Celanese Corp
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 5, 2026
CE$46.49-2.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001306830-26-000096
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001306830-26-000117
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 159 previous paragraphs and 203 current paragraphs.
109 unchanged; 30 reworded; 62 added; 20 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 8 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (62)
Current report
Net sales increased $220 million, or 9%, for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to:
Current report
•higher pricing in our Acetyl Chain segment, primarily due to regional supply dislocation, as well as higher raw materials and sourcing costs;
Current report
•higher pricing in our Engineered Materials segment, primarily due to pricing actions implemented during the three months ended June 30, 2026, as well as a more favorable product mix; and
Current report
Operating profit increased $45 million, or 19%, for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to:
Current report
•higher Net sales across all of our segments; and
Current report
•lower raw materials costs in our Engineered Materials segment, primarily driven by productivity initiatives and sourcing changes;
Current report
•higher accelerated depreciation expense of $65 million during the three months ended June 30, 2026 in our Engineered Materials and Acetyl Chain segments, primarily related to the announced closure of our facilities in Sakra, Singapore and Ulsan, South Korea, and optimization of the North American nylon 6,6 polymerization units in our Engineered
Current report
Materials segment, and the previously announced closure of our facility in Lanaken, Belgium in our Acetyl Chain segment (see Note 3 - Acquisitions, Dispositions and Plant Closures and Note 18 - Other (Charges) Gains, Net in the accompanying unaudited interim consolidated financial statements for further information);
Current report
•higher raw materials and sourcing costs in our Acetyl Chain segment, primarily for ethylene and methanol;
Current report
•higher spending of $49 million in our Engineered Material segment, primarily as a result of higher inventory and turnaround costs at our Frankfurt polyoxymethylene ("POM") unit during the three months ended June 30, 2026;
Current report
•higher spending of $48 million in our Acetyl Chain and Other Activities segments during the three months ended June 30, 2026, primarily as a result of increased plant operating and maintenance expenses and higher logistics costs in our Acetyl Chain segment, as well as higher incentive compensation and merger and acquisition costs incurred in Other Activities; and
Current report
•an unfavorable impact of $20 million to Other (charges) gains, net in our Acetyl Chain segment, primarily related to restructuring costs associated with the previously announced closure of our facility in Lanaken, Belgium (see Note 3 - Acquisitions, Dispositions and Plant Closures and Note 18 - Other (Charges) Gains, Net in the accompanying unaudited interim consolidated financial statements for further information).
Current report
•a decrease in earnings from our Mylar Specialty Films strategic affiliate, primarily due to restructuring activities.
Current report
Net sales increased $168 million, or 3%, for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to:
Current report
•higher pricing in our Acetyl Chain segment, primarily due to regional supply dislocation, as well as higher raw materials and sourcing costs;
Current report
•higher pricing in our Engineered Materials segment, primarily due to pricing actions implemented during the three months ended June 30, 2026, as well as a more favorable product mix; and
Current report
•a favorable currency impact from our Engineered Materials and Acetyl Chain segments, primarily resulting from a stronger euro and Chinese yuan relative to the U.S. dollar;
Current report
•lower volume in our Engineered Materials and Acetyl Chain segments, primarily due to the completed sale of the Micromax® business in our Engineered Materials segment (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information), and decreased global demand in our Acetyl Chain segment.
Current report
Operating profit increased $94 million, or 24%, for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to:
Current report
•higher Net sales across all of our segments;
Current report
•lower raw materials costs in our Engineered Materials segment, primarily driven by productivity initiatives and sourcing changes;
Current report
•higher accelerated depreciation expense of $85 million in our Engineered Materials and Acetyl Chain segments during the six months ended June 30, 2026, primarily related to the announced closure of our facilities in Sakra, Singapore and Ulsan, South Korea, and optimization of the North American nylon 6,6 polymerization units in our Engineered Materials segment, and the previously announced closure of our facility in Lanaken, Belgium in our Acetyl Chain segment (see Note 3 - Acquisitions, Dispositions and Plant Closures and Note 18 - Other (Charges) Gains, Net in the accompanying unaudited interim consolidated financial statements for further information);
Current report
•higher spending of $73 million in our Other Activities and Acetyl Chain segments during the six months ended June 30, 2026, primarily related to higher incentive compensation and merger and acquisition costs in Other Activities segment, and increased plant operating and maintenance expenses and higher logistics costs in our Acetyl Chain segment;
Current report
•higher raw materials costs in our Acetyl Chain segment, primarily for ethylene and methanol; and
Current report
•an unfavorable impact of $10 million to Other (charges) gains, net in our Acetyl Chain and Engineered Materials segments during the six months ended June 30, 2026, primarily related to restructuring costs associated with the previously announced closure of our facility in Lanaken, Belgium in our Acetyl Chain segment, and partially offset by lower restructuring costs related to the Company-wide business optimization projects in our Engineered Materials segment (see Note 3 - Acquisitions, Dispositions and Plant Closures and Note 18 - Other (Charges) Gains, Net in the accompanying unaudited interim consolidated financial statements for further information).
