Item 1A. Risk Factors
SUMMARY OF RISK FACTORS
The following is a summary of the principal risks that could adversely affect our business, operations and financial results. For a more complete discussion of the material risks facing our business, please see below. As noted under “Forward-Looking Statements” above, these factors could affect our future results and cause actual results to differ materially from those expressed in our forward-looking statements. Investors and other readers are urged to consider all of these risks, uncertainties and other factors carefully in evaluating our business.
● Risks associated with our ability to continue as a going concern.
● Deterioration of our credit profile limiting our access to commercial credit.
● Risks related to our current and future level of indebtedness.
● Our ability to successfully innovate and develop new products.
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● Operation of our joint venture with our joint venture partners.
● Risks related to strategic acquisitions or dispositions of assets.
● The impact of global trade conflicts and the imposition of tariffs.
● Our ability to comply with environmental, health and safety laws.
● We face competitive risks related to excess supply capacity.
● Negative impacts of fluctuations in currency exchange rates.
Risks Related to Our Ability to Continue as a Going Concern
We have identified conditions and events that raise substantial doubt about our ability to continue as a going concern.Doubts regarding our ability to continue as a going concern could materially adversely affect our business, results of operations and financial condition, and share price.
We have identified certain conditions or events, which, considered in the aggregate, could raise substantial doubt about our ability to continue as a going concern, including our continued compliance with certain financial covenants contained in our debt agreements and the current maturities of our existing debt facilities, our continued liquidity and anticipated capital requirements, including service of our debt, the significant uncertainty created by the current macroeconomic and geopolitical operating environment, including global trade conflicts and the imposition of tariffs,
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inflation, geopolitical tensions or conflicts (such as the Russia-Ukraine war and military conflict in Iran), and weak demand in many of our end markets.
Based on our substantial debt balance, the uncertainty surrounding compliance with our debt covenants, our ability to obtain waivers or amendments, or our ability to restructure our indebtedness, including through an in-court or out-of-court process, we have determined that there is substantial doubt regarding our ability to continue as a going concern for a period of twelve months from the issuance of the accompanying audited consolidated financial statements.
Doubts regarding our ability to continue as a going concern could result in the loss of confidence by customers, vendors, suppliers, employees and others, which in turn could materially adversely affect our business, results of operations and financial condition. Concerns about our financial condition could adversely impact the payment terms we can obtain from some of our vendors and suppliers. As a result of such actions, our suppliers may stop extending us trade credit, demand cash in advance payments, refuse to ship materials to us and otherwise threaten to terminate their relationship with us, among other remedies.
Furthermore, we depend on our ability to retain our key employees at all levels of our business and on our ability to attract new qualified personnel. If we are unable to retain our key employees and we do not succeed in attracting new qualified personnel as a result of the uncertainty regarding our ability to continue as a going concern, our business and results of operations could suffer.
Doubts regarding our ability to continue as a going concern may also adversely impact our customers’ perceptions of our business and our continued viability, which in turn could further negatively impact our revenues. Further declines in our revenues as a result of these perceptions or otherwise may have a material adverse impact on our cash flows, results of operations and financial condition, which may require us to curtail or cease operations.
We caution that trading in our ordinary shares may be highly speculative and pose a substantial risk of loss. Trading prices for our ordinary shares may bear little or no relationship to their actual value.
See “Potential Restructuring of Our Indebtedness” in Note 1, “Going Concern” in Note 2, and “Compliance with Debt Covenants” in Note 16 to our consolidated financial statements and Item 7—Management’s Discussion and Analysis of Financial Conditions and Results of Operations— Capital Resources, Indebtedness and Liquidity, for additional information.
Unexpected payment obligations or unanticipated liabilities may create liquidity challenges and further challenge our ability to continue as a going concern.
Unexpected payment obligations or unanticipated liabilities, including, without limitation, matters arising from ongoing litigation or arbitration, governmental investigations, regulatory enforcement actions, fines or penalties, adverse tax assessments, contractual indemnities, product liability or warranty claims, intellectual property disputes, environmental remediation obligations, data privacy or cybersecurity incidents, employment-related claims, and other contingent or off-balance sheet obligations, may result in adverse outcomes, monetary awards, settlements, fines, penalties, remediation costs, or other charges against the Company, representing a condition that may raise substantial doubt about our ability to continue as a going concern, and we may not have sufficient liquidity or capital resources to meet our current or future obligations as a result. If we become subject to future unanticipated large liability claims, obligations, or losses, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis, which may adversely affect our reputation, share price, liquidity, results of operations, cash flows, and overall financial condition.
We may be unsuccessful in discussions with our financial stakeholders, including for the potential restructuring of our indebtedness or may be unable to obtain necessary waivers or amendments.
Due to the uncertainty concerning our ability to service our substantial indebtedness and meet the related financial covenant requirements, we are engaged in ongoing discussions with our financial stakeholders to review potential alternatives regarding our capital structure, including refinancings, exchange offers, consent solicitations, the issuance of new indebtedness, amendments to the terms of our existing indebtedness and/or other transactions. We have also
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engaged outside advisors with respect to these alternatives and have recently appointed two new board members with significant experience in debt restructuring and strategic transactions.
Among these alternatives is a restructuring that would, on a consensual basis, seek to modify the terms of substantially all of our outstanding indebtedness, including through an in-court or out-of-court restructuring process. We may offer to exchange the indebtedness under our 2028 Refinance Term Loans, 2028 Term Loan B, or 2029 Refinance Senior Notes for new debt and/or equity securities. In conjunction with any such transactions, we may seek consents to amend the documents governing our indebtedness to amend or eliminate certain covenants or collateral provisions. Because the terms of any such transactions will be subject to negotiations with the holders of our indebtedness, they may differ materially from those described above and are, to a large extent, outside of our control. There can be no assurance that we will decide to pursue, or be able to complete any such transactions, and there can be no assurance that any such measures will be successful.
