Insiders ranked by realized 90-day signed return on their open-market trades at Celanese Corp. Minimum 3 scored trades. Returns are signed - a sale followed by a rally counts against the insider.
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.18pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Real-time Form 4 intelligence. Smarter insider tracking.
Net-tone change vs last year's 10-K.
MD&A
+0.38pp
Lean +
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
claims+5
against+3
damages+3
divestiture+3
adversely+2
Positive rising
able+4
favorable+1
opportunities+1
Risk Factors (Item 1A)
11,932 words
Item 1A. Risk Factors
The following risks could materially and adversely affect our business, financial condition, cash flows and results of operations, and the trading price of our common stock or outstanding senior notes could decline. These risk factors do not identify all risks that we face; our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. Additionally, the disclosures in this section reflect our beliefs and opinions as to factors that could materially and adversely affect us in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. Refer also to the other information set forth in this Form 10-K, including in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and the accompanying consolidated financial statements and notes thereto.
Risks Related to Business and Industry Conditions
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
closure+3
downgraded+3
terminated+2
default+1
divestiture+1
Positive rising
favorable+7
able+3
stronger+3
opportunities+1
effective+1
MD&A (Item 7)
8,879 words
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
In this Annual Report on Form 10-K ("Annual Report"), the term "Celanese" refers to Celanese Corporation, a Delaware corporation, and not its subsidiaries. The terms the "Company," "we," "our" and "us," refer to Celanese and its subsidiaries on a consolidated basis. The term "Celanese U.S." refers to the Company's subsidiary, Celanese US Holdings LLC, a Delaware limited liability company, and not its subsidiaries.
The following discussion should be read in conjunction with the accompanying consolidated financial statements and notes to the consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
Investors are cautioned that the forward-looking statements contained in this section and other parts of this Annual Report involve both risk and uncertainty. Several important factors could cause actual results to differ materially from those anticipated by these statements. Many of these statements are macroeconomic in nature and are, therefore, beyond the control of management. See "Forward-Looking Statements" below.
Forward-Looking Statements
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") and other parts of this Annual Report contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, us. Generally, words such as "believe," "expect," "intend," "estimate," "anticipate," "project," "plan," "may," "can," "could," "might," and "will," and similar expressions, as they relate to us are intended to identify forward-looking statements. These statements reflect our current views and beliefs with respect to future events as of the date hereof, are not historical facts or guarantees of future performance and involve risks and uncertainties that are to predict and many of which are outside of our control. Further, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. See " Special Note Regarding Forward-Looking Statements " at the beginning of this Annual Report for further discussion. All forward-looking statements made in this Annual Report are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed in this Annual Report will increase with the passage of time. We undertake no obligation, and any duty, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changes in our expectations or otherwise.
We are exposed to general economic, political and regulatory conditions and risks in the countries in which we have operations and customers.
We operate globally and have customers in many countries. Our major facilities are primarily located in North America, Europe and Asia, and we hold interests in affiliates that operate in the United States ("U.S."), Germany, China, Japan, South Korea and Saudi Arabia. Our principal customers are similarly global in scope and the prices of our most significant products are typically regional or world index prices. Consequently, our business and financial results are affected, directly and indirectly, by world economic conditions, including demand declines, declines in consumer and business confidence, fluctuating commodity prices and interest rates, cost inflation, instability in credit markets, volatile exchange rates and other challenges such as the changing regulatory environment.
Our operations are also subject to global political conditions, which may be subject to heightened uncertainty. For example, any future changes to laws or regulations, withdrawal or renegotiation of treaties or trade agreements, failure to reach agreement over trade matters, or the imposition of new or increased tariffs, including, but not limited to, anti-dumping and countervailing duties, on our products or raw materials, or more aggressive prosecution of trade disputes with countries like China, may increase costs or reduce profitability, or adversely affect our ability to operate our business and execute our growth strategy. In addition, it may be more difficult for us to enforce agreements, collect receivables, receive dividends and repatriate earnings through foreign legal systems. In certain foreign jurisdictions our operations are subject to nationalization and expropriation risk and some of our contractual relationships within these jurisdictions are subject to cancellation without full compensation
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for loss. Furthermore, in certain cases where we benefit from local government subsidies or other undertakings, such benefits are subject to the solvency of local government entities and are subject to termination without meaningful recourse or remedies.
We have invested significant resources in China and other Asian countries. This region's growth may not be as anticipated, or trade flows could be negatively impacted, and we may fail to realize the anticipated benefits associated with our investment there and, consequently, our financial results may be adversely impacted.
In addition, we have significant operations and financial relationships based in Europe. Historically, sales originating in Europe have accounted for approximately one-third of our net sales annually, and accounted for approximately 35% of our Net sales in 2025. Adverse conditions in the European economy are expected to continue to negatively impact our overall financial results and liquidity due to reduced economic growth, trade disruptions, decreased end-use customer demand or other factors.
From time to time, we provide guidance regarding our expected financial performance, which may take the foregoing and other factors into account. Correctly identifying key factors affecting business conditions and predicting future events is inherently an uncertain process, and our guidance may not ultimately be accurate. If our guidance varies from actual results, the market value of our common stock could decline significantly.
We are subject to risks associated with the volatility in the prices and availability of key raw materials and energy, which could have a significant adverse effect on the margins of our products and our financial results.
We are exposed to volatility in the prices of our raw materials and energy. We purchase significant amounts of ethylene, methanol, carbon monoxide and natural gas from third parties primarily for use in our production of basic chemicals in our intermediate chemistry business, principally acetic acid, VAM and formaldehyde. We use a portion of our output of these chemicals, in turn, as inputs in the production of downstream products in all of our business segments. We also purchase some of these raw materials for use in our emulsion polymers and EVA polymer businesses, primarily for vinyl acetate ethylene emulsions and ethylene vinyl acetate production, as well as significant amounts of wood pulp for use in our production of acetate tow. We also procure polymers, rubber and polypropylene for use in production of engineered materials, and other raw materials as additives to our products including fiberglass, flame retardant materials and other compounding components.
The prices and availability of many of these items are dependent on supply and logistics considerations. Prices can increase significantly as a result of uncertainties associated with inflationary pressures, transportation or logistics disruptions, weather, natural disasters, epidemics, pandemics, the effects of climate change or political instability, plant or production disruptions, war or conflicts, strikes or other labor unrest, breakdown or degradation of transportation infrastructure used in the delivery of raw materials and energy commodities, terrorist activities, civil unrest, or changes in laws, regulations, or tariffs in any of the countries in which we have significant suppliers. In particular, to the extent of our vertical integration in the production of chemicals, shortages in the availability of raw material chemicals, such as natural gas, ethylene and methanol or the loss of our dedicated supplies of carbon monoxide, may have an increased adverse impact on us as it can cause a shortage in intermediate and finished products. Such shortages would adversely impact our ability to produce certain products and increase our costs resulting in reduced margins and adverse impacts to our financial results.
Like many companies, in recent years, we have experienced significant supply disruptions and increased costs of inputs. These trends have impacted, and may in the future impact, our operating costs. We have previously undertaken efforts to offset these costs through pricing actions, alternative supply arrangements, and hedging strategies, however, these have not eliminated all exposure to inflationary pressure. We cannot always successfully pass increased costs to customers, and even where we are successful, increased prices have led to and could lead to reduced demand for our products or could result in competitive disadvantages.
Although we generally have long-term supply agreements, multi-year purchasing and sales agreements and forward purchase contracts providing for the supply of ethylene, methanol, carbon monoxide, wood pulp, hexamethylene diamine, PA66, PBT, ethanol, natural gas, fuel oil, and electricity, the contractual prices for these raw materials and energy can vary with economic conditions and may be highly volatile. In addition to the factors noted above that may impact supply or price, factors that have caused volatility in our raw material prices in the past and which may do so in the future include:
• Shortages of raw materials due to increasing demand, e.g., from growing uses or new uses;
• Capacity constraints, e.g., due to construction delays, labor disruption, government-imposed work or travel restrictions, involuntaryshutdowns or turnarounds;
• A supplier's inability to meet our delivery orders, a supplier's decision not to fulfill orders or to terminate a supply contract or our inability to obtain or renew supply contracts on favorable terms;
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• The general level of business, economic and industry activity; and
• The direct or indirect effect of governmental regulation (including the impact of government regulation relating to duties ( e.g., tariffs) or other trade barriers, power usage, climate change or regulation of production and transport of certain chemicals).
If we are not able to fully offset the effects of higher energy and raw material costs through price increases, productivity improvements or cost reduction programs, or if such commodities become unavailable, it could have a significant adverse effect on our ability to timely and profitably manufacture and deliver our products resulting in reduced margins, lost sales and adverse impacts to our financial results.
We have a practice of maintaining, when available, multiple sources of supply for raw materials and services. However, some of our individual plants may have single sources of supply for some of their raw materials, such as carbon monoxide, steam and ethylene, or site services. Almost all of our supply of methanol in North America is currently obtained from our Fairway joint venture with Mitsui, in which we own a 50% interest, for the production of methanol at our integrated chemical plant in Clear Lake, Texas. Although we have been able to obtain sufficient supplies of raw materials and services, there can be no assurance that unforeseen developments will not affect our ability to source raw materials or services in the future. Even if we have multiple sources of supply for a raw material or a service, there can be no assurance that these sources can make up for the loss of a major supplier. Furthermore, if any sole source or major supplier were unable or unwilling to deliver a raw material or a service for an extended period of time, we may not be able to find an acceptable alternative or any such alternative could result in increased costs. It is also possible that profitability would be adversely affected if we were required to qualify additional sources of supply for a raw material or a service to our specifications in the event of the loss of a sole source or major supplier.
Risks Related to Our Global Operations and Our Strategy
Production at our manufacturing facilities, or at our suppliers', could be disrupted for a variety of reasons, which could prevent us from producing enough of our products to maintain our sales and satisfy our customers' demands.
A disruption in production at one or more of our manufacturing facilities, or those of our suppliers, could have a material adverse effect on our business. Disruptions or interruptions of operations could occur for many reasons, including fire, flood, hurricanes, natural disasters, severe weather, unplanned maintenance or other manufacturing problems, public health crises, disease, geopolitical events, strikes or other labor unrest, transportation interruption, government regulation, political unrest or terrorism, accidents, interruptions in sources of raw materials, cybersecurity incidents, the direct or indirect consequences of acts of war or conflict (such as the Russia-Ukraine conflict or conflicts in the Middle East), other catastrophic events, or other unforeseen events or delays in construction or operation of facilities. Alternative facilities with sufficient capacity or capabilities may not be available, may cost substantially more or may take a significant time to start production, each of which could negatively affect our business and financial performance.
We have experienced disruptions of the type described above in recent years. For example, in 2024, concurrent outages by two of our suppliers of critical raw materials for production of acetic acid and subsequent production of VAM at our U.S. gulf coast sites led to the declaration of force majeure for these products sold in the Western Hemisphere.
If one of our key manufacturing facilities is unable to produce our products for an extended period of time, our sales may be reduced by the shortfall caused by the disruption and we may not be able to meet our customers' needs, which could cause them to seek other suppliers. In particular, production disruptions at our manufacturing facilities that produce chemicals used as inputs in the production of chemicals in other business segments, such as acetic acid, VAM and formaldehyde, had in the past and could have a more significant adverse effect on our business and financial performance and results of operations to the extent of such vertical integration. Furthermore, to the extent a production disruption occurs at a manufacturing facility that has been operating at or near full capacity, the resulting shortage of our product could be particularly harmful because production at such manufacturing facility may not be able to reach levels achieved prior to the disruption.
We may continue to experience difficulties and delaysachieving the intended benefits from acquiring the M&M Business.
In November 2022, we completed the acquisition of the Mobility & Materials business ("M&M Business") of DuPont de Nemours, Inc. (the "M&M Acquisition"). Since closing, we have actively worked, and continue to actively work, to integrate the M&M Business and its systems into our own and improve the performance of the M&M Business. The benefits of the M&M Acquisition, including the anticipated financial benefits and the synergies and growth opportunities, may not be realized as expected or may not be achieved within the anticipated timeframe, or at all.
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If the potential financial and other benefits and synergies of the M&M Business going forward do not materialize then our business, financial performance and operating results could be adversely affected.
