WILMINGTON, Del., Feb. 15, 2017 /PRNewswire/ --
Fourth Quarter 2016 Highlights
- Net Sales of $1.3 billion
- Net Loss of $230 million, or
($1.26) per diluted share, including
pre-tax items such as: PFOA settlement charge of $335 million, impairment charges of $13 million and additional restructuring costs of
$11 million
- Adjusted EBITDA of $239
million
- Adjusted Net Income of $15
million, or $0.08 per diluted
share, including ~$50 million tax
valuation allowance
Full Year 2016 Highlights
- Net Sales of $5.4 billion
- Net Income of $7 million, or
$0.04 per diluted share, including
pre-tax items such as: gain on asset sales of $254 million, PFOA settlement charge of
$335 million, impairment charges of
$119 million and restructuring costs
of $51 million
- Adjusted EBITDA of $822
million
- Adjusted Net Income of $187
million, or $1.02 per diluted
share, including ~$50 million tax
valuation allowance
Other Highlights
- Reduced costs by approximately $200
million in 2016 through transformation initiatives
- Improved cash from operating activities by ~$412 million in 2016
- Retired $385 million of long-term
debt through December 31, 2016
- Net debt of $2.6 billion, ~3.3
times net debt-to-EBITDA
The Chemours Company (Chemours) (NYSE: CC), a global chemistry
company with leading market positions in titanium technologies,
fluoroproducts and chemical solutions, today announced financial
results for the fourth quarter and full-year 2016.
Chemours President and CEO Mark
Vergnano said, "2016 was about transformation; our
five-point transformation plan delivered results on all fronts –
cost reductions, portfolio rationalization, growth opportunities,
focused capital investments and cultural change. We achieved our
$200 million cost reduction target,
and generated substantial proceeds from asset sales. At the same
time, we optimized our TiO2 manufacturing capabilities
and capitalized on the Opteon™ refrigerant growth opportunity. In
addition, the recent agreement with DuPont mitigates the
uncertainty around potential outcomes of the PFOA multi-district
litigation. Between our strong business performance and the recent
PFOA settlement, we significantly improved our earnings and
liquidity profile, and strengthened the company by reducing debt
and addressing a key contingent liability – all good results for
our shareholders."
Fourth quarter net sales were $1.3
billion, a decrease of 3 percent from $1.4 billion in the prior-year quarter, primarily
due to portfolio changes. Fourth quarter net loss was $230 million, or ($1.26) per diluted share, versus a net loss of
$86 million, or ($0.48) per diluted share in the prior-year
quarter. The net loss in 2016 was primarily due to a PFOA
settlement charge of $335 million
recorded in the quarter. Adjusted EBITDA for the fourth quarter was
$239 million versus $132 million in the prior-year quarter. Fourth
quarter results were driven by improved average prices in Titanium
Technologies, increased Opteon™ adoption, and continued progress on
cost reductions that were partially offset by the impact of
portfolio changes within Chemical Solutions.
Sequentially, sales declined 5 percent to $1.3 billion in the fourth quarter. Fourth
quarter net loss was $230 million, or
($1.26) per diluted share, which
included the $335 million PFOA
settlement charge, versus the third quarter net income of
$204 million or $1.11 per diluted share, which included a
$169 million gain on asset sales. The
sales decline was driven by lower seasonal volumes in Titanium
Technologies, a decline in base refrigerant volumes due to quotas,
and the effects of divestitures within Chemical Solutions. Fourth
quarter Adjusted EBITDA was $239
million versus $268 million in
the third quarter of 2016. The decline was primarily related to the
seasonal demand reductions in Titanium Technologies and
Fluoroproducts along with the impact from Chemical Solutions
portfolio changes.
Full-year 2016 net sales were $5.4
billion, a decrease of 6 percent from $5.7 billion in 2015, primarily due to the impact
of divestitures and a lower average price year-over-year in
Titanium Technologies. Net income for the year was $7 million, or $0.04 per diluted share, versus net loss of
$90 million, or ($0.50) per diluted share in the prior year. Net
income in 2016 reflected improved business performance partially
offset by the $335 million PFOA
accrual related to the multi-district litigation (MDL) settlement,
which was recorded in the fourth quarter. Adjusted EBITDA for 2016
was $822 million versus $573 million in the prior year, an increase of 43
percent. The increase was largely driven by strong Opteon™ growth
and benefits from cost reductions despite portfolio changes and
lower year-over-year average price of TiO2.
Titanium Technologies
In the fourth quarter, Titanium Technologies segment sales were
$623 million, a 6 percent increase
versus the prior-year quarter. Improved year-over-year global
average TiO2 pricing increased net sales by 8 percent.
Lower year-over-year volume within other derivative products
reduced sales by 2 percent, while TiO2 volume was flat
versus last year's fourth quarter. Segment Adjusted EBITDA was
$157 million, which more than doubled
over the prior-year quarter. Benefits of lower raw materials and
cost savings and price increases drove the improvement in Adjusted
EBITDA.
Sequentially, sales were relatively flat versus the third
quarter of 2016 while Adjusted EBITDA increased $13 million, or 9 percent. Volume declined 3
percent, in line with typical seasonal trends, which was offset by
improvement in price. The higher Adjusted EBITDA was primarily due
to global average price increases and better utilization resulting
in lower costs.
Annually, Titanium Technologies sales were $2.4 billion, a 1 percent decline, driven by 3
percent lower average annual price versus the prior year. Segment
Adjusted EBITDA for 2016 was $466
million, up 43 percent in comparison to the prior year. Cost
reductions and higher volumes more than offset the lower average
pricing for the year.
Fluoroproducts
Fluoroproducts segment sales in the fourth quarter were
$569 million, an increase of 10
percent versus the prior-year quarter. Strong demand for Opteon™
refrigerants was somewhat offset by lower prices and unfavorable
mix within fluoropolymers, as well as the timing of base
refrigerant quota sales earlier in the year. Segment Adjusted
EBITDA was $111 million, a 39 percent
improvement versus the prior-year quarter. The continued ramp up of
Opteon™ refrigerants demand more than offset unfavorable pricing
and mix within fluoropolymers.
Sequentially, sales and Adjusted EBITDA declined 4 percent and
22 percent, respectively, versus the third quarter of 2016.
Continued strength in sales of Opteon™ refrigerants was offset by
timing of base refrigerant sales as well as the effects of normal
seasonality.
For the 2016 fiscal year, Fluoroproducts sales improved 1
percent to $2.3 billion on increased
volume of Opteon™ refrigerants and fluoropolymers. Unfavorable
pricing and mix due to competitive pricing pressure within
fluoropolymers products as well as lower volume in base
refrigerants driven by phase downs partially offset the improvement
in volume. Segment Adjusted EBITDA for 2016 was $445 million, up 48 percent versus the prior year
as a result of increasing adoption of Opteon™ technology and cost
reductions.
Chemical
Solutions
In the fourth quarter, Chemical Solutions segment sales were
$130 million, a 49 percent decline
versus the prior-year quarter. Lower sales were driven by portfolio
changes executed throughout the year, including the sale and
shutdown of certain businesses. Segment Adjusted EBITDA was
$9 million, $7
million below the prior-year quarter, primarily due to the
impact of portfolio actions.
Sequentially, sales decreased $52
million versus the third quarter of 2016, primarily due to
the impact of portfolio changes. Adjusted EBITDA was flat on lower
costs as a result of transformation plan activities, which offset
the loss of earnings due to portfolio changes.
Chemical Solutions sales were $772
million in 2016 versus $1.1
billion in the previous year as a result of portfolio
impacts and the effect of lower raw materials costs on pass-through
contractual prices. Segment Adjusted EBITDA was $39 million, an improvement of 34 percent versus
2015 as a result of transformation plan cost reductions and lower
raw material pricing.
Corporate and Other
In connection to the global settlement in principle of the Ohio
PFOA MDL by DuPont, DuPont and Chemours agreed to each pay
$335.35 million of the $670.7 million global settlement amount. Both
companies also agreed to a sharing of potential future PFOA costs
not covered by the global settlement during each of the five years
following the effectiveness of the settlement.
Corporate and Other represented a negative $38 million of Adjusted EBITDA. The $335 million PFOA settlement charge was excluded
from Corporate and Other. However, it is reflected in Selling,
General and Administrative Expense. Outside of the accrued PFOA
costs, higher expenses were primarily related to increased legal
costs and performance-related compensation adjustments incurred in
the quarter. For the fiscal year, Corporate and Other represented a
negative $128 million of Adjusted
EBITDA versus a negative $82 million
in the prior year.
The company received a net cash tax refund of $4 million in the quarter and made net cash tax
payments of $50 million for the full
year. The company expects its cash tax rate to be in the mid- to
high-teens on a percentage basis for the full-year 2017, taking
into consideration the company's anticipated geographic mix of
earnings and the impact of Chemical Solutions portfolio changes
during the year.
Liquidity
As of December 31, 2016,
consolidated debt was $3.5 billion.
Debt, net of cash, was $2.6 billion,
resulting in a 2016 net debt-to-EBITDA ratio of approximately 3.3
times. Cash balances were $902
million at December 31, 2016.
During 2016, the company retired approximately $385 million of long-term debt, expected to
result in approximately $20 million
of savings annually from lower interest obligations.
Operating cash flow for the fourth quarter was $269 million, versus $302
million in the previous year quarter. Free Cash Flow for the
fourth quarter was $166 million, down
$9 million versus the previous-year
quarter. Working capital1 performance for the full-year
improved by $176 million, primarily
driven by inventory reductions. The full-year Free Cash Flow
improvement of $593 million was due
to higher cash from operations and lower capital spending versus
2015.
1Excluding the impact of the $335 PFOA settlement charge
Outlook
"We are very proud of what we have achieved so far with our
Five-Point Transformation Plan as our roadmap," Vergnano commented.
"We completed our strategic review of the Chemical Solutions
portfolio, delivered approximately $200
million in structural cost savings this year, and are
targeting an additional $150 million
of cost savings."
Vergnano added, "We expect transformation plan savings, an
improving pricing environment for TiO2 and increased
Opteon™ refrigerants adoption to remain drivers of our
growth. We recognize we have some headwinds in our Fluoroproducts
segment and will need to offset the EBITDA lost from our
divestitures. With these factors in mind, we expect to generate
greater than $1 billion in Adjusted
EBITDA in 2017, deliver positive free cash flow, and achieve our
net leverage target of less than 3 times. We have begun the year
with solid momentum and believe that Chemours is well positioned
for the future."
Conference Call
As previously announced, Chemours will hold a conference call
and webcast on Thursday, February 16,
2017 at 8:30 AM EST. The
webcast and additional presentation materials can be accessed by
visiting the Events & Presentations page of Chemours'
investor website: investors.chemours.com. A webcast replay of the
conference call will be available on the Chemours' investor
website.
About The Chemours Company
The Chemours Company (NYSE: CC) helps create a colorful, capable
and cleaner world through the power of chemistry. Chemours is
a global leader in titanium technologies, fluoroproducts and
chemical solutions, providing its customers with solutions in a
wide range of industries with market-defining products, application
expertise and chemistry-based innovations. Chemours
ingredients are found in plastics and coatings, refrigeration and
air conditioning, mining and oil refining operations and general
industrial manufacturing. Our flagship products include
prominent brands such as Teflon™, Ti-Pure™, Krytox™, Viton™,
Opteon™, Freon™ and Nafion™. Chemours has approximately 7,000
employees and 26 manufacturing sites serving approximately 4,000
customers in North America,
Latin America, Asia-Pacific and Europe. Chemours is
headquartered in Wilmington,
Delaware and is listed on the NYSE under the symbol
CC. For more information please visit chemours.com.
Non-GAAP Financial Measures
We prepare our financial statements in accordance with Generally
Accepted Accounting Principles ("GAAP"). Within this press release,
we make reference to Adjusted Net Income (Loss), Adjusted Diluted
Income (Loss) per share and Adjusted EBITDA and Free Cash Flow,
which are non-GAAP financial measures. Free Cash Flow is defined as
Cash from Operations minus cash used for PP&E purchases. The
company includes these non-GAAP financial measures because
management believes they are useful to investors in that they
provide for greater transparency with respect to supplemental
information used by management in its financial and operational
decision making.
Management uses Adjusted Net Income (Loss), Adjusted Diluted
Income (Loss) per share, Adjusted EBITDA and Free Cash Flow to
evaluate the company's performance excluding the impact of certain
non-cash charges and other special items which we expect to be
infrequent in occurrence in order to have comparable financial
results to analyze changes in our underlying business from quarter
to quarter.
Accordingly, the company believes the presentation of these
non-GAAP financial measures, when used in conjunction with GAAP
financial measures, is a useful financial analysis tool that can
assist investors in assessing the company's operating performance
and underlying prospects. This analysis should not be considered in
isolation or as a substitute for analysis of our results as
reported under GAAP. This analysis, as well as the other
information in this press release, should be read in conjunction
with the company's financial statements and footnotes contained in
the documents that the company files with the U.S. Securities and
Exchange Commission. The non-GAAP financial measures used by the
company in this press release may be different from the methods
used by other companies. For more information on the non-GAAP
financial measures, please refer to the attached schedules or the
table, "Reconciliation of Non-GAAP Financial Measures to GAAP
Financial Measures" and materials posted to the website at
investors.chemours.com.
Forward-Looking Statements
This press release contains forward-looking statements, within
the meaning of the federal securities laws, that involve risks and
uncertainties. Forward-looking statements provide current
expectations of future events based on certain assumptions and
include any statement that does not directly relate to any
historical or current fact. The words "believe," "expect,"
"anticipate," "plan," "estimate," "target," "project" and similar
expressions, among others, generally identify "forward-looking
statements," which speak only as of the date the statements were
made. These forward-looking statements address, among other things,
our agreement with DuPont relating to the Settlement, resolution of
environmental liabilities, litigation and other contingencies,
anticipated future operating and financial performance, business
plans and prospects, transformation plans, cost savings targets,
plans to increase profitability and our outlook for Adjusted
EBITDA, free cash flow and target net leverage that are subject to
substantial risks and uncertainties that could cause actual results
to differ materially from those expressed or implied by such
statements. Forward-looking statements are based on certain
assumptions and expectations of future events which may not be
accurate or realized. Forward-looking statements also involve risks
and uncertainties, many of which are beyond Chemours' control.
Additionally, there may be other risks and uncertainties that
Chemours is unable to identify at this time or that Chemours does
not currently expect to have a material impact on its business.
Factors that could cause or contribute to these differences
include: whether the Settlement becomes effective; the outcome of
any pending or future litigation related to PFOA; the performance
by DuPont of its obligations under the Settlement; the terms of any
final agreement between Chemours and DuPont relating to the
Settlement; and other risks, uncertainties and other factors
discussed in our filings with the Securities and Exchange
Commission, including our Annual Report on Form 10-K for the year
ended December 31, 2015. Chemours
assumes no obligation to revise or update any forward-looking
statement for any reason, except as required by law.
CONTACT
MEDIA
Alvenia
Scarborough
Director, Brand Marketing and
Corporate
Communications
+1.302.773.4507
media@chemours.com
INVESTORS
Alisha
Bellezza
Treasurer and Director of Investor
Relations
+1.302.773.2263
investor@chemours.com
The Chemours
Company
Consolidated
Statements of Operations
(Dollars in
millions, except per share amounts)
|
|
|
Three months
ended
|
|
|
Year
ended
|
|
|
December
31,
|
|
|
December
31,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Net sales
|
$
|
|
1,322
|
|
|
$
|
|
1,360
|
|
|
$
|
|
5,400
|
|
|
$
|
|
5,717
|
|
Cost of goods
sold
|
1,023
|
|
|
1,147
|
|
|
4,290
|
|
|
4,762
|
|
Gross
profit
|
299
|
|
|
213
|
|
|
1,110
|
|
|
955
|
|
Selling, general and
administrative expense 1
|
480
|
|
|
151
|
|
|
934
|
|
|
632
|
|
Research and
development expense
|
20
|
|
|
29
|
|
|
80
|
|
|
97
|
|
Restructuring and
asset related charges, net
|
25
|
|
|
88
|
|
|
170
|
|
|
333
|
|
Goodwill
impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
Total
expenses
|
525
|
|
|
268
|
|
|
1,184
|
|
|
1,087
|
|
Equity in earnings of
affiliates
|
12
|
|
|
4
|
|
|
29
|
|
|
22
|
|
Interest expense,
net
|
(56)
|
|
|
(53)
|
|
|
(213)
|
|
|
(132)
|
|
Other (expense)
income, net
|
(3)
|
|
|
(17)
|
|
|
247
|
|
|
54
|
|
(Loss) income
before income taxes
|
(273)
|
|
|
(121)
|
|
|
(11)
|
|
|
(188)
|
|
Benefit from income
taxes
|
(43)
|
|
|
(35)
|
|
|
(18)
|
|
|
(98)
|
|
Net (loss)
income
|
(230)
|
|
|
(86)
|
|
|
7
|
|
|
(90)
|
|
Less: Net income
attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net (loss) income
attributable to Chemours
|
$
|
|
(230)
|
|
|
$
|
|
(86)
|
|
|
$
|
|
7
|
|
|
$
|
|
(90)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
data
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss)
earnings per share of common stock
|
$
|
|
(1.26)
|
|
|
$
|
|
(0.48)
|
|
|
$
|
|
0.04
|
|
|
$
|
|
(0.50)
|
|
Diluted (loss)
earnings per share of common stock
|
$
|
|
(1.26)
|
|
|
$
|
|
(0.48)
|
|
|
$
|
|
0.04
|
|
|
$
|
|
(0.50)
|
|
Dividends per share
of common stock
|
$
|
0.03
|
|
|
$
|
0.03
|
|
|
$
|
0.12
|
|
|
$
|
0.58
|
|
1
|
The three months and
the year ended December 31, 2016 includes $335 million of PFOA
settlement charge.
|
The Chemours
Company
Consolidated
Balance Sheets
(Dollars in
millions, except per share amounts)
|
|
|
|
December
31,
2016
|
|
|
December
31,
2015
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
902
|
|
|
$
|
366
|
|
Accounts and notes
receivable - trade, net
|
|
|
807
|
|
|
|
859
|
|
Inventories
|
|
|
767
|
|
|
|
972
|
|
Prepaid expenses and
other
|
|
|
77
|
|
|
|
104
|
|
Total current
assets
|
|
|
2,553
|
|
|
|
2,301
|
|
Property, plant and
equipment
|
|
|
7,997
|
|
|
|
9,015
|
|
Less: Accumulated
depreciation
|
|
|
(5,213)
|
|
|
|
(5,838)
|
|
Net property, plant
and equipment
|
|
|
2,784
|
|
|
|
3,177
|
|
Goodwill and other
intangible assets, net
|
|
|
170
|
|
|
|
176
|
|
Investments in
affiliates
|
|
|
136
|
|
|
|
136
|
|
Other
assets
|
|
|
417
|
|
|
|
508
|
|
Total
assets
|
|
$
|
6,060
|
|
|
$
|
6,298
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
884
|
|
|
$
|
973
|
|
Short-term borrowings
and current maturities of long-term debt
|
|
|
15
|
|
|
|
39
|
|
Other accrued
liabilities
|
|
|
872
|
|
|
|
454
|
|
Total current
liabilities
|
|
|
1,771
|
|
|
|
1,466
|
|
Long-term debt,
net
|
|
|
3,529
|
|
|
|
3,915
|
|
Deferred income
taxes
|
|
|
132
|
|
|
|
234
|
|
Other
liabilities
|
|
|
524
|
|
|
|
553
|
|
Total
liabilities
|
|
|
5,956
|
|
|
|
6,168
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Common stock (par
value $0.01 per share; 810,000,000 shares
authorized; shares
issued and outstanding at December 31, 2016:
182,600,533 and
2015: 181,069,751)
|
|
|
2
|
|
|
|
2
|
|
Additional paid-in
capital
|
|
|
789
|
|
|
|
775
|
|
Accumulated
deficit
|
|
|
(114)
|
|
|
|
(115)
|
|
Accumulated other
comprehensive loss
|
|
|
(577)
|
|
|
|
(536)
|
|
Total Chemours
stockholders' equity
|
|
|
100
|
|
|
|
126
|
|
Noncontrolling
interests
|
|
|
4
|
|
|
|
4
|
|
Total
equity
|
|
|
104
|
|
|
|
130
|
|
Total liabilities
and equity
|
|
$
|
6,060
|
|
|
$
|
6,298
|
|
The Chemours
Company
Consolidated
Statements of Cash Flows
(Dollars in
millions)
|
|
|
|
Year Ended
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Operating
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
7
|
|
|
$
|
(90)
|
|
|
$
|
401
|
|
Adjustments to
reconcile net income (loss) to cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
284
|
|
|
|
267
|
|
|
|
257
|
|
Amortization of
deferred financing costs and issuance discount
|
|
|
20
|
|
|
|
8
|
|
|
|
—
|
|
Other operating
charges and credits, net
|
|
|
52
|
|
|
|
7
|
|
|
|
18
|
|
(Gain) loss on sale of
assets and businesses
|
|
|
(254)
|
|
|
|
9
|
|
|
|
(40)
|
|
Equity in earnings of
affiliates, net of dividends received of $18, $23 and
$19
|
|
|
(12)
|
|
|
|
—
|
|
|
|
1
|
|
Deferred tax
benefits
|
|
|
(111)
|
|
|
|
(198)
|
|
|
|
(22)
|
|
Asset related
charges
|
|
|
124
|
|
|
|
206
|
|
|
|
—
|
|
Decrease (increase) in
operating assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable - trade, net
|
|
|
5
|
|
|
|
(64)
|
|
|
|
4
|
|
Inventories and other
operating assets
|
|
|
147
|
|
|
|
19
|
|
|
|
(29)
|
|
Increase (decrease) in
operating liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
other operating liabilities
|
|
|
332
|
|
|
|
18
|
|
|
|
(85)
|
|
Cash provided by
operating activities
|
|
|
594
|
|
|
|
182
|
|
|
|
505
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
|
(338)
|
|
|
|
(519)
|
|
|
|
(604)
|
|
Proceeds from sales of
assets, net
|
|
|
708
|
|
|
|
12
|
|
|
|
32
|
|
Foreign exchange
contract settlements
|
|
|
(12)
|
|
|
|
42
|
|
|
|
—
|
|
Investment in
affiliates
|
|
|
(1)
|
|
|
|
(32)
|
|
|
|
(8)
|
|
Other investing
activities
|
|
|
—
|
|
|
|
—
|
|
|
|
20
|
|
Cash provided by (used
for) investing activities
|
|
|
357
|
|
|
|
(497)
|
|
|
|
(560)
|
|
Financing
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of debt, net
|
|
|
—
|
|
|
|
3,491
|
|
|
|
—
|
|
Debt
repayments
|
|
|
(381)
|
|
|
|
(10)
|
|
|
|
—
|
|
Dividends
paid
|
|
|
(22)
|
|
|
|
(105)
|
|
|
|
—
|
|
Debt issuance
costs
|
|
|
(4)
|
|
|
|
(79)
|
|
|
|
—
|
|
Proceeds from
exercised stock options
|
|
|
11
|
|
|
|
—
|
|
|
|
—
|
|
Cash provided at
separation by DuPont
|
|
|
—
|
|
|
|
247
|
|
|
|
—
|
|
Net transfers (to)
from DuPont
|
|
|
—
|
|
|
|
(2,857)
|
|
|
|
55
|
|
Cash (used for)
provided by financing activities
|
|
|
(396)
|
|
|
|
687
|
|
|
|
55
|
|
Effect of exchange
rate changes on cash
|
|
|
(19)
|
|
|
|
(6)
|
|
|
|
—
|
|
Increase in cash
and cash equivalents
|
|
|
536
|
|
|
|
366
|
|
|
|
—
|
|
Cash and cash
equivalents at beginning of year
|
|
|
366
|
|
|
|
—
|
|
|
|
—
|
|
Cash and cash
equivalents at end of year
|
|
$
|
902
|
|
|
$
|
366
|
|
|
$
|
—
|
|
SUPPLEMENTAL CASH
FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the
year for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest, net of
amounts capitalized
|
|
$
|
208
|
|
|
$
|
103
|
|
|
$
|
—
|
|
Income taxes, net of
refunds
|
|
$
|
50
|
|
|
$
|
53
|
|
|
$
|
—
|
|
Non-cash change in
property, plant and equipment included in accounts
payable
|
|
$
|
(12)
|
|
|
$
|
45
|
|
|
$
|
(11)
|
|
The Chemours
Company
Segment Financial
and Operating Data (Unaudited)
(Dollars in
millions)
|
|
Segment Net
Sales
|
Three months
ended
|
|
|
|
Three months
ended
|
Sequential
|
|
|
December
31,
|
Increase
/
|
|
|
September
30,
|
Increase
/
|
|
|
2016
|
2015
|
(Decrease)
|
|
|
2016
|
(Decrease)
|
|
Titanium
Technologies
|
$
|
623
|
|
|
$
|
589
|
|
|
$
|
|
34
|
|
|
$
|
625
|
|
|
$
|
|
(2)
|
|
Fluoroproducts
|
|
569
|
|
|
|
515
|
|
|
|
|
54
|
|
|
|
591
|
|
|
|
|
(22)
|
|
Chemical
Solutions
|
|
130
|
|
|
|
256
|
|
|
|
|
(126)
|
|
|
|
182
|
|
|
|
|
(52)
|
|
Net
sales
|
$
|
|
1,322
|
|
|
$
|
|
1,360
|
|
|
$
|
|
(38)
|
|
|
$
|
|
1,398
|
|
|
$
|
|
(76)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA
|
Three months
ended
|
|
|
|
Three months
ended
|
Sequential
|
|
|
December
31,
|
Increase
/
|
|
|
September
30,
|
Increase
/
|
|
|
2016
|
2015
|
(Decrease)
|
|
|
2016
|
(Decrease)
|
|
Titanium
Technologies
|
$
|
|
157
|
|
|
$
|
|
62
|
|
|
$
|
|
95
|
|
|
$
|
|
144
|
|
|
$
|
|
13
|
|
Fluoroproducts
|
|
|
111
|
|
|
|
|
80
|
|
|
|
|
31
|
|
|
|
|
143
|
|
|
|
|
(32)
|
|
Chemical
Solutions
|
|
|
9
|
|
|
|
|
16
|
|
|
|
|
(7)
|
|
|
|
|
9
|
|
|
|
—
|
|
Corporate and
Other
|
|
|
(38)
|
|
|
|
|
(26)
|
|
|
|
|
(12)
|
|
|
|
|
(28)
|
|
|
|
|
(10)
|
|
Total Adjusted
EBITDA
|
$
|
|
239
|
|
|
$
|
|
132
|
|
|
$
|
|
107
|
|
|
$
|
|
268
|
|
|
$
|
|
(29)
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
18%
|
|
|
10%
|
|
|
|
|
|
19%
|
|
|
|
|
Quarterly Change
in Net Sales from December 31, 2015
|
|
|
|
|
|
|
|
December
31,
|
|
|
Percentage
|
|
Percentage change
due to:
|
|
|
2016
Net
Sales
|
|
|
Change vs
2015
|
|
Local
Price
|
|
Volume
|
|
Currency
Effect
|
|
Portfolio /
Other
|
|
Total
Company
|
$
|
|
1,322
|
|
|
|
(3)
|
%
|
|
2
|
%
|
|
3
|
%
|
—
|
%
|
|
(8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Titanium
Technologies
|
$
|
623
|
|
|
|
6
|
%
|
|
8
|
%
|
|
(2)
|
%
|
—
|
%
|
—
|
%
|
Fluoroproducts
|
$
|
569
|
|
|
|
10
|
%
|
|
(4)
|
%
|
|
14
|
%
|
|
1
|
%
|
|
(1)
|
%
|
Chemical
Solutions
|
$
|
130
|
|
|
|
(49)
|
%
|
|
(2)
|
%
|
|
(5)
|
%
|
—
|
%
|
|
(42)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Change
in Net Sales from September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage
|
|
Percentage change
due to:
|
|
|
December 31,
2016
Net Sales
|
|
|
Change vs
September 30, 2016
|
|
Local
Price
|
|
Volume
|
|
Currency
Effect
|
|
Portfolio /
Other
|
|
Total
Company
|
$
|
|
1,322
|
|
|
|
(5)
|
%
|
—
|
%
|
|
(3)
|
%
|
—
|
%
|
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Titanium
Technologies
|
$
|
623
|
|
|
|
—
|
%
|
|
3
|
%
|
|
(3)
|
%
|
—
|
%
|
—
|
%
|
Fluoroproducts
|
$
|
569
|
|
|
|
(4)
|
%
|
|
(3)
|
%
|
|
(1)
|
%
|
—
|
%
|
—
|
%
|
Chemical
Solutions
|
$
|
130
|
|
|
|
(28)
|
%
|
—
|
%
|
|
(9)
|
%
|
—
|
%
|
|
(19)
|
%
|
The Chemours
Company
Segment Financial
and Operating Data (Unaudited)
(Dollars in
millions)
|
|
Segment Net
Sales
|
|
|
|
|
Year Ended
December 31,
|
Increase
/
|
|
|
2016
|
2015
|
(Decrease)
|
|
Titanium
Technologies
|
$
|
|
2,364
|
|
|
$
|
|
2,392
|
|
|
$
|
|
(28)
|
|
Fluoroproducts
|
|
|
2,264
|
|
|
|
|
2,230
|
|
|
|
|
34
|
|
Chemical
Solutions
|
|
772
|
|
|
|
|
1,095
|
|
|
|
|
(323)
|
|
Net
sales
|
$
|
|
5,400
|
|
|
$
|
|
5,717
|
|
|
$
|
|
(317)
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA
|
|
|
|
|
Year Ended
December 31,
|
Increase
/
|
|
|
2016
|
2015
|
(Decrease)
|
|
Titanium
Technologies
|
$
|
466
|
|
|
$
|
326
|
|
|
$
|
140
|
|
Fluoroproducts
|
|
445
|
|
|
|
300
|
|
|
|
145
|
|
Chemical
Solutions
|
|
39
|
|
|
|
29
|
|
|
|
10
|
|
Corporate and
Other
|
|
|
(128)
|
|
|
|
|
(82)
|
|
|
|
|
(46)
|
|
Total Adjusted
EBITDA
|
$
|
822
|
|
|
$
|
573
|
|
|
$
|
249
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
15%
|
|
|
10%
|
|
|
|
|
Year-to-Date
Change in Net Sales from December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Percentage change
due to:
|
|
|
2016
Net Sales
|
|
|
Percentage
Change vs 2015
|
|
Local
Price
|
|
Volume
|
|
Currency
Effect
|
|
Portfolio /
Other
|
|
Total
Company
|
$
|
|
5,400
|
|
|
|
(6)
|
%
|
|
(3)
|
%
|
|
2
|
%
|
|
(1)
|
%
|
|
(4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Titanium
Technologies
|
$
|
|
2,364
|
|
|
|
(1)
|
%
|
|
(3)
|
%
|
|
2
|
%
|
—
|
%
|
—
|
%
|
Fluoroproducts
|
$
|
|
2,264
|
|
|
|
1
|
%
|
|
(1)
|
%
|
|
4
|
%
|
|
(1)
|
%
|
|
(1)
|
%
|
Chemical
Solutions
|
$
|
|
772
|
|
|
|
(29)
|
%
|
|
(7)
|
%
|
|
(3)
|
%
|
—
|
%
|
|
(19)
|
%
|
The Chemours
Company
Reconciliations of
Non-GAAP Information (Unaudited)
GAAP Net Income
(Loss) to Adjusted Net Income and Adjusted EBITDA Tabular
Reconciliations
(Dollars in
millions)
|
|
|
|
Three months
ended
|
|
|
Year
ended
|
|
|
|
December
31,
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2016
|
|
|
2015
|
|
Net (loss) income
attributable to Chemours
|
|
$
|
|
(230)
|
|
|
$
|
|
(86)
|
|
|
$
|
|
204
|
|
|
$
|
|
7
|
|
|
$
|
|
(90)
|
|
Non-operating pension
and other postretirement employee benefit (income) costs
|
|
|
|
(1)
|
|
|
|
|
(8)
|
|
|
|
|
(5)
|
|
|
|
|
(20)
|
|
|
|
|
(3)
|
|
Exchange losses
(gains)
|
|
|
|
20
|
|
|
|
|
28
|
|
|
|
|
17
|
|
|
|
|
57
|
|
|
|
|
(19)
|
|
Restructuring
charges
|
|
|
|
11
|
|
|
|
|
85
|
|
|
|
|
14
|
|
|
|
|
51
|
|
|
|
|
285
|
|
Asset related
charges1
|
|
|
|
14
|
|
|
|
|
3
|
|
|
|
|
46
|
|
|
|
|
124
|
|
|
|
|
73
|
|
Loss (gain) on sale
of assets or business
|
|
|
|
3
|
|
|
|
|
9
|
|
|
|
|
(169)
|
|
|
|
|
(254)
|
|
|
|
|
9
|
|
Transaction
costs2
|
|
|
|
1
|
|
|
|
|
9
|
|
|
|
|
2
|
|
|
|
|
19
|
|
|
|
|
9
|
|
Legal and other
charges3
|
|
|
|
336
|
|
|
|
|
8
|
|
|
|
|
5
|
|
|
|
|
359
|
|
|
|
|
8
|
|
Benefit from income
taxes relating to reconciling items4
|
|
|
|
(139)
|
|
|
|
|
(46)
|
|
|
|
|
(2)
|
|
|
|
|
(156)
|
|
|
|
|
(129)
|
|
Adjusted Net
Income
|
|
|
|
15
|
|
|
|
|
2
|
|
|
|
|
112
|
|
|
|
|
187
|
|
|
|
|
143
|
|
Net income
attributable to noncontrolling interests
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Interest expense,
net
|
|
|
|
56
|
|
|
|
|
53
|
|
|
|
|
51
|
|
|
|
|
213
|
|
|
|
|
132
|
|
Depreciation and
amortization
|
|
|
|
72
|
|
|
|
|
66
|
|
|
|
|
73
|
|
|
|
|
284
|
|
|
|
|
267
|
|
All remaining
provision for income taxes4
|
|
|
|
96
|
|
|
|
|
11
|
|
|
|
|
32
|
|
|
|
|
138
|
|
|
|
|
31
|
|
Adjusted
EBITDA
|
|
$
|
|
239
|
|
|
$
|
|
132
|
|
|
$
|
|
268
|
|
|
$
|
|
822
|
|
|
$
|
|
573
|
|
1
|
The three and twelve
months ended December 31, 2016 includes $13 million pre-tax asset
impairment of our corporate headquarters building in Wilmington,
Delaware and other asset write-offs. The twelve months ended
December 31, 2016 also included $48 million pre-tax asset
impairment of our Pascagoula Aniline facility, $58 million pre-tax
asset impairment in connection with the sale of the Sulfur business
and other asset write-offs. The twelve months ended December
31, 2015 includes $25 million of goodwill impairment and $45 asset
impairment of RMS facility. All charges, except for corporate
headquarters building (which is included in Corporate and Other),
are recorded in the Chemical Solutions segment.
|
2
|
Includes accounting,
legal and bankers transaction fees incurred related to the
Company's strategic initiatives, which includes transaction costs
incurred in connection with the sales of the C&D and Sulfur
businesses.
|
3
|
Includes litigation
settlements, water treatment accruals and $335 million litigation
settlement accrual related to PFOA, and lease termination
charges.
|
4
|
Total of provision
for (benefit from) income taxes reconciles to the amount reported
in the Interim Consolidated Statements of Operations for the three
and twelve months ended December 31, 2016 and 2015.
|
Adjusted Net Income
diluted earnings per share is calculated using Adjusted Net Income
divided by diluted weighted-average shares of common shares
outstanding during each period, which includes unvested restricted
shares. The table below shows a reconciliation of the
numerator and denominator for basic and diluted earnings per share
and adjusted earnings per share calculations for the periods
indicated:
|
|
|
|
Three months
ended
|
|
|
Year
ended
|
|
|
|
December
31,
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2016
|
|
|
2015
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
|
(230)
|
|
|
$
|
|
(86)
|
|
|
$
|
|
204
|
|
|
$
|
|
7
|
|
|
$
|
|
(90)
|
|
Adjusted Net
Income
|
|
$
|
|
15
|
|
|
$
|
|
2
|
|
|
$
|
|
112
|
|
|
$
|
|
187
|
|
|
$
|
|
143
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding - Basic
|
|
|
|
182,125,428
|
|
|
|
|
181,019,197
|
|
|
|
|
181,596,161
|
|
|
|
|
181,621,422
|
|
|
|
|
180,993,623
|
|
Dilutive effect of the
company's employee compensation plans 5
|
|
|
|
3,911,098
|
|
|
|
|
569,247
|
|
|
|
|
1,932,395
|
|
|
|
|
1,795,078
|
|
|
|
|
743,964
|
|
Weighted average
number of common shares outstanding - Diluted
|
|
|
|
186,036,526
|
|
|
|
|
181,588,444
|
|
|
|
|
183,528,556
|
|
|
|
|
183,416,500
|
|
|
|
|
181,737,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
share - basic
|
|
$
|
|
(1.26)
|
|
|
$
|
|
(0.48)
|
|
|
$
|
|
1.12
|
|
|
$
|
|
0.04
|
|
|
$
|
|
(0.50)
|
|
(Loss) earnings per
share - diluted5
|
|
$
|
|
(1.26)
|
|
|
$
|
|
(0.48)
|
|
|
$
|
|
1.11
|
|
|
$
|
|
0.04
|
|
|
$
|
|
(0.50)
|
|
Adjusted earnings per
share - basic
|
|
$
|
|
0.08
|
|
|
$
|
|
0.01
|
|
|
$
|
|
0.62
|
|
|
$
|
|
1.03
|
|
|
$
|
|
0.79
|
|
Adjusted earnings per
share - diluted5
|
|
$
|
|
0.08
|
|
|
$
|
|
0.01
|
|
|
$
|
|
0.61
|
|
|
$
|
|
1.02
|
|
|
$
|
|
0.79
|
|
5
|
Diluted earnings
(loss) per share is calculated using net income (loss) available to
common shareholders divided by diluted weighted-average shares of
common shares outstanding during each period, which includes
unvested restricted shares. Diluted earnings per share considers
the impact of potentially dilutive securities except in periods in
which there is a loss because the inclusion of the potential common
shares would have an antidilutive effect.
|
The Chemours
Company
Reconciliations of
Non-GAAP Information (Unaudited)
(Dollars in
millions)
Estimated Income
Before Income Taxes and Estimated Adjusted EBITDA Tabular
Reconciliations
|
|
|
|
Year
ending
|
|
|
|
December 31,
2017
|
|
(Dollars in
millions)
|
|
|
|
|
Income before income
taxes (estimated to be greater than) 1
|
|
$
|
510
|
|
Interest expense,
net
|
|
|
200
|
|
Depreciation and
amortization
|
|
|
280
|
|
Other reconciling
items 2
|
|
|
10
|
|
Adjusted EBITDA
(estimated to be greater than) 1
|
|
$
|
1,000
|
|
1
|
Our estimates reflect
our current visibility and expectations on market factors, such as
but not limited to, current movements, TiO2 price and end-market
demand. Actual results could differ from the current
estimates due to factors mentioned above and unknown or other
market factors, which are not practical to estimate without
unreasonable effort.
|
2
|
Includes estimated
non-operating pension benefit costs (income), restructuring and
other charges expected to be incurred in 2017.
|
GAAP Cash Flow to
Free Cash Flow Tabular Reconciliations
|
|
|
|
Three months
ended
|
|
|
Year
ended
|
|
|
|
December
31,
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2016
|
|
|
2015
|
|
Cash flow provided by
(used for) operating activities
|
|
$
|
|
269
|
|
|
$
|
|
302
|
|
|
$
|
|
199
|
|
|
$
|
|
594
|
|
|
$
|
|
182
|
|
Cash flow used for
purchases of property, plant and equipment
|
|
|
|
(103)
|
|
|
|
|
(127)
|
|
|
|
|
(67)
|
|
|
|
|
(338)
|
|
|
|
|
(519)
|
|
Free cash
flows 3
|
|
$
|
|
166
|
|
|
$
|
|
175
|
|
|
$
|
|
132
|
|
|
$
|
|
256
|
|
|
$
|
|
(337)
|
|
3
|
Cash flows from
operating activities for year ended December 31, 2016 include the
DuPont prepayments outstanding balance of approximately $58
million. Excluding the DuPont prepayment, free cash flows for
the year ended December 31, 2016 would have been $198
million.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/the-chemours-company-reports-fourth-quarter-and-full-year-2016-results-300408332.html
SOURCE The Chemours Company