Q2 2025 The Chemours Co Earnings Call

Jericho: Good morning. My name is Jericho, and I will be your conference operator today. I would like to welcome everyone to the Chemours Company second quarter 2025 results conference call. Currently, all participants are in listen-only mode. A question and answer session will follow the conclusion of the prepared remarks. I would like to remind everyone that this conference call is being recorded. I would now like to hand the conference call over to Brandon Ontjes, Vice President, Head of Strategy and Investor Relations for Chemours. You may begin your conference.

Good morning. My name is Jericho and I'll be your conference operator. Today, I would like to welcome everyone to the Kors company. Second quarter, 2025 results conference call.

Currently all participants are in a listen-only mode. A question and answer session will follow the conclusion of the prepared remarks. I would like to remind everyone that this conference call is being recorded.

I would now like to hand the conference call over to Brandon aches, vice president head of strategy and investor relations for kamor. You may begin your conference

Brandon Ontjes: Good morning, everybody. Welcome to the Chemours Company's second quarter 2025 earnings conference call. I am joined today by Denise Dignam, Chemours' President and Chief Executive Officer, and our Senior Vice President and Chief Financial Officer, Shane Hostetter. Before we start, I would like to remind you that the comments made on this call, as well as in the supplemental information provided on our website, contain forward-looking statements that involve risks and uncertainties as described in Chemours' SEC filings. These forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events that may not be realized. Actual results may differ, and Chemours undertakes no duty to update any forward-looking statements as a result of future developments or new information.

Good morning, everybody. Welcome to the Kors companies. Second quarter 2025 earnings conference call.

I'm joined today by Denise. Dignam Kors is President and chief executive officer and our senior vice president and Chief Financial Officer. Shane Hostetter

Before we start, I would like to remind you that the comments made on this call as well as in the supplemental information provided on our website, contains forward-looking statements that involve risks and uncertainties as described in kamora's SEC filings.

These forward-looking statements are not guarantees of future performance. And are based on certain assumptions and expectations of future events that may not be realized.

Brandon Ontjes: During the course of this call, we will refer to certain non-GAAP financial measures that we believe are useful to investors evaluating the company's performance. A reconciliation of non-GAAP terms and adjustments is included in our press release issued yesterday evening. Additionally, we also posted our earnings presentation and prepared financial remarks on our website yesterday evening. The prepared financial remarks are intended to largely replace management's quarterly financial prepared remarks, allowing for additional time for your questions. With that, I will turn the call over to Denise Dignam.

Actual results May differ and kamora's undertakes, no duty to update any forward-looking statements as a result of future developments or new information.

During the course of this call. We refer to certain non-gaap Financial measures that we believe are useful to investors. Evaluating the company's performance.

Denise Dignam: Thank you, Brandon, and thank you, everyone, for joining us. During today's call, I will begin by discussing our second quarter performance, including meaningful progress on our Pathway to Thrive strategy. I will then turn it over to Shane, who will provide details around our outlook. Finally, I will share some closing remarks before taking your questions. As you saw in our announcement on August 4th, we reached a settlement with the state of New Jersey, continuing the notable progress we have made under our strengthening the long-term pillar of Chemours' Pathway to Thrive strategy. The settlement reached with New Jersey, announced with DuPont and Corteva, is a significant step forward as it resolves all environmental claims, including those related to PFAS across four current and former operating sites and all statewide claims.

A reconciliation of non-GAAP terms and adjustments is included in our press release issued yesterday evening. Additionally, we also posted our earnings presentation and prepared financial remarks on our website. The prepared financial remarks are intended to largely replace management's quarterly financial prepared remarks, allowing for additional time for your questions. With that, I will turn the call over to Denise Dignam.

Thank you, Brandon, and thank you everyone for joining us.

During today's call, I will Begin by discussing our second quarter performance, including meaningful progress. On our Pathway to thrive strategy.

I'll then turn it over to Shane, who will provide details around our outlook.

Finally, I will share some closing remarks before taking your questions.

As you saw in our announcement on August 4th, we reached a settlement with the state of New Jersey. Continuing the notable progress. We've made under our strengthening. The long-term pillar of kamora's Pathway to thrive strategy.

Denise Dignam: Chemours' share of the settlement on a net present value basis is approximately $250 million, reflecting a 25-year payment timeframe. In connection with this settlement earlier this week, Chemours also established a new agreement with DuPont and Corteva to acquire the rights to Chemours' insurance proceeds, which would provide approximately $150 million to fund the payments for the New Jersey settlement. The combination of these insurance proceeds and the release of approximately $50 million in restricted cash from the 2021 MOU escrow account fully funds $200 million of Chemours' New Jersey payment obligation, which covers our obligations through at least 2030. The present value of payments remaining after 2030 by Chemours for the New Jersey settlement, not considering the potential for additional insurance recoveries, is approximately $80 million. This settlement is a meaningful step forward in our continued efforts to address the overall legacy PFAS and other environmental claims.

The settlement reached with New Jersey announced with Dupont and corteva is a significant step forward as it resolves. All environmental claims, including those related to Pas across 4 current and former operating sites and all Statewide claims

More to share of the settlement on a Net Present Value basis is approximately $250 million, reflecting a 25-year payment time frame.

Settlement.

The combination of these insurance proceeds and the release of approximately 50 million in restricted cash from the 2021 mou escrow accounts, fully funds, 200 million of kamora's, New Jersey payment obligation which covers our obligations through at least 2030.

The present value of payments remaining after 2030 by Kors for the New Jersey settlement, not considering the potential for additional Insurance. Recovery is a proximately 80 million

Denise Dignam: We will continue to work in partnership with DuPont and Corteva to resolve such matters in the best interests of our stakeholders. In addition to this achievement, we also delivered strong second quarter results, surpassing our expectations with improved performance across each of our three businesses. In closing out the quarter, our results came in stronger, driven by the following: increased demand for Opteon Refrigerants tied to the 2025 transition, TT sales ahead of our expectations with sequential volume growth across all of our regions, and scalable pricing in APM from Performance Solutions in new higher-value applications, as well as solid sales execution for our SPS Capstone product line wind-down, which is on track for the third quarter.

This settlement is a meaningful step forward in our continued efforts to address the overall legacy PFAS and other environmental claims.

We will continue to work in partnership with Dupont and corteva to resolve such matters in the best interest of our stakeholders.

In addition to this achievement, we also delivered strong second quarter results surpassing our expectations with improved performance across each of our 3 businesses.

In closing out the quarter, our results came in stronger, driven by the following.

Increased demand for options, tied to the 2025 transition.

Denise Dignam: However, with this strong momentum, we must acknowledge that we have had a significant impact from discrete operational issues in TT and APM, most of which were caused by external events, but some were due to controllable operational matters. We have taken actions to address these issues, which I will speak to later in the call. Now turning to each segment's performance in the quarter. Starting with TSS, our TSS business delivered another impressive quarter driven by continued momentum in the transition to Opteon Refrigerants. Net sales of Opteon Refrigerants grew 65% year over year, supported by seasonal demand and the impact of the 2025 U.S. AIM Act transition mandate for residential and light commercial stationary air conditioning.

TT sales ahead of our expectations with sequential volume growth across all of our regions and favorable pricing in APM from performance solutions. In new higher value applications as well as solid sales. Execution, for our SPS Capstone product line down which is on track for the third quarter.

However, with this strong momentum, we must acknowledge that we've had a significant impact from discrete operational issues in TT and APN.

Most of which were caused by external events but some were due to controllable operational matters. We've taken actions to address these issues which I will speak to later in the call.

Now turning to each segment's performance in the quarter.

Starting with TSS.

Our TSS business delivered another impressive quarter, driven by continued momentum in the transition to options on refrigerators.

Denise Dignam: This performance contributed to a 35% adjusted EBITDA margin, underscoring the strength of our differentiated portfolio and ability to capture profitable growth as the market continues to shift towards lower global warming potential solutions. While in the last quarter, we highlighted challenges in the air conditioning aftermarket around cylinder constraints and product availability, I am proud of the TSS team's ability to remain steadfast and customer-focused during this time. As a point of emphasis, our team's ability to be resourceful and solutions-focused to meet the needs of our customers was key to delivering these better-than-expected results. Looking ahead, we expect continued Opteon Refrigerants demand growth in the second half, moderated by typical seasonality, with an unwavering strong regulatory framework to drive the transition within additional stationary subsectors.

