# Celanese Corp (CE) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from Celanese Corp's 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1306830/000130683025000027/ce-20241231.htm
Accession: 0001306830-25-000027
Filing date: 2025-02-21
Report date: 2024-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high

Company profile: /company/CE/
All MD&A years: /company/CE/mda/
Previous year: /company/CE/mda/fy2023/ (FY 2023)
Next year: /company/CE/mda/fy2025/ (FY 2025)

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

In this Annual Report on Form 10-K ("Annual Report"), the term "Celanese" refers to Celanese Corporation, a Delaware corporation, and not its subsidiaries. The terms the "Company," "we," "our" and "us," refer to Celanese and its subsidiaries on a consolidated basis. The term "Celanese U.S." refers to the Company's subsidiary, Celanese US Holdings LLC, a Delaware limited liability company, and not its subsidiaries.

The following discussion should be read in conjunction with the accompanying consolidated financial statements and notes to the consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

Investors are cautioned that the forward-looking statements contained in this section and other parts of this Annual Report involve both risk and uncertainty. Several important factors could cause actual results to differ materially from those anticipated by these statements. Many of these statements are macroeconomic in nature and are, therefore, beyond the control of management. See "Forward-Looking Statements" below.

Forward-Looking Statements

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") and other parts of this Annual Report contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, us. Generally, words such as "believe," "expect," "intend," "estimate," "anticipate," "project," "plan," "may," "can," "could," "might," and "will," and similar expressions, as they relate to us are intended to identify forward-looking statements. These statements reflect our current views and beliefs with respect to future events as of the date hereof, are not historical facts or guarantees of future performance and involve risks and uncertainties that are difficult to predict and many of which are outside of our control. Further, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. See "Special Note Regarding Forward-Looking Statements" at the beginning of this Annual Report for further discussion. All forward-looking statements made in this Annual Report are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed in this Annual Report will increase with the passage of time. We undertake no obligation, and disclaim any duty, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changes in our expectations or otherwise.

Risk Factors

Item 1A. Risk Factors of this Annual Report also contains a description of certain risk factors that you should consider which could significantly affect our business and/or financial results. In addition, the following factors, among others, could cause our actual results to differ materially from those results, performance or achievements that may be expressed or implied by such forward-looking statements:

•changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate;

•the length and depth of product and industry business cycles particularly in the automotive, electrical, textiles, electronics and construction industries;

•volatility or changes in the price and availability of raw materials and energy, particularly changes in the demand for, supply of, and market prices of ethylene, methanol, natural gas, carbon monoxide, wood pulp, hexamethylene diamine, Polyamide 66 ("PA66"), polybutylene terephthalate, ethanol, natural gas and fuel oil, and the prices for electricity and other energy sources;

•the ability to pass increases in raw materials prices, logistics costs and other costs on to customers or otherwise improve margins through price increases;

•the possibility that we will not be able to realize the anticipated benefits of the Mobility & Materials business (the "M&M Business") we acquired from DuPont de Nemours, Inc. (the "M&M Acquisition"), including synergies and growth opportunities, whether as a result of difficulties arising from the operation of the M&M Business or other unanticipated delays, costs, inefficiencies or liabilities;

•additional impairments of goodwill or intangible assets;

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•increased commercial, legal or regulatory complexity of entering into, or expanding our exposure to, certain end markets and geographies;

•risks in the global economy and equity and credit markets and their potential impact on our ability to pay down debt in the future and/or refinance at suitable rates, in a timely manner, or at all;

•risks and costs associated with increased leverage from the M&M Acquisition, including increased interest expense and potential reduction of business and strategic flexibility;

•the ability to maintain plant utilization rates and to implement planned capacity additions, expansions and maintenance;

•the ability to reduce or maintain current levels of production costs and to improve productivity by implementing technological improvements to existing plants;

•increased price competition and the introduction of competing products by other companies;

•the ability to identify desirable potential acquisition or divestiture opportunities and to complete such transactions, including obtaining regulatory approvals, consistent with our strategy;

•market acceptance of our products and technology;

•compliance and other costs and potential disruption or interruption of production or operations due to accidents, interruptions in sources of raw materials, transportation, logistics or supply chain disruptions, cybersecurity incidents, terrorism or political unrest, public health crises, or other unforeseen events or delays in construction or operation of facilities, including as a result of geopolitical conditions, the direct or indirect consequences of acts of war or conflict (such as the Russia-Ukraine conflict or conflicts in the Middle East) or terrorist incidents or as a result of weather, natural disasters, or other crises;

•the ability to obtain governmental approvals and to construct facilities on terms and schedules acceptable to us;

•changes in applicable tariffs, duties and trade agreements, tax rates or legislation throughout the world including, but not limited to, anti-dumping and countervailing duties, adjustments, changes in estimates or interpretations or the resolution of tax examinations or audits that may impact recorded or future tax impacts and potential regulatory and legislative tax developments in the United States and other jurisdictions;

•changes in the degree of intellectual property and other legal protection afforded to our products or technologies, or the theft of such intellectual property;

•potential liability for remedial actions and increased costs under existing or future environmental, health and safety regulations, including those relating to climate change or other sustainability matters;

•potential liability resulting from pending or future claims or litigation, including investigations or enforcement actions, or from changes in the laws, regulations or policies of governments or other governmental activities, in the countries in which we operate;

•our level of indebtedness, which could diminish our ability to raise additional capital to fund operations or limit our ability to react to changes in the economy or the chemical industry, and the success of our deleveraging efforts, as well as any changes to our credit ratings.

•changes in currency exchange rates and interest rates;

•tax rates and changes thereto; and

•various other factors, both referenced and not referenced in this Annual Report.

Many of these factors are macroeconomic in nature and are, therefore, beyond our control. Should one or more of these risks or uncertainties materialize, affect us in ways or to an extent that we currently do not expect or consider to be significant, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described in this Annual Report as anticipated, believed, estimated, expected, intended, planned or projected. We neither intend nor assume any obligation to update these forward-looking statements, which speak only as of the dates hereof.

