the Ohio MDL. As of December 31, 2024, 45 plaintiffs
purporting to be Leach class members have filed personal injury cases. Trial was scheduled to start in September 2024 for two plaintiffs, with a second
trial scheduled to start in March 2025 for two plaintiffs. Prior to the start of the first trial in September, EID and Chemours entered into an agreement in
principle with counsel representing MDL plaintiffs providing for settlement for all filed and pending cases in the MDL as well as additional pre-suit
claims, under which those cases and claims of settling plaintiffs would be resolved and the MDL closed for $58.5, with Chemours contributing $29.25
and DuPont and Corteva contributing together contributing $29.25. The parties finalized and executed the term sheet as of November 13, 2024 on
terms consistent with the above-referenced agreement in principle. In December 2024, the plaintiffs filed an unopposed motion to terminate the MDL. In
February 2025, the court entered an order granting the motion and suggesting dissolution of the MDL to the JPML. In December 2024, the first payment
under the term sheet became payable and Chemours paid its share of $14.75. Chemours expects its share of the final payment of $14.5 will become
payable under the term sheet in 2025.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-53
PFAS
EID and Chemours have received governmental and regulatory inquiries and have been named in other litigations, including class actions, brought by
individuals, municipalities, businesses, and water districts alleging exposure to and/or contamination from PFAS, including PFOA. Many actions include
an allegation of fraudulent transfer in the spin-off that created Chemours. Chemours has declined EID’s requests for indemnity for fraudulent transfer
claims.
Chemours has responded to letters and inquiries from governmental law enforcement entities regarding PFAS, including in January 2020, a letter
informing it that the U.S. Department of Justice, Consumer Protection Branch, and the United States Attorney’s Office for the Eastern District of
Pennsylvania are considering whether to open a criminal investigation under the Federal Food, Drug, and Cosmetic Act and asking that it retain its
documents regarding PFAS and food contact applications. In July 2020, Chemours received a grand jury subpoena for documents. The Company is
presently unable to predict the duration, scope, or result of any potential governmental, criminal, or civil proceeding that may result, the imposition of
fines and penalties, and/or other remedies. The Company is also unable to develop a reasonable estimate of a possible loss or range of losses, if any.
Fayetteville Works, Fayetteville, North Carolina
For information regarding the Company’s ongoing litigation and environmental remediation matters at Fayetteville, refer to “Fayetteville Works,
Fayetteville, North Carolina” under the “Environmental Overview” within this “Note 22 – Commitments and Contingent Liabilities”.
Aqueous Film Forming Foam Matters
Chemours does not manufacture or sell, and has never, manufactured nor sold aqueous film forming foam (“AFFF”). Numerous defendants, including
EID and Chemours, have been named in approximately 5,900 matters, involving AFFF, which is used to extinguish hydrocarbon-based (i.e., Class B)
fires and subject to U.S. military specifications. Most matters have been transferred to or filed directly into a multi-district litigation (“AFFF MDL”) in
South Carolina federal court or identified by a party for transfer. The matters pending in the AFFF MDL allege damages as a result of contamination,
in most cases due to migration from military installations or airports, or personal injury from exposure to AFFF. Plaintiffs seek to recover damages for
investigating, monitoring, remediating, treating, and otherwise responding to the contamination. Others have claims for personal injury, property
diminution, and punitive damages.
In March 2021, ten water provider cases within the AFFF MDL were approved by the court for purposes of commencing initial discovery (Tier One
discovery) and in October 2021, the court approved three of these cases for additional discovery (Tier Two discovery). In September 2022, a water
provider action filed by the City of Stuart, Florida was selected for the first bellwether trial. The court encouraged all parties to discuss resolution of the
water provider category of cases, and in October 2022 appointed a mediator to facilitate discussions among and between the parties. Chemours,
Corteva/EID and DuPont, together, entered into U.S. public water system class action settlement agreement in June 2023, as further discussed below.
Prior to the public water system class action suit settlement, in May 2023, the Plaintiffs filed, and the court granted, a motion to sever all claims against
Chemours and EID from the first bellwether trial for the water provider cases. There are currently approximately 600 water provider cases in the AFFF
MDL, of which approximately 40 such matters that had been filed as of the Settlement Agreement have submitted opt-outs per below discussion.
For non-water provider cases in the AFFF MDL (approximately 5,300), the parties are now proceeding with discovery in certain personal injury cases,
with Tier One discovery completed in June 2024. In July 2024, the parties jointly submitted to the Court a list of proposed Group A and Group B
plaintiffs for purposes of staggering Tier 2 discovery. Tier 2 expert discovery for Group A cases is being completed and Tier 2 discovery for Group 2
cases is to be completed in March 2025. An initial Tier 2 Group A trial date has been set for October 2025. Further, the Court has also established a
case management process for reviewing and listing diseases claimed to be associated with exposure to an AFFF source as well a protocol for
dismissing personal injury claims for unlisted diseases. Plaintiffs asserting these unlisted claims were required to dismiss their unlisted personal injury
claims without prejudice by September 10, 2024 or produce medical records and expert reports on general and specific causation for the alleged
disease.
There are other AFFF lawsuits pending outside the AFFF MDL that have not been designated by a party for inclusion in the MDL. These matters
identifying EID and/or Chemours as a defendant are:
Valero Refining (“Valero”) has five pending state court lawsuits filed commencing in June 2019 regarding its Tennessee, Texas, Oklahoma, California,
and Louisiana facilities. These lawsuits allege that several defendants that designed, manufactured, marketed, and/or sold AFFF or PFAS incorporated
into AFFF have caused Valero to incur damages and costs including remediation, AFFF disposal, and replacement. Valero also alleges fraudulent
transfer.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-54
In New York state court, four individuals filed a lawsuit in September 2019 against numerous defendants including Chemours. The lawsuit alleges
personal injury resulting from exposure to AFFF in Long Island drinking water and violation of New York Uniform Fraudulent Conveyance Act. Plaintiffs
seek compensatory and punitive damages and medical monitoring.
In Illinois, a lawsuit was filed in May 2022 in the state court against numerous defendants, including EID. The lawsuit alleges personal injury from
occupational exposure, including from AFFF-related materials/products, and seeks compensatory damages and punitive damages. In July 2023, an
agreement to resolve the lawsuit was reached. This matter is now closed. Since February 2023, two other lawsuits have been filed in Illinois state court
against numerous defendants, including EID, which also allege personal injury from occupational exposure, including from AFFF-related
materials/products, and seeks compensatory damages and punitive damages. Chemours is not a named defendant in either of these lawsuits.
In Ontario, Canada, three lawsuits were filed by two parties in December 2022 against DuPont de Nemours, Inc. and another defendant, seeking
contribution and indemnification, interest, and costs in connection with three underlying actions filed by property owners in Canada, and a related third-
party action filed by some defendants in one of the matters. The plaintiffs in the underlying actions allege PFAS contamination of their respective
properties from the use of firefighting foam. Chemours is not a named defendant in any of these matters but has agreed to defend pursuant to the
MOU. These lawsuits against DuPont were noticed for discontinuance by two of the filing parties.
In July 2024, a civil claim was filed in Virginia state court against multiple defendants, including Chemours, alleging that plaintiff was exposed to PFAS
substances through products that defendants manufactured, designed, marketed, sold, supplied, or distributed, such as turn out gear and AFFF.
Plaintiffs seek both compensatory and punitive damages. Chemours has not yet been served in this matter.
In September 2024, a matter was filed in New Jersey state court against EIDP, DuPont de Nemours, Chemours and other defendants alleging personal
injury due to exposure to AFFF-related PFAS in drinking water.
In British Columbia, Canada, a civil claim was filed in the Supreme Court of British Columbia in December 2023 against multiple defendants, including
Chemours, seeking to certify the action as a class proceeding. The complaint identifies the class as individuals with certain diagnosed conditions after
using or being exposed to AFFF containing PFAS under certain conditions and seeks compensatory and punitive damages.
Also in the British Columbia court, in June 2024, a civil claim was filed by His Majesty the King in Right of the Province of British Columbia against
multiple defendants, including Chemours, seeking to certify the action as a class proceeding. The complaint identifies the class as all provincial and
territorial governments that have incurred expenditures relating to alleged PFAS contamination, including from AFFF, of its water resources as well as
municipalities, regional districts, and other governance authorities and persons responsible for drinking water systems. The complaint seeks
compensatory and punitive damages.
In July 2024, a civil claim was filed in the Superior Court of Quebec, District of Montreal, against multiple defendants, including Chemours, seeking to
certify the action as a class proceeding. The complaint identifies the class as all natural and legal persons in Quebec who own, operate, or supply
water through a drinking water disbursement system intended for human consumption, and whose water source is located near sites where PFAS and
PFAS-containing products, such as AFFF, were allegedly manufactured, used, transported, processed or sold by defendants. The claim seeks
compensatory and punitive damages.
In August 2024, a claim was filed in the Manitoba Court of King's Bench (Winnipeg Centre) by the Muskoday First Nation against multiple defendants,
including Chemours, seeking to certify the action as a class proceeding. The complaint identifies the class as Indian Bands as defined under Canadian
law. Plaintiff alleges that “any water, fish, and game they obtain from the reserve is contaminated with PFAS” by PFAS and PFAS-containing products,
such as AFFF, that were allegedly manufactured, used, transported, processed, or sold by defendants near their water sources. The claim seeks
compensatory and punitive damages.
In August 2024, a civil claim was filed in the Superior Court of Ontario against multiple defendants, including Chemours, seeking to certify the action
as a class proceeding. The complaint identifies the class as all persons in Canada who own property with a well and whose well contains PFAS.
Plaintiff alleges that their well as the wells of class members were contaminated by PFAS and PFAS-containing products, such as AFFF, that were
allegedly manufactured, used, transported, processed, or sold by defendants near their water sources. The claim seeks compensatory and punitive
damages.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-55
In September 2024, a civil claim was filed in the Supreme Court of British Columbia in Canada against multiple defendants, including Chemours,
seeking to certify the action as a class proceeding. The complaint identifies the class as all persons in Canada who currently own property with a well,
and whose well water contains PFAS. Plaintiff alleges that their well, and the wells of class members, were contaminated by PFAS and PFAS-
containing products, such as AFFF, that were allegedly manufactured, used, transported, processed, or sold by defendants near their water
sources. The claim seeks compensatory and punitive damages.
United States Public Water System Class Action Suit Settlement and Related Opt-Outs
On June 1, 2023, Chemours, Corteva/EID, and DuPont, together, entered into a binding agreement in principle to comprehensively resolve all drinking
water claims related to PFAS of a defined class of U.S. public water systems that serve the vast majority of the United States population arising out of
the AFFF MDL, that was finalized by a definitive agreement on June 30, 2023 (the "Settlement Agreement"), subject to approval by the United States
District Court for the District of South Carolina (the “Court”). A preliminary approval of the Settlement Agreement by the Court was granted on August
22, 2023.
Under the Settlement Agreement, Chemours, Corteva and DuPont collectively established and contributed a total of $1,185 to a qualified settlement
fund (“Water District Settlement Fund”). Contribution rates were consistent with the MOU, with Chemours (together with its subsidiaries) contributing
50%, and DuPont and Corteva collectively (together with their subsidiaries) contributing the remaining 50%. The settlement amounts were funded in
full and deposited into the Water District Settlement Fund. On September 6, 2023, Chemours deposited $592 into the Water District Settlement Fund,
which was recognized as restricted cash and restricted cash equivalents on its consolidated balance sheet at December 31, 2023. In exchange for the
payment to the Water District Settlement Fund, Chemours, Corteva and DuPont (together with their subsidiaries) will receive a release of the claims
from the Class (as defined below), upon entry into final judgment by the Court in accordance with the Settlement Agreement. The agreement was
entered into solely by way of compromise and settlement and is not in any way an admission of liability or fault by Chemours or the other parties.
The class represented in the Settlement Agreement is composed of all Public Water Systems, as defined in 42 U.S.C. § 300f, with a current detection
of PFAS or that are currently required to monitor for PFAS under the Environmental Protection Agency’s Fifth Unregulated Contaminant Monitoring
Rule or other applicable federal or state law (the “Class”). The following systems are excluded from the settlement class: water systems owned and
operated by a State or the United States government; small systems that have not detected the presence of PFAS and are not currently required to
monitor for it under federal or state requirements; and water systems in the lower Cape Fear River Basin of North Carolina (which are included only if
they so request). PFAS, as defined in the Settlement Agreement, includes PFOA and HFPO-DA among a broad range of fluorinated organic
substances. While it is reasonably possible that the excluded systems or claims could result in additional future lawsuits, claims, assessments or
proceedings, it is not possible to predict the outcome of any such matters, and as such, the Company is unable to develop an estimate of a possible
loss or range of losses, if any, at this time.
The Settlement Agreement does not resolve claims of Public Water Systems that are not included in the settlement as described above, or of Public
Water Systems that requested exclusion from the Class (“opt out”) pursuant to the process established by the Court. It also does not resolve potential
future claims of Public Water Systems that have not detected and do not detect any PFAS contamination, but where such contamination first occurs
in the future. The Settlement Agreement also does not resolve certain claims not related to drinking water, such as certain specified separate alleged
claims relating to stormwater or wastewater treatment, or other alleged types of claims such as for personal injury or for natural resource damages
claimed by state attorneys general, that remain outstanding in the AFFF MDL or other courts. Matters related to claims from other public water systems,
state natural resources damages and other PFAS matters are further described below.
As part of the preliminary approval of the Settlement Agreement in August 2023, notice of the Settlement Agreement has been provided to class
members and such members had until November 11, 2023 to object to the settlement or December 4, 2023 to submit a request for exclusion, indicating
they wish to opt-out of the settlement class. A Final Fairness Hearing on the Settlement Agreement occurred on December 14, 2023.
On January 3, 2024, the Court-appointed Notice Administrator for the settlement submitted a declaration regarding objections to the settlement and
opt-outs, and on February 6, 2024, it submitted an updated report to the Court regarding its further review of the submitted opt-outs. The Notice
Administrator identified that, based on his then February 2024 review as done in accordance with the Court's guidance, opt-outs had been received
from approximately 1,000 of the 14,167 listed potential Class members. In addition to those opt-outs, the Notice Administrator stated that he also
received requests for exclusion from approximately 300 additional entities that were not on the list of Class members. The Court issued an order
providing that the deadline for entities to withdraw a previously submitted opt-out was March 1, 2024, which was subsequently extended to March 15,
2024 by the Court. The Notice Administrator’s determinations are not dispositive of the validity of opt-outs, which may be subject to judicial review and
the Notice Administrator also continues to review the opt-outs for whether they were proper or duplicative.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-56
Chemours, Corteva and DuPont deny the allegations in the underlying litigation and reserve all legal and factual defenses against such claims if they
were litigated to conclusion. On February 8, 2024, the Court issued an opinion and order granting the plaintiffs’ motion for final approval of the
settlement, and on February 26, 2024, the Court entered a final order and judgment. On March 11, 2024, one public water system filed a notice of
appeal from the district court’s judgment, and such appeal was dismissed in April 2024. No additional appeals were filed during the appeal period, and
accordingly the court's approval is a final judgment in accordance with the Settlement Agreement. The Settling Defendants confirmed to the escrow
agent in May 2024 that the Effective Date has occurred under the Settlement Agreement and Chemours no longer maintains its reversionary interest
to the underlying restricted funds within the Water District Settlement Fund.
With respect to the submitted opt-outs, for those entities that have filed claims and/or lawsuit against numerous defendants, including Chemours, EID,
Corteva, DuPont, either prior or subsequent to the Settlement Agreement, approximately 40 of such opt-out entities are in the U.S. District Court of
South Carolina Multi-district litigation and approximately 90 of such opt-out entities are named plaintiffs in other various federal, state or local courts
(see Other Public Water System Matters below). The Company’s assessment of its potential liability with respect to the opt-outs considers numerous
factors, many of which are not yet determinable. Many of these lawsuits and claims involve highly complex issues related to causation, scientific
evidence and alleged actual damages and other substantial uncertainties.
Other than a single opt-out matter, for which the Company is engaged in discussions with the opt-out entity and maintains an immaterial accrual, the
Company has not accrued for any potential losses with respect to the opt-out population as of December 31, 2024 and 2023, as such losses are not
probable or estimable. Additional future lawsuits, claims, assessments or proceedings, including for those identified in the Other Public Water Systems
Matters below, could be brought or maintained either by entities that submitted opt-outs, or by entities asserting claims that are expressly excluded
from the releases in the Settlement Agreement. However, it is not possible to predict the outcome of any such matter due to various reasons including,
among others, legal and factual defenses against such claims including factors noted above, timing when such claims could be resolved in court, and
the number of defendants in any of those claims. While management believes that it is reasonably possible that the Company could incur losses related
to the matters, which could be material to the results of operations, financial position, or cash flows, the Company is unable to develop a reasonable
estimate of a possible loss or range of losses, if any, at this time.
Other Public Water System Matters
In addition to the matters described in the AFFF MDL, as well as the matters described in "Litigation and Other matters related to Fayetteville” within
this “Note 22 – Commitments and Contingent Liabilities”, other public water systems have filed lawsuits against Chemours, Corteva/EID, and DuPont
including the following:
In New York federal court, 23 Long Island water suppliers that have filed lawsuits since August 2019 against several defendants including EID and
Chemours alleging PFAS, PFOA, and perfluorooctanesulfonic acid (“PFOS”) contamination through releases from industrial and manufacturing
facilities and business locations where PFAS-contaminated water was used for irrigation and sites where consumer products were disposed. Claims
vary between matters but include claims of personal injury alleging various disease conditions, product liability, negligence, nuisance, trespass and
fraudulent transfer. All matters are seeking compensatory and punitive damages and, in certain cases, medical monitoring, declaratory and/or injunctive
relief. In January 2022, Chemours filed a third-party claim for indemnity in connection with one of the Long Island water supplier matters. One of the
water suppliers filed to opt out of the Public Water System Class Action Settlement.
The Town of Petersburgh in New York also filed suit in New York state court in August 2022 alleging defendants 3M, EID, and other defendants, are
responsible for PFOA contamination of its municipal drinking water supply. The complaint alleges product liability claims, negligence, and trespass.
Plaintiff seeks injunctive and declaratory relief as well as compensatory and punitive damages. In May 2024, the case was dismissed by stipulation in
connection with the Public Water System Class Action Settlement, and the matter is now closed.