We have recognized goodwill and indefinite-lived intangible asset impairmentlosses and may be required to recognize goodwill and indefinite-lived intangible asset impairmentlosses in the future.
As of December 31, 2025, the Company has $4.2 billion of goodwill and $1.2 billion of indefinite-lived intangible assets recorded on its balance sheet. We test goodwill and indefinite-lived intangibles for impairment at least annually and more frequently if the Company believes indicators of impairment exist. The valuation models used to determine the fair value of goodwill or indefinite-lived intangible assets are dependent upon various assumptions and reflect management's best estimates.
The goodwill and indefinite-lived intangible asset impairment analyses are sensitive to changes in key assumptions used, such as discount rate, revenue growth rate, tax rate, cash flow projections and terminal value rate. Such key assumptions may be adversely impacted by significant negative industry or economic trends and forecasts, disruptions to our business, inability to effectively integrate acquired businesses, unexpected significant change or planned changes in use of our assets, changes in the structure of our business, divestitures, or further decline to market capitalization. Changes in market conditions or key assumptions made in future quantitative tests could negatively impact the results of future impairment testing for any of the Company's reporting units and could result in the recognition of an impairmentloss. Because of the significance of our goodwill and indefinite-lived intangible assets, any future impairment of these assets could require material noncash impairmentlosses, which also could be material to our statements of operations.
During the year ended December 31, 2025, we recognized a noncash goodwill impairmentloss of $1.1 billion in our Engineered Materials segment. In addition, we recognized noncash impairmentlosses of $346 million for the year ended December 31, 2025 related to certain trade names, primarily Zytel ® , included in the Engineered Materials segment. See Note 9 - Goodwill and Intangible Assets, Net in the accompanying consolidated financial statements for further information.
There can be no assurance that future events or conditions may not result in additional impairmentlosses in our engineered materials reporting unit or impairmentlosses to any of our other reporting units' goodwill or to any of our indefinite-lived intangible or long-lived assets.
Failure to develop new products, product applications, and production technologies may harm our competitive position.
Our operating results depend significantly on the development of commercially viable new products, product grades and applications, as well as improving process technologies. If we are unsuccessful in developing new products, applications and improved production processes in the future, including failing to leverage our opportunity pipeline in our Engineered Materials segment, our competitive position and operating results may be negatively affected. However, as we invest in new technology, we face the risk of unanticipated operational or commercialization difficulties, including an inability to obtain necessary permits or governmental approvals, the development of competing technologies, failure of facilities or processes to operate in accordance with specifications or expectations, construction delays, cost overruns, the unavailability of financing, required materials or equipment and various other factors.
We could be subject to damages based on claims brought against us by our customers or lose customers as a result of the failure of our products to meet certain quality specifications.
Our products provide important performance attributes to our customers' products. In the event that one of our products fails to perform in a manner consistent with applicable quality specifications, customers have previously sought and a customer could in the future seek replacement of the product or damages for costs incurred as a result of the product failing to perform as specified. A successful claim or series of claimsagainst us could have a material adverse effect on our reputation, financial condition and results of operations and could result in a loss of one or more key customers.
Our production facilities, including facilities we own and/or operate and operations at our facilities owned and/or operated by third parties, handle the processing of some volatile and hazardous materials that subject us to operating and other risks that could have a negative effect on our operating results.
Although we take precautions to enhance the safety of, and minimize the disruption to, our operations and operations at our facilities owned and/or operated by third parties, we are subject to operating and other risks associated with chemical manufacturing, including the storage and transportation of raw materials, finished products and waste. These risks include, among other things, pipeline and storage tank leaks and ruptures, explosions and fires and discharges or releases of toxic or hazardous substances. In addition, we may have limited control over operations at our facilities owned and/or operated by third parties or such operations may not be fully integrated into our safety programs.
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These operating and other risks have previously caused and could in the future cause personal injury, property damage, third-party damages and environmental contamination, and may result in the shutdown of affected facilities and the imposition of civil or criminalpenalties. The occurrence of any of these events may disrupt production and have a negative effect on the productivity and profitability of a particular manufacturing facility, our operating results and cash flows.
Our future success depends in part on our ability to protect our intellectual property rights and our rights to use our intellectual property. Our inability to protect and enforce these rights could reduce our ability to maintain our industry position and our profit margins.
We rely on our patents, trademarks, copyrights, know-how and trade secrets, and patents and other technology licensed from third parties, to protect our investment in research and development and our competitive commercial positions in manufacturing and marketing our products. We have adopted internal policies and practices for protecting our know-how and trade secrets. In addition, our practice is to seek patent or trade secret protection for significant developments that provide us competitive advantages and freedom to practice for our businesses. Patents may cover catalysts, processes, products, intermediate products and product uses. These patents are usually filed in strategic countries throughout the world and provide varying periods and scopes of protection based on the filing date and the type of patent application. The legal life and scope of protection provided by a patent may vary among those countries in which we seek protection. As patents expire, the catalysts, processes, products, intermediate products and product uses described and claimed in those patents generally may become available for use by the public subject to our continued protection for associated know-how and trade secrets. We also monitor intellectual property of others, especially patents that could impact our rights to commercially implement research and development, our rights to manufacture and market our products, and our rights to use know-how and trade secrets. We will not intentionally infringe upon the valid intellectual property rights of others, and we will continue to assess and take actions as necessary to protect our positions. We also seek to register trademarks as a means of protecting the brand names of our products, which brand names become more important once the corresponding product or process patents have expired. We operate in regions of the world where intellectual property protection may be limited and difficult to enforce and our continued growth strategy may result in us seeking intellectual property protection in additional regions with similar challenges. We also monitor the trademarks of others and take action when our trademark rights are being infringed upon. If we are not successful in protecting or maintaining our patent, license, trademark or other intellectual property rights, or protecting our rights to commercially make, market and sell our products, our net sales, results of operations and cash flows may be adversely affected.
Our business is exposed to risks associated with the creditworthiness of our suppliers, customers and business partners and the industries in which our suppliers, customers and business partners participate are cyclical in nature, both of which may adversely affect our business and results of operations.
Our business is exposed to risks associated with the creditworthiness of our key suppliers, customers and business partners and reductions in demand for our customers' products. These risks include the interruption of production at the facilities of our customers, the reduction, delay or cancellation of customer orders, delays in or the inability of customers to obtain financing to purchase our products, delays in or interruptions of the supply of raw materials we purchase and bankruptcy of customers, suppliers or other creditors. Furthermore, some of the industries in which our end-use customers participate, such as the automotive, electrical, construction and textile industries, are highly competitive, to a large extent driven by end-use applications, and may experience overcapacity, all of which may affect demand for and the pricing of our products. In addition, many of these industries are highly cyclical in nature, thus posing risks to us that vary throughout the year, including, but not limited to, accurately forecasting demand and other trends affecting our ability to accurately forecast revenues and operating results, and vary according to macroeconomic factors. The occurrence of any of these events may adversely affect our cash flow, profitability and financial condition.
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We may incur significant charges or experience other significant risks and uncertainties in the event we close or divest all or part of a manufacturing plant or facility or engage in other divestitures.
We periodically assess our manufacturing operations in order to manufacture and distribute our products in the most efficient manner. Based on our assessments, we may make capital improvements to modernize certain units, move manufacturing or distribution capabilities from one plant or facility to another plant or facility, discontinue manufacturing or distributing certain products or close or divest all or part of a manufacturing plant or facility. We also have shared services agreements at several of our plants and if such agreements are terminated or revised, we would assess and potentially adjust our manufacturing operations. The intended closure of our facility in Lanaken, Belgium is expected to result in charges, including employee termination costs, of $140 million through 2027. The closure or divestiture of all or part of a manufacturing plant or facility could result in future charges that could be significant. In addition, as part of our deleveraging efforts, we may engage in opportunistic dispositions or monetization of product or business lines or other assets, such as our completed divestiture of the Micromax ® business. Such actions involve significant risks and uncertainties that could adversely affect our business, results of operations and financial condition. These include, among others, the inability to find potential buyers on favorable terms, disruption to our business and/or diversion of management attention from other business concerns, loss of key employees, renegotiation or termination of key business relationships, retention of certain liabilities related to the divested business or other assets and indemnification or other post-closingclaims. See Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information.
The insurance coverage that we maintain may not fully cover all operational risks.
We maintain property, business interruption, casualty and cyber/information security insurance but such insurance may not cover all of the risks associated with the hazards of our business and is subject to limitations, including deductibles and maximum liabilities covered. We may incur losses beyond the limits, or outside the coverage, of our insurance policies, including liabilities for environmental remediation. In the future, the types of insurance we obtain and the level of coverage we maintain may be inadequate or we may be unable to continue to maintain our existing insurance or obtain comparable insurance at a reasonable cost.
Risks associated with our joint ventures, including differences in views with our joint venture partners may cause them not to operate according to their business plans, which may adversely affect our results of operations.
We currently participate in a number of joint ventures and may enter into additional joint ventures in the future. Our joint ventures require us to work cooperatively with unaffiliated third parties. Differences in views among joint venture participants may result in delayed decisions or failure to agree on major decisions. In addition, our partners may be unable or unwilling to meet their economic or other obligations to the joint ventures, which could negatively impact them. If these risks cause the joint ventures to fail to achieve their desired operating performance, our results of operations could be adversely affected.
Our significant non-U.S. operations expose us to global exchange rate fluctuations that could adversely impact our profitability.
We conduct a significant portion of our operations outside the U.S. Consequently, fluctuations in currencies of other countries, especially the euro and Chinese yuan, may materially affect our operating results. Because our consolidated financial statements are presented in U.S. dollars, we must translate revenues, income and expenses, as well as assets and liabilities, into U.S. dollars based on average exchange rates prevailing during the reporting period or the exchange rate at the end of that period. Therefore, increases or decreases in the value of the U.S. dollar against other major currencies will affect our net operating revenues, operating income and the cost of balance sheet items denominated in foreign currencies. Foreign exchange rates can also impact the competitiveness of products produced in certain jurisdictions and exported for sale into other jurisdictions. These changes may impact the value received for the sale of our goods versus those of our competitors.
In addition to currency translation risks, we incur a currency transaction risk whenever one of our operating subsidiaries enters into a purchase or sales transaction using a currency different from the operating subsidiary's functional currency. Given the volatility of exchange rates, particularly the strengthening of the U.S. dollar against major currencies or the currencies of large developing countries, we may not be able to manage our currency transaction and translation risks effectively.
We use financial instruments to hedge certain exposure to foreign currency fluctuations, but those hedges in most cases cover existing balance sheet exposures and not future transactional exposures. We cannot guarantee that our hedging strategies will be effective. In addition, the use of financial instruments creates counterparty settlement risk. Failure to effectively manage these risks could have an adverse impact on our financial position, results of operations and cash flows.
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We are subject to information or operational technology cybersecurity threats that could materially affect our business.
We have been and will continue to be subject to advanced and persistentthreats in the areas of information and operational technology security and fraud. We rely on information and operational technology systems, including tools that utilize artificial intelligence, to conduct our business. We seek to prevent unauthorized access, maintain the confidentiality and the integrity of our information and operational technology systems and strive to detect and investigate any cybersecurity incidents that may occur, however in some cases we might be unaware of a particular incident or its magnitude and effects. We may face increased information technology security, continuity and fraud risks due in part to our business efforts to digitize certain operations at our manufacturing sites to increase efficiencies and to our continued reliance on many employees working remotely part of the time, which may create additional information security vulnerabilities and/or magnify the impact of any disruption in information technology systems. In addition, the rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks. Many tools and resources we use integrate or will integrate some form of artificial intelligence, which has the potential to result in bias, miscalculations, data errors, intellectual property infringement and other unintended consequences. Artificial intelligence technologies may also be used by adversaries to enable new or augment existing attack techniques, tactics and protocols. In addition, we may be exposed to unauthorized access or operational interruptions to our information or operational technology systems through undetectedvulnerabilities in our service providers' information systems or software. These risks may be heightened as a result of our ongoing efforts to integrate the M&M Business's technology environment with our own. It may take considerable time for us to investigate and evaluate the full impact of incidents, particularly for sophisticated attacks. These factors may inhibit our ability to provide prompt, full, and reliable information about the incident to our customers, partners, regulators, and the public.