Net sales of option, refrigerants grew, 65%, year-over-year supported by seasonal demand and the impact of the 2025 us. Aim act transition mandate for residential and Light commercial stationary, air conditioning.

This performance contributed to a 35% adjusted ebit of margin. Underscoring, this strength of our differentiated portfolio and ability to capture profitable growth as the market continues to shift towards lower global warming, potential Solutions.

While in the last quarter, we highlighted challenges in the air conditioning aftermarket around cylinder constraints and product availability. I am proud of the TSS team's ability to remain steadfast and customer-focused during this time.

As a point of emphasis, our team's ability to be resourceful and solutions focused to meet the needs of our customers with key to delivering these better than expected results.

Denise Dignam: Driven by this transition, at the end of the second quarter, we are now seeing Opteon Refrigerants make up 75% of total refrigerants' revenues, up from 57% in the prior year quarter, with superior positioning in the market. One area I also want to highlight is around the ramp-up of our Opteon Refrigerants YF capacity expansion at our Corpus Christi site. This important investment has been key to securing the capacity to be able to support the growth we are experiencing during this regulatory transition. Through the second quarter, we remain ahead of our target of half the overall expansion project we plan to have available this year. This team's ability to drive this performance is a clear illustration of our strategic execution under our operational excellence pillar and what we are looking to achieve across all of our sites.

Looking ahead. We expect continued option on demand growth in the second half moderated by typical seasonality with an unwavering strong regulatory framework to drive the transition within additional stationary sub sectors.

Driven by this transition, at the end of the second quarter. We're now seeing opion refrigerants, make up 75% of total refrigerants revenues up from 57%, in the prior year quarter with Superior positioning in the market.

One area I also want to highlight is around the ramp-up of our option-wise capacity expansion at our Corpus Christi site.

This important investment has been key to securing the capacity to be able to support the growth. We're experiencing during this regulatory transition.

Through the second quarter, we remain ahead of our Target of half the overall Expansion Project. We plan to have available this year.

Denise Dignam: A big thank you to all those at our Corpus site who have been part of driving this performance and remain focused on our continued ramp-up efforts. Altogether, an industry-leading performance from TSS, outpacing our Q2 expectations and setting a solid foundation for the second half. Moving to TT, in the second quarter, TT delivered overall results ahead of our previous guidance with sequential net sales of 10%, supported by increased volumes of 9% paired with overall flat pricing. In this weaker demand environment, our team executed well, securing increased volumes across all of our regions. While we are proud of this result, we have had some discrete operational issues, one being the rail line service interruption, which is now resolved, and the others caused by a gap of operational discipline in this low-demand environment. The teams have now instituted a series of actions to rectify these issues.

This team's ability to drive this performance is a clear illustration of our strategic execution, under our operational, excellence pillar, and what we're looking to achieve across all of our sites.

to this a big thank you to all those at our corporate site who have been part of driving this performance and remain focused on our continued ramp up efforts

altogether and industry-leading performance from TSS outpacing our Q2 expectations and setting a solid foundation for the second half.

Moving to TT.

In the second quarter TT delivered overall results ahead of our previous Guidance with sequential net sales of 10% supported by increased volumes of 9% paired with overall flat pricing.

Our team executed well, securing increased volumes across all of our regions.

While we are proud of this result, we've had some discrete operational issues 1 being the rail line, service Interruption, which is now resolved and the others caused by a gap of operational. Discipline in this low demand environment,

Denise Dignam: However, we do anticipate that some of these issues will impact our third-quarter results. These recent challenges to run our plants at optimal levels have taken us off our transformation plan, and a refocus on our cost out diligence is well underway. I am confident that the team is taking the right steps to drive long-term improvements through these actions, and I will speak to the efforts we are taking through our manufacturing COE later in this call. From a broader market perspective, in line with our expectations from last quarter, we are beginning to see the effects of Chinese producer capacity rationalization. This change in the global supply environment, paired with recent fair trade actions, have provided opportunities in Western markets where our teams have been able to drive commercial opportunities.

the teams have now instituted a series of actions to rectify these issues. However, we do anticipate that some of these issues will impact our third quarter results,

These recent challenges to run our plants at optimal levels, have taken us off our transformation plan and a refocus on our cost out. Diligence is well underway.

I am confident that the team is taking the right steps to drive long-term, improvements through these actions. And I will speak to the effort for taking to our manufacturing Coe later in this call.

From a broader Market perspective in line with our expectations. From last quarter, we are beginning to see the effects of Chinese producer capacity rationalization.

Denise Dignam: While we find ourselves in a challenging environment in a global market that is in transition, our team has been diligent in efforts around commercial excellence and our long-term winning strategy. Turning now to APM. Despite continued weakness in cyclical end markets impacting advanced materials and products serving the hydrogen market under Performance Solutions, APM delivered a notable performance in the second quarter. APM’s performance reflects our continued focus on strategic execution under our portfolio management pillar, where we continue to shift our product mix to higher-value applications in growing end markets and optimize our asset footprint.

This change in the global Supply environment paired with recent fair trade actions, have provided opportunities in Western markets where our teams have been able to drive commercial opportunities.

Well, we find ourselves in a challenging environment in a global market. That is in transition. Our team has been diligent in efforts around commercial excellence and our long-term winning strategy.

Turning now, to APM.

despite continued weakness, in cyclical and markets, impacting Advanced Materials and product serving the hydrogen Market under performance solutions, APM delivered a notable performance in the second quarter, apm's performance, reflects our continued focus on strategic execution under our portfolio management, pillar,

Denise Dignam: In our Performance Solutions portfolio, APM saw a sequential sales increase of 14%, driven by product sales into the data center cable market, with advanced materials seeing a 20% sequential sales increase, primarily driven by stronger pricing in the SPS Capstone product line in connection with the product line’s planned exit in the third quarter. The impact of the strategic execution on our bottom line is evident in our adjusted EBITDA margin increasing from 11% in the first quarter of 2025 to 14% in the second quarter. Our performance in the second quarter is indicative of how we view the APM business going forward, continuing to drive and improve quality of earnings across our strategic pillars with an added emphasis on portfolio management. As we move into the third quarter, I want to highlight an issue that we’ve had at our Washington work site related to a local power outage.

Where we continue to shift our product mix to higher value applications in growing and markets, and optimize our asset footprint.

In our performance solutions, portfolio APM fellow sequential sales, increase of 14% driven by product sales into the data center cable Market with Advanced Materials. Seeing a 20% sequential sales increase primarily driven by stronger, pricing in the SPs Capstone product line in connection with the product lines planned exit in the third quarter.

The impact of the Strategic execution, on our bottom line is evident in our adjusted, Eva margin, increasing from 11% in the first quarter of 2025 to 14% in the second quarter.

Our performance. In the second quarter is indicative of how we view the APM business. Going forward, continuing to drive and improve quality of earnings across our strategic pillars with an added emphasis on portfolio management,

Denise Dignam: This event caused an unplanned full shutdown of our site. After an initial restart and following further assessments, our team identified damage to a critical piece of equipment that resulted in unscheduled downtime into mid-August. When these circumstances occur, our emphasis is on the safety of our employees and our surrounding community as we work through the repairs and a planned restart. Shane Hostetter will speak to the impacts on our Q3 outlook shortly. Overall, I couldn’t be more proud of the execution from all of our teams in achieving these results for the second quarter, illustrating Chemours’ collective focus on strategic execution. I know we will continue to keep the same focus as we move into the second half of the year. With that, I’ll turn it over to Shane to walk through our outlook.

However, as we move into the third quarter, I want to highlight an issue that we've had at our Washington work, site related to a local power outage.

This event caused an unplanned full shutdown of our site.

After an initial restart and following further assessments, our team identified damage to a critical piece of equipment, that resulted in an unscheduled downtime into mid August.

When these circumstances occur are emphasis, is on the safety of our employees, and our surrounding Community, as we work through the repairs, and they planned restart.

Shame will speak to the impacts on our Q3 Outlook shortly.

Overall, I couldn't be more proud of the execution from all of our teams in achieving these results for the second quarter, illustrating kor's Collective focus on strategic execution.

I know we will continue to keep the same Focus as we move into the second half of the year.