Current report
Our effective income tax rate for the six months ended June 30, 2026 was 20% compared to (54)% for the same period in 2025. The higher effective income tax rate was primarily due to favorable tax items recorded in the prior-year period that did not recur in 2026, including net deferred tax benefits related to the relocation of certain intangible assets among wholly-owned foreign affiliates as part of the continued integration of global principal operations and a tax benefit associated with the settlement of German tax examinations for the 2008 through 2012 tax years. The higher rate also reflected unfavorable functional-currency tax impacts in certain jurisdictions during the current period. These effects were partially offset by favorable changes in the geographic mix of earnings in the current year and by reductions in valuation allowances on foreign tax credit carryforwards resulting from revised forecasts of foreign-sourced income and expenses during the applicable carryforward period. See Note 11 - Income Taxes in the accompanying unaudited interim consolidated financial statements for further information.
Current report
•higher pricing for most of our products, primarily due to pricing actions implemented during the three months ended June 30, 2026, as well as a more favorable product mix; and
Current report
•a favorable currency impact, primarily resulting from a stronger euro and Chinese yuan relative to the U.S. dollar;
Current report
largely offset by:
Current report
•lower volume, primarily due to the completed sale of the Micromax® business (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information).
Current report
•higher spending of $49 million, primarily as a result of higher inventory and turnaround costs at our Frankfurt POM unit during the three months ended June 30, 2026; and
Current report
•accelerated depreciation expense of $43 million, primarily related to the announced closure of our facilities in Sakra, Singapore and Ulsan, South Korea, and optimization of the North American nylon 6,6 polymerization units during the three months ended June 30, 2026;
Current report
•higher Net sales; and
Current report
•a decrease in earnings from our Mylar Specialty Films strategic affiliate, primarily due to restructuring activities.
Current report
Net sales increased for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to:
Current report
•a favorable currency impact, primarily resulting from a stronger euro and Chinese yuan relative to the U.S. dollar; and
Current report
•higher pricing for most of our products, primarily due to pricing actions implemented during the three months ended June 30, 2026, as well as a more favorable product mix;
Current report
largely offset by:
Current report
•lower volume, primarily due to the completed sale of the Micromax® business (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information).
Current report
Operating profit increased for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to:
Showing the first 40 of 62 passages. Open the source sections for the rest.
Removed paragraphs (20)
Previous report
Net sales decreased $52 million, or 2%, for the three months ended March 31, 2026 compared to the same period in 2025, primarily due to:
Previous report
•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;
Previous report
Operating profit increased $49 million, or 30%, for the three months ended March 31, 2026 compared to the same period in 2025, primarily due to:
Previous report
•lower spending of $47 million, primarily in our Engineered Materials segment as a result of the positive impact from our planned inventory build as well as the realization of cost savings and productivity actions, partially offset by higher spending in our Other Activities segment, primarily related to higher merger and acquisition and incentive compensation costs incurred during the three months ended March 31, 2026; and
Previous report
•lower raw material costs in our Engineered Materials segment;
Previous report
•lower Net sales in our Acetyl Chain segment.
Previous report
•an increase in earnings from our Ibn Sina strategic affiliate, primarily as a result of lower methyl tertiary-butyl ether ("MTBE") volumes arising from a plant turnaround during the three months ended March 31, 2025, which did not recur in the current year.
Previous report
•a favorable currency impact, primarily resulting from a stronger euro relative to the U.S. dollar;
Previous report
•lower pricing for most of our products, primarily due to competitive market dynamics.
Previous report
•lower spending of $56 million, primarily as a result of the positive impact from our planned inventory build as well as the realization of cost savings and productivity actions during the three months ended March 31, 2026;
Previous report
•an increase in earnings from our Ibn Sina strategic affiliate, primarily as a result of lower MTBE volumes arising from a plant turnaround during the three months ended March 31, 2025, which did not recur in the current year.