In February 2026 we entered into an amendment to the credit agreement governing our 2028 Term Loan B (the “Senior Credit Facility”), which extended the grace period for payment of interest due before March 1, 2026 until March 19, 2026, and elected to utilize the contractually-available grace periods for payment of interest on both the 2028 Term Loan B and our 2029 Refinance Senior Notes. These grace periods will both expire on March 19, 2026. A failure to make the interest payment owed under either the Senior Credit Facility or the 2029 Refinance Senior Notes indenture (the “2L Note Indenture”) at the end of the contractually-available grace period would result in an event of default under such facilities and a cross-default under the other facility, and also result in a cross-default under our 2028 Refinance Credit Facility, our Opco Super-Priority Revolver, and our accounts receivable securitization facility.
We expect to seek amendments to our Senior Credit Facility, our 2028 Refinance Credit Facility, our OpCo Super-Priority Revolver and our accounts receivable securitization facility to waive certain acceleration and collateral enforcement rights under such facilities following certain events of default or cross-defaults. and to remove certain covenants and other provisions. There can be no assurance that any such additional waivers or amendments would be available on acceptable terms or at all.
If we seek but are unable to obtain necessary consents, waivers or amendments from our lenders, and a default or cross-default occurs under our indebtedness and our debt is accelerated, there can be no assurance that we would be able to obtain replacement financing arrangements or successfully restructure our indebtedness. Our failure to complete any of these potential alternatives, including obtaining waivers or amendments to prevent the acceleration of our indebtedness, to prevent the exercise of remedies against the collateral securing such indebtedness, such as the possession and disposal of pledged assets, or our failure to restructure our indebtedness through an in-court or out-of-court process, could have a material adverse impact on our liquidity and financial condition.
Deterioration of our credit profile could limit our access to commercial credit.
We currently maintain credit ratings near the lower end of the rating scale, which limits our financial flexibility and affects the cost and availability of our capital. Operating at these rating levels may reduce the number of lenders and counterparties willing to provide credit on acceptable terms and require us to provide cash-in-advance payments to raw material suppliers and other vendors. Any downgrade from our current ratings, any further deterioration in our credit profile, doubts about our ability to meet our payment obligations or covenants under our indebtedness, or doubts about our ability continue as a going concern, could increase our borrowing costs, reduce our credit capacity, restrict our access to commercial credit markets, or trigger additional collateral, covenant, or liquidity requirements under certain agreements. These developments could adversely affect our liquidity, financial condition, and results of operations.
Risks Related to Delisting of our Ordinary Shares
We have received notice of delisting procedures from the New York Stock Exchange (“NYSE”) and trading in our shares has been suspended, and trading may continue to be restricted with no trading market readily available.
On March 2, 2026, we received written notice (the “Notice”) from the New York Stock Exchange (the “NYSE”) that they determined to commence proceedings to delist the Company’s ordinary shares and will file a Form 25 with the SEC to delist the Company’s ordinary shares from the NYSE upon completion of applicable procedures. The delisting will be effective 10 days after the filing of the Form 25. As stated in the Notice, the NYSE reached its decision to delist the Company’s securities pursuant to Section 802.01B of the NYSE Listed Company Manual because the Company had
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fallen below the NYSE continued listing standard requiring listed companies to maintain an average market capitalization over a 30-trading day period of at least $15.0 million.
Upon suspension of trading and delisting of the Company’s ordinary shares from the NYSE, transfers of ordinary shares will be subject to Irish stamp duty at a rate of 1% of the higher of the purchase price or the market value of the shares, unless an exemption or relief is available to the purchaser. The Company’s clearing and settlement agent, Depository Trust Company, has notified the Company that as a result of the application of Irish stamp duty it will cease clearing or settling trades in our ordinary shares. Our shareholders may not be able to continue to trade in our ordinary shares without transferring their shares to another clearing and settlement agent, or into a registered position directly with the Company’s transfer agent. The Company can provide no assurance that its ordinary shares will continue trading on any market, without transfer of shares to another settlement agent or direct registration with its transfer agent. However, the Company can provide no assurance that its ordinary shares will trade or be quoted on the OTC Pink Limited Market or any other market, or, if such trading or quotation does commence, that such trading will continue, whether broker-dealers will continue to provide public quotes of its ordinary shares on this market, or whether the trading volume of its ordinary shares will be sufficient to provide for an efficient trading market for existing and potential holders of its ordinary shares. Shareholders are advised to consult with their own tax and legal counsel regarding the potential issues related to trading the ordinary shares following the suspension of trading and delisting from the NYSE. Shareholders are advised to consult with their brokers to inquire about the process to register their ordinary shares into a direct position in their name with the Company’s transfer agent, Computershare Trust Company, N.A., if they wish to sell their shares in the Company
Delisting also could limit our strategic or financial alternatives and have other negative results, including the potential loss of employee confidence or the loss of institutional investors. Similarly, customers, vendors, landlords, banks or other third parties may be less willing to transact business with us if they believe our future is uncertain, any of which could adversely impact our business, financial performance, financial position or future prospects.
Risks Related to Our Indebtedness
Our current and future level of indebtedness of our subsidiaries could adversely affect our financial condition.
Our current level of indebtedness, as well as future borrowings or other indebtedness, could have significant consequences for our business, including but not limited to:
● substantially increasing our borrowing costs;
The terms of our debt contain significant restrictions on the incurrence of additional indebtedness and pledge of existing or future assets. These restrictions are subject to certain qualifications and exceptions which could allow us to incur additional indebtedness. If new debt is added to our subsidiaries’ current debt levels, the risks related to indebtedness that we now face could intensify.
In addition, the majority of our current indebtedness is secured by virtually all of our assets, which may make it more difficult to secure additional borrowings at reasonable costs. If we default or declare bankruptcy, after these
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obligations are met, there may not be sufficient funds or assets to satisfy our subordinate interests, including those of our shareholders.
For more information regarding our indebtedness, see Item 7—Management’s Discussion and Analysis of Financial Conditions and Results of Operations— Capital Resources, Indebtedness and Liquidity.
