Chemours Co

Previous wording

We are a different kind of chemistry company, driven by our vision to create a better world through the power of our chemistry. 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, renowned for 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)Customer Centered – driving customer growth, and our own, by understanding our customers’ needs and building long-lasting relationships with them; (ii)Refreshing Simplicity – cutting complexity by investing in what matters, and getting results faster; (iii)Collective Entrepreneurship – empowering our employees to act like they own our business, while embracing the power of inclusion and teamwork; (iv)Safety Obsession – living our steadfast belief that a safe workplace is a profitable workplace; and, (v)Unshakable Integrity – doing what’s right for our customers, colleagues, and communities – always.

Current wording

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.

Previous wording

Our core values, in unison with our company purpose and 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. As a result, in 2023 we aligned our sustainability focus and actions to the four key strategic pillars that support our Chemours vision: Innovation and Sustainable Solutions, Environmental Leadership, Community Impact, and Greatest Place to Work for All. The four pillars support an effort to achieve, among other goals, increased sustainability of our products, addressing our carbon emissions, and increased diversity and inclusion in our global workforce.

Current wording

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.

Previous wording

The following table sets forth our results of operations for the three months ended March 31, 2024 and 2023.

Current wording

The following table sets forth our results of operations for the three and six months ended June 30, 2024 and 2023.

Previous wording

The following table sets forth the impacts of price, volume, currency, and portfolio changes on our net sales for the three months ended March 31, 2024, compared with the same period in 2023.

Current wording

The following table sets forth the impacts of price, volume, currency, and portfolio changes on our net sales for the three and six months ended June 30, 2024, compared with the same periods in 2023.

Previous wording

Our net sales decreased by $186 million (or 12%) to $1.4 billion for the three months ended March 31, 2024, compared with net sales of $1.5 billion for the same period in 2023. The decrease in our net sales for the three months ended March 31, 2024 was primarily attributable to a decrease in volume of 6% and a decrease in price of 5%. Volume decreases were attributed to our Thermal and Specialized Solutions and Advanced Performance Materials segments. Price decreased across all our reportable segments. Unfavorable currency movements in our Advanced Performance Materials segment added a headwind of 1% to our net sales.

Current wording

Our net sales decreased by $105 million (or 6%) to $1.5 billion for the three months ended June 30, 2024, compared with net sales of $1.6 billion for the same period in 2023. The decrease in our net sales for the three months ended June 30, 2024 was primarily attributable to a decrease in price of 6%, and partially offset by an increase in volume of 1%. Price decreases were attributed to all of our business segments, primarily related to our Titanium Technologies and Advanced Performance Materials segments. Volume increases primarily related to both the Titanium Technologies and Thermal & Specialized Solutions segments. Unfavorable portfolio movements in our Other Segment added a headwind of 1% to our net sales. Currency was flat for the three months ended June 30, 2024 when compared to the same period in the prior year.

Previous wording

Our cost of goods sold (“COGS”) decreased by $104 million (or 9%) to $1.1 billion for the three months ended March 31, 2024, compared with COGS of $1.2 billion for the same period in 2023. The decrease in our COGS for the three months ended March 31, 2024 was primarily attributable to lower sales volumes and lower raw material costs.

Current wording

Our cost of goods sold (“COGS”) decreased by $1 million (or less than 1%) and $107 million (or 4%) to $1.2 billion and $2.3 billion for three and six months ended June 30, 2024, respectively, compared with COGS of $1.2 billion and $2.4 billion for the same periods in 2023. Our COGS for the three months ended June 30, 2024 was relatively flat as higher sales volumes were largely offset by lower raw materials costs. The decrease in our COGS for the six months ended June 30, 2024 was driven by lower sales volumes and lower raw materials costs.

Previous wording

Our selling, general, and administrative (“SG&A”) expense increased by $18 million (or 15%) to $142 million for the three months ended March 31, 2024, compared with SG&A expense of $124 million for the same period in 2023. The increase in our SG&A expense for the three months ended March 31, 2024 was primarily attributable to costs incurred related to the Audit Committee internal review process and third-party costs related to the Titanium Technologies Transformation Plan, partially offset by lower performance-based compensation expenses.