Jericho: Thank you, Denise, and good morning, everyone. As shared in our earnings materials, as well as the supplemental prepared financial remarks available on our investor website, I would like to now discuss our expectations for the third quarter, followed by our outlook for the full year 2025. Beginning with TSS, for the third quarter, we expect TSS's net sales to decrease sequentially in the mid-single-digit percentage range, driven by traditional seasonality, primarily concentrated in our Freon refrigerants. TSS's adjusted EBITDA is also expected to decrease in the low teens percentage range sequentially, primarily driven by the seasonality I mentioned, as well as overall product mix. For our TT business, we expect TT's sequential net sales to decrease in the low single-digit percentage range, driven by seasonality and regional sales mix, with volumes expected to remain stable.

With that, I'll turn it over to Shane to walk through our Outlook.

Thank you, Denise. And good morning everyone.

As shared in our earnings materials, as well as the supplemental prepared Financial remarks available on our investor website. I would like to now discuss our expectations for the third quarter, followed by our outlook for the full year 2025

Beginning with TSS for the third quarter, we expect TSS is net sales to decrease sequentially. In the mid single digit, percentage range, driven by traditional seasonality primarily concentrated in our freon refrigerants.

TSS is adjusted. Eva is also expected to decrease in the low teens percentage, range sequentially primarily driven by the seasonality. I mentioned as well as overall product mix.

For our TT business. We expect TT sequential, net sales to decrease in the low single digit percentage range, driven by seasonality and Regional sales mix.

Jericho: Adjusted EBITDA is expected to decline in the low teens percentage range sequentially due to lower sales paired with certain operational disruptions. Costs associated with these operational issues are anticipated to approximate $15 million in the third quarter. As we look past the third quarter, we expect our operations to improve, driven by broader COE efforts, which Denise will speak to later. For our APM business, we expect APM's net sales to decrease in the mid-teens percentage range sequentially due to production constraints associated with the Washington works downtime. Adjusted EBITDA is expected to approximate $15 million in the third quarter, considering the lower sales as well as additional costs from the referenced site outage, which will approximate $20 million. On a consolidated basis, we anticipate our third quarter net sales to decrease 4% to 6% sequentially, with consolidated adjusted EBITDA expected to range between $175 million to $195 million.

With volumes expected to remain stable.

Cost associated with these operational issues are anticipated to approximate 15 million in the third quarter.

As we look past the third quarter, we expect our operations to improve driven by broader coefficients which Denise will speak to later.

For our APM business, we expect apm's net sales to decrease in the mid teens percentage range. Sequentially due to production, constraints associated with the Washington Works downtime.

Adjusted ibida is expected to approximate 15 million in the third quarter. Considering the lower sales as well as additional costs from the referenced site outage, which will approximately 20 million

on a Consolidated basis. We anticipate our third quarter, net sales to decrease 4 to 6% sequentially.

Jericho: Also, we anticipate corporate expenses to decrease approximately 5% compared to the second quarter. Our capital expenditures for the third quarter are expected to be in the range of $50 million, with free cash flow conversion expected to be between 60% and 80%. Turning to the full year 2025, we expect to deliver adjusted EBITDA of $775 million to $825 million in 2025. Our capital expenditures are anticipated to approximate $250 million, and our free cash flow conversion for the second half of the year is expected to be between 60% to 80%, driven by seasonal impacts as well as improvements to our net working capital. Also, the company's overall net leverage ratio is anticipated to continue to improve throughout 2025. With that, I will hand it back over to Denise for final remarks.

With Consolidated adjusted ibida expected to range between 175 to 195 million.

Also we anticipate corporate expenses to decrease approximately 5% compared to the second quarter.

Our Capital expenditures for the third quarter are expected to be in the range of 50 million dollars with free cash flow conversion expected to be between 60 and 80%.

Turning to the full year 2025.

We expect to deliver adjusted ibida of 775 million to 825 million in 2025.

Our Capital expenditures are anticipated to approximate 250 million, and our 3 cash flow conversion. For the second half of the year, is expected to be between 60 to 80% driven by seasonal, impacts as well as improvements to our networking capital.

Also, the company's overall. Net leverage ratio is the anticipated to continue to improve throughout 2024.

Denise Dignam: Thank you, Shane. I am proud of the significant progress we have made to date in executing our Pathway to Thrive strategy. However, we still have work to do. While we have made great strides in resolving legacy litigation in this quarter, supported by overall strong business performance, operational excellence is the pillar where we continue to place our focus. Our efforts have driven clear success in certain instances, as is exemplified in our ramp-up at Corpus. While many of our recent operational impacts have been caused by outside events, we have to continue to reduce business interruptions and strengthen our resilience. We have really ramped up the engagement of our manufacturing COE with my direct involvement. As a former operations leader at Chemours, knowing our asset base, I believe we have room to improve our own performance to be better prepared for the unexpected.

With that, I'll hand it back over to Denise for final remarks.

Thank you, Shane.

I'm proud of the significant progress. We've made to date and executing our Pathway to thrive strategy. However, we still have work to do.

What we've made great strides in resolving Legacy of litigation. In this quarter supported by overall, strong business performance, operational excellence at the pillar where we continue to place our Focus.

Our efforts have driven clear success in certain instances as is exemplified in our ramp up at Corpus.

but while many of our recent operational impacts have been caused by outside events, we have to continue to reduce business interruptions and strengthen our resilience

We have really ramped up the engagement of our manufacturing Coe with my direct involvement.

Denise Dignam: By engaging our COE, I have outlined our priorities in the following phases. First, realignment of experienced resources, creating more effective alignment of in-house manufacturing expertise to drive focus to the highest operational priorities in our circuit. This phase is now complete. Second, solidifying foundational capabilities, connecting people, processes, and data to enhance performance and achieve top reliability benchmarks. Third, building advanced operational capabilities with more effective use of technology to enable us to be an industry-leading manufacturing enterprise. I believe these are the keys to drive improved operational excellence under Pathway to Thrive, ensuring we drive resilient operational consistency moving forward. I want to thank all our employees for their unwavering commitment and hard work, which have been instrumental in driving our progress this quarter and advancing our Pathway to Thrive strategy.

As a former operations leader at Kors. Knowing our asset base I believe we have room to improve our own performance and be better prepared for the unexpected.

By engaging our Coe, I've outlined our priorities in the following phases.

First.

Realignment of experienced resources, creating more effective alignment of In-House manufacturing, expertise to drive, Focus to the highest operational priorities in our circuit.

This phase is now complete.

Second.

Solidifying, foundational capabilities, Connecting People processes and data to enhance performance and Achieve top reliability benchmarks.

Third building, Advanced operational capabilities with more effective. Use of technology to enable us to be an industry-leading, manufacturing Enterprise

I believe these are the keys to drive improved. Operational excellence under Pathway, to thrive ensuring we drive resilient operational consistency, moving forward,

Denise Dignam: There is no question that the Chemours team's dedication to keeping our customers first and driving strategic execution ensures that we will have continued outstanding performance like we did in the current quarter. With that, we can now open the line up for questions.

I want to thank all our employees, for, their unwavering commitment and hard work, which have been instrumental in driving our progress, this quarter and advancing our Pathway to thrive strategy.

There is no question that the Kors team's dedication to keeping our customers first and driving strategic execution. Chores. That we will have continued upstanding performance, like we did in the current quarter.

With that. We can now open the line up for questions.

Jericho: Thank you. We will begin the question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one in your telephone keypad. If you want to withdraw your question, press star one again. Our first question comes from John McNulty from BMO Capital Markets. Please go ahead.

Thank you. We will begin the question and answer session. If you'd like to ask a question during this time, simply press star followed by the number 1, your telephone key. At if you want to withdraw your question, press star 1 again.

Shane Hostetter: Yeah, good morning. Thanks for taking my question. I guess I wanted to dig into the outlook for the full year, because based on your Q3 guide, the implications are that Q4 really doesn't have much of the usual seasonal dip. I guess some of that's probably tied to the hopefully the absence of one-time items in APM and TiO2, but it still doesn't quite bridge me there. So I guess how should I be thinking about the good guys, the things that kind of help to offset that usual seasonal pattern from Q3 down to Q4?

Our first question comes from John mcdel from BMO Capital markets. Please go ahead.

Of 1 time items in in APM and tio2. But it still doesn't quite Bridge me there. So, I guess how should I be thinking about the good guys? The things that kind of help to offset that usual seasonal pattern from 3Q down to 4 q.

