The Chemours Company Reports Second Quarter 2018 Results, Double Digit Growth Across All Key Financial Metrics, EPS up 82 Percent with Adjusted EPS up 99 Percent

The Chemours Company

Interim Consolidated Statements of Operations (Unaudited)

(Dollars in millions, except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

2018

2017

2018

2017

Net sales

$

1,816

$

1,588

$

3,546

$

3,024

Cost of goods sold

1,259

1,150

2,452

2,230

Gross profit

557

438

1,094

794

Selling, general, and administrative expense

161

164

304

313

Research and development expense

20

21

40

41

Restructuring, asset-related, and other charges

10

6

20

18

Total other operating expenses

191

191

364

372

Equity in earnings of affiliates

10

10

22

17

Interest expense, net

(48)

(54)

(100)

(105)

Loss on extinguishment of debt

(38)

(1)

(38)

(1)

Other income, net

33

23

90

66

Income before income taxes

323

225

704

399

Provision for income taxes

41

64

125

87

Net income

282

161

579

312

Less: Net income attributable to non-controlling interests

1

—

1

1

Net income attributable to Chemours

$

281

$

161

$

578

$

311

Per share data

Basic earnings per share of common stock

$

1.58

$

0.87

$

3.21

$

1.69

Diluted earnings per share of common stock

1.53

0.84

3.11

1.64

Dividends per share of common stock

0.17

0.03

0.17

0.06

The Chemours Company

Interim Consolidated Balance Sheets

(Dollars in millions, except per share amounts)

(Unaudited)

June 30, 2018

December 31, 2017

Assets

Current assets:

Cash and cash equivalents

$

1,217

$

1,556

Accounts and notes receivable, net

1,095

919

Inventories

1,013

935

Prepaid expenses and other

72

83

Total current assets

3,397

3,493

Property, plant, and equipment

8,718

8,511

Less: Accumulated depreciation

(5,613)

(5,503)

Property, plant, and equipment, net

3,105

3,008

Goodwill and other intangible assets, net

189

166

Investments in affiliates

172

173

Other assets

475

453

Total assets

$

7,338

$

7,293

Liabilities

Current liabilities:

Accounts payable

$

1,175

$

1,075

Current maturities of long-term debt

13

15

Other accrued liabilities

434

558

Total current liabilities

1,622

1,648

Long-term debt, net

3,960

4,097

Deferred income taxes

255

208

Other liabilities

476

475

Total liabilities

6,313

6,428

Commitments and contingent liabilities

Equity

Common stock (par value $0.01 per share; 810,000,000 shares authorized;
186,594,368 shares issued and 176,521,132 shares outstanding at June 30,
2018; 185,343,034 shares issued and 182,956,628 shares outstanding at
December 31, 2017)

2

2

Treasury stock at cost (10,073,236 shares at June 30, 2018;

2,386,406 shares at December 31, 2017)

(500)

(116)

Additional paid-in capital

859

837

Retained earnings

1,127

579

Accumulated other comprehensive loss

(469)

(442)

Total Chemours stockholders' equity

1,019

860

Non-controlling interests

6

5

Total equity

1,025

865

Total liabilities and equity

$

7,338

$

7,293

The Chemours Company

Interim Consolidated Statements of Cash Flows (Unaudited)

(Dollars in millions)

Six Months Ended June 30,

2018

2017

Cash flows from operating activities

Net income

$

579

$

312

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization

142

142

Asset-related charges

—

2

Gain on sale of assets and businesses

(45)

(14)

Equity in earnings of affiliates, net

6

(17)

Loss on extinguishment of debt

38

1

Amortization of debt issuance costs and issue discounts

7

7

Deferred tax provision

38

38

Other operating charges and credits, net

10

13

Decrease (increase) in operating assets:

Accounts and notes receivable, net

(175)

(170)

Inventories and other operating assets

(96)

(43)

(Decrease) increase in operating liabilities:

Accounts payable and other operating liabilities

35

(46)

Cash provided by operating activities

539

225

Cash flows from investing activities

Purchases of property, plant, and equipment

(228)

(138)

Acquisition of business, net

(37)

—

Proceeds from sale of assets and businesses, net

41

38

Foreign exchange contract settlements, net

(6)

2

Cash used for investing activities

(230)

(98)

Cash flows from financing activities

Proceeds from issuance of debt, net

520

494

Debt repayments

(672)

(20)

Payments related to extinguishment of debt

(29)

(1)

Payments of debt issuance costs

(12)

(6)

Purchases of treasury stock, at cost

(394)

