美國
證券交易委員會
華盛頓特區，20549
形式
根據1934年《證券交易法》第13或15(D)條規定的季度報告 |
截至本季度末
或
根據1934年證券交易法第13或15（d）條提交的過渡報告 |
佣金文件編號
(註冊人的確切姓名載於其章程)
(述明或其他司法管轄權 公司或組織) |
(稅務局僱主 識別號碼) |
(主要行政辦公室地址)
(
（註冊人電話號碼）
根據該法第12(B)條登記的證券：
每個班級的標題 |
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交易代碼 |
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註冊所在的交易所名稱 |
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用複選標記表示註冊人(1)是否在過去12個月內(或註冊人被要求提交此類報告的較短時間內)提交了1934年《證券交易法》第13條或15(D)節要求提交的所有報告，以及(2)在過去90天內是否符合此類提交要求。
用複選標記表示註冊人是否在過去12個月內(或在註冊人被要求提交此類文件的較短時間內)以電子方式提交了根據S-T規則第405條(本章232.405節)要求提交的每個交互數據文件。
用複選標記表示註冊人是大型加速申報公司、加速申報公司、非加速申報公司、較小的報告公司或新興成長型公司。請參閱《交易法》第12b-2條規則中「大型加速申報公司」、「加速申報公司」、「較小申報公司」和「新興成長型公司」的定義。
加速文件管理器☐ |
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非加速文件管理器☐ |
規模較小的報告公司 |
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新興成長型公司 |
如果是一家新興的成長型公司，用複選標記表示註冊人是否已選擇不使用延長的過渡期來遵守根據《交易所法》第13(A)節提供的任何新的或修訂的財務會計準則。☐
用複選標記表示註冊人是否是空殼公司(如《交易法》第12b-2條所定義)。是☐ 沒有
註冊人有
《化學公司》
目錄 |
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頁面 |
第一部分 |
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第1項。 |
2 |
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4 |
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5 |
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6 |
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第二項。 |
57 |
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第三項。 |
83 |
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第四項。 |
84 |
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第II部 |
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第1項。 |
88 |
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第1A項。 |
89 |
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第二項。 |
92 |
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第三項。 |
92 |
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第四項。 |
92 |
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第五項。 |
92 |
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第六項。 |
93 |
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94 |
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1
第一部分融資AL信息
項目1.中期綜合財務報表 |
《化學公司》
臨時合併報表運營TS（未經審計）
(百萬美元，每股除外)
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截至9月30日的三個月， |
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截至9月30日的9個月， |
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2024 |
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2023 |
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2024 |
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2023 |
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淨銷售額 |
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$ |
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$ |
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$ |
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$ |
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銷貨成本 |
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毛利 |
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銷售、一般和管理費用 |
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研發費用 |
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重組、資產相關和其他費用 |
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商譽減值費用 |
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— |
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— |
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其他運營費用合計 |
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附屬公司盈利權益 |
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利息支出，淨額 |
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( |
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( |
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( |
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( |
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債務清償損失 |
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— |
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( |
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— |
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( |
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其他收入，淨額 |
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所得稅前收入(虧損) |
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( |
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( |
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所得稅撥備(受益於) |
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( |
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( |
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淨(虧損)收益 |
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( |
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( |
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減去：非控股權益的淨收入 |
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— |
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— |
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— |
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克慕應占淨（虧損）收入 |
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$ |
( |
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$ |
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$ |
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$ |
( |
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每股數據 |
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每股普通股基本（損失）收益 |
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$ |
( |
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$ |
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$ |
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$ |
( |
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每股普通股稀釋（損失）收益 |
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( |
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( |
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請參閱中期合併財務報表隨附的附註。
2
《化學公司》
中期合併報表 綜合收益（未經審計）
(百萬美元)
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截至9月30日的三個月， |
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2024 |
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2023 |
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稅前 |
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稅收 |
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稅後 |
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稅前 |
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稅收 |
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稅後 |
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淨收益(虧損) |
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$ |
( |
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$ |
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其他全面收益(虧損)： |
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對沖活動： |
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淨投資對沖未實現（損失）收益 |
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$ |
( |
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$ |
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( |
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$ |
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$ |
( |
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現金流對沖未實現（損失）收益 |
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( |
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( |
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( |
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重新分類至淨利潤-現金流對沖 |
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( |
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— |
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( |
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— |
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對沖活動，淨 |
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( |
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( |
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( |
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累計平移調整 |
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— |
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( |
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— |
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( |
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確定的福利計劃： |
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累計其他全面收益（虧損）的增加： |
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淨虧損 |
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( |
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( |
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( |
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— |
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( |
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削減收益 |
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— |
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— |
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— |
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( |
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外匯匯率的影響 |
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( |
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— |
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( |
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— |
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重新分類至淨利潤： |
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精算損失攤銷 |
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— |
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( |
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前期服務收益攤銷 |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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沉降收益 |
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( |
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— |
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( |
) |
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— |
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— |
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— |
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固定福利計劃，淨值 |
|
$ |
( |
) |
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$ |
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( |
) |
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$ |
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$ |
( |
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其他綜合損失 |
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( |
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( |
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綜合損失 |
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( |
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( |
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克慕公司綜合虧損 |
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$ |
( |
) |
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$ |
( |
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截至9月30日的9個月， |
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2024 |
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2023 |
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稅前 |
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稅收 |
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稅後 |
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稅前 |
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稅收 |
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稅後 |
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淨收益(虧損) |
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$ |
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$ |
( |
) |
|||||
其他全面收益(虧損)： |
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對沖活動： |
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淨投資對沖未實現（損失）收益 |
|
$ |
( |
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$ |
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( |
) |
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$ |
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$ |
( |
) |
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現金流對沖未實現收益 |
|
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— |
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— |
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— |
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( |
) |
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重新分類至淨利潤-現金流對沖 |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
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對沖活動，淨 |
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( |
) |
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( |
) |
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( |
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累計平移調整 |
|
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( |
) |
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— |
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( |
) |
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— |
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確定的福利計劃： |
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累計其他全面收益（虧損）的增加： |
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淨收益(虧損) |
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— |
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( |
) |
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— |
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( |
) |
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削減收益 |
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— |
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— |
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— |
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( |
) |
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外匯匯率的影響 |
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( |
) |
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— |
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( |
) |
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— |
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重新分類至淨利潤： |
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精算損失攤銷 |
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( |
) |
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( |
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前期服務收益攤銷 |
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( |
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— |
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( |
) |
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( |
) |
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— |
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( |
) |
沉降收益 |
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( |
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— |
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( |
) |
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— |
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— |
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— |
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固定福利計劃，淨值 |
|
$ |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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其他綜合(虧損)收入 |
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( |
) |
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綜合收益(虧損) |
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( |
) |
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減去：非控股權益的綜合收益 |
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— |
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克慕應占綜合收益（虧損） |
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$ |
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$ |
( |
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請參閱中期合併財務報表隨附的附註。
3
《化學公司》
臨時合併ed資產負債表（未經審計）
(百萬美元，每股除外)
|
|
2024年9月30日 |
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2023年12月31日 |
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資產 |
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流動資產： |
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現金及現金等價物 |
|
$ |
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$ |
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受限現金和受限現金等價物 |
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應收賬款和票據，淨額 |
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庫存 |
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預付費用和其他 |
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流動資產總額 |
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物業、廠房和設備 |
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減去：累計折舊 |
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( |
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( |
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財產、廠房和設備、淨值 |
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經營性租賃使用權資產 |