The terms of our subsidiaries’ indebtedness may restrict our current and future operations, particularly our ability to respond to change or to take certain actions.
Our credit, debt and refinance agreements contain covenants imposing certain restrictions on our subsidiaries’ businesses. These restrictions may affect our ability to operate our business and may limit our ability to take advantage of business opportunities. These agreements restrict, among other things, our subsidiaries’ ability to:
● sell or assign assets;
● incur additional indebtedness;
● pay dividends to Trinseo PLC;
● make investments or acquisitions;
● incur liens;
● repurchase or redeem capital shares;
● engage in mergers or consolidations;
● materially alter the business they conduct;
● engage in transactions with affiliates; and
● consolidate, merge or transfer all or substantially all of their assets.
We are required to meet a minimum liquidity test under our 2028 Refinance Credit Agreement, our OpCo Super-Priority Revolver and our accounts receivable securitization facility. The OpCo Super-Priority Revolver also contains a revised springing covenant and an anti-cash hoarding covenant. The ability of our subsidiaries to comply with the covenants, financial ratios and tests contained in the Credit Agreement, the 2028 Refinance Credit Agreement, the OpCo Super-Priority Revolver and the Indenture, to pay interest on indebtedness, fund working capital, and make anticipated capital expenditures depends on our future performance, which is subject to general economic conditions and other factors, some of which are beyond our control. There can be no assurance that our business will generate sufficient cash flow from operations in an amount sufficient to enable us to service our indebtedness, or that sufficient borrowings will be available under our Senior Credit Facility, OpCo Super-Priority Revolver, 2028 Refinance Credit Facility or our accounts receivable securitization facility to fund future liquidity needs. Furthermore, if we need additional capital for general corporate purposes or to execute on an expansion strategy, there can be no assurance that this capital will be available on satisfactory terms or at all.
A failure to service or repay amounts owed under the Senior Credit Facility, 2028 Refinance Credit Facility, OpCo Super-Priority Revolver or 2L Note Indenture when due, or at the end of any applicable grace period, would result in a default. In addition, a breach of any of the covenants in the Credit Agreement, 2028 Refinance Credit Agreement, OpCo Super-Priority Revolver, Indenture or accounts receivable securitization facility, or our inability to comply with the required financial ratios, tests or limits could result in a default. A default under one of our subsidiaries’ debt agreements may trigger a cross-default under some or all of our other debt agreements. If a default occurs, lenders may refuse to lend us additional funds or terminate existing commitments, lenders or noteholders could declare all of the debt and any accrued interest and fees immediately due and payable and demand immediate repayment, or certain lenders could exercise remedies against the collateral securing their debt agreements, including but not limited to rights to take possession and dispose of certain of our assets. For more information regarding our indebtedness, please see Item 7—Management’s Discussion and Analysis of Financial Conditions and Results of Operations— Capital Resources, Indebtedness and Liquidity.
Risks Related to Our Operations
We are subject to risks associated with our strategy to transform to a specialty materials and sustainable solutions provider.
We have taken steps toward executing on our strategy to transform the Company to a specialty materials and sustainable solutions provider, including the PMMA Acquisition, the acquisition of Aristech Surfaces LLC, the sale of
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our synthetic rubber business, and the sale of our proprietary polycarbonate manufacturing assets in Stade, Germany. We plan to continue to prioritize investments in higher growth, higher margin and lower earnings volatility areas such as Engineered Materials and CASE applications, products containing recycled materials, and to deemphasize the more volatile, lower growth assets in our portfolio.
The implementation of our transformation strategy has resulted in, and may continue to result in, changes to our business, operations, capital allocation, operational and organizational structure, increased demands on management, and could result in short-term and one-time costs, including higher than expected restructuring costs, loss of revenue, and other negative impacts on our business. We cannot guarantee that the execution of this strategy, including the steps taken to date, will lead to higher growth, higher margins and lower earnings volatility. We also cannot be certain that we will be successful in identifying investments in assets we believe best fit our portfolio transformation, whether such opportunities will be available at a price and at terms acceptable to us, or at all, or whether we will face difficulties due to timing or funding availability. Implementation of this transformation may take longer than anticipated, and once implemented, we may not realize, in full or in part, the anticipated benefits or such benefits may be realized more slowly than anticipated. The failure to realize benefits, which may be due to our inability to execute, delays in implementation, global or local economic conditions, accessibility to capital markets, inflation, high interest rates, competition, and the other risks described herein, could have a material adverse effect on our business, prospects, financial condition, results of operations, cash flows, as well as the trading price of our securities.
We may be unable to achieve cost savings and other benefits from our restructuring activities and cost reduction initiatives.
We have announced several restructuring programs designed to reduce costs, streamline commercial and operational activities, improve profitability, preserve cash flow and reduce exposure to cyclical markets. These plans included workforce reductions and the elimination and consolidation of certain executive positions to streamline the Company’s internal general & administrative network. As a result of these closures, we no longer produce certain products and instead will purchase from external suppliers.
We believe these actions will reduce production risk and exposure to cyclical markets, reduce ongoing capital expenditures and future turnaround costs. We believe these actions will increase our profitability and cash generation until market conditions improve, while allowing us to continue focusing on transformation projects such as recycling and material substitution innovations, which offer growth potential even in the current market environment.
Our efforts to achieve these improvements and efficiencies may not be successful or generate expected cost savings, and we may incur greater costs than currently anticipated to complete these initiatives, which could have an adverse impact on our financial condition or results of operations. We cannot guarantee that these initiatives will successfully generate the expected cost savings or will not require additional expenditures beyond our initial estimates. The actual timing and costs of this asset restructuring may differ from our expectations and estimates, and such differences may be material.
Volatility in the cost of raw materials, disruption in the supply of raw materials, may adversely affect our financial condition and results of operations or cause our financial results to differ materially from our forecasts.
