Celanese Corp

Previous wording

•lower pricing, primarily driven by our Acetyl Chain segment due to an environment with greater supply than demand, as well as our Engineered Materials segment due to competitive market dynamics and product mix; and

Current wording

•lower pricing, primarily driven by our Acetyl Chain segment due to an environment with greater supply than demand, as well as our Engineered Materials segment due to competitive market dynamics; and

Previous wording

•lower volume in our Acetyl Chain and Engineered Materials segments, primarily driven by decreased global demand and weaker global economic conditions;

Current wording

•lower volume in our Engineered Materials and Acetyl Chain segments, primarily driven by weaker global economic conditions and decreased global demand;

Previous wording

•lower Net sales across our segments; and

Current wording

•lower Net sales across our segments;

Previous wording

•a decrease in earnings from our Ibn Sina strategic affiliates of $26 million, primarily due to lower methyl tertiary-butyl ether ("MTBE") volume arising from a plant turnaround, as well as lower MTBE pricing and higher feedstock costs.

Current wording

•a decrease in earnings from our Ibn Sina strategic affiliate, primarily due to lower methyl tertiary-butyl ether ("MTBE") volume from weaker economic conditions, as well as lower MTBE pricing and higher feedstock costs.

Previous wording

•accelerated depreciation expense of $37 million in our Engineered Materials segment during the three months ended March 31, 2024, related to the previously announced closure of our polymerization units in Uentrop, Germany, which did not recur in the current period; and

Current wording

•accelerated depreciation expense of $56 million in our Engineered Materials segment, during the six months ended June 30, 2024, primarily related to the previously announced closure of our polymerization units in Uentrop, Germany and our facility in Mechelen, Belgium, which did not recur in the current period;

Previous wording

Our effective income tax rate for the three months ended March 31, 2025 was (300)% compared to 21% for the same period in 2024, primarily due to increases in valuation allowance on U.S. foreign tax credit carryforwards due to revised forecasts of foreign sourced income and expenses during the carryforward period in the current period and decreased earnings in the current year due to the current demand conditions. The effective income tax rate for the three months ended March 31, 2024 included non-recurring tax effects related to internal debt restructuring transactions. See Note 10 - Income Taxes in the accompanying unaudited interim consolidated financial statements for further information.

Current wording

Our effective income tax rate for the six months ended June 30, 2025 was a benefit of 52% compared to an expense of 18% for the same period in 2024, primarily due to a net deferred tax benefit related to the relocation of certain intangible assets among wholly owned foreign affiliates as part of the continued integration of global principal operations during the three months ended June 30, 2025 and a tax benefit related to the settlement of tax examinations with the German tax authorities for the tax years 2008 through 2012 during the three months ended June 30, 2025, partially offset by increases in valuation allowance on U.S. foreign tax credit carryforwards due to revised forecasts of foreign sourced income and expenses during the carryforward period during the three months ended March 31, 2025. In addition, the effective income tax rate for the six months ended June 30, 2024, included non-recurring tax effects related to internal debt restructuring transactions for the three months ended March 31, 2024. See Note 11 - Income Taxes in the accompanying unaudited interim consolidated financial statements for further information.

Previous wording

•lower volume, primarily due to weaker global economic conditions;

Current wording

•lower volume, primarily due to weaker global economic conditions; and

Previous wording

•lower pricing for most of our products, primarily due to competitive market dynamics and product mix; and

Current wording

•lower pricing for most of our products, primarily due to competitive market dynamics;

Previous wording

•accelerated depreciation expense of $37 million during the three months ended March 31, 2024, related to the previously announced closure of our polymerization units in Uentrop, Germany, which did not recur in the current period; and

Current wording

•accelerated depreciation expense of $56 million during the six months ended June 30, 2024, primarily related to the previously announced closure of our polymerization units in Uentrop, Germany and our facility in Mechelen, Belgium, which did not recur in the current period;

Previous wording

•a decrease in earnings from our Ibn Sina strategic affiliate, primarily due to lower MTBE volume arising from a plant turnaround, as well as lower MTBE pricing and higher feedstock costs.