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商譽 |
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其他無形資產，淨額 |
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對關聯公司的投資 |
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受限現金和受限現金等價物 |
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— |
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其他資產 |
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總資產 |
|
$ |
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$ |
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負債 |
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流動負債： |
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應付帳款 |
|
$ |
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$ |
|
||
補償和其他與僱員相關的費用 |
|
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長期債務的短期和當前期限 |
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當前的環境修復 |
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其他應計負債 |
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流動負債總額 |
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長期債務，淨額 |
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經營租賃負債 |
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長期環境修復 |
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遞延所得稅 |
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其他負債 |
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總負債 |
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股權 |
|
|
|
|
|
|
||
普通股(面值$ |
|
|
|
|
|
|
||
庫存股，按成本計算( |
|
|
( |
) |
|
|
( |
) |
額外實收資本 |
|
|
|
|
|
|
||
留存收益 |
|
|
|
|
|
|
||
累計其他綜合損失 |
|
|
( |
) |
|
|
( |
) |
Chemours股東權益總額 |
|
|
|
|
|
|
||
非控制性權益 |
|
|
|
|
|
|
||
權益總額 |
|
|
|
|
|
|
||
負債和權益總額 |
|
$ |
|
|
$ |
|
||
請參閱中期合併財務報表隨附的附註。
4
《化學公司》
中期合併報表 股東權益（未經審計）
(百萬美元，每股除外)
|
|
普通股 |
|
|
庫存股 |
|
|
其他內容 |
|
|
保留 |
|
|
累計 |
|
|
非控制性 |
|
|
|
|
|||||||||||||||
|
|
股份 |
|
|
量 |
|
|
股份 |
|
|
量 |
|
|
資本 |
|
|
收益 |
|
|
(虧損)收入 |
|
|
利益 |
|
|
總股本 |
|
|||||||||
2023年7月1日的餘額 |
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||
發行的普通股- |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
股票期權的行使，淨值 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
按成本價購買庫藏股 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
基於股票的薪酬費用 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
淨收入 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
普通股宣佈的股息（美元 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
非控股權益的貢獻 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
其他綜合損失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
2023年9月30日的餘額 |
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2024年7月1日餘額 |
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||
發行的普通股- |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
股票期權的行使，淨值 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
按成本價購買庫藏股 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
基於股票的薪酬費用 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
取消未發行的股票獎勵預扣以繳稅 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
淨虧損 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
普通股宣佈的股息（美元 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
其他綜合損失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
2024年9月30日餘額 |
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
普通股 |
|
|
庫存股 |
|
|
其他內容 |
|
|
保留 |
|
|
累計 |
|
|
非控制性 |
|
|
|
|
|||||||||||||||
|
|
股份 |
|
|
量 |
|
|
股份 |
|
|
量 |
|
|
資本 |
|
|
收益 |
|
|
(虧損)收入 |
|
|
利益 |
|
|
總股本 |
|
|||||||||
2023年1月1日的餘額 |
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
|
||||||
發行的普通股-補償計劃 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
股票期權的行使 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
按成本價購買庫藏股 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
基於股票的薪酬費用 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
取消未發行的股票獎勵預扣以繳稅 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
淨(虧損)收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
普通股宣佈的股息（美元 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
非控股權益的貢獻 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
其他綜合收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
2023年9月30日的餘額 |
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2024年1月1日餘額 |
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||
發行的普通股-補償計劃 |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
股票期權的行使 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
按成本價購買庫藏股 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
基於股票的薪酬費用 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
取消未發行的股票獎勵預扣以繳稅 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
淨收入 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
普通股宣佈的股息（美元 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
向非控制性利益分紅 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
其他綜合損失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
2024年9月30日餘額 |
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||
請參閱中期合併財務報表隨附的附註。
5
《化學公司》
臨時合併報表現金流量（未經審計）
(百萬美元)
|
|
截至9月30日的9個月， |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
經營活動的現金流 |
|
|
|
|
|
|
||
淨收益(虧損) |
|
$ |
|
|
$ |
( |
) |
|
淨利潤與經營活動使用的現金進行調節的調整： |
|
|
|
|
|
|
||
折舊及攤銷 |
|
|
|
|
|
|
||
資產和業務出售收益 |
|
|
( |
) |
|
|
( |
) |
附屬公司盈利權益，淨值 |
|
|
( |
) |
|
|
( |
) |
債務清償損失 |
|
|
— |
|
|
|
|
|
債務發行成本攤銷和發行折扣 |
|
|
|
|
|
|
||
遞延稅項優惠 |
|
|
( |
) |
|
|
( |
) |
資產相關費用 |
|
|
|
|
|
|
||
基於股票的薪酬費用 |
|
|
|
|
|
|
||
定期養老金淨成本 |
|
|
|
|
|
|
||
固定福利計劃繳款 |
|
|
( |
) |
|
|
( |
) |
其他運營費用和抵免，淨額 |
|
|
( |
) |
|
|
( |
) |
商譽減值 |
|
|
|
|
|
— |
|
|
經營資產減少（增加）： |
|
|
|
|
|
|
||
應收賬款和票據，淨額 |
|
|
( |
) |
|
|
( |
) |
庫存和其他流動經營資產 |
|
|
( |
) |
|
|
|
|
其他非流動經營資產 |
|
|
|
|
|
|
||
(減少)經營負債增加： |
|
|
|
|
|
|
||
應付帳款 |
|
|
( |
) |
|
|
( |
) |
其他流動經營負債 |
|
|
( |
) |
|
|
|
|
其他非流動經營負債 |
|
|
|
|
|
( |
) |
|
經營活動提供的現金（用於） |
|
|
( |
) |
|
|
|
|
投資活動產生的現金流 |
|
|
|
|
|
|
||
購買房產、廠房和設備 |
|
|
( |
) |
|
|
( |
) |
出售資產和企業的收益 |
|
|
|
|
|
|
||
外匯合同結算，淨值 |
|
|
— |
|
|
|
( |
) |
其他投資活動 |
|
|
|
|
|
|
||
用於投資活動的現金 |
|
|
( |
) |
|
|
( |
) |
融資活動產生的現金流 |
|
|
|
|
|
|
||
發行債券所得款項 |
|
|
— |
|
|
|
|
|
償還債務 |
|
|
( |
) |
|
|
( |
) |
債務發行成本的支付 |
|
|
|
|
|
( |
) |
|
融資租賃的付款 |
|
|
( |
) |
|
|
( |
) |
供應商融資計劃的收益 |
|
|
|
|
|
|
||
向供應商融資計劃付款 |
|
|
( |
) |
|
|
( |
) |
按成本價購買庫藏股 |
|
|
— |
|
|
|
( |
) |
已行使股票期權的收益，淨額 |
|
|
|
|
|
|
||
與既得股票獎勵的稅款預扣稅相關的付款 |
|
|
( |
) |
|
|
( |
) |
向公司普通股股東支付股息 |
|
|
( |
) |
|
|
( |
) |
從非控股股東收到的現金 |
|
|
— |
|
|
|
|
|
其他融資活動 |
|
|
|
|
|
— |
|
|
融資活動提供的現金(用於) |
|
|
( |
) |
|
|
|
|
匯率變動對現金、現金等價物、限制性現金和限制性現金等價物的影響 |
|
|
( |
) |
|
|
( |
) |
現金、現金等值物、受限制現金和受限制現金等值物（減少）增加 |
|
|
( |
) |
|
|
|
|
現金、現金等值物、限制現金和限制現金等值物1月1日， |
|
|
|
|
|
|
||
截至9月30日，現金、現金等值物、限制現金和限制現金等值物， |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
補充現金流信息 |
|
|
|
|
|
|
||
非現金投資和融資活動： |
|
|
|
|
|
|
||
計入應付賬款的不動產、廠房和設備購買 |
|
$ |
|
|
$ |
|
||
請參閱中期合併財務報表隨附的附註。
6
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
注1.Pre的背景、業務描述和基礎標示
化學公司(「化學」或「公司」)是一家領先的全球高性能化學品供應商，這些化學品是各種行業的最終產品和工藝的關鍵投入。該公司爲市場提供範圍廣泛的工業和特種化學產品的定製化解決方案，包括塗料、塑料、製冷和空調、交通、半導體和消費電子、一般工業和石油和天然氣。該公司的主要產品包括製冷劑、二氧化鈦(「二氧化鈦」)2“)顏料和工業用含氟聚合物樹脂。化學公司通過其
除文意另有所指外，此處所指的「化學公司」、「化學」、「本公司」及「本公司」均指本公司及其合併附屬公司。這裏提到的「EID」是指EIDP，Inc.，以前稱爲E.I.Du Pont de Nemour and Company，它是Chemour的前母公司，現在是Corteva，Inc.(「Corteva」)的子公司。這裏所指的「杜邦」指的是杜邦公司。
所附中期綜合財務報表乃根據美國公認會計原則(「GAAP」)編制。管理層認爲，所有被認爲是公平陳述公司中期業績所必需的調整(包括正常的、經常性的調整)已包括在內。以下附註是公司中期綜合財務報表的組成部分。該公司中期業績不應被視爲其全年業績的指標，年終綜合資產負債表不包括公認會計准則要求的所有披露。因此，這些中期綜合財務報表應與合併財務報表幷包括在公司截至2023年12月31日的年度報告Form 10-k中對此的說明。
審計委員會內部審查
2024年2月29日，公司宣佈需要更多時間來完成年終報告流程，包括對截至2023年12月31日的財務報告內部控制的審查，並讓董事會審計委員會(「審計委員會」)完成相關的內部審查(「審計委員會內部審查」)。審計委員會內部審查的範圍包括，除其他事項外，審查(I)審查向化學道德熱線提交的報告的程序；(Ii)公司管理營運資本的做法，包括對公司激勵計劃中的指標的相關影響；以及(Iii)在提交給證券交易委員會或以其他方式公開發布的文件中包括的某些非公認會計准則指標，以及相關披露。
審計委員會已完成內部審查的計劃程序，除其他外，根據在獨立外部律師協助下進行的審查，確定：
與審計委員會內部審查有關的進一步討論載於標題“審計委員會內部審查引起的與證券有關的訴訟和信息請求，以及相關的賠償協議「附註18--承付款和或有負債」。
7
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
對以前發佈的財務報表的修訂
在2023年第四季度的財務結算過程中，公司發現了某些重大錯誤，影響了自2017年3月31日開始發佈的先前發佈的財務報表，以及隨後截至2023年9月30日的年度和季度報告期間。具體地說，該公司發現了與以下有關的錯誤：1)供應商融資計劃的財務報表列報。管理層認定，在合併資產負債表中，與供應商融資方案有關的負債被錯誤地歸類爲應付賬款，而不是短期和當前期限的長期債務。根據付款代理將公司的付款日期延長到供應商最初付款條款之外的事實，得出的結論是，該計劃更類似於債務安排。相應地，與供應商融資安排有關的現金流量在合併現金流量表中被錯誤地列爲業務活動，而這些現金流量本應作爲毛額融資活動列報；2)將某些存貨費用歸類爲#美元。
該公司根據美國證券交易委員會(「美國證券交易委員會」)員工會計公報第99號「重要性」評估了這些錯誤在前期合併財務報表中的重要性，該公告編入了ASC250，會計變更和糾錯(「ASC250」)。根據這一評估，管理層得出結論，糾錯對以前提交的任何中期或年度財務報表並不重要。下表列出了對截至2023年9月30日的季度進行修訂的影響。
此外，某些前期金額已重新分類，以符合本期列報，其影響對公司的綜合財務報表並不重要。對於以前發佈的截至2023年9月30日的季度財務報表，最初作爲應付賬款和其他經營負債的一部分報告的應收賬款、其他流動經營負債和非流動經營負債的變化，現在在中期合併現金流量表的單獨項目中單獨報告。
8
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
修訂後的中期合併經營報表
|
|
截至2023年9月30日的三個月 |
|
|||||||||
|
|
如報道所述 |
|
|
修訂版本 |
|
|
修訂後的 |
|
|||
銷貨成本 |
$ |
|
|
$ |
|
|
$ |
|
|
|||
毛利 |
$ |
|
|
$ |
|
( |
) |
$ |
|
|
||
重組、資產相關和其他費用 |
$ |
|
|
$ |
|
|
$ |
|
|
|||
其他運營費用合計 |
$ |
|
|
$ |
|
|
$ |
|
|
|||
所得稅前收入(虧損) |
$ |
|
|
$ |
|
( |
) |
$ |
|
|
||
所得稅準備金(受益於) |
$ |
|
|
$ |
|
( |
) |
$ |
|
|
||
淨收益(虧損) |
$ |
|
|
$ |
|
( |
) |
$ |
|
|
||
克慕應占淨利潤（虧損） |
$ |
|
|
$ |
|
( |
) |
$ |
|
|
||
每股數據 |
|
|
|
|
|
|
|
|
|
|||
每股普通股基本收益（損失） |
$ |
|
|
$ |
|
( |
) |
$ |
|
|
||
每股普通股稀釋收益（損失） |
$ |
|
|
$ |
|
( |
) |
$ |
|
|
||
|
|
截至2023年9月30日的9個月 |
|
|||||||||
|
|
如報道所述 |
|
|
修訂版本 |
|
|
修訂後的 |
|
|||
銷貨成本 |
$ |
|
|
$ |
|
|
$ |
|
|
|||
毛利 |
$ |
|
|
$ |
|
( |
) |
$ |
|
|
||
重組、資產相關和其他費用 |
$ |
|
|
$ |
|
|
$ |
|
|
|||
其他運營費用合計 |
$ |
|
|
$ |
|
|
$ |
|
|
|||
所得稅前虧損 |
$ |
|
( |
) |
$ |
|
( |
) |
$ |
|
( |
) |
從所得稅中受益 |
$ |
|
( |
) |
$ |
|
( |
) |
$ |
|
( |
) |
淨虧損 |
$ |
|
( |
) |
$ |
|
( |
) |
$ |
|
( |
) |
應占Chemours的淨虧損 |
$ |
|
( |
) |
$ |
|
( |
) |
$ |
|
( |
) |
每股數據 |
|
|
|
|
|
|
|
|
|
|||
每股普通股基本損失 |
$ |
|
( |
) |
$ |
|
( |
) |
$ |
|
( |
) |
每股普通股稀釋虧損 |
$ |
|
( |
) |
$ |
|
( |
) |
$ |
|
( |
) |
修訂的中期綜合全面（損失）收益表
|
|
截至2023年9月30日的三個月 |
|
|||||||||
|
|
如報道所述 |
|
|
修訂版本 |
|
|
修訂後的 |
|
|||
淨收益(虧損) |
$ |
|
|
$ |
|
( |
) |
$ |
|
|
||
綜合損失 |
$ |
|
( |
) |
$ |
|
( |
) |
$ |
|
( |
) |
克慕公司綜合虧損 |
$ |
|
( |
) |
$ |
|
( |
) |
$ |
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|||
|
|
截至2023年9月30日的9個月 |
|
|||||||||
|
|
如報道所述 |
|
|
修訂版本 |
|
|
修訂後的 |
|
|||
淨虧損 |
$ |
|
( |
) |
$ |
|
( |
) |
$ |
|
( |
) |
綜合損失 |
$ |
|
( |
) |
$ |
|
( |
) |
$ |
|
( |
) |
克慕公司綜合虧損 |
$ |
|
( |
) |
$ |
|
( |
) |
$ |
|
( |
) |
9
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
修訂後的中期合併現金流量表
|
|
截至2023年9月30日的9個月 |
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
修訂後的 |
|
|||||
|
|
如報道所述 |
|
|
修訂後 |
|
|
修訂後的 |
|
|
重新分類 |
|
|
並重新分類 |
|
|||||
淨虧損 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
( |
) |
經營活動的現金流： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(減少)經營負債增加： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
遞延稅項優惠 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
( |
) |
應付帳款和其他負債 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
應付帳款 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
其他流動經營負債 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
非流動經營負債 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
用於經營活動的現金 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
融資活動的現金流： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
供應商融資計劃的收益 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
向供應商融資計劃付款 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
融資活動提供的現金(用於) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||
保險追討
截至2024年9月30日的三個月和九個月期間的中期綜合經營報表包括稅前收益$
從2020年第二季度開始，在四年多的時間裏追回了收益。在截至2024年9月30日的9個月期間，中期綜合業務報表記錄的金額爲#美元
10
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
附註2.最近的會計聲明
已發佈但尚未採用的會計準則
合資企業組建
2023年8月，財務會計準則委員會(FASB)發佈了ASU 2023-05，企業合併--組建合資企業這要求合資企業在成立之日按公允價值初步計量其資產和負債。該指南將對2025年1月1日或之後成立的所有合資企業具有前瞻性的效力，並允許及早採用。本公司將採用該指導方針，並將ASU 2023-05的規定適用於在2025年1月1日或之後成立的合資企業。
對可報告分部披露的改進
2023年11月，FASB發佈了ASU 2023-07，對可報告部門披露的改進，它要求與公共實體的可報告部門相關的遞增披露，包括披露每個可報告分部的重要分部費用類別和金額。該指導意見將在2023年12月15日之後的財政年度和2024年12月15日之後的財政年度的過渡期間生效，並允許及早採用，並應追溯適用於財務報表中列報的所有先前期間。該公司將採納該指導意見，並從截至2024年12月31日的年度開始，在其合併財務報表中納入遞增披露要求。
改進所得稅披露
2023年12月，FASB發佈了ASU 2023-09， 所得稅(專題740)：所得稅披露的改進這需要加強圍繞有效稅率調節的披露，以及關於已支付所得稅和某些與損益表相關的披露的遞增披露。該指南將在2024年12月15日之後的財年生效，並允許提前採用。該公司計劃採納該指導意見，並從截至2025年12月31日的一年開始，在其合併財務報表中納入所需的加強披露。
說明3.收購和資產剝離
資產剝離
2023年6月，公司與PureTech Science Inc.達成最終協議以現金代價約爲美元出售公司的乙醇酸業務（包括在公司其他部門）
11
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
說明4.淨銷售額
淨銷售額細分
下表列出了公司按地理區域和細分的淨銷售額細分 截至2024年9月30日和2023年9月30日的三個月和九個月。
|
|
截至9月30日的三個月， |
|
|
截至9月30日的9個月， |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
按地理區域劃分的淨銷售額（1） |
|
|
|
|
|
|
|
|
|
|
|
|
||||
北美： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
熱力和專業解決方案 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
鈦技術 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
先進性能材料 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
其他分部 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
北美地區總數 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
亞太地區： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
熱力和專業解決方案 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
鈦技術 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
先進性能材料 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
其他分部 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
亞太地區合計 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
歐洲、中東和非洲： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
熱力和專業解決方案 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
鈦技術 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
先進性能材料 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
其他分部 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
歐洲、中東和非洲總計 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
拉丁美洲（2）： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
熱力和專業解決方案 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
鈦技術 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
先進性能材料 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
其他分部 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
拉丁美洲共計 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
總淨銷售額 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
12
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
下表列出了公司按產品組和細分的淨銷售額細分 截至2024年9月30日和2023年9月30日的三個月和九個月。
|
|
截至9月30日的三個月， |
|
|
截至9月30日的9個月， |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
按產品組和細分的淨銷售額 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
OpteonTM 製冷劑 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
氟利昂TM 製冷劑 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
泡沫、推進劑和其他 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
全面熱力和專業解決方案 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
二鈦和其他礦物質 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
全鈦技術 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
先進材料 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
性能解決方案 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total先進性能材料 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
性能化學品和中間體 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
其他部門總計 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
總淨銷售額 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
該公司幾乎所有的淨銷售額都來自在某個時間點轉移的商品和服務。
合同餘額
公司從與客戶簽訂的合同中獲得的資產和負債構成應收賬款貿易、遞延收入和客戶回扣。當合同項下的對價權利變得無條件時，就記錄了應收賬款交易的金額。當在訂立合同之前收到對價，或當客戶在公司履行合同規定的履行義務之前轉移對價時，將計入遞延收入金額。客戶回扣是指根據合同對客戶的預期退款責任。在與提供回扣的客戶簽訂的合同中，回扣通常在達到一定銷售門檻的基礎上追溯適用。隨着收入的確認，公司估計是否會達到銷售門檻，以確定交易價格中包含的可變對價金額。
下表列出了公司與客戶簽訂的合同餘額2024年9月30日和2023年12月31日。
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||
合同資產： |
|
|
|
|
|
|
||
應收賬款--貿易，淨額(附註8) |
|
$ |
|
|
$ |
|
||
合同責任： |
|
|
|
|
|
|
||
遞延收入 |
|
$ |
|
|
$ |
|
||
客戶回扣(注15) |
|
|
|
|
|
|
||
在截至2024年9月30日的三個月和九個月中，由於增加預付款和扣除在淨銷售額中確認的金額而導致的公司遞延收入餘額的變化不大。在截至2024年9月30日的三個月和九個月內，從前幾個時期(例如，由於交易價格變化)履行的履約確認的淨銷售額並不大。
截至2024年9月30日和2023年12月31日，沒有與獲得或履行客戶合同相關的重大合同資產餘額或資本化成本。
13
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
剩餘履約義務
公司的某些主服務協議或其他安排包含收取或付費條款，要求客戶在規定的時間內購買固定最低數量的產品，或爲此類訂單向公司支付費用，即使客戶沒有提出要求。本公司認爲該等「不收即付」條款爲可強制執行的合約，因此，該等安排下可依法強制執行的最低金額被視爲最初預期期限超過一年的合約的未履行責任。2024年9月30日，Chemors有$
說明5.重組、資產相關和其他費用
下表按分部列出了公司重組、資產相關和其他費用的組成部分 截至2024年9月30日和2023年9月30日的三個月和九個月。
|
|
熱力和專業解決方案 |
|
|
鈦技術 |
|
|
先進性能材料 |
|
|
其他分部 |
|
|
公司 |
|
|
總 |
|
||||||
截至2024年9月30日的三個月 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
員工離職費 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2024年重組計劃 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|||
員工離職費用總額 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
退役和其他費用： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2024年重組計劃 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
鈦技術轉型計劃 |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
退役和其他費用總額 |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
重組和其他費用總額 |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
資產相關費用： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2024年重組計劃 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
資產相關費用總額 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
重組、資產相關和其他費用總額 |
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
熱力和專業解決方案 |
|
|
鈦技術 |
|
|