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Results of Operations

Financial Highlights

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","","2023","","Change"],["","(In $ millions, except percentages)"],["Statement of Operations Data"],["Net sales","10,280","","","10,940","","","(660)"],["Gross profit","2,356","","","2,603","","","(247)"],["Selling, general and administrative (\"SG&A\") expenses","(1,030)","","","(1,075)","","","45"],["Other (charges) gains, net","(1,744)","","","(68)","","","(1,676)"],["Gain (loss) on disposition of businesses and assets, net","(14)","","","505","","","(519)"],["Operating profit (loss)","(697)","","","1,687","","","(2,384)"],["Equity in net earnings (loss) of affiliates","196","","","102","","","94"],["Non-operating pension and other postretirement employee benefit (expense) income","(20)","","","(69)","","","49"],["Interest expense","(676)","","","(720)","","","44"],["Interest income","33","","","39","","","(6)"],["Dividend income - equity investments","128","","","126","","","2"],["Earnings (loss) from continuing operations before tax","(996)","","","1,183","","","(2,179)"],["Earnings (loss) from continuing operations","(1,506)","","","1,973","","","(3,479)"],["Earnings (loss) from discontinued operations","(8)","","","(9)","","","1"],["Net earnings (loss)","(1,514)","","","1,964","","","(3,478)"],["Net earnings (loss) attributable to Celanese Corporation","(1,522)","","","1,960","","","(3,482)"],["Other Data"],["Depreciation and amortization","801","","","706","","","95"],["SG&A expenses as a percentage of Net sales","10.0","%","","9.8","%"],["Operating margin(1)","(6.8)","%","","15.4","%"],["Other (charges) gains, net"],["Restructuring","(107)","","","(52)","","","(55)"],["Asset impairments","(1,639)","","","(15)","","","(1,624)"],["Plant/office closures","2","","","(1)","","","3"],["Total Other (charges) gains, net","(1,744)","","","(68)","","","(1,676)"]]
[[/GREPCENT_TABLE]]

_____________________________

(1)Defined as Operating profit (loss) divided by Net sales.

[[GREPCENT_TABLE]]
[["","As of December 31,"],["","2024","","2023"],["","(In $ millions)"],["Balance Sheet Data"],["Cash and cash equivalents","962","","","1,805"],["Short-term borrowings and current installments of long-term debt - third party and affiliates","1,501","","","1,383"],["Long-term debt, net of unamortized deferred financing costs","11,078","","","12,301"],["Total debt","12,579","","","13,684"]]
[[/GREPCENT_TABLE]]

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Factors Affecting Business Segment Net Sales

The percentage increase (decrease) in Net sales attributable to each of the factors indicated for each of our business segments is as follows:

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

[[GREPCENT_TABLE]]
[["","Volume","","Price","","Currency","","","","Total"],["","(In percentages)"],["Engineered Materials","(5)","","","(3)","","","(1)","","","","","(9)"],["Acetyl Chain","4","","","(6)","","","\u2014","","","","","(2)"],["Total Company","(1)","","","(4)","","","(1)","","","","","(6)"]]
[[/GREPCENT_TABLE]]

Consolidated Results

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Net sales decreased $660 million, or 6%, for the year ended December 31, 2024 compared to the same period in 2023 primarily due to:

•lower pricing, 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, product mix, and decreased energy surcharges;

•lower volume in our Engineered Materials segment primarily due to the formation of the Nutrinova joint venture (see Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information) and reduced demand for elastomers due to weaker automotive demand, partially offset by higher volume, principally for POM in Europe and Asia; and

•an unfavorable currency impact, primarily resulting from a weaker Chinese Yuan ("CNY") and Japanese Yen ("JPY") relative to the U.S. dollar;

partially offset by:

•higher volume in our Acetyl Chain segment for most of our products, primarily methanol, downstream derivative products, acid, and VAM.

Operating profit decreased $2.4 billion, or 141%, for the year ended December 31, 2024 compared to the same period in 2023 primarily due to:

•an unfavorable impact of $1.7 billion to Other (charges) gains, net primarily in our Engineered Materials segment related to an impairment loss on goodwill of $1.5 billion and impairment losses on certain trade names, primarily Zytel® (see Note 9 - Goodwill and Intangible Assets, Net and Note 24 - Other (Charges) Gains, Net in the accompanying consolidated financial statements for further information);

•lower Net sales across our segments; and

•a gain of $515 million in our Engineered Materials segment recognized on the formation of the Nutrinova joint venture during the year ended December 31, 2023, which did not recur in the current year (see Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information);

partially offset by:

•lower raw material costs in our Engineered Materials and Acetyl Chain segments.

Non-operating pension and other postretirement employee expense decreased $49 million for the year ended December 31, 2024 compared to the same period in 2023 primarily due to a decrease in recognized actuarial loss of $29 million as a result of an increase in the weighted average discount rate used to determine benefit obligations from 4.5% to 4.8%,

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partially offset by lower than expected actual asset returns. See Note 12 - Benefit Obligations in the accompanying consolidated financial statements for further information.

Our effective income tax rate for the year ended December 31, 2024 was (51)% compared to (67)% for the year ended 2023. The change in the effective income tax rate for the year ended December 31, 2024 compared to the same period in 2023 was primarily due to:

•prior year impacts that did not recur in the current year, including the relocation of certain intangible assets to better align with the acquired M&M foreign operations, the realignment of our European headquarters and principal operations to Switzerland to achieve operational efficiencies, the release of valuation allowances on U.S. foreign tax credit carryforwards, and the excess of the U.S. GAAP gain over the tax gain from the formation of the Nutrinova joint venture; and

•current year impacts of a non-deductible goodwill impairment loss and recognition of a valuation allowance against certain local country, non-U.S. tax credit carryforwards due to reduced forecasts of earnings in future periods and capital gains tax arising from an internal integration-related restructuring of our acquired China operations to optimize our debt profile.

See Note 15 - Income Taxes in the accompanying consolidated financial statements for further information.

Discussion of our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 and for the year ended December 31, 2022 compared to the year ended December 31, 2021, can be found in Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Reports for the years ended December 31, 2023 and December 31, 2022, respectively.