Current wording

•a decrease in earnings from our Ibn Sina strategic affiliate, primarily due to lower MTBE volume arising from weaker economic conditions, as well as lower MTBE pricing and higher feedstock costs.

Previous wording

•lower volume across most of our products primarily due to decreased global demand;

Current wording

•lower volume across most of our products, due to decreased global demand and weaker seasonal trends;

Previous wording

•lower spending of $26 million, primarily as a result of plant turnaround costs related to our joint venture, Fairway Methanol LLC, incurred during the three months ended March 31, 2024, which did not recur in the current year.

Current wording

•higher spending of $16 million, primarily as a result of plant turnaround costs at our Clear Lake site, inclusive of our joint venture, Fairway Methanol LLC, incurred during the three months ended June 30, 2025;

Previous wording

•higher raw materials and sourcing costs, primarily for methanol and ethylene;

Current wording

•lower raw materials and sourcing costs, primarily for ethylene and acid.

Previous wording

Dividend income - equity investments decreased for the three months ended March 31, 2025 compared to the same period in 2024, primarily due to:

Current wording

Dividend income - equity investments decreased for the six months ended June 30, 2025 compared to the same period in 2024, primarily due to:

Previous wording

Our primary sources of liquidity are cash generated from operations, available cash and cash equivalents, dividends from our portfolio of strategic investments and available borrowings under our senior unsecured revolving credit facilities. As of March 31, 2025, we have $1.75 billion available for borrowing under our senior U.S. unsecured revolving credit facility and $98 million available for borrowing under our separate China Revolving Credit Facilities (defined below), if required, to meet our working capital needs and other contractual obligations. In addition, we held cash and cash equivalents of $951 million as of March 31, 2025. We are actively managing our business to maintain cash flow, and we believe that liquidity from the above-referenced sources will be sufficient to meet our operational and capital investment needs and financial obligations for the foreseeable future.

Current wording

Our primary sources of liquidity are cash generated from operations, available cash and cash equivalents, dividends from our portfolio of strategic investments and available borrowings under our senior unsecured revolving credit facilities. As of June 30, 2025, we have $1.75 billion available for borrowing under our senior U.S. unsecured revolving credit facility and $70 million available for borrowing under our separate China Revolving Credit Facilities (defined below), if required, to meet our working capital needs and other contractual obligations. In addition, we held cash and cash equivalents of $1.2 billion as of June 30, 2025. We are actively managing our business to maintain cash flow, and we believe that liquidity from the above-referenced sources will be sufficient to meet our operational and capital investment needs and financial obligations for the foreseeable future.

Previous wording

We continue to focus our near-term capital expenditures on required maintenance projects and productivity improvements, as we continue to prioritize deleveraging and expect total capital expenditures to be approximately $300 million to $350 million in 2025. In Engineered Materials, at our Nanjing, China facility, our expansions of (1) the compounding plant is in construction and we are accelerating completion to meet demand and (2) the new liquid crystal polymer ("LCP") plant is in construction and remains on schedule under a delayed timeline. At our Bishop, Texas facility, our debottleneck of the ultra-high molecular weight polyethylene ("UHMW-PE") unit is on schedule and in detailed engineering design while construction is delayed in line with expected demand growth. Our energy optimization productivity and greenhouse gas reduction project at our polyoxymethylene ("POM") unit in Frankfurt, Germany is delayed consistent with our capital reductions. In the Acetyl Chain, our planned expansion of our vinyl acetate ethylene ("VAE") emulsion plant in Frankfurt, Germany is in construction and on schedule for start-up in the third quarter of 2025. We continue to see the investments made in recent years strengthen the growth and reliability, while lowering the carbon footprint, of our manufacturing network to best serve our customers.