The theft, misuse or publication of our intellectual property and/or confidential business information or the compromising of our systems or networks (including through ransomware, unauthorized access or insider threats) could harm our competitive position, cause operational disruption (including the potential to disrupt or compromise our control of physical plant operations at our manufacturing sites), reduce the value of our investment in research and development of new products and other strategic initiatives or otherwise adversely affect our business or results of operations. To the extent that any security breach impacts operations at our manufacturing sites, we may experience production or shipping disruptions. To the extent that any security breach results in inappropriate disclosure of our employees', customers' or vendors' confidential or personally identifiable information, we may incur liability or suffer reputational damage in the marketplace as a result. We maintain cyber/information security insurance, but any losses may be beyond the limits, or outside the coverage, of our policy.
Information and operational security threats and methods of perpetratingfraud or misappropriating information are constantly evolving and becoming more complex, which increases the difficulty and expense of defendingagainst these threats. Although we attempt to mitigate these risks by employing a number of measures, including insurance, monitoring of our systems and networks, implementation of security tools and processes, employee training, crisis simulations and maintenance of backup and protective systems, our systems, networks, products and services remain potentially vulnerable to increasingly sophisticated advanced persistentthreats, including nation-state actors, that may have a material effect on our business. In addition, the devotion of additional resources to the security of our information or operational technology systems in the future could significantly increase the cost of doing business or otherwise adversely impact our financial results.
We cannot guarantee the timing or amount of our dividends and/or our share repurchases, which are subject to a number of uncertainties that may affect the price of our common stock.
The declaration, payment, and amount of any dividends, and/or the decision to purchase common stock under our share repurchase programs, are subject to the sole discretion of our Board of Directors and, in the context of our capital allocation strategy, will depend upon many factors, including our financial condition, operating results, cash flows, relevant prospects, our capital requirements and access to capital markets, covenants associated with certain of our debt obligations, legal requirements, and other factors that our Board of Directors may deem relevant, and there can be no assurances that we will continue to pay a dividend or repurchase shares of our common stock in the future. In furtherance of our deleveraging efforts, we have paused our share repurchase program and are in the process of evaluating additional cash generation or conservation opportunities. As part of this process, we reduced our quarterly dividend by approximately 95% beginning in the first quarter of 2025. We plan to continue to evaluate our dividend policy, taking into account our ability to return to a balanced capital allocation strategy. Any further reduction or elimination of our dividends could adversely affect the price of our common stock.
Our increasing reliance on artificial intelligence ("AI") technologies in our products, services, and operations presents risks that could adversely impact our business, financial condition, and results of operations.
We are increasingly incorporating AI capabilities into the development of technologies and our business operations, and into our products and services, including, for example, our Chemille platform. AI technology is complex and rapidly evolving, and
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may subject us to significant competitive, reputational, cybersecurity, legal, regulatory, operational and other risks. If our products and services incorporating AI fail to operate as anticipated or as well as competing offerings or otherwise do not meet customer needs, our business and reputation may be adversely impacted. Our use of AI may introduce operational vulnerabilities by producing inaccurate outcomes or suggestions. Incorporating AI also gives rise to litigation risk and risk of non-compliance and unknown cost of compliance, as AI is an emerging technology for which the legal and regulatory landscape is not fully developed or uniform.
Our efforts to develop and use AI responsibly, may not successfully mitigate all associated risks. Any failure to address concerns relating to the responsible use of AI technology may cause harm to our reputation or financial liability and, as such, may increase our costs to address or mitigate such risks and issues.
Regulatory, Legal, Environmental and Tax Risks
Failure to comply with applicable laws or regulations and/or changes in applicable laws or regulations may adversely affect our business and financial results as a whole.
We are subject to extensive international, national, state, local and other laws and regulations. Failure to comply with these laws, including antitrust, anticorruption and sanctions laws, rules, regulations or court decisions, could expose us to fines, penalties and other costs. Although we have implemented policies, procedures and employee training designed to promote compliance with these laws, rules, regulations and court decisions, there can be no assurance that our employees and business partners and other third parties acting on our behalf will comply with these laws, rules, regulations and court decisions, which could result in fines, penalties and costs and damage to our business reputation. For example, in July 2020 we settled a European Commission competition law investigation involving certain of our subsidiaries and three other companies related to certain past ethylene purchases. Shell Chemicals Europe, certain Repsol entities represented by Stichting Ethylene Claims ("Stichting"), TotalEnergies, OMV, Borealis, LyondellBasell, and more recently, Stichting, on behalf of Versalis entities, have each filed separate claims for damages with the District Court of Amsterdam against four companies, including Celanese, arising from those activities. Preliminary hearings have been held in certain of these matters. With respect to the Stichting Repsol claims, a ruling on the initial phase, which phase is related to liability and not monetary damages, could be received in the first quarter of 2026, but we do not expect that such ruling would include a damages award or conclude the matter. BASF, Dow, ExxonMobil, BP, MOL Group and Braskem have filed similar claimsagainst Celanese in the Court of Munich, Germany, and Dow filed a second claim against Celanese and others in the Court of Dortmund, Germany. In sum, 11 new claims were filed against Celanese and other ethylene purchasers in 2025 and early 2026, and we anticipate that new or existing claimants may assert additional claims or seek additional damages associated with the 2020 European Commission settlement. We expect additional hearings will take place and briefings will be filed in 2026. See Note 19 - Commitments and Contingencies in the accompanying consolidated financial statements for further information.
Moreover, changes in laws or regulations, including the more aggressive enforcement of such laws and regulations, such as unexpected changes in regulatory requirements (including trade compliance requirements), or changes in reporting requirements of the U.S., Canadian, Mexican, German, EU or Asian governmental agencies, could increase the cost of doing business in these regions or delay or restrict our collection of accounts receivable. In addition, enforcement of environmental or other governmental policy may result in plant shut downs or significantly decreased production, such as in China on high pollution days. Any of these types of conditions, including the failure to obtain or maintain operating permits for our business, may have an effect on our business and financial results as a whole and may result in volatile current and future prices for our products and raw materials. See Note 19 - Commitments and Contingencies in the accompanying consolidated financial statements for further information.
Our business exposes us to potential product liability, warranty, and tort claims, and recalls, which could adversely affect our financial condition and performance.
The development, manufacture and sale of specialty materials and chemical products by us, including products produced for the medical device, pharmaceutical, automobile, construction, appliance, cigarette and aerospace end markets, involves a risk of exposure to product liability, warranty, toxic tort, public nuisance, and other tort claims, product recalls, product seizures and related adverse publicity. A product liability, warranty, toxic tort, public nuisance, or other tort claim or judgment against us that is larger than those typically experienced in the regular course of business could also result in substantial and unexpected expenditures, affect consumer or customer confidence in our products, and divert management's attention from other responsibilities. Although we maintain product liability insurance, there can be no assurance that this type or the level of coverage is adequate or that we will be able to continue to maintain our existing insurance or obtain comparable insurance at a reasonable cost, if at all. A product recall or a significant partially or completely uninsured judgment against us could have a material adverse effect on our results of operations or financial condition. Although we have standard contracting policies and
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controls, we may not always be able to contractually limit our exposure to third party claims should our failure to perform result in downstream supply disruptions or product recalls.
Environmental regulations and other obligations relating to environmental matters could subject us to liability for clean-ups, fines, penalties and other damages, require us to incur significant costs to modify our operations and increase our manufacturing and delivery costs.
Costs related to our compliance with environmental, health and safety laws and regulations, and potential obligations with respect to sites currently or formerly owned or operated by us, may have a negative impact on our operating results. We also have obligations related to the indemnity agreement contained in the demerger and transfer agreement between Celanese GmbH and Hoechst AG for environmental matters arising out of certain divestitures that took place prior to the demerger. See Note 13 - Environmental in the accompanying consolidated financial statements for further information.
Our operations are subject to extensive international, national, state, local and other laws and regulations that govern environmental, health and safety matters and that regulate the handling, manufacture, use, emission and disposal of products, materials and hazardous and non-hazardous waste. If we violate any one of those laws or regulations, we can be held liable for substantial fines and other sanctions, including limitations on our operations as a result of changes to or revocations of environmental permits involved. We could also face claims for damages from individuals or groups for allegedviolations of these laws or regulations.
We also incur substantial capital and other costs to comply with environmental, health and safety requirements. Stricter environmental, safety and health laws and regulations could result in substantial additional costs and liabilities to us or limitations on our operations. Consequently, compliance with these laws and regulations may negatively affect our earnings and cash flows in a particular reporting period. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources for further information.
For more information on risks we face specifically related to climate change and related potential regulation, see the risk factor titled "We are subject to financial, regulatory, physical and transition risks associated with climate change or other sustainability matters as well as potential legislation, regulation and international accords to address climate change and other sustainability matters" below.
Changes in environmental, health and safety regulations in the jurisdictions where we manufacture or sell our products could lead to a decrease in demand for or significant restrictions on use and/or production of our products and raw materials.
New or revised governmental regulations, independent studies or consumer or societal perceptions relating to the effect of our products on health, safety or the environment may affect demand for our products and the cost of producing our products. In addition, products we produce, including VAM, formaldehyde, polymers derived from formaldehyde and acetaldehyde, may be classified and labeled in a manner that would adversely affect demand for such products. For example, in 2019 the EPA designated formaldehyde as a high-priority substance under the Toxic Substances Control Act ("TSCA") and the substance is currently undergoing a multi-step review process. In December 2024, the EPA issued its final risk evaluation of certain uses of formaldehyde under the TSCA. In December 2025, the EPA released an Updated Draft Risk Calculation Memorandum for Formaldehyde for public comment. EPA anticipates that it will develop a draft risk management plan that is expected to be released by early summer 2026 for public comment.
Other initiatives, including the Chemical Strategy for Sustainability initiative currently to be undertaken by the EU as part of the Green Deal will potentially require, or increase existing requirements for, toxicological testing and risk assessments of a wide variety of chemicals, including chemicals used or produced by us. These assessments may result in heightened concerns about the chemicals involved and additional regulatory requirements being placed on the production, handling, labeling and/or use of the subject chemicals. The new requirements may necessitate reformulation of products in order to meet customers' demands, which would be a financially burdensome process.
Such concerns and additional requirements could also increase the cost incurred by our customers to use our chemical products and otherwise limit the use of these products, which could lead to a decrease in demand for these products. Such a decrease in demand would likely have an adverse impact on our business and results of operations.
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We are subject to financial, regulatory, physical and transition risks associated with climate change or other sustainability matters as well as potential legislation, regulation and international accords to address climate change and other sustainability matters.
Greenhouse gas ("GHG") emissions have become the subject of significant international, national, regional, state and local attention. For example, the EPA, SEC, and European Commission have promulgated or proposed extensive rules concerning reporting of GHG emissions. The European Commission has also embarked on the European Green Deal initiative with the goal of making the EU carbon neutral by 2050, including an interim goal of 90% reduction by 2040, which is leading to additional statutory and regulatory requirements. In addition, regulation of greenhouse gas also could occur pursuant to future treaty obligations, statutory or regulatory changes or new climate change legislation intended to reduce or mitigate the effects of GHG emissions. Compliance with such legislation, regulation and accords and the associated potential cost is complicated by the fact that various countries and regions are following different approaches and standards to the regulation of climate change.
A number of our operations are within jurisdictions that have or are developing regulatory regimes governing GHG emissions, which may lead to direct and indirect costs on our operations. Some jurisdictions have emissions reduction measures directed at the power or oil and gas sectors, which could result in higher power input costs or reduced energy availability for us. Other regulations that are being implemented or contemplated include the potential for restrictions on GHG emissions, cap and trade emissions trading systems, taxes on GHG emissions, fuel, and energy, or carbon import charges on certain products among other provisions. These may exist in addition to country and corporate-level net-zero GHG emissions pledges. These measures, if and where enacted, may significantly increase our costs of operations or require us to incur significant additional capital costs for the installation of equipment to mitigate GHG emissions for our sites' manufacturing operations.
Physical impacts that could be associated with climate change, such as increased frequency and severity of fires, droughts, hurricanes, floods and other weather events and impacts on sea levels, as well as other catastrophic events, may also impact our facilities and operations and those of our key suppliers. A number of our sites are located in areas that are exposed to weather events and changing sea levels (such as the Texas Gulf Coast) and that have been impacted by hurricanes and other weather events in the past as described elsewhere in these risk factors. To the extent climate change exacerbates these threats, our operations and supply chains could experience increased levels of disruptions and added costs.
In addition, increased social, legislative and regulatory focus on climate change and other sustainability matters as well as customer demand for responsibly manufactured products could lead to changes in the behavior of our customers or their end-customers, and could result in reduced customer demand for products made from materials that are perceived to be significant contributors to greenhouse gas emissions and global climate change. We may fail to accurately react to these trends and refine our product offerings through innovation, or we may not be able to fully address these concerns through changes in manufacturing methods or use of more sustainable materials and processes, which could result in reduced demand for our products.
We closely monitor developments in this area, but there is significant uncertainty regarding what legislative or regulatory requirements may be put in place, which makes it impossible for us to predict the longer-term impact these measures have on our operations. However, we believe that future legislative and regulatory developments related to climate change are likely, which could materially increase operating costs in the chemical industry and thereby increase our manufacturing and delivery costs.
Our aspirations and initiatives related to sustainability, and our public statements and disclosures regarding them, expose us to risks.
We have developed and publicized, and expect to continue to establish, goals, targets, aspirations, and other objectives related to sustainability matters. These include a GHG intensity reduction target and other environmental targets. Such statements reflect our current plans at the time they are made, and do not constitute a guarantee that they will be achieved. Our ability to track and meet these goals depends on future innovations and technology and the availability of accurate reporting methods. Our efforts to research, establish, accomplish, and accurately report on these goals, targets, aspirations and objectives could expose us to operational, reputational, financial, legal, and other risks. Our ability to achieve any stated goal, target, or objective is and will be subject to numerous factors and conditions, many of which are outside of our control, such as evolving regulatory or quasi-regulatory sustainability standards, the ability of suppliers to meet our sustainability and other standards, differing requirements and the pace of changes in technology.
We may face scrutiny from the investment community, other stakeholders, regulators, and the media related to our sustainability activities, including the goals, targets, aspirations and objectives that we announce, and our methodologies and timelines for pursuing them. If our sustainability practices do not meet regulator, investor or other stakeholder expectations and
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standards, which continue to evolve and may be conflicting, our reputation, ability to attract or retain employees, and attractiveness as an investment, business partner, or as an acquirer could be negatively impacted, or we could become the target of litigation, investigations or other proceedings initiated by government authorities or private actors, which could in turn adversely impact our business and results of operations. Similarly, our failure or perceived failure to pursue or fulfill our goals, targets, aspirations and objectives, to comply with ethical, environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines that we announce, or at all, could have the same negative impacts, as well as expose us to government enforcement actions and private litigation. Even if we achieve the goals, targets, aspirations and objectives we set, we may not realize all of the benefits expected at the time they were established.
Our business and financial results may be adversely affected by various legal and regulatory proceedings.
We are involved in legal and regulatory proceedings, lawsuits, claims and investigations in the normal course of business and could become subject to additional claims in the future, some of which could be material. The outcome of existing proceedings, lawsuits, claims and investigations may differ from our expectations because the outcomes of such proceedings, including regulatory matters, are often difficult to reliably predict. Various factors or developments can lead us to change current estimates of liabilities and related insurance receivables where applicable, or permit us to make such estimates for matters previously not susceptible to reasonable estimates, such as a significant judicial ruling or judgment, a significant settlement, significant regulatory developments, or changes in applicable law. A future adverse ruling, settlement, or unfavorable development could result in charges that could have a material adverse effect on our business, results of operations or financial condition in any particular period. See Note 13 - Environmental and Note 19 - Commitments and Contingencies in the accompanying consolidated financial statements for further information.
Changes in, or the interpretation of, tax legislation or rates throughout the world, or the resolution of tax examinations or audits, could materially impact our results.
Our future effective tax rate and related tax balance sheet attributes could be impacted by changes in, or the interpretation of, tax legislation throughout the world. The overall tax environment has made it increasingly challenging for multinational corporations to operate with certainty about taxation in many jurisdictions. For example, the European Commission has been conducting investigations focusing on whether local country tax rulings or tax legislation provide preferential tax treatment that violates EU state aid rules.
Furthermore, a number of countries where we do business, including the U.S. and many countries in the EU, have changed or are considering changes in relevant tax, accounting and other laws, regulations and interpretations, including changes to tax laws applicable to multinational corporations. Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, expirations of tax holidays or rulings, changes in the assessment regarding the realization of deferred tax assets, or changes in tax laws and regulations or their interpretation. The increasingly complex global tax environment and related legislative developments could have a material adverse effect on our effective tax rate, results of operations, cash flows and financial condition.
For example, the Organization of Economic Cooperation and Development (the "OECD"), which represents a coalition of member countries, is supporting changes to numerous long-standing tax principles through its base erosion and profit shifting initiatives, which focus on a number of issues, including (i) the shifting of profits among affiliated entities located in different tax jurisdictions and (ii) a global minimum tax of at least 15% of adjusted financial statement income, applied on a country-by-country basis, applicable to multinational groups with annual revenue of EUR750 million or more. The adoption of such changes is contingent upon the independent actions of participating countries to enact implementing domestic legislation. Countries where we do business, including several EU member states, have either implemented, or are in the process of implementing, the 15% global minimum tax into domestic legislation. Consistent with a joint statement from the United States and G7 countries that was issued in June 2025, on January 5, 2026, the OECD released a "side-by-side" safe harbor from the global minimum tax rules that, if enacted into local law in the relevant jurisdiction, would establish a new side‑by‑side safe harbor under which U.S.‑parented groups may, for fiscal years starting in 2026, elect to be exempt from certain elements of the global minimum tax, particularly the "income inclusion rule" and the "undertaxed profits rule." The effect of this "side-by-side" safe harbor will ultimately depend on whether, when and how individual jurisdictions implement the "side-by-side" safe harbor into domestic law, and there is significant uncertainty regarding scope, timing and consistency of such implementation.
In August 2022, the Inflation Reduction Act of 2022 ("IRA") was enacted in the U.S. The IRA created a new book minimum tax, effective for tax years beginning after December 31, 2022, of 15% of adjusted consolidated GAAP pre-tax income for corporations with three-year average adjusted annual book income in excess of $1.0 billion. The IRA also created an excise tax that is generally equal to 1% of the value of any stock repurchased by us after December 31, 2022.
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We are subject to the regular examination of our income tax returns by various tax authorities. Examinations in material jurisdictions or changes in laws, rules, regulations or interpretations by local taxing authorities could result in impacts to tax years open under statute or to foreign operating structures currently in place.
Our tax returns have been under audit for the years 2013 through 2015 by the United States, the Netherlands and Germany. In September 2021, we received a draft joint audit report proposing adjustments to transfer pricing and the reallocation of income between the related jurisdictions. The relevant tax authorities also proposed to apply these adjustments to open tax years through 2019. We were unable to reach an agreement with the relevant tax authorities and therefore these audits continued on a separate jurisdictional basis. During the three months ended December 31, 2022, we concluded settlement discussions with the Dutch tax authority, and during the three months ended September 30, 2024, we concluded settlement discussions with the German tax authority related to the German transfer pricing audit. We engaged in continuing discussions with the tax authority in the United States, and we are currently evaluating all additional potential remedies regarding the ongoing examination.
In addition, we are under examination in certain jurisdictions for other matters for various years, including Mexico, Canada, the United States, China, South Korea and Germany.
We cannot predict with certainty the outcome of tax examinations or audits. We regularly assess the likelihood of adverse outcomes resulting from these examinations or changes in laws, rules, regulations or interpretations to determine the adequacy of our provision for taxes. It is possible the outcomes from these examinations or audits will have a material adverse effect on our financial condition and operating results in future periods.
Risks Related to Our Indebtedness
Our indebtedness and interest expense, could adversely affect us, our business flexibility, our ability to raise additional capital to fund our operations or refinance our existing indebtedness when it matures, our credit ratings (which may in turn increase our interest expense), and our ability to react to changes in the economy or the chemicals industry.
See Note 11 - Debt in the accompanying consolidated financial statements for further information about our indebtedness. See Note 12 - Benefit Obligations , Note 13 - Environmental and Note 19 - Commitments and Contingencies in the accompanying consolidated financial statements for further information about our other obligations.
As of December 31, 2025, our total debt was $12.6 billion. Despite our level of indebtedness, we expect to continue to have the ability to borrow additional debt though there is no guarantee we will be able to borrow on the same terms as our existing indebtedness. There may be circumstances in which required payments of principal and/or interest on our debt could adversely affect our cash flows, our operating results or our ability to return capital to our shareholders. We have allocated, and intend to continue to allocate, capital to repay and reduce our outstanding debt using cash from operations and proceeds from asset sales or dispositions in cases where we are able to do so on favorable terms. Our ability to reduce our level of indebtedness over time in line with our strategic goals depends on a number of factors including our business performance, macroeconomic and industry conditions, commercial and financing market conditions, and other factors described in these risk factors, and our inability to achieve these objectives could delay or alter our deleveraging plan, or could negatively impact the trading prices of our securities or our credit ratings. In furtherance of our deleveraging efforts, we have completed our planned divestiture of the Micromax ® business, executed a number of transactions to manage our debt maturity profile, paused our share repurchase program and are in the process of evaluating additional cash generation or conservation opportunities. As part of this process, we reduced our quarterly dividend by approximately 95% beginning in the first quarter of 2025.
Our higher level of indebtedness and other liabilities could have other important consequences, including:
• Increasing our vulnerability to general economic and industry conditions, including exacerbating the impact of any adverse business conditions that could impact our ability to repay amounts due under or refinance on favorable terms existing senior credit agreements (the "Credit Agreements") or the indentures (the "Indentures") governing our outstanding senior unsecured notes (collectively, the "Senior Notes");
• Requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on indebtedness and amounts payable in connection with the satisfaction of our other liabilities, therefore reducing our ability to use our cash flow to fund operations, capital expenditures and future business opportunities or pay dividends on or repurchase our common stock, par value $0.0001 per share ("Common Stock");
• Adversely affecting our ability to comply with restrictive covenants in our debt agreements, which could result in an event of default, including cross-defaults to other debt facilities, if not cured or waived;
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• Reducing our flexibility to respond to changing business and economic conditions;
• Exposing us to the risk of increased interest rates as certain of our borrowings are at variable rates of interest or increase their interest rates in the event of credit rating downgrades;
• Exposing us to the risk of changes in currency exchange rates as certain of our borrowings are denominated in foreign currencies;
• Adversely affecting our future credit ratings, which could increase our borrowing costs, liquidity and access to capital markets; and
• Limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate or other purposes.
We remain in compliance with the covenants in our material financing arrangements as of December 31, 2025.
Due to scheduled step downs of the required consolidated leverage ratio under our U.S. revolving credit facility (the "U.S. Revolving Credit Facility") taking effect beginning in the first quarter of 2026, we believe we may be unable to comply with the consolidated leverage ratio in its current form within the twelve-month period subsequent to the date of this filing unless we are able to implement sufficient mitigation strategies. Such strategies include, but are not limited to, amending the outstanding U.S. Revolving Credit Facility consistent with prior similar amendments we have obtained over the past several years, obtaining a waiver of the default, replacing the U.S. Revolving Credit Facility with a new revolving credit facility, consummating additional divestitureopportunities, and/or reducing operating costs. Implementation of such strategies may increase our borrowing costs under existing material financing arrangements. If we are not able to implement sufficient mitigating strategies and are therefore not able to comply with the consolidated leverage ratio, the lenders under the U.S. Revolving Credit Facility could elect to terminate the facility. As of the date of this filing, the U.S. Revolving Credit Facility has no outstanding borrowings.
We may not be able to generate sufficient cash, through normal operations, productivity and cost reduction initiatives, or otherwise, to service our indebtedness and may be forced to take other actions to satisfy obligations under our indebtedness, which may not be successful.
We have undertaken and are continuing to undertake initiatives in all of our business segments to improve productivity and performance and to generate cost savings to support our deleveraging efforts. These initiatives, which may be limited or offset by, among other things, contractual obligations, may not be completed or beneficial or the estimated cost savings from such activities may not be realized.
If our cash flows and capital resources are insufficient to fund our debt obligations, we may be forced to sell assets on unfavorable terms, seek additional capital, restructure or refinance our indebtedness or delay capital expenditures. These alternative measures may not be successful and may not permit us to meet our scheduled debt service and other obligations. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. We may not be able to complete those dispositions or to obtain the proceeds that we could realize from them, and these proceeds may not be adequate to meet any debt service obligations then due.