Our results of operations can be directly affected, positively and negatively, by volatility in the cost of our raw materials, which are subject to global supply and demand and other factors beyond our control. Our principal raw materials (butadiene, MMA, and styrene) together represent approximately 44% of our total cost of goods sold. Crude oil prices also impact our raw material and energy costs. Generally, higher crude oil prices lead to higher costs of natural gas and raw materials, although some raw materials are impacted less than others. Volatility in the cost of energy or raw materials makes it more challenging to manage pricing and pass the increases on to our customers in a timely manner. We believe that rapid changes in pricing have affected, and can continue to affect, the volume our customers consume. As a result, our gross profit and margins could also be adversely affected and our financial results may differ materially from our forecasts.
We have supply agreements with Dow and other suppliers for certain raw materials critical to our business. As these supply agreements expire, we may be unable to renegotiate or renew these contracts or obtain new long-term supply agreements on terms comparable to us, or at all, which may significantly impact our operations. See Item 1—Business— Sources and Availability of Raw Materials.
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If the availability of any of our principal raw materials is limited, we may be unable to produce some of our products in the quantities demanded by our customers, which could have an adverse effect on plant utilization and our sales of products requiring such raw materials. Suppliers may have temporary limitations preventing them from meeting our requirements, and we may not be able to obtain substitute alternative suppliers in a timely manner.
Increased energy costs, shipping costs and supply constraints, including as a result of ongoing global conflicts, could adversely impact our results of operations.
We use natural gas and electricity to operate our facilities and generate heat and steam for our various manufacturing processes, and these operations can be directly affected by volatility in the cost and availability of energy, which is often subject to factors outside of our control. The war between Russia and Ukraine continues to affect global energy markets, particularly in Europe, contributing to elevated volatility and higher prices for natural gas and other energy supplies. Reductions in Russian natural gas deliveries to Europe have resulted in supply constraints which are expected to persist. Prolonged or worsening natural gas shortages could lead to additional price increases, energy-supply rationing, or temporary reductions or shutdowns of our European manufacturing operations, any of which could materially and adversely affect our business or results of operations. In the past we have entered into certain commodity swap agreements to protect against fluctuations in energy prices, including natural gas, some of which have generated losses when prices stabilized. We may continue to enter into commodity swaps, forward contracts, or options from time to time. The outcome of our hedges against energy price volatility could adversely impact our results of operations.
Global conflicts and geopolitical instability may adversely affect our regional and global shipping networks, increase transportation and logistics costs, and delay shipments of our products or the raw materials on which we rely. The recent escalation of military conflict involving Iran, including retaliatory strikes across the Middle East and disruptions to commercial shipping lanes, has further strained transit routes through the Red Sea and surrounding regions. These conditions have contributed to longer transit times, elevated freight and insurance costs, and increased uncertainty for vessel availability. A broader or prolonged regional conflict could amplify these impacts, potentially disrupting key supply chains, increasing our operating costs, and materially and adversely affecting our results of operations.
Chemical manufacturing is inherently hazardous and production at our manufacturing facilities could be disrupted for a variety of reasons. Disruptions could expose us to significant losses or liabilities.
There are hazards and risks of disruption inherent in chemical manufacturing and the related storage and transportation of raw materials, products and wastes which exist in our operations and the operations of other occupants with whom we share manufacturing sites. These potential risks of disruption include, but are not necessarily limited to:
● pipeline and storage tank leaks and ruptures;
● explosions and fires;
● terrorist attacks;
● cyber-attacks to our operations or those of critical third parties;
● failures or delays in properly implementing new technologies and processes;
● exposure to toxic chemicals.
These hazards could expose employees, customers, the community and others to toxic chemicals and other hazards, contaminate the environment, damage property, result in personal injury or death, lead to an interruption or suspension of operations, damage our reputation and adversely affect the productivity and profitability of a particular manufacturing facility or us as a whole, and result in the need for remediation, governmental enforcement, regulatory shutdowns, the imposition of government fines and penalties, and claims brought by governmental entities or third parties. Legal claims and regulatory actions could subject us to both civil and criminal penalties, which could affect our product sales, reputation and profitability. Liabilities associated with the investigation and cleanup of hazardous substances, as well as personal injury, property damage or environmental damages arising from the release of, or
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exposure to, such hazardous substances, may be imposed in many situations without regard to violations of laws or regulations or other fault. These liabilities may be material and can be difficult to identify or quantify.
We are dependent upon the continued safe and reliable operation of our production facilities to minimize risks associated with our manufacturing processes, but we cannot eliminate the risk of accidental contamination, discharge or injury resulting from these materials. We have been in the past, and may be in the future, subject to claims relating to exposure to hazardous materials, and have had, from time to time in the past, incidents that have temporarily shut down or otherwise disrupted our manufacturing, causing production delays and resulting in liability for workplace injuries, environmental remediation, regulatory penalties or other claims. Systems in place to manage environmental, health and safety compliance, and our emergency response and crisis management plans may not address or foresee all potential risks or causes of disruption, or sufficiently address the impacts of such incidents on our employees, customers or the communities in which our plants reside. We cannot assure you that we will not experience these types of incidents in the future or that these incidents will not result in production delays or otherwise have a material adverse effect on our business, reputation, financial condition or results of operations.
If disruptions occur, 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 these scenarios could negatively affect our business and financial performance. 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. 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 the manufacturing facility may not be able to reach levels achieved prior to the disruption. Our insurance policies may not fully insure against all potential causes of disruption due to limitations and exclusions in those policies. Therefore, incidents that significantly disrupt our operations may expose us to significant losses and/or liabilities.
If we are not able to continue the technological innovation and successful commercial introduction of new products, our customers may turn to other producers to meet their requirements.