—

Proceeds from exercised stock options, net

13

26

Payments related to tax withholdings on vested restricted stock units

(6)

—

Payments of dividends

(61)

(11)

Cash (used for) provided by financing activities

(641)

482

Effect of exchange rate changes on cash and cash equivalents

(7)

18

(Decrease) increase in cash and cash equivalents

(339)

627

Cash and cash equivalents at January 1,

1,556

902

Cash and cash equivalents at June 30,

$

1,217

$

1,529

Supplemental cash flows information

Non-cash investing and financing activities:

Changes in property, plant, and equipment included in accounts payable

$

(1)

$

(5)

Obligations incurred under build-to-suit lease arrangement

26

—

The Chemours Company

Segment Financial and Operating Data (Unaudited)

(Dollars in millions)

Segment Net Sales

Three Months

Three Months Ended

Year-Over-Year

Ended

Sequential

June 30,

Increase /

March 31,

Increase /

2018

2017

(Decrease)

2018

(Decrease)

Fluoroproducts

$

801

$

710

$

91

$

732

$

69

Chemical Solutions

153

149

4

144

9

Titanium Technologies

862

729

133

854

8

Total Net Sales

$

1,816

$

1,588

$

228

$

1,730

$

86

Segment Adjusted EBITDA

Three Months

Three Months Ended

Year-Over-Year

Ended

Sequential

June 30,

Increase /

March 31,

Increase /

2018

2017

(Decrease)

2018

(Decrease)

Fluoroproducts

$

230

$

197

$

33

$

206

$

24

Chemical Solutions

16

7

9

11

5

Titanium Technologies

295

193

102

294

1

Corporate and Other

(44)

(36)

(8)

(43)

(1)

Total Adjusted EBITDA

$

497

$

361

$

136

$

468

$

29

Adjusted EBITDA Margin

27%

23%

27%

Quarterly Change in Net Sales from June 30, 2017

Percentage

Percentage Change Due To

June 30, 2018

Net Sales

Change vs.

June 30, 2017

Price

Volume

Currency

Portfolio /
Other

Total Company

$

1,816

14

%

9

%

3

%

2

%

—

%

Fluoroproducts

$

801

13

%

4

%

7

%

2

%

—

%

Chemical Solutions

153

3

%

(1)%

3

%

1

%

—

%

Titanium Technologies

862

18

%

16

%

(1)%

3

%

—

%

Quarterly Change in Net Sales from March 31, 2018

Percentage

Percentage Change Due To

June 30, 2018

Net Sales

Change vs.

March 31, 2018

Price

Volume

Currency

Portfolio / Other

Total Company

$

1,816

5

%

2

%

3

%

—

%

—

%

Fluoroproducts

$

801

9

%

2

%

7

%

—

%

—

%

Chemical Solutions

153

6

%

—

%

6

%

—

%

—

%

Titanium Technologies

862

1

%

1

%

—

%

—

%

—

%

The Chemours Company

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (Unaudited)

(Dollars in millions)

Adjusted EBITDA and Adjusted Net Income to GAAP Net Income Reconciliation

Adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) is defined as income (loss) before income taxes,
excluding the following: interest expense, depreciation, and amortization; non-operating pension and other post-retirement employee benefit
costs, which represent the components of net periodic pension (income) costs excluding the service cost component; exchange (gains) losses
included in other income (expense), net; restructuring, asset-related, and other charges; asset impairments; (gains) losses on sales of assets
and businesses; and, other items not considered indicative of the Company's ongoing operational performance and expected to occur
infrequently. Adjusted Net Income is defined as net income (loss) attributable to Chemours, adjusted for items excluded from Adjusted EBITDA,
except interest expense, depreciation, certain amortization, and certain provision for (benefit from) income tax amounts.

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

2018

2017

2018

2018

2017

Net income attributable to Chemours

$

281

$

161

$

297

$

578

$

311

Non-operating pension and other post-retirement
employee benefit income

(7)

(10)

(7)

(14)

(18)

Exchange gains, net

(2)

(2)

—

(2)

(7)

Restructuring and other charges

9

6

10

19

18

Asset-related and other charges

1

2

—

1

2

Loss on extinguishment of debt

38

1

—

38

1

(Gain) loss on sale of assets or businesses (1)

(3)

2

(42)

(45)

(14)

Transaction costs (2)

9

2

—

9

2

Legal and other charges (3,6)

10

10

4

14

17

Adjustments made to income taxes (4,7)

(8)

(3)

(5)

(13)

(13)

(Benefit from) provision for income taxes relating to
reconciling items (5,7)

(14)