Denise Dignam: Thanks for the question, John. I am going to turn it over to Shane to talk about.

Shane Hostetter: Yeah, thanks, John. As you mentioned, I mean, just doing math, we pointed to midpoint at roughly 185 for the third quarter, and that kind of puts a midpoint at 195 for the fourth quarter. Just to note, we had about 35 million of operational items between TT and APM in the third quarter. You add that back, which we are doing everything from an operational perspective, and everything looks good so that will not repeat into Q4. You will see a seasonal decline. I would say, as you mentioned, some of the positives that we do see for the fourth quarter that are offsetting some of that normal seasonality. I think the strength in TSS, as we look ahead, as demand continues to ramp up with the regulatory change, is going to be a positive, and we will continue to execute across both as we end the year.

Thanks for the question John. I'm going to turn it over to Shane to talk about. Yeah, yeah, thanks Sean. Uh, as you mentioned I mean just doing math, right? We pointed to midpoint at at roughly 185 for the third quarter and that kind of puts a midpoint at 195 for the fourth quarter, you know, just to note right that we had about 35 million of operational items between TT and APM and the third quarter. Yeah, add that back, which we are doing everything from an operational perspective, and everything looks good. So that that will not repeat in the Q4. Uh, you will see a seasonal decline. I would say you know as you mentioned some of the positives that we do see for the fourth quarter, you know, that are all setting some of that, you know, normal seasonality, you know, I think the strength in TSS you know as we as we look ahead you know as demand continues to rip up with the regulatory change is going to be a positive and we'll continue to execute across both the

Well, as we end the year,

Shane Hostetter: Okay, fair enough. Then I guess just maybe as a follow-up, maybe we can talk a little bit more about TSS. It looks like a lot of moving parts. I mean, you guys clearly blew out kind of your own expectations, our expectations, pretty much everyone's expectations on that one. I guess, can you help us to unpack the drivers there? It sounds like a lot of it may have been some of the aftermarket improvement and the ability to access that or target that market. Can you speak to how maybe how big that bucket was? How much was just the regulatory shift for the OEM side and maybe some of the catch-up around the raw material costs that you were dealing with with the OEMs?

Shane Hostetter: I guess also to that, how much of that do you feel like is, hesitate to say one time, but maybe might not be recurring just because of all the cylinder issues as we look to 2026? How much of it do you think carries over and continues in terms of the strength that you are seeing?

Okay, fair enough. Um and then I guess, just maybe, um, maybe we can talk a little bit more about TSS, you know. It looks like a lot of moving parts. I mean you guys clearly you blew out kind of your own expectations. Our expectations. Um pretty much everyone's expectations on that 1, I guess. Can you can you help us to unpack? The drivers there? It sounds like a lot of. It may have been some of the aftermarket, um, Improvement and the ability to access that or Target that market, um, can you speak to how maybe, how big that bucket was? How much was just the, the, the regulatory shift for the OEM side and maybe some of the catch up, um, around the, the raw material costs that you were dealing with, with the oems. And, and I guess also to that

How much of that do you feel like is hesitate to say 1 time but maybe might not be recurring, just because of all the cylinder issues, um, as we look to to 2026. And how much of it do you think carries over and continues in terms of the the strength that you're seeing?

Denise Dignam: Thanks, John, for the question. We are super proud of the TSS team for how we have executed. The transition has come on strong, but I would say our performance, we have outperformed our expectations for the market. We have a lot of confidence. Clearly, there was some shortage. There was what we think is potentially some hoarding going on because of the shortages, but we still are really confident in the growth for the rest of the year and see double-digit growth throughout the year. We have a lot of confidence going into 2026. We have to consider competitive dynamics. I would say that there was some hoarding, maybe a one-time issue, short issue with the aftermarket, but we do not think that is going to have a big impact on the rest of the year.

Thanks John for.

Watching. Yeah. We are, you know, super proud of of, of the TSS team for how we've executed, um, you know, there's clearly the the transition has come on strong. But I would say our performance, we have outperformed, um, you know, our expectations for the for the market and, uh, you know, we have a lot of confidence. Clearly there was some shortage.

Shane Hostetter: Got it. Great. Thanks very much for the caller.

There. There there was some what we think is potentially some hoarding going on because of the shortages. But uh, we still are really confident in the growth for the rest of the year, uh, and see, you know, double digit growth throughout the year. And, you know, we um, you know, we have a lot of confidence going into 2026, we have to consider, uh, competitive, uh, competitive Dynamics. Um, but I would say that, yeah, there were some hoarding, maybe a 1-time, uh, issue short-term issue with the aftermarket, but, but we, we don't think that's going to have a big impact on the rest of the year.

Got it. Great. Thanks very much for the caller.

Jericho: Our next question comes from Pete Osterland from Truist Securities. Please go ahead.

Speaker 5: Hey, good morning. Thanks for taking the questions. My first question is on TT. Are your operations and earnings in that business more vulnerable to being disrupted right now, just given that you are also working on some pretty substantial cost improvement efforts? Is there any portion of your cost-cutting target that you are finding you might need to delay or cancel in order to focus on maximizing reliability?

Our next question comes from the Australian from True security. These go ahead

Hey, good morning. Thanks for taking the questions.

Uh, my first question is on TT. Um, are your operations and earnings in that business more vulnerable to being disrupted right now, given that you're also working on some pretty substantial cost improvements? And I guess, is there any portion of your cost-cutting target that you're finding you might need to delay or cancel in order to focus on maximizing reliability?

Denise Dignam: Hey, thanks for the question. Yeah, absolutely. From a cost-out perspective, I would say absolutely, you know, no concerns. I do not think that there is anything relative to our cost-out efforts that have impacted the reliability of our operations. We are really focused on productivity, and you know, we are really confident in that. I would say, you know, looking at TT, the overall market is definitely a challenge. We have a lot of confidence in our strategy. We are focused on our cost-out, driving to lowest cost, gaining share in fair trade markets. We definitely have had some issues, discrete issues in operational performance, but I just want to make sure everyone knows I am fully engaged in the operational aspects of the business.

Denise Dignam: We have a clear plan, and I have confidence that we are going to fix these issues and, you know, kind of have them behind us.

Speaker 5: Very helpful. Thanks. Then, just as a follow-up on the full-year guidance, could you give a bit more color on what is happening with the APM outage? I mean, you mentioned it as one of the drivers for hitting the low or the high end of the full-year EBITDA guide. Just wondering how much visibility you have there into the total earnings impact and the timeframe, and how much of this is under your control?

Denise Dignam: Yeah, I would say the actual issue that occurred was a bit outside of our control, although we really pride ourselves on trying to be resilient for all those things. I would look at it, first of all, the second quarter was a really good performance by the business. I would, you know, anchor back to that. The issue that's happened at Washington Works is really a blip. It's something that happened from a power outage that really shouldn't have happened. So think of that as a one-time, you know, $20 million impact. This business is really focused on making progress against the third pillar, portfolio management and commercial excellence. You saw that in the second quarter, and that's what I would expect as we go into the fourth quarter. This should be isolated to the third quarter.

Very helpful. Thanks. And then just uh, as a follow-up on the full year guidance, um could you give a bit more color on what's happening with the APM outage? I mean, you mentioned it as 1 of the drivers for hitting the lower the high end of the full year, Eva guide. So just wondering how much visibility you have their into the total earnings impact and and the time frame and how much of this is under your control

Yeah, I would say the the actual issue.

That occurred was a bit outside of our control. Although we we really pride ourselves on trying to be resilient for all those things. I would look at it. First of all the the second quarter was was a really good performance by the business. I would um you know anchor back to that. That the the issue that's happened. At Washington works is really a blip. Um it's something that happened from a power outage that really shouldn't have happened. Um so think of that as a a 1 time, you know, 20 million dollar impact. Um but the this business is really focused on making progress against the third pillar, portfolio management and Commercial Excellence, you saw that in the second quarter and that's what I would expect, as we go into the fourth quarter, this should be isolated to the third quarter.

Speaker 5: Great. Thanks a lot.

Great. Thanks a lot.

Jericho: Our next question comes from John Roberts from Zio. Please go ahead.

Our next question comes from John Roberts from xumo.