Restrictive covenants in our debt agreements may limit our ability to engage in certain transactions and may diminish our ability to make payments on our indebtedness, pay dividends, or repurchase our Common Stock.
The Credit Agreements, the Indentures and the Receivables Purchase Agreement governing our receivables securitization facility each contain various covenants that limit our ability to engage in specified types of transactions. The Credit Agreements require the maintenance of certain financial ratios and contain other covenants including, but not limited to, restrictions on our and certain of our subsidiaries' ability to incur additional debt; incur liens securing debt; increase dividends, repurchase our Common Stock or make other restricted payments; merge or consolidate with any other person; and sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the Issuer's assets or the assets of certain subsidiaries. The Indentures contain covenants including, but not limited to, restrictions on our and certain of our subsidiaries' ability to incur liens securing debt; merge or consolidate with any other person; and sell, assign, transfer, lease, leaseback, convey or otherwise dispose of certain or all or substantially all of the Issuer's assets or the assets of certain subsidiaries.
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The Receivables Purchase Agreement also contains covenants including, but not limited to, restrictions on CE Receivables LLC's, a wholly-owned, "bankruptcy remote" special purpose subsidiary of the Company, and certain other Company subsidiaries' ability to incur indebtedness; grant liens on assets; merge, consolidate, or sell assets; pay dividends, repurchase our Common Stock or make other restricted payments; make investments; prepay or modify certain indebtedness; or engage in other businesses.
Such restrictions in the instruments governing our debt obligations could result in us having to obtain the consent of our lenders and holders of the Senior Notes in order to take certain actions. Disruptions in credit markets may prevent us from obtaining or make it more difficult or more costly for us to obtain such consents. Our ability to expand our business or to address declines in our business may be limited if we are unable to obtain such consents.
A breach of any of these covenants could result in a default, which, if not cured or waived, could have a material adverse effect on our business, financial condition and results of operations. Furthermore, a default under any of the Credit Agreements could permit lenders to accelerate the maturity of our indebtedness under such Credit Agreement and to terminate any commitments to lend. If the lenders under any Credit Agreement accelerate the repayment of such indebtedness, we may not have sufficient liquidity to repay such amounts or our other indebtedness, including the Senior Notes. In such event, we could be forced into bankruptcy or liquidation.
Our credit ratings are subject to change and may not reflect all risks of investments in our securities.
Our credit ratings are an assessment by rating agencies of our ability to pay our debts when due. Consequently, real or anticipated changes in our credit ratings will generally affect the market value of our securities. These credit ratings may not reflect the potential impact of risks relating to our securities. Agency ratings are not a recommendation to buy, sell or hold any security, and may be revised or withdrawn at any time by the issuing organization. Each agency's rating should be evaluated independently of any other agency's rating. We have in the past been subject to ratings downgrades, and we cannot be assured that we will be able to maintain our current credit ratings, and any additional actual or anticipated negative changes or downgrades in our credit ratings or ratings outlook or watch, including any announcement that our ratings are under review for a downgrade, could further increase our corporate borrowing costs and affect the market value of our securities and may have a negative impact on our liquidity, capital position and access to capital markets.
Celanese and Celanese U.S. are holding companies and depend on subsidiaries to satisfy their obligations under the Senior Notes and the guarantee of Celanese U.S.'s obligations under the Senior Notes and the Credit Agreements by Celanese.
As holding companies, Celanese and Celanese U.S. conduct substantially all of their operations through their subsidiaries, which own substantially all of our consolidated assets. Consequently, the principal source of cash to pay Celanese and Celanese U.S.'s obligations, including obligations under the Senior Notes and the guarantee of Celanese U.S.'s obligations under the Credit Agreements and the Indentures by Celanese, is the cash that our subsidiaries generate from their operations. We cannot assure that our subsidiaries will be able to, or be permitted to, make distributions to enable Celanese U.S. and/or Celanese to make payments in respect of their obligations. Each of our subsidiaries is a distinct legal entity and, under certain circumstances, applicable country or state laws, regulatory limitations and terms of our debt instruments may limit our subsidiaries' ability to distribute cash to Celanese U.S. and Celanese. In the event Celanese U.S. and/or Celanese do not receive distributions from our subsidiaries, Celanese U.S. and/or Celanese may be unable to make required payments on the indebtedness under the Credit Agreements, the Indentures, the guarantee of Celanese U.S.'s obligations under the Credit Agreements and the Indentures by Celanese, or our other indebtedness.
Risks Related to Our Human Capital
Our success depends upon our ability to attract and retain key employees and the identification and development of talent to succeed senior management.
Our success depends on our ability to attract and retain key personnel including our management team. The inability to recruit and retain talented employees or the unexpectedloss of such talented employees or key personnel may adversely affect our operations. Like many companies, we have experienced in the last couple of years and continue to experience an increasingly competitive hiring environment for skilled employees at our manufacturing and other sites, which in some cases has increased, or may in the future increase, the cost of retaining or hiring talented employees, particularly in technical manufacturing roles critical to our success.
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In addition, we rely on our senior management team specifically, therefore our future success depends in part on our ability to retain those members of senior management and to identify and develop talent to succeed senior management. The hiring and retention of key personnel and appropriate senior management succession planning will continue to be important to the successful implementation of our strategies. To help attract, retain, and motivate qualified employees, we use share-based awards and performance-based cash incentive awards. Sustained declines in our stock price or lower stock price performance relative to our competitors have reduced the retention value of our share-based awards, which can impact the competitiveness of our compensation. To the extent our compensation programs are not viewed as competitive, our ability to attract, retain, and motivate employees can be weakened, which could harm our results of operations.
Significant changes in pension fund investment performance or assumptions relating to pension costs may have a material effect on the valuation of pension obligations, the funded status of pension plans and our pension cost.
The cost of our pension plans is incurred over long periods of time and involves many uncertainties during those periods of time. Our funding policy for pension plans is to accumulate plan assets that, over the long run, will approximate the present value of projected benefit obligations. Our pension cost is materially affected by the discount rate used to measure pension obligations, the level and value of plan assets available to fund those obligations at the measurement date and the expected long-term rate of return on plan assets. Significant changes in investment performance or a change in the portfolio mix of invested assets will likely result in corresponding increases and decreases in the valuation of plan assets and a change in the discount rate or mortality assumptions, which will likely result in an increase or decrease in the valuation of pension obligations. The combined impact of these changes will affect the reported funded status of our pension plans as well as the net periodic pension cost in the following fiscal years. An extended duration strategy in the asset portfolio was implemented in some plans to reduce the influence of liability volatility due to changes in interest rates. If the funded status of a pension plan declines, we may be required to make unscheduled contributions in addition to those contributions for which we have already planned. See Note 12 - Benefit Obligations in the accompanying consolidated financial statements for further information.
Some of our employees are unionized, represented by workers councils or are subject to local laws that are less favorable to employers than the laws of the U.S.
As of December 31, 2025, we had 11,434 employees globally. Approximately 14% of our 3,763 U.S.-based employees are unionized. In addition, a large number of our employees are employed in countries in which employment laws provide greater bargaining or other employment rights than the laws of the U.S. Such employment rights require us to work collaboratively with the legal representatives of the employees to effect any changes to labor agreements. Most of our employees in Europe are represented by workers councils and/or unions that must approve any changes in terms and conditions of employment, including potentially salaries and benefits. They may also impede efforts to restructure our workforce. Although we believe we have a good working relationship with our employees globally and their legal representatives, a strike, work stoppage, or slowdown by our employees, including in connection with renegotiation of labor contracts from time to time, could occur, resulting in a disruption of our operations or higher ongoing labor costs.
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Risk Factors
Item 1A. Risk Factors of this Annual Report also contains a description of certain risk factors that you should consider which could significantly affect our business and/or financial results. In addition, the following factors, among others, could cause our actual results to differ materially from those results, performance or achievements that may be expressed or implied by such forward-looking statements:
• the ability to successfullyachieve planned cost reductions;
• changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate;
• the length and depth of product and industry business cycles particularly in the automotive, electrical, textiles, electronics and construction industries;
• potential liability resulting from pending or future claims or litigation, including investigations or enforcement actions, or from changes in the laws, regulations or policies of governments or other governmental activities, in the countries in which we operate;
• our level of indebtedness and our financial condition, each of which could diminish our ability to raise additional capital to fund operations, reduce our business and strategic flexibility, increase our interest expense, limit the success of our deleveraging efforts, and impact changes to our credit ratings, which could increase our interest expense in the event of additional downgrades;
• volatility or changes in the price and availability of raw materials and energy, particularly changes in the demand for, supply of, and market prices of ethylene, methanol, natural gas, carbon monoxide, wood pulp, hexamethylene diamine, Polyamide 66 ("PA66"), polybutylene terephthalate, ethanol, natural gas and fuel oil, and the prices for electricity and other energy sources;
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• the ability to pass increases in raw materials prices, logistics costs and other costs on to customers or otherwise improve margins through price increases;
• the possibility that we will not be able to realize the anticipated benefits of the Mobility & Materials business (the "M&M Business") we acquired from DuPont de Nemours, Inc. (the "M&M Acquisition"), including synergies and growth opportunities, whether as a result of difficulties arising from the operation of the M&M Business or other unanticipateddelays, costs, inefficiencies or liabilities;
• additional impairment of goodwill or intangible assets;
• increased commercial, legal or regulatory complexity of entering into, or expanding our exposure to, certain end markets and geographies;
• risks in the global economy and equity and credit markets and their potential impact on our ability to pay down debt in the future and/or refinance at suitable rates, in a timely manner, or at all;
• the ability to maintain plant utilization rates and to implement planned capacity additions, expansions and maintenance;
• the ability to reduce or maintain current levels of production costs and to improve productivity by implementing technological improvements to existing plants;
• increased price competition and the introduction of competing products by other companies;
• the ability to identify desirable potential acquisition or divestitureopportunities and to complete such transactions, including obtaining regulatory approvals, consistent with our strategy;
• market acceptance of our products and technology;
• compliance and other costs and potential disruption or interruption of production or operations due to accidents, interruptions in sources of raw materials, transportation, logistics or supply chain disruptions, cybersecurity incidents, AI-related vulnerabilities, terrorism or political unrest, public health crises, or other unforeseen events or delays in construction or operation of facilities, including as a result of geopolitical conditions, the direct or indirect consequences of acts of war or conflict (such as the Russia-Ukraine conflict or conflicts in the Middle East) or terrorist incidents or as a result of fire, flood, hurricanes, other severe weather, natural disasters, other catastrophic events or other crises;
• the ability to obtain governmental approvals and to construct facilities on terms and schedules acceptable to us;
• changes in applicable tariffs, duties, treaties and trade agreements, tax rates or legislation throughout the world including, but not limited to, anti-dumping and countervailing duties, adjustments, changes in estimates or interpretations or the resolution of tax examinations or audits that may impact recorded or future tax impacts and potential regulatory and legislative tax developments in the United States ("U.S.") and other jurisdictions;
• changes in the degree of intellectual property and other legal protection afforded to our products or technologies, or the theft of such intellectual property;
• potential liability for remedial actions and increased costs under existing or future environmental, health and safety regulations, including those relating to climate change or other sustainability matters;
• changes in currency exchange rates and interest rates;
• tax rates and changes thereto; and
• various other factors, both referenced and not referenced in this Annual Report.
Many of these factors are macroeconomic in nature and are, therefore, beyond our control. Should one or more of these risks or uncertainties materialize, affect us in ways or to an extent that we currently do not expect or consider to be significant, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described in this Annual Report as anticipated, believed, estimated, expected, intended, planned or projected. We neither intend nor assume any obligation to update these forward-looking statements, which speak only as of the date hereof.
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Results of Operations
Financial Highlights
Year Ended
December 31,
Change
(In $ millions, except percentages)
Statement of Operations Data
Net sales
Gross profit
Selling, general and administrative ("SG&A") expenses
Other (charges) gains, net
Gain (loss) on disposition of businesses and assets, net
Operating profit (loss)
Equity in net earnings (loss) of affiliates
Non-operating pension and other postretirement employee benefit (expense) income
Interest expense
Refinancing expense
Interest income
Dividend income - equity investments
Earnings (loss) from continuing operations before tax
Earnings (loss) from continuing operations
Earnings (loss) from discontinued operations
Net earnings (loss)
Net earnings (loss) attributable to Celanese Corporation
Other Data
Depreciation and amortization
SG&A expenses as a percentage of Net sales
Operating margin (1)
Other (charges) gains, net
Restructuring
Asset impairmentlosses
Plant/office closures
Total Other (charges) gains, net
(1) Defined as Operating profit (loss) divided by Net sales.
As of December 31,
(In $ millions)
Balance Sheet Data
Cash and cash equivalents
Short-term borrowings and current installments of long-term debt - third party and affiliates
Long-term debt, net of unamortized deferred financing costs
Total
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Factors Affecting Business Segment Net Sales
The percentage increase (decrease) in Net sales attributable to each of the factors indicated for each of our business segments is as follows:
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Volume
Price
Currency
Total
(In percentages)
Engineered Materials
Acetyl Chain
Total Company
Consolidated Results
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Net sales decreased $724 million, or 7%, for the year ended December 31, 2025 compared to the same period in 2024 primarily due to:
• lower volume in our Engineered Materials and Acetyl Chain segments, primarily driven by weaker global economic conditions and decreased global demand; and
• lower pricing in our Acetyl Chain segment, primarily due to an environment with greater supply than demand, as well as our Engineered Materials segment, primarily due to competitive market dynamics, and product mix;
partially offset by:
• a favorable currency impact, primarily resulting from a stronger euro relative to the U.S. dollar.
Operating loss increased $66 million, or 9%, for the year ended December 31, 2025 compared to the same period in 2024 primarily due to:
• lower Net sales across our segments;
partially offset by:
• a favorable impact of $172 million to Other (charges) gains, net in our Engineered Materials segment, primarily due to a decrease in goodwill and certain trade names impairmentlosses and decreased severance costs (see Note 9 - Goodwill and Intangible Assets, Net and Note 24 - Other (Charges) Gains, Net in the accompanying consolidated financial statements for further information);
• lower raw material costs in our Engineered Materials and Acetyl Chain segments;
• lower spending of $195 million, primarily as a result of the realization of synergy and cost savings actions in our Engineered Materials and Other Activities segments during the year ended December 31, 2025; and
• a decrease of accelerated depreciation expense of $56 million during the year ended December 31, 2025, primarily due to a decrease of $67 million in our Engineered Materials segment, related to the 2024 closures of our polymerization units in Uentrop, Germany and our facility in Mechelen, Belgium, partially offset by an increase in accelerated depreciation of $11 million in our Acetyl Chain segment related to the intended closure of our facility in Lanaken, Belgium (see Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information).
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Non-operating pension and other postretirement employee benefit income increased for the year ended December 31, 2025 compared to the same period in 2024 primarily due to:
• a decrease in the actuarial loss of $82 million primarily due to higher than expected asset returns, partially offset by unfavorable plan experience and a decrease in the weighted average discount rate (see Note 12 - Benefit Obligations in the accompanying consolidated financial statements for further information).
Our effective income tax rate for the year ended December 31, 2025 was 7.4% compared to (49.8)% for the year ended 2024. The change in the effective income tax rate for the year ended December 31, 2025 compared to the same period in 2024 was primarily due to:
• current year impacts of a non-deductible goodwill impairmentloss, recognition of a valuation allowance on U.S. foreign tax credit carryforwards due to revised forecasts of foreign sourced income and expenses during the carryforward period, the further integrated global principal operations and the relocation of certain intangible assets among wholly-owned foreign affiliates and the settlement of tax examinations with German tax authorities; and
• prior year impacts of a non-deductible goodwill impairmentloss and recognition of a valuation allowance against certain local country, non-U.S. tax credit carryforwards due to reduced forecasts of earnings in future periods and capital gains tax arising from an internal integration-related restructuring of our acquired China operations to optimize our debt profile.
See Note 15 - Income Taxes in the accompanying consolidated financial statements for further information.
Discussion of our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 and for the year ended December 31, 2023 compared to the year ended December 31, 2022, can be found in Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Reports for the years ended December 31, 2024 and December 31, 2023, respectively.
Business Segments
Engineered Materials
Year Ended
December 31,
Change
Change
(In $ millions, except percentages)
Net sales
Net Sales Variance
Volume
Price
Currency
Other (charges) gains, net
Operating profit (loss)
Operating margin
Equity in net earnings (loss) of affiliates
Depreciation and amortization
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Net sales decreased for the year ended December 31, 2025 compared to the same period in 2024 primarily due to:
• lower volume, primarily due to weaker global economic conditions; and
• lower pricing for most of our products, primarily due to competitive market dynamics, and product mix;
partially offset by:
• a favorable currency impact, primarily resulting from a stronger euro relative to the U.S. dollar.
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Operating loss decreased for the year ended December 31, 2025 compared to the same period in 2024 primarily due to:
• a favorable impact of $172 million to Other (charges) gains, net, primarily related to a decrease in goodwill and certain trade names impairmentlosses and decreased severance costs (see Note 9 - Goodwill and Intangible Assets, Net and N ote 24 - Other (Charges) Gains, Net in the accompanying consolidated financial statements for further information);
• lower raw material costs and favorable raw materials mix;
• lower spending of $98 million, primarily as a result of the realization of synergy and cost savings actions during the year ended December 31, 2025; and
• a decrease of accelerated depreciation expense of $67 million for the year ended December 31, 2025, primarily related to the 2024 closures of our polymerization units in Uentrop, Germany and our facility in Mechelen, Belgium;
partially offset by:
• lower Net sales.
Equity in net earnings (loss) of affiliates decreased for the year ended December 31, 2025 compared to the same period in 2024 primarily due to:
• a decrease in earnings from our Ibn Sina strategic affiliate, primarily due to lower methyl tertiary-butyl ether ("MTBE") volume arising from weaker economic conditions, as well as lower MTBE pricing and higher feedstock costs.
Acetyl Chain
Year Ended
December 31,
Change
Change
(In $ millions, except percentages)
Net sales
Net Sales Variance
Volume
Price
Currency
Operating profit (loss)
Operating margin
Dividend income - equity investments
Depreciation and amortization
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Net sales decreased for the year ended December 31, 2025 compared to the same period in 2024 primarily due to:
• lower pricing for most of our products globally, due to an environment with greater supply than demand; and
• lower volume across the chain, primarily for acetate tow, due to decreased global demand;
partially offset by:
• a favorable currency impact, primarily resulting from a stronger euro relative to the U.S. dollar.
Operating profit decreased for the year ended December 31, 2025 compared to the same period in 2024 primarily due to:
• lower Net sales; and
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• an increase of accelerated depreciation expense of $11 million for the year ended December 31, 2025, related to the intended closure of our facility in Lanaken, Belgium (see Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information);
partially offset by:
• lower raw material and sourcing costs driven by productivity initiatives.
Other Activities
Year Ended
December 31,
Change
Change
(In $ millions, except percentages)
Operating profit (loss)
Non-operating pension and other postretirement employee benefit (expense) income
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Operating loss decreased for the year ended December 31, 2025 compared to the same period in 2024 primarily due to:
• lower spending of $97 million, primarily due to realization of synergy and cost savings actions during the year ended December 31, 2025.
Non-operating pension and other postretirement employee benefit income increased for the year ended December 31, 2025 compared to the same period in 2024 primarily due to:
• a decrease in the actuarial loss of $82 million, primarily due to higher than expected asset returns, partially offset by unfavorable plan experience and a decrease in the weighted average discount rate (see Note 12 - Benefit Obligations in the accompanying consolidated financial statements for further information).
Liquidity and Capital Resources
Our primary sources of liquidity are cash generated from operations, available cash and cash equivalents, dividends from our portfolio of strategic investments and available borrowings under our senior unsecured revolving credit facilities. As of December 31, 2025, we have $1.75 billion available for borrowing under our senior U.S. Revolving Credit Facility (defined below) and $50 million available for borrowing under our separate China Revolving Credit Facilities (defined below), if required, to meet our working capital needs and other contractual obligations (see Covenants section below for further information). In addition, we held cash and cash equivalents of $1.3 billion as of December 31, 2025. We are actively managing our business to maintain cash flow, and we believe that liquidity from the above-referenced sources will be sufficient to meet our operational and capital investment needs and financial obligations for the foreseeable future.
On February 2, 2026, we completed the sale of the Micromax® business to Element Solutions Inc for a purchase price of $492 million, subject to customary transaction adjustments. See Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information.
On October 28, 2025, we announced the intended closure of our facility in Lanaken, Belgium to streamline our production costs across our global network. We intend to permanently cease all manufacturing operations during the second half of 2026. We expect to incur additional exit and shutdown costs related to the closure of the facility of $140 million, including employee termination costs, through 2027. See Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information.
In February 2024, we announced the intended closure of our facility in Mechelen, Belgium to optimize production costs across our global network. This operation is included in the Engineered Materials segment. We fully ceased operations as of December 31, 2024. See Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information.
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In October 2023, we announced the intended closure of our PA66 and certain High-Performance Nylon ("HPN") polymerization units at our facility in Uentrop, Germany to optimize production costs across our global network. We fully ceased operation of PA66 polymerization unit and certain HPN polymerization units during the year ended December 31, 2024. See Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information.
Our incurrence of debt to finance the purchase price for the M&M Acquisition increased our leverage and our ratio of indebtedness to consolidated EBITDA as set forth in our senior unsecured credit facilities. We believe that cash flows from our operations, together with synergy opportunities from the M&M Acquisition and cost reduction initiatives, will support our deleveraging efforts over the next few years. However, we expect the weakened demand environment, as discussed below, to continue to adversely impact our cash generation in the near-term. In furtherance of our deleveraging efforts, we have paused our share repurchase program and are in the process of evaluating additional cash generation or conservation opportunities. As part of this process we reduced our quarterly dividend by approximately 95% beginning in the first quarter of 2025. We will continue to evaluate our dividend policy, taking into account our ability to return to a balanced capital allocation strategy. Our deleveraging efforts may also include, in addition to the sale of the Micromax ® business described above, other opportunistic dispositions or monetization of other product or business lines or other assets.
While our contractual obligations, commitments and debt service requirements over the next several years are significant, we continue to believe we will have available resources to meet our liquidity requirements, including debt service, for the next twelve months. If our cash flow from operations is insufficient to fund our debt service and other obligations, we may be required to use other means available to us such as increasing our borrowings, reducing or delaying capital expenditures, seeking additional capital, further reducing or pausing dividend payments, or seeking to restructure or refinance our indebtedness. There can be no assurance, however, that we will continue to generate cash flows at or above current levels.
Total capital expenditures were $343 million for the year ended December 31, 2025. We continue to focus our near-term capital expenditures on required maintenance projects and productivity improvements, as we continue to prioritize deleveraging and expect total capital expenditures to be approximately $300 million to $350 million in 2026. In Engineered Materials, at our Nanjing, China facility, our expansions of (1) the compounding plant was completed and began production activities during the three months ended December 31, 2025 and (2) the new liquid crystal polymer ("LCP") plant is in construction and on schedule for completion in the second half of 2026. Our energy optimization productivity and greenhouse gas reduction project at our polyoxymethylene ("POM") unit in Frankfurt, Germany is progressing on an extended schedule that aligns with our strategy for capital spending. In the Acetyl Chain, our planned expansion of our vinyl acetate ethylene ("VAE") emulsion plant in Frankfurt, Germany is in construction with start-up scheduled in the first half of 2026 to align with demand. We continue to see the investments made in recent years strengthen the growth and reliability, while lowering the carbon footprint, of our manufacturing network to best serve our customers.
We did not repurchase any Common Stock during the year ended December 31, 2025.
On a stand-alone basis, Celanese and its immediate 100% owned subsidiary, Celanese U.S., have no independent external operations of their own. Accordingly, they generally depend on the cash flow of their subsidiaries and their ability to pay dividends and make other distributions to Celanese and Celanese U.S. in order to meet their obligations, including their obligations under senior credit facilities and senior notes, and to pay dividends on our Common Stock.