Previous report
Net sales decreased for the three months ended March 31, 2026 compared to the same period in 2025, primarily due to:
Previous report
•lower pricing for our products globally, due to an environment with greater supply than demand during the three months ended March 31, 2026;
Previous report
•a favorable currency impact, primarily resulting from a stronger euro relative to the U.S. dollar.
Previous report
•lower Net sales.
Previous report
•an unfavorable currency impact.
Previous report
•a decrease in net cash interest paid of $108 million; and
Previous report
•a decrease in net borrowings on short-term debt of $238 million, primarily due to a decrease in net borrowings of $200 million under the November 2024 U.S. Term Loan Credit Facility, during three months ended March 31, 2025, which did not recur in the current year, and a decrease in net borrowings on our China Revolving Credit Facilities (defined below) and U.S. Revolving Credit Facility (defined below) of $49 million, as well as a decrease of net borrowings under various China working capital loans during the three months ended March 31, 2026;
Previous report
On March 10, 2026, CNCC entered into a CNY600 million senior unsecured term loan credit agreement bearing interest at certain floating interest rates, expiring seven years from the drawdown date.
Previous report
On March 26, 2026, CNCC entered into a CNY950 million senior unsecured term loan credit agreement bearing interest at certain floating interest rates, expiring five years from the drawdown date. No draws were initiated as of March 31, 2026.
Reworded paragraphs (30)
Previous wording
•a favorable currency impact from our Engineered Materials and Acetyl Chain segments, primarily resulting from a stronger euro relative to the U.S. dollar.
Current wording
•a favorable currency impact from our Engineered Materials and Acetyl Chain segments, primarily resulting from a stronger euro and Chinese yuan relative to the U.S. dollar;
Previous wording
•lower volume in our Acetyl Chain segment, primarily driven by decreased global demand; and
Current wording
•lower volume in our Engineered Materials segment, primarily due to the completed sale of the Micromax® business (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information).
Previous wording
Equity in net earnings (loss) of affiliates increased $13 million, or 59%, for the three months ended March 31, 2026 compared to the same period in 2025, primarily due to:
Current wording
Equity in net earnings (loss) of affiliates decreased $18 million, or 62%, for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to:
Previous wording
Our effective income tax rate for the three months ended March 31, 2026 was 40% compared to (150)% for the same period in 2025. The change in the effective income tax rate for the three months ended March 31, 2026 compared to the same period in 2025 was primarily due to increased earnings in the current year, as well as changes in uncertain tax benefits related to prior year tax examinations in various foreign jurisdictions and differences in functional currency for tax purposes in certain jurisdictions, partially offset by favorable changes in the geographic mix of earnings in the current year. See Note 11 - Income Taxes in the accompanying unaudited interim consolidated financial statements for further information.
Current wording
Our effective income tax rate for the three months ended June 30, 2026 was 8% compared to (58)% for the same period in 2025. The change in the effective income tax rate for the three months ended June 30, 2026 compared to the same period in 2025 was primarily due to favorable tax items recorded in the prior-year period that did not recur in 2026, including net deferred tax benefits related to the relocation of certain intangible assets among wholly-owned foreign affiliates as part of the continued integration of global principal operations and a tax benefit associated with the settlement of German tax examinations for the 2008 through 2012 tax years. The higher rate also reflected unfavorable functional-currency tax impacts in certain jurisdictions during the current period. These effects were partially offset by favorable changes in the geographic mix of earnings in the current year and by reductions in valuation allowances on foreign tax credit carryforwards resulting from revised forecasts of foreign-sourced income and expenses during the applicable carryforward period. See Note 11 - Income Taxes in the accompanying unaudited interim consolidated financial statements for further information.
Previous wording
•a gain of $50 million recognized on the completed sale of the Micromax® business (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information); and
Current wording
•a gain of $50 million in our Engineered Materials segment, recognized on the completed sale of the Micromax® business (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information); and
Previous wording
•lower raw materials costs, primarily driven by productivity initiatives.
Current wording
•lower raw materials costs, primarily driven by productivity initiatives and sourcing changes.
Previous wording
Equity in net earnings (loss) of affiliates increased for the three months ended March 31, 2026 compared to the same period in 2025, primarily due to:
Current wording
Equity in net earnings (loss) of affiliates decreased for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to:
Previous wording
•lower volume across most of our products, due to decreased global demand; and
Current wording
•lower volume for some of our products, primarily related to decreased global demand.