Current wording

Our selling, general, and administrative (“SG&A”) expense decreased by $640 million (or 82%) and $622 million (or 69%) to $139 million and $281 million for the three and six months ended June 30, 2024, respectively, compared with SG&A expense of $779 million and $903 million for the same periods in 2023. The decrease in our SG&A expense for the three and six months ended June 30, 2024 was primarily attributable to the litigation-related charges of $592 million recorded in the second quarter of 2023 related primarily to the U.S. public water system settlement agreement, along with lower performance-based compensation expenses in 2024. The decrease in our SG&A expense for the three and six months ended June 30, 2024 was partially offset by $11 million and $23 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.

Previous wording

Our research and development (“R&D”) expense increased by $2 million (or 8%) to $28 million for the three months ended March 31, 2024 compared with R&D expense of $26 million for the same period in 2023. The increase in our R&D expense for the three months ended March 31, 2024 was primarily attributable to higher investment in immersion cooling and next generation refrigerants in our Thermal and Specialized Solutions Segment.

Current wording

Our research and development (“R&D”) expense decreased by $2 million (or 7%) and $1 million (or 2%) to $26 million and $53 million for the three and six months ended June 30, 2024, respectively, compared with R&D expense of $28 million and $54 million for the same periods in 2023. The decrease in our R&D expense for the three and six months ended June 30, 2024 was primarily driven by transformation initiatives within our Titanium Technologies business.

Previous wording

Our restructuring, asset-related, and other charges decreased by $12 million (or 75%) to $4 million for the three months ended March 31, 2024, compared with restructuring, asset-related, and other charges of $16 million for the same period in 2023. Our restructuring, asset-related, and other charges for the three months ended March 31, 2024 were primarily attributable to $4 million of decommissioning and other charges related to the Titanium Technologies Transformation Plan. Our restructuring, asset-related, and other charges for the three months ended March 31, 2023 were primarily attributable to charges of $16 million resulting from our decision to abandon implementation of a new enterprise resource planning ("ERP") software platform.

Current wording

Our restructuring, asset-related, and other charges increased by $4 million (or over 100%) and decreased by $8 million (or 53%) to $3 million and $7 million for the three and six months ended June 30, 2024, respectively, compared with restructuring, asset-related, and other charges of $(1) million and $15 million for the same periods in 2023. Our restructuring, asset-related, and other charges for the three and six months ended June 30, 2024 were primarily attributable to $4 million and $9 million, respectively, of decommissioning and other charges related to the Titanium Technologies Transformation Plan. Our restructuring, asset-related, and other charges for the three and six months ended June 30, 2023 were primarily attributable to charges of $16 million resulting from our decision to abandon implementation of a new enterprise resource planning ("ERP") software platform.

Previous wording

Our equity in earnings of affiliates remained largely unchanged at $13 million for the three months ended March 31, 2024, compared with equity in earnings of affiliates of $12 million for the same period in 2023.

Current wording

Our equity in earnings of affiliates decreased by $2 million (or 15%) and $2 million (or 8%) to $11 million and $23 million for the three and six months ended June 30, 2024, respectively, compared with equity in earnings of affiliates of $13 million and $25 million for the same periods in 2023. The decrease in our equity in earnings of affiliates for the three and six months ended June 30, 2024 was primarily attributable to lower demand in the region where our investees operate.

Previous wording

Our interest expense, net increased by $21 million (or 50%) to $63 million for the three months ended March 31, 2024, compared with interest expense, net of $42 million for the same period 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.

Current wording

Our interest expense, net increased by $18 million (or 38%) and $38 million (or 42%) to $66 million and $128 million for the three and six months ended June 30, 2024, respectively, compared with interest expense, net of $48 million and $90 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, partially offset by higher interest income.

Previous wording

Our other income, net increased by $4 million (or over 100%) to other income, net of $5 million for the three months ended March 31, 2024, compared with other income, net of $1 million for the same period in 2023. The increase in our other income was primarily attributable to the gain on sale of assets related to our previously owned facility in Gomez Palacio, Durango, Mexico and favorable changes in net exchange gains and losses.

Current wording

Our other expense, net decreased by $1 million (or 50%) and our other income increased by $3 million (or over 100%) to other expense, net of $1 million and other income, net of $2 million for the three and six months ended June 30, 2024, respectively, compared with other expense, net of $2 million and $1 million for the same periods in 2023. The decrease in our other expense for the three months ended June 30, 2024 was primarily attributable to favorable changes in non-operating pension and other post-retirement employee benefit income. The increase in our other income for the six months ended June 30, 2024 was primarily attributable to the gain on sale of assets related to our previously owned facility in Gomez Palacio, Durango, Mexico and favorable changes in net exchange gains and losses.

Previous wording

We had a provision for income taxes of $15 million and $28 million for the three months ended March 31, 2024 and 2023, respectively, which represented effective tax rates of 22% and 16%, respectively. The $13 million decrease in our provision for income taxes for the three months ended March 31, 2024 was attributable to decreased profitability and changes to our geographical mix of earnings. We recorded 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. The change in the effective tax rate for the three months ended March 31, 2024 from the three months ended March 31, 2023 was due to an increase in the US taxes on earnings of our non-US subsidiaries and the impact of US base-erosion payments.

Current wording

We had a provision for income taxes of $12 million and a benefit from income taxes of $57 million for the three months ended June 30, 2024 and 2023, respectively, which represented effective tax rates of 15% and 13%, respectively. The $69 million increase in our provision for income taxes for the three months ended June 30, 2024 was primarily attributable to a one-time tax benefit of $88 million associated with the Settlement Agreement in the prior year. After excluding this one-time benefit, our provision for income taxes for the three months ended June 30, 2024 decreased over the prior year due to a decline in profitability and changes to our geographical mix of earnings. 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.

Previous wording

A reconciliation of Segment Adjusted EBITDA to the Company's consolidated income before income taxes for the three months ended March 31, 2024 and 2023 is included in “Note 23 – Segment Information” to the Interim Consolidated Financial Statements.

Current wording

A reconciliation of Segment Adjusted EBITDA to the Company's consolidated income before income taxes for the three and six months ended June 30, 2024 and 2023 is included in “Note 23 – Segment Information” to the Interim Consolidated Financial Statements.

Previous wording

The following table sets forth the net sales, Adjusted EBITDA, and Adjusted EBITDA margin amounts for our Titanium Technologies segment for the three months ended March 31, 2024 and 2023.

Current wording

The following table sets forth the net sales, Adjusted EBITDA, and Adjusted EBITDA margin amounts for our Titanium Technologies segment for the three and six months ended June 30, 2024 and 2023.

Previous wording

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 months ended March 31, 2024, compared with the same period in 2023.

Current wording

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 six months ended June 30, 2024, compared with the same periods in 2023.

Previous wording

The following table sets forth the net sales, Adjusted EBITDA, and Adjusted EBITDA margin amounts for our Thermal & Specialized Solutions segment for the three months ended March 31, 2024 and 2023.

Current wording

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 six months ended June 30, 2024 and 2023.

Previous wording

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 months ended March 31, 2024, compared with the same period in 2023.

Current wording

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 six months ended June 30, 2024, compared with the same periods in 2023.

Previous wording

The following table sets forth the net sales, Adjusted EBITDA, and Adjusted EBITDA margin amounts for our Advanced Performance Materials segment for the three months ended March 31, 2024 and 2023.

Current wording

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 six months ended June 30, 2024 and 2023.

Previous wording

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 months ended March 31, 2024, compared with the same period in 2023.

Current wording

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 six months ended June 30, 2024, compared with the same periods in 2023.

Previous wording

Our Advanced Performance Materials segment’s net sales decreased by $89 million (or 23%) to $299 million for the three months ended March 31, 2024, compared with segment net sales of $388 million for the same period in 2023. The decrease in segment net sales for the three months ended March 31, 2024 was primarily attributable to a decrease in volume of 18% and price of 5%. Volumes decreased primarily due to weaker demand inmore economically sensitive and non-strategic end markets, and the tail impact of an extended maintenance outage from the fourth quarter of 2023 that is now resolved. Prices decreased primarily due to mix and softer market dynamics. Currency was flat for the three months ended March 31, 2024 when compared to the same period in the prior year.