In New York and New Jersey federal courts, lawsuits were filed by Suez Water in December 2020 against several defendants, including EID and
Chemours, alleging damages from PFAS releases into the environment, including PFOA and PFOS, that impacted water sources that the utilities use
to provide water, as well as products liability, negligence, nuisance, and trespass. Defendants filed motions to dismiss the complaints in both matters.
The motion was denied in the Suez Water New Jersey lawsuit in October 2021. In January 2022, the court granted defendants’ motion to dismiss in
the Suez New York lawsuit without prejudice and the plaintiff filed a second amended complaint in February 2022. Following the filing of the second
amended complaint in the Suez New York lawsuit, the defendants filed a motion to dismiss. In March 2023, the court granted in part defendants’ motion
to dismiss the second amended complaint, dismissing all claims against Chemours with prejudice, and finding a claim for design defect could be
maintained against EID. Suez filed to opt out these matters from the Public Water System Class Action Settlement. In March 2024, the stays in these
matters were lifted and discovery is proceeding.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-57
In Georgia and Alabama courts, lawsuits were filed beginning in 2017 against numerous carpet manufacturers, certain municipal defendants, and
suppliers and former suppliers, including EID and Chemours. The lawsuits include a matter filed by the Water Works and Sewer Board of the Town of
Centre, Alabama alleging negligence, nuisance, and trespass in the release of PFAS, including PFOA, into a river leading to the town’s water source.
The Town of Centre filed to opt out of the Public Water System Class Action Settlement, and this matter is expected to proceed to trial in March 2025.
Also, in Alabama, a purported class action was filed in July 2022 in Alabama federal court by the Utilities Board of Tuskegee on behalf of certain
drinking water utilities against 3M, EID, Corteva and the Company alleging contamination of drinking water. The complaints allege negligence, public
nuisance, private nuisance and trespass. The plaintiffs seek injunctive relief as well as compensatory and punitive damages. In April 2023, Shelby
County, Alabama and Talladega County, Alabama, filed suit in Alabama state court against numerous carpet manufacturers located near Dalton
Georgia, suppliers, EID, Chemours, and other defendants to be named later. The complaint alleges negligence, nuisance and trespass in the release
by the carpet mills of PFAS compounds, including PFOA, into the water sources used by the Counties to provide drinking water. The Counties seek
compensatory and punitive damages as well as injunctive relief to remove PFAS from the water supply and prevent alleged ongoing contamination. In
May 2023, the matter was removed to federal court and later remanded to state court. In August 2023, the Water Works and Sewer Board of the City
of Gadsden, Alabama also filed suit in Alabama state court against the Company, DuPont, Corteva and other suppliers to carpet mills in Dalton Georgia,
as well as against various landfill and waste companies. The complaint alleges negligence, nuisance, and trespass in the release of PFAS compounds,
including PFOA, reaching the town’s water source. Gadsden seeks compensatory damages as well as expenses, potential lost profits, punitive
damages and injunctive release. These matters were stayed in September 2023 pending final approval of the Public Water System Class Action
Settlement. Shelby County, Talladega County, City of Gadsden and the Utilities Board of Tuskegee as well as other water utilities that may be within
the class, filed to opt out of the Public Water System Class Action Settlement and the matters are now proceeding. In November 2024, the Court
dismissed the Utilities Board of Tuskegee matter without prejudice. Also in November 2024, the Alabama Supreme Court accepted Defendants’
mandamus petition seeking a writ to dismiss the Gadsden case on the grounds that all injuries have been redressed and that the claims are time
barred. The ruling by the Alabama Supreme Court is pending.
In March 2024, the Municipal Utilities Board of the City of Albertville, Alabama filed suit in Alabama state court against certain defendants, including
Chemours and EID. The complaint alleges negligence, nuisance, trespass and seeks compensatory damages, real property damages, as well as past
and future expenses, potential lost profits, and punitive damages. The plaintiffs also seek injunctive relief. Albertville filed to opt out of the Public Water
System Class Action Settlement.
In April 2024, the Board of Water and Sewer Commissioners of the City of Mobile, Alabama filed suit in Alabama state court against certain defendants,
including Chemours, DuPont and Corteva. The complaint alleges negligence, nuisance, trespass and wantonness through disposal of construction
materials made with PFAS allegedly supplied by defendants, to the local landfill, which allegedly resulted in the release of PFAS compounds reaching
the town’s water source. Mobile seeks compensatory damages as well as expenses, potential lost profits, punitive damages, and attorneys’ fees. Mobile
also seeks an injunction requiring defendants to remove PFAS from the water supply. Mobile filed to opt out of the Public Water Class Action
Settlement. In October 2024, the Court dismissed Plaintiff’s complaint in its entirety for failure to state a claim as well as lack of standing.
In Georgia, a lawsuit was filed by the City of Rome against numerous carpet manufacturers, certain municipal defendants, and suppliers and former
suppliers, including EID and Chemours, alleging negligence, nuisance, and trespass in the release of PFAS, including PFOA, into a river leading to
the town’s water source. In June 2023, Chemours, DuPont and Corteva entered into a confidential settlement with the City of Rome and its claims
against these parties related to this matter have been released and the matter dismissed. The Company recorded the related settlement amount in
selling, general and administrative expense in the Consolidated Statement of Operations for the year ended December 31, 2023.
In Georgia, a putative class action was filed in 2019 on behalf of customers of the Rome, Georgia water division and the Floyd County, Georgia water
department against the City of Dalton, Georgia, numerous carpet manufacturers located in Dalton, Georgia, Chemours and EID, alleging negligence,
nuisance and other claims related to the release of perfluorinated compounds, including PFOA, into a river leading to their water sources (“Rome
ratepayer matter”). In November 2022, EID and Chemours were added as defendants in a purported class action filed on behalf of residents of
Summerville, Georgia and Chattooga County, Georgia in Federal Court (“Summerville ratepayer matter”). Plaintiffs seek various statutory violations as
well as negligence and nuisance and seek remedies, injunctive relief, personal injury and property damages, as well as punitive damages. These
matters are pending in court. Floyd County, City of Rome and Summerville filed to opt out of the Public Water System Class Action Settlement. In
December 2024, the court in the Rome ratepayer matter ruled that the putative class did not have standing to seek injunctive relief and granted
summary judgment for Defendants on that count. The court has stayed rulings on the pending motions in this matter to allow the parties to mediate
the remaining claims for alleged damages related to rate increases during the first half of 2025.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-58
Additionally in Georgia state court, in January 2024, certain landowners of property in Gordon County, Georgia, filed suit against the City of Calhoun,
numerous carpet manufacturers operating in Calhoun, and carpet mill suppliers, including 3M, EID and Chemours. The complaint alleges that the
carpet manufacturers sent PFAS containing wastewater to the Calhoun Water Pollution Control Plant for many years. It further alleges Calhoun spread
the treated sludge containing PFAS from the Calhoun Water Pollution Control Plant on plaintiffs' land until 2023. Plaintiffs allege negligence and
nuisance, and seek compensatory damages, including diminution of property value, and punitive damages, as well as an injunctive order to remediate
the property. Calhoun filed to opt out of the Public Water System Class Action Settlement. In May 2024, a separate lawsuit was filed in Georgia state
court on behalf of multiple plaintiffs located in Calhoun, Georgia, alleging that defendants, including Chemours and EID, manufacture chemicals used
in carpet manufacturing processes which have been discharged in wastewater to the Calhoun Water Pollution Control Plant. Plaintiffs allege and seek
damages for PFAS contamination of their properties due to sewage sludge dumped in close proximity to their properties by Defendant City of
Calhoun. The lawsuit alleges negligence, failure to warn, nuisance, wanton conduct and punitive damages, public nuisance, abatement of public
nuisance, and trespass. The Defendant City of Calhoun filed cross claims against numerous carpet manufacturers, and carpet mill suppliers, including
EID and Chemours in both of these actions. The cross claims allege that the carpet manufacturers and suppliers knew PFAS containing
wastewater sent to the Calhoun Water Pollution Control Plant and would not be removed by Calhoun’s treatment systems. The City of Calhoun alleges
negligence, nuisance, and statutory violations. Calhoun seek compensatory and punitive damages as well as injunctive relief ordering abatement,
remediation, and attorneys’ fees. Chemours and EID moved to dismiss the plaintiff's claims as well as the City of Calhoun's cross claims in the actions.
In October 2024, the Court denied the motions to dismiss the plaintiffs’ claims but dismissed the City of Calhoun’s crossclaims.
In June 2024, the City of Columbia, South Carolina (“City of Columbia”) filed suit in South Carolina state court against multiple defendants, including
Chemours, EID, and DuPont De Nemours, who are alleged to be responsible for the release of PFAS into the City of Columbia’s water supply as
suppliers to the metal finishing, paper finishing, plastics coating, textile, and aerospace industries. The complaint alleges that a variety of industrial
operations have discharged PFAS into the Broad River and the Saluda River, which are the source of the City of Columbia’s drinking water, and that
PFAS have been detected at high levels in these rivers and in Lake Murray (a Saluda River impoundment). The City of Columbia seeks compensatory
and punitive damages. In January 2025, the Joint Municipal Water and Sewer Commission (“Joint Municipal”), Saluda County Water and Sewer
Authority (“Saluda County”), and the Town of Lexington, South Carolina (“Lexington”), all of which also rely upon Lake Murray as a source of drinking
water, also filed suit in South Carolina state court against multiple defendants, including Chemours, EIDP, and DuPont De Nemours, regarding alleged
discharges and seeking compensatory and punitive damages. The City of Columbia, Joint Municipal, Saluda County and Lexington each filed to opt
out of the Public Water Class Action Settlement.
In July 2024, the Town of Lyerly, Georgia (“Lyerly”) filed suit in Georgia state court against multiple defendants, who are alleged to be responsible for
the release of PFAS to the water supply from carpet mill operations or as suppliers to those carpet mills. The complaint alleges negligence,
nuisance, trespass and regulatory violations. Lyerly seeks compensatory damages for past and future expenses as well punitive damages and
attorneys’ fees. Lyerly has filed to opt out of the Public Water System Class Action Settlement.
In July 2024, the Town of Pine Hill, Alabama (“Pine Hill”) filed suit in Alabama state court against multiple defendants, including, the Company, DuPont,
and Corteva, who are alleged to be responsible for the release of PFAS to the water supply through paper mill operations or as suppliers to paper
mills. The complaint alleges negligence, nuisance, trespass, wantonness and punitive damages. Pine Hill seeks injunctive relief, compensatory
damages for property damages, potential lost profits and past and future expense as well punitive damages and attorneys’ fees. The Town of Pine Hill
has filed to opt out of the Public Water System Class Action Settlement.
In August 2024, the City of Irondale, Alabama (“Irondale”) filed a lawsuit in Alabama state court against multiple defendants, including
Chemours. Plaintiff alleges that defendants have manufactured, supplied, and/or sold products containing PFAS that have contaminated plaintiff's
water systems. Irondale disclaims any claims or causes of actions relating to AFFF and has opted out of the Public Drinking Water Settlement
In January 2025, Berkeley County, South Carolina (“Berkeley”) filed suit in South Carolina state court against several defendants, including
Chemours. Berkeley alleges that defendants have manufactured, sold, used, and/or caused discharge of PFAS into the Lake Moultrie and Lake Marion,
which Berkeley uses for its drinking water intake through a water supply contract with South Carolina Public Service Authority. Berkeley disclaims any
claims or causes of actions relating to AFFF and has opted out of the Public Drinking Water Settlement. The complaint seeks compensatory and
punitive damages.
In January 2025, the Town of Whitmire, South Carolina (“Whitmire”) filed suit in South Carolina state court filed suit in South state court against several
defendants, including Chemours. Whitmire alleges that defendants have manufactured, sold, used, and/or caused discharge of PFAS into the Enoree
River, which Whitmire uses for its drinking water intake. Whitmire disclaims any claims or causes of actions relating to AFFF and has opted out of the
Public Drinking Water Settlement. The complaint seeks damages.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-59
In January 2025, the Town of Cheraw, South Carolina (“Cheraw”) filed suit in South Carolina state court against several defendants, including
Chemours. Cheraw alleges that defendants discharged PFAS-containing wastewater and land-applied sludge that have contaminated Cheraw’s
drinking water systems. Cheraw disclaims any claims or causes of actions relating to AFFF and has opted out of the Public Drinking Water Settlement.
The complaint seeks damages.
In January 2025, the City of Georgetown, South Carolina (“Georgetown”) filed suit in South state court against several defendants, including
Chemours. Georgetown alleges that defendants have discharged PFAS that have contaminated Georgetown’s drinking water and cannot be removed
by Georgetown’s legacy water treatment technology. Georgetown disclaims any claims or causes of actions relating to AFFF and has opted out of the
Public Drinking Water Settlement. The complaint seeks damages.
In January 2025, Georgetown County Water and Sewer District (“GCWSD”) filed suit in South state court against several defendants, including
Chemours. GCWSD alleges that defendants have manufactured, sold, used, and/or caused discharge of PFAS into the Waccamaw River, which
GCWSD uses for its drinking water intake. GCWSD further alleges that its current legacy water treatment technology is unable to remove PFAS from
source water. GCWSD disclaims any claims or causes of actions relating to AFFF and has opted out of the Public Drinking Water Settlement. The
complaint seeks damages.
State Natural Resource Damages Matters
In addition to the State of New Jersey actions (as detailed below), a majority of the states and certain territories of the U.S., have filed lawsuits or are
investigating claims against various defendants, including EID and Chemours, relating to the alleged contamination of state natural resources with
PFAS compounds either from AFFF and/or other sources. These lawsuits seek damages including costs to investigate, clean up, restore, treat, monitor,
or otherwise respond to contamination of natural resources and some include counts for fraudulent transfer. Chemours, Corteva/EID and DuPont,
together under the MOU, are engaged with States and their counsel on certain of these cases. It is reasonably possible that these discussions could
result in a loss, which could be material; however, at this time, the Company is unable to predict the duration, scope, or result of such discussions, and
because of these uncertainties, the Company is also unable to develop a reasonable estimate of a possible loss or range of losses, if any.
In February 2018, the State of Ohio initiated litigation against EID regarding historical PFOA emissions from the Washington Works site. Chemours is
an additional named defendant. Ohio alleges damage to natural resources and fraudulent transfer in the spin-off that created Chemours and seeks
damages including remediation and other costs and punitive damages. On November 28, 2023, Chemours, DuPont, Corteva, and EID entered into a
settlement agreement with the State of Ohio to settle claims, including environmental releases or sales of products containing PFAS or other known
contaminants. Under the agreement, Chemours will pay $55 to the State of Ohio, which shall be used to support environmental restoration. Chemours
contribution is consistent with the 50% contribution rate under the MOU. This amount is included in Accrued Litigation and expected to be paid in 2025.
On July 13, 2021, Chemours, DuPont, Corteva, and EID entered into a settlement agreement with the State of Delaware to settle such potential claims,
including for environmental releases or sales of products containing PFAS or other known contaminants. Under the agreement, in January 2022, the
companies paid a total amount of $50 to the State of Delaware, which shall be utilized to fund a Natural Resources and Sustainability Trust (the “Trust”)
to be used for environmental restoration and enhancement of resources, sampling and analysis, community environmental justice and equity grants,
and other natural resource needs. Chemours contributed $25 to the settlement and the remaining $25 was divided between DuPont and Corteva which
shall be treated as Qualified Spend under the MOU. If the companies enter into a proportionally similar agreement to settle or resolve claims of another
state for PFAS-related natural resource damages, for an amount greater than $50, the companies may be required to make one or more supplemental
payment(s) directly to the Trust, with such payment(s) not to exceed $25 in the aggregate. Following entry of the settlement agreement with the State
of Ohio and its payment and pursuant to the terms of the settlement agreement with the State of Delaware, the Companies will make a supplemental
payment directly to the Trust in an amount equal to $25 in the aggregate. Chemours’ share of such supplemental payment is approximately $13, which
is included in Accrued Litigation and expected to be paid in the 2025.
In December 2024, the State of Texas filed a Deceptive Trade Practices action in federal court against 3M Company, E. I. du Pont de Nemours and
Company (EID), DuPont de Nemours, Inc. (DuPont) and Corteva alleging that the companies engaged in deceptive trade practices by failing to disclose
certain health risks and environmental harm related to PFAS. The lawsuit alleges that the EID defendants’ corporate restructurings were designed to
avoid liability for these actions. The suit seeks injunctive relief and civil penalties. In January 2025 the case was removed to federal court.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-60
Other PFAS Matters
In New York courts, EID has been named in approximately 40 lawsuits beginning in 2017, which are not part of the Leach class, brought by individual
plaintiffs alleging negligence and other claims in the release of PFAS, including PFOA, into drinking water against current and former owners and
suppliers of a manufacturing facility in Hoosick Falls, New York. Two additional lawsuits have been filed by a business seeking to recover its losses
and by nearby property owners and residents in a putative class action. The lawsuit filed by the business was dismissed, but the claims by the individual
business owner were allowed to proceed. In September 2022, the Court certified the class action, and EID filed a petition for review of the certification,
which was denied in January 2023. Chemours and EID, entered into settlement agreements in principle to resolve all but seven of the pending lawsuits,
including the class action suit, during the second quarter of 2023 and were substantially paid in the fourth quarter of 2023. In February 2024, the
Company agreed to resolve all of the remaining individual cases and claims, including six of the seven pending lawsuits for $0.4. As of September
2024, these settlements have all been paid consistent with prior reserves in the matters. Upon completion and dismissal of the individual matters, the
class action is the sole remaining lawsuit pending for these matters. In December 2024, the court scheduled the class action trial for July 2025.
In New Jersey federal court, lawsuits were filed against several defendants including EID and Chemours beginning in November 2019. The lawsuits
include ten lawsuits alleging that defendants are responsible for PFAS contamination, including PFOA and PFOS, in groundwater and drinking water.
During the second quarter of 2023, the companies resolved these claims. Eight lawsuits were also filed alleging exposure to PFAS and other chemicals,
including two lawsuits by parents on behalf of their adult children claiming pre-natal exposure, resulted in the children’s cognitive delays, neurological,
genetic, and autoimmune conditions. Further, eleven additional lawsuits were filed in state court with similar allegations of personal injury, which have
been removed to New Jersey federal court (and one of which was transferred to the AFFF MDL). In May 2024, a case alleging wrongful death from
exposure to PFAS and other chemicals on behalf of two deceased residents of Salem County, NJ was filed naming Chemours in New Jersey state
court. The case has also been removed to federal court. Plaintiffs seek certain damages including punitive damages.
In January 2025, several state court lawsuits were filed against multiple defendants, including DuPont defendants and Chemours, alleging personal
injury, trespass and property damage claims primarily related to exposure to PFAS via groundwater. In New Jersey state court, a lawsuit was filed on
behalf of fifteen plaintiffs who reside in the state; in New York state court the lawsuit is on behalf of thirty plaintiffs who reside in the state; in Illinois
state court the lawsuit is on behalf of twenty four plaintiffs who reside in the state; and in Delaware state court three lawsuits were filed on behalf of
approximately 250 plaintiffs who reside in the state. The complaints also allege fraudulent conveyance as to DuPont defendants and Chemours and
demand compensatory and punitive damages.
In Ohio federal court, a putative class action ("Hardwick") was filed in October 2018 against several defendants including 3M, EID and Chemours
seeking class action status for U.S. residents having a detectable level of PFAS in their blood serum. The complaint seeks declaratory and injunctive
relief, including the establishment of a “PFAS Science Panel”. In March 2022, the court granted in part and denied in part the plaintiff’s class certification
and certified a class covering anyone subject to Ohio laws having minimal levels of PFOA plus at least one other PFAS in their blood. The court
requested further briefing on whether the class should be extended to include other states that recognize the claims for relief filed in the action. The
defendants, including EID and Chemours, jointly filed a petition to appeal the class certification decision and in September 2022 the petition was
granted. During the fourth quarter of 2023, the Court dismissed the class action against 3M, EID, Chemours and the other defendants. In December,
2023, the plaintiff filed a petition for reconsideration and for rehearing en banc with the 6th Circuit. In January 2024, the 6th Circuit denied the request
for rehearing. In March 2024, the case was dismissed. In June 2024, Hardwick refiled a putative national class action in federal court in Ohio against
3M, DuPont, and the Company. The refiled Hardwick suit seeks class status for all those in the United States who have 2 ppb or more of “C8 (PFOA
and PFOS combined)” in their blood and who are subject to the laws of a state that recognizes medical monitoring. The complaint alleges negligence,
battery and conspiracy and seeks equitable, declaratory, and injunctive relief including medical monitoring overseen by a court-appointed independent
science panel. The complaint does not seek monetary damages or personal injury. In October 2024, defendants filed a motion to dismiss the matter.
In Delaware state court, a putative class action was filed in May 2019 against two electroplating companies, 3M and EID, and two other defendants
added in an amended complaint, alleging responsibility for PFAS contamination, including PFOA and PFOS, in drinking water and the environment in
the nearby community. In November 2023, a motion to amend the complaint was filed seeking to add Chemours as a defendant. The putative class of
residents alleges negligence, nuisance, trespass, and other claims and seeks medical monitoring, personal injury and property damages, and punitive
damages. The matter has been removed to federal court. In January 2025, the federal magistrate recommended that summary judgment be entered
in favor of EID and two other defendants based on lack of any record connecting the PFAS contamination alleged with products sold by these
defendants. After an objection period, the court may accept the magistrate’s recommendation and enter summary judgment.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-61
In South Carolina, a putative class action was filed in March 2022 in the state court against 3M, EID and the Company alleging PFAS contamination
from a former textile plant located in Society Hill, South Carolina which allegedly used PFAS containing textile treatment chemicals supplied by the
defendants. The lawsuit alleges negligence, trespass, strict liability and nuisance and seeks monetary damages, including property diminution, and
injunctive relief, including water treatment and remediation, as well as punitive damages. The matter has been removed to federal court. In April 2024,
EID and Chemours filed a third-party complaint against Huntsman, Ciba Specialty Chemicals, Galey & Lord, Nanotex and John Does alleging
indemnification and contribution. In September 2024, Huntsman filed a counterclaim against EID and Chemours alleging indemnification and
contribution. In August 2024, a complaint related to the same fabric mill was filed on behalf of an individual in South Carolina state court against 3M,
EID, Chemours and other companies alleging personal injuries resulting from exposure to PFAS emissions from the former textile plant. The complaint
alleged negligence, strict liability, products liability counts, and fraud and seek compensatory and punitive damages and costs. In August 2024, 3M
removed the matter to federal court.
In Maine, a previously filed lawsuit in federal court by individuals against various paper mills owners in Maine was amended in October 2022 to add
various alleged suppliers to the paper mills as defendants, including EID. The lawsuit alleges PFAS chemicals were used in making paper products at
the mills and that discharges, waste disposal and the selling of byproducts from paper mills caused property damages as well as personal injury to the
plaintiffs. The lawsuit alleges various claims against the mills; alleges negligence, strict liability and nuisance against the supplier defendants; and
seeks monetary damages. In March 2023, plaintiffs dismissed the case against EID and other defendants.
In Pennsylvania, in December 2023, a lawsuit was filed in state court on behalf of multiple plaintiffs alleging that defendants including Chemours, EID,
Corteva and DuPont, as manufacturers of chemicals used in gas well fracking, are responsible for contamination of the water supply. The lawsuit
alleges negligence, personal injury, medical monitoring, property damage and punitive damages. In May 2024, Plaintiffs filed an amended complaint
and did not name Chemours, EID, Corteva or DuPont de Nemours.
In Delaware, in October 2023, a lawsuit was filed in state court on behalf of the spouse of a former EID employee, naming Chemours, EID, Corteva,
DuPont and others alleging personal injury as a result of take-home exposure to PFAS and other compounds. The complaint seeks compensatory and
punitive damages. In January 2025, this matter was voluntarily dismissed without prejudice.
In Missouri, in April 2024, a putative class action was filed in federal court against several defendants including 3M, EID, Corteva, DuPont, and
Chemours alleging responsibility for PFAS contamination in drinking water and the environment in Portageville, Missouri. The putative class of residents
alleges negligence, nuisance and strict liability. The complaint also alleges personal injury and property damages and seeks medical monitoring,
abatement and compensatory and punitive damages. In August 2024, the case was dismissed against EID and Chemours for lack of personal
jurisdiction.
In April 2024, three defendants in a 2022 Massachusetts federal court putative class action alleging PFAS contamination and related in part to the
Massachusetts Natural Fertilizer Company Site, The Newark Group, Seaman Paper Company and Otter Farm, Inc., filed cross claims against the
Company, DuPont, Corteva, EID and other defendants, including John Doe defendants, for the sole purpose of pleading and protecting any claims for
indemnity or contribution they may have against the cross claim defendants, if they are found liable in the underlying putative class action. In October
2024, the Court disallowed the cross claims which ends the matter as to the Company. In December 2024, The Newark Group moved for the court to
reconsider its denial of the cross claims against the Company and others and argues that the Court misapplied the law on timeliness and proper
joinder.
In May 2024, a lawsuit was filed in Missouri federal court against multiple defendants, including Chemours, seeking to certify the action as a class
proceeding. Plaintiffs allege that defendants have manufactured, supplied, and/or sold products containing PFAS that have contaminated the soil,
groundwater, aquifer, and drinking water for plaintiffs’ properties in and near Canton, Missouri. The complaint seeks certification on behalf of plaintiffs
and others similarly situated whose properties were allegedly damages by contaminants produced by defendants. Plaintiffs seek a medical monitoring
class as well. Plaintiffs seek compensatory and punitive damages. This case has been transferred to the AFFF MDL.
In June 2024, a lawsuit was filed in Connecticut federal court on behalf of multiple firefighter unions and individual firefighters against multiple
defendants, including Chemours, EID, and DuPont De Nemours, seeking to certify the action as a class proceeding. Plaintiffs allege that defendants
manufactured, sold, or supplied chemicals containing PFAS which was allegedly found in turnout gear. Plaintiffs allege strict liability, negligence, failure
to warn, negligent design and manufacture, medical monitoring, and statutory punitive damages.
In September 2024, a civil claim was filed in the Supreme Court of British Columbia in Canada against multiple defendants, including Chemours,
seeking to certify the action as a class proceeding. The complaint identifies the class as all resident persons or entities in Canada who purchased
carpeting treated with PFAS-containing products through a retailer or distributor before January 1, 2020 and had it installed in a building still owned by
such persons or entities and who have not removed the carpeting. The complaint seeks compensatory and punitive damages.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-62
In September 2023, a civil claim was filed in Virginia state court against multiple defendants, including Chemours, alleging breach of implied warranties,
breach of express warranties, negligence, gross negligence, recklessness, and willful and wanton misconduct. Plaintiff alleges that defendants
manufactured, designed, marketed, sold, supplied, or distributed PFAS, PFAS containing chemical feedstock, and PFAS-containing turnouts to
firefighting training facilities and fire departments nationally, including Virginia where plaintiff’s husband was a firefighter. Plaintiff alleges that repeated
and extensive exposure to PFAS resulted in her husband’s brain cancer. The complaint seeks compensatory and punitive damages.
In April 2024, a civil claim was filed in Virginia state court against multiple defendants, including Chemours, alleging breach of implied warranties,
breach of express warranties, negligence, gross negligence, recklessness, and willful and wanton misconduct. Plaintiff alleges that Defendants
manufactured, designed, marketed, sold, supplied, or distributed PFAS, PFAS containing chemical feedstock, and PFAS-containing turnouts to
firefighting training facilities and fire departments nationally, including Virginia. The complaint seeks compensatory and punitive damages.
In August 2024, a putative national class action was filed in federal court in Minnesota against 3M, EIDP and Chemours related to PFAS in carpet.
Violations of the federal Racketeer Influenced and Corrupt Organizations Act (RICO) are alleged as well as violations of over 30 state statutes, including
consumer fraud, deceptive trade practices, misrepresentation, and unfair competition laws. The complaint also includes product liability and nuisance
claims. EIDP and Chemours filed a motion to dismiss.
In November 2024, Aladdin Manufacturing Corporation, Mohawk Industries, Inc. and Mohawk Carpet, LLC (hereinafter “Mohawk”), which are carpet
manufacturers with operations in Georgia, sued carpet treatment chemical suppliers 3M, EIDP (“DuPont”), Daikin and the Company in Georgia state
court alleging fraud, misrepresentation, contractual and common law indemnity, negligence, nuisance, punitive damages and other claims related to
future and past PFAS liabilities and attorney’s fees incurred by Mohawk. Mohawk alleges concealment and misrepresentation by the suppliers related
to PFAS and the carpet treatment chemicals supplied. Mohawk further claims that it has been named as a defendant in at least 8 lawsuits brought by
water suppliers downstream of its carpet manufacturing operations and has already paid over $100 in settlements of some of those matters. Mohawk
seeks a declaratory judgment holding the suppliers responsible for its PFAS liabilities, including damages to Mohawk’s property interests, past, present,
and future compensatory damages, including settlements already paid, attorneys’ fees and punitive damages.
In December 2024, the City of Dalton, Georgia, acting through its Board of Water, Light and Sinking Fund Commissioners, d/b/a Dalton Utilities
(hereinafter “Dalton”) sued 3M, EIDP (“DuPont”), Daikin, INV Performance Surfaces, Aladdin Manufacturing, Shaw Industries, unnamed DOES and
the Company in federal court in Georgia. Dalton has received and treated waste from carpet and flooring manufacturers since the 1970s and alleges
that Defendants have caused long-running contamination of Dalton’s wastewater treatment operations through the sale, use and disposal of PFAS.
Dalton’s operations include Riverbend Land Application System (“LAS”) where treated wastewater is land-applied, as well as three wastewater
treatment plants (collectively, the “POTW”). Dalton alleges that the Defendants sold and used PFAS containing carpet treatment chemicals while
knowing the PFAS would not be removed by the POTW. Dalton further alleges that Defendants did not provide disclosures or warnings to Dalton or
the public. CERCLA is asserted as the basis for cost recovery and for a declaration of Defendants’ joint and several liability for past and future response
costs by the POTW and abatement of PFAS. Dalton also alleges negligence, nuisance, trespass, strict liability and violations of various state
statutes and seeks compensatory and punitive damages and attorneys’ fees and costs.
In December 2024, Murray County, Georgia sued 3M, Daikin, Invista, Shaw, Aladdin, Mohawk, INV Performance Surfaces, EIDP, Corteva and the
Company in Georgia state court alleging PFAS contamination from disposal of carpet manufacturing wastes into its landfills. Murray County asserts
Georgia statutory violations as well as common law torts, including negligence and nuisance, and seeks damages arising from PFAS contamination
of its property. Murray County also seeks punitive damages, attorneys’ fees and costs.
In January 2025, Catoosa County, Georgia sued 3M, Daikin, Shaw, Aladdin, Mohawk, and EIDP in Georgia state court alleging PFAS related to carpet
manufacturing was manufactured, used, and discharged by Defendants and exists at dangerous levels in its landfill, and in its surface water, leachate,
groundwater, and methane gas. Catoosa County asserts Georgia statutory violations as well as common law torts, including negligence and nuisance,
and seeks past and future compensatory and statutory damages for remediation, abatement, interference with use and enjoyment of property, and
diminished property values. Catoosa County also seeks punitive damages, attorneys’ fees, and costs.
In January 2025, James and Pamela Stephens filed a lawsuit in Georgia state court against the City of Calhoun, 3M, INV Performance Surfaces,
Daikin, Arrowstar, Aladdin, Mohawk, Shaw, Milliken, Mannington Mills, Dixie Group, Marquis Industries, EIDP and the Company. Plaintiffs assert that
PFAS containing waste from defendant carpet manufacturers and suppliers was sent to Calhoun’s treatment facility and Calhoun disposed of its post
treatment sludge on nearby and adjacent property which resulted in PFAS contamination to their historic home, property, creek and drinking
water. Plaintiffs’ assertions include negligence, nuisance, and trespass, and they seek compensatory and punitive damages as well as abatement,
removal of PFAS from their property, attorneys’ fees and costs.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-63
In January 2025, Gordon County, Georgia sued 3M, Daikin, Shaw, Aladdin, Mohawk, INV Performance Surfaces, Corteva, EIDP and the Company in
Georgia state court alleging PFAS related to carpet manufacturing was manufactured, used, and discharged by Defendants and exists at dangerous
levels in its landfill, and in its storm water runoff, leachate, groundwater, and methane gas. Gordon County asserts Georgia statutory violations as well
as common law torts, including negligence and nuisance, and seeks past and future compensatory and statutory damages for remediation, abatement,
interference with use and enjoyment of property, and diminished property values. Gordon County also seeks punitive damages, attorneys’ fees, and
costs.
In January 2025, 1001 Newark Ave. Associates, LLC filed a lawsuit in New Jersey federal court against General Spray Drying Services, Inc., Fabvan
Sales Company (d/b/a Geral Spray Drying), EIDP, DuPont de Nemours, Corteva, Chemours and other defendants related to alleged contamination at
a property in Elizabeth, NJ. The complaint alleges that General Spray’s processing operations resulted in discharges of other defendants’ PFAS and
that these compounds have contaminated underlying soil and groundwater. The Complaint is brought under the federal CERCLA Act and the New
Jersey Spill Compensation and Control Act and seeks, inter alia, recovery of costs for the investigation and remediation of PFAS at the property and
declaratory judgments relating thereto.
In the Netherlands, Chemours, along with DuPont and Corteva, received a civil summons filed before the Court of Rotterdam by four municipalities
(Dordrecht, Papendrecht, Sliedrecht and Molenlanden) seeking liability declarations relating to the Dordrecht site’s operations and emissions.
Chemours reviewed the summons and filed a statement of defense during the fourth quarter of 2021, and in September 2022 the court entered an
interlocutory judgment denying in part certain aspects of such statement of defense. A hearing on the merits of the municipalities’ claims took place in
March 2023. On September 27, 2023, the court entered a second interlocutory judgment, ruling, inter alia, that defendants were liable to the
municipalities for (i) PFOA emissions during a certain time period and (ii) removal costs if deposited emissions on the municipalities land infringes their
property rights by an objective standard. Any damages will be decided in a separate, subsequent proceeding. Chemours is in discussions with the
municipalities to identify actions that may resolve their and other community concerns, including providing technical and financial support for activities.
An initial estimate of this liability was included in Accrued Litigation at December 31, 2023 and was reclassified to Accrued Environmental Remediation
as of December 31, 2024 based on the remediation plan to be implemented as part of the letter of intent ("LOI") described below.
In June 2024 the Company and the Municipalities signed a LOI that includes the implementation of a specific remediation plan for the restoration of
restricted vegetable gardens in certain areas of those municipalities to be funded by Chemours, sampling and developing a program to address the
Merwelanden recreational lake, and further settlement discussions, including a fund to cover certain other expenditures aimed at environmental-related
activities. The LOI contemplates the possibility of settling the court dispute, although still subject to further discussions which are ongoing with the
municipalities and there is no guarantee that these discussions will result in a settlement. Settlement discussions are complex and often involve
potential amounts, scope and terms, which can be monetary and non-monetary. The Company does not consider these ongoing settlement
discussions, including any amounts with respect to a potential fund that the municipalities put forward as part of such negotiations, to be indicative of
the merits or potential outcome of any court proceeding with respect to the underlying claim. As such, as of December 31, 2024, the Company has not
accrued for any amounts related to the fund mentioned above. Although the Company believes a loss is probable and could be material, it is not
estimable at this time due to various reasons including, among others, that such discussions are in their early stages and have significant issues to be
resolved.
Further, in the Netherlands, in September 2023, a Dutch criminal defense lawyer announced a criminal complaint with the support of a few thousand
citizens against Chemours and its current and former directors for alleged unlawful emissions of PFOA and GenX in Dordrecht. This claim has been
filed with the Office of the Public Prosecutor, which is proceeding with the investigation.
In May 2020, we were notified of an alleged criminal offense related to the Netherlands’ Environmental Management Act and the Working Conditions
Decree, regarding the use of PFOA during the pre-spin time period of June 1, 2008 to December 31, 2012. The investigation was initiated in the first
quarter of 2016 by a public prosecutor. We believe that we have complied with all relevant laws, and we are in contact with the prosecutor.
In addition to the above matters, the Company may engage in discussions or dispute resolutions with various parties regarding other claims, including
third-party indemnity claims, and potential resolutions of such matters. In the year ended December 31, 2024, the Company recorded an immaterial
amount related to one or more of these matters.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-64
New Jersey Department of Environmental Protection Directives and Litigation
In March 2019, NJ DEP issued two Directives and filed four lawsuits against Chemours and other defendants. The Directives are: (i) a state-wide
PFAS Directive issued to EID, DowDuPont, DuPont Specialty Products USA (“DuPont SP USA”), Solvay S.A., 3M, and Chemours seeking a meeting
to discuss future costs for PFAS-related costs incurred by NJ DEP and establishing a funding source for such costs by the Directive recipients, and
information relating to historic and current use of certain PFAS compounds; and, (ii) a Pompton Lakes Natural Resources Damages (“NRD”) Directive
to EID and Chemours demanding $0.1 to cover the cost of preparation of a natural resource damage assessment plan and access to related
documents.