Previous wording
•higher spending of $9 million, primarily related to higher merger and acquisition and incentive compensation costs incurred during the three months ended March 31, 2026; and
Current wording
•higher spending of $37 million, primarily related to higher incentive compensation and merger and acquisition costs incurred during the three months ended June 30, 2026;
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, 2026, we have $1.75 billion available for borrowing under our senior U.S. Revolving Credit Facility (defined below) and $94 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 (see Covenants section below for further information). In addition, we held cash and cash equivalents of $1.8 billion as of March 31, 2026. 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, 2026, we have $1.75 billion available for borrowing under our senior U.S. Revolving Credit Facility (defined below) and $96 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 (see Covenants section below for further information). In addition, we held cash and cash equivalents of $1.4 billion as of June 30, 2026. 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
In October 2025, we announced the intended closure of our facility in Lanaken, Belgium to streamline our production costs across our global network. We intend to permanently cease all manufacturing operations during the second half of 2026. We expect to incur additional exit and shutdown costs related to the closure of the facility of $100 million, including employee termination costs, through 2027. See Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information.
Current wording
In October 2025, we announced the intended closure of our facility in Lanaken, Belgium to streamline our production costs across our global network. We intend to permanently cease all manufacturing operations during the second half of 2026. We expect to incur additional exit and shutdown costs related to the closure of the facility of $60 million, including employee termination costs, through 2027. See Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information.
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 2026. In Engineered Materials, at our Nanjing, China facility, our expansions of (1) the compounding plant was completed and began production activities during the three months ended December 31, 2025 and (2) the liquid crystal polymer ("LCP") compounding facility is on schedule for completion in the second half of 2026. Our energy optimization productivity and greenhouse gas reduction project at our polyoxymethylene ("POM") unit in Frankfurt, Germany is progressing on an extended schedule that aligns with our strategy for capital spending. In the Acetyl Chain, our planned expansion of our vinyl acetate ethylene ("VAE") emulsion plant in Frankfurt, Germany is in construction with start-up scheduled in the third quarter of 2026 to align with demand. 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 stewardship, maintenance, and productivity projects, as we continue to prioritize deleveraging and expect total capital expenditures to be approximately $300 million to $350 million in 2026. In Engineered Materials, at our Nanjing, China facility, our expansions of (1) the compounding plant was completed and began production activities during the three months ended December 31, 2025 and (2) the liquid crystal polymer ("LCP") facility is on schedule for completion in the second half of 2026. Our energy optimization productivity and greenhouse gas reduction project at our POM unit in Frankfurt, Germany is progressing on an extended schedule that aligns with our strategy for capital spending. In the Acetyl Chain, our planned expansion of our vinyl acetate ethylene ("VAE") emulsion plant in Frankfurt, Germany is in construction with start-up scheduled in the third quarter of 2026 to align with demand. 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 increased $495 million to $1.8 billion as of March 31, 2026 compared to December 31, 2025. As of March 31, 2026, $706 million of the $1.8 billion of cash and cash equivalents was held by our foreign subsidiaries. Cash and cash equivalents held by foreign subsidiaries are largely accessible without additional material tax consequences, if needed in the U.S., to fund operations. See Note 11 - Income Taxes in the accompanying unaudited interim consolidated financial statements for further information.
Current wording
Cash and cash equivalents increased $101 million to $1.4 billion as of June 30, 2026 compared to December 31, 2025. As of June 30, 2026, $811 million of the $1.4 billion of cash and cash equivalents was held by our foreign subsidiaries. Cash and cash equivalents held by foreign subsidiaries are largely accessible without additional material tax consequences, if needed in the U.S., to fund operations. See Note 11 - Income Taxes in the accompanying unaudited interim consolidated financial statements for further information.
Previous wording
Net cash provided by operating activities increased $39 million to $76 million for the three months ended March 31, 2026 compared to net cash provided by operating activities of $37 million for the same period in 2025, primarily due to:
Current wording
Net cash provided by operating activities decreased $162 million to $285 million for the six months ended June 30, 2026 compared to net cash provided by operating activities of $447 million for the same period in 2025, primarily due to:
Previous wording
•unfavorable trade working capital of $104 million, primarily due to the timing of collections of trade receivables and inventory increases compared to prior year reductions, partially offset by timing of settlement of trade payables during the three months ended March 31, 2026.