Our industry and the end markets into which we sell our products experience periodic technological changes and ongoing product improvements. Our customers may introduce new generations of their own products or require new technological and increased performance specifications that would require us to develop customized products. Our future growth will depend on our ability to predict and react to changes in key end markets, and to successfully develop, manufacture and market products in such changing end markets. We need to continue to identify, develop and market innovative products on a timely basis to replace existing products in order to maintain our profit margins and our competitive position. We may not be successful in developing new products and technology that successfully compete with these materials, and our customers may not accept any of our new products. We may also face regulatory or operational difficulties in our ability to scale up new technologies, including recycling technology, to meet customer demand or keep up with competition. If we fail to keep pace with evolving technological innovations or fail to modify our products in response to our customers’ needs, then our business, financial condition and results of operations could be adversely affected as a result of reduced sales of our products.
If we are unable to execute on our capital projects, growth or maintenance projects within their expected budget and timelines, or if the market conditions assumed in our projections deteriorate, our business, financial condition, results of operations and cash flows could be materially and adversely affected.
We rely on capital projects, including plant improvements, maintenance activities, turnaround projects, and growth initiatives, to maintain the reliability of our operations and support our long-term strategy. Our recent actions to close certain underperforming or uncompetitive plants and product lines and exit from underperforming assets have reduced overall capital expenditure requirements. Further, we have proactively reduced capital expenditures in response to our financial performance, capital allocation priorities, and elevated borrowing costs. Operating with this reduced capital spending may increase the risk of equipment failures, unplanned outages, or delays in implementing operational improvements, any of which could adversely affect our production capabilities, costs, and financial results.
Capital projects and other investments often require long lead times, and market conditions may change materially between the approval of a project and its completion, negatively affecting expected returns. Decisions to defer, scale back, or cancel projects due to liquidity constraints, credit-rating considerations, or other financial pressures may limit
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our ability to maintain or enhance our manufacturing capabilities, pursue strategic initiatives, or respond to market opportunities.
In addition, delays or cost increases related to engineering, procurement, and construction activities, or to the development of new technologies, could materially adversely affect our ability to achieve forecasted operating results. Project delays or budget overruns may arise from factors beyond our control, including:
● delays in obtaining required regulatory approvals, licenses, or permits;
● increases in the cost of construction materials, labor, or utilities;
● transportation disruptions affecting components or materials;
● disease outbreaks and related governmental responses;
● shortages of skilled labor or labor disputes; or
● non‐performance or disputes with vendors, suppliers, contractors, or partners
If we are unable to execute capital projects within expected budgets or timelines, or if market conditions deteriorate during the project period, our business, financial condition, results of operations, and cash flows could be materially and adversely affected.
Risks Related to Acquisitions and Dispositions
We may not be successful in the proposed divestiture of our interest in Americas Styrenics.
In 2024 we announced that we had commenced a sale process for our interest in Americas Styrenics LLC, pursuant to an ownership exit provision in our joint venture agreement. We may not be able to accurately estimate the timing of the Americas Styrenics sale process or signing of a final agreement, valuation or purchase price, or whether economic or other market conditions will impact the timing, price or market interest. We cannot estimate whether economic conditions, capital markets, or other factors will allow us to successfully complete the sale of Americas Styrenics, or to locate an adequate buyer or buyers for our remaining styrenics business, negotiate terms of a sale acceptable to the Company or successfully complete such sale.
A successful divestiture depends on various factors, including our ability to effectively transfer liabilities, contracts, facilities and employees to any purchaser, revise our legal entity structure, negotiate continued equity ownership, identify and separate intellectual property, reduce fixed costs previously associated with the divested assets or business, and collect the proceeds from any sale. Any divestiture may result in a dilutive impact to our future earnings if we are unable to offset the dilutive impacts from the loss of revenue associated with the divested business, as well as significant write-offs, including those related to long-lived assets, including goodwill and other intangible assets, which could have a material adverse effect on our results of operations and financial condition. All of these efforts require varying levels of management resources, which may divert our attention from other business operations.
Joint ventures may not operate according to their business plans if we or our partners fail to fulfill our or their obligations, or differences in views among our joint venture partners result in delayed decisions, which may adversely affect our results of operations and may force us to dedicate additional resources to these joint ventures.
For the year ended December 31, 2025, we received dividends of $12.5 million from our Americas Styrenics joint venture. We may enter into additional joint ventures in the future. The nature of a joint venture requires us to share control with unaffiliated third parties. If joint venture partners do not fulfill their obligations, the affected joint venture may not be able to operate according to its business plan. In that case, our results of operations may be adversely affected and we may be required to increase the level of our commitment to the joint venture. Differences in views among joint venture participants and our inability to unilaterally implement sales and production strategies or determine cash distributions from joint ventures may significantly impact short-term and longer-term financial results, financial condition and the value of our ordinary shares.
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We may fail to realize the anticipated benefits of acquisitions or such benefits may take longer to realize than expected, and we may encounter difficulty integrating these businesses into our operations. We may also be required to incur impairment and other charges, which would adversely affect our operating results.
Our ability to realize the anticipated benefits of acquisitions will depend on our ability to successfully integrate the underlying businesses into ours. The Company has devoted significant attention and resources integrating the operations, systems, processes and procedures of the acquired businesses, and we expect to continue to do so. If we fail to effectively integrate or grow acquired businesses, we could lose or diminish the expected benefits of these acquisitions. We also face risks that we fail to meet our financial and strategic goals, due to, among other things, inability to grow the acquired business, achieve expected margins and grow relationships with customers. Further, these acquisitions may not result in the realization of the cost and revenue synergies and benefits that we expected at the time of the acquisitions, nor can we give assurances that these benefits will be achieved when expected or at all.
These risks may force us to write down the book value of underperforming acquired businesses. We may also be adversely affected by other economic, business, and/or competitive factors which did not exist at the time of closing. Such conditions could materially adversely impact our business and results of operations.
We may engage in other future strategic disposition or acquisitions of certain assets and/or businesses that could affect our business, results of operations, financial condition and liquidity.
We may selectively pursue collaboration agreements, joint ventures or complimentary acquisitions which inherently involves a number of risks and presents financial, managerial and operational challenges, including, but not limited to:
● difficulty maintaining relationships with customers;
● hiring additional management and other critical personnel;
● generating expected cost savings and synergies from the acquisition; and
● increasing the scope, geographic diversity and complexity of our operations.