Speaker 6: Yeah, thank you. Maybe one for Shane Hostetter. On slide seven on liquidity, I guess I had never really thought of insurance proceeds as a source of liquidity. Does the $150 million insurance rights that you sold only relate to existing claims, or did you sell forward any rights to insurance for potential future claims, or how do we think about insurance adding to your liquidity?

Please go ahead.

Yeah, thank you, maybe 1 for Shane on on slide 7 on liquidity. I guess, I'd never really thought of insurance proceeds, as a source of liquidity. Um, does the 150 million insurance rights that you sold only relate to existing claims or did you sell forward any rights to insurance for potential future claims or how how do we think about insurance adding to your liquidity?

Shane Hostetter: Hey, John. Related to the $150 million of insurance that we talked about in the New Jersey settlement, this was related to past claims as it relates to the New Jersey settlement for natural resources. The $150 million is an advance from Corteva and DuPont that will be realized throughout the next five years, as we've talked about, to offset the payments underneath the New Jersey settlement. As we think about what these are, these are areas where we feel very good about getting the actual amounts from the insurance carriers down the way. The $150 million is just a piece of the total pie. We noted in the slide that there's about $750 million out there. It's not to say we're going to get $750 million. We feel very comfortable with the first $300 million, hence why I believe we were receiving the $150 million upfront.

Hey John. Yeah, so related to the 150 million of insurance that we've talked about in the New Jersey settlement. This was related to, you know, past claims as it relates to the, you know, obviously the New Jersey settlement for national resources. Um, the 150 is an advance, um, you know, from from cortiva, uh, and Dupont. Um, that will be realized, um, you know, throughout the next 5 years as we talked about, uh, to offset, um, the the up, the payments underneath of the New Jersey settlement. Um, so as we think about what these are, these are, um, areas where we feel very good, um, about getting the actual amounts from the, the newer or from the insurance carriers down the way. Um, the 150, uh, is just a piece of, you know, the total Pi. We noted in the slide that there's about 750 million

Million out there. It's not to say we're going to get 750 million. Uh, we feel very comfortable, you know, with the first 300 hence why, you know, I believe we were receiving the 150 upfront.

Jericho: Our next question comes from Arun Viswanathan from RBC Capital Markets. Please go ahead.

Our next question comes from a room.

This is from RBC Capital Markets. Please go ahead.

Speaker 7: Great. Thanks for taking my question. Hope you guys are well. I wanted to ask about the slide that you put out on some of the longer-term priorities. It looks like you have guidance or a line of sight to greater than 5% sales growth in the next few years. Does that start as soon as 2026? If you were to think about how that shapes up, I imagine high single-digit growth can continue in TSS, but that could be offset by more moderate growth in the other two segments. Along with that, if you could potentially provide some updates, if there are any, on the portfolio review as well, that would be great. Thanks.

Great, thanks for taking my question. Hope you guys are well

Um, I guess I I, uh, wanted to to ask about the, um, the slide that you put out uh, on some of the longer term priorities. So um, looks like you have uh, guidance or a line of sight to greater than 5% sales growth.

Uh, in the, um, few next few years. So does that start as soon as '26? And then, um, I guess, uh, maybe if you were to think about how that shapes up. Um, I imagine maybe high single-digit growth can continue and TSS, but, um, that could be offset by.

More moderate growth than the other 2 segments. Um, and then along with that, if you could potentially provide some, um, updates, if there are any on the portfolio review as well, that'd be great. Thanks.

Denise Dignam: Thanks, Arun. Relative to the 5% sales growth, we definitely see that impacting in 2026. Definitely, TSS, we see significant growth. But if you look at our second pillar around a lot of work going on around commercial excellence, you saw in the second quarter with APM, all the pricing efforts that are going on, and that is going to continue. Relative to our portfolio work, we are still, as we have announced, working on the review of our European assets, and we have given some updates relative to the exit of the SPS portfolio, which there are three sites where that business operates, and that is well underway. So we feel really good about that portfolio work.

Thanks Jerome, you know, relative to the, the 5% sales growth. We, we definitely see, um, you know, that, uh, impacting in in 2026 definitely, you know, TSS. We have, um, you know, we see significant growth. But if you look at our second pillar around, I mean, enabling growth, we have a lot of work going on. Around commercial Excellence. You saw, you know, in the second quarter, uh, with with, uh, APM all the pricing efforts that that are going on and that's going to continue.

And we've given we've given some updates relative to the exit of the SPs portfolio, which is there are 3 sites where, where, um, that business, um, operates and that's well, that's well underway. So we feel really good about that, uh, portfolio work.

Speaker 7: Thanks for that. If I could, just as a follow-up then, if it does start in the 2026 period and it is driven by TSS, does that also imply that maybe as that mix continues to grow of Opteon Refrigerants above 70% of TSS, you could see some margin growth as well? The EBITDA growth should be well above that 5% level, maybe high single digits. How should we think about how that translates, how the sales growth translates to EBITDA, maybe even EPS growth? Thanks.

Shane Hostetter: Yeah, thanks, Arun Viswanathan. We obviously have not given a guide as it relates to the bottom line here on a longer-term base, but we always strive for growth on the bottom line above our top line, right, in that side, some of which could come from margin expansion. As we look at Surface Protection Solutions, we are really excited about the business and its perspectives and feel great about being above that 30% EBITDA margin.

Thanks for that. And then, um, if I could just as a follow-up then, so if it does start in the 26 period, um, and it's been driven by TSS, does that also imply that maybe as that mix continues to grow of option, um, above 70% of TSS, um, you could see some margin growth as well? And so the EBITDA growth should be well above that 5% level, maybe high single digits. How should we think about how that translates? Uh, how the sales growth translates to EBITDA, maybe even EPS growth? Thanks.

Yeah, thanks run. Uh, we we obviously we're not giving guide, uh, as it relates to the bottom line here on a longer term base. Um, but we always strive for growth on the bottom line, above our Top Line, right in that side some of which could come from margin expansion. Uh but you know as we as we look at TSS, you know, we're really excited about the business and its perspectives and feel great about, you know, being above that 30%, even to margin.

Speaker 7: Thanks a lot.

Thanks a lot.

Jericho: Our next question comes from Josh Spector from UBS. Please go ahead.

Speaker 5: Yeah, hi, good morning. I want to try again on some of the TSS questions to some extent. If I kind of think about where we came into the year, Shane, you just made this comment again, 30% plus EBITDA margins. Our math looks like you are running closer to 32% now. Just top line assumptions, initially longer term thinking high single digits, maybe now you are running mid-teens. So, of what you are doing this year, is this a base from a margin perspective and a top line perspective that you build off of into 2026, 2027, or to John's question earlier, is there a little bit of give-back on either of those points, sales or margins, because of some of the outperformance in the aftermarket this year?

Our next question comes from Josh Spectre from EBS. Please go ahead.

Yeah. Hi, good morning. Um I want to try again on some of the the TSS questions to some extent if I kind of think about where we came into the year. I mean Shane you just made this comment again 30% plus IBA margins. Our math looks like you're running closer to 32% now. Um Topline assumptions, you know initially longer term thinking High, single digits. Maybe now you're running mid teens.

So you know, of what you're doing this year, is this a base from a margin perspective and a Topline perspective that you build off of into 2026 2027 or to John's question earlier? Is there a little bit of give back on either of those points sales or margins because of some of the outperformance in the aftermarket this year?

Shane Hostetter: So, thanks for the question, Josh. I will address the margins first as we think ahead. We come back to the 30%, but as you just talked about, run rate 32%. We have some delay in some of the raw material costs increase where we priced ahead a bit. So we will see a little bit of impact there, but we still feel very good with where we are going to exit the year, as we think about run rates above 30%. Looking ahead and longer term, I think we are excited about the business and think about the prospects of just overall further adoption in the aftermarket, driving performance. That said, it is, we do believe there will be more competitive dynamics going forward.

So yeah, thanks for the question, Josh. You know, I'll address the margins first as we think ahead. Um, you know, we're I we come back to the 30% but you know and you just talked about run rate 32%, you know, there we have um, some delay in some of the raw material costs, uh, increase where we priced ahead a bit. So we will see a little bit of impact there, but we still feel very good with where we're going to exit the year, you know, as we think about run rates above 30%.

Shane Hostetter: So we are not committing to any growth numbers at this time, but we will just continue to execute and really believe that TSS is going to be a strong growth enabler for our company going forward underneath of the next three years under our strategy.

