The formation of the Nutrinova joint venture in September 2023 contributed to lower volume in the Engineered Materials segment, as the Company now accounts for its interest in the joint venture as an equity method investment.

The expansion of the acetic acid unit at Clear Lake, Texas, and the vinyl acetate ethylene (VAE) emulsions unit in Nanjing, China, were successfully commissioned and started during Q1 2024. These expansions aim to strengthen the manufacturing network and serve customers better.

The company is evaluating additional cash generation opportunities which may also include, in addition to the food ingredients joint venture described above, additional opportunistic dispositions or monetization of other product or business lines or other assets. The company is committed to rapid deleveraging and to maintaining its investment grade debt rating.

The company is proceeding with the intended closure of its Polyamide 66 (PA66) and High-Performance Nylon (HPN) polymerization units at its facility in Uentrop, Germany, and the facility in Mechelen, Belgium to optimize production costs across its global network.

Management reiterated its commitment to deleveraging following the M&M acquisition, pausing share repurchases and evaluating additional cash generation opportunities. This demonstrates a focus on financial discipline.

Higher functional spending of $24 million in our Other Activities segment, primarily due to IT integration costs, indicating ongoing efforts to integrate acquired businesses and streamline operations.

The company acknowledges that geopolitical effects impact demand conditions and the supply chain. Demand conditions and moderating raw materials costs resulted in elevated industry competitive dynamics and continuing pricing pressure across end-markets.

Celanese and Celanese U.S. depend on the cash flow of their subsidiaries and their ability to pay dividends and make other distributions to meet their obligations, including debt obligations.

The company is subject to capital controls and exchange restrictions imposed by local governments in certain jurisdictions where it operates, such as China, South Korea, India and Indonesia. These controls impose limitations on the ability to exchange currencies, repatriate earnings or capital.

Lower pricing, primarily driven by our Acetyl Chain segment due to a more balanced global demand and supply environment, as well as our Engineered Materials segment due to competitive markets, product mix, and decreased energy surcharges.

Higher volume in our Acetyl Chain segment due to increased demand for most of our products, primarily in Asia, indicating a strong competitive position in that region.

The Company manages its Acetyl Chain business segment by leveraging its ability to sell chemicals externally to end-use markets or downstream to its acetate tow, intermediate chemistry, emulsion polymers, redispersible powders and ethylene vinyl acetate polymers businesses. Decisions to sell externally and geographically or downstream and along the Acetyl Chain are based on market demand, trade flows and maximizing the value of its chemicals.

Higher accelerated depreciation expense of $37 million in our Engineered Materials segment, related to the previously announced closure of our polymerization units in Uentrop, Germany.

Our energy optimization productivity project at our polyoxymethylene (“POM”) unit in Frankfurt, Germany is on schedule in detailed engineering design, indicating efforts to improve operational efficiency.

Lower spending in our Engineered Materials segment primarily driven by distribution and administrative costs, indicating improved operational efficiency.

In Engineered Materials, at our Nanjing, China facility, our expansions of (1) the compounding plant and (2) the new liquid crystal polymer (“LCP”) plant are on schedule and in construction.

We continue to prioritize projects that drive growth and productivity in the near term and expect total capital expenditures to be approximately $425 million in 2024, primarily associated with certain investments in growth opportunities and productivity improvements.

In furtherance of these deleveraging efforts, we have paused our share repurchase program and are in the process of evaluating additional cash generation opportunities which may also include, in addition to the food ingredients joint venture described above, additional opportunistic dispositions or monetization of other product or business lines or other assets.

Our incurrence of debt to finance the purchase price for a majority of the Mobility & Materials business (the “M&M Business”) acquired from DuPont de Nemours, Inc. in November 2022 (the “M&M Acquisition”) has increased our leverage and our ratio of indebtedness to consolidated EBITDA as set forth in our senior unsecured credit facilities.

The closure of the PA66 and HPN polymerization units in Uentrop, Germany, and the facility in Mechelen, Belgium, while primarily driven by cost optimization, also likely contributes to reduced environmental impact.

We experienced below-normal underlying demand conditions across several end-markets. We continue to closely monitor the impact of, and responses to, geopolitical effects on demand conditions and the supply chain.

Demand conditions and moderating raw materials costs resulted in elevated industry competitive dynamics and continuing pricing pressure across end-markets.

We continue to closely monitor the impact of, and responses to, geopolitical effects on demand conditions and the supply chain.