Business Segments

Engineered Materials

[[GREPCENT_TABLE]]
[["","Year Ended December 31,","","","","%"],["","2024","","2023","","Change","","Change"],["","(In $ millions, except percentages)"],["Net sales","5,607","","","6,149","","","(542)","","","(8.8)","%"],["Net Sales Variance"],["Volume","(5)","%"],["Price","(3)","%"],["Currency","(1)","%"],["Other (charges) gains, net","(1,724)","","","(56)","","","(1,668)","","","(2,978.6)","%"],["Operating profit (loss)","(1,179)","","","1,083","","","(2,262)","","","(208.9)","%"],["Operating margin","(21.0)","%","","17.6","%"],["Equity in net earnings (loss) of affiliates","172","","","83","","","89","","","107.2","%"],["Depreciation and amortization","510","","","462","","","48","","","10.4","%"]]
[[/GREPCENT_TABLE]]

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Net sales decreased for the year ended December 31, 2024 compared to the same period in 2023 primarily due to:

•lower volume, primarily driven by the formation of the Nutrinova joint venture (see Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information) and reduced demand for elastomers due to weaker automotive demand, partially offset by higher volume for certain products, principally for POM in Europe and Asia;

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

•an unfavorable currency impact, primarily resulting from a weaker JPY and CNY relative to the U.S. dollar.

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Operating profit decreased for the year ended December 31, 2024 compared to the same period in 2023 primarily due to:

•an unfavorable impact of $1.7 billion to Other (charges) gains, net primarily related to an impairment loss on goodwill of $1.5 billion and impairment losses on certain trade names, primarily Zytel® (see Note 9 - Goodwill and Intangible Assets, Net and Note 24 - Other (Charges) Gains, Net in the accompanying consolidated financial statements for further information);

•a gain of $515 million recognized on the formation of the Nutrinova joint venture during the year ended December 31, 2023, which did not recur in the current year (see Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information); and

•lower Net sales;

partially offset by:

•lower raw materials costs for most of our products.

Equity in net earnings (loss) of affiliates increased for the year ended December 31, 2024 compared to the same period in 2023 primarily due to:

•an increase in earnings from our Mylar Specialty Films strategic affiliates of $61 million, primarily due to increased restructuring costs incurred in the year ended December 31, 2023, which did not recur in the current year.

Acetyl Chain

[[GREPCENT_TABLE]]
[["","Year Ended December 31,","","","","%"],["","2024","","2023","","Change","","Change"],["","(In $ millions, except percentages)"],["Net sales","4,763","","","4,884","","","(121)","","","(2.5)","%"],["Net Sales Variance"],["Volume","4","%"],["Price","(6)","%"],["Currency","\u2014","%"],["Operating profit (loss)","951","","","1,109","","","(158)","","","(14.2)","%"],["Operating margin","20.0","%","","22.7","%"],["Dividend income - equity investments","127","","","124","","","3","","","2.4","%"],["Depreciation and amortization","244","","","217","","","27","","","12.4","%"]]
[[/GREPCENT_TABLE]]

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Net sales decreased for the year ended December 31, 2024 compared to the same period in 2023 primarily due to:

•lower pricing for most of our products globally, due to an environment with greater supply than demand during the year ended December 31, 2024;

partially offset by:

•higher volume for most of our products, primarily methanol, downstream derivative products, acid, and VAM.

Operating profit decreased for the year ended December 31, 2024 compared to the same period in 2023 primarily due to:

•lower Net sales; and

•higher spending of $40 million, primarily as a result of increased plant operating and maintenance expenses, including costs at our new acetic acid unit at Clear Lake, Texas, and plant turnaround costs related to our joint venture, Fairway Methanol LLC;

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partially offset by:

•lower raw material and sourcing costs, primarily for carbon monoxide and methanol.

Other Activities

[[GREPCENT_TABLE]]
[["","Year Ended December 31,","","","","%"],["","2024","","2023","","Change","","Change"],["","(In $ millions, except percentages)"],["Operating profit (loss)","(469)","","","(505)","","","36","","","7.1","%"],["Non-operating pension and other postretirement employee benefit (expense) income","(28)","","","(68)","","","40","","","58.8","%"]]
[[/GREPCENT_TABLE]]

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Operating loss decreased for the year ended December 31, 2024 compared to the same period in 2023 primarily due to:

•lower functional spending and incentive compensation cost of $33 million.

Non-operating pension and other postretirement employee expense decreased for the year ended December 31, 2024 compared to the same period in 2023 primarily due to:

•a decrease in the actuarial loss of $29 million as a result of an increase in the weighted average discount rate used to determine benefit obligations from 4.5% to 4.8%, partially offset by lower than expected actual asset returns. See Note 12 - Benefit Obligations in the accompanying consolidated financial statements for further information.

Liquidity and Capital Resources

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 December 31, 2024, we have $1.75 billion available for borrowing under our senior U.S. unsecured revolving credit facility, $171 million available for borrowing under our separate China Revolving Credit Facilities (defined below) and up to $1.0 billion under the November 2024 U.S. Term Loan Credit Agreement (defined below), if required, in meeting our working capital needs and other contractual obligations. In addition, we held cash and cash equivalents of $962 million as of December 31, 2024. 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.

On February 29, 2024, we announced the intended closure of our facility in Mechelen, Belgium to optimize production costs across our global network. This operation is included in the Engineered Materials segment. We fully ceased operations during the three months ended December 31, 2024. We expect to incur additional exit and shutdown costs related to the closure of the facility of approximately $20 million, inclusive of estimated employee termination costs, through 2028. See Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements.

In October 2023, we announced the intended closure of our PA66 and High-Performance Nylon ("HPN") polymerization units at our facility in Uentrop, Germany to optimize production costs across our global network. These operations are included in the Engineered Materials segment. We fully ceased operation of the PA66 polymerization unit and partially ceased operation of the HPN polymerization units during the year ended December 31, 2024. See Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements.

In September 2023, we formed a food ingredients joint venture with Mitsui & Co., Ltd. ("Mitsui") under the name Nutrinova. We contributed receivables, inventory, property, plant and equipment, certain other assets, liabilities, technology and employees of our food ingredients business while retaining a 30% interest in the joint venture. Mitsui acquired the remaining 70% interest in the food ingredients business for a purchase price of $503 million, subject to transaction adjustments. We accounted for our interest in the joint venture as an equity method investment, and our portion of the results will continue to be included in the Engineered Materials segment. For further information regarding the food ingredients joint venture, see Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements.