Also, the presence of one or more material liabilities of an acquired company that are unknown to us at the time of acquisition may have a material adverse effect on our business or financial results. Our acquisition and joint venture strategy may not be successfully received by customers or other stakeholders, and we may not realize any anticipated benefits from these other acquisitions or joint ventures.
We may pursue dispositions of certain other assets and/or businesses, which may involve material amounts of assets or lines of business, and adversely affect our results of operations, financial condition and liquidity. If any such dispositions were to occur, under the terms of our outstanding third party indebtedness we may be required to apply the proceeds of the sale to repay any borrowings under such facilities and may also involve continued financial involvement in the divested business, such as through continuing equity ownership, transition service agreements, supply agreements, guarantees, indemnities or other current or contingent financial obligations.
Risks Related to Regulation and Compliance
We are subject to customs, international trade, export control, and antitrust laws that could require us to modify our current business practices and incur increased costs.
We are subject to numerous regulations, including customs and international trade laws, export/import control laws, and associated regulations. These laws and regulations limit the countries in which we can do business; the persons or entities with whom we can do business; the products which we can buy or sell; and the terms under which we can do business, including anti-dumping restrictions. In addition, we are subject to antitrust laws and zoning and occupancy laws that regulate manufacturers generally and/or govern the importation, promotion and sale of our products, the operation of factories and warehouse facilities and our relationship with our customers, suppliers and competitors. If any of these laws or regulations were to change or were violated by our management, employees, suppliers, buying agents or trading companies, the costs of certain goods could increase, or we could experience delays in shipments of our goods, be subject to fines or penalties, or suffer reputational harm, which could reduce demand for our products and hurt our business and negatively impact results of operations. In addition, in some areas we benefit from certain trade protections,
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including anti-dumping protection and the EU’s Authorized Economic Operator program, which provides expedited customs treatment for materials crossing national borders. If we were to lose these protections, our results of operations could be adversely affected.
Global trade conflicts and the imposition of tariffs may have a material adverse impact on our business and results of operations.
Various governments have adopted or may adopt protectionist trade policies seeking to impose tariffs, or renegotiate or terminate certain existing trade relationships or trade agreements. During 2025, the Trump administration announced and changed tariff polices on certain goods imported to the United States. The tariff landscape is continually changing and varies by country. We are not able to predict whether such tariffs will be permanent, whether new tariffs will be implemented or which jurisdictions would be impacted. In addition, recent U.S. Supreme Court decisions addressing executive authority and administrative rulemaking have added further uncertainty to the tariff and trade policy environment. Uncertainty over global tariffs has and may continue to delay purchasing decisions by our customers as they assess the impact of such trade policies on their business. Further changes in trade policy, trade restrictions, tariffs, or other governmental action have the potential to adversely impact our costs, including prices of raw materials, or demand for our products or our customers’ products, which in turn could adversely impact our business, financial condition and results of operations.
We could be subject to changes in the global and local tax regulatory environments in the jurisdictions in which we operate, which could adversely impact our results of operations.
We are subject to income taxes in Ireland, the United States, and numerous other foreign jurisdictions where our subsidiaries are organized. Due to economic and political conditions, tax rates in these jurisdictions may change significantly. Our effective tax rate in the future can be impacted by changes in the mix of earnings in countries with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws or their interpretations, and other administrative or judicial rulings, and changes to our uncertain tax positions. Our tax returns are subject to examination by local tax authorities and other governmental bodies. We regularly assess the probability of an adverse outcome resulting from these examinations when determining our provision for income taxes. There is an inherent uncertainty to the outcome of these examinations. If it is determined that the taxes we owe are in excess of amounts previously accrued, our operating results and cash flows could be adversely affected.
Effective from 2024, the Organization for Economic Co-operation and Development’s Global Anti-Base Erosion rules under Pillar Two have been enacted by the European Union and other countries in which the Company operates. These rules impose a global minimum corporate tax rate of 15% on multinational enterprises. As the OECD continues to update their administrative guidance, additional jurisdictions enact similar legislation, transitional relief expires, and other provisions and guidance of Pillar Two go into effect, our effective tax rate and cash tax payments could increase in future years which could have an adverse impact on our future operating results and cash flows.
Regulatory and statutory changes, including those related to climate change and sustainability, applicable to our raw materials and products or our customers’ products, or changes to consumer preferences or public perception, could require material expenditures, changes in our operations and could adversely affect our financial condition and results of operations.
Changes in environmental, health and safety regulations in jurisdictions where we manufacture and sell our products could lead to a decrease in demand for our products. In addition to changes in regulations, customers, investors and other stakeholders are increasingly focusing on environmental issues and disclosures, including climate change, energy and water use, greenhouse gas emissions and other sustainability concerns. Change in public sentiment may result in changing demands for our products or could cause changes in the market dynamics of our existing products, impacting pricing, or cause us to incur additional costs to make changes to our operations to comply with such demand changes. Compliance with new regulations could increase the costs incurred to manufacture our products, or costs incurred by our customers to use our products and otherwise limit the use of these products and lead to decreased demand which would have an adverse effect on our business and results of operations. Our inability to meet investor, industry or stakeholder sustainability goals could materially impact our financial condition and results of operations.
Materials such as acrylonitrile, ethylbenzene, styrene, butadiene, bisphenol-A (“BPA”), MMA, UV-stabilizers, and halogenated flame retardant and others are used in the manufacturing of our products and have come under scrutiny due
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to potentially significant or perceived health and safety concerns. In addition, per- and polyfluoroalkyl substances (“PFAS”), chemicals used in products which require anti-dripping, temperature, chemicals, or fire resistance properties, are under heightened governmental and regulatory scrutiny in the U.S., Europe and other countries for potential contamination of soil, air and water, specifically in drinking water. The hazard classification of our products, or materials in our products, could change due to new data or toxicology studies, which may make sales of such products difficult to certain customers or in certain markets if we are unable to manufacture products without such classified materials. Heightened regulatory scrutiny, consumer protection actions or customer disapproval of these types of materials could lead to regulatory action or declining sales and could adversely affect our results of operations and financial condition.