Speaker 5: Okay, thanks for that. If I could just follow up on the PFAS comment specifically around insurance, can you just give us a little bit more framework of if or when that can apply? I guess it appears this was maybe a bit more specific with the sites in New Jersey. I do not know if it was product related. Basically, can this apply to a settlement in North Carolina or anything else you have down the pike, which then maybe extends the MOU funds further out, or how should we think about that?

You know, looking ahead and longer term. Um, you know, I think you know, we're excited about the business and think about the prospects of just overall, uh, further adoption in the aftermarket um, you know, driving performance that said that is a, you know, we do believe there will be more competitive Dynamics, um, you know, going forward. Uh, so, you know, we're not committing, you know, to any, uh, growth numbers at this time, but we'll just continue to execute. And really believe that, you know, TSS is going to be a strong uh, growth enabler for our, you know company. Uh, going forward underneath of the next 3 years under under our, um, our um our our our, our strategy,

Okay, uh, thanks for that. And if I could just follow up on the POS comments, specifically around Insurance can, can you just give us a little bit more framework of if, when that can apply. I guess it appears. This was maybe a bit more specific with the sites in New Jersey or or Jersey. I don't know if it was product related. Basically, you know, can this apply to a settlement in North Carolina or anything else? You have down the pike, which then maybe extends the mou funds further out or how should we think about that?

Shane Hostetter: So, a couple of things there, Josh. As I look at these insurance, I mentioned a total of $750 million, but that number is the gross number. We will have to think through what the carriers will ultimately provide and what we will settle for on that side. Under the MOU, this does extend the amount of items underneath the MOU and provide more cover there. As we think about the applicability and where this is, we are really much focused on the New Jersey settlement at this time. We think that this is a really good advance to help us cover the next five years from a cash flow perspective. The specific areas are around product liability and other areas which were applicable to the national resources underneath the New Jersey.

Shane Hostetter: We will continue to look at other avenues to try and apply this elsewhere, but just really focused on New Jersey at this time.

Apply this elsewhere, but you know, just really focused on New Jersey at this time.

Speaker 5: Okay, thank you.

Okay, thank you.

Jericho: Our next question comes from Duffy Fisher from Goldman Sachs. Please go ahead.

Speaker 5: Good morning. I was hoping you could talk to us about what your strategy is in TiO2 currently. Historically, you have been stronger on price and have given up volume to peers in weak periods. This quarter, if you look, your pricing year over year was 4% weaker than your biggest competitor, Western competitor. Your volumes were 10% better. It is pretty clear you are much more aggressive in the market than they were this quarter. Is that a structural change in your strategy to be more volume-driven? If so, do you think there will be a competitive response from them?

Our next question comes from Duffy Fisher from Goldman Sachs. Please go ahead.

Yeah, good morning. Um, I was hoping you could talk to us about what your strategy is in tio2. Currently historically, you've been stronger on price and have given up volume to peers in Weak periods. Um, you know this quarter, if you look your pricing year over year was 4% weaker than your biggest competitor, Western competitor, your volumes were 10% better. So, you know, it's pretty clear, you are much more aggressive in the market than they were. This quarter is that a structural change in your strategy to be more volume driven. And if so, do you think there'll be a competitive response from them?

Denise Dignam: Thanks for the question, Duffy. We are really confident and clear in our strategy. When we started this, we really looked at we need to be the lowest cost manufacturer. We took out our high-cost capacity, and we talked about the fact that we are going to continue to do that in our assets, and we are going to gain share in fair trade markets. We look whenever we have an opportunity, we have a very diligent process. We evaluate all opportunities. I am confident in our strategy driving lower costs and achieving share gain in those fair trade markets. I really cannot comment on what the response of the competitors will be. I think it is some really positive signs when you think about what is going on with the capacity that has been taken out of the market.

I don't have any clear in our strategy, and when we started this, you know, we really looked at, we need to be lowest cost manufacturer. We took out our high cost capacity and we talked about the fact that we are going to continue to do that in our in our assets, and we're going to gain share in Fair Trade markets. You know? We look, uh, whenever we have, um, an opportunity we have a very diligent process.

Denise Dignam: We believe there is at least 400 kilotons that have been taken out. Just even looking at the export data from China, significant reductions year over year, quarter over quarter, even into Brazil and India, which yet would still do not have the firm duties or tariffs in place. Again, we are focused on lowest cost and gaining share in fair trade zones.

Speaker 5: Great, thanks. Maybe just to jump to Surface Protection Solutions, last year, your sequential sales Q2 to Q3 were down about 10%, but the decremental margin was roughly equal to the segment average. This year, your sales are down less, but your decremental margin looks like it is double what the segment average is. Is that a mixed shift issue? Is that something around the 454B issues? Why is the decremental so much greater this year than last year?

We evaluate all opportunities. You know, I'm confident in our strategy drove driving lower costs, and achieving shared gain in those, those fair trade markets, I really can't comment on, you know what the response of the of of uh, of the, the competitors will be. But I think it's some really positive signs when you when you think about, um, you know, what's going on with the, the capacity that's been taken out of the market. You know, we believe there's at least 400 kilotons that have been taken out and just even looking at the, um, the export data from China, you know, significant reductions year-over-year quarter over quarter even into, uh, you know, Brazil and in India which yet would still have not do not have the firm, um, uh, duties or tariffs in place. So again, we're focused on lowest cost and, uh, gaining Sharon and fair trade deals.

Great thanks. And then maybe just to jump to TSS last year your sequential sales Q2 to Q3 were down about 10%, but the decremental margin was roughly equal to the segment average. You know this year, your sales are down less but your decremental margin looks like it's double what the the segment average is. So, you know, is that a mixed shift issue? Is that something around the 4 54, B issues. You know, why is the decremental so much greater this year than last year?

Shane Hostetter: Yeah, thanks, Duffy. It is really a mixed shift. As we look at the Freon rolloff last year, we have seen a coordinate that was so dramatic from the decline went right to the bottom line versus a shift in kind of the volumes this year.

Yeah, thanks dphie. It's really Nick shift. You know, as we look at, you know, the the freon roll off last year in the pricing, you know, according that was so dramatic on the decline. Um, right to the bottom line versus a shift in kind of the volumes this year.

Speaker 5: Okay, thank you guys.

Okay, thank you guys.

Jericho: Our next question comes from Hassan Ahmed from Alembic Global. Please go ahead.

Speaker 5: Morning, Denise and Shane. I just wanted to revisit the earlier question, get a little more granular around TT and the 9% sequential uptake you guys saw in volumes versus one of your largest competitors sequentially reporting a 2% decline. My understanding is that Europe sort of became the battleground with the whole sort of anti-dumping stuff going on over there. It just seems that you guys were very aggressive on pricing. Again, sort of revisiting some of the stuff that you said earlier, my fear is that could this potentially signal a walking away from the whole sort of value over volume strategy that the industry so painstakingly sort of evolved into over the last five, six years?

Our next question comes from Hassan Ahmed. From mmic, Global Peace. Go ahead.

The earlier question, uh, get a little more granular around um, around, you know, GT and uh, the 9% sequential uptake you guys saw in volumes versus, you know, 1 of your largest competitors. Sequentially reporting a 2% decline. I mean, my understanding is that, um, that you know, Europe, sort of became the Battleground, you know, with the whole sort of anti-dumping stuff going on over there. And it just seems that

You know, uh, you guys were very aggressive on pricing. So again, sort of revisiting some of the stuff that you said earlier, I mean, you know, my fear is that, you know, could this potentially, you know, signal a walking away from, uh, you know, the whole sort of value over volume strategy, you know, that the industry is so painstakingly sort of evolved into over the

You know, 5 6 years.

Denise Dignam: Hassan, thanks for the question. I would not jump to the conclusion that this is a, you know, a dropping of price. I would focus on our strategy, our overall strategy of commercial excellence, and really, you know, winning in the marketplace based on our, on our, on the value proposition that we offer.

Speaker 5: Understood. Understood. If I could just sort of follow up with, again, sticking to the TIO2 side of things, can you just give me your views both from the supply side and the demand side of things, as you see them sort of progressing 2026 and beyond? More particularly, you guys mentioned some capacity rationalization, particularly in China. If you could sort of expand on that a bit more on the supply side and on the demand side, obviously, it appears that over the last couple of years, we are well below normal levels on the demand side. How do you see the cycle evolving 2026 and beyond, both from the supply and the demand side of things?