先進性能材料 |
|
|
其他分部 |
|
|
公司 |
|
|
總 |
|
||||||
截至2024年9月30日的九個月 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
員工離職費： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2024年重組計劃 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|||
鈦技術轉型計劃 |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
2023年重組計劃 |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
員工離職費用總額 |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
退役和其他費用： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2024年重組計劃 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
鈦技術轉型計劃 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
退役和其他費用總額 |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
重組和其他費用總額 |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
資產相關費用： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2024年重組計劃 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
資產相關費用總額 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
重組、資產相關和其他費用總額 |
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||||
14
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
|
|
熱力和專業解決方案 |
|
|
鈦技術 |
|
|
先進性能材料 |
|
|
其他分部 |
|
|
公司 |
|
|
總 |
|
||||||
截至2023年9月30日的三個月 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
員工離職費： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
鈦技術轉型計劃 |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
2023年重組計劃 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
2022年重組計劃 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
員工離職費用總額 |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
退役和其他費用： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
鈦技術轉型計劃 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
退役和其他費用總額 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
重組和其他費用總額 |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
資產相關費用： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
鈦技術轉型計劃 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
資產相關費用總額 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
重組、資產相關和其他費用總額 |
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
熱力和專業解決方案 |
|
|
鈦技術 |
|
|
先進性能材料 |
|
|
其他分部 |
|
|
公司 |
|
|
總 |
|
||||||
截至2023年9月30日的9個月 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
員工離職費： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
鈦技術轉型計劃 |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
2023年重組計劃 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
2022年重組計劃 |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
企業資源規劃實施費用 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
員工離職費用總額 |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
退役和其他費用： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
鈦技術轉型計劃 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
企業資源規劃實施費用 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
退役和其他費用總額 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
重組和其他費用總額 |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
資產相關費用： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
鈦技術轉型計劃 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
ERP實施費用 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
資產相關費用總額 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
重組、資產相關和其他費用總額 |
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||||
2024年重組計劃
2024年第三季度，管理層啓動了一些轉型計劃，主要是在先進性能材料業務和某些公司職能方面，以實現運營和商業協同效應以及成本優化。作爲這些努力的一部分，2024年第三季度，公司啓動了額外的成本節約計劃，這在很大程度上是由於進一步使公司業務和公司職能的成本結構與其財務目標保持一致。因此，在截至2024年9月30日的三個月和九個月內，公司記錄的費用爲$
15
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
鈦技術轉型計劃
在……上面
因此，在截至2024年9月30日的三個月和九個月內，公司記錄的費用爲(
作爲鈦技術改造計劃的一部分，在工廠關閉後，該部門還啓動了組織重新設計，以進一步使其成本結構與其財務目標保持一致。因此，累計的員工離職費用爲#美元。
2023年重組計劃
除鈦科技計劃外，2023年，管理層還啓動了額外的遣散費計劃，以進一步使公司業務和公司職能的成本結構與其財務目標保持一致。自成立至2024年9月30日，公司累計記錄的員工離職費用爲$
2022年重組計劃
管理層在2022年啓動了一項遣散費計劃，這在很大程度上是因爲使公司業務和公司職能的成本結構與其戰略和財務目標保持一致。自公司成立至2024年9月30日，公司2022年重組計劃的累計金額爲
企業資源計劃(「ERP」)實施放棄費用
2023年第一季度，公司決定放棄實施新的企業資源規劃軟件平台，並記錄了以下費用：
下表列出了與公司重組計劃相關的員工離職相關負債的變化截至2024年9月30日的9個月。
|
|
2024年重組 |
|
|
鈦技術轉型計劃 |
|
|
2023重組 |
|
|
總 |
|
||||
2023年12月31日的餘額 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
收入費用 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
付款 |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
2024年9月30日餘額 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
關於美元
16
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
Note 6. Other Income, Net
The following table sets forth the components of the Company’s other income, net for the three and nine months ended September 30, 2024 and 2023.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Leasing, contract services, and miscellaneous income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Royalty income (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on sales of assets and businesses, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exchange losses, net (2) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Non-operating pension and other post-retirement employee benefit income (cost) (3) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Total other income, net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
附註7.普通股每股收益
下表列出了公司基本每股收益和稀釋後每股收益(「EPS」)計算的分子和分母的對賬。截至2024年9月30日和2023年9月30日的三個月和九個月。
|
|
截至9月30日的三個月， |
|
|
截至9月30日的9個月， |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
分子： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
克慕應占淨（虧損）收入 |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
分母： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
加權-已發行普通股的平均數量-基本 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
公司員工補償計劃的攤薄效應(1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
加權-已發行普通股的平均數-稀釋 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
普通股每股基本(虧損)收益(2) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
普通股每股攤薄(虧損)收益(1)(2) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
下表列出了沒有現金的股票期權和績效股票期權的平均數量，因此沒有包括在公司的稀釋每股收益計算中截至2024年9月30日和2023年9月30日的三個月和九個月。
|
|
截至9月30日的三個月， |
|
|
截至9月30日的9個月， |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
股票期權平均數量 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
17
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
說明8.應收賬款和票據，淨額
下表列出了公司應收賬款和應收票據的組成部分，淨額爲 2024年9月30日和2023年12月31日。
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||
應收賬款-貿易，淨額（1） |
|
$ |
|
|
$ |
|
||
增值稅、一般消費稅和其他稅（2） |
|
|
|
|
|
|
||
其他應收賬款（3） |
|
|
|
|
|
|
||
應收賬款和票據總額(淨額) |
|
$ |
|
|
$ |
|
||
應收賬款和票據按接近公允價值的金額列賬。壞賬費用達美元
客戶供應商融資設施
該公司參與其客戶維護的多項融資機制。這些設施使公司能夠將某些內容貨幣化
其到期日之前的應收賬款。公司從金融機構獲得折扣金額，具體取決於
與客戶發票到期日相關的融資機構付款時間。公司對收到的現金進行分類
從金融機構作爲經營現金流。
說明9.庫存
下表列出了公司庫存的組成部分 2024年9月30日和2023年12月31日。
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||
成品 |
|
$ |
|
|
$ |
|
||
半成品 |
|
|
|
|
|
|
||
原材料、商店和用品 |
|
|
|
|
|
|
||
LIFO調整前的庫存 |
|
|
|
|
|
|
||
減：根據LIFO基礎調整庫存 |
|
|
( |
) |
|
|
( |
) |
總庫存 |
|
$ |
|
|
$ |
|
||
在後發先出（「LIFO」）調整之前的庫存價值通常通過平均成本法確定，該方法接近當前成本。公司美國地點的庫存採用LIFO法估值，其中包括美元
18
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
說明10.財產、廠房和設備，淨值
下表列出了公司財產、廠房和設備的組成部分，淨值爲 2024年9月30日和2023年12月31日。
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||
裝備 |
|
$ |
|
|
$ |
|
||
建築 |
|
|
|
|
|
|
||
在建工程 |
|
|
|
|
|
|
||
土地 |
|
|
|
|
|
|
||
礦業權 |
|
|
|
|
|
|
||
物業、廠房和設備 |
|
|
|
|
|
|
||
減去：累計折舊 |
|
|
( |
) |
|
|
( |
) |
財產、廠房和設備合計(淨額) |
|
$ |
|
|
$ |
|
||
不動產、廠房和設備，淨額包括融資租賃項下的資產總額美元
折舊費用總計爲$
附註11.商譽和其他無形資產，淨額
商譽
下表列出了截至2024年9月30日的9個月中按部門劃分的公司商譽賬面金額的變化：
|
|
熱力和專業解決方案 |
|
|
鈦技術 |
|
|
先進性能材料 |
|
|
其他分部 |
|
|
總 |
|
|||||
2023年12月31日的餘額 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||
商譽減值 |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
2024年9月30日餘額 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||
化學公司包括
計入公司2024年9月30日和2023年12月31日商譽餘額的累計商譽減值損失總額爲
在2024年第三季度，該公司審查了最近發佈的第三方行業預測，這些預測現在反映出終端市場需求下降，到2030年市場增長放緩，以及2030年後更不確定的長期增長軌跡。爲了應對這些負面的市場前景發展，以及由於終端市場週期性復甦和競爭強度有限而導致的商業逆風增加，該公司修訂了對先進性能材料業務的財務預測，其中包括削減其投資計劃。本公司的結論是，這些市場發展，以及本公司爲反映這些事件而修訂的財務預測，是2024年第三季度本公司高級業績材料報告部門和相關商譽以及相關資產組的觸發事件。 作爲這一結論的結果，本公司完成了截至2024年8月31日的中期減值評估，對其高級業績材料報告部門和相關資產組進行了評估。
19
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
本公司的結論是，未貼現的現金流量超過了長期資產的賬面價值，不存在減值。在完成中期量化商譽減值測試時，本公司將報告單位的公允價值與其賬面價值進行比較，以確定是否需要減值費用。本公司高級業績材料報告單位的公允價值是通過結合使用貼現現金流量模型(收益法的一種形式)和指導上市公司法(市場法的一種形式)來確定的。這些估值模型包含了許多關於一般市場和經濟狀況的假設和判斷，以及基於短期和長期收入增長率、EBITDA利潤率和有關報告單位未來現金流的預期財務信息的對未來業務業績的內部預測。折現率和市場倍數假設是基於化學品行業的相關同行公司確定的。根據所進行的分析，本公司得出結論，先進業績材料報告單位的賬面金額超過其公允價值，導致非現金商譽減值費用爲#美元。
其他無形資產，淨額
下表列出了公司在2024年9月30日和2023年12月31日按主要類別劃分的其他無形資產的賬面總額和累計攤銷。
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||||||||||||||||||
|
|
成本 |
|
|
累計 |
|
|
網絡 |
|
|
成本 |
|
|
累計 |
|
|
網絡 |
|
||||||
免稅額單位(1) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
客戶列表 |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
客戶關係 |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
專利 |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
購買和許可的技術 |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
其他 |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
其他無形資產總額 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
固定壽命無形資產的稅前攤銷費用總額不到美元
說明12.對附屬機構的投資
公司在日常業務過程中與其權益法投資對象進行交易。對公司權益法投資對象的淨銷售額爲美元
20
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
注13。其他資產
下表列出了公司於 2024年9月30日和2023年12月31日。
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||
資本化的維修和維護成本 |
|
$ |
|
|
$ |
|
||
養老金資產（1） |
|
|
|
|
|
|
||
遞延所得稅 |
|
|
|
|
|
|
||
其他（2） |
|
|
|
|
|
|
||
其他資產總額 |
|
$ |
|
|
$ |
|
||
附註14.應付帳款
下表列出了該公司應付賬款的組成部分2024年9月30日和2023年12月31日。
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||
貿易應付款項 |
|
$ |
|
|
$ |
|
||
增值稅和其他應付款 |
|
|
|
|
|
|
||
應付賬款總額 |
|
$ |
|
|
$ |
|
||
供應商融資
該公司與幾家金融機構保持着供應鏈融資計劃。該計劃允許其供應商將其應收款出售給其中一家參與的金融機構，由雙方自行決定，條款由供應商和各自的金融機構商定。根據與金融機構達成的協議，某些供應商可酌情選擇提早付款。供應商發票的關鍵條款，包括到期金額和預定付款日期，不受供應商根據計劃出售應收賬款的決定的影響。對於歸類爲應付賬款的供應商融資計劃債務，公司同意在原始發票到期日向金融機構支付已售出發票的款項。該公司還維持着一項供應商融資計劃，其債務被歸類爲短期債務，其依據是付款期限延長至原始發票到期日之後。沒有與這些計劃相關的資產質押或其他形式的擔保。公司或金融機構可以在至少30天的通知後終止該計劃。
截至2024年9月30日和2023年12月31日的未償還付款義務 爲$
21
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
說明15.其他應計負債
下表列出了公司其他應計負債的組成部分 2024年9月30日和2023年12月31日。
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||
應計訴訟（1） |
|
$ |
|
|
$ |
|
||
資產報廢義務（2） |
|
|
|
|
|
|
||
所得稅 |
|
|
|
|
|
|
||
客戶返點 |
|
|
|
|
|
|
||
應計利息 |
|
|
|
|
|
|
||
經營租賃負債 |
|
|
|
|
|
|
||
其他（3） |
|
|
|
|
|
|
||
其他應計負債總額 |
|
$ |
|
|
$ |
|
||
說明16.債務
下表列出了公司債務的組成部分 2024年9月30日和2023年12月31日。
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||
高級擔保定期貸款： |
|
|
|
|
|
|
||
b-3部分美元定期貸款，2028年8月到期 |
|
$ |
|
|
$ |
|
||
b-3部分歐元定期貸款將於2028年8月到期 |
|
|
|
|
|
|
||
高級無擔保票據： |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
融資租賃負債 |
|
|
|
|
|
|
||
融資義務（1） |
|
|
|
|
|
|
||
(2) |
|
|
|
|
|
|
||
其他 |
|
|
|
|
|
— |
|
|
債務本金總額 |
|
|
|
|
|
|
||
減：未發行折扣 |
|
|
( |
) |
|
|
( |
) |
減去：未攤銷債務發行成本 |
|
|
( |
) |
|
|
( |
) |
減：長期債務的短期和當前期限 |
|
|
( |
) |
|
|
( |
) |
長期債務總額，淨額 |
|
$ |
|
|
$ |
|
||
22
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
高級擔保信貸安排
於2023年8月18日，本公司訂立修訂及重述信貸協議(「信貸協議」)，該協議規定
應收賬款證券化安排
本公司透過全資擁有的特殊目的實體(「特殊目的實體」)維持一份日期爲2020年3月9日的經修訂及重述的應收賬款購買協議，該協議於2021年3月5日修訂，並於2021年11月24日及2023年3月23日進一步修訂(「經修訂購買協議」)。根據經修訂的採購協議，本公司並不對轉讓的應收賬款保持有效控制，因此將該等轉讓計入應收賬款的銷售。
從已售出應收賬款收款中獲得的現金用於爲額外購買應收賬款提供資金，
其他
在截至2024年9月30日的季度內，本公司達成了一項融資安排，根據該安排，一家外部融資公司爲本公司的某些年度保險費提供資金#美元。
23
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
到期日
下表列出了公司未來五年及之後的債務本金到期日。
|
|
優先債 |
|
|
融資租賃負債 |
|
|
融資責任 |
|
|
供應商融資義務 |
|
|
其他 |
|
|
總 |
|
||||||
2024年剩餘時間 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
2025 |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||||
2026 |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
2027 |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
2028 |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
此後 |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
付款總額 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
減去：推定利息 |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
債務本金到期總額 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
該公司要求每季度支付與美元定期貸款相關的本金，相當於
截至2024年9月30日，第一個到期的重大長期未償債務是歐元
債務公允價值
下表列出了本公司優先債務發行的估計公允價值，該估計公允價值基於從第三方經紀商收到的報價，並在公允價值等級中被歸類爲2級金融工具。融資性保險費的賬面價值根據短期性質和到期日接近其公允價值。
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||||||||||
|
|
攜帶 |
|
|
公允價值 |
|
|
攜帶 |
|
|
公允價值 |
|
||||
高級擔保定期貸款： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
b-3部分美元定期貸款，2028年8月到期 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
b-3部分歐元定期貸款將於2028年8月到期 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
高級無擔保票據： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
其他 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
優先債務本金總額 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
減：未發行折扣 |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
減去：未攤銷債務發行成本 |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
優先債務共計，淨額 |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
24
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
Note 17. Other Liabilities
The following table sets forth the components of the Company’s other liabilities at September 30, 2024 and December 31, 2023.
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Employee-related costs (1) |
|
$ |
|
|
$ |
|
||
Accrued litigation (2) |
|
|
|
|
|
|
||
Asset retirement obligations (3) |
|
|
|
|
|
|
||
Miscellaneous (4) |
|
|
|
|
|
|
||
Total other liabilities |
|
$ |
|
|
$ |
|
||
Note 18. Commitments and Contingent Liabilities
Litigation Overview
The Company and certain of its subsidiaries, from time to time, are subject to various lawsuits, claims, assessments, and proceedings with respect to product liability, intellectual property, personal injury, commercial, contractual, employment, governmental, environmental, anti-trust, and other such matters that arise in the ordinary course of business. 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. Except as noted below, while management believes it is reasonably possible that Chemours could incur losses in excess of the amounts accrued, if any, for the aforementioned proceedings, it does not believe any such loss would have a material impact on the Company’s consolidated financial position, results of operations, or cash flows. It is not possible to predict the outcomes of these various lawsuits, claims, assessments, or proceedings. Disputes between Chemours and EID may arise regarding indemnification matters, including disputes based on matters of law or contract interpretation. Should disputes arise, they could materially adversely affect Chemours.
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. 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 an exposure 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 uncertainties related to these matters, accruals are based on the best information available at the time, including, among others, settlement agreements. 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 which Chemours operates, management’s 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.
25
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
Management believes the Company’s litigation accruals 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 September 30, 2024 and December 31, 2023.
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Asbestos |
|
$ |
|
|
$ |
|
||
PFOA (1) |
|
|
|
|
|
|
||
PFAS (2) |
|
|
|
|
|
|
||
All other matters |
|
|
|
|
|
|
||
Total accrued litigation |
|
$ |
|
|
$ |
|
||
The following table sets forth the current and long-term components of the Company’s accrued litigation and their balance sheet locations at September 30, 2024 and December 31, 2023.
|
|
Balance Sheet Location |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Accrued Litigation: |
|
|
|
|
|
|
|
|
||
Current accrued litigation |
|
Other accrued liabilities (Note 15) |
|
$ |
|
|
$ |
|
||
Long-term accrued litigation |
|
Other liabilities (Note 17) |
|
|
|
|
|
|
||
Total accrued litigation |
|
|
|
$ |
|
|
$ |
|
||
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 $
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 $
26
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
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.
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 $
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 $
The parties have also sought insurance coverage for certain claims relating to PFAS matters, including claims in the AFFF MDL. In July 2024, a $
The parties will cooperate in good faith to enter into additional agreements reflecting the terms set forth in the MOU.
27
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
Asbestos
In the Separation, EID assigned its asbestos docket to Chemours. At September 30, 2024 and December 31, 2023, there were approximately
At September 30, 2024 and December 31, 2023, Chemours had accruals of $
Benzene
In the Separation, EID assigned its benzene docket to Chemours. At September 30, 2024 and December 31, 2023, there were
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.