Current wording

Our Advanced Performance Materials segment’s net sales decreased by $48 million (or 12%) and $138 million (or 18%) to $339 million and $637 million for the three and six months ended June 30, 2024, respectively, compared with segment net sales of $387 million and $775 million for the same periods in 2023. The decrease in segment net sales for the three and six months ended June 30, 2024 was primarily attributable to decreases in volume of 4% and 11%, respectively, and price of 7% and 6% respectively. Volumes decreased primarily due to weaker demand inmore economically sensitive and non-strategic end markets. Prices decreased primarily due to softer market dynamics and product mix. Unfavorable currency movements added a 1% headwind to the segment's net sales during boththe three and six months ended June 30, 2024, when compared to the same periods in the prior year.

Previous wording

Our Performance Solutions portfolio’s net sales were $113 million for thethree months ended March 31, 2024, and $144 million for the same period in 2023. Our Advanced Materials portfolio’s net sales were $186 million for thethree months ended March 31, 2024, and $244 million for the same period in 2023.

Current wording

Our Performance Solutions portfolio’s net sales were $133 million and $245 million for the three and six months ended June 30, 2024, respectively, and $140 million and $284 million for the same periods in 2023. Our Advanced Materials portfolio’s net sales were $206 million and $392 million for the three and six months ended June 30, 2024, respectively, and $247 million and $491 million for the same periods in 2023.

Previous wording

For the three months ended March 31, 2024, segment Adjusted EBITDA decreased by $54 million (or 64%) to $30 million and Adjusted EBITDA margin decreased by approximately 1,200 basis points to 10%, compared with segment Adjusted EBITDA of $84 million and Adjusted EBITDA margin of 22% for the same period in 2023. The decreases in segment Adjusted EBITDA and Adjusted EBITDA margin for the three months ended March 31, 2024 were primarily attributable to the aforementioned decrease in sales price, lower volume driving lower fixed cost absorption, and the aforementioned extended maintenance outage, partially offset by lower input costs.

Current wording

For the three months ended June 30, 2024, segment Adjusted EBITDA decreased by $36 million (or 44%) to $45 million and Adjusted EBITDA margin decreased by approximately 800 basis points to 13%, compared with segment Adjusted EBITDA of $81 million and Adjusted EBITDA margin of 21% for the same period in 2023. For the six months ended June 30, 2024, segment Adjusted EBITDA decreased by $90 million (or 55%) to $75 million and Adjusted EBITDA margin decreased by approximately 900 basis points to 12%, compared with segment Adjusted EBITDA of $165 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 months ended June 30, 2024 were primarily attributable to the aforementioned decreases in price and currency. The decreases in segment Adjusted EBITDA and Adjusted EBITDA margin for the six months ended June 30, 2024 were primarily attributable to the aforementioned decreases in price, along with lower volumes driving lower fixed cost absorption.

Previous wording

Corporate and Other costs increased by $10 million (or 22%) to $55 million for the three months ended March 31, 2024, compared with Corporate and Other costs of $45 million for the same period in 2023. The increase in Corporate and Other costs for the three months ended March 31, 2024 was primarily attributable to increased costs associated with the Audit Committee Internal Review, partially offset by lower long-term performance-related compensa tion, and the timing of certain environmental remediation expenses.

Current wording

Corporate and Other costs increased by $14 million (or 22%) and $25 million (or 23%) to $77 million and $132 million for the three and six months ended June 30, 2024, respectfully, compared with Corporate and Other costs of $63 million and $107 million for the same periods in 2023. The increase in Corporate and Other costs for the three and six months ended June 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.

Previous wording

The following table sets forth our corporate and unallocated items for the three months ended March 31, 2024 and 2023.

Current wording

The following table sets forth our corporate and unallocated items for the three and six months ended June 30, 2024 and 2023.

Previous wording

In 2024, transaction costs includes $5 million of third-party costs related to the Titanium Technologies Transformation Plan, which was not allocated in the measurement of Titanium Technologies segment profitability used by the CODM.

Current wording

For the three and six months ended June 30, 2024, transaction costs includes $6 million and $11 million, respectively, of third-party costs related to the Titanium Technologies Transformation Plan, which was not allocated in the measurement of Titanium Technologies segment profitability used by the CODM.

Previous wording

Qualified spend recovery represents costs and expenses that were previously excluded from the determination of segment Adjusted EBITDA, reimbursable by DuPont and/or Corteva as part of the our cost-sharing agreement under the terms of the MOU. Terms of the MOU are discussed in further detail in "Note 16 – Commitments and Contingent Liabilities" to the Interim Consolidated Financial Statements.