That we that we offer.

Understood understood. And if I could just sort of, uh, follow up with again, sticking to the tio2 side of things, I mean, can you just give me your views? Both from the supply side and the demand side of things, you know, as you see them sort of progressing 26 and Beyond and you know more particularly, you know, you guys mentioned some capacity rationalization, particularly in China. So if you could sort of expand on that a bit more on the supply side and on the demand side of the, you know, it appears that over the last couple of years, we are well below normal levels on the demand side. So how do you see the cycle? Evolving 26, and Beyond both from the supply and the demand side of things.

Denise Dignam: Yeah, from a, I will just take demand first. From a demand standpoint, we do not see anything for this year, any big trigger this year. Certainly, we look at certain indicators like everyone else does and expect to see some improvement next year, but really nothing, nothing in the short term. I think the story really is on the supply side. There has been significant capacity that has been taken out of the market, starting with our, initially with us. But we see at least 400 kilotons from China coming out, which really gives a more balanced supply-demand picture. Also on top of that, the tariffs and duties and the real differentiation between the fair trade markets and the non-fair trade markets, definitely, I would say over the next couple of years, this is a very proving trend.

Yeah, from a I'll just

Demand first, I mean, from a demand standpoint, you know, we don't see any anything, uh, for this year. Any big trigger this year, certainly we look at certain indicators like everyone else does and, and expect to see some improvement next year. But you know, really nothing. Nothing in this short term. Um, I think the, the, the, the, the story really is on the supply side, you know, there's been significant capacity, it has been taken out of the market, you know, starting with with our our initially with us. But, um, you know, we see at least 400 kilotons from China coming out, which is really, you know, gives a more balanced um, Supply, demand picture.

But also on top of that, the the the tariffs and duties and uh you know, the real differentiation between the fair trade markets and the non-air trade markets.

Speaker 5: Very helpful, Denise. Thank you so much.

Um, definitely I would say over the next couple years. This is a very improving trend.

Very helpful Denise. Thank you so much.

Jericho: Our next question comes from Laurence Alexander from Jefferies. Please go ahead.

Shane Hostetter: Hey guys, it's Arun Viswanathan for Laurence. Thank you for taking my question. So in terms of PFAS, what's the kind of the next? Is North Carolina, I don't know, coming up soon or is it, I mean, are you in negotiations or what can we, what's the timeline and what can we expect maybe in terms of another announcement if there's anything you can tell us?

Our next question comes from Lawrence. Alexander from Jeffries. Please go ahead.

Hey guys, it's Dan Roan for Lawrence. Thank you for taking my question. Um, so in terms of the P5, what's the kind of the next is is, is North Carolina? I don't know. Coming up soon. Or is it? I mean is are you negotiations or what? What can we

Denise Dignam: Sure. Hey, I really appreciate this question. I first want to start with New Jersey is a major milestone for us, and we are just really pleased for a whole host of reasons. We looked at that comprehensive settlement. This was four former and current operations. I should talk about North Carolina and West Virginia. So already with New Jersey, we have four behind us and two more in the future. It is a 25-year payment at NPB value. So it puts more, I will say more under our MOU in addition to the advancement of insurance of $150 million with no cash interest payments, along with the escrow, giving us more, also more room under the MOU and no payment at least through 2030. That is just incredible.

Timeline. And what can we expect maybe in terms of another announcement, if there's anything, you can tell us,

Sure, hey, I really appreciate this question. I first want to start with, um, New Jersey is a major milestone for us, and we are just really clean for just a whole host of reasons. You'll look at the comprehensive settlement, this was for former and current operating, but you talk about North Carolina and West Virginia. So we've already with New Jersey, we have uh 4 uh behind us and and 2 more uh in the future. It's a 25 year payment at npv Value, so it puts more um I'll say more under our mou in addition to the advancement of insurance of 15

Denise Dignam: You go to what will the $16.5 million that was pointed out on the settlement, that is the PFAS allocation for New Jersey. It really aligns well with the allocation of liability that came from the water district settlement in the 3% to 7% range. You really cannot underestimate the importance of this. When you think about what is next, I talked about the four sites behind us. There are two, North Carolina and West Virginia, when you think of the big milestones for the states. Beyond that would be personal injury. We are following a process. We are in settlement discussions. All I am going to say here is that overall, we have the same interest in resolving all of our outstanding litigations and liabilities in the same spirit and manner that we did for New Jersey.

50 million with no cash interest pay payments. Uh, along with the asgrow, giving us more uh also more room under the mou and no payment um, at least through 2030. So just incredible. And then you go to. Well, what, well, the 16.5 that's been pointing out 15.5 million that was pointed out on the settlement that the Pas allocation for New Jersey. It really aligned, uh, well, with the, the, uh, allocation of liability that came from the water district settlement in the 3 to 7% range. So you really can can, um, you know, underestimate the importance of, of this. So, when you think about what's next, I talked about the foresight behind us. There's 2, North Carolina, and West Virginia. When you think of the big milestones for the for the state,

Denise Dignam: This is clear examples of executing on our strengthening the long-term pillar and bringing confidence and clarity to our stakeholders. It really reflects our resolve to de-risk our portfolio.

And then beyond that would be, um, personal injury. Uh, and you know, we're we're following a process we're in, you know, settlement discussions. But, you know, all I'm going to say here is that overall, you know, we have the same interest in resolving all of our, our outstanding uh litigation uh and liabilities In The Same Spirit and manner that we did for New Jersey. Um you know this is a clear example of executing on our strengthening the long term pillar and bringing confidence and Clarity to our stakeholders and really reflects our resolve to re to de-risk our portfolio.

Shane Hostetter: Is the 3% to 7% the blueprint we should think of going forward when we are thinking about how North Carolina and West Virginia might shake out?

And the the 3 to 7% is I mean is that the blueprint we should think or just I mean obviously anything can happen. But is that the blueprint we should think of going forward when when you when we're thinking about how North Carolina and and West Virginia might take out

Denise Dignam: As you said, we can't project it out, but certainly the blueprint we think about, and really it's demonstrating throughout the settlements that it's holding.

Shane Hostetter: Thank you very much.

Thank you very much.

Jericho: Our next question comes from Jeff Zekauskas from J.P. Morgan. Please go ahead.

Speaker 5: Thanks very much. In some of the press and legal accounts of the New Jersey settlement, it is talked about as a $2.5 billion settlement and that I think a $1.2 billion remediation fund has to be set up and a $475 million reserve fund has to be set up. Are there claims on you for those or how do those amounts relate to the settlement amounts that have been agreed to?

Our next question comes from Jeffrey zucos from JP Morgan. Please go ahead.

Uh, thanks very much.

In some of the press and legal accounts of the New Jersey settlement. It, it's talked about as a 2.5 billion dollar settlement in that, I think a 1.2 billion remediation fund has to be set up.

And a 40075 million Reserve fund has to be set up.

Are are their claims on on you for for those or how do those amounts relate to the settlement amounts that have been agreed to?

Shane Hostetter: Yeah, thanks, Jeff Zekauskas. As you mentioned, the reconciliation to what we provided versus what the state provided, they are the same numbers. They are just differently presented. The two big items that you mentioned, there was a remediation fund of, call it $1.2 billion in the state's numbers. What that is, is really a reference, a surety or a backstop for future remediation efforts over many years, right, in this side. Just to note, as we think about that, that is really already in our ongoing cash flow on what we are actually doing on a day-to-day basis at these plants to make sure they are operating appropriately and remediating those environmental items. The other area outside of the $1.2 billion was about a half a billion reserve fund. That is a backstop for the surety of which Corteva and DuPont have to post, that in that side.

Yeah, thanks Jeffrey. Um, so as you mentioned the reconciliation to what we provided versus what, the state provided they're the same numbers. Uh, they're just differently presented, uh, the 2 big items that that you mentioned. So there was a remediation fund of, you know, call 1.2 billion in the state's numbers. Uh, what that is is really, you know, kind of a reference assurity or a back stop uh, for future uh, remediation efforts uh, over many years right in this side. Uh, just a note, you know, as we think about that that's really already in our ongoing cash flow on what we're actually doing on a day-to-day basis at these plants to make sure they're operating appropriately.

Remediating, those environmental items.

the other area outside of the 1.2 was about a half a billion Reserve fund, that is a back stop for the the shy uh of which uh Corte Dupont have to post, you know that and that side

Speaker 5: Are there cash flow claims that are in addition to the $500 million in net present value that you are responsible for, or how exactly do those remediation and reserve funds affect your future cash flow if they do affect them?

so are there so are their cash flow. Um, claims that are in addition to the

You know, the 500 million in Net, Present Value that, um, your responsible for or how exactly do those.

Uh, remediation and Reserve funds affect your future cash flow.

If they do affect them.

Shane Hostetter: So, Jeffrey, in our ongoing results, we have monitoring, we have maintenance, we have other areas to remediate these plants. They are in our ongoing, in our past cash flow, and will be on our ongoing cash flow for some time. That is depending upon the agreement of how to remediate these sites, which we will have conversations on in the future. Just to note, the $1.2 billion is the high end of that surety. We believe it will be a lower amount, which will be discussed within this one-year description underneath the agreement.

Denise Dignam: Okay, and maybe to add a little bit to the top end and how that top end was arrived, we have done assessments based on science, and they are at the low end of the range. It is not like we have gone into this line, right? So we have done our assessment work. In order to get the settlement done, the timing didn't really allow for a lot of diligence and reconciliation between, you know, what New Jersey thought and what our science would tell us. So we established this range, and as you will see in the JCO, just a really practical process to align, and you know, we are really happy with that outcome.

So Jeffrey in our ongoing results, right? So we have monitoring, we have maintenance, we have other areas to remediate these plans and so they're in our ongoing in our past cash flow and we'll be on our ongoing cash flow for some time that is, depending upon, you know, the agreement of how to remediate these sites, which we will have conversations on in the future. Um, and just to note, the 1.2 billion is the high-end, you know, of that shity right. So we believe, you know, it will be at the lower amount, which will be, uh, discussed. And, you know, within this 1 year, uh, description underneath the agreement.

Okay. And that means to add a little bit to the to the to the to the top end and how that top end, um, was arrived. You know, we have done assessments. Um, So based on science and

Speaker 5: Okay, and then lastly, your CapEx is roughly $250 million this year, roughly. What is a normalized level for you when you think about the next few years? Where do you think your capital expenditures normally will be?

They're they're at the low end of the range. We have, it's not like we've gone into this blind, right? So we've done our assessment work in order to get the the, the settlement done. The timing didn't really allow for a lot of diligence and Reconciliation between, you know, what New Jersey thought and and what our science would tell us. So we established this range and um as you'll see in the in the the jco, just a, a really practical, um, process to align and, you know, we're really happy with with the with that outcome.

and and then lastly your capex is um,

roughly 250 million.

This year roughly. Um, what's a, what's a normalized level for you? When you think about the next few years, where where do you think your

Capital expenditures normally will be.

Shane Hostetter: Yeah, thanks, Jeff Zekauskas. Yes, we've had, we expect around $250 million, as we've guided. I would note that's, you know, lower than any recent periods in Chemours' history. The outlook depends upon, you know, some strategic growth initiatives, which we've had very focused spend in this given year, and we'll continue to very much focus on that side. I do think, you know, as we look ahead, there may be a little bit more CapEx, but it's not going to be anything past the range of where we're at, you know, from, you know, now and past history. It's not going to get out of bounds. The efforts here are really to be strategic on what is really needed to operate our sites, both safety and compliant, as well as very much focused on strategic growth initiatives that are very much focused.

Yeah, thanks Jeffrey. Um, yes we've had we expect around 250 as we've guided. I would note that uh, you know, lower uh than any recent periods and think more so history. Um, the Outlook depends upon, you know, some strategic growth initiatives, which we've had very focused spend, uh, in this given year and we'll continue to very much focus on that side. Um, I do think, you know,

Speaker 5: Does that mean $350 million?

You know, as we look ahead there may be a a little bit more capex but it's not going to be anything past the range of where we're at. You know, from uh, you know, now, and and past history. It's not going to get out of bounds. The efforts here is really to be strategic on what is really needed to operate our sites, both safety and compliance, uh, as well as very much focused on the Strategic growth initiatives that are very much focused.

Does that mean 350?

Shane Hostetter: Yeah, Jeffrey, I am not going to give a guide, you know, long range from a CapEx perspective. I do think if you look in the past, right, so this is the lowest we are at. I do think we will have, you know, potentially a little bit more as we look ahead, but I am not going to give a range, you know, to the high and low end at this point.

Speaker 5: Okay, great. Thank you.

Perspective. Um, I do think if you look in the past, right? So this is the lowest per area. I do think we'll have, um, you know, potentially a little bit more as we look ahead. Um, but I'm not going to give a range, you know, to the high and low end at this point.

Okay, great. Thank you.

Jericho: Our next question comes from Vincent Andrews from Morgan Stanley. Please go ahead.

Speaker 5: Good morning. This is Justin Pellegrino on for Vincent Andrews. I wanted to shift back over to TT for a second and ask if you could give us kind of the competitive dynamics in the different regions around the world. Then within the countries that have put in place the fair trade or the anti-dumping duties, have you seen some duties be more effective than others and kind of what are driving those differences? Thank you.

Our next question comes from Vincent. Andrews. From Morgan Stanley. Please go ahead.

Good morning. This is Justin pelligrino on. For Vincent, wanted to shift back over to TT for a second. And ask if you could give us kind of the competitive Dynamics and the different regions around the world and then within the countries that have put in place, the the fair trade or the anti-dumping duties, have you seen some duties be more effective than than others and kind of what are driving those differences. Thank you.

Denise Dignam: Thanks for the question, Justin. Relative to the competitive dynamic, I would say in an overall perspective, in the regions where we call the fair trade markets, it is more of the multinational competitors, excluding the Chinese manufacturers. I would say it is pretty competitive in those non-fair trade markets. There is a lot of pressure from Chinese producers in those areas.

Answer the question.

To the, the competitive Dynamic. I would say. And an overall perspective, you know, that from within the regions, where we call the fair trade markets, you know, it's more of the multinational competitors. Um, uh, you know, excluding the, um, Chinese manufacturers. It's, it's, I would say it's pretty, um, competitive. In those non-par, trademark markets. There's a lot of of pressure from Chinese producers in those in those areas. Um,

Speaker 5: Thanks for that.

Denise Dignam: You can repeat the second part of your question. I am sorry.

Speaker 5: Yeah, just within the countries or regions that have put in anti-dumping duties, is there any differences between the regions or within the duties that they've put in place? If there are any differences, what's driving those differences?

Denise Dignam: Yeah, thank you. I would say that where the duties have been put in, they've been very effective. So in the U.S. and Europe, there's a time for transition, right? So once they come in, if you say that, like, when did Europe finally, you know, probably took a good nine months for inventories to be worked down, but you can see the signs of how these are going to be effective in other regions that are contemplating the or have preliminary rulings around tariffs or anti-dumping duties. As I mentioned earlier, you can just look at the exports into India. You can see the drop there. You can look at the exports into Brazil. You see the drops there. So I would say when the rules become final, we have a lot of confidence in the effectiveness of those.

You can repeat the second part of your question, I'm sorry. Yeah. Just within the, um, countries or regions that have put in anti-dumping. Duties, is there is there any differences between the regions or within the duties that they've put in place? And, you know, if there are any differences, what's what's driving? Those differences?

Yeah, thank you. Um, I would say that where the, where the duties have been put in and they've been very effective. Um, so in the US and Europe, there's a time for transition, right? So once they come in and you say, like, when did when did Europe? Finally, you know, probably took a good.

Speaker 5: Wonderful. Thank you.

9 months for inventories to be worked down. But you can see the signs of of how these are going to be effective. In other reasons where that are that are contemplating, um, the uh, or have preliminary rulings around tariffs or or or anti-dumping duties. Um, as I mentioned earlier, you can just look at the exports into India and you can see the drop there, you can look at the exports into Brazil, you see the drops there. So, I would say when the rules become final, if a lot of confidence in in the effectiveness of those,

Wonderful, thank you.

Jericho: We have reached the end of our question and answer session. Thank you for joining the Chemours Second Quarter 2025 Results Conference call. You may now disconnect.

We have reached the end of our question and answer session. Thank you, for joining the tumor second quarter, 2025 results conference call. You may now disconnect