Current wording

We continue to focus our near-term capital expenditures on required maintenance projects and productivity improvements, as we continue to prioritize deleveraging and expect total capital expenditures to be approximately $300 million to $350 million in 2025. In Engineered Materials, at our Nanjing, China facility, our expansions of (1) the compounding plant is in construction and on schedule for completion in the third quarter of 2025 to meet demand and (2) the new liquid crystal polymer ("LCP") plant is in construction and on schedule for completion in the second half of 2026. At our Bishop, Texas facility, our debottleneck of the ultra-high molecular weight polyethylene ("UHMW-PE") unit has completed detailed engineering design though construction is delayed in line with expected demand growth. Our energy optimization productivity and greenhouse gas reduction project at our polyoxymethylene ("POM") unit in Frankfurt, Germany is delayed consistent with our capital reductions. In the Acetyl Chain, our planned expansion of our vinyl acetate ethylene ("VAE") emulsion plant in Frankfurt, Germany is in construction and on schedule for start-up in the third quarter of 2025. We continue to see the investments made in recent years strengthen the growth and reliability, while lowering the carbon footprint, of our manufacturing network to best serve our customers.

Previous wording

Cash and cash equivalents decreased $11 million to $951 million as of March 31, 2025 compared to December 31, 2024. As of March 31, 2025, $580 million of the $951 million of cash and cash equivalents was held by our foreign subsidiaries. Under the Tax Cuts and Jobs Act, we incurred a prior year charge associated with the deemed repatriation of foreign earnings. These funds are largely accessible without additional material tax consequences, if needed in the U.S., to fund operations.

Current wording

Cash and cash equivalents increased $211 million to $1.2 billion as of June 30, 2025 compared to December 31, 2024. As of June 30, 2025, $704 million of the $1.2 billion of cash and cash equivalents was held by our foreign subsidiaries. Under the Tax Cuts and Jobs Act, we incurred a prior year charge associated with the deemed repatriation of foreign earnings. These funds are largely accessible without additional material tax consequences, if needed in the U.S., to fund operations.

Previous wording

Net cash provided by operating activities decreased $64 million to $37 million for the three months ended March 31, 2025 compared to net cash provided by operating activities of $101 million for the same period in 2024, primarily due to:

Current wording

Net cash provided by operating activities increased $54 million to $447 million for the six months ended June 30, 2025 compared to net cash provided by operating activities of $393 million for the same period in 2024, primarily due to:

Previous wording

•favorable trade working capital of $103 million, primarily due to the timing of settlement of trade payables, inventory reductions, and the timing of collections of trade receivables during the three months ended March 31, 2025.

Current wording

•favorable trade working capital of $203 million, primarily due to inventory reductions and the timing of settlement of trade payables, during the six months ended June 30, 2025;

Previous wording

Net cash used in investing activities decreased $53 million to $98 million for the three months ended March 31, 2025 compared to net cash used in investing activities of $151 million for the same period in 2024, primarily due to:

Current wording

Net cash used in investing activities decreased $56 million to $186 million for the six months ended June 30, 2025 compared to net cash used in investing activities of $242 million for the same period in 2024, primarily due to:

Previous wording

•a decrease of $35 million in capital expenditures during the three months ended March 31, 2025.

Current wording

•a decrease of $47 million in capital expenditures during the six months ended June 30, 2025.

Previous wording

Net cash provided by financing activities increased $304 million to $45 million for the three months ended March 31, 2025 compared to net cash used in financing activities of $259 million for the same period in 2024, primarily due to:

Current wording

Net cash used in financing activities decreased $677 million to $71 million for the six months ended June 30, 2025 compared to net cash used in financing activities of $748 million for the same period in 2024, primarily due to:

Previous wording

•an increase in proceeds from long-term debt primarily due to the 2025 Offering (defined below) of $2.6 billion; and

Current wording

•an increase in proceeds from long-term debt primarily due to the 2025 Offering (defined below) of $2.6 billion;

Previous wording

•an increase in net borrowings on short-term debt of $465 million, primarily due to a net borrowing of $200 million under the November 2024 U.S. Term Loan Credit Agreement (defined below) and an increase in net proceeds on our revolving credit facilities of $173 million during the three months ended March 31, 2025, as well as payments under the China Working Capital Term Loan Agreement (defined below) during the three months ended March 31, 2024, which did not recur in the current year;

Current wording

•an increase in net borrowings on short-term debt of $285 million, primarily due to an increase in net borrowings on our China Revolving Credit Facilities (defined below) of $187 million, and an increase in net borrowings under the China Working Capital Term Loan Agreement (defined below); and

Previous wording

•an increase in repayments of long-term debt, primarily due to the Tender Offers (defined below) of $1.1 billion, redemption of the 6.050% Senior Notes due March 15, 2025, partial repayment of $400 million of the March 2022 U.S. Term Loan Credit Agreement (defined below), and redemption of the 1.250% Senior Notes due February 11, 2025.