Current wording

Qualified spend recovery represents costs and expenses that were previously excluded from the determination of segment Adjusted EBITDA, reimbursable by DuPont and/or Corteva as part of our cost-sharing agreement under the terms of the MOU. Terms of the MOU are discussed in further detail in "Note 16 – Commitments and Contingent Liabilities".

Previous wording

Our primary sources of liquidity are cash generated from operations and available cash, including restricted cash and restricted cash equivalents. 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 May 2025.

Current wording

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 August 2025.

Previous wording

At March 31, 2024, we had total unrestricted cash and cash equivalents of $746 million, of which $559 million was held by our foreign subsidiaries, plus restricted cash and restricted cash equivalents of $607 million, primarily held in a qualified settlement fund per the terms of the U.S. public water system settlement agreement. The availability under our Revolving Credit Facility as of March 31, 2024 was $853 million, net of $47 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 Restated Credit Agreement. At March 31, 2024, we were in compliance with the applicable covenants under the Restated 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.

Current wording

At June 30, 2024, we had total unrestricted cash and cash equivalents of $604 million, of which $432 million was held by our foreign subsidiaries. The availability under our Revolving Credit Facility as of June 30, 2024 was $852 million, net of $48 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 June 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.

Previous wording

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 three months ended March 31, 2024, we incurred a net $290 million usage of cash in operating activities, which included accounts and notes receivable and accounts payable uses of cash of $177 million and $157 million, respectively. In the three months ended March 31, 2023, we incurred a net $124 million usage of cash in operating activities, which included accounts and notes receivable and accounts payable uses of cash of $205 million and $44 million, respectively. The working capital uses of cash in the first quarters of 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.

Current wording

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 six months ended June 30, 2024, we incurred a net $895 million usage of cash in operating activities, which included accounts and notes receivable and accounts payable uses of cash of $289 million and $178 million, respectively. In the six months ended June 30, 2023, we incurred a net $57 million usage of cash in operating activities, which included accounts and notes receivable and accounts payable uses of cash of $261 million and $209 million, respectively. The working capital uses of cash in the six months ended June 30, 2024 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.

Previous wording

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. Based on these seasonal trends and the impact of fourth quarter 2023 working capital actions on the first quarter of 2024, we currently expect our unrestricted cash and cash equivalents balance to decrease by approximately $475 million in the first half of 2024, with a majority of the decrease having occurred in the first quarter of 2024. We currently anticipate that we will remain in compliance with applicable covenants under the Restated Credit Agreement through at least May of 2025.

Current wording

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 August of 2025.

Previous wording

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. See "Note 12 – Accounts Payable" to the Interim Consolidated Financial Statementsfor further details regarding supplier financing programs.

Current wording

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 June 30, 2024 and 2023, we utilized various customer facilitated supply chain financing facilities to accelerate the collection of $111 million and $78 million, respectively, of our accounts receivable, incurring an immaterial discount amount for both periods. For the six months ended June 30, 2024 and 2023, we accelerated the collection of approximately $128 million and $205 million, respectively, of our accounts receivable, incurring an immaterial discount amount for both periods. These actions improved our quarter end liquidity by approximately $74 million and $72 million, respectively, for the quarters ending on June 30, 2024 and 2023. See “Note 7 - Accounts and Notes Receivable, Net” to the Interim Consolidated Financial Statementsfor further details regarding our supplier financing programs.

Previous wording

A substantial majority of the $559 million of unrestricted cash and cash equivalents held by our foreign subsidiaries at March 31, 2024, is available for local operations or is readily convertible into currencies used in our worldwide operations, including the U.S. dollar. We are subject to restrictions imposed by the local governments in certain jurisdictions where we operate, which impose certain limitations on our ability to exchange currencies, repatriate earnings or capital, or create cross-border cash pooling arrangements. During the quarter ended March 31, 2024, we received approximately $191 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.

Current wording

A substantial majority of the $432 million of unrestricted cash and cash equivalents held by our foreign subsidiaries at June 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 six months ended June 30, 2024, we received approximately $259 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.

Previous wording

Environmental remediation– We, due to the terms of our Separation-related agreements with EID, are subject to contingencies pursuant to environmental laws and regulations that in the future may require further action to correct the effects on the environment of prior disposal practices or releases of chemical substances, which are attributable to EID’s activities before our spin-off. Much of this liability results from Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”), Resource Conservation and Recovery Act (“RCRA”), and similar federal, state, local, and foreign laws. These laws may require us to undertake certain investigative, remediation, and restoration activities at sites where we conduct or EID once conducted operations or at sites where waste generated by us was disposed. At March 31, 2024, our consolidated balance sheets include $581 million for environmental remediation liabilities, of which $129 million was classified as current, and a portion is subject to recovery under the MOU. Of the current environmental liabilities of $129 million, $77 million relates to Fayetteville. Pursuant to the binding MOU that we entered into with DuPont, Corteva, and EID in January 2021, costs related to potential future legacy PFAS liabilities arising out of pre-July 1, 2015 conduct will subject to the cost-sharing arrangement, where we bear half of the cost of such future potential legacy PFAS liabilities and DuPont and Corteva will collectively bear the other half of the cost of such future potential legacy PFAS liabilities up to an aggregate $4 billion, of which approximately $2.1 billion is available after consideration of the funding of the qualified settlement fund per the terms of the U.S. public water system settlement agreement, payment to the State of Ohio, and supplemental payment to the State of Delaware (discussed below). Refer to the “Environmental Matters” section within this MD&Afor the anticipated environmental remediation payments over the next three years. Refer to “Note 16 – Commitments and Contingent Liabilities” to the Interim Consolidated Financial Statements for further discussion of the MOU and Qualified Spend.

Current wording

Environmental remediation– We, due to the terms of our Separation-related agreements with EID, are subject to contingencies pursuant to environmental laws and regulations that in the future may require further action to correct the effects on the environment of prior disposal practices or releases of chemical substances, which are attributable to EID’s activities before our spin-off. Much of this liability results from Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”), Resource Conservation and Recovery Act (“RCRA”), and similar federal, state, local, and foreign laws. These laws may require us to undertake certain investigative, remediation, and restoration activities at sites where we conduct or EID once conducted operations or at sites where waste generated by us was disposed. At June 30, 2024, our consolidated balance sheets include $580 million for environmental remediation liabilities, of which $127 million was classified as current, and a portion is subject to recovery under the MOU. Of the current environmental liabilities of $127 million, $74 million relates to Fayetteville. Pursuant to the binding MOU that we entered into with DuPont, Corteva, and EID in January 2021, costs related to potential future legacy PFAS liabilities arising out of pre-July 1, 2015 conduct will subject to the cost-sharing arrangement, where we bear half of the cost of such future potential legacy PFAS liabilities and DuPont and Corteva will collectively bear the other half of the cost of such future potential legacy PFAS liabilities up to an aggregate $4 billion, of which approximately $2.2 billion is available after consideration of the funding of the payment to the State of Ohio and supplemental payment to the State of Delaware (discussed below). Refer to the “Environmental Matters” section within this MD&Afor the anticipated environmental remediation payments over the next three years. Refer to “Note 16 – Commitments and Contingent Liabilities” to the Interim Consolidated Financial Statements for further discussion of the MOU and Qualified Spend.

Previous wording

Other legal settlements - In addition to the legal items noted above, we have other legal settlements that we expect to pay within the next 12 months and beyond. In November 2023, we, DuPont, Corteva, and EID entered into a settlement agreement with the State of Ohio to settle claims, including for environmental releases or sales of products containing PFAS or other known contaminants. Our share of this settlement is $55 million, representing our portion of the contribution consistent with the MOU entered into among the parties in January 2021. Following the settlement agreement with the State of Ohio and pursuant to the terms of the settlement agreement with the State of Delaware entered into in 2021, we will also contribute our portion of the supplemental payment to the State of Delaware for $13 million. We expect to pay these amounts in 2024. We have accrued litigation of $784 million at March 31, 2024, which is inclusive of the U.S. public water system settlement agreement and the settlement agreements with Ohio and Delaware, of which $712 million is classified as current. Refer to “Note 16 – Commitments and Contingent Liabilities” to the Interim Consolidated Financial Statementsfor further discussion.

Current wording

Other legal settlements - In addition to the legal items noted above, we have other legal settlements that we expect to pay within the next 12 months and beyond. In November 2023, we, DuPont, Corteva, and EID entered into a settlement agreement with the State of Ohio to settle claims, including for environmental releases or sales of products containing PFAS or other known contaminants. Our share of this settlement is $55 million, representing our portion of the contribution consistent with the MOU entered into among the parties in January 2021. Following the settlement agreement with the State of Ohio and pursuant to the terms of the settlement agreement with the State of Delaware entered into in 2021, we will also contribute our portion, $13 million, of a supplemental payment owed to the State of Delaware and expect to pay these amounts in the second half of 2024 or in 2025. We have accrued litigation of $175 million at June 30, 2024, which is inclusive of the settlement agreements with Ohio and Delaware, of which $103 million is classified as current. Refer to “Note 16 – Commitments and Contingent Liabilities” to the Interim Consolidated Financial Statementsfor further discussion.

Previous wording

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 May 2025. Our capital allocation strategy seeks to: (i) selectively invest in organic and inorganic growth to enhance our portfolio, including certain strategic capital investments; (ii) resolve contingent or accrued liabilities on terms and bases deemed by our board of directors to be in the best interest of the Company and its stakeholders; (iii) maintain appropriate leverage; and (iv) return cash to shareholders through dividends, and share repurchases. 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 April 29, 2024, we announced our quarterly cash dividend of $0.25 per share for the second quarter of 2024. Under our 2022 Share Repurchase Program, as further discussed in Item 2 –Unregistered Sales of Equity Securities and Use of Proceedsand in "Note 17 - Equity" in this Quarterly Report on Form 10-Q, we also have remaining authority to repurchase $441 million of our outstanding common stock. 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 March 1, 2024, Moody’s placed our ratings under review for downgrade. On March 17, 2024, S&P Global affirmed our BB- credit rating with negative outlook. These rating agency actions could constrain the capital available to us, reduce or eliminate available borrowing to us, and could limit our access to and/or increase the cost of funding our operation. Further, the decision to refinance our existing debt is based on a number of factors, many of which are beyond our control, including general market conditions and our ability to refinance on attractive terms at any given point in time. Any attempts to raise additional capital or borrowings or refinance our existing debt could cause us to incur significant charges. Such charges could have a material adverse impact on our financial position, results of operations, or cash flows.

Current wording

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 our existing debt could cause us to incur significant charges. Such charges could have a material adverse impact on our financial position, results of operations, or cash flows.

Previous wording

The following table sets forth a summary of the net cash provided by (used for) our operating, investing, and financing activities for the three months ended March 31, 2024 and 2023.

Current wording

The following table sets forth a summary of the net cash provided by (used for) our operating, investing, and financing activities for the six months ended June 30, 2024 and 2023.

Previous wording

We used $290 million and $124 million in cash flows for our operating activities during the three months ended March 31, 2024 and 2023, respectively. The increase in our operating cash outflows was primarily attributable to the unwinding of year end net working capital actions (discussed further in the "Liquidity and Capital Resources" section above) and lower net income, partially offset by lower performance compensation payments in the first quarter of 2024 and higher environmental remediation spend at our Fayetteville site in the first quarter of 2023.

Current wording

We used $910 million and $57 million in cash flows for our operating activities during the six months ended June 30, 2024 and 2023, respectively. The increase in our operating cash outflows 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, along with theunwinding of year end net working capital actions (discussed further in the "Liquidity and Capital Resources" section above).

Previous wording

We used $101 million and $97 million in cash flows for our investing activities during the three months ended March 31, 2024 and 2023, respectively which were primarily attributable to purchases of property, plant, and equipment amounting to $102 million and $91 million, respectively.

Current wording

We used $171 million and $157 million in cash flows for our investing activities during the six months ended June 30, 2024 and 2023, respectively which were primarily attributable to purchases of property, plant, and equipment amounting to $175 million and $149 million, respectively.

Previous wording

We used $54 million in cash flows for our financing activities during the three months ended March 31, 2024 which were primarily attributable to our capital allocation activities, resulting in $37 million of cash dividends and $10 million of net payments in connection with one of our supplier financing programs.

Current wording

We used $94 million in cash flows for our financing activities during the six months ended June 30, 2024 which were primarily attributable to our capital allocation activities, resulting in $74 million of cash dividends and $14 million of net payments in connection with one of our supplier financing programs.