(5)

9

(5)

(4)

Adjusted Net Income

314

164

266

580

295

Net income attributable to non-controlling interests

1

—

—

1

1

Interest expense, net

48

54

52

100

105

All remaining depreciation and amortization (6)

71

71

70

141

142

All remaining provision for income taxes (7)

63

72

80

143

104

Adjusted EBITDA

$

497

$

361

$

468

$

965

$

647

(1)

For the three months ended June 30, 2018, gain on sale includes a $3 gain associated with the sale of the Company's East Chicago, Indiana site.  For the six months
ended June 30, 2018, gain on sale includes a $3 gain and a $42 gain associated with the sales of the Company's East Chicago and Linden, New Jersey sites,
respectively.  For the three months ended June 30, 2017, loss on sale includes a $2 adjustment associated with the sale of the Company's Sulfur business in 2016. 
For the six months ended June 30, 2017, gain on sale includes a $12 gain associated with the sale of the Company's Edge Moor, Delaware site and a $4 gain
associated with the sale of the Company's land in Repauno, New Jersey that was previously deferred and realized upon meeting certain milestones, which are offset
by a $2 adjustment associated with the sale of the Company's Sulfur business in 2016.  For the three months ended March 31, 2018, gain on sale includes a $42
gain associated with the sale of the Company's Linden site.

(2)

Includes costs associated with the Company's debt transactions, as well as accounting, legal, and bankers' transaction costs incurred in connection with the
Company's strategic initiatives. 

(3)

Includes litigation settlements, PFOA drinking water treatment accruals, acquisition-related intangible asset amortization, and other charges.

(4)

Includes the removal of certain discrete income tax amounts within the Company's provision for income taxes.  For the three and six months ended June 30, 2018,
adjustments made to income taxes includes $5 and $10 in windfall tax benefits on the Company's share-based payments, respectively, and $3 in tax benefits
resulting from unrealized losses on foreign exchange rates related to toll charges pursuant to U.S. tax reform.  For the three and six months ended June 30, 2017,
adjustments made to income taxes includes $3 and $13 in windfall tax benefits on the Company's share-based payments, respectively.  For the three months ended
March 31, 2018, adjustments made to income taxes includes $5 in windfall tax benefits on the Company's share-based payments.

(5)

The income tax impacts included in this caption are determined using the applicable rates in the taxing jurisdictions in which income or expense occurred and include
both current and deferred income tax expense or benefit based on the nature of the non-GAAP financial measure.

(6)

The total amount of depreciation and amortization, including acquisition-related intangible asset amortization included in legal and other charges above, reconciles
to the amount reported in the statements of cash flows for the six months ended June 30, 2018 and 2017.

(7)

The total provision for income taxes reconciles to the amount reported in the consolidated statements of operations for the three and six months ended June 30,
2018 and 2017 and for the three months ended March 31, 2018.

The Chemours Company

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (Unaudited)

(Dollars in millions, except per share amounts)

Adjusted Earnings per Share to GAAP Earnings per Share Reconciliation

Adjusted earnings per share (EPS) is calculated by dividing Adjusted Net Income by the weighted-average number of common shares
outstanding. Adjusted Diluted EPS accounts for the dilutive impact of stock-based compensation awards, which includes unvested restricted
shares. Adjusted Diluted EPS considers the impact of potentially-dilutive securities, except in periods in which there is a loss because the
inclusion of the potentially-dilutive securities would have an anti-dilutive effect.

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

2018

2017

2018

2018

2017

Numerator:

Net income attributable to Chemours

$

281

$

161

$

297

$

578

$

311

Adjusted Net Income

314

164

266

580

295

Denominator:

Weighted-average number of common shares
outstanding - basic

177,798,484

185,069,436

182,069,982

179,922,433

184,243,461

Dilutive effect of the Company's employee
compensation plans

6,022,757

6,057,203

6,263,215

6,142,986

5,899,412

Weighted-average number of common shares
outstanding - diluted

183,821,241

191,126,639

188,333,197

186,065,419

190,142,873

Basic earnings per share of common stock

$

1.58

$

0.87

$

1.63

$

3.21

$

1.69

Diluted earnings per share of common stock

1.53

0.84

1.58

3.11

1.64

Adjusted basic earnings per share of common stock

1.77

0.89

1.46

3.22

1.60

Adjusted diluted earnings per share of common stock

1.71

0.86

1.41

3.12

1.55

2018 Estimated Adjusted EBITDA and Estimated Adjusted EPS to Estimated GAAP Net Income Reconciliation (*)

(Estimated)

Year Ended December 31, 2018

Low

High

Net income attributable to Chemours

$

985

$

1,080

Other adjustments

(45)

(45)

Restructuring, asset-related, and other charges, net

35

25

Provision for income taxes relating to reconciling items (1)

5

5

Adjusted Net Income

980

1,065

Interest expense, net

220

220

Depreciation and amortization

280

280

All remaining provision for income taxes

295

285

Adjusted EBITDA

$

1,775

$

1,850

Weighted average number of common shares outstanding - basic (2)

179,000,000

179,000,000

Dilutive effect of the Company's employee compensation plans (2)

6,000,000

6,000,000

Weighted average number of common shares outstanding - diluted (2)

185,000,000

185,000,000

Basic earnings per share of common stock

$

5.50

$

6.03

Diluted earnings per share of common stock

5.32

5.84

Adjusted basic earnings per share of common stock

5.47

5.95

Adjusted diluted earnings per share of common stock

5.30

5.76

(1)

The income tax impacts included in this caption are determined using the applicable rates in the taxing jurisdictions in which income or expense occurred and include
both current and deferred income tax expense or benefit based on the nature of the non-GAAP financial measure. 

(2)

The Company's estimates for the weighted-average number of common shares outstanding - basic and diluted reflect results for the year ended December 31, 2017,
which are carried forward for the projection period and updated for the estimated impacts of the Company's 2018 share repurchase and other activity on a weighted-
average basis.

(*)    

The Company's estimates reflect its current visibility and expectations of market factors, such as, but not limited to:  currency movements, titanium dioxide prices,
and end-market demand.  Actual results could differ materially from the current estimates due to market factors and unknown or uncertain other factors, such as
non-operating pension and other post-retirement employee benefit activity with respect to the Company's foreign pension plans, including settlements or curtailments,
cost savings actions that may be taken in the future, the impact of currency movements on the Company's results, including exchange gains and losses, and the
related tax effects, or the impact of new accounting pronouncements.

The Chemours Company

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (Unaudited)

(Dollars in millions)

Free Cash Flows to GAAP Cash Flows Provided by Operating Activities Reconciliation

Free Cash Flows is defined as cash flows provided by (used for) operating activities, less purchases of property, plant, and equipment as
shown in the consolidated statements of cash flows.

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

2018

2017

2018

2018

2017

Cash provided by operating activities

$

343

$

184

$

196

$

539

$

225

Less: Purchases of property, plant, and equipment

(126)

(69)

(102)

(228)

(138)

Free Cash Flows

$

217

$

115

$

94

$

311

$

87

2018 Estimated Free Cash Flows to GAAP Cash Flows Provided by Operating Activities Reconciliation (*)

(Estimated)

Year Ended December 31,

2018

Cash provided by operating activities

> $1,225

Less: Purchases of property, plant, and equipment

(525) - (475)

Free Cash Flows

(*)

The Company's estimates reflect its current visibility and expectations of market factors, such as, but not limited to:  currency movements, titanium dioxide prices, and
end-market demand.  Actual results could differ materially from the current estimates due to market factors and unknown or uncertain other factors, such as non-
operating pension and other post-retirement employee benefit activity with respect to the Company's foreign pension plans, including settlements or curtailments, cost
savings actions that may be taken in the future, the impact of currency movements on the Company's results, including exchange gains and losses, and the related
tax effects, or the impact of new accounting pronouncements.

Return on Invested Capital Reconciliation

Return on Invested Capital is defined as Adjusted EBITDA, less depreciation and amortization (Adjusted EBIT), divided by the average of
invested capital, which amounts to net debt, or debt less cash and cash equivalents, plus equity.

Twelve Months Ended June 30,

2018

2017

Adjusted EBITDA (1)

$

1,740

$

1,153

Less: Depreciation and amortization (1)

(273)

(287)

Adjusted EBIT

1,467

866

Total debt

3,973

4,070

Total equity

1,025

572

Less: Cash and cash equivalents

(1,217)

(1,529)

Invested capital, net

$

3,781

$

3,113

Average invested capital (2)

$

3,481

$

3,158

Return on Invested Capital

42.1

%

27.4

%

(1)

Based on amounts for the trailing 12 months ended June 30, 2018 and 2017.  Reconciliations of Adjusted EBITDA to net income (loss) attributable to Chemours
are provided on a quarterly basis.  See the preceding tables for the reconciliation of Adjusted EBITDA to net income attributable to Chemours for the three and six months
ended June 30, 2018 and 2017.

(2)

Average invested capital is based on a five-quarter trailing average of invested capital, net.