Current wording

•an increase in repayments of long-term debt, primarily due to the Tender Offers (defined below) of $1.1 billion, redemption of the 6.050% Senior Notes due March 15, 2025, partial repayment of $400 million of the March 2022 U.S. Term Loan Credit Agreement (defined below), and redemption of the 1.250% Senior Notes due February 11, 2025, offset by the $473 million payment at maturity of the 3.500% senior unsecured notes during the six months ended June 30, 2024.

Previous wording

In March 2022, we entered into a term loan credit agreement (as amended to date, the "March 2022 U.S. Term Loan Credit Agreement"), pursuant to which lenders provided a tranche of delayed-draw term loans due 5 years from issuance in an amount equal to $1.0 billion (the "5-year Term Loans").

Current wording

In March 2022, we entered into a term loan credit agreement (as amended to date, the "March 2022 U.S. Term Loan Credit Agreement"), pursuant to which lenders provided a tranche of delayed-draw term loans due 5 years from issuance in an amount equal to $1.0 billion (the "5-year Term Loans"). As of June 30, 2025, $480 million was outstanding under the March 2022 U.S. Term Loan Credit Agreement. On July 30, 2025, $150 million of such outstanding amount was repaid. On August 11, 2025, Celanese, Celanese U.S. and certain subsidiaries entered into an amendment to the March 2022 U.S. Term Loan Credit Agreement (see Note 19 - Subsequent Events in the accompanying unaudited interim consolidated financial statements for further information).

Previous wording

Also in March 2022, we entered into a new revolving credit agreement (as amended to date, the "U.S. Revolving Credit Agreement") consisting of a $1.75 billion senior unsecured revolving credit facility (with a letter of credit sublimit), maturing in 2027.

Current wording

Also in March 2022, we entered into a new revolving credit agreement (as amended to date, the "U.S. Revolving Credit Agreement") consisting of a $1.75 billion senior unsecured revolving credit facility (with a letter of credit sublimit), maturing in 2027. On August 11, 2025, Celanese, Celanese U.S. and certain subsidiaries entered into a new revolving credit agreement (see Note 19 -Subs equent Events in the accompanying unaudited interim consolidated financial statements for further information).

Previous wording

In June 2024, CNC entered into a senior unsecured working capital loan agreement for CNY800 million, payable in installments until June 2027 and bearing interest at 2.75% (the "June 2024 CNC Three Year Working Capital Loan Agreement"). CNY760 million of the June 2024 CNC Three Year Working Capital Loan Agreement was drawn during the year ended December 31, 2024.

Current wording

In June 2024, CNC entered into a senior unsecured working capital loan agreement for CNY800 million, payable in installments until June 2027 and bearing interest at 2.75% (the "June 2024 CNC Three Year Working Capital Loan Agreement"). CNY720 million of the June 2024 CNC Three Year Working Capital Loan Agreement was outstanding as of June 30, 2025.

Previous wording

In November 2024, we entered into a senior unsecured term loan credit agreement (the "November 2024 U.S. Term Loan Credit Agreement", and together with the U.S. Revolving Credit Agreement and March 2022 U.S. Term Loan Credit Agreement, the "U.S. Credit Agreements"), pursuant to which the lenders provided a delayed-draw term loan due 364 days from the date of borrowing in an amount up to $1.0 billion. Amounts outstanding under the November 2024 U.S. Term Loan Credit Agreement accrue interest at a rate equal to the Secured Overnight Financing Rate with an interest period of one or three months ("Term SOFR") plus a margin of 1.300% to 2.250% per annum, or the base rate plus a margin of 0.300% to 1.250%, in each case, based on our senior unsecured debt rating, subject to further changes based on such ratings. $500 million was drawn under the November 2024 U.S. Term Loan Credit Agreement during the three months ended March 31, 2025, and any remaining commitments thereunder terminated on March 15, 2025. $300 million of such drawn amount was repaid during the three months ended March 31, 2025, and $100 million was repaid on April 14, 2025.