Current wording
•unfavorable trade working capital of $396 million, primarily due to the timing of collections of trade receivables and inventory increases as a result of higher pricing and raw material costs, partially offset by timing of settlement of trade payables during the six months ended June 30, 2026; and
Previous wording
•an increase in earnings performance after noncash adjustments;
Current wording
•a decrease in earnings performance after noncash adjustments;
Previous wording
Net cash provided by investing activities increased $523 million to $425 million for the three months ended March 31, 2026 compared to net cash used in investing activities of $98 million for the same period in 2025, primarily due to:
Current wording
Net cash provided by investing activities increased $552 million to $366 million for the six months ended June 30, 2026 compared to net cash used in investing activities of $186 million for the same period in 2025, primarily due to:
Previous wording
•a cash flow of $493 million related to sale of the Micromax® business (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information).
Current wording
•a cash inflow of $493 million related to sale of the Micromax® business (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information); and
Previous wording
Net cash used in financing activities increased $48 million to $3 million for the three months ended March 31, 2026 compared to net cash provided by financing activities of $45 million for the same period in 2025, primarily due to:
Current wording
Net cash used in financing activities increased $478 million to $549 million for the six months ended June 30, 2026 compared to net cash used in financing activities of $71 million for the same period in 2025, primarily due to:
Previous wording
•a decrease in proceeds from long-term debt, primarily due to the March 2025 Offering (defined below), of $2.6 billion during three months ended March 31, 2025, which did not recur in the current year; and
Current wording
•a decrease in proceeds from long-term debt, primarily due to the March 2025 Offering (defined below), of $2.6 billion during the six months ended June 30, 2025, which did not recur in the current year, and a decrease in proceeds of $119 million from our various long-term China working capital and term loans;
Previous wording
•a decrease in repayments of long-term debt, primarily due to the March 2025 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 Facility (defined below), and redemption of the 1.250% Senior Notes due February 11, 2025, during the three months ended March 31, 2025, which did not recur in the current year; and
Current wording
•a decrease in repayments of long-term debt, primarily due to the March 2025 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 Facility (defined below), and redemption of the 1.250% Senior Notes due February 11, 2025, during the six months ended June 30, 2025, which did not recur in the current year, partially offset by the redemption of the 4.777% Notes (defined below), and repayment of certain long-term China working capital loans during the six months ended June 30, 2026; and
Previous wording
•a decrease in debt refinancing costs paid of $69 million during the three months ended March 31, 2025, which did not recur in the current year.
Current wording
•a decrease in debt refinancing costs paid of $73 million during the six months ended June 30, 2025, which did not recur in the current year.
Previous wording
Celanese (Nanjing) Chemical Co., Ltd. ("CNCC") has entered into various working capital and term loans that bear interest at floating or fixed interest rates and expire on various dates beginning December 2026 through March 2031. These working capital and term loans have an outstanding balance of $628 million as of March 31, 2026.
Current wording
Celanese (Nanjing) Chemical Co., Ltd. ("CNCC") and CSIT entered into various working capital and term loans (the "China Working Capital and Term Loans") that bear interest at floating or fixed interest rates and expire on various dates beginning December 2026 through April 2031. During the three and six months ended June 30, 2026, CNCC and CSIT entered into four such agreements, with a combined borrowing capacity of CNY100 million and CNY1.8 billion, respectively. The China Working Capital and Term Loans have an outstanding balance of $614 million as of June 30, 2026.
Previous wording
Deferred financing costs related to the March 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. Fees and expenses related to the March 2025 Tender Offers of $32 million, including accelerated amortization of deferred financing costs associated with the principal amounts tendered, are included in Refinancing expense in the unaudited interim consolidated statements of operations for the three months ended March 31, 2025.
Current wording
Deferred financing costs related to the March 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. Fees and expenses related to the March 2025 Tender Offers of $32 million, including accelerated amortization of deferred financing costs associated with the principal amounts tendered, are included in Refinancing expense in the unaudited interim consolidated statements of operations for the six months ended June 30, 2025.
Previous wording
In June 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 $315 million and $1.5 billion of accounts receivable under this agreement for the three months ended March 31, 2026 and year ended December 31, 2025, respectively, and collected $294 million and $1.5 billion of accounts receivable sold under this agreement during the same periods. Unsold U.S. accounts receivable of $104 million were pledged by the SPE as collateral to the Purchasers as of March 31, 2026.