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 September 30, 2024 and December 31, 2023, Chemours maintained an accrual of $
28
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
利奇定居點
2004年，開齋節解決了一起集體訴訟，標題爲利奇訴杜邦案，在西弗吉尼亞州法院提起訴訟，聲稱大約
C8科學小組發現，根據和解協議的定義，暴露於全氟辛烷磺酸與妊娠高血壓之間可能存在聯繫，包括先兆子癇、腎癌、睾丸癌、甲狀腺疾病、潰瘍性結腸炎和確診的高膽固醇。根據和解協議的條款，開齋節有義務提供高達$
此外，根據LEACH和解協議，EID必須繼續提供水處理，旨在將水中的全氟辛烷磺酸水平降低到
全氟辛烷磺酸授課課人身傷害
此外，根據LEACH和解協議，班級成員只能對C8科學小組確定存在可能聯繫的疾病向EID提出人身傷害索賠。大致
在達成第一個MDL和解協議的同時，EID和Chemour同意有限地分擔未來可能的全氟辛酸成本(即「可賠償損失」，如EID和Chemour之間的分離協議所定義)，期限爲
雖然所有MDL訴訟都被駁回或通過第一個MDL和解協議解決，但第一個MDL和解協議沒有解決MDL中沒有案件或索賠的原告的PFOA人身傷害索賠，或者基於2017年2月11日之後首次診斷的疾病的人身傷害索賠。大致
沒有包括在第二次MDL和解協議中的唯一事項是2020年3月審理的一起睾丸癌案件，判決金額爲美元。
2022年12月，多地區訴訟司法委員會(JPML)拒絕關閉俄亥俄州MDL。截至2024年9月30日，已有44名自稱LEACH班級成員的原告提起人身傷害訴訟。對兩名原告的審判定於2024年9月開始，對兩名原告的第二次審判定於2025年3月開始。在9月份第一次審判開始之前，EID和Chemour與代表MDL原告的律師原則上達成了一項協議，規定對MDL中所有已提交和未決的案件以及額外的訴訟前索賠達成和解。 俄亥俄州MDL法院已命令雙方在2024年11月4日提交一份聯合狀況報告，除非在此之前提交解僱條款，雙方關於和解的討論仍在繼續，條款說明書即將敲定。截至2024年9月30日，根據雙方和原告律師之間正在進行的和解談判的狀況，公司記錄了應計 $
29
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
全氟辛烷磺酸
EID和Chemour收到了政府和監管機構的詢問，並在個人、市政當局、企業和水區提起的其他訴訟中被點名，包括集體訴訟，指控他們接觸和/或污染全氟辛烷磺酸，包括全氟辛烷磺酸。許多行動包括一項指控，即在創建化學公司的剝離中進行欺詐性轉移。Chemour拒絕了EID就欺詐性轉移索賠提出的賠償要求。
Chemour已經回覆了政府執法實體關於PFAS的信件和詢問，包括在2020年1月的一封信中通知它，美國司法部、消費者保護分部和賓夕法尼亞州東區聯邦檢察官辦公室正在考慮是否根據聯邦食品、藥物和化妝品法案展開刑事調查，並要求其保留有關PFAS和食品接觸申請的文件。2020年7月，Chemour收到了大陪審團要求提供文件的傳票。本公司目前無法預測任何可能導致罰款和處罰和/或其他補救措施的潛在政府、刑事或民事訴訟的持續時間、範圍或結果。該公司也無法對可能的損失或損失範圍(如果有的話)做出合理的估計。
費耶特維爾工作，北卡羅來納州費耶特維爾
有關公司在費耶特維爾正在進行的訴訟和環境補救事宜的信息，請參閱本「附註18-承諾和或有負債」中「環境概述」下的「費耶特維爾工廠，北卡羅來納州費耶特維爾」。
水成膜泡沫物質
化學公司不生產或銷售，也從未生產或銷售過水性成膜泡沫(「AFFF」)。包括EID和Chemour在內的多名被告已在大約6,800起案件中被點名，涉及AFFF，這種火災用於撲滅碳氫化合物(即B類)火災，並符合美國軍方的規範。大多數案件已被移交給或直接提交到南卡羅來納州聯邦法院的多地區訴訟(「AFFF MDL」)中，或由一方確定要移交。AFFF MDL中懸而未決的事項聲稱，污染造成的損害，在大多數情況下是由於從軍事設施或機場遷徙，或接觸AFFF造成的人身傷害。原告尋求追回調查、監測、補救、治療和以其他方式應對污染的損害賠償。其他人則要求人身傷害、財產減值和懲罰性賠償。
2021年3月，法院批准了AFFF MDL範圍內的10起供水者案件，以便開始初步發現(第一級發現)，2021年10月，法院批准了其中三起案件的額外發現(第二級發現)。2022年9月，佛羅里達州斯圖亞特市提起的水提供商訴訟被選爲第一次領頭羊審判。法院鼓勵所有各方討論解決供水供應商類別的案件，並於2022年10月任命了一名調解人，以促進各方之間的討論。化學、Corteva/EID和杜邦於2023年6月共同簽署了美國公共水系統集體訴訟和解協議，如下所述。在公共供水系統集體訴訟和解之前，2023年5月，原告提出了一項動議，要求將針對Chemour和EID的所有索賠從自來水供應商案件的第一次領頭羊審判中切斷，法院批准了這項動議。目前在AFFF MDL中大約有700個水供應商案件，其中大約40個截至和解協議提交的此類事項已根據以下討論提交了選擇退出。
對於AFFF MDL中的非供水者案件(約6100起)，雙方目前正在處理某些人身傷害案件的發現工作，第一級發現工作於2024年6月完成。2024年7月，雙方共同向法院提交了一份擬議的A組和B組原告名單，目的是驚人的第二級證據開示。A類病例的第二級發現將於2024年12月完成，第二類病例的第二級發現將於2025年3月完成。最初的Tier 2 Group A試驗日期已定爲2025年10月6日。此外，法院還制定了案件管理程序，以審查和列出聲稱與接觸AFFF來源有關的疾病，並制定了駁回未列出疾病的人身傷害索賠的議定書。聲稱這些未列出的索賠的原告被要求在2024年9月10日之前在不損害其未列出的人身傷害索賠的情況下駁回其索賠，或提供關於所稱疾病的一般和特定因果關係的醫療記錄和專家報告。
在AFFF MDL之外還有其他尚未被某一締約方指定列入MDL的AFFF訴訟。將開齋節及/或化工列爲被告的事項如下：
瓦萊羅煉油公司(「瓦萊羅」)於2019年6月開始就其田納西州、德克薩斯州、俄克拉何馬州、加利福尼亞州和路易斯安那州的設施提起5起懸而未決的州法院訴訟。這些訴訟聲稱，幾名被告設計、製造、營銷和/或銷售納入AFFF的AFFF或PFAS，導致Valero招致損害和費用，包括補救、AFFF處置和更換。瓦萊羅還指控轉會是欺詐性的。
30
《化學公司》
中期合併財務報表附註（未經審計）
(百萬美元，每股除外)
在紐約州法院，四人於2019年9月對包括Chemour在內的多名被告提起訴訟。訴訟稱，暴露在長島飲用水中的AFFF造成人身傷害，並違反了紐約統一欺詐性運輸法。原告尋求補償性和懲罰性賠償以及醫療監督。
在伊利諾伊州，2022年5月，州法院對包括開齋節在內的許多被告提起了訴訟。訴訟聲稱，職業暴露造成的人身傷害，包括與AFFF相關的材料/產品，並尋求補償性賠償和懲罰性賠償。2023年7月，達成了解決訴訟的協議。這件事現在結束了。自2023年2月以來，伊利諾伊州法院還對包括EID在內的多名被告提起了另外兩起訴訟，EID還指控職業暴露造成人身傷害，包括AFFF相關材料/產品，並尋求補償性賠償和懲罰性賠償。在這兩起訴訟中，化學公司都不是被點名的被告。
2024年7月，弗吉尼亞州法院對包括Chemour在內的多名被告提起民事訴訟，指控原告通過被告製造、設計、營銷、銷售、供應或分銷的產品，如Turn Out Gear和AFFF，接觸到PFAS物質。原告同時尋求補償性和懲罰性賠償。在這件事上，化學公司還沒有得到送達。
2024年9月，新澤西州法院對EIDP、DuPont de Nemour、Chemour和其他被告提起訴訟，指控他們因接觸飲用水中與AFFF相關的PFAS而造成人身傷害。
在加拿大安大略省，兩方於2022年12月對DuPont de Nemour，Inc.和另一名被告提起了三起訴訟，要求與加拿大物業所有者提起的三起基本訴訟有關的分擔和賠償、利息和費用，以及一些被告就其中一起案件提起的相關第三方訴訟。原告在基本訴訟中聲稱，由於使用滅火泡沫，全氟辛烷磺酸污染了他們各自的財產。在上述任何案件中，中國化工都不是被點名的被告，但已同意根據諒解備忘錄進行辯護。這些針對杜邦的訴訟被兩個提起訴訟的當事人注意到了中止訴訟。
在加拿大不列顛哥倫比亞省，2023年12月，不列顛哥倫比亞省最高法院向不列顛哥倫比亞省最高法院提起民事訴訟，指控包括Chemour在內的多名被告，試圖將這起訴訟證明爲集體訴訟。起訴書指出，這一類別的人在某些條件下使用或接觸含有全氟辛烷磺酸的AFFF後，患有某些診斷的疾病，並尋求補償性和懲罰性賠償。
同樣是在不列顛哥倫比亞省法院，2024年6月，不列顛哥倫比亞省國王陛下對包括Chemour在內的多名被告提起民事訴訟，試圖證明該訴訟爲集體訴訟。起訴書指出，這一類別是指與據稱的PFAS污染有關的所有省和地區政府，包括AFFF對其水資源的污染，以及市政、地區和其他治理當局和飲用水系統負責人。起訴書要求獲得補償性和懲罰性賠償。
2024年7月，蒙特利爾魁北克區高等法院對包括Chemour在內的多名被告提起民事訴訟，試圖將該訴訟證明爲集體訴訟。起訴書指出，這一類別是指在魁北克擁有、經營或通過供人飲用的飲用水分配系統供應水的所有自然人和法人，其水源位於據稱被告製造、使用、運輸、加工或銷售全氟辛烷磺酸和含有全氟辛烷磺酸的產品，如AFFF的地點附近。索賠要求獲得補償性和懲罰性賠償。
2024年8月，馬斯科日第一民族向馬尼托巴省國王法庭(溫尼伯中心)提出索賠，要求將該訴訟證明爲集體訴訟。起訴書稱，根據加拿大法律的定義，這一類別是印度樂隊。原告聲稱，被告在其水源附近生產、使用、運輸、加工或銷售的全氟辛烷磺酸和含全氟辛烷磺酸的產品，如AFFF，「污染了他們從保護區獲得的任何水、魚和野味」。索賠要求賠償和懲罰性損害。
31
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
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.
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 $
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.
32
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
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
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
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 September 30, 2024 and December 31, 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.
33
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
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 18 – 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.
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.
34
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
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 expenses 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. 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. 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.
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 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. The City of Columbia 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.
35
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
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.
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 $
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 $
Other PFAS Matters
In New York courts, EID has been named in approximately
36
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
In New Jersey federal court, lawsuits were filed against several defendants including EID and Chemours beginning in November 2019. The lawsuits include
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 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.
37
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
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 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.
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.
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 September 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.
38
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
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. In June 2024 the Company and the Municipalities signed a Letter of Intent (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. An estimate of this liability was included in Accrued Litigation at December 31, 2023 and was reclassified to Accrued Environmental Remediation as of September 30, 2024 based on the remediation plan to be implemented as part of the LOI. The LOI contemplates the possibility of settling the court dispute, although still subject to further discussion with the municipalities.
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 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, 2023, the Company recorded an amount related to one or more of these matters.
New Jersey Department of Environmental Protection Directives and Litigation
In March 2019, NJ DEP issued two Directives and filed
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.
39
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
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 $
Chemours believes that the January 2022 motion as directed to it is not supported by applicable law and the RFS sought by NJ DEP is not an appropriate estimate of remedial cost for the Chambers Works site and, subject to the discussions regarding overall remediation costs under “Environmental Overview” within this "Note 18 – Commitments and Contingent Liabilities", management believes that a loss is reasonably possible, but not estimable at this time, due to various reasons, including that the motion is in its early stages and there are significant factual issues and legal questions to be resolved.
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.
U.S. Smelter and Lead Refinery, Inc.
There are six 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.
40
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
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. The Company has made SEC filings and issued press releases related to the Audit Committee Internal Review. 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 has incurred less than $
41
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
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 September 30, 2024 and December 31, 2023 for the five sites that are deemed the most significant during the periods presented, together with the aggregate liabilities for all other sites.
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Chambers Works, Deepwater, New Jersey |
|
$ |
|
|
$ |
|
||
Fayetteville Works, Fayetteville, North Carolina (1) |
|
|
|
|
|
|
||
Pompton Lakes, New Jersey |
|
|
|
|
|
|
||
USS Lead, East Chicago, Indiana |
|
|
|
|
|
|
||
Washington Works, West Virginia |
|
|
|
|
|
|
||
All other sites |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
The following table sets forth the current and long-term components of the Company’s environmental remediation liabilities at September 30, 2024 and December 31, 2023.
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Current environmental remediation |
|
$ |
|
|
$ |
|
||
Long-term environmental remediation |
|
|
|
|
|
|
||
Total environmental remediation |
|
$ |
|
|
$ |
|
||
42
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
Typically, the timeframe for a site to go through all phases of remediation (investigation and active clean-up) may take about
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 plans 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 draft Effluent Limitations Guidelines for PFAS manufacturers as announced in the PFAS Strategic Roadmap is now expected to be proposed in the fourth quarter of 2024.
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. The petitioners filed opening briefs in October 2024 and briefing will continue to March 2025. 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.
The environmental remediation liabilities and accrued litigation, as applicable, recorded for Fayetteville, Washington Works, Parkersburg, West Virginia and Chambers Works, Deepwater, New Jersey as of September 30, 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.
43
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
Chemours incurred expenses of $
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.
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 $
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 September 30, 2024 and December 31, 2023.
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
On-site remediation |
|
$ |
|
|
$ |
|
||
Off-site groundwater remediation |
|
|
|
|
|
|
||
Total Fayetteville environmental remediation |
|
$ |
|
|
$ |
|
||
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 September 30, 2024 and December 31, 2023.
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Current environmental remediation |
|
$ |
|
|
$ |
|
||
Long-term environmental remediation |
|
|
|
|
|
|
||
Total Fayetteville environmental remediation |
|
$ |
|
|
$ |
|
||
44
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
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. Qualifying surrounding properties with private drinking water wells that have tested above 10 ppt for GenX or 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
At September 30, 2024 and December 31, 2023, the Company had $
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.
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.
45
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
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.
In September 2022, NC DEQ issued a permit for discharge of treated groundwater and surface water associated with the project. The permit contained conditions and limits that exceeded the requirements contained within the CO and the previously public-noticed draft discharge permit. The Company filed an administrative petition contesting the discharge permit on October 14, 2022. On November 14, 2022, the Company reached an agreement with NC DEQ and the Cape Fear Public Utility Authority with respect to the discharge permit that, inter alia, facilitated the construction of the barrier wall and groundwater extraction and treatment system and recognizes an optimization period after commencement of discharge from the system which has been completed and required no material modification to the system. Chemours has since dismissed its petition without prejudice pursuant to the agreement.
The Company began operation of a capture and treatment system from the site’s old outfall channel following the issuance of a National Pollutant Discharge Elimination System ("NPDES") permit by NC DEQ in September 2020. In January 2021, the operation of the old outfall treatment system was interrupted on two occasions, and notice was provided to NC DEQ of the low treatment flow conditions through the system. The Company received an NOV from NC DEQ, alleging violations of the CO and the NPDES water permit arising from the design and operation of the treatment system related to the old outfall. The Company and its third-party service provider have taken actions intended to improve the operation of the old outfall treatment system and address challenges posed by substantial rain events, sediment loading into the system, and variability in water influent conditions. System enhancements completed or being implemented consist of a holding pond, installation of new ultra-filtration units and additional water pretreatment equipment which was substantially completed by the end of 2023.
Based on the CO, the Addendum, the CAP, and management’s plans, which are based on current regulations and technology, the Company has accrued $
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
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.
46
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
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 management believes a loss is reasonably possible, but not estimable at this time.
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
In addition to natural resource damages matter filed by the State of North Carolina (as discussed within the “PFAS” section of this “Note 18 – Commitments and Contingent Liabilities”), in September 2020,
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 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 September, 2024, 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.