Current wording

In November 2024, we entered into a senior unsecured term loan credit agreement (the "November 2024 U.S. Term Loan Credit Agreement", and together with the U.S. Revolving Credit Agreement and March 2022 U.S. Term Loan Credit Agreement, the "U.S. Credit Agreements"), pursuant to which the lenders provided a delayed-draw term loan due 364 days from the date of borrowing in an amount up to $1.0 billion. Amounts outstanding under the November 2024 U.S. Term Loan Credit Agreement accrued interest at a rate equal to the Secured Overnight Financing Rate with an interest period of one or three months ("Term SOFR") plus a margin of 1.300% to 2.250% per annum, or the base rate plus a margin of 0.300% to 1.250%, in each case, based on our senior unsecured debt rating, subject to further changes based on such ratings. $500 million was drawn under the November 2024 U.S. Term Loan Credit Agreement during the six months ended June 30, 2025, and any remaining commitments thereunder terminated on March 15, 2025. $500 million of such drawn amount was repaid and the facility was terminated during the six months ended June 30, 2025.

Previous wording

In December 2024, CNC entered into a senior unsecured working capital loan agreement for CNY1.0 billion, payable in installments until March 2028 and bearing interest at certain floating rates (the "December 2024 CNC Three Year Working Capital Loan Agreement"). CNY500 million of the December 2024 CNC Three Year Working Capital Loan Agreement was drawn during the three months ended March 31, 2025.

Current wording

In December 2024, CNC entered into a senior unsecured working capital loan agreement for CNY1.0 billion, payable in installments until March 2028 and bearing interest at certain floating rates (the "December 2024 CNC Three Year Working Capital Loan Agreement"). CNY500 million of the December 2024 CNC Three Year Working Capital Loan Agreement was drawn during the six months ended June 30, 2025.

Previous wording

On March 6, 2025, CNC entered into a senior unsecured working capital loan agreement for CNY750 million, payable in installments until March 2028 and bearing interest at certain floating rates (the "March 2025 CNC Three Year Working Capital Loan Agreement" together with the December 2024 Three Year Working Capital Loan Agreement, the June 2024 CNC Three Year Working Capital Loan Agreement, the December 2023 CNC Three Year Working Capital Loan Agreement, the January 2023 CSIT One Year Working Capital Term Loan Agreement, and the CSIT Revolving Credit Agreement, the "China Credit Agreements," and the China Credit Agreements together with the U.S. Credit Agreements, the "Global Credit Agreements"). The March 2025 CNC Three Year Working Capital Loan Agreement was partially drawn during the three months ended March 31, 2025. We expect that the China Credit Agreements will continue to facilitate our efficient repatriation of cash to the U.S. to repay debt and effectively redomicile a portion of its U.S. debt to China at a lower average interest rate.

Current wording

On March 6, 2025, CNC entered into a senior unsecured working capital loan agreement for CNY750 million, payable in installments until March 2028 and bearing interest at certain floating rates (the "March 2025 CNC Three Year Working Capital Loan Agreement" together with the December 2024 CNC Three Year Working Capital Loan Agreement, the June 2024 CNC Three Year Working Capital Loan Agreement, the December 2023 CNC Three Year Working Capital Loan Agreement, the January 2023 CSIT One Year Working Capital Term Loan Agreement, and the CSIT Revolving Credit Agreement, the "China Credit Agreements," and the China Credit Agreements together with the U.S. Credit Agreements, the "Global Credit Agreements"). CNY509 million of the March 2025 CNC Three Year Working Capital Loan Agreement was drawn during the six months ended June 30, 2025. We expect that the China Credit Agreements will continue to facilitate its efficient repatriation of cash to the U.S. to repay debt and effectively redomicile a portion of its U.S. debt to China at a lower average interest rate.