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In November 2022, we acquired a majority of the M&M Business for a purchase price of $11.0 billion, subject to transaction adjustments, in an all-cash transaction. For further information regarding the acquisition and related financing transactions, see Debt and Other Obligations in this Liquidity and Capital Resources and Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information.

Our incurrence of debt to finance the purchase price for the M&M Acquisition has increased our leverage and our ratio of indebtedness to consolidated EBITDA as set forth in our senior unsecured credit facilities. We believe that cash flows from our operations, together with synergy opportunities from the M&M Acquisition and cost reduction initiatives, will support our deleveraging efforts over the next few years. However, we expect the weakened demand environment, as discussed below, to continue to adversely impact our cash generation in the near-term. In furtherance of our deleveraging efforts, we have paused our share repurchase program and are in the process of evaluating additional cash generation or conservation opportunities. As part of this process, on November 4, 2024, we announced our intent to reduce our quarterly dividend by approximately 95 percent beginning in the first quarter of 2025. We will continue to evaluate our dividend policy, taking into account our ability to return to a balanced capital allocation strategy. Our deleveraging efforts may also include, in addition to the food ingredients joint venture described above, other opportunistic dispositions or monetization of other product or business lines or other assets.

While our contractual obligations, commitments and debt service requirements over the next several years are significant, we continue to believe we will have available resources to meet our liquidity requirements, including debt service, for the next twelve months. If our cash flow from operations is insufficient to fund our debt service and other obligations, we may be required to use other means available to us such as increasing our borrowings, reducing or delaying capital expenditures, seeking additional capital, further reducing or pausing dividend payments, or seeking to restructure or refinance our indebtedness. There can be no assurance, however, that we will continue to generate cash flows at or above current levels.

Total capital expenditures were $435 million for the year ended December 31, 2024. 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 on schedule and in detailed engineering design. 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 second half 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.

We did not repurchase any Common Stock during the year ended December 31, 2024.

On a stand-alone basis, Celanese and its immediate 100% owned subsidiary, Celanese U.S., have no independent external operations of their own. Accordingly, they generally depend on the cash flow of their subsidiaries and their ability to pay dividends and make other distributions to Celanese and Celanese U.S. in order to meet their obligations, including their obligations under senior credit facilities and senior notes, and to pay dividends on our Common Stock.

We are subject to capital controls and exchange restrictions imposed by the local governments in certain jurisdictions where we operate, such as China, South Korea, India and Indonesia. Capital controls impose limitations on our ability to exchange currencies, repatriate earnings or capital, lend via intercompany loans or create cross-border cash pooling arrangements. Our largest exposure to a country with capital controls is in China. Pursuant to applicable regulations, foreign-invested enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, the Chinese government imposes certain currency exchange controls on cash transfers out of China, puts certain limitations on duration, purpose and amount of intercompany loans, and restricts cross-border cash pooling. While it is possible that future tightening of these restrictions or application of new similar restrictions could impact us, these limitations do not currently restrict our operations.

We remain in compliance with the covenants in the existing Global Credit Agreements (defined below, and as amended to date) and expect to remain in compliance based on our current expectation of future results of operations and planned cash generation activities. If the actual future results of our operations and cash generation activities differ materially from these expectations, we may be required to seek an amendment to or waiver of any impacted covenants, which may increase our borrowing costs under the existing Global Credit Agreements.

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Cash Flows

Cash and cash equivalents decreased $843 million to $962 million as of December 31, 2024 compared to December 31, 2023. As of December 31, 2024, $627 million of the $962 million of cash and cash equivalents was held by our foreign subsidiaries. Under the Tax Cuts and Jobs Act, we have 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. See Note 15 - Income Taxes in the accompanying consolidated financial statements for further information.

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

•Net Cash Provided by (Used in) Operating Activities

Net cash provided by operating activities decreased $933 million to $966 million for the year ended December 31, 2024 compared to $1.9 billion for the same period in 2023, primarily due to:

•unfavorable trade working capital of $654 million, primarily due to inventory reductions compared to those in the prior year driven by balancing production with demand and the timing of settlement of trade payables during the year ended December 31, 2024;

•a decrease in Net earnings, excluding the non-cash impacts of impairment losses, primarily due to the goodwill impairment loss of $1.5 billion in the Engineered Materials segment, (see Note 9 - Goodwill and Intangible Assets, Net in the accompanying consolidated financial statements for further information), deferred income taxes of $1.2 billion and the gain of $515 million recognized on the formation of the Nutrinova joint venture during the year ended December 31, 2023, which did not recur in the current year (see Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information); and

•an increase in cash taxes paid of $112 million.

•Net Cash Provided by (Used in) Investing Activities

Net cash used in investing activities increased $336 million to $470 million for the year ended December 31, 2024 compared to $134 million for the same period in 2023, primarily due to:

•a cash inflow of $461 million recognized during the year ended December 31, 2023 related to the formation of the Nutrinova joint venture (see Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information), which did not recur in the current year.

partially offset by:

•a decrease of $133 million in capital expenditures during the year ended December 31, 2024.

•Net Cash Provided by (Used in) Financing Activities

Net cash used in financing activities decreased $143 million to $1.3 billion for the year ended December 31, 2024 compared to $1.5 billion for the same period in 2023, primarily due to:

•a decrease in payments on long-term debt, primarily due to our cash tender offer of $2.25 billion completed in August 2023, payment in full of delayed-draw term loans of $870 million and repayment at maturity of the 1.125% senior unsecured notes during the year ended December 31, 2023, that did not recur in the current year, partially offset by repayments at maturity of the 5.900% and 3.500% senior unsecured notes during the year ended December 31, 2024; and

•a decrease in net payments on short-term debt, primarily driven by a payment of $500 million on our March 2022 U.S. Term Loan Credit Agreement (defined below) during the year ended December 31, 2023, which did not recur in the current year, partially offset by an increase in net payments on our revolving credit facilities of $74 million;

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partially offset by:

•a decrease in proceeds of long-term debt, primarily due to the issuance of certain senior unsecured notes of $3.0 billion during the year ended December 31, 2023, that did not recur in the current year, partially offset by current year borrowings on working capital loan facilities in China; and

•an increase in net payments on our China Working Capital Term Loan Agreement (defined below).