Current wording
On May 22, 2026, 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, a wholly-owned, "bankruptcy remote" special purpose subsidiary (the "U.S. SPE") and certain global financial institutions ("U.S. Purchasers"). We de-recognized $738 million and $1.5 billion of accounts receivable under this agreement for the six months ended June 30, 2026 and year ended December 31, 2025, respectively, and collected $693 million and $1.5 billion of accounts receivable sold under this agreement during the same periods. Unsold U.S. accounts receivable of $124 million were pledged by the U.S. SPE as collateral to the U.S. Purchasers as of June 30, 2026.
Previous wording
We have factoring agreements in Europe, Japan, Singapore and China with financial institutions. We de-recognized $185 million and $717 million of accounts receivable under these factoring agreements for the three months ended March 31, 2026 and year ended December 31, 2025, respectively, and collected $172 million and $724 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 $350 million and $717 million of accounts receivable under these factoring agreements for the six months ended June 30, 2026 and year ended December 31, 2025, respectively, and collected $359 million and $724 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 $13 million and $82 million from the accounts receivable transferred under the Master Discounting Agreements for the three months ended March 31, 2026 and year ended December 31, 2025, 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 $42 million and $82 million from the accounts receivable transferred under the Master Discounting Agreements for the six months ended June 30, 2026 and year ended December 31, 2025, respectively.
Previous wording
During the year ended December 31, 2025, we amended certain covenants in certain U.S. Credit Facilities, including financial ratio maintenance covenants.
Current wording
On July 31, 2026, and during the year ended December 31, 2025, we amended certain covenants in certain U.S. Credit Facilities, including financial ratio maintenance covenants.
Previous wording
In addition, our income tax returns are under examination by the tax authorities in Mexico 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 periods after 2012. In August 2023, we entered into a partial settlement with the Mexican tax authorities with respect to the audit for the 2018 tax year. The partial settlement did not have a material impact on income tax expense in the unaudited interim consolidated statements of operations. We are currently engaged in discussions with the Mexican tax authorities regarding preliminary audit findings for the 2019 and 2020 tax years. We have concluded the audit for the 2019 through 2022 tax years with the Canadian tax authorities, which resulted in an immaterial adjustment. The Company remains in discussions with the Canadian tax authorities regarding audit findings for the 2016 through 2018 tax years and currently does not expect those audits to have a material impact on income tax expense. The audit in the U.S. for the years 2016 through 2020 is in the data gathering phase. During the first quarter of 2025, we initiated settlement discussions with the German tax authorities regarding certain matters related to the audit for periods after 2007. In the second quarter of 2025, the Company concluded settlement discussions with respect to the 2008 through 2012 tax years. We will record the impacts of any additional audit settlements in income tax expense in the period in which such settlements are finalized. Based on information currently available, we do not expect any additional material impacts to the unaudited interim consolidated statements of operations.
Current wording
The audit by the U.S. tax authorities for the years 2016 through 2020 is in the data gathering phase. During the first quarter of 2025, we initiated settlement discussions with the German tax authorities regarding certain matters related to the audit for periods after 2007. In the second quarter of 2025, the Company concluded settlement discussions with respect to the 2008 through 2012 tax years. We will record the impacts of any additional audit settlements in income tax expense in the period in which such settlements are finalized. Based on information currently available, we do not expect any additional material impacts to the unaudited interim consolidated statements of operations.
Previous wording
During the three months ended March 31, 2026, demand in the Western Hemisphere was supported by sequential seasonal improvement but remained overall muted in key end markets, including automotive, paints and coatings and construction, reflecting ongoing global macroeconomic weakness. Supply chain dislocations drove raw material and energy inflation, resulting in price escalation across the value chain particularly in the Eastern Hemisphere and Europe. We continue to identify and execute actions that aim to improve earnings, accelerate deleveraging and drive long‑term shareholder value.
Current wording
During the three months ended June 30, 2026, demand in the Western Hemisphere was supported by sequential seasonal improvement but remained overall muted in key end markets, including automotive, paints and coatings and construction, reflecting ongoing global macroeconomic weakness. Supply chain dislocations drove raw material and energy inflation, resulting in price escalation across the value chain particularly in Europe. We continue to identify and execute actions that aim to improve earnings, accelerate deleveraging and drive long‑term shareholder value.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Net sales increased for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to:
Current report — wording carried from elsewhere
Operating loss increased for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to: