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Financial Instruments
12 Months Ended
Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments

Note 26. Financial Instruments

 

Net Monetary Assets and Liabilities Hedge – Foreign Currency Forward Contracts

 

At December 31, 2024, the Company had 11 foreign currency forward contracts outstanding with an aggregate gross notional U.S. dollar equivalent of $196 and an average maturity of one month. At December 31, 2023, the Company had 12 foreign currency forward contracts outstanding with an aggregate gross notional U.S. dollar equivalent of $252, and an average maturity of one month. Chemours recognized a net gain of $5, a net loss of $7, and a net gain of $2 for the years ended December 31, 2024, 2023 and 2022, respectively, in other income, net.

 

Cash Flow Hedge – Foreign Currency Forward Contracts

 

At December 31, 2024, the Company had 173 foreign currency forward contracts outstanding under its cash flow hedge program with an aggregate notional U.S. dollar equivalent of $178, and an average maturity of four months. At December 31, 2023, the Company had 176 foreign currency forward contracts outstanding under its cash flow hedge program with an aggregate notional U.S. dollar equivalent of $203, and an average maturity of four months. Chemours recognized a pre-tax gain of $7, a pre-tax loss of $2, and a pre-tax gain of $17 for the years ended December 31, 2024, 2023, and 2022, respectively, within accumulated other comprehensive loss. For the years ended December 31, 2024, 2023, and 2022, $1, $5, and $19 of gain was reclassified to the cost of goods sold from accumulated other comprehensive loss, respectively.

 

The Company expects to reclassify approximately $8 of net pre-tax gain, based on current foreign currency exchange rates, from accumulated other comprehensive loss to the cost of goods sold over the next 12 months.

Cash Flow Hedge – Interest Rate Swaps

 

In October 2023, the Company entered into interest rate swaps, the objective of which is to mitigate the volatility in the Company’s cash payments for interest related to the portion of its senior secured term loan facility denominated in U.S. dollars, which bears a variable interest rate equal to, at the election of the Company, adjusted Term SOFR plus 3.50% or adjusted SOFR floor of 0.50%, or an adjusted base rate plus 2.50%, subject to a base rate floor of 0.0%. At December 31, 2024 and 2023, the Company had two interest rate swaps outstanding under its cash flow hedge program with an aggregate notional U.S. dollar equivalent of $300; each of the interest rate swaps mature on October 31, 2026.

 

In September 2022, the Company terminated all of its outstanding interest rate swaps, which resulted in a cash settlement of $8. These interest rate swaps were related to the portion of the then senior secured term loan facility denominated in U.S. dollars, which bears a variable interest rate equal to, at the election of the Company, adjusted LIBOR plus 1.75% or adjusted base rate plus 0.75%, subject to an adjusted LIBOR or an adjusted base rate floor of 0.00% or 1.00%, respectively.

 

Chemours recognized a pre-tax gain of $9, a pre-tax loss of $6, and a pre-tax gain of $8 for the years ended December 31, 2024, 2023, and 2022 within accumulated other comprehensive loss, respectively. For the years ended December 31, 2024, 2023 and 2022, $1, $4, and $5 of gain was reclassified to interest expense, net from accumulated other comprehensive loss, respectively.

 

The Company expects to reclassify approximately $2 of net pre-tax loss from accumulated other comprehensive loss to interest expense, net over the next 12 months, based on the current market rate.

 

Net Investment Hedge – Foreign Currency Borrowings

 

The Company recognized a pre-tax gain of $47, a pre-tax loss of $27, and a pre-tax gain of $53 for the years ended December 31, 2024, 2023, and 2022, respectively, on its net investment hedge within accumulated other comprehensive loss. No amounts were reclassified from accumulated other comprehensive loss for the Company’s net investment hedges during the years ended December 31, 2024, 2023 and 2022.

 

Net Investment Hedge – Cross-Currency Swaps

 

Concurrently with the offering of the senior unsecured notes due January 2033 (as described further in "Note 20 – Debt), the Company entered into a cross-currency swap to effectively convert $600 of the senior unsecured notes due January 2033 into a euro-denominated borrowing of (€567 at prevailing euro interest rates, maturing on January 15, 2030. The foreign currency swap qualifies and has been designated as a net investment hedge of the Company's foreign currency exchange rate exposure of the net investments of certain of its euro-denominated subsidiaries. The Company recognized pre-tax gain of $5 for the year ended December 31, 2024 on its cross-currency swap within accumulated other comprehensive loss. No amount was reclassified from accumulated other comprehensive loss for the Company's cross-currency swap for the year ended December 31, 2024.

Fair Value of Derivative Instruments

 

The following table sets forth the fair value of the Company’s derivative assets and liabilities at December 31, 2024 and 2023.

 

 

 

 

 

Fair Value Using Level 2 Inputs

 

 

 

Balance Sheet Location

 

December 31, 2024

 

 

December 31, 2023

 

Asset derivatives:

 

 

 

 

 

 

 

 

Foreign currency forward contracts
not designated as a hedging instrument

 

Accounts and notes receivable, net (Note 11)

 

$

1

 

 

$

1

 

Foreign currency forward contracts
designated as a cash flow hedge

 

Accounts and notes receivable, net (Note 11)

 

 

7

 

 

1

 

Cross-currency swap designated as a net investment hedge

 

Accounts and notes receivable, net (Note 11)

 

 

5

 

 

 

 

Total asset derivatives

 

 

 

$

13

 

$

2

 

 

 

 

 

 

 

 

 

 

Liability derivatives:

 

 

 

 

 

 

 

 

Foreign currency forward contracts
not designated as a hedging instrument

 

Other accrued liabilities (Note 19)

 

$

1

 

$

1

 

Foreign currency forward contracts
designated as a cash flow hedge

 

Other accrued liabilities (Note 19)

 

 

 

 

 

3

 

Interest rate swaps
designated as a cash flow hedge

 

Other accrued liabilities (Note 19)

 

 

3

 

 

 

7

 

Total liability derivatives

 

 

 

$

4

 

$

11

 

 

The Company’s foreign currency forward contracts and interest rate swaps are classified as Level 2 financial instruments within the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments. For derivative assets and liabilities, standard industry models are used to calculate the fair value of the various financial instruments based on significant observable market inputs, such as foreign exchange rates and implied volatilities obtained from various market sources. Market inputs are obtained from well-established and recognized vendors of market data, and are subjected to tolerance and/or quality checks.

 

Summary of Financial Instruments

 

The following table sets forth the pre-tax changes in fair value of the Company’s financial instruments for the years ended December 31, 2024, 2023 and 2022.

 

 

 

Gain (Loss) Recognized In

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated Other

 

 

 

Cost of

 

 

Interest

 

 

Other

 

 

Comprehensive

 

Year Ended December 31,

 

Goods Sold

 

 

Expense, Net

 

 

Income, Net

 

 

Loss

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts not designated as a hedging instrument

 

$

 

 

$

 

 

$

5

 

 

$

 

Foreign currency forward contracts designated as a cash flow hedge

 

 

1

 

 

 

 

 

 

 

 

 

7

 

Interest rate swaps designated as a cash flow hedge

 

 

 

 

 

1

 

 

 

 

 

 

9

 

Euro-denominated debt designated as a net investment hedge

 

 

 

 

 

 

 

 

 

 

 

47

 

Cross-currency swap designated as a net investment hedge

 

 

 

 

 

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts not designated as a hedging instrument

 

$

 

 

$

 

 

$

(7

)

 

$

 

Foreign currency forward contracts designated as a cash flow hedge

 

 

5

 

 

 

 

 

 

 

 

 

(2

)

Interest rate swaps designated as a cash flow hedge

 

 

 

 

 

4

 

 

 

 

 

 

(6

)

Euro-denominated debt designated as a net investment hedge

 

 

 

 

 

 

 

 

 

 

 

(27

)

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts not designated as a hedging instrument

 

$

 

 

$

 

 

$

2

 

 

$

 

Foreign currency forward contracts designated as a cash flow hedge

 

 

19

 

 

 

 

 

 

 

 

 

17

 

Interest rate swaps designated as a cash flow hedge

 

 

 

 

 

5

 

 

 

 

 

 

8

 

Euro-denominated debt designated as a net investment hedge

 

 

 

 

 

 

 

 

 

 

 

53