Moreover, bans on single-use plastic, restrictions on microplastics and similar regulatory actions to reduce plastic waste and influence consumer preferences for sustainable and recyclable materials may reduce the demand for some of our products over time. New or proposed legislation addressing the global challenge of plastic waste may place responsibility on producers and sellers to include recycled content in their products. This legislation or other market factors, may impact our sales and place more importance on our initiatives to further develop technologies for recycled products.
Additionally, these regulatory regimes currently require significant compliance expenditures and future regulatory changes applicable to our raw materials and products or our customers’ products, could require significant additional expenditures or changes in our operations. Governmental inquiries or lawsuits involving these chemicals could lead us to incur liability for damages or other costs, lead to civil proceedings, the imposition of fines and penalties, or other remedies, and potentially add costs or restrictions to our manufacturing operations in the future.
Our products are also used in a variety of end-uses that have specific regulatory requirements such as those relating to products that have contact with food or medical device end-uses. Our customers or distributors may not follow our policies and advice regarding the safe use and application of our products, which may unknowingly expose us to third-party claims. We and many of the applications for the products in the end markets in which we sell our products are regulated by various national and local rules, laws and regulations, such as the U.S. Toxic Substances Control Act and the EU’s Registration, Evaluation, Authorisation and Restriction of Chemicals regulations. An increasing number of countries continue to adopt similar requirements, which could require significant compliance expenditures or changes to our sales and marketing strategies and operations. Changes to existing regulations could result in additional compliance costs, seizures, confiscations, recall or monetary fines, any of which could prevent or inhibit the development, distribution and sale of our products. Changes in environmental and safety laws and regulations banning or restricting the use of these residual materials in our products, or our customers’ products, could adversely affect our results of operations and financial condition. Failure to appropriately manage safety, human health, product liability and environmental risks associated with our products, product life cycles and production processes could adversely impact employees, communities, stakeholders, our reputation and the results of our operations.
Compliance with extensive and evolving environmental, health and safety laws may require substantial expenditures.
We use large quantities of hazardous substances, generate hazardous waste and emit wastewater and air pollutants in our manufacturing operations. Consequently, our operations are subject to extensive environmental, health and safety laws and regulations at both the national and local level in multiple jurisdictions. Many of these laws and regulations have become more stringent over time and the costs of compliance with these requirements may continue to increase, including costs associated with any capital investments for pollution control facilities. In addition, our production facilities and operations require operating permits, licenses or other approvals that may be subject to periodic renewal and, in circumstances of noncompliance, may be subject to revocation. The necessary licenses, permits or other approvals may not be issued or continue in effect, and any issued licenses, permits or approvals may contain more stringent limitations that restrict our operations or that require further expenditures to meet the permit requirements.
This continuing focus on climate change in jurisdictions in which we operate has and will continue to result in new environmental regulations that may require us to incur additional costs in complying with new regulatory and customer requirements, which may adversely impact our operations and financial condition. Compliance with more stringent environmental requirements would likely increase our costs of transportation and storage of raw materials and finished products, as well as the costs of storage and disposal of waste. Additionally, we may incur substantial costs, including penalties, fines, damages, criminal or civil sanctions and remediation costs for the failure to comply with these laws or permit requirements.
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We may be subject to losses due to liabilities or lawsuits related to contaminated land we own or operate or arising out of environmental damage or personal injuries associated with exposure to chemicals or the release of chemicals.
Under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and similar statutes outside the U.S., the current or former owner or operator of a property contaminated by hazardous substance releases is subject to strict, unlimited, joint, several and retroactive liability for the investigation and remediation of the property, and also may be liable for natural resource damages associated with the releases. In addition to potential statutory liability, we also face the risk that individuals could seek damages for personal injury due to exposure to chemicals at our facilities, chemicals which have been released from our facilities, chemicals otherwise owned or controlled by us, or chemicals which allegedly migrated from products containing our materials. We face ongoing regulatory action by certain government agencies related to a spill at our Bristol site (see Item 3—Legal Proceedings). We may be subject to claims with respect to workplace exposure, workers’ compensation and other health and safety matters. Legal claims and regulatory actions could subject us to both civil and criminal penalties, which could affect our reputation as well as our results of operations, financial condition, and liquidity.
There are several properties which we own on which Dow has been conducting remediation to address historical contamination, while there are other properties with historical contamination that are owned by Dow that we lease for our operations. While we did not assume the liabilities associated with these properties in the U.S., because CERCLA and similar laws can impose liability for contamination on the current owner or operator of a property, even if it did not create the contamination, there is a possibility that a governmental authority or private party could seek to include us in an action or claim for remediation or damages, even though the contamination may have occurred prior to our ownership or occupancy. While Dow has agreed to indemnify us for liability for releases of hazardous materials that occurred prior to our separation from Dow, the indemnity is subject to monetary and temporal limitations. The period for new claims at these sites has expired. Sites acquired after the Dow Separation are subject to a different limitations period or may not be subject to any indemnification. We cannot be certain that Dow will fully honor the indemnity or that the indemnity will be sufficient to satisfy all claims that we may incur. Any active remedial projects on our properties which were part of the Dow Separation are being performed by Dow pursuant to its indemnification obligations. In addition, we face the risk that future claims might fall partially or fully outside of the scope of the indemnity, particularly if there is a release of hazardous materials that occurs in the future or at any time after our separation from Dow or if the condition requiring remediation is attributable to a combination of events or operations occurring prior to and after our separation from Dow. The Company believes it has set adequate reserves for all remediation projects it is currently undertaking.
Risks Related to Litigation
We are party to certain legal proceedings, and may be subject to additional litigation, arbitration or legal proceedings in the future.