Previous wording

Deferred financing costs related to the 2025 Offering were $34 million for the three months ended March 31, 2025 and are being amortized to Interest expense in the unaudited interim consolidated statements of operations over the terms of the applicable notes.

Current wording

Deferred financing costs related to the 2025 Offering were $34 million and are being amortized to Interest expense in the unaudited interim consolidated statements of operations over the terms of the applicable notes.

Previous wording

Refinancing expense in the unaudited interim consolidated statements of operations includes fees and expenses related to the Tender Offer, including accelerated amortization of deferred financing costs associated with the principal amounts tendered, was $32 million for the three months ended March 31, 2025.

Current wording

Refinancing expense in the unaudited interim consolidated statements of operations includes fees and expenses related to the Tender Offer, including accelerated amortization of deferred financing costs associated with the principal amounts tendered, was $32 million.

Previous wording

In June 2023, we entered into an amendment to the amended and restated receivables purchase agreement under our U.S. accounts receivable purchasing facility among certain of our subsidiaries, our wholly-owned, "bankruptcy remote" special purpose subsidiary ("SPE") and certain global financial institutions ("Purchasers"). We de-recognized $352 million and $1.5 billion of accounts receivable under this agreement for the three months ended March 31, 2025 and year ended December 31, 2024, respectively, and collected $347 million and $1.5 billion of accounts receivable sold under this agreement during the same periods. Unsold U.S. accounts receivable of $147 million were pledged by the SPE as collateral to the Purchasers as of March 31, 2025.

Current wording

On June 13, 2025, we entered into an amendment to the amended and restated receivables purchase agreement under our U.S. accounts receivable purchasing facility among certain of our subsidiaries, our wholly-owned, "bankruptcy remote" special purpose subsidiary ("SPE") and certain global financial institutions ("Purchasers"). We de-recognized $802 million and $1.5 billion of accounts receivable under this agreement for the six months ended June 30, 2025 and year ended December 31, 2024, respectively, and collected $764 million and $1.5 billion of accounts receivable sold under this agreement during the same periods. Unsold U.S. accounts receivable of $95 million were pledged by the SPE as collateral to the Purchasers as of June 30, 2025.

Previous wording

We have factoring agreements in Europe, Japan, Singapore and China with financial institutions. We de-recognized $161 million and $700 million of accounts receivable under these factoring agreements for the three months ended March 31, 2025 and year ended December 31, 2024, respectively, and collected $170 million and $640 million of accounts receivable sold under these factoring agreements during the same periods.

Current wording

We have factoring agreements in Europe, Japan, Singapore and China with financial institutions. We de-recognized $356 million and $700 million of accounts receivable under these factoring agreements for the six months ended June 30, 2025 and year ended December 31, 2024, respectively, and collected $337 million and $640 million of accounts receivable sold under these factoring agreements during the same periods.

Previous wording

We have master discounting agreements (the "Master Discounting Agreements") with financial institutions in China to discount, on a non-recourse basis, banker's acceptance drafts, classified as accounts receivable. We received $15 million and $100 million from the accounts receivable transferred under the Master Discounting Agreements as of March 31, 2025 and December 31, 2024, respectively.

Current wording

We have master discounting agreements (the "Master Discounting Agreements") with financial institutions in China to discount, on a non-recourse basis, banker's acceptance drafts, classified as accounts receivable. We received $39 million and $100 million from the accounts receivable transferred under the Master Discounting Agreements for the six months ended June 30, 2025 and year ended December 31, 2024, respectively.

Previous wording

The Company's material financing arrangements contain customary covenants, such as events of default and change of control provisions, and in the case of the existing U.S. Credit Agreements the maintenance of certain financial ratios (subject to adjustment following certain qualifying acquisitions and dispositions, as set forth in the U.S. Credit Agreements, as amended). Failure to comply with these covenants, or the occurrence of any other event of default, could result in acceleration of the borrowings and other financial obligations.

Current wording

The Company's material financing arrangements contain customary covenants, such as events of default and change of control provisions, and in the case of the existing U.S. Credit Agreements the maintenance of certain financial ratios (subject to adjustment following certain qualifying acquisitions and dispositions, as set forth in the existing U.S. Credit Agreements, as amended). Failure to comply with these covenants, or the occurrence of any other event of default, could result in acceleration of the borrowings and other financial obligations.