The lawsuits filed in New Jersey state courts by NJ DEP are: (i) in Salem County, against EID, 3M, and Chemours primarily alleging clean-up and
removal costs and damages and natural resource damages under the Spill Act, the Water Pollution Control Act (“WPCA”), the Industrial Site Recovery
Act (“ISRA”), and common law regarding past and present operations at Chambers Works, a site assigned to Chemours at Separation; (ii) in Middlesex
County, against EID, DuPont SP USA, 3M, and Chemours primarily alleging clean-up and removal costs and damages and natural resource damages
under the Spill Act, ISRA, WPCA, and common law regarding past and present operations at Parlin, an EID owned site; (iii) in Gloucester County,
against EID and Chemours primarily alleging clean-up and removal costs and damages and natural resource damages under the Spill Act, WPCA,
and common law regarding past operations at Repauno, a non-operating remediation site assigned to Chemours at Separation which has been sold;
and, (iv) in Passaic County, against EID and Chemours primarily alleging clean-up and removal costs and damages and natural resource damages
under the Spill Act, WPCA, and common law regarding past operations at Pompton Lakes, a non-operating remediation site assigned to Chemours at
Separation. The alleged pollutants listed in the Salem County and Middlesex County matters above include PFAS. Each lawsuit also alleges fraudulent
transfer.
In August 2020, a Second Amended Complaint was filed in each matter, adding fraudulent transfer and other claims against DuPont SP USA, Corteva,
and DuPont. For the Salem County matter, NJ DEP added claims relating to failure to comply with state directives, including the state-wide PFAS
Directive.
The matters were removed to federal court and consolidated for case management and pretrial purposes. In December 2021, the federal court entered
a consolidated order granting, in part, and denying, in part, a motion to dismiss or strike parts of the Second Amended Complaints. In January 2022,
NJ DEP filed a motion for a preliminary injunction requiring EID and Chemours to establish a remediation funding source (“RFS”) in the amount of
$943 for the Chambers Works site, the majority of which is for non-PFAS remediation items. In March 2023, the four NJDEP lawsuits were referred to
mediation by the federal court, with the proceedings in the matters stayed pending the mediation. In April 2024 NJDEP submitted to the court a letter
declaring that the parties had reached an impasse in the mediation. A case management schedule was entered by the court in May 2024, with the
Chambers Works and Pompton Lakes matter being active and the other two matters being administratively terminated without prejudice. In August
2024, Third Amended Complaints were filed in the Chambers Works and Pompton Lakes Works matters. Discovery is ongoing in the Chambers Works
matter with pretrial papers due in early May 2025, with trial to begin in May 2025. Discovery is also ongoing in the Pompton Lakes matter with document
and ESI discovery set to close in May 2025. Other deadlines in the Pompton Lakes matter are to be addressed in a future scheduling order. In June
2024, Carneys Point Township filed a motion to intervene in such matter seeking to bring counterclaims against both the State of New Jersey and
defendants, including Chemours, related to natural resource damages, remediation funding sources, ISRA penalties, off-site remediation and lost
property taxes. In November 2024, Carneys Point Township’s motion to intervene was denied and it is proceeding separately in its 2016 state court
matter.
EID requested that Chemours defend and indemnify it in these matters. Chemours has accepted the indemnity and defense of EID while reserving
rights and declining EID’s demand as to matters involving other EID entities, as well as ISRA and fraudulent transfer, subject to the terms of the MOU.
PFOA and PFAS Summary
With the exception of the individual matters specifically noted otherwise above, management believes that it is reasonably possible that the Company
could incur losses related to PFOA and/or PFAS matters in excess of amounts accrued, but any such losses, which could be material to results of
operations, financial position, or cash flows are not estimable at this time due to various reasons, including, among others, that some matters are in
their early stages and that there are significant factual issues to be resolved.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-65
U.S. Smelter and Lead Refinery, Inc.
There are five lawsuits currently pending in Indiana federal court, including a putative class action, by area residents concerning the U.S. Smelter and
Lead Refinery multi-party Superfund site in East Chicago, Indiana. Several of the lawsuits allege that Chemours is now responsible for EID
environmental liabilities. The lawsuits include allegations for personal injury damages, property diminution, and other damages. At Separation, EID
assigned Chemours its former plant site, which is located south of the residential portion of the Superfund area, and its responsibility for the
environmental remediation at the Superfund site. Management believes a loss, which could be material, is reasonably possible, but not estimable at
this time due to various reasons including, among others, that such matters are in their early stages and have significant factual issues to be resolved.
Securities Related Litigation and Requests for Information Arising From Audit Committee Internal Review, and Related Indemnification
Agreements
The Audit Committee, with the assistance of independent counsel, conducted an internal review in the first quarter of 2024 arising from a report made
to the Chemours Ethics Hotline, and its findings include that the Company’s then CEO, CFO and Controller violated the Chemours Code of Ethics for
those positions. Chemours is cooperating with requests for information from the SEC and the United States Attorney’s Office for the Southern District
of New York concerning the results of the Audit Committee Internal Review and the Company’s SEC filings and in June 2024 received a subpoena
from the SEC. In March 2024, two putative class actions were filed in Delaware federal court against the Company and former officers of the Company
alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. The complaints allege claims on behalf of
proposed classes of purchasers of Chemours stock beginning February 10, 2023 and ending February 28, 2024 and seek compensatory damages
and fees. In September 2024, an Amended Complaint was filed, and the Company and former officers filed a motion to dismiss the Amended Complaint
in October 2024. In April 2024, June 2024, July 2024, August 2024 and October 2024, the Company received seven stockholder demands for inspection
of books and records under Section 220 of the General Corporation Law of the State of Delaware and the common law (“Section 220 Demand”),
including in its purpose the investigation of possible wrongdoing, mismanagement or breach of fiduciary duties by the Board of Directors and/or senior
management in connection with the compensation of executive officers and oversight over the Company’s accounting practices. In addition, the
Company is aware of additional efforts by private law firms to solicit clients in regard to potential securities class action or derivative litigation.
Management believes that it is not possible at this time to reasonably assess the outcome of these matters or to estimate the loss or range of loss, if
any, as the matters are in their early stages with significant issues to be resolved, including, for certain matters, whether a claim will be made.
The Company has indemnification and expense advancement obligations pursuant to its bylaws and indemnification agreements with respect to certain
current and former members of senior management and the Company’s directors. In connection with the Audit Committee Internal Review, and above
litigation matters, the Company has received requests from former members of senior management under such indemnification agreements and its
bylaws to provide advances of funds for legal fees and other expenses and expects additional requests in connection with the investigation and any
future related litigation. The Company incurred $1 of costs for these indemnification agreement requests during the year ended December 31, 2024.
These costs have been recorded within Selling, general, and administrative expense. The Company has not recorded any material liabilities for these
matters as of December 31, 2024 and 2023 as it cannot estimate the ultimate outcome at this time.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-66
Environmental Overview
Chemours, due to the terms of the Separation-related agreements with EID, is subject to contingencies pursuant to environmental laws and regulations
that in the future may require further action to correct the effects on the environment of prior disposal practices or releases of chemical substances,
which are attributable to EID’s activities before it spun-off Chemours. Much of this liability results from the Comprehensive Environmental Response
Compensation and Liability Act (“CERCLA”, often referred to as “Superfund”), the Resource Conservation and Recovery Act (“RCRA”), and similar
federal, state, local, and foreign laws. These laws may require Chemours to undertake certain investigative, remediation, and restoration activities at
sites where ownership was transferred to Chemours under the Separation-related agreements or at sites where EID-generated waste was disposed
before the 2015 separation. The accrual also includes estimated costs related to a number of sites identified for which it is probable that environmental
remediation will be required, but which are not currently the subject of enforcement activities.
Chemours accrues for remediation activities when it is probable that a liability has been incurred and a reasonable estimate of the liability can be made.
Where the available information is sufficient to estimate the amount of liability, that estimate has been used. Where the available information is only
sufficient to establish a range of probable liability, and no point within the range is more likely than any other, the lower end of the range has been
used. Estimated liabilities are determined based on existing remediation laws and technologies and the Company’s planned remedial responses, which
are derived from environmental studies, sampling, testing, and analyses. Inherent uncertainties exist in such evaluations, primarily due to unknown
environmental conditions, changing governmental regulations regarding liability, and emerging remediation technologies. The Company, from time to
time, may engage third parties to assist in obtaining and/or evaluating relevant data and assumptions when estimating its remediation liabilities. These
liabilities are adjusted periodically as remediation efforts progress and as additional technological, regulatory, and legal information becomes available.
Environmental liabilities and expenditures include claims for matters that are liabilities of EID and its subsidiaries, which Chemours may be required to
indemnify pursuant to the Separation-related agreements. These accrued liabilities are undiscounted and do not include claims against third parties.
Costs related to environmental remediation are charged to expense in the period that the associated liability is accrued.
The following table sets forth the Company’s environmental remediation liabilities at December 31, 2024 and 2023 for the six sites that are deemed
the most significant during the periods presented, together with the aggregate liabilities for all other sites.
December 31,
2024
2023
Chambers Works, Deepwater, New Jersey
$
31
$
30
Dordrecht Works, Netherlands (1)
28
4
Fayetteville Works, Fayetteville, North Carolina (2)
351
383
Pompton Lakes, New Jersey
41
41
USS Lead, East Chicago, Indiana (3)
—
12
Washington Works, West Virginia
25
22
All other sites
95
98
Total environmental remediation
$
571
$
590
(1)
As of December 31, 2024, environmental remediation at Dordrecht Works primarily relates to the remediation plan to be implemented as part of the letter of intent described
further within this “Note 22 – Commitments and Contingent Liabilities”. An initial estimate of this liability was included in Accrued Litigation at December 31, 2023 and reclassified
to Accrued Environmental Remediation at December 31, 2024
(2)
For more information on this matter refer to “Fayetteville Works, Fayetteville, North Carolina” within this “Note 22 – Commitments and Contingent Liabilities”.
(3)
USS Lead, East Chicago, Indiana: Although USS Lead, East Chicago, Indiana has a $0 balance as of December 31, 2024, the Company continues to include this remediation
site in the table above due to the accrued environmental remediation liabilities associated with it as of December 31, 2023 for comparable purposes.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-67
The following table sets forth the current and long-term components of the Company’s environmental remediation liabilities at December 31, 2024 and
2023.
December 31,
2024
2023
Current environmental remediation
$
115
$
129
Long-term environmental remediation
456
461
Total environmental remediation
$
571
$
590
Typically, the timeframe for a site to go through all phases of remediation (investigation and active clean-up) may take about 15 to 20 years, followed
by several years of operation, maintenance, and monitoring (“OM&M”) activities. Remediation activities, including OM&M activities, vary substantially
in duration and cost from site to site. These activities, and their associated costs, depend on the mix of unique site characteristics, evolving remediation
technologies, and diverse regulatory requirements, as well as the presence or absence of other potentially responsible parties. In addition, for claims
that Chemours may be required to indemnify EID pursuant to the Separation-related agreements, Chemours, through EID, has limited available
information for certain sites or is in the early stages of discussions with regulators. For these sites in particular, there may be considerable variability
between the clean-up activities that are currently being undertaken or planned and the ultimate actions that could be required. Therefore, considerable
uncertainty exists with respect to environmental remediation costs and, under adverse changes in circumstances, management currently estimates
the potential liabilities may range up to approximately $720 above the amount accrued at December 31, 2024. This estimate is not intended to reflect
an assessment of Chemours’ maximum potential liability. As noted above, the estimated liabilities are determined based on existing remediation laws
and technologies and the Company’s planned remedial responses, which are derived from environmental studies, sampling, testing, and analyses.
Inherent uncertainties exist in such evaluations, primarily due to unknown environmental conditions, changing governmental regulations regarding
liability, and emerging remediation technologies. Management will continue to evaluate as new or additional information becomes available in the
determination of its environmental remediation liability.
In October 2021, EPA released its PFAS Strategic Roadmap, identifying a comprehensive approach to addressing PFAS. The PFAS Strategic
Roadmap sets timelines by which EPA planned to take specific actions through 2024, including establishing a national primary drinking water regulation
for PFOA and PFOS and taking Effluent Limitations Guidelines actions to regulate PFAS discharges from industrial categories among other actions.
As provided under its roadmap, EPA also released its National PFAS Testing Strategy, under which the agency will identify and select certain PFAS
compounds for which it will require manufacturers to conduct testing pursuant to the Toxic Substances Control Act (“TSCA”) section 4. Chemours has
received various test orders and has formed consortia to jointly manage compliance with the test order requirements. Chemours expects to receive
future test orders, however the timing of the remaining test orders is not determinable at this time. The timing of the draft Effluent Limitations Guidelines
for PFAS manufacturers as announced in the PFAS Strategic Roadmap is uncertain.
Also in October 2021, EPA published a final toxicity assessment for GenX compounds that decreased the draft reference dose for GenX compounds
based on EPA’s review of new studies and analyses. On March 18, 2022, Chemours filed a petition to EPA requesting to withdraw and correct its
toxicity assessment for GenX compounds, which was denied by EPA on June 14, 2022. The next day, on June 15, 2022, EPA released health
advisories for four PFAS, including interim updated lifetime drinking water health advisories for PFOA and PFOS, and final health advisories for GenX
compounds, including hexafluoropropylene oxide dimer acid (“HFPO Dimer Acid”), and another PFAS compound (PFBS). On July 13, 2022 the
Company filed a Petition for Review of the GenX compounds health advisory, and the Third Circuit held argument on the petition in January 2024. In
July 2024, the Third Circuit dismissed the Company’s petition for lack of subject matter jurisdiction, finding the health advisory was not a final agency
action.
In March 2023, EPA proposed a national primary drinking water regulation ("NPDWR") to establish Maximum Contaminant Levels ("MCLs") for six
PFAS, with PFOA and PFOS having MCLs as individual compounds (each proposed as 4 parts per trillion ("ppt")) and four other PFAS compounds,
including HFPO Dimer Acid, having a hazard index approach limit on any mixture containing one or more of the compounds. The proposed PFAS
NPDWR was subject to public comment until May 30, 2023, and on April 10, 2024 EPA issued its final rule, which included promulgating individual
MCLs for PFOA and PFOS at 4ppt and individual MCLs for PFHxS, PFNA and HFPO-DA at 10ppt. In addition, EPA finalized a hazard index of 1
(unitless) as the MCL for any mixture of PFHxS, PFNA, HFPO-DA and PFBS. The final rule became effective 60 days from publication in the Federal
Register and the compliance date for public water systems in the U.S. to meet the MCLs is five years from the publication date. In June 2024, Chemours,
as well as other organizations including the American Water Works Association and the American Chemistry Council, filed petitions for review of the
final rule in the U.S. Court of Appeals for the D.C. Circuit. This appeal is now being held in abeyance until April 2025 to allow EPA to review the
underlying rule. Also in April 2024, EPA issued a final rule designating PFOA and PFOS as hazardous substances under CERCLA, which has also
been challenged in the same appeals court. EPA has moved to hold this appeal also in abeyance to allow review of the underlying rule. Depending on
the ultimate outcome of EPA’s actions, our estimated environmental remediation liabilities and accrued litigation could increase to meet any new
drinking water standards, which could have a material adverse effect on our results of operations, financial condition, and cash flows.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-68
As further discussed in the Other PFAS Matters section above, the Company and the municipalities of Dordrecht, Papendrecht, Sliedrecht and
Molenlanden signed a Letter of Intent ("LOI") that includes the implementation of a specific remediation plan for the restoration of restricted vegetables
in certain areas of those municipalities to be funded by Chemours, sampling and developing a program to address the Merwelanden recreational lake,
and further settlement discussions. In the fourth quarter of 2024, the Company received comments from the Municipality of Dordrecht and the Province
of South Holland on a Plan of Action for Vegetable Gardens ("Plan of Action") in the municipalities and approval for the pilot stage of the plan. The
Plan of Action provides for replacement of soil impacted with PFOA above certain levels to remove RIVM documented consumption restriction as well
as providing for alternative irrigation water, if necessary, as determined by PFOA levels. This accrual had a change in estimate which increased the
accrual by $15 based on the comments on the Plan of Action and other factors and is included in the environmental remediation balance as of
December 31, 2024.
Further, The Dordrecht Works facility discharges, through outfalls at the site, wastewater and stormwater pursuant to permits issued by the applicable
local authorities, including the DCMR Environmental Protection Agency (‘DCMR”). As the regulatory landscape has evolved in the Netherlands over
the last years, there is increased focus on PFAS compounds discharged under the site’s permits, including compounds that were previously discharged
at undetected levels, and the site has been ordered to meet certain limits for these discharges or be subject to conditional fines. The Company regularly
carries out analyses of its wastewater to assess compliance with current emission limits as well as detect other contaminants as analysis methods
develop. The Company identified the presence of certain compounds based upon new analysis methods and reported these to DCMR and in
December 2023 submitted an application under normal permitting practice for a discharge requirement based on limited information for these
compounds. The Company has continued to engage with regulatory authorities on the application, including providing additional data and information
in November 2024. In January 2025, the Company submitted a revised permit application.
In December 2024, DCMR indicated an intention to impose a conditional fine of up to €3.7 million per violation for one of the compounds, for which the
Company has objected. The Company has responded to this intention, including that such intention is not consistent with normal permitting practice.
In February 2025, DCMR responded to the Company indicating it will impose the conditional fine, after a two-month grace period. The Company has
taken and continues to take actions to reduce discharges. The Company is evaluating DCMR's recent response and all available legal actions and
recourse available to the Company. The Company has not recorded a liability for this matter at December 31, 2024 as the conditional fine is not
effective at this time and will only be imposed after the two-month grace period, if at that time, the Company fails to comply with the discharge limits
for the compound. As of December 31, 2024, the Company does not believe the above matter will have a material impact on the Company's financial
position, results of operations or cash flows.
The environmental remediation liabilities and accrued litigation, as applicable, recorded for Fayetteville, Washington Works, Parkersburg, West Virginia,
Dordrecht Works, Netherlands and Chambers Works, Deepwater, New Jersey as of December 31, 2024 are based upon the existing Consent Orders,
agreements and/or voluntary commitments with EPA, state and other local regulators and depending on the ultimate outcome of EPA’s actions, could
require adjustment to meet any new drinking water standards. It is reasonably possible that additional costs could be incurred in connection with EPA’s
actions, however, the Company cannot estimate the potential impact or additional cost at this time, due in part to the uncertainties of challenges to
them, the, regulatory implementation site by site, where applicable, the current condition and the additional sampling required to determine the level
of contamination at the site, possible method(s) of remediation that may be required, and determination of other potential responsible parties. Refer to
“Fayetteville Works, Fayetteville, North Carolina” below for further detail on the impact of EPA’s final drinking water health advisory for GenX
compounds, including HFPO Dimer Acid.
Chemours incurred environmental remediation expenses of $70, $66 and $269 for the years ended December 31, 2024, 2023 and 2022, respectively,
of which $20, $25 and $229, respectively, relate to Fayetteville (discussed further below).
Fayetteville Works, Fayetteville, North Carolina
Fayetteville has been in operation since the 1970s and is located next to the Cape Fear River southeast of the City of Fayetteville, North Carolina.
Hexafluoropropylene oxide dimer acid ("HFPO Dimer Acid"), (sometimes referred to as “GenX” or “C3 Dimer Acid”) is manufactured at Fayetteville.
The Company has operated the site since its Separation from EID in 2015.
While the Company believes that discharges from Fayetteville to the Cape Fear River, on-site surface water, groundwater, and air emissions have not
impacted the safety of drinking water in North Carolina, the Company is cooperating with a variety of ongoing inquiries and investigations from federal,
state, and local authorities, regulators, and other governmental entities including EPA.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-69
Consent Order with North Carolina Department of Environmental Quality (“NC DEQ”)
In February 2019, the North Carolina Superior Court for Bladen County approved a Consent Order (“CO”) between NC DEQ, Cape Fear River Watch
("CFRW"), and the Company, resolving the State’s and CFRW’s lawsuits and other matters (including Notices of Violation (“NOVs”) issued by the
State). Under the terms of the CO, Chemours paid $13 in March 2019 to cover a civil penalty and investigative costs and agreed to certain compliance
measures (with stipulated penalties for failures to do so), including the following:
•
Install a thermal oxidizer (“TO”) to control all PFAS in process streams from certain processes at Fayetteville at an efficiency of 99.99%;
•
Develop, submit, and implement, subject to approval from NC DEQ and CFRW, a plan for interim actions that are economically and
technologically feasible to achieve the maximum PFAS reduction from Fayetteville to the Cape Fear River within a two-year period;
•
Develop and implement, subject to approval, a Corrective Action Plan (“CAP”) that complies with North Carolina’s groundwater standards
and guidance provided by NC DEQ. At a minimum, the CAP must require Chemours to reduce the total loading of PFAS originating from
Fayetteville to surface water by at least 75% from baseline, as defined by the CO; and,
•
Provide and properly maintain permanent drinking water supplies, including via whole-building filtration units and reverse osmosis (“RO”)
units to qualifying surrounding properties with private drinking water wells.
In August 2020, NC DEQ, CFRW, and the Company reached agreement on the terms of an addendum to the CO (the “Addendum”), which includes
procedures for implementing specified remedial measures for reducing PFAS loadings from Fayetteville to the Cape Fear River. The Addendum also
includes stipulated financial penalties, inclusive of daily and weekly fines for untimeliness in meeting deadlines for construction, installation and other
requirements, as well as intermittent performance-based fines for noncompliance in meeting PFAS loading reduction requirements and removal
efficiency targets. In October 2020, the Addendum was approved by the North Carolina Superior Court for Bladen County.
The following table sets forth the on-site and off-site components of the Company’s accrued environmental remediation liabilities related to PFAS at
Fayetteville at December 31, 2024 and 2023.
December 31,
2024
2023
On-site remediation
$
188
$
208
Off-site groundwater remediation
163
175
Total Fayetteville environmental remediation
$
351
$
383
The following table sets forth the current and long-term components of the Company’s accrued environmental remediation liabilities related to PFAS
at Fayetteville at December 31, 2024 and 2023.
December 31,
2024
2023
Current environmental remediation
$
68
$
76
Long-term environmental remediation
283
307
Total Fayetteville environmental remediation
$
351
$
383
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-70
Off-site replacement drinking water supplies
The CO requires the Company to provide permanent replacement drinking water supplies, including via connection to public water supply, whole
building filtration units and/or RO units, to qualifying surrounding residents, businesses, schools, and public buildings with private drinking water wells.
Qualifying surrounding properties with private drinking water wells that have tested for GenX above the state provisional health goal of 140 ppt, or any
applicable health advisory, whichever is lower, may be eligible for public water or a whole building filtration system. NCDEQ provided notice that the
June 2022 release of the final health advisory for GenX compounds by EPA constituted an applicable health advisory for determining eligibility for
public water or whole house filtration system. Additionally, under the CO, qualifying surrounding properties with private drinking water wells that have
tested above 10 ppt for other perfluorinated compounds (“Table 3 Compounds”) are eligible for three under-sink RO units. The Company provides
bottled drinking water to a qualifying property when it becomes eligible for a replacement drinking water supply, and continues to provide delivery of
bottled drinking water to the qualifying property until the eligible supply is established or installed. Under the terms of the CO, Chemours must make
the offer to install a water treatment system to property owners in writing multiple times, and property owners have approximately one year to accept
the Company’s offer before it expires. In September 2021, the Company entered into an agreement with Bladen County, North Carolina to fund public
water system upgrades and connections associated with providing permanent replacement drinking water supplies under the CO.
Further, in addition to the surrounding counties, in November 2021, NC DEQ sent a notice to Chemours regarding PFAS contamination from the Cape
Fear River of groundwater monitoring wells and water supply wells in New Hanover County and potentially three other downstream counties based on
new sampling data by NC DEQ and its determination of Chemours’ obligations for such contamination. NC DEQ directed Chemours to submit for its
review and approval a comprehensive groundwater contamination assessment in such counties, as well as an updated drinking water program to
provide for sampling under the CO in such counties. In 2022, the Company submitted an interim drinking water plan and a separate assessment
framework plan, which were subsequently updated and resubmitted, based on comments received from NC DEQ. In 2023, NC DEQ provided additional
comments identifying additional actions regarding the groundwater assessment as well as the drinking water program, which the Company responded
to.
The Company’s estimated liability for off-site replacement drinking water supplies is based on management’s assessment of the current facts and
circumstances for this matter, including comments received from NC DEQ, which are subject to various assumptions that include, but are not limited
to, the number of affected surrounding properties, response rates to the Company’s offer, the timing of expiration of offers made to the property owners,
the type of water treatment systems selected (i.e., public water, whole building filtration, or RO units), the cost of the selected water treatment systems,
and any related OM&M requirements, fines and penalties, and other charges contemplated by the CO. For off-site drinking water supplies, OM&M is
accrued for 20 years on an undiscounted basis based on the Company’s current plans under the CO.
At December 31, 2024 and 2023, the Company had $141 and $147 of accrued liabilities, respectively, for off-site groundwater testing and water
treatment system installations at qualifying third-party properties primarily in Bladen and Cumberland counties surrounding Fayetteville, which is
expected to be disbursed over approximately 20 years. In addition, as of December 31, 2024 and 2023, the Company had $21 and $28, respectively,
of accrued liabilities for the assessment and for sampling related to potential PFAS contamination of groundwater and supply of alternative drinking
water in New Hanover and three other downstream counties. Off-site installation, maintenance, and monitoring cost estimates are based on
management’s assessment of the current facts and circumstances for these matters, including comments received from NC DEQ, and could change
as actual experience may differ from management’s estimates or new information may become available.
The estimated liability was based on certain assumptions, which management believes are reasonable under the circumstances and include, but are
not limited to, implementation of the soil and groundwater assessment, the source and cause of PFAS contamination for the four downstream counties,
the estimated number of properties at which sampling is conducted and whether such property will qualify for an alternative drinking water supply,
other potentially responsible parties and the method of long-term alternative water supply, if any. Further, management’s estimate of the ultimate
liability for this matter is dependent upon NC DEQ approval of the proposed plans in response to various NC DEQ letters, obtaining additional
information, implementation of EPA’s health advisories, additional feasibility and investigation work that has not yet been scoped or performed, and
the estimated additional future cost of OM&M. The ultimate resolution of the matters could have a material adverse effect on the Company’s financial
position, results of operations and cash flow.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-71
On-site surface water and groundwater remediation
Abatement and remediation measures already taken by Chemours, including the capture and disposal of its operations’ process wastewater and other
interim actions, have addressed and abated nearly all PFAS discharges from the Company’s continuing operations at Fayetteville. However, the
Company continues to have active dialogue with NC DEQ and other stakeholders regarding the potential incremental remedies that are both
economically and technologically feasible to achieve the CO and Addendum objectives related to the impact of site surface water and groundwater
contamination from historical operations, during and subsequent to the optimization period of the groundwater treatment system and following
installation of the barrier wall.
In 2019, the Company completed and submitted its Cape Fear River PFAS Loading Reduction Plan - Supplemental Information Report and its CAP to
NC DEQ. The Supplemental Information Report provided information to support the evaluation of potential interim remedial options to reduce PFAS
loadings to surface waters. The CAP described potential long-term remediation activities to address PFAS in groundwater and surface waters at the
site, in accordance with the requirements of the CO and the North Carolina groundwater standards, and built upon the previous submissions to NC
DEQ. The NC DEQ received comments on the CAP during a public comment period, and the Company is awaiting formal response to the CAP from
NC DEQ. With respect to the CO, the Addendum was approved by the North Carolina Superior Court for Bladen County in October 2020 and
establishes the procedure to implement specified remedial measures for reducing PFAS loadings from Fayetteville to the Cape Fear River, including
construction of a barrier wall with a groundwater extraction system, which was completed in June 2023, followed by an engineers certification confirming
that the barrier wall was constructed and documented to be in conformance with the approved design.
Based on the CO, the Addendum, the CAP, and management’s plans, which are based on current regulations and technology, the Company has
accrued $188 and $208 at December 31, 2024 and 2023, respectively, related to the estimated cost of on-site remediation, based on the range of
potential outcomes on current potential remedial options, and the projected amounts to be paid over a period of approximately 20 years. The final
costs of any selected remediation will depend primarily on permit compliance requirements, ongoing dialogue with NC DEQ and other stakeholders
regarding the potential incremental remedies that are both economically and technologically feasible to achieve the CO and Addendum objectives,
and estimated future cost and time period of OM&M. Further, the final cost of the on-site groundwater treatment system depends on water treatment
requirements and estimated treatment reagent and media usage. As such, cost estimates could change as actual experience may differ from
management's estimates. Changes in estimates are recorded in results of operations in the period that the events and circumstances giving rise to
such changes occur.
The Company’s estimated liability for the remediation activities that are probable and estimable is based on the CO, the Addendum, the CAP, and
management’s assessment of the current facts and circumstances, which is subject to various assumptions including the transport pathways (being
pathways by which PFAS reaches the Cape Fear River) that will require remedial actions, the types of interim and permanent site surface water and
on-site remedies and treatment systems selected and implemented, the estimated cost of such potential remedies and treatment systems, any related
OM&M requirements, and other charges contemplated by the CO and the Addendum.
The Company accrued 20 years of OM&M for Fayetteville environmental remediation systems based on the CO and Addendum, which includes
estimated higher power consumption, ongoing monitoring, pretreatment, filtering supplies (principally carbon) and regular maintenance of the system
over a 20-year period of estimated operation starting in 2023.
It is possible that issues relating to site discharges in various transport pathways, the selection of remediation alternatives to achieve PFAS loading
reductions, or the operating effectiveness of the TO could result in further litigation and/or regulatory demands with regards to Fayetteville, including
potential permit modifications or penalties under the CO and the Addendum. It is also possible that, as additional data is collected on the transport
pathways and dialogue continues with NC DEQ and other stakeholders, the type or extent of remediation actions required to achieve the objectives
committed to in the CO may change (increase or decrease) or remediation activities could be delayed. If such issues arise, or if the CO is further
amended, an additional loss is reasonably possible, but not estimable at this time.
Litigation and Other matters related to Fayetteville
In February 2019, the Company received an NOV from EPA, alleging certain TSCA violations at Fayetteville. Matters raised in the NOV could have
the potential to affect operations at Fayetteville. For this NOV, the Company responded to EPA in March 2019, asserting that the Company has not
violated environmental laws. The Company is in discussions with EPA regarding PFAS-related allegations at its sites, including the February 2019
NOV, and as of December 31, 2024, management believes a loss is reasonably possible, but not estimable at this time.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-72
Beginning in 2017, civil actions have been filed against EID and Chemours in North Carolina courts relating to discharges from Fayetteville. These
actions include a consolidated action brought by four public water suppliers seeking damages and injunctive relief, a consolidated purported class
action seeking medical monitoring, and property damage and/or other monetary and injunctive relief on behalf of the putative classes of property
owners and residents in areas near or that draw drinking water from the Cape Fear River, and two actions encompassing approximately 2,600 private
well owners seeking compensatory and punitive damages. Ruling on the Company’s motions in April 2019, the court dismissed the medical monitoring,
injunctive demand, and many other alleged causes of actions in these lawsuits. In October 2023, the court certified the property damages class action.
In December 2024, EID and Chemours filed a motion to decertify the class on the grounds, among others, that the class representatives are inadequate
and not representative. In March 2023, one of the public water suppliers brought a complaint in Delaware Chancery Court against EID, Chemours,
Corteva and DuPont alleging voidable transfer and other claims arising from the Chemours separation and DowDuPont merger and subsequent
restructurings, asset transfers and separations; the matter is now stayed.
In addition to natural resource damages matter filed by the State of North Carolina (as discussed within the “PFAS” section of this “Note 22 –
Commitments and Contingent Liabilities”), in September 2020, three additional lawsuits were filed in North Carolina state court against Chemours and
EID, as well as other defendants. One of the lawsuits is a putative class action on behalf of residents who are served by the Cape Fear Public Water
utility, alleges negligence, nuisance, and other claims related to the release of perfluorinated compounds from Fayetteville, and seeks compensatory
and punitive damages and medical monitoring. The other two lawsuits were filed on behalf of individuals residing near Fayetteville and allege
negligence, nuisance, and other claims related to the release of perfluorinated compounds. The individuals seek compensatory property damages,
punitive damages, and, in some cases, medical monitoring. All three lawsuits allege fraudulent transfer against EID and other EID entities, but not
against Chemours. In October 2020, the cases were removed to federal court and then the two lawsuits filed on behalf of individuals were remanded
back to state court.
In March 2022, a lawsuit was filed on behalf of an individual residing near the Fayetteville site against Chemours, EID and other defendants alleging
negligence, nuisance and other claims related to the discharges from the Fayetteville site. The individual seeks compensatory property damages,
punitive damages and medical monitoring. The lawsuit also alleges fraudulent transfer against EID and other EID entities, but not against Chemours.
Also, in March 2022, Cumberland County, North Carolina filed suit in state court against Chemours, EID and other defendants related to discharges
from the Fayetteville site alleging negligence, nuisance, trespass and fraudulent transfer. The lawsuit seeks damages as well as injunctive and equitable
relief. In January 2025, the court informed the parties that trial will be scheduled for September 29, 2025.
In December 2022, Aqua North Carolina, Inc. filed suit in North Carolina state court alleging EID, DuPont, DowDuPont, Inc and the Company are
responsible for polyfluorinated chemical contamination of the Cape Fear River, groundwater and other water sources used by Aqua North Carolina
across the state to serve its water customers. The complaint alleges product liability, negligence, trespass, deceptive trade practices, unjust enrichment
and fraudulent transfer. Plaintiff seeks equitable relief as well as compensatory and punitive damages. In February 2023, the matter was removed to
federal court. In July 2024, the court dismissed the claims for products liability, deceptive trade practices and public nuisance.
As of December 2023, lawsuits were filed in the Eastern District of North Carolina on behalf of 59 individuals residing near Fayetteville against
Chemours, EID, Corteva and DuPont alleging personal injury, property damages and deceptive trade practices related to the discharges from
Fayetteville. The individuals seek compensatory damages, equitable relief, attorney fees and punitive damages. In December 2023 and January 2024,
amended complaints were filed in each case dropping fraudulent transfer claims. In September 2024, the court dismissed claims for deceptive trade
practices, public nuisance, negligence per se and trespass to chattels.
It is possible that additional litigation may be filed against the Company and/or EID concerning the Fayetteville discharges. It is not possible at this
point to predict the timing, course, or outcome of all governmental and regulatory inquiries and notices and litigation related to Fayetteville, and it is
reasonably possible that these matters could have a material adverse effect on the Company’s financial position, results of operations, and cash flows.
In addition, local communities, organizations, and federal and state regulatory agencies have raised questions concerning HFPO Dimer Acid and other
perfluorinated and polyfluorinated compounds at certain other manufacturing sites operated by the Company. It is possible that additional developments
similar to those described above and centering on Fayetteville could arise in other locations.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-73
Other Environmental Matters
On October 31, 2024, the Company received a request from the Dutch ILT agency to amend the Company's F-gas reporting for certain years to reflect
HFCs produced and consumed or destroyed at the Dordrecht Works facility. The agency asserts that under Regulation (EU) 2024/573, which repealed
and replaced Regulation 517/2014 in February 2024, such compounds are subject to the F-gas quota system. In November 2024, the Company made
minor amendments to its F-gas reporting for the above years and consulted with the Dutch ILT agency and EU Commission on the above. In February
2025, the Company received an intention for the ILT to collect a penalty of €1 million based on the consideration that HFC-23 imported or acquired on
the market and added to the production process rather than directly sent for destruction is quota consuming. The Company is reviewing the ILT
intention and believes it is not possible at this time to reasonably assess the outcome of this matter or to estimate the loss or range of loss, if any, as
the matter continues to have significant issues to be evaluated.
In addition, in the ordinary course of business, the Company may make certain commitments, including representations, warranties, and indemnities
relating to current and past operations, including environmental remediation and other potential costs related to divested assets and businesses, and
issue guarantees of third-party obligations. The Company accrues for these matters when it is probable that a liability has been incurred and the
amount of the liability can be reasonably estimated.
In connection with the sale of the Mining Solutions business, the Company provided a limited indemnification with respect to environmental liabilities
that may arise from activities prior to the closing date. Such indemnification would not exceed approximately $78 and will expire on December 1, 2026.
No liabilities have been recorded at December 31, 2024 and 2023, respectively, with respect to this indemnification.
In December 2024, the West Virginia Rivers Coalition filed a complaint under the Clean Water Act in West Virginia federal court alleging past and
ongoing exceedances of certain effluent discharge limits, including those for PFOA and HFPO-DA, under the NPDES permit held by the Chemours
Washington Works facility. The complaint alleges CWA violations since December 2019 and seeks civil penalties of less than $0.1 per day for each
violation, as well as injunctive relief. The complaint lists 199 separate violations, including daily and monthly reporting. At this early stage of the litigation,
Management believes that a loss is reasonably possible but not estimable.
Note 23. Equity
2018 Share Repurchase Program
On August 1, 2018, the Company’s board of directors approved a share repurchase program authorizing the purchase of shares of Chemours’ issued
and outstanding common stock in an aggregate amount not to exceed $750, plus any associated fees or costs in connection with the Company’s share
repurchases activity (the “2018 Share Repurchase Program”). On February 13, 2019, the Company’s board of directors increased the authorization
amount of the 2018 Share Repurchase Program from $750 to $1,000. Under the 2018 Share Repurchase Program, shares of Chemours’ common
stock can be purchased in the open market from time to time, subject to management’s discretion, as well as general business and market conditions.
On May 19, 2022, the Company completed the aggregate $1,000 in authorized purchases of Chemours’ issued and outstanding common stock under
the 2018 Share Repurchase Program, which amounted to a cumulative 28,603,784 shares purchased at an average share price of $34.96 per share.
All common shares purchased under the 2018 Share Repurchase Program are held as treasury stock and accounted for using the cost method.
The following table sets forth the Company’s share repurchase activity under the 2018 Share Repurchase Program for the years ended December 31,
2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Total number of shares purchased
—
—
7,824,039
Total paid for shares purchased
$
—
$
—
$
251
Average price paid per share
$
—
$
—
$
32.06
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-74
2022 Share Repurchase Program
On April 27, 2022, the Company’s board of directors approved a share repurchase program authorizing the purchase of shares of Chemours’ issued
and outstanding common stock in an aggregate amount not to exceed $750, plus any associated fees or costs in connection with the Company’s share
repurchase activity (the “2022 Share Repurchase Program”). Under the 2022 Share Repurchase Program, shares of Chemours’ common stock can
be purchased in the open market from time to time, subject to management’s discretion, as well as general business and market conditions. The
Company’s 2022 Share Repurchase Program became effective on April 27, 2022 and is scheduled to continue through the earlier of its expiration on
December 31, 2025 or the completion of repurchases up to the approved amount. The program may be suspended or discontinued at any time. All
common shares purchased under the 2022 Share Repurchase Program are expected to be held as treasury stock and accounted for using the cost
method.
The following table sets forth the Company’s share repurchase activity under the 2022 Share Repurchase Program for the years ended December 31,
2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Total number of shares purchased
—
2,108,408
8,234,314
Total paid for shares purchased
$
—
$
69
$
241
Average price paid per share
$
—
$
32.48
$
29.24
Through December 31, 2024, the Company purchased a cumulative 10,342,722 shares of Chemours’ issued and outstanding common stock under
the 2022 Share Repurchase Program, which amounted to $309 at an average share price of $29.90 per share. The aggregate amount of Chemours’
common stock that remained available for purchase under the 2022 Share Repurchase Program at December 31, 2024 was $441, though the Company
does not anticipate additional repurchases under the 2022 Share Repurchase Program.
Note 24. Stock-based Compensation
The Company’s total stock-based compensation expense amounted to $15, $18, and $27 for the years ended December 31, 2024, 2023 and 2022,
respectively. The total stock-based compensation expense for the year ended December 31, 2024 includes $3 for modifications of the vested stock
options granted to the former President and Chief Executive Officer and former Chief Financial Officer, partially offset by a $1 reduction in stock-based
compensation expense related to negative discretion applied to certain vested performance share units held by former members of senior management.
In 2017, Chemours’ stockholders approved Chemours’ Equity and Incentive Plan (the “Equity Plan”), which provides for grants to certain employees,
independent contractors, or non-employee directors of the Company of different forms of awards, including stock options, restricted stock units
("RSUs"), performance stock units ("PSUs") and performance stock options ("PSOs"), with 19,000,000 shares reserved for issuance. The Equity Plan
replaced the Company’s prior plan adopted at Separation (the “Prior Plan”). As a result, no further grants will be made under the Prior Plan.
On April 28, 2021, Chemours’ stockholders approved an amendment and restatement of the Equity Plan to increase the number of shares of the
Company’s common stock reserved for issuance by 3,050,000 shares.
Following the amendment and restatement of the Equity Plan, a total of 22,050,000 shares of the Company’s common stock may be subject to awards
granted under the Equity Plan, less one share for every one share that was subject to an option or stock appreciation right granted after December 31,
2016 under the Prior Plan, and one-and-a-half shares for every one share that was subject to an award other than an option or stock appreciation right
granted after December 31, 2016 under the Prior Plan. Any shares that are subject to options or stock appreciation rights will be counted against this
limit as one share for every one share granted, and any shares that are subject to awards other than options or stock appreciation rights will be counted
against this limit as one-and-a-half shares for every one share granted. Awards that were outstanding under the Prior Plan remain outstanding under
the Prior Plan in accordance with their terms. The underlying share awards granted under the Prior Plan after December 31, 2016 that are forfeited,
cancelled, or that otherwise do not result in the issuance of shares, will be available for issuance under the Equity Plan. At December 31, 2024,
approximately 9,500,000 shares of the Equity Plan reserve are available for grants.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-75
The Chemours Compensation and Leadership Development Committee determines the long-term incentive mix, including stock options, RSUs, PSUs
and PSOs, and may authorize new grants annually.
Stock Options
During the years ended December 31, 2024, 2023 and 2022, Chemours granted non-qualified stock options to certain of its employees, which will vest
over a three-year period and expire 10 years from the date of grant. The fair values of the Company’s stock options are based on the Black-Scholes
valuation model.
The following table sets forth the weighted-average assumptions used at the respective grant dates to determine the fair values of the Company’s
stock option awards granted during the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Risk-free interest rate
4.45%
4.18%
1.61%
Expected term (years)
6.00
6.00
6.00
Volatility
49.02%
55.63%
56.71%
Dividend yield
3.64%
2.87%
3.85%
Fair value per stock option
$
10.28
$
15.36
$
9.89
The Company determined the dividend yield by dividing the expected annual dividend on the Company's stock by the option exercise price. A historical
daily measurement of volatility is determined based on the blended volatilities of Chemours and the average of its peer companies, adjusted for
Chemours’ debt leverage. The risk-free interest rate is determined by reference to the yield on an outstanding U.S. Treasury note with a term equal to
the expected term of the option granted. The expected term is determined using a simplified approach, calculated as the mid-point between the graded
vesting period and the contractual life of the award.
The following table sets forth Chemours’ stock option activity for the years ended December 31, 2024, 2023 and 2022.
Number of
Shares
(in Thousands)
Weighted-
average
Exercise Price
(per Share)
Weighted-
average
Remaining
Contractual
Term (in Years)
Aggregate
Intrinsic Value
(in Thousands)
Outstanding, December 31, 2021
6,967
$
20.32
6.60
$
101,261
Granted
1,031
25.98
Exercised
(3,041)
16.76
Forfeited
(202)
21.29
Expired
(87)
32.78
Outstanding, December 31, 2022
4,668
$
23.61
7.08
$
42,668
Granted
560
34.82
Exercised
(1,153)
16.84
Forfeited
(296)
29.04
Expired
(169)
39.02
Outstanding, December 31, 2023
3,610
$
26.35
6.51
$
27,760
Granted
705
27.50
Exercised
(453)
18.23
Forfeited
(290)
30.01
Expired
(267)
40.04
Outstanding, December 31, 2024
3,305
$
26.28
6.22
$
3,294
Exercisable, December 31, 2024
2,319
$
25.27
5.12
$
3,307
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-76
The aggregate intrinsic values in the preceding table represent the total pre-tax intrinsic value (the difference between the Company's closing stock
price on the last trading day at the end of the year and the exercise price, multiplied by the number of in-the-money options) that would have been
received by the option holders had all option holders exercised their in-the-money options at year-end. The amount changes based on the fair market
value of the Company’s stock. The total intrinsic value of all options exercised for the years ended December 31, 2024, 2023 and 2022 amounted to
$1, $17, and $45, respectively.
For the years ended December 31, 2024, 2023 and 2022, the Company recorded $8, $8, and $8 in stock-based compensation expense specific to its
stock options, respectively. At December 31, 2024, there was $5 of unrecognized stock-based compensation expense related to stock options, which
is expected to be recognized over a weighted-average period of 2.02 years.
Restricted Stock Units
Chemours grants RSUs to key management employees that generally vest over a three-year period and, upon vesting, convert one-for-one to
Chemours’ common stock. The fair value of all stock-settled RSUs is based on the market price of the underlying common stock at the grant date.
RSUs vest contingent upon a time-based vesting condition and do not have explicit performance conditions.
The following table sets forth non-vested RSUs at December 31, 2024, 2023 and 2022.
Number of Shares
(in Thousands)
Weighted-average
Grant Date
Fair Value
(per Share)
Non-vested, December 31, 2021
1,159
$
22.20
Granted
388
28.08
Vested
(473)
20.97
Forfeited
(77)
21.75
Non-vested, December 31, 2022
997
$
25.10
Granted
497
33.22
Vested
(391)
20.71
Forfeited
(236)
18.84
Non-vested, December 31, 2023
867
$
30.86
Granted
430
25.02
Vested
(343)
28.65
Forfeited
(152)
32.50
Non-vested, December 31, 2024
802
$
28.36
For the years ended December 31, 2024, 2023 and 2022, the Company recorded $9, $9, and $11 in stock-based compensation expense specific to
its RSUs, respectively. At December 31, 2024, there was $12 of unrecognized stock-based compensation expense related to RSUs, which is expected
to be recognized over a weighted-average period of 1.12 years.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-77
Performance Share Units
Chemours grants PSUs to key senior management employees which, upon vesting, convert one-for-one to Chemours’ common stock if specified
performance goals, including certain market-based conditions, are met over the three-year performance period specified in the grant, subject to
exceptions through the respective vesting period of three years. Each grantee is granted a target award of PSUs, and may earn between 0% and
200% of the target amount depending on the Company’s performance against stated performance goals.
The following table sets forth non-vested PSUs at 100% of target amounts at December 31, 2024, 2023 and 2022.
Number of Shares
(in Thousands)
Weighted-average
Grant Date
Fair Value
(per Share)
Non-vested, December 31, 2021
755
$
26.72
Granted
316
28.77
Vested
(213)
43.83
Forfeited
—
—
Non-vested, December 31, 2022
858
$
22.48
Granted
103
40.64
Vested
(410)
17.14
Forfeited
(158)
30.63
Non-vested, December 31, 2023
393
$
31.41
Granted
73
32.77
Vested
(103)
26.68
Forfeited
(272)
32.84
Non-vested, December 31, 2024
91
$
33.57
A portion of the fair value of PSUs was estimated at the grant date based on the probability of satisfying the market-based conditions associated with
the PSUs using the Monte Carlo valuation method, which assesses probabilities of various outcomes of market conditions. The other portion of the
fair value of the PSUs is based on the fair market value of the Company’s stock at the grant date, regardless of whether the market-based conditions
are satisfied. The per unit weighted-average fair value at the date of grant for PSUs granted during the year ended December 31, 2024 was $32.77.
The fair value of each PSU grant is amortized monthly into compensation expense based on its respective vesting conditions over a three-year period.
Compensation cost is incurred based on the Company’s estimate of the final expected value of the award, which is adjusted as required for the portion
based on the performance-based condition. The Company assumes that forfeitures will be minimal and recognizes forfeitures as they occur, which
results in a reduction in compensation expense. As the payout of PSUs includes dividend equivalents, no separate dividend yield assumption is
required in calculating the fair value of the PSUs.
For the year ended December 31, 2024, the Company recorded a reduction of stock-based compensation expense of $3 specific to its PSUs. For the
years ended December 31, 2023 and 2022, the Company recorded stock-based compensation expense of less than $1 and $8 specific to its PSUs,
respectively. At December 31, 2024, based on the Company’s assessment of its performance goals, approximately 188,000 additional shares may be
awarded under the Equity Plan.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-78
Performance Stock Options
During the years ended December 31, 2024 and 2023, Chemours granted PSOs to certain of its key senior management employees. These awards
have a strike price that is 10% above the closing stock value on the grant date and become exercisable when vested and this market condition is
satisfied. These awards will vest over a three-year period and expire 10 years from the date of grant. The fair value of the Company's PSOs was
estimated using a Monte Carlo valuation method.
The following table sets forth the assumptions used at the grant date to determine the fair value of the Company's performance stock option awards
granted during the years ended December 31, 2024 and 2023.
Year Ended December 31,
2024
2023
Risk-free interest rate
4.43%
4.13%
Expected term (years)
6.09
7.00
Volatility
48.91%
56.32%
Dividend yield
3.64%
2.87%
Fair value per performance stock option (1)
$
10.05
$
14.97
(1)
Represents the weighted-average fair value at each point of projected exercise under the Monte Carlo valuation method.
The Company determined the dividend yield by dividing the expected annual dividend on the Company's stock by the option exercise price. A historical
daily measurement of volatility is determined based on the blended volatilities of Chemours and the average of its peer companies, adjusted for
Chemours’ debt leverage. The risk-free interest rate is determined by reference to the yield on an outstanding U.S. Treasury note with a term equal to
the expected term of the option granted. The expected term is determined using a simplified approach, calculated as the mid-point between the graded
vesting period and the contractual life of the award.
Number of
Shares
(in Thousands)
Weighted-
average
Exercise Price
(per Share)
Weighted-
average
Remaining
Contractual
Term (in Years)
Aggregate
Intrinsic Value
(in Thousands)
Outstanding, December 31, 2022
—
$
—
—
$
—
Granted
239
38.32
Vested
—
—
Forfeited
(64)
38.32
Expired
—
—
Outstanding, December 31, 2023
175
$
38.32
9.17
$
—
Granted
204
30.25
Vested
—
—
Forfeited
(97)
37.27
Expired
—
—
Outstanding, December 31, 2024
282
$
32.85
8.97
$
—
Exercisable, December 31, 2024
57
$
38.32
8.17
$
—
The aggregate intrinsic values in the preceding table represent the total pre-tax intrinsic value (the difference between the Company's closing stock
price on the last trading day at the end of the year and the exercise price, multiplied by the number of in-the-money options) that would have been
received by the option holders had all option holders exercised their in-the-money options at year-end. The amount changes based on the fair market
value of the Company’s stock.
For each the years ended December 31, 2024 and 2023, the Company recorded $1 in stock-based compensation expense specific to its PSOs. At
December 31, 2024, there was $1 of unrecognized stock-based compensation expense related to PSOs, which is expected to be recognized over a
weighted-average period of 2.20 years.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-79
Employee Stock Purchase Plan
Since 2017, the Company has provided employees the opportunity to participate in Chemours’ Employee Stock Purchase Plan (“ESPP”). Under the
ESPP, a total of 7,000,000 shares of Chemours’ common stock is reserved and authorized for issuance to participating employees, as defined by the
ESPP, which excludes executive officers of the Company. The ESPP provides for consecutive 12-month offering periods, each with two purchase
periods in March and September within those offering periods. Participating employees are eligible to purchase the Company’s common stock at a
discounted rate equal to 95% of its fair value on the last trading day of each purchase period. To date, the Company has executed open market
transactions to purchase the Company’s common stock on behalf of its ESPP participants, which amounted to 354,000 shares. The total amount of
Chemours’ common stock received by employees in connection with the ESPP amounted to $9 at December 31, 2024.
Note 25. Accumulated Other Comprehensive Loss
The following table sets forth the changes and after-tax balances of the Company’s accumulated other comprehensive loss for the years ended
December 31, 2024, 2023 and 2022.
Net Investment
Hedge
Cash Flow
Hedge
Cumulative
Translation
Adjustment
Defined Benefit
Plans
Total
Balance at January 1, 2022
$
(21)
$
5
$
(236)
$
(112)
$
(364)
Other comprehensive income (loss)
40
1
(32)
12
21
Balance at December 31, 2022
19
6
(268)
(100)
(343)
Other comprehensive income (loss)
(19)
(14)
94
8
69
Balance at December 31, 2023
—
(8)
(174)
(92)
(274)
Other comprehensive income (loss)
39
12
(180)
36
(93)
Balance at December 31, 2024
$
39
$
4
$
(354)
$
(56)
$
(367)
Note 26. Financial Instruments
Net Monetary Assets and Liabilities Hedge – Foreign Currency Forward Contracts
At December 31, 2024, the Company had 11 foreign currency forward contracts outstanding with an aggregate gross notional U.S. dollar equivalent
of $196 and an average maturity of one month. At December 31, 2023, the Company had 12 foreign currency forward contracts outstanding with an
aggregate gross notional U.S. dollar equivalent of $252, and an average maturity of one month. Chemours recognized a net gain of $5, a net loss of
$7, and a net gain of $2 for the years ended December 31, 2024, 2023 and 2022, respectively, in other income, net.
Cash Flow Hedge – Foreign Currency Forward Contracts
At December 31, 2024, the Company had 173 foreign currency forward contracts outstanding under its cash flow hedge program with an aggregate
notional U.S. dollar equivalent of $178, and an average maturity of four months. At December 31, 2023, the Company had 176 foreign currency forward
contracts outstanding under its cash flow hedge program with an aggregate notional U.S. dollar equivalent of $203, and an average maturity of four
months. Chemours recognized a pre-tax gain of $7, a pre-tax loss of $2, and a pre-tax gain of $17 for the years ended December 31, 2024, 2023, and
2022, respectively, within accumulated other comprehensive loss. For the years ended December 31, 2024, 2023, and 2022, $1, $5, and $19 of gain
was reclassified to the cost of goods sold from accumulated other comprehensive loss, respectively.
The Company expects to reclassify approximately $8 of net pre-tax gain, based on current foreign currency exchange rates, from accumulated other
comprehensive loss to the cost of goods sold over the next 12 months.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-80
Cash Flow Hedge – Interest Rate Swaps
In October 2023, the Company entered into interest rate swaps, the objective of which is to mitigate the volatility in the Company’s cash payments for
interest related to the portion of its senior secured term loan facility denominated in U.S. dollars, which bears a variable interest rate equal to, at the
election of the Company, adjusted Term SOFR plus 3.50% or adjusted SOFR floor of 0.50%, or an adjusted base rate plus 2.50%, subject to a base
rate floor of 0.0%. At December 31, 2024 and 2023, the Company had two interest rate swaps outstanding under its cash flow hedge program with an
aggregate notional U.S. dollar equivalent of $300; each of the interest rate swaps mature on October 31, 2026.
In September 2022, the Company terminated all of its outstanding interest rate swaps, which resulted in a cash settlement of $8. These interest rate
swaps were related to the portion of the then senior secured term loan facility denominated in U.S. dollars, which bears a variable interest rate equal
to, at the election of the Company, adjusted LIBOR plus 1.75% or adjusted base rate plus 0.75%, subject to an adjusted LIBOR or an adjusted base
rate floor of 0.00% or 1.00%, respectively.
Chemours recognized a pre-tax gain of $9, a pre-tax loss of $6, and a pre-tax gain of $8 for the years ended December 31, 2024, 2023, and 2022
within accumulated other comprehensive loss, respectively. For the years ended December 31, 2024, 2023 and 2022, $1, $4, and $5 of gain was
reclassified to interest expense, net from accumulated other comprehensive loss, respectively.
The Company expects to reclassify approximately $2 of net pre-tax loss from accumulated other comprehensive loss to interest expense, net over the
next 12 months, based on the current market rate.
Net Investment Hedge – Foreign Currency Borrowings
The Company recognized a pre-tax gain of $47, a pre-tax loss of $27, and a pre-tax gain of $53 for the years ended December 31, 2024, 2023, and
2022, respectively, on its net investment hedge within accumulated other comprehensive loss. No amounts were reclassified from accumulated other
comprehensive loss for the Company’s net investment hedges during the years ended December 31, 2024, 2023 and 2022.
Net Investment Hedge – Cross-Currency Swaps
Concurrently with the offering of the senior unsecured notes due January 2033 (as described further in "Note 20 – Debt), the Company entered into a
cross-currency swap to effectively convert $600 of the senior unsecured notes due January 2033 into a euro-denominated borrowing of (€567 at
prevailing euro interest rates, maturing on January 15, 2030. The foreign currency swap qualifies and has been designated as a net investment hedge
of the Company's foreign currency exchange rate exposure of the net investments of certain of its euro-denominated subsidiaries. The Company
recognized pre-tax gain of $5 for the year ended December 31, 2024 on its cross-currency swap within accumulated other comprehensive loss. No
amount was reclassified from accumulated other comprehensive loss for the Company's cross-currency swap for the year ended December 31, 2024.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-81
Fair Value of Derivative Instruments
The following table sets forth the fair value of the Company’s derivative assets and liabilities at December 31, 2024 and 2023.
Fair Value Using Level 2 Inputs
Balance Sheet Location
December 31, 2024
December 31, 2023
Asset derivatives:
Foreign currency forward contracts
not designated as a hedging instrument
Accounts and notes receivable, net (Note 11)
$
1
$
1
Foreign currency forward contracts
designated as a cash flow hedge
Accounts and notes receivable, net (Note 11)
7
1
Cross-currency swap designated as a net
investment hedge
Accounts and notes receivable, net (Note 11)
5
—
Total asset derivatives
$
13
$
2
Liability derivatives:
Foreign currency forward contracts
not designated as a hedging instrument
Other accrued liabilities (Note 19)
$
1
$
1
Foreign currency forward contracts
designated as a cash flow hedge
Other accrued liabilities (Note 19)
—
3
Interest rate swaps
designated as a cash flow hedge
Other accrued liabilities (Note 19)
3
7
Total liability derivatives
$
4
$
11
The Company’s foreign currency forward contracts and interest rate swaps are classified as Level 2 financial instruments within the fair value hierarchy
as the valuation inputs are based on quoted prices and market observable data of similar instruments. For derivative assets and liabilities, standard
industry models are used to calculate the fair value of the various financial instruments based on significant observable market inputs, such as foreign
exchange rates and implied volatilities obtained from various market sources. Market inputs are obtained from well-established and recognized vendors
of market data, and are subjected to tolerance and/or quality checks.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-82
Summary of Financial Instruments
The following table sets forth the pre-tax changes in fair value of the Company’s financial instruments for the years ended December 31, 2024, 2023
and 2022.
Gain (Loss) Recognized In
Accumulated
Other
Cost of
Interest
Other
Comprehensive
Year Ended December 31,
Goods Sold
Expense, Net
Income, Net
Loss
2024
Foreign currency forward contracts not designated as a
hedging instrument
$
—
$
—
$
5
$
—
Foreign currency forward contracts designated as a cash
flow hedge
1
—
—
7
Interest rate swaps designated as a cash flow hedge
—
1
—
9
Euro-denominated debt designated as a net investment
hedge
—
—
—
47
Cross-currency swap designated as a net investment hedge
—
—
—
5
2023
Foreign currency forward contracts not designated as a
hedging instrument
$
—
$
—
$
(7)
$
—
Foreign currency forward contracts designated as a cash
flow hedge
5
—
—
(2)
Interest rate swaps designated as a cash flow hedge
—
4
—
(6)
Euro-denominated debt designated as a net investment
hedge
—
—
—
(27)
2022
Foreign currency forward contracts not designated as a
hedging instrument
$
—
$
—
$
2
$
—
Foreign currency forward contracts designated as a cash
flow hedge
19
—
—
17
Interest rate swaps designated as a cash flow hedge
—
5
—
8
Euro-denominated debt designated as a net investment
hedge
—
—
—
53
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-83
Note 27. Long-term Employee Benefits
Plans Covering Employees in the U.S.
Chemours established a defined contribution plan, which covered all eligible U.S. employees. The purpose of the plan is to encourage employees to
save for their future retirement needs. The plan is a tax-qualified contributory profit-sharing plan, with cash or deferred arrangement, and any eligible
employee of Chemours may participate. Chemours matches 100% of the first 6% of the employee’s contribution election, and the plan’s matching
contributions vest immediately upon contribution. In 2021, the Company enhanced its previous discretionary retirement savings contribution to provide
eligible employees with a guaranteed annual contribution ranging from 1% to 3% for the first $0.1 of base salary based on age and years of service.
Plans Covering Employees Outside the U.S.
Pension coverage for employees of Chemours’ non-U.S. subsidiaries is provided, to the extent deemed appropriate, through separate plans established
after the Separation and comparable to the EID plans in those countries. Obligations under such plans are either funded by depositing funds with
trustees, covered by insurance contracts, or unfunded.
The following table sets forth the Company’s net periodic pension income and amounts recognized in other comprehensive income (loss) for the years
ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Service cost
$
(9)
$
(9)
$
(14)
Interest cost
(14)
(15)
(7)
Expected return on plan assets
22
20
18
Amortization of actuarial loss
(8)
(9)
(8)
Amortization of prior service gain
2
3
2
Curtailment/settlement gain
1
1
—
Total net periodic pension cost
$
(6)
$
(9)
$
(9)
Net gain (loss)
$
35
$
(4)
$
(2)
Prior service benefit
1
—
2
Amortization of actuarial loss
8
9
8
Amortization of prior service gain
(2)
(3)
(2)
Recognition of curtailment/settlement gain
(1)
(1)
—
Curtailment gain
2
11
—
Effect of foreign exchange rates
4
(3)
7
Benefit recognized in other comprehensive income
47
9
13
Total changes in plan assets and benefit obligations
recognized in other comprehensive income
$
41
$
—
$
4
During the third quarter of 2023, the Company announced the closure of its manufacturing site in Kuan Yin, Taiwan, which resulted in employment
termination of substantially all of the employees based in Kuan Yin, beginning in the fourth quarter of 2023 and expected to be completed by the
second quarter of 2024. The employee terminations related to the shutdown meets the definition of a plan curtailment event by eliminating the additional
accrual of defined benefits for impacted employees. As a result of the curtailment, the Company remeasured its Taiwan projected pension obligation
and recorded a $1 mark-to-market loss on remeasurement of the pension liability as a result of a decrease in discount rates since December 31, 2022,
and recorded a reduction in the projected benefit obligation of $11 which was recognized in accumulated other comprehensive income. The $11
curtailment gain, together with the existing $9 of plan net losses in accumulated other comprehensive income, will be amortized to the consolidated
statements of operations as the impacted employees are terminated from the plan. For each of the years ended December 31, 2024 and 2023, the
Company amortized $1 of net curtailment gain to net periodic pension cost.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-84
The following table sets forth the pre-tax amounts recognized in accumulated other comprehensive loss at years ended December 31, 2024, 2023 and
2022.
Year Ended December 31,
2024
2023
2022
Net loss
$
73
$
123
$
132
Prior service credit
(5)
(7)
(9)
Total amount recognized in accumulated other comprehensive loss
$
68
$
116
$
123
The following table sets forth summarized information on the Company’s pension plans at December 31, 2024 and 2023.
December 31,
2024
2023
Change in benefit obligation:
Benefit obligation at beginning of year
$
437
$
407
Service cost
9
9
Interest cost
14
15
Plan participants’ contributions
2
2
Actuarial loss (gain)
(9)
26
Benefits paid
(7)
(9)
Plan amendments
—
—
Curtailment
(2)
(11)
Settlements and transfers
(28)
(17)
Currency translation
(28)
15
Benefit obligation at end of year
388
437
Change in plan assets:
Fair value of plan assets at beginning of year
464
422
Actual return on plan assets
47
41
Employer contributions
12
10
Plan participants’ contributions
2
2
Benefits paid
(7)
(9)
Settlements and transfers
(28)
(17)
Currency translation
(28)
15
Fair value of plan assets at end of year
462
464
Total funded status at end of year
$
74
$
27
The following table sets forth the net amounts recognized in the Company’s consolidated balance sheets at December 31, 2024 and 2023.
December 31,
2024
2023
Non-current assets
$
97
$
57
Current liabilities
(1)
(1)
Non-current liabilities
(22)
(29)
Total net amount recognized
$
74
$
27
The accumulated benefit obligation for all pension plans was $356 and $396 as of December 31, 2024 and 2023, respectively.
For the year ended December 31, 2024, the liability component of the Company’s global pension plans generated a net actuarial gain of $9, primarily
driven by $11 of gains as a result of lower inflation assumptions and increases in discount rates in most countries. Those gains were partially offset by
$2 of losses primarily due to the impact of a lower discount rate applied to the Company's Swiss plan.
The Company’s pension plan assets, in aggregate, generated a gain in accumulated other comprehensive income of $26 as actual returns from equity
and bond performance were greater than those projected at the beginning of the year and used to record pension expense.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-85
The following tables set forth information related to the Company’s pension plans with projected and accumulated benefit obligations in excess of the
fair value of plan assets at December 31, 2024 and 2023.
December 31,
Pension plans with projected benefit obligation in excess of plan assets
2024
2023
Projected benefit obligation
$
75
$
110
Accumulated benefit obligation
69
102
Fair value of plan assets
52
80
December 31,
Pension plans with accumulated benefit obligation in excess of plan assets
2024
2023
Projected benefit obligation
$
75
$
86
Accumulated benefit obligation
69
79
Fair value of plan assets
52
57
Assumptions
The Company generally utilizes discount rates that are developed by matching the expected cash flows of each benefit plan to various yield curves
constructed from a portfolio of high-quality, fixed income instruments provided by the plans’ actuaries as of the measurement date. The expected rate
of return on plan assets reflects economic assumptions applicable to each country.
The following tables set forth the assumptions that have been used to determine the Company’s benefit obligations and net benefit cost at December
31, 2024 and 2023.
December 31,
Weighted-average assumptions used to determine benefit obligations
2024
2023
Discount rate
3.3%
3.3%
Rate of compensation increase (1)
3.2%
3.4%
Interest crediting rate (2)
1.8%
2.3%
(1)
The rate of compensation increase represents the single annual effective salary increase that an average plan participant would receive during the participant’s entire career
at Chemours.
(2)
The interest crediting rate, which is applicable only for account balance type plans, represents the single effective annual account balance increase that an average participant
would receive during the participant’s entire career at Chemours.
December 31,
Weighted-average assumptions used to determine net benefit cost
2024
2023
Discount rate
3.3%
3.6%
Rate of compensation increase (1)
3.4%
3.5%
Expected return on plan assets
4.9%
4.6%
(1)
The rate of compensation increase represents the single annual effective salary increase that an average plan participant would receive during the participant’s entire career
at Chemours.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-86
Plan Assets
Each pension plan’s assets are invested through either an insurance vehicle, a master trust fund, or a stand-alone pension fund. The strategic asset
allocation for each plan is selected by management, together with the pension board, where appropriate, reflecting the results of comprehensive asset
and liability modeling. For assets under its control, Chemours establishes strategic asset allocation percentage targets and appropriate benchmarks
for significant asset classes with the aim of achieving a prudent balance between return and risk. Strategic asset allocations in countries are selected
in accordance with the laws and practices of those countries.
The following table sets forth the weighted-average allocation for the Company’s pension plan assets at December 31, 2024 and 2023.
December 31,
2024
2023
Cash and cash equivalents
2%
6%
U.S. and non-U.S. equity securities
38%
36%
Fixed income securities
60%
58%
Total weighted-average allocation
100%
100%
Fixed income securities include corporate-issued, government-issued, and asset-backed securities. Corporate debt investments encompass a range
of credit risk and industry diversification.
Fair value calculations may not be indicative of net realizable value or reflective of future fair values. Furthermore, although Chemours believes its
valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the
fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The following tables set forth the fair values of the Company’s pension assets by level within the fair value hierarchy at December 31, 2024 and 2023.
Fair Value Measurements at December 31, 2024
Total
Level 1
Level 2
Asset category:
Debt - government issued
$
69
$
5
$
64
Debt - corporate issued
116
4
112
U.S. and non-U.S. equities
175
18
157
Derivatives - asset position
60
—
60
Cash and cash equivalents
9
9
—
Other
2
—
2
Total pension assets at fair value
431
$
36
$
395
Pooled mortgage funds (1)
31
Total pension assets
$
462
(1)
Pooled mortgage funds consist of funds that invest in residential mortgages. These funds generally allow for monthly redemption with 30 days' notice. Timing for redemption
could be delayed based on the priority of the Company's request and the availability of funds. Interests in these funds are valued using the net asset value ("NAV") per share
practical expedient and are not classified in the fair value hierarchy. Pooled real estate funds consist of funds that invest in real estate. These funds generally allow for redemption
upon twelve months' notice. Interests in these funds are valued using the net asset value ("NAV") per share practical expedient and are not classified in the fair value hierarchy.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-87
Fair Value Measurements at December 31, 2023
Total
Level 1
Level 2
Asset category:
Debt - government issued
$
63
$
15
$
48
Debt - corporate issued
116
23
93
U.S. and non-U.S. equities
168
39
129
Derivatives - asset position
66
—
66
Cash and cash equivalents
28
28
—
Other
2
—
2
Total pension assets at fair value
443
$
105
$
338
Pooled mortgage funds (1)
21
Total pension assets
$
464
(1)
Pooled mortgage funds consist of funds that invest in residential mortgages. These funds generally allow for monthly redemption with 30 days' notice. Timing for redemption
could be delayed based on the priority of the Company's request and the availability of funds. Interests in these funds are valued using the NAV per share practical expedient
and are not classified in the fair value hierarchy.
For pension plan assets classified as Level 1 instruments within the fair value hierarchy, total fair value is either the price of the most recent trade at
the time of the market close or the official close price, as defined by the exchange on which the asset is most actively traded on the last trading day of
the period, multiplied by the number of units held without consideration of transaction costs.
For pension plan assets classified as Level 2 instruments within the fair value hierarchy, where the security is frequently traded in less active markets,
fair value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the price a dealer
would pay for the security or similar securities, adjusted for any terms specific to that asset or liability. Market inputs are obtained from well-established,
recognized vendors of market data and subjected to tolerance and/or quality checks. For derivative assets and liabilities, standard industry models are
used to calculate the fair value of the various financial instruments based on significant observable market inputs, such as foreign exchange rates,
commodity prices, swap rates, interest rates, and implied volatilities obtained from various market sources. With the exception of pooled mortgage
funds and pooled real estate funds, pooled funds are valued at the per-unit NAV as determined by the fund manager based on the value of the
underlying traded securities.
Cash Flows – Defined Benefit Plans
Employer Contributions
For the years ended December 31, 2024, 2023 and 2022, Chemours contributed $12, $10, and $10, respectively, to its defined benefit plans.
Chemours expects to contribute $6 to its pension plans in 2025. The Company’s future contributions to its defined benefit pension plans are dependent
on market-based discount rates.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-88
Future Benefit Payments
The following table sets forth the benefit payments that are expected to be paid by the plans over the next five years and the five years thereafter.
2025
$
11
2026
11
2027
12
2028
13
2029
17
2030 to 2034
95
Cash Flows – Defined Contribution Plan
Employer Contributions
For the years ended December 31, 2024, 2023 and 2022, Chemours contributed $29, $30, and $31, respectively, to its defined contribution plan.
Note 28. Supplemental Cash Flow Information
The following table provides a reconciliation of cash and cash equivalents, as reported on the Company’s consolidated balance sheets, to cash, cash
equivalents, restricted cash and restricted cash equivalents, as reported on the Company’s consolidated statements of cash flows.
December 31,
2024
2023
2022
Cash and cash equivalents
$
713
$
1,203
$
1,102
Restricted cash and restricted cash equivalents (1)
50
604
202
Cash, cash equivalents, restricted cash and restricted cash equivalents
$
763
$
1,807
$
1,304
(1)
At December 31, 2024, the restricted cash and restricted cash equivalent balance includes $50 of cash and cash equivalents deposited in an escrow account as per the terms
of the MOU, which is classified as a noncurrent asset. At December 31, 2023, the restricted cash and restricted cash equivalents balance includes cash and cash equivalents
deposited in the Water District Settlement Fund related to the U.S. Public Water System Class Action Suit Settlement, which was classified as a current asset. At December
31, 2022, the restricted cash and restricted cash equivalents balance includes cash and cash equivalents deposited in an escrow account as per the terms of the MOU, which
was classified as a noncurrent asset. See “Note 22 – Commitments and Contingent Liabilities” for further details.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-89
Note 29. Geographic and Segment Information
As described further in "Note 2 – Basis of Presentation", certain prior period amounts reflected in the tables below have been revised to correct for
immaterial errors pertaining to income statement presentation of byproduct revenue sales.
Geographic Information
The following table sets forth the geographic locations of the Company’s net sales for the years ended and property, plant, and equipment, net as of
December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Net Sales (1)
Property, Plant,
and
Equipment, Net
Net Sales (1)
Property, Plant,
and
Equipment, Net
Net Sales (1)
Property, Plant,
and
Equipment, Net
North America
$
2,589
$
2,435
$
2,745
$
2,345
$
2,984
$
2,320
Asia Pacific
1,386
52
1,462
56
1,787
127
Europe, the Middle East, and Africa
1,138
285
1,197
298
1,315
249
Latin America (2)
669
411
674
517
745
475
Total
$
5,782
$
3,183
$
6,078
$
3,216
$
6,831
$
3,171
(1)
Net sales are attributed to countries based on customer location.