We are subject to capital controls and exchange restrictions imposed by the local governments in certain jurisdictions where we operate, such as China, South Korea, India and Indonesia. Capital controls impose limitations on our ability to exchange currencies, repatriate earnings or capital, lend via intercompany loans or create cross-border cash pooling arrangements. Our largest exposure to a country with capital controls is in China. Pursuant to applicable regulations, foreign-invested enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, the Chinese government imposes certain currency exchange controls on cash transfers out of China, puts certain limitations on duration, purpose and amount of intercompany loans, and restricts cross-border cash pooling. While it is possible that future tightening of these restrictions or application of new similar restrictions could impact us, these limitations do not currently restrict our operations.
Cash Flows
Cash and cash equivalents increased $301 million to $1.3 billion as of December 31, 2025 compared to December 31, 2024. As of December 31, 2025, $828 million of the $1.3 billion of cash and cash equivalents was held by our foreign subsidiaries. Cash and cash equivalents held by foreign subsidiaries are largely accessible without additional material tax consequences if needed
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in the U.S. to fund operations. See Note 15 - Income Taxes in the accompanying consolidated financial statements for further information.
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
• Net Cash Provided by (Used in) Operating Activities
Net cash provided by operating activities increased $180 million to $1.1 billion for the year ended December 31, 2025 compared to $1.0 billion for the same period in 2024, primarily due to:
• favorable trade working capital of $524 million, primarily due to the timing of settlement of trade payables, inventory reductions, and the timing of collection of trade receivables during the year ended December 31, 2025;
partially offset by:
• the change in Net earnings after noncash adjustments, which resulted in a $236 million decrease of cash flows provided by operating activities for the year ended December 31, 2025.
• Net Cash Provided by (Used in) Investing Activities
Net cash used in investing activities decreased $121 million to $349 million for the year ended December 31, 2025 compared to $470 million for the same period in 2024, primarily due to:
• a decrease of $92 million in capital expenditures during the year ended December 31, 2025; and
• an increase of $21 million during the year ended December 31, 2025, primarily due to the sale of long-lived assets in our Engineered Materials segment.
• Net Cash Provided by (Used in) Financing Activities
Net cash used in financing activities decreased $800 million to $513 million for the year ended December 31, 2025 compared to $1.3 billion for the same period in 2024, primarily due to:
• an increase in proceeds from long-term debt, primarily due to $4.0 billion in proceeds received from the March 2025 Offering (defined below) and December 2025 Offering (defined below);
• a decrease in common stock dividends paid of $294 million during the year ended December 31, 2025; and
• a decrease in net payments on short-term debt of $220 million, primarily due to a decrease in net payment on our China Revolving Credit Facilities (defined below) and U.S. Revolving Credit Facility (defined below) of $138 million, and an increase in net borrowings under the China Working Capital Term Loan Agreement (defined below);
partially offset by:
• an increase in repayments of long-term debt, primarily due to payments made in connection with the March 2025 Tender Offers (defined below) and December 2025 Tender Offers (defined below) of $2.3 billion, redemption of the 6.050% Senior Notes due March 15, 2025, repayment of $880 million of the March 2022 U.S. Term Loan Credit Agreement (defined below), and redemption of the 1.250% Senior Notes due February 11, 2025, partially offset by the $527 million payment at maturity of the 5.900% senior unsecured notes and $473 million payment at maturity of the 3.500% senior unsecured notes, during the year ended December 31, 2024; and
• an increase in debt refinancing costs paid of $142 million during the year ended December 31, 2025.
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Debt and Other Obligations
• Senior Credit Facilities
In March 2022, Celanese U.S. entered into a $1.0 billion senior unsecured term loan credit agreement (as amended to date, the "March 2022 U.S. Term Loan Credit Facility") and in November 2024, Celanese U.S. entered into a $1.0 billion senior unsecured term loan credit agreement (the "November 2024 U.S. Term Loan Credit Facility"). The March 2022 U.S. Term Loan Credit Facility and the November 2024 U.S. Term Loan Facility were each fully repaid and terminated as of December 31, 2025.
On August 11, 2025, Celanese U.S. entered into a new senior unsecured revolving credit agreement (the "U.S. Revolving Credit Facility" and together with the March 2022 U.S. Term Loan Credit Facility and the November 2024 U.S. Term Loan Credit Facility, the "U.S. Credit Facilities"), consisting of a $1.75 billion senior unsecured revolving credit facility (with a letter of credit sublimit), maturing in 2030, which replaced the existing U.S. revolving credit facility. The margin for borrowings under the U.S. Revolving Credit Facility is 1.00% to 2.00% (or between 0.00% and 1.00% in the case of U.S. dollar base rate borrowings) above certain interbank rates at current Company credit ratings. The U.S. Revolving Credit Facility had no outstanding balance as of December 31, 2025
The U.S. Revolving Credit Facility is guaranteed by Celanese and certain domestic subsidiaries, together representing substantially all of our U.S. assets and business operations (the "Subsidiary Guarantors"). The March 2022 U.S. Term Loan Credit Facility and the November 2024 U.S. Term Loan Credit Facility were guaranteed by Celanese and the Subsidiary Guarantors prior to being fully repaid and terminated as of December 31, 2025. The Subsidiary Guarantors are listed in Exhibit 22.1 to this Annual Report.
Certain of our subsidiaries in China have outstanding senior unsecured bank obligations (collectively, the "China Credit Facilities"). Celanese (Shanghai) International Trading Co., Ltd ("CSIT") entered into a revolving credit facility guaranteed by Celanese U.S. (the "CSIT Revolving Credit Facility") which bears interest at a fixed rate and expired January 13, 2026. This revolving credit facility had an outstanding balance of $43 million as of December 31, 2025 and was fully repaid on January 13, 2026.
Celanese (Nanjing) Chemical Co., Ltd. ("CNCC") has entered into various working capital loans that bear interest at floating interest rates or fixed interest rates and expire on various dates beginning December 2026 through July 2028. These working capital loans have an outstanding balance of $571 million as of December 31, 2025.
On April 11, 2025, CNCC entered into a CNY100 million revolving credit facility guaranteed by Celanese U.S. (the "CNCC Revolving Credit Facility" and together with the CSIT Revolving Credit Facility, the "China Revolving Credit Facilities") expiring 12 months from the drawdown date. No draws were initiated as of December 31, 2025.
On October 20, 2025, CNCC entered into a CNY300 million working capital loan expiring three years from the drawdown date. No draws were initiated as of December 31, 2025.
We expect the China Credit Facilities will continue to facilitate our efficient repatriation of cash to the U.S. to repay debt and effectively redomicile a portion of our U.S. debt to China at a lower average interest rate.
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• Senior Notes
We have outstanding senior unsecured notes, issued in public offerings registered under the Securities Act of 1933, as amended (the "Securities Act") (collectively, the "Senior Notes") as follows:
Issue Date
Principal
Interest Rate
Interest Pay Dates
Maturity Date
(In $ millions)
(In percentages)
July 2022
July 19
July 19, 2026
August 2021
February 5
August 5
August 5, 2026
November 2018
March 1
March 1, 2027
July 2022
January 15
July 15
July 15, 2027
September 2021
September 10
September 10, 2028
August 2023
May 15
November 15
November 15, 2028
July 2022
January 19
January 19, 2029
July 2022
January 15
July 15
July 15, 2029
March 2025
April 15
October 15
April 15, 2030
August 2023
May 15
November 15
November 15, 2030
December 2025
February 15
August 15
February 15, 2031
March 2025
April 15
October 15
April 15, 2031
July 2022
January 15
July 15
July 15, 2032
March 2025
April 15
October 15
April 15, 2033
August 2023
May 15
November 15
November 15, 2033
December 2025
February 15
August 15
February 15, 2034
(1) Issued in euro.
(2) In November 2024, S&P Global Ratings downgraded our credit rating and on February 12, 2025, Moody's Ratings downgraded our credit rating, which together had the effect of increasing interest rates by 50 basis points on certain senior unsecured notes, effective on various dates beginning May 15, 2025 through January 19, 2026.
On November 17, 2025, S&P Global Ratings downgraded our credit rating and on November 25, 2025, Moody's Ratings downgraded our credit rating, which together will have the effect of increasing interest rates for certain senior unsecured notes by an additional 50 basis points, effective on various dates beginning January 15, 2026 through May 15, 2026.
(3) On March 14, 2025, Celanese U.S. completed a public offering of senior unsecured notes registered under the Securities Act in aggregate principal amounts of €750 million and $1.8 billion (the "March 2025 Offering"). On March 21, 2025, Celanese U.S. completed cash tender offers for €552 million and $500 million in aggregate principal amounts of senior unsecured notes (the "March 2025 Tender Offers").
The net proceeds from the March 2025 Offering, together with borrowings under the November 2024 U.S. Term Loan Credit Facility, were used (i) to fund the March 2025 Tender Offers, (ii) for repayment of other outstanding indebtedness, including a portion of the March 2022 U.S. Term Loan Credit Facility, borrowings under the U.S. Revolving Credit Facility and certain senior unsecured notes due March 15, 2025 and (iii) to pay related fees and expenses.
(4) On December 17, 2025, Celanese U.S. completed a public offering of senior unsecured notes registered under the Securities Act in an aggregate principal amount of $1.4 billion (the "December 2025 Offering"). In addition, on December 17, 2025, Celanese U.S. completed cash tender offers for $1.2 billion in aggregate principal amounts of senior unsecured notes (the "December 2025 Tender Offers").
The net proceeds from the December 2025 Offering were used to (i) fund the December 2025 Tender Offers, (ii) repay the outstanding borrowings under the March 2022 U.S. Term Loan Credit Facility and (iii) pay related fees and expenses.
The Senior Notes were issued by Celanese U.S. and are guaranteed on a senior unsecured basis by Celanese and the Subsidiary Guarantors. Celanese U.S. may redeem some or all of each of the Senior Notes, prior to their respective maturity dates, at a redemption price of 100% of the principal amount, plus a "make-whole" premium as specified in the applicable indenture, plus accrued and unpaid interest, if any, to the redemption date. See Note 11 - Debt in the accompanying consolidated financial statements for further information.
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• Accounts Receivable Purchasing Facility
On June 13, 2025, we entered into an amendment to the amended and restated receivables purchase agreement under our U.S. accounts receivable purchasing facility among certain of our subsidiaries, our wholly-owned, "bankruptcy remote" special purpose subsidiary ("SPE") and certain global financial institutions ("Purchasers"). We de-recognized $1.5 billion and $1.5 billion of accounts receivable under this agreement for the years ended December 31, 2025 and 2024, respectively, and collected $1.5 billion and $1.5 billion of accounts receivable sold under this agreement during the same periods. Unsold U.S. accounts receivable of $92 million were pledged by the SPE as collateral to the Purchasers as of December 31, 2025.
• Factoring and Discounting Agreements
We have factoring agreements in Europe, Japan, Singapore and China with financial institutions. We de-recognized $717 million and $700 million of accounts receivable under these factoring agreements for the years ended December 31, 2025 and 2024, respectively, and collected $724 million and $640 million of accounts receivable sold under these factoring agreements during the same periods.
We have master discounting agreements with financial institutions in China to discount, on a non-recourse basis, banker's acceptance drafts, classified as accounts receivable. We received $82 million and $100 million from the accounts receivable transferred under master discounting agreements for the years ended December 31, 2025 and 2024, respectively.
See Note 11 - Debt in the accompanying consolidated financial statements for further information.
Covenants
Our material financing arrangements contain customary covenants, including the maintenance of certain financial ratios, events of default and change of control provisions. Failure to comply with these covenants, or the occurrence of any other event of default, could result in acceleration of the borrowings and other financial obligations.
During the years ended December 31, 2025 and 2024, we amended certain covenants in certain U.S. Credit Facilities, including financial ratio maintenance covenants.
We are in compliance with the covenants in our material financing arrangements as of December 31, 2025.
Due to scheduled step downs of the required consolidated leverage ratio under the U.S. Revolving Credit Facility taking effect beginning in the first quarter of 2026, we believe we may be unable to comply with the consolidated leverage ratio in its current form within the twelve-month period subsequent to the date of this filing unless we are able to implement sufficient mitigation strategies. Such strategies include, but are not limited to, amending the outstanding U.S. Revolving Credit Facility consistent with prior similar amendments we have obtained over the past several years, obtaining a waiver of the default, replacing the U.S. Revolving Credit Facility with a new revolving credit facility, consummating additional divestitureopportunities, and/or reducing operating costs. Implementation of such strategies may increase our borrowing costs under existing material financing arrangements. If we are not able to implement sufficient mitigating strategies and are therefore not able to comply with the consolidated leverage ratio, the lenders under the U.S. Revolving Credit Facility could elect to terminate the facility. As of the date of this filing, the U.S. Revolving Credit Facility has no outstanding borrowings. We currently do not expect to draw on the U.S. Revolving Credit Facility to fund our operations or financial obligations within the twelve-month period subsequent to the date of this filing and expect to have sufficient liquidity available to meet our operational and capital investment needs and financial obligations for the foreseeable future.