Previous wording

Our tax returns have been under joint audit for the years 2013 through 2015 by the United States, Netherlands and Germany (the "Authorities"). The Company and the Authorities were unable to reach an agreement jointly and therefore the audits continued on a separate jurisdictional basis. In the fourth quarter of 2022, we concluded settlement discussions with the Dutch tax authority. In the third quarter of 2024, we concluded settlement discussions with the German tax authority related to the German transfer pricing audit. In addition, our income tax returns in Mexico are under audit for the years 2018 through 2020, in Canada for the years 2016 through 2022, in the United States for the years 2016 through 2020, and in Germany for the years after 2007. In August 2023, we negotiated a partial settlement with the Mexico tax authorities for its audit for the year 2018. The partial settlement did not have a material impact on income tax expense in the consolidated statements of operations for the year ended December 31, 2023. We are in discussions with the Mexican tax authorities regarding the preliminary findings in the 2019 audit. In September 2023, the Canadian tax authorities opened tax audits for the years 2019 through 2022, and the audits are in the preliminary stages. The audit in the United States for the years 2016 through 2020 is in the data gathering phase. In the first quarter of 2025, the Company began settlement discussions with the German tax authorities on certain matters related to this audit. The Company will record the impacts of any settlements as they are concluded but currently does not expect a material impact to the consolidated statements of operations.

Current wording

Our tax returns have been under joint audit for the years 2013 through 2015 by the United States, Netherlands and Germany (the "Authorities"). The Company and the Authorities were unable to reach an agreement jointly and therefore the audits continued on a separate jurisdictional basis. In the fourth quarter of 2022, we concluded settlement discussions with the Dutch tax authority. In the third quarter of 2024, we concluded settlement discussions with the German tax authority related to the German transfer pricing audit. In addition, our income tax returns in Mexico are under audit for the years 2018 through 2020, in Canada for the years 2016 through 2022, in the United States for the years 2016 through 2020, and in Germany for the years after 2012. In August 2023, we negotiated a partial settlement with the Mexico tax authorities for its audit for the year 2018. The partial settlement did not have a material impact on income tax expense in the consolidated statements of operations for the year ended December 31, 2023. We are in discussions with the Mexican tax authorities regarding the preliminary findings in the 2019 audit. In September 2023, the Canadian tax authorities opened tax audits for the years 2019 through 2022, and the audits are in the preliminary stages. The audit in the United States for the years 2016 through 2020 is in the data gathering phase. In the first quarter of 2025, we began settlement discussions with the German tax authorities on certain matters related to the German audit for the years after 2007, and in the second quarter of 2025, we concluded settlement discussions with the German tax authorities for the years 2008 through 2012. The associated tax effects from the settlement discussions are included in income tax expense in the consolidated statements of operations for the three and six months ended June 30, 2025. The Company will record the impacts of any additional audit settlements as they are concluded but currently does not expect a material impact to the consolidated statements of operations.

Previous wording

During the three months ended March 31, 2025, we continued to experience demand challenges in key end-markets like automotive, paints, coatings, and construction due to the tepid global macroeconomic conditions. Automotive destocking in Europe related to the downturn in the second half of 2024 continued for most of the quarter but largely reaching more stabilized levels in March 2025. We anticipate demand conditions to remain sluggish in the second quarter of 2025. We will continue to closely monitor the impact of, and response to, tariffs and other geopolitical effects on demand conditions. We remain committed to identifying and implementing actions to improve long-term growth and value creation.

Current wording

During the three months ended June 30, 2025, we continued to experience demand challenges in key end-markets like automotive, paints, coatings, and construction due to the tepid global macroeconomic conditions and muted lift in seasonal demand. Automotive demand in Europe stabilized but at lower levels compared to last year. We anticipate demand conditions to remain sluggish in the third quarter of 2025. We will continue to closely monitor the impact of, and response to, tariffs and other geopolitical effects on demand conditions. We remain committed to identifying and implementing actions to improve long-term growth and value creation.