47
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
Other Environmental Matters
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. The Company is reviewing the assertion 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 is in its early stages with 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 $
Note 19. Equity
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 $
The following table sets forth the Company’s share repurchase activity under the 2022 Share Repurchase Program for the three and nine months ended September 30, 2024 and 2023, respectively.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Total number of shares purchased |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total amount for shares purchased |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
Average price paid per share |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
There were
48
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
Note 20
The Company’s total stock-based compensation expense amounted to $
Stock Options
On May 8, 2024, the Company granted approximately
The following table sets forth the assumptions used at the grant date to determine the fair value of the Company's stock option awards granted during the nine months ended September 30, 2024.
|
|
Nine Months Ended September 30, 2024 |
|
|
Risk-free interest rate |
|
|
% |
|
Expected term (years) |
|
|
|
|
Volatility |
|
|
% |
|
Dividend yield |
|
|
% |
|
Fair value per stock option |
|
$ |
|
|
The Company recorded $
Restricted Stock Units
During the nine months ended September 30, 2024, Chemours granted approximately
The Company recorded $
Performance Share Units
On May 8, 2024, Chemours granted approximately
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 a 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.
49
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
The Company recorded less than $
Performance Stock Options
On May 8, 2024, the Company granted approximately
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 nine months ended September 30, 2024.
|
|
Nine Months Ended September 30, 2024 |
|
|
Risk-free interest rate |
|
|
% |
|
Expected term (years) |
|
|
|
|
Volatility |
|
|
% |
|
Dividend yield |
|
|
% |
|
Fair value per performance stock option (1) |
|
$ |
|
|
The Company recorded less than $
Note 21. 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 nine months ended September 30, 2024 and 2023.
|
|
Net Investment Hedge |
|
|
Cash Flow Hedge |
|
|
Cumulative Translation Adjustment |
|
|
Defined Benefit Plans |
|
|
Total |
|
|||||
Balance at January 1, 2024 |
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Other comprehensive (loss) income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Balance at September 30, 2024 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at January 1, 2023 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
||
Other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Balance at September 30, 2023 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
||
50
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
Note 22. Financial Instruments
Objectives and Strategies for Holding Financial Instruments
In the ordinary course of business, Chemours enters into contractual arrangements to reduce its exposure to foreign currency 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 variable interest rates, 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, which is 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.
Net Monetary Assets and Liabilities Hedge – Foreign Currency Forward Contracts
At September 30, 2024, the Company had
Cash Flow Hedge – Foreign Currency Forward Contracts
At September 30, 2024, the Company had
The Company expects to reclassify approximately $
Cash Flow Hedge – Interest Rate Swaps
At September 30, 2024 and December 31, 2023, the Company had
The Company expects to reclassify approximately $
51
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
Net Investment Hedge – Foreign Currency Borrowings
The Company recognized pre-tax losses of $
Fair Value of Derivative Instruments
The following table sets forth the fair value of the Company’s derivative assets and liabilities at September 30, 2024 and December 31, 2023.
|
|
|
|
Fair Value Using Level 2 Inputs |
|
|||||
|
|
Balance Sheet Location |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Asset derivatives: |
|
|
|
|
|
|
|
|
||
Foreign currency forward contracts |
|
Accounts and notes receivable, net (Note 8) |
|
$ |
|
|
$ |
|
||
Foreign currency forward contracts |
|
Accounts and notes receivable, net (Note 8) |
|
|
|
|
|
|
||
Total asset derivatives |
|
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
||
Liability derivatives: |
|
|
|
|
|
|
|
|
||
Foreign currency forward contracts |
|
Other accrued liabilities (Note 15) |
|
$ |
|
|
$ |
|
||
Foreign currency forward contracts |
|
Other accrued liabilities (Note 15) |
|
|
|
|
|
|
||
Interest rate swaps |
|
Other accrued liabilities (Note 15) |
|
|
|
|
|
|
||
Total liability derivatives |
|
|
|
$ |
|
|
$ |
|
||
The Company’s foreign currency forward contracts 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.
52
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
Summary of Financial Instruments
The following table sets forth the pre-tax changes in fair value of the Company’s financial instruments for the three and nine months ended September 30, 2024 and 2023.
|
|
Gain (Loss) Recognized In |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
||||
|
|
|
|
|
|
|
|
|
|
|
Other |
|
||||
|
|
Cost of |
|
|
Interest |
|
|
Other |
|
|
Comprehensive |
|
||||
Three Months Ended September 30, |
|
Goods Sold |
|
|
Expense, Net |
|
|
Income, Net |
|
|
Loss |
|
||||
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency forward contracts not designated as a hedging instrument |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
Foreign currency forward contracts designated as a cash flow hedge |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Interest rate swaps designated as a cash flow hedge |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Euro-denominated debt designated as a net investment hedge |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency forward contracts not designated as a hedging instrument |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
Foreign currency forward contracts designated as a cash flow hedge |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
Euro-denominated debt designated as a net investment hedge |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Gain (Loss) Recognized In |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
||||
|
|
|
|
|
|
|
|
|
|
|
Other |
|
||||
|
|
Cost of |
|
|
Interest |
|
|
Other |
|
|
Comprehensive |
|
||||
Nine Months Ended September 30, |
|
Goods Sold |
|
|
Expense, Net |
|
|
Income, Net |
|
|
Loss |
|
||||
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency forward contracts not designated as a hedging instrument |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
Foreign currency forward contracts designated as a cash flow hedge |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Interest rate swaps designated as a cash flow hedge |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Euro-denominated debt designated as a net investment hedge |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency forward contracts not designated as a hedging instrument |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
Foreign currency forward contracts designated as a cash flow hedge |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Interest rate swaps designated as a cash flow hedge |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Euro-denominated debt designated as a net investment hedge |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
53
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
Note 23. Long-term Employee Benefits
Chemours sponsors defined benefit pension plans for certain of its employees in various jurisdictions outside of the U.S. The Company’s net periodic pension cost is based on estimated values and the use of assumptions about the discount rate, expected return on plan assets, and the rate of future compensation increases received by its employees.
The following table sets forth the Company’s net periodic pension cost and amounts recognized in other comprehensive income (loss) for the three and nine months ended September 30, 2024 and 2023.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Service cost |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Interest cost |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Expected return on plan assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of actuarial loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Amortization of prior service gain |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Settlement gain |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total net periodic pension cost |
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) gain |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Amortization of actuarial loss |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of prior service gain |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Recognition of settlement gain |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Curtailment gain |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Effect of foreign exchange rates |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
(Cost) benefit recognized in other comprehensive income |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Total changes in plan assets and benefit obligations recognized in other comprehensive income |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
The Company made cash contributions of $
Note 24. 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.
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash and restricted cash equivalents (1) |
|
|
|
|
|
|
||
Cash, cash equivalents, restricted cash and restricted cash equivalents |
|
$ |
|
|
$ |
|
||
54
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
Note
Chemours operates through its
Adjusted earnings before interest, taxes, depreciation, and amortization ("Adjusted EBITDA") is the primary measure of segment profitability used by the Company’s Chief Operating Decision Maker ("CODM") and is defined as income (loss) before income taxes, excluding the following:
The following table sets forth certain summary financial information for the Company’s reportable segments for the periods presented.
|
|
Thermal & Specialized Solutions |
|
|
Titanium Technologies |
|
|
Advanced Performance Materials |
|
|
Other Segment |
|
|
Segment Total |
|
|||||
Three Months Ended September 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net sales to external customers |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Three Months Ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net sales to external customers |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Thermal & Specialized Solutions |
|
|
Titanium Technologies |
|
|
Advanced Performance Materials |
|
|
Other Segment |
|
|
Segment Total |
|
|||||
Nine Months Ended September 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net sales to external customers |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Nine Months Ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net sales to external customers |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
September 30, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Corporate and Other depreciation and amortization expense amounted to $
55
The Chemours Company
Notes to the Interim Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share amounts)
The following table sets forth a reconciliation of Segment Adjusted EBITDA to the Company’s consolidated (loss) income before income taxes for the three and nine months ended September 30, 2024 and 2023.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Thermal & Specialized Solutions |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Titanium Technologies |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Advanced Performance Materials |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other Segment |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate and Unallocated |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate expenses (1) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Unallocated Items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Non-operating pension and other post-retirement employee benefit income (cost) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Exchange losses, net |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Restructuring, asset-related, and other charges (Note 5) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Goodwill impairment charge (Note 11) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Inventory write-offs (2) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Loss on extinguishment of debt |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Gain on sales of assets and businesses, net (Note 3) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Transaction costs (3) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Qualified spend recovery (4) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Litigation-related charges (5) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Environmental charges (6) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
(Loss) income before income taxes |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
56
The Chemours Company
Item 2. 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 unaudited Interim 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. 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. References herein to “DuPont” refer to DuPont de Nemours, Inc., a Delaware Corporation.
This MD&A should be read in conjunction with the unaudited Interim Consolidated Financial Statements and the related notes thereto included in Item 1 of this Quarterly Report on Form 10-Q, as well as our audited Consolidated Financial Statements and the related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023.
This section and other parts of this Quarterly Report on Form 10-Q 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.
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 in the Forward-looking Statements and the Risk Factors sections in our Annual Report on Form 10-K for the year ended December 31, 2023, and as otherwise discussed in this report. We assume no obligation to revise or update any forward-looking statement for any reason, except as required by law.
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 coatings, plastics, refrigeration and air conditioning, 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.
We are a different kind of chemistry company. Our world-class product portfolio brings everyday convenience to virtually everything people touch 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 around the world through innovative and sustainable solutions, environmental leadership, community impact and making Chemours the greatest place to work for every employee. Our global workforce, with its deep and unmatched expertise, 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.
57
The Chemours Company
Our core values, in unison with our company vision, underpin our commitment to our stakeholders to make chemistry as responsible as it is essential, and our commitment to sustainability cannot be separated from our growth strategy and vision.
With sustainability embedded in our growth strategy, we have set forth ambitious Corporate Responsibility Commitment ("CRC") goals that we aim to achieve by 2030, anchored on our strategic pillars. These goals are designed to promote accountability to our commitment and position us for sustainable, long-term earnings growth. Leveraging a robust governance framework, we are working to integrate sustainability across our organization and our business management processes. We understand that maintaining safe, sustainable operations has an impact on us, our communities, the environment, and our collective future. With this focus, we invest in research and development (“R&D”) in order to develop safer, cleaner, and more efficient products and processes that enable our operations, customers, and consumers to reduce their greenhouse gas ("GHG") emissions, carbon footprint, and overall environmental footprint. We value collaboration to drive change and commit to continue working with policymakers, our value chain, and other organizations to encourage collective action to reduce GHG emissions and encourage lower-carbon forms of energy.
Recent Developments
2024 Restructuring Plan
In line with our strategic priorities for creating long-term shareholder value, management initiated an organizational redesign to further align the cost structure of our Advanced Performance Materials business and corporate functions with its financial objectives. As a result of the 2024 Restructuring Program, for the period ended September 30, 2024, we recorded charges of $46 million, consisting of non-cash asset related charges of $25 million, employee separation charges of $18 million and other charges of $3 million. We currently expect that the 2024 Restructuring Program will result in future run-rate cost savings that approximate one to two times the cash costs incurred to date, which are expected to be realized by the end of 2025. These savings are part of our broader cost-out operating model with targeted cost savings across each of the businesses and corporate overhead. Refer to "Note 5 – Restructuring, Asset-related and Other Charges" to the Interim Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further details.
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, resulting in a non-cash goodwill impairment charge of $56 million. Refer to “Critical Accounting Policies and Estimates” within this Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations as well as "Note 11 - Goodwill and Intangible Assets, Net" to the Interim Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further details.
58
The Chemours Company
Results of Operations and Business Highlights
Results of Operations
The following table sets forth our results of operations for the three and nine months ended September 30, 2024 and 2023.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(Dollars in millions, except per share amounts) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net sales |
|
$ |
1,501 |
|
|
$ |
1,487 |
|
|
$ |
4,388 |
|
|
$ |
4,666 |
|
Cost of goods sold |
|
|
1,215 |
|
|
|
1,214 |
|
|
|
3,510 |
|
|
|
3,615 |
|
Gross profit |
|
|
286 |
|
|
|
273 |
|
|
|
878 |
|
|
|
1,051 |
|
Selling, general, and administrative expense |
|
|
135 |
|
|
|
165 |
|
|
|
416 |
|
|
|
1,067 |
|
Research and development expense |
|
|
29 |
|
|
|
28 |
|
|
|
83 |
|
|
|
82 |
|
Restructuring, asset-related, and other charges |
|
|
45 |
|
|
|
126 |
|
|
|
52 |
|
|
|
141 |
|
Goodwill impairment charge |
|
|
56 |
|
|
|
— |
|
|
|
56 |
|
|
|
— |
|
Total other operating expenses |
|
|
265 |
|
|
|
319 |
|
|
|
607 |
|
|
|
1,290 |
|
Equity in earnings of affiliates |
|
|
11 |
|
|
|
13 |
|
|
|
34 |
|
|
|
38 |
|
Interest expense, net |
|
|
(69 |
) |
|
|
(55 |
) |
|
|
(197 |
) |
|
|
(145 |
) |
Loss on extinguishment of debt |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
Other income, net |
|
|
7 |
|
|
|
102 |
|
|
|
10 |
|
|
|
100 |
|
(Loss) income before income taxes |
|
|
(30 |
) |
|
|
13 |
|
|
|
118 |
|
|
|
(247 |
) |
(Benefit from) provision for income taxes |
|
|
(3 |
) |
|
|
1 |
|
|
|
24 |
|
|
|
(28 |
) |
Net (loss) income |
|
|
(27 |
) |
|
|
12 |
|
|
|
94 |
|
|
|
(219 |
) |
Less: Net income attributable to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
Net (loss) income attributable to Chemours |
|
$ |
(27 |
) |
|
$ |
12 |
|
|
$ |
94 |
|
|
$ |
(220 |
) |
Per share data |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic (loss) earnings per share of common stock |
|
$ |
(0.18 |
) |
|
$ |
0.08 |
|
|
$ |
0.63 |
|
|
$ |
(1.47 |
) |
Diluted (loss) earnings per share of common stock |
|
|
(0.18 |
) |
|
|
0.08 |
|
|
|
0.63 |
|
|
|
(1.47 |
) |
59
The Chemours Company
Net Sales
The following table sets forth the impacts of price, volume, currency, and portfolio changes on our net sales for the three and nine months ended September 30, 2024, compared with the same periods in 2023.
Change in net sales from prior period |
|
Three Months Ended September 30, 2024 |
|
|
Nine Months Ended September 30, 2024 |
|
||
Price |
|
|
(3 |
)% |
|
|
(5 |
)% |
Volume |
|
|
5 |
% |
|
|
— |
% |
Currency |
|
|
(1 |
)% |
|
|
— |
% |
Portfolio |
|
|
— |
% |
|
|
(1 |
)% |
Total change in net sales |
|
|
1 |
% |
|
|
(6 |
)% |
Our net sales increased by $14 million (or 1%) to $1.5 billion for the three months ended September 30, 2024, compared with net sales of $1.5 billion for the same period in 2023. The increase in our net sales for the three months ended September 30, 2024 was primarily attributable to a volume increase of 5%, partially offset by a decrease in price of 3% and unfavorable currency movements of 1%. Price declined across all our reportable segments. The volume increase was attributed to our Thermal & Specialized Solutions and Advanced Performance Materials segments.
Our net sales decreased by $278 million (or 6%) to $4.4 billion for the nine months ended September 30, 2024, compared with net sales of $4.7 billion for the same period in 2023. The decrease in our net sales for the nine months ended September 30, 2024 was primarily attributable to a decrease in price of 5%. Price declined across all 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 key drivers of these changes for each of our reportable segments are discussed further under the “Segment Reviews” section within this MD&A.
Cost of Goods Sold
Our cost of goods sold (“COGS”) was relatively flat at $1.2 billion for the three months ended September 30, 2024 and 2023, as higher sales volumes were offset by lower raw materials costs. Our COGS decreased by $105 million (or 3%) to $3.5 billion for nine months ended September 30, 2024, respectively, compared with COGS of $3.6 billion for the same period in 2023. The decrease in our COGS for the nine months ended September 30, 2024 was driven by lower raw materials costs.
Selling, General, and Administrative Expense
Our selling, general, and administrative (“SG&A”) expense decreased by $30 million (or 18%) and $651 million (or 61%) to $135 million and $416 million for the three and nine months ended September 30, 2024, respectively, compared with SG&A expense of $165 million and $1.1 billion for the same periods in 2023. The decrease in our SG&A expense for the three months ended September 30, 2024 was primarily attributable to a decrease in litigation-related charges as a result of benefits from insurance recoveries recognized in the third quarter of 2024. The decrease in our SG&A expense for the nine months ended September 30, 2024 was primarily attributable to the litigation-related charges of $592 million recorded in the second quarter of 2023 primarily related to the U.S. public water system settlement agreement, along with the benefits recorded in the second and third quarters of 2024 for insurance recoveries. The decreases in our SG&A expense for the three and nine months ended September 30, 2024 were partially offset by $2 million and $24 million, respectively, 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 $29 million and $83 million for the three and nine months ended September 30, 2024, respectively, compared with R&D expense of $28 million and $82 million for the same periods in 2023.
60
The Chemours Company
Restructuring, Asset-Related, and Other Charges
Our restructuring, asset-related, and other charges decreased by $81 million (or 64%) and $89 million (or 63%) to $45 million and $52 million for the three and nine months ended September 30, 2024, respectively, compared with restructuring, asset-related, and other charges of $126 million and $141 million for the same periods in 2023. Our restructuring, asset-related, and other charges for the three and nine months ended September 30, 2024 were primarily attributable to $25 million of non-cash asset-related charges, $18 million of employee separation charges and $3 million of other charges related to the 2024 Restructuring Program initiated in the third quarter of 2024. During the nine months ended September 30, 2024, we also recorded $8 million of decommissioning and other charges related to the Titanium Technologies Transformation Plan.
Our restructuring, asset-related, and other charges for the three and nine months ended September 30, 2023 were primarily attributable to $121 million of charges related to the Titanium Technologies Transformation Plan, consisting of $78 million of asset-related charges, employee separation charges of $20 million and $23 million of decommissioning and other charges. In addition, our restructuring, asset-related, and other charges for the nine months ended September 30, 2023 included $16 million related to our first quarter of 2023 decision to abandon our implementation of a new enterprise resource planning software platform implementation.
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, for the three and nine months ended September 30, 2024, we recognized a goodwill impairment charge of $56 million related to the Advanced Performance Materials reporting unit. For the three and nine months ended September 30, 2023, there was no goodwill impairment charge. Refer to “Critical Accounting Policies and Estimates” within this Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations as well as "Note 11 - Goodwill and Intangible Assets, Net" to the Interim Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further details.
Equity in Earnings of Affiliates
Our equity in earnings of affiliates decreased by $2 million (or 15%) and $4 million (or 11%) to $11 million and $34 million for the three and nine months ended September 30, 2024, respectively, compared with equity in earnings of affiliates of $13 million and $38 million for the same periods in 2023. The decrease in our equity in earnings of affiliates for the three and nine months ended September 30, 2024 was primarily attributable to lower demand in the region where our investees operate.
Interest Expense, Net
Our interest expense, net increased by $14 million (or 25%) and $52 million (or 36%) to $69 million and $197 million for the three and nine months ended September 30, 2024, respectively, compared with interest expense, net of $55 million and $145 million for the same periods in 2023. The increase in our interest expense, net was primarily attributable to higher interest rates on our variable rate debt and higher debt principal following issuance of new term loans in August 2023.
Other Income, Net
Our other income, net decreased by $95 million (or 93%) and $90 million (or 90%) to $7 million and $10 million for the three and nine months ended September 30, 2024, respectively, compared with other income, net of $102 million and $100 million for the same periods in 2023. Our other income, net in the three and nine months ended September 30, 2023, includes a net pre-tax gain on sale of $106 million, associated with the Glycolic Acid Transaction. The decrease in our other income, net was partially offset by favorable changes in net exchange gains and losses.
(Benefit from) Provision for Income Taxes
We had a benefit from income taxes of $3 million and a provision for income taxes of $1 million for the three months ended September 30, 2024 and 2023, respectively, which represented effective tax rates of 10% and 8%, respectively. The $4 million increase in our benefit from income taxes for the three months ended September 30, 2024 was primarily attributable to changes in our geographic mix of earnings and non-recurring items. During the three months ended September 30, 2024, we recognized $10 million of income tax benefit related to the 2024 Restructuring Program. During the three months ended September 30, 2023, we recognized a $28 million income tax benefit associated with the Kuan Yin, Taiwan plant shutdown, net of a $13 million valuation allowance recorded on certain deferred tax assets of one of our Taiwanese subsidiaries and $26 million of income tax expense associated with the Glycolic Acid Transaction. We continued to record the impact of the enactment of the Organization for Economic Co-operation and Development Global Anti-Base Erosion Model Rules ("Pillar Two") in the quarter, which was overall not material.
61
The Chemours Company
We had a provision for income taxes of $24 million and a benefit from income taxes of $28 million for the nine months ended September 30, 2024 and 2023, respectively, which represented effective tax rates of 20% and 11%, respectively. The $52 million increase in our provision for income taxes for the nine months ended September 30, 2024 was primarily attributable to several one-time items recorded during both 2023 and 2024. During the nine months ended September 30, 2024, we recognized $3 million of income tax expense related to insurance recoveries and settlements, offset by $10 million of income tax benefit related to the 2024 Restructuring Program. During the nine months ended September 30, 2023, we recognized one-time income tax benefits of $28 million associated with the Kuan Yin, Taiwan plant shutdown, net of a $13 million valuation allowance recorded on certain deferred tax assets of one of our Taiwanese subsidiaries. Additionally, we recognized an $88 million tax benefit associated with the U.S. public water system settlement agreement and $26 million of income tax expense associated with the Glycolic Acid Transaction.
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:
A reconciliation of Segment Adjusted EBITDA to our consolidated income before income taxes for the three and nine months ended September 30, 2024 and 2023 is included in “Note 25 – Segment Information” to the Interim Consolidated Financial Statements.
62
The Chemours Company
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 three and nine months ended September 30, 2024 and 2023.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(Dollars in millions) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Segment net sales |
|
$ |
460 |
|
|
$ |
436 |
|
|
$ |
1,422 |
|
|
$ |
1,445 |
|
Adjusted EBITDA |
|
|
141 |
|
|
|
162 |
|
|
|
453 |
|
|
|
561 |
|
Adjusted EBITDA margin |
|
|
31 |
% |
|
|
37 |
% |
|
|
32 |
% |
|
|
39 |
% |
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 three and nine months ended September 30, 2024, compared with the same periods in 2023.
Change in segment net sales from prior period |
|
Three Months Ended September 30, 2024 |
|
|
Nine Months Ended September 30, 2024 |
|
||
Price |
|
|
(2 |
)% |
|
|
(3 |
)% |
Volume |
|
|
8 |
% |
|
|
1 |
% |
Currency |
|
|
— |
% |
|
|
— |
% |
Total change in segment net sales |
|
|
6 |
% |
|
|
(2 |
)% |
Segment Net Sales
Our Thermal & Specialized Solutions segment’s net sales increased by $24 million (or 6%) to $460 million for the three months ended September 30, 2024, compared with segment net sales of $436 million for the same period in 2023. The increase in segment net sales for the three months ended September 30, 2024 was primarily attributable to an increase in volume of 8%, partially offset by a decrease in price of 2%. The increase in volume was primarily due to higher demand within the OpteonTM Refrigerants portfolio as a result of continued stationary and automotive end-market adoption, along with increased demand in the Foam, Propellants and Other portfolio. The increase in volume was partially offset by declines in the Freon™ Refrigerants portfolio. The decrease in price was primarily related to weaker Freon™ Refrigerants portfolio pricing due to elevated hydrofluorocarbon ("HFC") market inventory levels. The decrease in price was partially offset by stronger Opteon™ Refrigerants portfolio pricing. Currency was flat for the three months ended September 30, 2024 when compared to the same period in the prior year.
Our Thermal & Specialized Solutions segment’s net sales decreased by $23 million (or 2%) to $1.4 billion for the nine months ended September 30, 2024, respectively, compared with segment net sales of $1.4 billion for the same period in 2023. The decrease in segment net sales for the nine months ended September 30, 2024 was primarily attributable to a decrease in price of 3%, partially offset by an increase in volume of 1%. Price decreases were primarily attributable to the same factors discussed in the preceding paragraph. Volumes increases primarily due to higher demand within the Opteon™ Refrigerants portfolio as a result of continued stationary and automotive end-market adoption, partially offset by declines in the Freon™ Refrigerants portfolio in connection with the step downs under the AIM Act and EU F-Gas regulation. Currency was flat for the nine months ended September 30, 2024 when compared to the same period in the prior year.
Adjusted EBITDA and Adjusted EBITDA Margin
For the three months ended September 30, 2024, segment Adjusted EBITDA decreased by $21 million (or 13%) to $141 million and Adjusted EBITDA margin decreased by approximately 600 basis points to 31%, compared with segment Adjusted EBITDA of $162 million and Adjusted EBITDA margin of 37% for the same period in 2023. For the nine months ended September 30, 2024, segment Adjusted EBITDA decreased by $108 million (or 19%) to $453 million and Adjusted EBITDA margin decreased by approximately 700 basis points to 32%, compared with segment Adjusted EBITDA of $561 million and Adjusted EBITDA margin of 39% for the same period in 2023. The decreases in segment Adjusted EBITDA and Adjusted EBITDA margin for the three months ended September 30, 2024 was primarily attributable to the aforementioned decrease in price related to the Freon™ Refrigerants portfolio, increased costs to secure additional near-term quota allowances, and higher raw material costs. The decreases in segment Adjusted EBITDA and Adjusted EBITDA margin were partially offset by the aforementioned increases in volume within the OpteonTM Refrigerants portfolio as a result of continued stationary end-market adoption. For the nine months ended September 30, 2024, the decreases in Segment Adjusted EBITDA and Adjusted EBITDA margin were attributable to the aforementioned decrease in price related to the Freon™ Refrigerants portfolio, increased costs related to near-term quota allowances, lower fixed cost absorption, higher raw material costs, and decrease in volumes within the Freon™ Refrigerants portfolio, partially offset by higher demand within the Opteon™ Refrigerants portfolio as a result of continued stationary and automotive end-market adoption.
63
The Chemours Company
Titanium Technologies
The following table sets forth the net sales, Adjusted EBITDA, and Adjusted EBITDA margin amounts for our Titanium Technologies segment for the three and nine months ended September 30, 2024 and 2023.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(Dollars in millions) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Segment net sales |
|
$ |
679 |
|
|
$ |
690 |
|
|
$ |
1,940 |
|
|
$ |
2,029 |
|
Adjusted EBITDA |
|
|
85 |
|
|
|
69 |
|
|
|
235 |
|
|
|
226 |
|
Adjusted EBITDA margin |
|
|
13 |
% |
|
|
10 |
% |
|
|
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 three and nine months ended September 30, 2024, compared with the same periods in 2023.
Change in segment net sales from prior period |
|
Three Months Ended September 30, 2024 |
|
|
Nine Months Ended September 30, 2024 |
|
||
Price |
|
|
(2 |
)% |
|
|
(5 |
)% |
Volume |
|
|
1 |
% |
|
|
1 |
% |
Currency |
|
|
(1 |
)% |
|
|
— |
% |
Total change in segment net sales |
|
|
(2 |
)% |
|
|
(4 |
)% |
Segment Net Sales
Our Titanium Technologies segment’s net sales decreased by $11 million (or 2%) to $679 million for the three months ended September 30, 2024 compared with segment net sales of $690 million for the same period in 2023. The decrease in segment net sales for the three months ended September 30, 2024 was primarily attributable to a decrease in price of 2%. Volumes provided a 1% tailwind compared to the prior-year period. Unfavorable currency movements added a 1% headwind to the segment's net sales for the three months ended September 30, 2024 compared to the same period of the prior year.
Our Titanium Technologies segment’s net sales decreased by $89 million (or 4%) to $1.9 billion for the nine months ended September 30, 2024, compared with segment net sales of $2 billion for the same period in 2023. The decrease in segment net sales for the nine months ended September 30, 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 $16 million (or 23%) to $85 million and Adjusted EBITDA margin increased to 13% for three months ended September 30, 2024 compared with segment Adjusted EBITDA of $69 million and Adjusted EBITDA margin of 10% for the same period in 2023. For the nine months ended September 30, 2024, segment Adjusted EBITDA increased by $9 million (or 4%) to $235 million and Adjusted EBITDA margin increased to 12% compared with segment Adjusted EBITDA of $226 million and Adjusted EBITDA margin of 11% for the same period in 2023. The increase in segment Adjusted EBITDA during the three and nine months ended September 30, 2024 was primarily driven by the 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 $18 million and $26 million for the three and nine months ended September 30, 2024, respectively.
64
The Chemours Company
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 three and nine months ended September 30, 2024 and 2023.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(Dollars in millions) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Segment net sales |
|
$ |
348 |
|
|
$ |
343 |
|
|
$ |
985 |
|
|
$ |
1,118 |
|
Adjusted EBITDA |
|
|
39 |
|
|
|
68 |
|
|
|
113 |
|
|
|
233 |
|
Adjusted EBITDA margin |
|
|
11 |
% |
|
|
20 |
% |
|
|
11 |
% |
|
|
21 |
% |
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 three and nine months ended September 30, 2024, compared with the same periods in 2023.
Change in segment net sales from prior period |
|
Three Months Ended September 30, 2024 |
|
|
Nine Months Ended September 30, 2024 |
|
||
Price |
|
|
(7 |
)% |
|
|
(6 |
)% |
Volume |
|
|
9 |
% |
|
|
(5 |
)% |
Currency |
|
|
(1 |
)% |
|
|
(1 |
)% |
Total change in segment net sales |
|
|
1 |
% |
|
|
(12 |
)% |
Segment Net Sales
Our Advanced Performance Materials segment’s net sales increased by $5 million (or 1%) to $348 million for the three months ended September 30, 2024, compared with segment net sales of $343 million for the same period in 2023. The increase in segment net sales for the three months ended September 30, 2024 was primarily attributable to an increase in volume of 9%, partially offset by a 7% price decrease driven by softer market dynamics and product mix. Volumes increased primarily due to a higher demand within the Performance Solutions portfolio. Unfavorable currency movements added a 1% headwind to the segment's net sales for the three months ended September 30, 2024 compared to the prior year.
Our Advanced Performance Materials segment’s net sales decreased by $133 million (or 12%), to $985 million for the nine months ended September 30, 2024, compared with segment net sales of $1.1 billion for the same period in 2023. The decrease in segment net sales for the nine months ended September 30, 2024 was primarily attributable to a decrease in price of 6%, a decrease in volumes of 5% and unfavorable currency movements which added a 1% headwind to the segment's net sales. Volumes decreased primarily due to weaker demand 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
For the three months ended September 30, 2024, segment Adjusted EBITDA decreased by $29 million (or 43%) to $39 million and Adjusted EBITDA margin decreased by approximately 900 basis points to 11%, compared with segment Adjusted EBITDA of $68 million and Adjusted EBITDA margin of 20% for the same period in 2023. For the nine months ended September 30, 2024, segment Adjusted EBITDA decreased by $120 million (or 52%) to $113 million and Adjusted EBITDA margin decreased by approximately 1,000 basis points to 11%, compared with segment Adjusted EBITDA of $233 million and Adjusted EBITDA margin of 21% for the same period in 2023. The decreases in segment Adjusted EBITDA and Adjusted EBITDA margin for the three and nine months ended September 30, 2024 were primarily attributable to the aforementioned decreases in price and currency, along with lower volumes driving lower fixed cost absorption in the nine month period.
65
The Chemours Company
Corporate and Unallocated Items
In addition to our reportable segments, Chemours assigns certain costs to “Corporate expenses”, which is presented separately in the segment reconciliation table below and in “Note 25 – Segment Information” to the Interim 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 and Other costs increased by $3 million (or 6%) and $23 million (or 14%) to $57 million and $187 million for the three and nine months ended September 30, 2024, respectfully, compared with Corporate and Other costs of $54 million and $164 million for the same periods in 2023. The increase in Corporate and Other costs for the three and nine months ended September 30, 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.
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 25 – Segment Information” to the Interim Consolidated Financial Statements.
The following table sets forth our corporate and unallocated items for the three and nine months ended September 30, 2024 and 2023.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(Dollars in millions) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Corporate expenses |
|
$ |
(57 |
) |
|
$ |
(54 |
) |
|
$ |
(187 |
) |
|
$ |
(164 |
) |
Unallocated items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
(69 |
) |
|
|
(55 |
) |
|
|
(197 |
) |
|
|
(145 |
) |
Depreciation and amortization |
|
|
(78 |
) |
|
|
(76 |
) |
|
|
(223 |
) |
|
|
(233 |
) |
Non-operating pension and other post-retirement employee benefit income (cost) |
|
|
2 |
|
|
|
(1 |
) |
|
|
4 |
|
|
|
(1 |
) |
Exchange losses, net |
|
|
— |
|
|
|
(9 |
) |
|
|
(6 |
) |
|
|
(21 |
) |
Restructuring, asset-related, and other charges (Note 5 to the Interim Consolidated Financial Statements) |
|
|
(43 |
) |
|
|
(127 |
) |
|
|
(51 |
) |
|
|
(142 |
) |
Goodwill impairment charge (Note 11 to the Interim Consolidated Financial Statements) |
|
|
(56 |
) |
|
|
— |
|
|
|
(56 |
) |
|
|
— |
|
Inventory write-offs (1) |
|
|
— |
|
|
|
(36 |
) |
|
|
— |
|
|
|
(36 |
) |
Loss on extinguishment of debt |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
Gain on sales of assets and business, net (Note 3 to the Interim Consolidated Financial Statements) |
|
|
— |
|
|
|
106 |
|
|
|
3 |
|
|
|
106 |
|
Transaction costs (2) |
|
|
(3 |
) |
|
|
(7 |
) |
|
|
(15 |
) |
|
|
(7 |
) |
Qualified spend recovery (3) |
|
|
7 |
|
|
|
11 |
|
|
|
22 |
|
|
|
43 |
|
Litigation-related charges (4) |
|
|
(1 |
) |
|
|
(31 |
) |
|
|
15 |
|
|
|
(675 |
) |
Environmental charges (5) |
|
|
— |
|
|
|
(8 |
) |
|
|
— |
|
|
|
(9 |
) |
Corporate expenses and unallocated items |
|
$ |
(298 |
) |
|
$ |
(288 |
) |
|
$ |
(691 |
) |
|
$ |
(1,285 |
) |
66
The Chemours Company
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 November 2025.
At September 30, 2024, we had total unrestricted cash and cash equivalents of $596 million, of which $394 million was held by our foreign subsidiaries. The availability under our Revolving Credit Facility as of September 30, 2024 was $652 million, net of $49 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 September 30, 2024, our availability under the Revolving Credit Facility decreased compared to prior periods due to a decline in our trailing twelve-month EBITDA. At September 30, 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 in our Annual Report on Form 10-K for the year ended December 31, 2023.
As of September 30, 2024, the first significant long-term debt maturity is the €441 million ($491 million) senior unsecured notes due May 2026. It is our expectation that we will refinance this amount prior to maturity, though there can be no assurances that we will be able to complete this refinancing on attractive terms at a given point in time, or at all. 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 March 17, 2024, S&P Global affirmed our 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 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 16 – Debt” to the Interim Consolidated Financial Statements, among other actions, where appropriate and deemed to be in our commercial interest.
As disclosed in "Note 2 – Basis of Presentation" to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023, 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 nine months ended September 30, 2024, we incurred a net $771 million usage of cash in operating activities, which included accounts and notes receivable and accounts payable uses of cash of $348 million and $95 million, respectively. In the nine months ended September 30, 2023, cash provided by operating activities was $74 million, which included accounts and notes receivable and accounts payable uses of cash of $212 million and $333 million, respectively. The working capital uses of cash in the nine months ended September 30, 2024 and 2023 were largely driven by, among other things, the payment of the accounts payable delayed from the prior fourth quarters and lower collections of accounts receivable due to efforts to accelerate those collections into the prior fourth quarters that impacted the first quarters of 2024 and 2023. Refer to the "Cash Flows" section below for further details of the changes in operating cash flows in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
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The Chemours Company
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 currently anticipate that we will remain in compliance with applicable covenants under the Credit Agreement through at least November 2025.
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 quarters ended September 30, 2024 and 2023, we utilized various customer facilitated supply chain financing facilities to accelerate the collection of $40 million and $95 million, respectively, of our accounts receivable, incurring an immaterial discount amount for both periods. For the nine months ended September 30, 2024 and 2023, we accelerated the collection of approximately $168 million and $300 million, respectively, of our accounts receivable, incurring an immaterial discount amount for both periods. These actions improved our quarter end liquidity by approximately $38 million and $86 million, respectively, for the quarters ended on September 30, 2024 and 2023 based on the stated collection terms of the receivables. See “Note 8 - Accounts and Notes Receivable, Net” to the Interim Consolidated Financial Statements for further details regarding our supplier financing programs.
A substantial majority of the $394 million of unrestricted cash and cash equivalents held by our foreign subsidiaries at September 30, 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 nine months ended September 30, 2024, we received approximately $441 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, share repurchases, 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 our Annual Report on Form 10-K for the year ended December 31, 2023.
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.
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. Such obligations include principal and interest obligations on long-term debt, MOU Funding requirements, funding restructuring obligations, contractual obligations for operating and finance leases, purchase obligations, legal settlement agreements, and our expectations for capital expenditures, which except as noted below, did not significantly change from what was previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023. Our contractual and other obligations also include:
68
The Chemours Company
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 November 2025. 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 October 23, 2024, we announced our quarterly cash dividend of $0.25 per share for the fourth quarter of 2024. Under our 2022 Share Repurchase Program, as further discussed in Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds and in "Note 19 - Equity" in this Quarterly Report on Form 10-Q, 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 Program.
69
The Chemours Company
Cash Flows
The following table sets forth a summary of the net cash (used for) provided by our operating, investing, and financing activities for the nine months ended September 30, 2024 and 2023.
|
|
Nine Months Ended September 30, |
|
|||||
(Dollars in millions) |
|
2024 |
|
|
2023 |
|
||
Cash (used for) provided by operating activities |
|
$ |
(771 |
) |
|
$ |
74 |
|
Cash used for investing activities |
|
|
(246 |
) |
|
|
(99 |
) |
Cash (used for) provided by financing activities |
|
|
(121 |
) |
|
|
177 |
|
Operating Activities
We used $771 million in cash flows for our operating activities during the nine months ended September 30, 2024. Comparatively, we generated $74 million in cash flows for our operating activities during the nine months ended September 30, 2023. The increase in our operating cash outflows 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, along with the unwinding of year end net working capital actions (discussed further in the "Liquidity and Capital Resources" section above).
Investing Activities
We used $246 million and $99 million in cash flows for our investing activities during the nine months ended September 30, 2024 and 2023, respectively which were primarily attributable to purchases of property, plant, and equipment amounting to $251 million and $235 million, respectively. Cash outflows from investing activities during the nine months ended September 30, 2023 were partially offset by $138 million of cash proceeds related to the Glycolic Acid Transaction.
Financing Activities
We used $121 million in cash flows for our financing activities during the nine months ended September 30, 2024 which were primarily attributable to our capital allocation activities, resulting in $112 million of cash dividends and $13 million of net payments in connection with one of our supplier financing programs.
We generated $177 million in cash flows for our financing activities during the nine months ended September 30, 2023 which were primarily attributable to $367 million of net proceeds received in connection with the issuance of the New Term Loans. 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 $112 million of cash dividends.
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The Chemours Company
Current Assets
The following table sets forth the components of our current assets at September 30, 2024 and December 31, 2023.
(Dollars in millions) |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Cash and cash equivalents |
|
$ |
596 |
|
|
$ |
1,203 |
|
Restricted cash and restricted cash equivalents |
|
|
20 |
|
|
|
604 |
|
Accounts and notes receivable, net |
|
|
951 |
|
|
|
610 |
|
Inventories |
|
|
1,438 |
|
|
|
1,352 |
|
Prepaid expenses and other |
|
|
75 |
|
|
|
66 |
|
Total current assets |
|
$ |
3,080 |
|
|
$ |
3,835 |
|
Restricted cash and restricted cash equivalents decreased by $584 million (or 97%) to $20 million at September 30, 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 the $592 million of 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. This matter is further discussed in "Note 18 – Commitments and Contingent Liabilities" to the Interim Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
Our accounts and notes receivable, net increased by $341 million (or 56%) to $951 million at September 30, 2024, compared with accounts and notes receivable, net of $610 million at December 31, 2023. This increase in our accounts and notes receivable, net at September 30, 2024 was primarily attributable to higher sales in the third quarter of 2024 driving higher receivables when compared to the fourth quarter of 2023, along with 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. The increase in our accounts receivable, net was partially offset by increased utilization of our Securitization Facility.
Our inventories increased by $86 million (or 6%) to $1.4 billion at September 30, 2024, compared with inventories of $1.4 billion at December 31, 2023. The increase in our inventories at September 30, 2024 was primarily attributable to higher inventories within our Thermal & Specialized Solutions business in advance of plant maintenance activity in the fourth quarter of 2024, along with build-up of our finished product inventories within our Advanced Performance Materials business following maintenance activity in the fourth quarter of 2023.
Our prepaid expenses and other increased by $9 million (or 14%) to $75 million at September 30, 2024, compared with prepaid expenses and other of $66 million at December 31, 2023. The increase in our prepaid expenses and other was primarily due to increases in our prepaid insurance premiums.
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The Chemours Company
Current Liabilities
The following table sets forth the components of our current liabilities at September 30, 2024 and December 31, 2023.
(Dollars in millions) |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Accounts payable |
|
$ |
1,069 |
|
|
$ |
1,159 |
|
Compensation and other employee-related costs |
|
|
89 |
|
|
|
89 |
|
Short-term and current maturities of long-term debt |
|
|
53 |
|
|
|
51 |
|
Current environmental remediation |
|
|
119 |
|
|
|
129 |
|
Other accrued liabilities |
|
|
447 |
|
|
|
1,058 |
|
Total current liabilities |
|
$ |
1,777 |
|
|
$ |
2,486 |
|
Our accounts payable decreased by $90 million (or 8%) to $1.1 billion at September 30, 2024 compared with accounts payable of $1.2 billion at December 31, 2023. The decrease in our accounts payable at September 30, 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.
Our compensation and other employee-related costs remained largely unchanged at $89 million at September 30, 2024 and December 31, 2023, respectively.
Our current environmental remediation decreased by $10 million (or 8%) to $119 million at September 30, 2024 compared with current environmental remediation of $129 million at December 31, 2023. The decrease in our current environmental remediation 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 18 – Commitments and Contingent Liabilities" to the Interim Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further information.
Our other accrued liabilities decreased by $611 million (or 58%) to $447 million at September 30, 2024 compared with other accrued liabilities of $1.1 billion at December 31, 2023. The decrease in our other accrued liabilities 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 18 - Commitments and Contingent Liabilities" to the Interim Consolidated Financial Statements in this Quarterly Report on Form 10-Q. The decrease in our other accrued liabilities was partially offset by an increase in our accrued interest due to timing of payment under our senior unsecured notes.
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The Chemours Company
Credit Facilities and Notes
Refer to “Note 16 – Debt” to the Interim Consolidated Financial Statements in this Quarterly Report on Form 10-Q and “Note 20 – Debt” to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023 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 4.000% senior unsecured notes due May 2026, which are denominated in euros and the 5.375% senior unsecured notes due May 2027 (collectively, 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, which are further discussed in “Note 20 – Debt” to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023. 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 subsidiaries included in Exhibit 22 to this Quarterly Report on Form 10-Q. 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) |
|
Nine Months Ended September 30, 2024 |
|
|
Net sales |
|
$ |
3,051 |
|
Gross profit |
|
|
428 |
|
Income before income taxes |
|
|
43 |
|
Net income |
|
|
27 |
|
Net income attributable to Chemours |
|
|
27 |
|
(Dollars in millions) |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets (1,2,3) |
|
$ |
1,552 |
|
|
$ |
2,013 |
|
Long-term assets (4) |
|
|
3,178 |
|
|
|
3,302 |
|
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
||
Current liabilities (2) |
|
$ |
1,567 |
|
|
$ |
2,121 |
|
Long-term liabilities |
|
|
4,927 |
|
|
|
4,931 |
|
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.
73
The Chemours Company
Supplier Financing
We maintain supply chain finance programs with several financial institutions. The available capacity under these programs can vary based on the number of investors and/or financial institutions participating in these programs at any point in time. See "Note 14 – Accounts Payable" to the Interim Consolidated Financial Statements for further details regarding supplier financing programs.
Off-Balance Sheet Arrangements
There have been no material changes to the off-balance sheet arrangement described in our MD&A and "Note 20 – Debt" to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023. 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.
Critical Accounting Policies and Estimates
Our critical accounting policies and estimates, as described in our MD&A and “Note 3 – Summary of Significant Accounting Policies” to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023, remain materially consistent. However, due to the ongoing financial and economic conditions impacting the Company, we re-evaluated certain of its estimates, most notably its estimates and assumptions with regards to the fair value of its Advanced Performance Materials reporting unit and related asset group during the third quarter of 2024.
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.
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. In the third quarter of 2024, we recorded non-cash asset-related charges of $25 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. Refer to “Note 5 – Restructuring, Asset-related, and Other Charges” to the Interim Consolidated Financial Statements for further details related to these charges. For the three and nine months ended September 30, 2023, we recorded a pre-tax impairment charge of $78 million related to the shutdown of our TiO2 manufacturing facility in Kuan Yin, Taiwan.
74
The Chemours Company
During the third quarter of 2024, the Company 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-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.
Notwithstanding the results of the Company's 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 fair value of our reporting units is 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 incorporate 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 future cash flows of the reporting unit. Discount rate and market multiple assumptions are determined based on relevant peer companies in the chemicals sector.
As described above, 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 was recorded within “Goodwill impairment charge” on the Interim Consolidated Statements of Operations for the three and nine months ended September 30, 2024. After this impairment charge, as of September 30, 2024, goodwill for the Advanced Performance Materials reporting unit was $0 million.
As of both September 30, 2024 and December 31, 2023, goodwill for the Thermal & Specialized Solutions and Titanium Technologies reporting units was $33 million and $13 million respectively. The Company has not identified a triggering event for either of these reporting units since the last annual goodwill impairment assessment performed as of October 1, 2023, and therefore no interim impairment assessment has been performed for either reporting unit. As of October 1, 2023, for our Thermal & Specialized Solutions reporting unit, a qualitative assessment was performed, 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, for our Titanium Technologies reporting unit, the estimated fair value was 67% higher than the carrying value of the reporting unit.
Recent Accounting Pronouncements
See “Note 2 – Recent Accounting Pronouncements” to the Interim Consolidated Financial Statements for a discussion about recent accounting pronouncements.
75
The Chemours Company
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 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 our separation from EID on July 1, 2015 (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. Our consolidated balance sheets at September 30, 2024 and December 31, 2023 include environmental remediation liabilities of $567 million and $590 million, respectively, relating to these matters, which, as discussed in further detail below, include $356 million and $383 million, respectively, for 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 $710 million above the amount accrued at September 30, 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.
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.
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Significant Environmental Remediation Sites
While there are many remediation sites that contribute to our total accrued environmental remediation liabilities at September 30, 2024 and December 31, 2023, the following table sets forth the liabilities of the five sites that are deemed the most significant, during the periods presented, together with the aggregate liabilities for all other sites.
(Dollars in millions) |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Chambers Works, Deepwater, New Jersey |
|
$ |
31 |
|
|
$ |
30 |
|
Fayetteville Works, Fayetteville, North Carolina |
|
|
356 |
|
|
|
383 |
|
Pompton Lakes, New Jersey |
|
|
41 |
|
|
|
41 |
|
USS Lead, East Chicago, Indiana |
|
|
— |
|
|
|
12 |
|
Washington Works, West Virginia |
|
|
26 |
|
|
|
22 |
|
All other sites |
|
|
113 |
|
|
|
102 |
|
Total environmental remediation |
|
$ |
567 |
|
|
$ |
590 |
|
The five sites listed above represent 80% and 83% of our total accrued environmental remediation liabilities at September 30, 2024 and December 31, 2023, respectively. For these five sites, we expect to spend, in the aggregate, $160 million over the next three years. For all other sites, we expect to spend $71 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.
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.
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, NafionTM membranes, and the related polymerization aid manufacturing units. A polyvinyl fluoride resin manufacturing unit remained with EID.
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The Chemours Company
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 (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 18 – Commitments and Contingent Liabilities” to the Interim Consolidated Financial Statements, we, along with NC DEQ and Cape Fear River Watch (“CFRW”), a non-profit organization, have filed a final Consent Order (“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.
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 18 – Commitments and Contingent Liabilities” to the Interim 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.
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The Chemours Company
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.
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 3013(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 $26 million and $22 million as of September 30, 2024 and December 31, 2023, respectively.
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The Chemours Company
Chemours Washington Works discharges, through outfalls at the site, wastewater and stormwater pursuant to National Pollutant Discharge Elimination System ("NPDES") permits 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 NPDES permit 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 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 consistent with the Administrative Order on Consent which is under EPA review. We expect to make future capital and other operating related expenditures at Washington Works in connection with this Consent Order. 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.
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 $16 million as of September 30, 2024 and December 31, 2023, respectively, and were included in Accrued Litigation liability (see additional discussions under "Leach Settlement" in Note 18 – Commitments and Contingent Liabilities” to the Interim Consolidated Financial Statements.)
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 18 – Commitments and Contingent Liabilities” to the Interim Consolidated Financial Statements.
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The Chemours Company
Climate Change
Our commitment to sustainability cannot be separated from our growth strategy or our vision and as a result, we aligned our sustainability focus and actions to the four key strategic pillars that support Chemours vision: Innovation and Sustainable Solutions, Environmental Leadership, Community Impact, and Greatest Place to Work for All.
The Environmental Leadership pillar underlines our commitment to deliver essential solutions responsibly, with a focus on the responsible treatment of climate, water, and waste. Our Environmental Leadership 2030 goals are comprised of the following:
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.
As part of the Innovation and Sustainable Solutions pillar, we are reimagining our portfolio to offer solutions that are also safer, healthier, and more resilient for a world that demands more. 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 consumer 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 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 at least 99% of 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.
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, and enabling vehicle electrification and the shift to hydrogen-powered vehicles. 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.
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, circularity, resource efficiency, and health and wellness. Going forward, our product portfolio will continue to be centered on the evolving needs of our customers.
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The Chemours Company
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 additional 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.
PFOA
See our discussion under the heading “PFOA” in “Note 18 – Commitments and Contingent Liabilities” to the Interim 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 18 – Commitments and Contingent Liabilities” to the Interim 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 November 2024 and 2025. 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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The Chemours Company
Item 3. 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 22 – Financial Instruments” to the Interim 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 September 30, 2024, we had 9 foreign currency forward contracts outstanding with an aggregate gross notional U.S. dollar equivalent of $153 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 $1 million and a net loss of $5 million for the three and nine months ended September 30, 2024, respectively, and net losses of $1 million and $8 million for the three and nine months ended September 30, 2023, 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 September 30, 2024, we had 182 foreign currency forward contracts outstanding under our cash flow hedge program with an aggregate notional U.S. dollar equivalent of $214 million, the fair value of which amounted to negative $3 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 loss of $6 million and a pre-tax gain of $1 million for the three and nine months ended September 30, 2024, respectively, and pre-tax gains of $7 million and $5 million for the three and nine months ended September 30, 2023, respectively, within accumulated other comprehensive loss. For the three and nine months ended September 30, 2024, $1 million and $2 million of gain were reclassified to the cost of goods sold from accumulated other comprehensive loss, respectively. For the three and nine months ended September 30, 2023, $1 million of loss and $5 million of gain were 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 pre-tax losses of $38 million and $11 million for the three and nine months ended September 30, 2024, respectively, and pre-tax gains of $35 million and $13 million for the three and nine months ended September 30, 2023, respectively, on our net investment hedge within accumulated other comprehensive loss.
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The Chemours Company
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 September 30, 2024 and 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 $8 million and negative $7 million, respectively. We recognized pre-tax losses of $6 million and less than $1 million for the three and nine months ended September 30, 2024, respectively, within accumulated other comprehensive loss. No pre-tax gains or losses were recognized within accumulated other comprehensive loss during the three and nine months ended September 30, 2023. For the three and nine months ended September 30, 2024, less than $1 million and $1 million of gain was reclassified to interest expense, net from accumulated other comprehensive loss, respectively. For the three and nine months ended September 30, 2023, $0 million and $4 million of gain was reclassified to interest expense, net from accumulated other comprehensive loss, respectively.
Item 4. CONTROLS AND PROCEDURES |
Disclosure Controls and Procedures
As previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, we determined that certain material weaknesses in our internal control over financial reporting existed as of December 31, 2023. These material weaknesses and remediation status as of September 30, 2024 are described below.
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.
As of September 30, 2024, our CEO and CFO, together with management, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. Based on that evaluation, due to the material weaknesses in internal control over financial reporting described below, the CEO and CFO have concluded that these disclosure controls and procedures were not effective as of September 30, 2024.
Notwithstanding the material weaknesses, our CEO and CFO have concluded that the Company’s unaudited interim consolidated financial statements included in this Quarterly Report are fairly stated in all material respects in accordance with U.S. generally accepted accounting principles for each of the periods presented.
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The Chemours Company
Material Weaknesses in Internal Control over Financial Reporting
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
The following material weaknesses had been identified as of December 31, 2023:
We did not design and maintain an effective control environment as senior management failed to set an appropriate tone at the top. 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.
These material weaknesses did not result in any material misstatements of the Company’s financial statements or disclosures but did result in immaterial revisions to our March 31, 2023, June 30, 2023 and September 30, 2023 financial statements and a revision to the Company’s Balance Sheet as of December 31, 2022 and the Company’s Statement of Cash Flows for each of the years ended December 31, 2022 and 2021. Additionally, the material weaknesses described above could lead to a misstatement of substantially all account balances or disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected.
Remediation of 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 have established a Project Management Office (“PMO”) to monitor progress towards remediation and have 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. This workplan included the following:
Ethics and Compliance Reporting
With respect to maintaining 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, the Company has reassessed and redesigned certain elements of its processes and procedures. The Company retained the services of an external firm to assist the Company in its efforts in the design, implementation, and interim supervision of the ethics and compliance aspects of the remediation program, as well as supporting the day-to day operations of the Ethics & Compliance function, as a result of the retirement of the Company’s former Chief Ethics & Compliance Officer. The Company hired its new Chief Compliance and Enterprise Risk Management Officer effective September 16, 2024.
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The Company has modified its policies, processes, and procedures with respect to managing, investigating, and closing ethics complaints, including establishing processes for the escalation of matters involving Section 16 Officers to the General Counsel and Audit Committee Chair. Additionally, if a complaint implicates the General Counsel, the Chief Audit Executive and the Chair of the Audit Committee will be notified. The Company’s Investigations Policy outlines the key principles to be applied including objectivity, thoroughness, professionalism, confidentiality and timeliness, and the accompanying Ethics Hotline Investigations Procedures outlines expectations for each step of the investigation process including roles and responsibilities, case intake, investigation planning and execution, and final resolution, documentation, and communication to relevant stakeholders. Additionally, the Company has provided training on the Investigations Policy and Ethics Hotline Investigations Procedures to those who conduct investigations.
The Company published both internally and externally a new Speak Up Policy, which reinforced every employee’s responsibility to raise concerns and outlines the numerous avenues available to report potential issues. Additionally, the Company provided mandatory training on the new Speak Up Policy to all employees worldwide.
Through these efforts, the Company implemented its plan to remediate the previously identified material weakness related to the evaluation and escalation of reports made through the Chemours Ethics Hotline.
Vendor Master Files
With respect to designing and maintaining effective controls related to preventing or detecting unauthorized changes to our vendor master files, the Company has completed its enhancements of our policies, procedures, workflows, and training as it relates to the controls over verification of vendor master file changes with vendor contacts to prevent unauthorized cash disbursements. Specifically, the Company has enhanced its controls and workflow as it relates to the verification of vendor master file bank account changes with vendor contacts.
Through the efforts described above, the Company was able to implement its plan to remediate the previously identified material weakness related to its vendor master file bank account changes.
As of September 30, 2024, the remediation measures described above have been implemented and we have had sufficient time to test the operating effectiveness and remediate the two material weaknesses noted above and, as such, the material weaknesses identified in the Company’s internal control over financial reporting related to Ethics and Compliance Reporting and Vendor Master files have been remediated.
Status of Remediation Efforts for the Unremediated Material Weaknesses
With respect to the material weaknesses related to the failure to set an appropriate tone at the top and failure to design and maintain effective controls related to the information and communication component of the COSO Framework, the Company has made the following enhancements to our internal control over financial reporting:
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In addition to the above completed actions, we are in the process of designing and implementing the following enhancements to our internal control over financial reporting:
Changes to internal control over financial reporting require operation for a sufficient period of time in order for management to evaluate and test the operating effectiveness of the internal controls over financial reporting. Management will continue to monitor and evaluate the effectiveness of these changes for a sufficient period of time prior to concluding that these controls are designed and operating effectively, and the material weaknesses can be considered remediated. The Company’s internal audit function is assessing and implementing procedures to monitor these updated processes.
As we continue to evaluate and work to improve our internal control over financial reporting and disclosure controls and procedures, we may decide to take additional measures to address control deficiencies or modify the remediation actions described above. We anticipate that the foregoing efforts and enhanced internal control over financial reporting, when implemented and tested for a sufficient period of time, will remediate the material weaknesses as described above.
Changes in Internal Control over Financial Reporting
Other than as described above, there have been no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS |
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. Information regarding certain of these matters is set forth below and in “Note 18 – Commitments and Contingent Liabilities” to the Interim Consolidated Financial Statements. In the foregoing, we have excluded matters that we expect to result in sanctions of less than $1 million, if any.
Litigation
PFOA and PFAS: Environmental and Litigation Proceedings
For purposes of this report, the term “PFOA” means, collectively, perfluorooctanoic acid and its salts, including the ammonium salt, and does not distinguish between the two forms. The term “PFAS” means per- and polyfluoroalkyl substances. Information related to these, and other litigation matters, is included in “Note 18 – Commitments and Contingent Liabilities” to the Interim Consolidated Financial Statements.
Environmental Proceedings
Dordrecht, Netherlands
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, 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. The Company is reviewing the assertion 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 is in its early stages with significant issues to be evaluated.
Fayetteville, North Carolina
In February 2019, we received a Notice of Violation (“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, we responded to EPA in March 2019. We are in discussion with EPA regarding PFAS-related allegations at our sites, including the February 2019 NOV, and at this time management believes that a loss is possible but not estimable. We have also received NOVs from the NC DEQ following entry of the CO, including in April 2020, January 2021, and August 2021, alleging violations relating to Fayetteville. We have responded to these matters and in April 2022 entered into a settlement agreement with NC DEQ with respect to the August 2021 NOV. We do not believe that a loss is probable related to the matters in the other NOVs. Further discussion related to these matters is included under the heading “Fayetteville Works, Fayetteville, North Carolina” in “Note 18 – Commitments and Contingent Liabilities” to the Interim Consolidated Financial Statements.
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Item 1A. RISK FACTORS |
Except for the updated risk factors set forth below relating to environmental matters, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.
If our long-lived assets, including goodwill, become impaired, we may be required to record a significant charge 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, 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 year end, 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 well as the related asset group. As a result of the interim 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 or conditions may not result in an impairment to any of our other reporting units' goodwill or to any of our long-lived assets.
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:
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. 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.
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The Chemours Company
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. We also could incur significant additional costs as a result of additional contamination that is discovered or remedial obligations imposed in the future.
As discussed in “Note 22 – Commitments and Contingent Liabilities” to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023, 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.
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 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 November 2024 and 2025. 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.
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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 for PFAS manufacturers as announced in the PFAS Strategic Roadmap is now expected to be proposed in the fourth quarter of 2024.
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. 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. 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.
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 Titanium Dioxide 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.
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我們已經制定了與業務實體方面相關的準備計劃，並制定了在發生不可預見事件或惡劣天氣時所需的詳細行動。我們還對我們的設施進行設計，以更好地抵禦這些事件，並持有保險，以防止物理損壞和相關業務中斷造成的損失。這些措施歷來都已實施，此類活動和相關成本是由正常的運營準備驅動的。然而，無法保證此類措施對我們可能經歷的特定事件有效。
第二項股權證券的未經登記的銷售和收益的使用 |
發行人購買股票證券
2022年股票回購計劃
2022年4月27日，我們的董事會批准了一項股份回購計劃，授權購買我們已發行和發行普通股的股份，總金額不超過75000萬美元，加上與我們的股份回購活動相關的任何相關費用或成本（「2022年股份回購計劃」）。根據2022年股票回購計劃，我們的普通股可以根據管理層的酌情決定以及一般業務和市場狀況不時在公開市場購買。我們的2022年股票回購計劃於2022年4月27日生效，計劃持續至2025年12月31日到期或完成回購至批准金額（以較早者爲準）。該計劃可能隨時暫停或停止。
截至2024年9月30日，我們根據2022年股份回購計劃累計購買了10，342，722股已發行和發行普通股，價值30900萬美元，平均股價爲每股29.90美元。截至2024年9月30日止三個月，2022年股份回購計劃下沒有進行股份回購。截至2024年9月30日，根據2022年股份回購計劃，我們仍可購買的普通股總額爲44100萬美元，但我們預計不會根據2022年股份回購計劃進行額外回購。
項目3.高級證券違約 |
沒有。
項目4.礦山安全披露 |
有關我們位於佛羅里達州斯塔克、佐治亞州傑蘇普、佐治亞州納洪塔和佐治亞州奧夫曼的露天礦山和/或油砂分離設施的礦山安全和其他監管行動的信息包含在 證據95 本季度報告的表格10-Q。
項目5.其他信息 |
該公司的董事或高級管理人員
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項目6.展品 |
展品 數 |
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描述 |
3.1 |
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公司修訂和重新註冊的公司證書(通過參考2015年7月1日提交給美國證券交易委員會的公司當前報告8-k表的附件3.1併入)。 |
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31.1 |
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31.2 |
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32.1 |
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第1350條公司首席執行官的證明。本附件中包含的信息不應被視爲已提交給證券交易委員會，也不應被視爲註冊人根據修訂後的1933年證券法提交的任何註冊聲明中的參考內容。
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32.2 |
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第1350條公司首席財務官的證明。本附件中包含的信息不應被視爲已提交給證券交易委員會，也不應被視爲註冊人根據修訂後的1933年證券法提交的任何註冊聲明中的參考內容。 |
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95 |
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101 |
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本公司截至2024年9月30日的Form 10-Q季度報告中的以下財務報表已以內聯XBRL格式編制：(I)中期綜合經營報表(未經審計)；(Ii)中期綜合全面收益表(未經審計)；(Iii)中期綜合資產負債表(未經審計)；(Iv)股東權益中期綜合報表(未經審計)；(V)中期現金流量表(未經審計)；以及(Vi)中期綜合財務報表附註(未經審計)。這些財務報表已被標記爲文本塊，幷包括詳細標記。 |
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104 |
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公司截至2024年9月30日的Form 10-Q季度報告的封面，該報告已採用內聯XBRL格式幷包含在附件101中。 |
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《化學公司》
簽名 |
根據1934年《證券交易法》的要求，註冊人已正式促使本報告由正式授權的簽署人代表其簽署。
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The Chemours Company |
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(註冊人) |
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日期： |
2024年11月4日 |
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作者： |
/s/ Shane Hostetter |
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肖恩·霍斯特特 |
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首席財務官高級副總裁 |
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(As正式授權官員兼首席財務官和首席會計官） |
94