(2)
Latin America includes Mexico.
Segment Information
Chemours operates through its three principal reportable segments, which were organized based on their similar economic characteristics, the nature
of products and production processes, end-use markets, channels of distribution, and regulatory environments: Thermal & Specialized Solutions,
Titanium Technologies, and Advanced Performance Materials. Other non-reportable segment includes the Company’s Performance Chemicals and
Intermediates business.
The Company's Chief Operating Decision Maker ("CODM"), which is the Company's President and Chief Executive Officer, is regularly provided
adjusted earnings before interest, taxes, depreciation, and amortization ("Adjusted EBITDA") which is the primary measure of segment profitability, by
segment and on a consolidated basis. The CODM uses Segment Adjusted EBITDA as the primary basis to measure segment performance relative to
expectations set during the Company's annual budget process, which is where decisions regarding allocation of the Company's capital expenditures,
employees and financial resources predominately occurs. This regular review of segment and consolidated Adjusted EBITDA, which takes place in
monthly Business Operating Reviews (BORs), includes budget-to-actual and various period-over-period variances, which allows the CODM to modify
resource allocation accordingly. Adjusted EBITDA is defined as income (loss) before income taxes, excluding the following:
•
interest expense, depreciation, and amortization;
•
non-operating pension and other post-retirement employee benefit costs, which represents the non-service cost component of net periodic
pension (income) costs;
•
exchange (gains) losses included in other income, net;
•
restructuring, asset-related, and other charges;
•
(gains) losses on sales of assets and businesses; and,
•
other items not considered indicative of the Company’s ongoing operational performance and expected to occur infrequently, including certain
litigation related and environmental charges and Qualified Spend reimbursable by DuPont and/or Corteva as part of the Company's cost-
sharing agreement under the terms of the MOU that were previously excluded from Adjusted EBITDA.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-90
The following table sets forth financial information for the Company’s reportable segments as of, and for the years ended December 31, 2024, 2023
and 2022.
Thermal & Specialized
Solutions
Titanium Technologies
Advanced Performance
Materials
Year Ended December 31, 2024
Segment information from Consolidated Statements of Operations:
Net sales to external customers (1)
$
1,830
$
2,572
$
1,326
Segment cost of goods sold
1,180
2,248
1,102
Segment selling, general, and administrative expense
104
118
147
Segment research and development expense
29
28
50
Add back: Depreciation and amortization (2)
53
133
89
Equity in earnings of affiliates
(8 )
—
(35 )
Other segment items (3)
2
(1 )
(10 )
Segment Adjusted EBITDA
$
576
$
312
$
161
Segment information from Consolidated Balance Sheets:
Total assets
$
1,549
$
2,290
$
1,748
Investments in affiliates
72
—
81
Segment information from Consolidated Statements of Cash Flow:
Purchases of property, plant, and equipment
$
168
$
55
$
122
Thermal & Specialized
Solutions
Titanium Technologies
Advanced Performance
Materials
Year Ended December 31, 2023
Segment information from Consolidated Statements of Operations:
Net sales to external customers (1)
$
1,851
$
2,680
$
1,462
Segment cost of goods sold
1,130
2,370
1,128
Segment selling, general, and administrative expense
98
122
145
Segment research and development expense
25
32
48
Add back: Depreciation and amortization (2)
62
133
85
Equity in earnings of affiliates
(10 )
—
(35 )
Other segment items (3)
(15 )
(1 )
(12 )
Segment Adjusted EBITDA
$
685
$
290
$
273
Segment information from Consolidated Balance Sheets:
Total assets
$
1,283
$
2,226
$
1,833
Investments in affiliates
75
—
84
Segment information from Consolidated Statements of Cash Flow:
Purchases of property, plant, and equipment
$
75
$
83
$
193
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-91
Thermal & Specialized
Solutions
Titanium Technologies
Advanced Performance
Materials
Year Ended December 31, 2022
Segment information from Consolidated Statements of Operations:
Net sales to external customers (1)
$
1,702
$
3,380
$
1,633
Segment cost of goods sold
1,070
2,746
1,184
Segment selling, general, and administrative expense
101
125
153
Segment research and development expense
25
34
54
Add back: Depreciation and amortization (2)
55
125
82
Equity in earnings of affiliates
(24 )
—
(31 )
Other segment items (3)
(18 )
(1 )
(12 )
Segment Adjusted EBITDA
$
603
$
601
$
367
Segment information from Consolidated Balance Sheets:
Total assets
$
1,238
$
2,384
$
1,742
Investments in affiliates
82
—
93
Segment information from Consolidated Statements of Cash Flow:
Purchases of property, plant, and equipment
$
30
$
149
$
115
(1)
Segment net sales to external customers are provided by product group in “Note 5 – Net Sales".
(2)
Segment depreciation and amortization expense is included as a component of cost of goods sold; selling, general, and administrative expense; and research and development
expense in the amounts regularly provided to the CODM and are therefore added back to arrive at Segment Adjusted EBITDA.
(3)
Other segment items includes segment other (income) expense, net.
The following table sets forth a reconciliation for instances in which the above financial information for the Company’s reportable segments does not
sum to consolidated amounts.
Year Ended December 31,
Segment Total
Other Non-Reportable
Segment
Corporate
Total Consolidated
2024
Net sales to external customers
$
5,728
$
54
$
—
$
5,782
Depreciation and amortization
$
275
$
5
$
21
$
301
Total assets (1)
$
5,587
$
97
$
1,831
$
7,515
Purchases of property, plant, and equipment
$
345
$
5
$
10
$
360
2023
Net sales to external customers
$
5,993
$
85
$
—
$
6,078
Depreciation and amortization
$
280
$
6
$
21
$
307
Total assets (1)
$
5,342
$
96
$
2,813
$
8,251
Purchases of property, plant, and equipment
$
351
$
7
$
12
$
370
2022
Net sales to external customers
$
6,715
$
116
$
—
$
6,831
Depreciation and amortization
$
262
$
8
$
21
$
291
Total assets (1)
$
5,364
$
124
$
2,152
$
7,640
Purchases of property, plant, and equipment
$
294
$
6
$
7
$
307
(1)
Corporate assets primarily includes cash and cash equivalents, property, plant and equipment associated with the Chemours Discovery Hub, pension assets and deferred tax
assets.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-92
The following table sets forth a reconciliation of Segment Adjusted EBITDA to the Company’s consolidated income (loss) before income taxes for the
years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
Thermal & Specialized Solutions
$
576
$
685
$
603
Titanium Technologies
312
290
601
Advanced Performance Materials
161
273
367
Segment Adjusted EBITDA
1,049
1,248
1,571
Other non-reportable segment Adjusted EBITDA
8
18
2
Corporate expenses (1)
(255)
(212)
(212)
Unallocated Items:
Interest expense, net
(264)
(208)
(163)
Depreciation and amortization
(301)
(307)
(291)
Non-operating pension and other post-retirement employee benefit
income
3
—
5
Exchange losses, net (Note 8)
(9)
(38)
(15)
Restructuring, asset-related, and other charges (Note 7)
(58)
(153)
(15)
Goodwill impairment charge (Note 15)
(56)
—
—
Inventory write-offs (2)
—
(40)
—
(Loss) gain on extinguishment of debt
(1)
(1)
7
Gain on sales of assets and businesses, net (Note 4)
3
110
21
Transaction costs (3)
(18)
(16)
—
Qualified spend recovery (4)
26
54
58
Litigation-related charges (5)
15
(764)
(23)
Environmental charges (6)
(15)
(9)
(204)
Income (loss) before income taxes
$
127
$
(318)
$
741
(1)
Includes corporate costs and certain legal and environmental expenses, and stock-based compensations expenses excluding unallocated items as listed above.
(2)
Inventory adjustments for the year ended December 31, 2023 represents write-off of certain raw materials and stores inventories from the Kuan Yin, Taiwan plant closure,
which was not allocated in the measurement of Titanium Technologies segment profitability used by the CODM.
(3)
For the year ended December 31, 2024, transaction costs includes $16 of third-party costs related to the Titanium Technologies Transformation Plan, which was not allocated
in the measurement of Titanium Technologies segment profitability used by the CODM. For the year ended December 31, 2023, transaction costs includes $7 of costs
associated with the Senior Secured Credit Facilities, which is discussed in further detail in "Note 20 – Debt", and $9 of third-party costs related to the Titanium Technologies
Transformation Plan.
(4)
Qualified spend recovery represents costs and expenses that were previously excluded from the determination of Segment Adjusted EBITDA, reimbursable by DuPont and/or
Corteva as part of the Company's cost-sharing agreement under the terms of the MOU. Terms of the MOU are discussed in further detail in "Note 22 – Commitments and
Contingent Liabilities".
(5)
Litigation-related charges pertains to litigation settlements, PFOA drinking water treatment accruals, and other related legal fees. For the year ended December 31, 2024,
litigation-related charges primarily includes $44 of benefits from insurance recoveries, along with the $29 accrual associated with the Ohio MDL. For the year ended December
31, 2023, litigation-related charges includes the $592 accrual related to the United States Public Water System Class Action Suit Settlement plus $24 of third-party legal fees
directly related to the settlement, $55 of charges related to the Company's portion of Chemours, DuPont, Corteva, EID and the State of Ohio's agreement entered into in
November 2023, $13 related to the Company's portion of the supplemental payment to the State of Delaware, $76 for other PFAS litigation matters, and $4 of other litigation
matters. For the year ended December 31, 2022, litigation-related charges primarily include proceeds from a settlement in a patent infringement matter relating to certain
copolymer patents associated with the Company’s Advanced Performance Materials segment and $20 associated with the Company's portion of the potential loss in the
single matter not included in the Leach settlement.
(6)
Environmental charges pertains to management’s assessment of estimated liabilities associated with certain non-recurring environmental remediation expenses at various
sites. For the year ended December 31, 2024, environmental charges primarily includes off-site remediation costs at Dordrecht Works. For the years ended December 31,
2022, environmental charges primarily include $196 related to on-site and off-site remediation costs at Fayetteville. Refer to “Note 22 – Commitments and Contingent
Liabilities” for further details.
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-93
Note 30. Unaudited Quarterly Financial Information
As discussed in "Note 2 – Basis of Presentation", during the fourth quarter of 2024 the Company identified certain immaterial errors impacting previously
issued financial statements beginning as of January 1, 2022, and subsequent quarterly reporting periods through September 30, 2024. Specifically,
the Company identified errors related to: 1) the income statement presentation of byproduct revenue sales, which were historically accounted for as a
contra cost of goods sold and 2) the income statement presentation of certain ore sales associated with the Company's Kuan Yin, Taiwan facility. The
identified errors impacted the Company's previously issued quarterly financial statements ended March 31, 2023, June 30, 2023, September 30, 2023,
March 31, 2024, June 30, 2024 and September 30, 2024. The Company adjusted the previously reported net sales and cost of goods sold for the
years ended December 31, 2023 and 2022, and within each quarter for the years ended December 31, 2024 and 2023, to correct for immaterial errors.
The Company intends to correct these financial statements through revisions in subsequently filed quarterly reports on Form 10-Q. The impact of these
future revisions are presented in the tables below. The Company evaluated the errors, individually and in the aggregate, and concluded that the related
impacts were not material to any previously presented interim financial statements.
The following sets forth a summary of the Company's quarterly results of operations for the years ended December 31, 2024, 2023 and 2022.
For the Three Months Ended
2024
March 31,
June 30,
September 30,
December 31,
Full Year (1)
Net sales (2)
$
1,362
$
1,554
$
1,508
$
1,359
$
5,782
Cost of goods sold (2)
$
1,076
$
1,248
$
1,221
$
1,086
$
4,631
Income (loss) before income taxes
$
67
$
82
$
(30 )
$
9
$
127
Net income (loss)
$
52
$
70
$
(27 )
$
(8 )
$
86
Net income (loss) attributable to Chemours
$
52
$
70
$
(27 )
$
(8 )
$
86
Basic earnings (loss) per share of common stock
$
0.35
$
0.47
$
(0.18 )
$
(0.05 )
$
0.58
Diluted earnings (loss) per share of common stock
$
0.34
$
0.46
$
(0.18 )
$
(0.05 )
$
0.57
For the Three Months Ended
2023
March 31,
June 30,
September 30,
December 31,
Full Year (1)
Net sales (2)
$
1,549
$
1,660
$
1,501
$
1,368
$
6,078
Cost of goods sold (2)
$
1,181
$
1,250
$
1,228
$
1,113
$
4,772
Income (loss) before income taxes
$
173
$
(433 )
$
13
$
(71 )
$
(318 )
Net income (loss)
$
145
$
(376 )
$
12
$
(18 )
$
(237 )
Net income (loss) attributable to Chemours
$
145
$
(376 )
$
12
$
(18 )
$
(238 )
Basic earnings (loss) per share of common stock
$
0.97
$
(2.52 )
$
0.08
$
(0.12 )
$
(1.60 )
Diluted earnings (loss) per share of common stock
$
0.96
$
(2.52 )
$
0.08
$
(0.12 )
$
(1.60 )
(1)
Individual quarters may not sum to full year amounts due to rounding.
(2)
As revised, as noted below.
Revised Interim Consolidated Statements of Operations (unaudited)
Three months ended March 31, 2023
As reported
Revision
As revised
Net sales
$
1,536
$
13
$
1,549
Cost of goods sold
$
1,168
$
13
$
1,181
Gross profit
$
368
$
—
$
368
Three months ended June 30, 2023
As reported
Revision
As revised
Net sales
$
1,643
$
17
$
1,660
Cost of goods sold
$
1,233
$
17
$
1,250
Gross profit
$
410
$
—
$
410
Six months ended June 30, 2023
As reported
Revision
As revised
Net sales
$
3,179
$
30
$
3,209
Cost of goods sold
$
2,401
$
30
$
2,431
Gross profit
$
778
$
—
$
778
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-94
Three months ended September 30, 2023
As reported
Revision
As revised
Net sales
$
1,487
$
14
$
1,501
Cost of goods sold
$
1,214
$
14
$
1,228
Gross profit
$
273
$
—
$
273
Nine months ended September 30, 2023
As reported
Revision
As revised
Net sales
$
4,666
$
44
$
4,710
Cost of goods sold
$
3,615
$
44
$
3,659
Gross profit
$
1,051
$
—
$
1,051
Three months ended March 31, 2024
As reported
Revision
As revised
Net sales
$
1,350
$
12
$
1,362
Cost of goods sold
$
1,064
$
12
$
1,076
Gross profit
$
286
$
—
$
286
Three months ended June 30, 2024
As reported
Revision
As revised
Net sales
$
1,538
$
16
$
1,554
Cost of goods sold
$
1,232
$
16
$
1,248
Gross profit
$
306
$
—
$
306
Six months ended June 30, 2024
As reported
Revision
As revised
Net sales
$
2,887
$
28
$
2,915
Cost of goods sold
$
2,294
$
29
$
2,323
Gross profit
$
593
$
(1) $
592
Other expense, net
$
(1) $
1
$
—
Income before income taxes
$
149
$
—
$
149
Three months ended September 30, 2024
As reported
Revision
As revised
Net sales
$
1,501
$
7
$
1,508
Cost of goods sold
$
1,215
$
6
$
1,221
Gross profit
$
286
$
1
$
287
Other income, net
$
7
$
(1) $
6
Loss before income taxes
$
(30) $
—
$
(30)
Nine months ended September 30, 2024
As reported
Revision
As revised
Net sales
$
4,388
$
35
$
4,423
Cost of goods sold
$
3,510
$
35
$
3,545
Gross profit
$
878
$
—
$
878
The Chemours Company
Notes to the Consolidated Financial Statements
(Dollars in millions, except per share amounts and par values)
F-95
Note 31. Subsequent Events
In January 2025, under the Portfolio Management pillar of Pathway to Thrive, management approved a restructuring program to exit its Surface
Protection Solutions (“SPS”) CapstoneTM business and begin the shutdown process for the underlying manufacturing assets across the Washington
Works and Chambers Works sites, as well as the Villers St. Paul site pending local regulatory approval. This action was taken due to regulatory
changes and uncertainty that have caused reduced demand and market deselection of telomer-based chemistries, making SPS economics unfavorable
going forward. Manufacturing of SPS CapstoneTM products is expected to end by June 30, 2025, pending local regulatory approval. Sales of SPS
CapstoneTM products were $88, $97 and $104 in the years ended December 31, 2024, 2023 and 2022, respectively. Based on current information, we
expect that the total cost impact of this restructuring program will include non-cash accelerated depreciation related to the SPS CapstoneTM
manufacturing assets remaining useful life of approximately $30, cash payments of approximately $20 for severance and retention, contract termination
costs and external spending to support various site closure activities, as well as approximately $10 for deconstruction and ongoing decommissioning
expenses which will be expensed as incurred. There are approximately 100 employees expected to be impacted by this program.
DENISE M. DIGNAM
Director
CURTIS V. ANASTASIO
Director
BRIAN SHAY
Interim Chief Human
Resources Officer
SEAN D. KEOHANE
Director
DIANE IULIANO PICHO
Chief Enterprise
Enablement Officer
DAMIÁN GUMPEL
President, Titanium
Technologies
ALISTER COWAN
Director
ALVENIA SCARBOROUGH
Senior Vice President,
Corporate Communications
and Chief Brand Officer
GUILLAUME PEPY
Director
KRISTINE M. WELLMAN
Senior Vice President,
General Counsel and
Corporate Secretary
LESLIE M. TURNER
Director
JOSEPH D. KAVA
Director
MARY B. CRANSTON
Director
SHANE HOSTETTER
Senior Vice President,
Chief Financial Officer
DAWN L. FARRELL
Chairperson
PAMELA F. FLETCHER
Director
JOSEPH MARTINKO
President, Thermal &
Specialized Solutions
ERIN N. KANE
Director
LIVINGSTON L.
SATTERTHWAITE
Director
GERARDO FAMILIAR
President, Advanced
Performance Materials
CHEMOURS LEADERSHIP TEAM
BOARD OF DIRECTORS
DENISE M. DIGNAM
President and CEO
CORPORATE HEADQUARTERS
The Chemours Company
1007 Market Street
P.O. Box 2047
Wilmington, Delaware 19801
1 302 773 1000
STOCK EXCHANGE LISTING
New York Stock Exchange
Stock Exchange Symbol: CC
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