Debt and Other Obligations

•Senior Credit Facilities

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").

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

On February 21, 2023, August 9, 2023, February 16, 2024, November 1, 2024 and February 17, 2025, we amended certain covenants in certain of the U.S. Credit Agreements, including financial ratio maintenance covenants.

The U.S. Credit Agreements are guaranteed by Celanese, Celanese U.S. and domestic subsidiaries together representing substantially all of our U.S. assets and business operations (the "Subsidiary Guarantors").

In January 2023, Celanese (Shanghai) International Trading Co., Ltd ("CSIT"), a fully consolidated subsidiary, entered into a restatement of an existing credit facility agreement (the "CSIT Revolving Credit Agreement") to upsize and modify the facility thereunder to consist of an aggregate CNY1.75 billion uncommitted senior unsecured revolving credit facility available under two tranches (with overdraft, bank guarantee and documentary credit sublimits) (the "CSIT January 2023 Facility"). Obligations bear interest at certain fixed and floating rates. On April 7, 2024, the CSIT January 2023 Facility was reduced to CNY750 million and on December 19, 2024, the CSIT January 2023 Facility was reduced to CNY550 million. The CSIT Revolving Credit Agreement is guaranteed by Celanese U.S.

Also in January 2023, CSIT entered into a senior unsecured working capital loan contract for CNY800 million (the "China Working Capital Term Loan Agreement"), payable 12 months from withdrawal date and bearing interest at 0.5% less than certain interbank rates. The loan under the China Working Capital Term Loan Agreement was fully drawn in January 2023 and was fully repaid during the three months ended March 31, 2024.

In December 2023, Celanese (Nanjing) Chemical Co., Ltd. ("CNC") entered into a senior unsecured working capital loan agreement for CNY800 million, payable on December 25, 2026 and bearing interest at 2.8% (the "CNC Working Capital Loan Agreement"). The loan under the CNC Working Capital Loan Agreement was fully drawn during the three months ended March 31, 2024.

On June 28, 2024, CNC entered into a senior unsecured working capital loan agreement for CNY800 million, payable in installments until June 28, 2027 and bearing interest at 2.75% (the "CNC Three Year Working Capital Loan Agreement"). The CNC Three Year Working Capital Loan Agreement was partially drawn during the year ended December 31, 2024.

On November 1, 2024, we entered into a senior unsecured term loan credit agreement (the "November 2024 U.S. Term Loan Credit Agreement"), 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 will 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 the Company's senior unsecured debt rating, subject to further changes based on such ratings. The commitments under the November 2024 U.S. Term Loan Credit Agreement will terminate by March 15, 2025. The loan under the November 2024 U.S. Term Loan Credit Agreement was not drawn during the year ended December 31, 2024.

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On December 10, 2024, CNC entered into a credit facility agreement (the "CNC Revolving Credit Agreement," together with the CNC Three Year Working Capital Loan Agreement, the CSIT Revolving Credit Agreement, the China Working Capital Term Loan Agreement and the CNC Working Capital Loan Agreement, the "China Credit Agreements," and the China Credit Agreements together with the U.S. Credit Agreements, the "Global Credit Agreements")) for a CNY1.0 billion uncommitted senior unsecured revolving credit facility (the "CNC December 2024 Facility", and together with the CSIT January 2023 Facility and any other revolving credit facilities available to the Company's subsidiaries in China, the "China Revolving Credit Facilities"). Obligations bear interest at certain floating rates. We expect the China Credit Agreements will facilitate our efficient repatriation of cash to the U.S. to repay debt and effectively redomicile a portion of our U.S. debt to China at a lower average interest rate.

On February 6, 2025, we drew $300 million from our U.S. Revolving Credit Facility. This borrowing and cash on hand were used primarily to repay in full our senior unsecured notes due 2025, with an interest rate of 1.250%, due on February 11, 2025, and for general corporate purposes.

•Senior Notes

We have outstanding senior unsecured notes, issued in public offerings registered under the Securities Act of 1933 ("Securities Act"), as amended, as follows (collectively, the "Senior Notes"):

[[GREPCENT_TABLE]]
[["Senior Notes","","Issue Date","","Principal","","Interest Rate","","Interest Pay Dates","","Maturity Date"],["","","","","(In millions)","","(In percentages)"],["1.250% Notes","","December 2017","","\u20ac300","","1.250","(1)","February 11","","February 11, 2025"],["6.050% Notes","","July 2022","","$1,000","","6.050","","March 15","","September 15","","March 15, 2025"],["4.777% Notes","","July 2022","","\u20ac1,000","","4.777","","July 19","","July 19, 2026"],["1.400% Notes","","August 2021","","$400","","1.400","","February 5","","August 5","","August 5, 2026"],["2.125% Notes","","November 2018","","\u20ac500","","2.125","","March 1","","March 1, 2027"],["6.165% Notes","","July 2022","","$2,000","","6.165","","January 15","","July 15","","July 15, 2027"],["0.625% Notes","","September 2021","","\u20ac500","","0.625","","September 10","","September 10, 2028"],["6.350% Notes","","August 2023","","$1,000","","6.350","(2)","May 15","","November 15","","November 15, 2028"],["5.337% Notes","","July 2022","","\u20ac500","","5.337","","January 19","","January 19, 2029"],["6.330% Notes","","July 2022","","$750","","6.330","","January 15","","July 15","","July 15, 2029"],["6.550% Notes","","August 2023","","$999","","6.550","(2)","May 15","","November 15","","November 15, 2030"],["6.379% Notes","","July 2022","","$1,000","","6.379","","January 15","","July 15","","July 15, 2032"],["6.700% Notes","","August 2023","","$1,000","","6.700","(2)","May 15","","November 15","","November 15, 2033"]]
[[/GREPCENT_TABLE]]

______________________________

(1)The 1.250% Notes were repaid in full on February 11, 2025.

(2)On November 14, 2024, S&P Global Ratings downgraded our credit rating to BB+, which had the effect of increasing the interest rates by 25 basis points on the senior unsecured notes due 2028, senior unsecured notes due 2030 and senior unsecured notes due 2033 to 6.600%, 6.800% and 6.950%, respectively, effective November 15, 2024.

The Senior Notes were issued by Celanese U.S. and are guaranteed on a senior unsecured basis by Celanese and the Subsidiary Guarantors. Celanese U.S. may redeem some or all of each of the Senior Notes, prior to their respective maturity dates, at a redemption price of 100% of the principal amount, plus a "make-whole" premium as specified in the applicable indenture, plus accrued and unpaid interest, if any, to the redemption date.

In August 2023, Celanese U.S. completed a public offering of senior unsecured notes registered under the Securities Act as follows (collectively, the "2023 Offering"):

[[GREPCENT_TABLE]]
[["Maturity Date","","Aggregate Principal Amount Issued","","Discount to Par","","Interest Rate"],["","","(In $ millions)"],["November 15, 2028","","1,000","","","99.986%","","6.350%"],["November 15, 2030","","999","","","99.950%","","6.550%"],["November 15, 2033","","1,000","","","99.992%","","6.700%"]]
[[/GREPCENT_TABLE]]

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Also in August 2023, Celanese U.S. completed a cash tender offer for $2.25 billion in aggregate principal amount (the "Tender Offer") as follows:

[[GREPCENT_TABLE]]
[["Maturity Date","","Aggregate Principal Amount Tendered","","Purchase price per $1,000 principal amount","","Total Tender Offer Consideration","","Accrued and Unpaid Interest"],["","","(In $ millions)","","","","(In $ millions)"],["July 5, 2024","","1,473","","","$","999.92","","","1,473","","","12"],["March 15, 2025","","750","","","$","1,002.85","","","752","","","20"],["May 8, 2024","","27","","","$","983.95","","","27","","","\u2014"]]
[[/GREPCENT_TABLE]]

The net proceeds from the 2023 Offering were used (i) to fund the Tender Offer and (ii) for the repayment of other outstanding indebtedness.

•Accounts Receivable Purchasing Facility

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 $1.5 billion and $1.4 billion of accounts receivable under this agreement for the years ended December 31, 2024 and 2023, respectively, and collected $1.5 billion and $1.3 billion of accounts receivable sold under this agreement during the same periods. Unsold U.S. accounts receivable of $139 million were pledged by the SPE as collateral to the Purchasers as of December 31, 2024.

•Factoring and Discounting Agreements

We have factoring agreements in Europe, Japan, Singapore and China with financial institutions. We de-recognized $700 million and $423 million of accounts receivable under these factoring agreements for the years ended December 31, 2024 and 2023, respectively, and collected $640 million and $407 million of accounts receivable sold under these factoring agreements during the same periods.

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 ("BADs"), classified as accounts receivable. We received $100 million and $45 million from the accounts receivable transferred under the Master Discounting Agreements as of December 31, 2024 and 2023.

Covenants

Our material financing arrangements contain customary covenants, including the maintenance of certain financial ratios, events of default and change of control provisions. 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. We are in compliance with all of the covenants related to our debt agreements as of December 31, 2024. On February 17, 2025, November 1, 2024, February 16, 2024, August 9, 2023 and February 21, 2023, we amended certain covenants in the U.S. Credit Agreements, including financial ratio maintenance covenants.

See Note 11 - Debt in the accompanying consolidated financial statements for further information.

Guarantor Financial Information

We have outstanding senior unsecured notes, issued in public offerings registered under the Securities Act of 1933, as amended (collectively, the "Senior Notes"). The Senior Notes were issued by Celanese U.S. ("Issuer") and are guaranteed by Celanese Corporation ("Parent Guarantor") and the Subsidiary Guarantors (collectively the "Obligor Group"). See Note 11 - Debt in the accompanying consolidated financial statements for further information. The Issuer and Subsidiary Guarantors are 100% owned subsidiaries of the Parent Guarantor. The Subsidiary Guarantors are listed in Exhibit 22.1 to this Annual Report.

The Parent Guarantor and the Subsidiary Guarantors have guaranteed the Senior Notes on a full and unconditional, joint and several, senior unsecured basis. The guarantees are subject to certain customary release provisions, including that a Subsidiary Guarantor will be released from its respective guarantee in specified circumstances, including (i) the sale or transfer of all of its assets or capital stock; (ii) its merger or consolidation with, or transfer of all or substantially all of its assets to, another person; or (iii) its ceasing to be a majority-owned subsidiary of the Issuer in connection with any sale of its capital stock or other transaction. Additionally, a Subsidiary Guarantor will be released from its guarantee of the Senior Notes at such time that it

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ceases to guarantee the Issuer's obligations under the existing U.S. Credit Agreements (subject to the satisfaction of customary document delivery requirements). The obligations of the Subsidiary Guarantors under their guarantees are limited as necessary to prevent such guarantees from constituting a fraudulent conveyance or fraudulent transfer under applicable law.

The Parent Guarantor and the Issuer are holding companies that conduct substantially all of their operations through their subsidiaries, which own substantially all of our consolidated assets. The Parent Guarantor holds the stock of its immediate 100% owned subsidiary, the Issuer, but has no material consolidated assets. The principal source of cash to pay the Parent Guarantor's and the Issuer's obligations, including obligations under the Senior Notes and the guarantee of the Issuer's obligations under the existing U.S. Credit Agreements, is the cash that our subsidiaries generate from their operations. Each of the Subsidiary Guarantors and our non-guarantor subsidiaries is a distinct legal entity and, under certain circumstances, applicable country or state laws, regulatory limitations and terms of other debt instruments may limit our subsidiaries' ability to distribute cash to the Issuer and the Parent Guarantor.

For cash management purposes, we transfer cash among the Parent Guarantor, Issuer, Subsidiary Guarantors and non-guarantors through intercompany financing arrangements, contributions or declaration of dividends between the respective parent and its subsidiaries. While the non-guarantor subsidiaries do not guarantee the Issuer's obligations under our outstanding debt, the transfer of cash under these activities facilitates the ability of the recipient to make specified third-party payments for principal and interest on the Senior Notes, the existing U.S. Credit Agreements, other outstanding debt, Common Stock dividends and Common Stock repurchases.

The summarized financial information of the Obligor Group is presented below on a combined basis after the elimination of: (i) intercompany transactions among such entities and (ii) equity in earnings from and investments in the non-guarantor subsidiaries. Transactions with, and amounts due to or from, non-guarantor subsidiaries and affiliates are separately disclosed.

[[GREPCENT_TABLE]]
[["","Year Ended December 31, 2024"],["","(In $ millions)"],["Net sales to third parties","1,819"],["Net sales to non-guarantor subsidiaries","1,140"],["Total net sales","2,959"],["Gross profit","558"],["Earnings (loss) from continuing operations","(367)"],["Net earnings (loss)","(374)"],["Net earnings (loss) attributable to the Obligor Group","(374)"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","As of December 31,"],["","2024","","2023"],["","(In $ millions)"],["Receivables from non-guarantor subsidiaries","1,138","","","787"],["Other current assets","2,372","","","2,245"],["Total current assets","3,510","","","3,032"],["Goodwill","536","","","536"],["Other noncurrent assets","6,386","","","3,289"],["Total noncurrent assets","6,922","","","3,825"],["Current liabilities due to non-guarantor subsidiaries","5,258","","","2,993"],["Current liabilities due to affiliates","5","","","6"],["Other current liabilities","2,212","","","1,940"],["Total current liabilities","7,475","","","4,939"],["Noncurrent liabilities due to non-guarantor subsidiaries","3,371","","","3,365"],["Other noncurrent liabilities","11,241","","","13,007"],["Total noncurrent liabilities","14,612","","","16,372"]]
[[/GREPCENT_TABLE]]

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Share Capital

On February 12, 2025, we declared a quarterly cash dividend of $0.03 per share on our Common Stock amounting to approximately $3 million. The cash dividend will be paid on March 11, 2025 to holders of record as of February 25, 2025. As disclosed above, as part of our deleveraging efforts, we announced our intent to reduce our quarterly dividend by approximately 95 percent beginning in the first quarter of 2025. We will continue to evaluate our dividend policy, taking into account our ability to return to a balanced capital allocation policy.

Our Board of Directors has authorized the aggregate repurchase of $6.9 billion of our Common Stock since February 2008. These authorizations give management discretion in determining the timing and conditions under which shares may be repurchased. This repurchase program does not have an expiration date. During the year ended December 31, 2024, we did not repurchase any shares of our Common Stock. As of December 31, 2024, we had $1.1 billion remaining under authorizations by our Board of Directors. As discussed above, as part of our deleveraging efforts, we have paused our share repurchase program.

See Note 14 - Shareholders' Equity in the accompanying consolidated financial statements for further information.

Contractual Obligations, Guarantees and Commitments

We calculated $2.5 billion of all future interest payments on debt and other obligations using the rate in effect on December 31, 2024 and $493 million of all future pension and other postretirement funding obligations. We have directly guaranteed various debt obligations under agreements with third parties related to certain equity affiliates. As of December 31, 2024, we have directly guaranteed $145 million and €31 million of such obligations.

We have not entered into any material off-balance sheet arrangements.

In the accompanying consolidated financial statements, see Note 10 - Current Other Liabilities for current asset retirement obligations, Note 11 - Debt for a description of the guarantees under our Senior Notes and Credit Agreement, Note 12 - Benefit Obligations for a description of the pension and other postretirement funding obligations, Note 13 - Environmental for a description of environmental obligations, Note 15 - Income Taxes for a description of uncertain tax positions, Note 16 - Leases for lease obligations and Note 19 - Commitments and Contingencies for a discussion of commitments and contingencies related to legal and regulatory proceedings.

Market Risks

See Item 7A. Quantitative and Qualitative Disclosure about Market Risk for further information.

Business Environment

During the three months ended December 31, 2024, we experienced a sustained decrease in our share price, following downward revisions in forecast earnings and our announcement to reduce our quarterly dividend by approximately 95% beginning in the first quarter of 2025 to redeploy cash toward debt reduction, and a challenging demand environment. We faced extended weakness in the macroeconomic environment, with downturns in the Western Hemisphere automotive and industrial end-markets, impacting our Engineering Materials segment, as well as persistent demand weakness in paints, coatings, and construction, impacting our Acetyl Chain segment, which deepened general demand softness. We are committed to taking actions that are expected to improve our earnings, accelerate deleveraging, and increase shareholder returns in this challenging, and any, environment. We also intend to continue to closely monitor the impact of, and responses to, geopolitical effects on demand conditions and the supply chain.

Critical Accounting Policies and Estimates

Our consolidated financial statements are based on the selection and application of significant accounting policies. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of net sales, expenses and allocated charges during the reporting period. Actual results could differ from those estimates.

We believe the following accounting policies and estimates are critical to understanding the financial reporting risks present in the current economic environment. These matters, and the judgments and uncertainties affecting them, are also essential to understanding our reported and future operating results. See Note 2 - Summary of Accounting Policies in the accompanying consolidated financial statements for further information.

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•Recoverability of Long-Lived Assets

Recoverability of Goodwill and Indefinite-Lived Intangible Assets

We assess the recoverability of the carrying amount of our goodwill and other indefinite-lived intangible assets annually during the third quarter of our fiscal year using June 30 balances or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be fully recoverable.

When assessing the recoverability of goodwill and other indefinite-lived intangible assets, we may first assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit or another indefinite-lived intangible asset is less than its carrying amount. The qualitative evaluation is an assessment of multiple factors, including the current operating environment, financial performance and market considerations. We may elect to bypass the qualitative assessment for some or all of our reporting units or other indefinite-lived intangible assets and proceed directly to a quantitative analysis depending on the facts and circumstances.

In performing a quantitative analysis of goodwill, recoverability of goodwill for each reporting unit is measured using the income approach based on a discounted cash flow model incorporating discount rates commensurate with the risks involved or a combination of the income approach and the market approach using the guideline public company method. The key assumptions used in the discounted cash flow valuation model include discount rates, revenue growth rates, tax rates, cash flow projections and terminal value rates. Discount rates, revenue growth rates and cash flow projections are the most sensitive and susceptible to change as they require significant management judgment. Discount rates used are similar to the rates estimated by the weighted average cost of capital ("WACC") considering any differences in company-specific risk factors. Revenue growth rates and cash flow projections are based on historical trends and expected growth drivers such as macroeconomic trends in the industries and territories in which the reporting units operate.