See Note 11 - Debt in the accompanying consolidated financial statements for further information.
Guarantor Financial Information
We have outstanding senior unsecured notes, issued in public offerings registered under the Securities Act. The Senior Notes were issued by Celanese U.S. ("Issuer") and are guaranteed by Celanese Corporation ("Parent Guarantor") and the Subsidiary Guarantors (collectively the "Obligor Group"). See Note 11 - Debt in the accompanying consolidated financial statements for further information. The Issuer and Subsidiary Guarantors are 100% owned subsidiaries of the Parent Guarantor.
The Parent Guarantor and the Subsidiary Guarantors have guaranteed the Senior Notes on a full and unconditional, joint and several, senior unsecured basis. The guarantees are subject to certain customary release provisions, including that a Subsidiary Guarantor will be released from its respective guarantee in specified circumstances, including (i) the sale or transfer of all of its assets or capital stock; (ii) its merger or consolidation with, or transfer of all or substantially all of its assets to, another person;
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or (iii) its ceasing to be a majority-owned subsidiary of the Issuer in connection with any sale of its capital stock or other transaction. In addition, a Subsidiary Guarantor will be released from its guarantee of the Senior Notes at such time that it ceases to guarantee the Issuer's obligations under the existing U.S. Revolving Credit Facility (subject to the satisfaction of customary document delivery requirements). The obligations of the Subsidiary Guarantors under their guarantees are limited as necessary to prevent such guarantees from constituting a fraudulent conveyance or fraudulent transfer under applicable law.
The Parent Guarantor and the Issuer are holding companies that conduct substantially all of their operations through their subsidiaries, which own substantially all of our consolidated assets. The Parent Guarantor holds the stock of its immediate 100% owned subsidiary, the Issuer, but has no material consolidated assets. The principal source of cash to pay the Parent Guarantor's and the Issuer's obligations, including obligations under the Senior Notes and the guarantee of the Issuer's obligations under the existing U.S. Revolving Credit Facility, is the cash that our subsidiaries generate from their operations. Each of the Subsidiary Guarantors and our non-guarantor subsidiaries is a distinct legal entity and, under certain circumstances, applicable country or state laws, regulatory limitations and terms of other debt instruments may limit our subsidiaries' ability to distribute cash to the Issuer and the Parent Guarantor.
For cash management purposes, we transfer cash among the Parent Guarantor, Issuer, Subsidiary Guarantors and non-guarantors through intercompany financing arrangements, contributions or declaration of dividends between the respective parent and its subsidiaries. While the non-guarantor subsidiaries do not guarantee the Issuer's obligations under our outstanding debt, the transfer of cash under these activities facilitates the ability of the recipient to make specified third-party payments for principal and interest on the Senior Notes, the existing U.S. Revolving Credit Facility, other outstanding debt, Common Stock dividends and Common Stock repurchases.
The summarized financial information of the Obligor Group is presented below on a combined basis after the elimination of: (i) intercompany transactions among such entities and (ii) equity in earnings from and investments in the non-guarantor subsidiaries. Transactions with, and amounts due to or from, non-guarantor subsidiaries and affiliates are separately disclosed.
Year Ended
December 31,
(In $ millions)
Net sales to third parties
Net sales to non-guarantor subsidiaries
Total net sales
Gross profit
Earnings (loss) from continuing operations
Net earnings (loss)
Net earnings (loss) attributable to the Obligor Group
As of December 31,
(In $ millions)
Receivables from non-guarantor subsidiaries
Other current assets
Total current assets
Goodwill
Other noncurrent assets
Total noncurrent assets
Current liabilities due to non-guarantor subsidiaries
Current liabilities due to affiliates
Other current liabilities
Total current liabilities
Noncurrent liabilities due to non-guarantor subsidiaries
Other noncurrent liabilities
Total noncurrent liabilities
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Share Capital
On February 11, 2026, we declared a quarterly cash dividend of $0.03 per share on our Common Stock amounting to $3 million. The cash dividend will be paid on March 10, 2026 to holders of record as of February 24, 2026. As indicated above, as part of our deleveraging efforts, we reduced our quarterly dividend by approximately 95% beginning in the first quarter of 2025. We will continue to evaluate our dividend policy, taking into account our ability to return to a balanced capital allocation policy.
Our Board of Directors has authorized the aggregate repurchase of $6.9 billion of our Common Stock since February 2008. These authorizations give management discretion in determining the timing and conditions under which shares may be repurchased. This repurchase program does not have an expiration date. During the year ended December 31, 2025, we did not repurchase any shares of our Common Stock. As of December 31, 2025, we had $1.1 billion remaining under authorizations by our Board of Directors. As discussed above, as part of our deleveraging efforts, we have paused our share repurchase program.
See Note 14 - Shareholders' Equity in the accompanying consolidated financial statements for further information.
Contractual Obligations, Guarantees and Commitments
We estimate future interest payments on debt and other obligations calculated using interest rates in effect on December 31, 2025 to be $3.5 billion. We estimate future pension and other postretirement funding obligations to be $503 million. We have directly guaranteed various debt obligations under agreements with third parties related to certain equity affiliates. As of December 31, 2025, we have directly guaranteed $145 million and €31 million of such obligations.
We have not entered into any material off-balance sheet arrangements.
In the accompanying consolidated financial statements, see Note 10 - Current Other Liabilities for current asset retirement obligations, Note 11 - Debt for a description of the guarantees under our Senior Notes and U.S. Revolving Credit Facility, Note 12 - Benefit Obligations for a description of the pension and other postretirement funding obligations, Note 13 - Environmental for a description of environmental obligations, Note 15 - Income Taxes for a description of uncertain tax positions, Note 16 - Leases for lease obligations and Note 19 - Commitments and Contingencies for a discussion of commitments and contingencies related to legal and regulatory proceedings.
Market Risks
See Item 7A. Quantitative and Qualitative Disclosure about Market Risk for further information.
Business Environment
During the three months ended December 31, 2025, we continued to experience demand challenges in key end-markets like automotive, paints, coatings, and construction due to continued weakness in global macroeconomic conditions. Demand during this time was further impacted by greater than anticipated western hemisphere seasonality. We continue to identify and implement actions to improve earnings, accelerate deleveraging, and create long-term shareholder value.
Critical Accounting Policies and Estimates
Our consolidated financial statements are based on the selection and application of significant accounting policies. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of net sales, expenses and allocated charges during the reporting period. Actual results could differ from those estimates.
We believe the following accounting policies and estimates are critical to understanding the financial reporting risks present in the current economic environment. These matters, and the judgments and uncertainties affecting them, are also essential to understanding our reported and future operating results. See Note 2 - Summary of Accounting Policies in the accompanying consolidated financial statements for further information.
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• Recoverability of Long-Lived Assets
Recoverability of Goodwill and Indefinite-Lived Intangible Assets
We assess the recoverability of the carrying amount of our goodwill and other indefinite-lived intangible assets annually during the third quarter of our fiscal year using June 30 balances or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be fully recoverable.
When assessing the recoverability of goodwill and other indefinite-lived intangible assets, we may first assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit or another indefinite-lived intangible asset is less than its carrying amount. The qualitative evaluation is an assessment of multiple factors, including the current operating environment, financial performance and market considerations. We may elect to bypass the qualitative assessment for some or all of our reporting units or other indefinite-lived intangible assets and proceed directly to a quantitative analysis depending on the facts and circumstances.
In performing a quantitative analysis of goodwill, recoverability of goodwill for each reporting unit is measured using the income approach based on a discounted cash flow model incorporating discount rates commensurate with the risks involved or a combination of the income approach and the market approach using the guideline public company method. The key assumptions used in the discounted cash flow valuation model include discount rates, revenue growth rates, tax rates, cash flow projections and terminal value rates. Discount rates, revenue growth rates and cash flow projections are the most sensitive and susceptible to change as they require significant management judgment. Discount rates used are similar to the rates estimated by the weighted average cost of capital ("WACC") considering any differences in company-specific risk factors. Revenue growth rates and cash flow projections are based on historical trends and expected growth drivers such as macroeconomic trends in the industries and territories in which the reporting units operate. Tax rates consider the operating structure of the reporting unit and jurisdictions in which the reporting unit operates. A terminal value rate is applied to the final year of the projected periods to reflect continued stable, perpetual growth.
Management tests other indefinite-lived intangible assets quantitatively utilizing the relief from royalty method under the income approach to determine the estimated fair value for each indefinite-lived intangible asset. Key assumptions used in this model include discount rates, royalty rates, revenue growth rates, tax rates, sales projections and terminal value rates. Discount rates, royalty rates, revenue growth rates, tax rates and sales projections are the assumptions most sensitive and susceptible to change as they require significant management judgment. Discount rates used are similar to the rates estimated by the WACC considering any differences in company-specific risk factors. Royalty rates are established by management using the most recent third party valuations and are periodically substantiated by third-party valuation consultants. Revenue growth rates and sales projections are based on historical trends and expected growth drivers such as macroeconomic trends in the industries and territories in which the indefinite-lived intangible assets operate. Tax rates consider the operating structure of the Company and jurisdictions in which the entity with the rights to the indefinite-lived intangible assets operate.
Specific assumptions discussed above are updated at the date of each test to consider current industry and company-specific risk factors from the perspective of a market participant. The current business environment is subject to evolving market conditions and requires significant management judgment to interpret the potential impact to our assumptions. To the extent that changes in the current business environment result in adjusted management projections, impairmentlosses may occur in future periods.
See Note 9 - Goodwill and Intangible Assets, Net in the accompanying consolidated financial statements for further information.
• Benefit Obligations
Various assumptions are used in the calculation of the actuarial valuation of the employee benefit plans. These key assumptions include the discount rate and expected long-term rates of return on plan assets. The actuarial assumptions used may differ materially from actual results due to changing market and economic conditions. These differences may result in a significant impact to the amount of net periodic benefit cost recorded in future periods.
Pension assumptions are reviewed annually in the fourth quarter of each fiscal year and whenever a plan is required to be remeasured. Assumptions are reviewed on a plan and country-specific basis by third-party actuaries and senior management. Such assumptions are adjusted as appropriate to reflect changes in market rates and outlook.
See Note 12 - Benefit Obligations in the accompanying consolidated financial statements for further information.
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The estimated change in pension net periodic benefit cost and projected benefit obligations that would occur in 2026 from a change in the indicated assumptions are as follows:
Change in Rate
Impact on Net Periodic Benefit Cost
Impact on Projected Benefit Obligations
(In $ millions)
U.S. Pension Benefits
Decrease in the discount rate
Decrease in the long-term expected rate of return on plan assets (1)
Non-U.S. Pension Benefits
Decrease in the discount rate
Decrease in the long-term expected rate of return on plan assets
(1) Excludes nonqualified pension plans.
• Income Taxes
We regularly review our deferred tax assets for recoverability and establish a valuation allowance as needed. In forming our judgment regarding the recoverability of deferred tax assets related to deductible temporary differences and tax attribute carryforwards, we give weight to positive and negative evidence based on the extent to which the forms of evidence can be objectively verified.
The recoverability of deferred tax assets and the recognition and measurement of uncertain tax positions are subject to various assumptions and management judgment. If actual results differ from the estimates made by management in establishing or maintaining valuation allowances against deferred tax assets, the resulting change in the valuation allowance would generally impact earnings or Other comprehensive income depending on the nature of the respective deferred tax asset. In addition, the positions taken with regard to tax contingencies may be subject to audit and review by tax authorities, which may result in future taxes, interest and penalties.
See Note 15 - Income Taxes in the accompanying consolidated financial statements for further information.
Recent Accounting Pronouncements
See Note 3 - Recent Accounting Pronouncements in the accompanying consolidated financial statements for information regarding recent accounting pronouncements.