Management tests other indefinite-lived intangible assets quantitatively utilizing the relief from royalty method under the income approach to determine the estimated fair value for each indefinite-lived intangible asset. Key assumptions used in this model include discount rates, royalty rates, revenue growth rates, tax rates, sales projections and terminal value rates. Discount rates, royalty rates, revenue growth rates, tax rates and sales projections are the assumptions most sensitive and susceptible to change as they require significant management judgment. Discount rates used are similar to the rates estimated by the WACC considering any differences in company-specific risk factors. Royalty rates are established by management using the most recent third party valuations and are periodically substantiated by third-party valuation consultants. Revenue growth rates and sales projections are based on historical trends and expected growth drivers such as macroeconomic trends in the industries and territories in which the indefinite-lived intangible assets operate. Tax rates consider the operating structure of the Company and tax rates in jurisdictions in which the indefinite-lived intangible assets operate.

Specific assumptions discussed above are updated at the date of each test to consider current industry and company-specific risk factors from the perspective of a market participant. The current business environment is subject to evolving market conditions and requires significant management judgment to interpret the potential impact to our assumptions. To the extent that changes in the current business environment result in adjusted management projections, impairment losses may occur in future periods.

During the three months ended September 30, 2024, the Company completed its annual goodwill impairment test. The results of the test indicated the estimated fair value for each of the Company's reporting units exceeded the carrying amount of the underlying assets. Although no impairment of the engineered materials reporting unit was identified during the nine months ended September 30, 2024, the estimated fair value exceeded its carrying value by less than 10% as of September 30, 2024.

During the three months ended December 31, 2024, the Company experienced a significant and sustained decrease in the Company's share price. Further, due to extended weakness in the macroeconomic environment, specifically the auto and industrial end-markets, which deepened general demand softness during the three months ended December 31, 2024, thereby impacting pricing and volume, the Company updated its engineered materials reporting unit forecast model for the 2025 fiscal year which showed additional deterioration in the projected financial results for the 2025 fiscal year compared to the analyses prepared during the three months ended September 30, 2024. While the long-term projections beyond 2025 include recovery, the lower projections in 2025 do have an impact on the forecast model beyond 2025 by applying forecasted growth rates to a lower anticipated 2025 base revenue. The updated 2025 projections continue to reflect industry wide challenges including demand softness across the majority of end uses resulting in lower pricing. Based on the sustained decrease in the share price and the downward revisions to projections, the Company determined that there were indicators that the engineered materials reporting unit's goodwill may be impaired. As a result, the Company performed an interim quantitative test of the engineered materials reporting unit during the three months ended December 31, 2024. The results of the test determined that the carrying amount of the engineered materials reporting unit exceeded its estimated fair value primarily due to the downward adjustments

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in the forecast model, as well as an increase in the discount rate. As such, the Company recorded a non-cash goodwill impairment loss of $1.5 billion in the Engineered Materials segment. As of December 31, 2024, the engineered materials reporting unit had goodwill of $5.0 billion.

In connection with the Company's annual indefinite-lived intangible assets impairment test during the three months ended September 30, 2024, the Company recorded a non-cash impairment loss of $34 million to impair the net book value of certain trade names, primarily Zytel®, included in the Engineered Materials segment.

Additionally, in conjunction with the goodwill impairment test in the three months ended December 31, 2024, the Company performed an interim impairment test of the indefinite-lived intangible assets assigned to the engineered materials reporting unit and determined certain trade names were impaired. As a result, the Company recorded a non-cash impairment loss of $83 million to impair the net book value of certain trade names, primarily Zytel®, included in the Engineered Materials segment.

See Note 9 - Goodwill and Intangible Assets, Net in the accompanying consolidated financial statements for further information.

•Benefit Obligations

Various assumptions are used in the calculation of the actuarial valuation of the employee benefit plans. These key assumptions include the discount rate and expected long-term rates of return on plan assets. The actuarial assumptions used may differ materially from actual results due to changing market and economic conditions. These differences may result in a significant impact to the amount of net periodic benefit cost recorded in future periods.

Pension assumptions are reviewed annually in the fourth quarter of each fiscal year and whenever a plan is required to be remeasured. Assumptions are reviewed on a plan and country-specific basis by third-party actuaries and senior management. Such assumptions are adjusted as appropriate to reflect changes in market rates and outlook.

See Note 12 - Benefit Obligations in the accompanying consolidated financial statements for further information.

The estimated change in pension net periodic benefit cost and projected benefit obligations that would occur in 2025 from a change in the indicated assumptions are as follows:

[[GREPCENT_TABLE]]
[["","Change in Rate","","Impact on Net Periodic Benefit Cost","","Impact on Projected Benefit Obligations"],["","","","(In $ millions)"],["U.S. Pension Benefits"],["Decrease in the discount rate","0.5","%","","(5)","","","74"],["Decrease in the long-term expected rate of return on plan assets(1)","0.5","%","","9","","","N/A"],["Non-U.S. Pension Benefits"],["Decrease in the discount rate","0.5","%","","(1)","","","55"],["Decrease in the long-term expected rate of return on plan assets","0.5","%","","3","","","N/A"]]
[[/GREPCENT_TABLE]]

______________________________

(1)Excludes nonqualified pension plans.

•Income Taxes

We regularly review our deferred tax assets for recoverability and establish a valuation allowance as needed. In forming our judgment regarding the recoverability of deferred tax assets related to deductible temporary differences and tax attribute carryforwards, we give weight to positive and negative evidence based on the extent to which the forms of evidence can be objectively verified.

The recoverability of deferred tax assets and the recognition and measurement of uncertain tax positions are subject to various assumptions and management judgment. If actual results differ from the estimates made by management in establishing or maintaining valuation allowances against deferred tax assets, the resulting change in the valuation allowance would generally impact earnings or Other comprehensive income depending on the nature of the respective deferred tax asset. In addition, the

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positions taken with regard to tax contingencies may be subject to audit and review by tax authorities, which may result in future taxes, interest and penalties.

See Note 15 - Income Taxes in the accompanying consolidated financial statements for further information.

Recent Accounting Pronouncements

See Note 3 - Recent Accounting Pronouncements in the accompanying consolidated financial statements for information regarding recent accounting pronouncements.