From time to time, we may be involved in litigation, arbitration or other legal proceedings relating to claims arising out of our operations, business, including but not limited to disputes over prior dispositions or other transactions, disputes over pricing or payments, or disputes over service or maintenance costs at sites we do not own. The results of any current or future legal proceedings cannot be predicted with certainty and, regardless of the outcome, we may incur significant costs and experience a diversion of management resources as a result of such proceedings. The results of any such proceedings could have a material adverse impact on our business, financial condition, cash flows and results of operations.
The Company records accruals for legal matters which are both probable and reasonably estimable, and the Company believes that it has adequately accrued for ongoing legal matters as appropriate. Litigation and arbitration are inherently unpredictable and, although the Company believes that its accruals are adequate and/or that it has valid defenses in such matters, unfavorable resolutions could occur that are in excess of amounts accrued or which could have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
Risks Related to Our Relationship with Dow
Dow provides significant operating and other services, and certain raw materials used in the production of our products, under agreements that are important to our business. The failure of Dow to perform its obligations, or the termination of these agreements, could adversely affect our operations.
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Prior to the Dow Separation, we were operated by Dow, which has provided and continues to provide services under certain agreements that are important to our business. We are a party to (i) SAR SSAs; (ii) supply and sales agreements; and (iii) the AR MOD5 Agreement, the terms of which permit either party to terminate the applicable agreement in a variety of situations, including in the event of the other party’s uncured material breach, insolvency, change of control or cessation of operations. Should Dow fail to provide these services or raw materials, or should any of the above agreements be terminated, we would be forced to obtain these services and raw materials from third parties or provide them ourselves. Additionally, if Dow terminates agreements pursuant to which we are obligated to provide certain services, we may lose the fees received by us under these agreements. The failure of Dow to perform its obligations under, or our inability to renegotiate, renew or replace any of these contracts, particularly without an alternative source of raw materials, could adversely affect our operations. Depending on market conditions at the time of any such termination, we may not be able to enter into substitute arrangements in a timely manner. For more information regarding our relationship with Dow, please see Item 1—Business — Our Relationship with Dow.
We are party to certain license agreements with Dow relating to intellectual property that is essential to our business. Because of this relationship, we may have limited ability to expand our use of certain intellectual property beyond the field of the license or to police infringement that may be harmful to our business.
In connection with the Dow Separation, we acquired ownership of, or in some cases, a worldwide right and license to use, certain patents, patent applications and other intellectual property of Dow that were used by Dow to operate our business segments or held by Dow primarily for the benefit of our business segments, prior to the Dow Separation. Generally, we acquired ownership of the intellectual property that was primarily used in our business segments and acquired a license to a more limited set of intellectual property that had broader application within Dow beyond our core business segments. Our license from Dow is perpetual, irrevocable, fully paid, and royalty-free. Furthermore, our license from Dow is exclusive within our business segments for certain patents and patent applications that were used by Dow primarily prior to our separation, subject to licenses previously granted by Dow, and to certain retained rights of Dow, including Dow’s retained right to use patents and patent applications outside of our business segments and for internal consumption by Dow. Our license from Dow relates to polymeric compositions, manufacturing processes and end applications for the polymeric compositions; and is limited to use in defined areas corresponding to our current business segments excluding certain products and end-use application technology retained by Dow. Our ability to develop, manufacture or sell products and technology outside of these defined areas may be impeded by the intellectual property rights that have been retained by Dow, which could adversely affect our business, financial condition and results of operations. Additionally, infringement on these intellectual property rights could also impact our business and competitive position. We may not be able to enforce our rights, and Dow may be unwilling to enforce its rights, with respect to this intellectual property that has been licensed by Dow.
Risks Related to Our Intellectual Property
Our business relies on intellectual property and other proprietary information and our failure to adequately protect or effectively enforce our rights, or our ability to successfully license our intellectual property, could harm our competitive advantages with respect to the manufacturing of some of our products.
Our success depends to a significant degree upon our ability to protect, preserve and enforce our intellectual property rights, including patents, trademarks, licenses, trade secrets and other proprietary information of our business. However, we may be unable to prevent third parties from using our intellectual property and other proprietary information without our authorization or independently developing intellectual property and other proprietary information that is similar to or competes with ours. Any inability by us to effectively prevent the unauthorized use of our intellectual property and other proprietary information by others could reduce or eliminate any competitive advantage we have developed, cause us to lose sales or otherwise harm our business or goodwill. If it becomes necessary for us to initiate litigation to protect our proprietary rights, any proceedings could be burdensome and costly, and we may not prevail.
We may be unable to determine when third parties are using our intellectual property rights without our authorization, particularly our manufacturing processes. In addition, we cannot be certain that any intellectual property rights that we have licensed to third parties are being used only as authorized by the applicable license agreement. The undetected, unremedied, or unauthorized use of our intellectual property rights or the legitimate development or acquisition of intellectual property that is similar to or competes with ours by third parties could reduce or eliminate the
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competitive advantage we have as a result of our intellectual property, adversely affecting our financial condition and results of operations.
We have licensed certain intellectual property and proprietary manufacturing processes to a third party as part of a sale and license of our polycarbonate manufacturing plant assets in Stade, Germany. Our inability to enforce our licensing rights or ownership of our intellectual property could have an adverse effect on our financial condition.
If we fail to adequately protect our intellectual property and other proprietary information, including our processes, apparatuses, technology, trade secrets, trade names and proprietary manufacturing know how, methods and compounds, through obtaining patent protection, securing trademark registrations and securing our trade secrets through the use of confidentiality agreements of appropriate scope and other means, our competitive advantages over other producers could be materially adversely affected. If we determine to take legal action to protect, defend or enforce our intellectual property rights, any suits or proceedings could result in significant costs and diversion of our resources and our management’s attention. We may not prevail in any such suits or proceedings. A failure to protect, defend or enforce our intellectual property rights could have an adverse effect on our financial condition and results of operations.
Our products may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products.
Many of our competitors have a substantial amount of intellectual property that we must continually strive to avoid infringing as we improve our own business processes and develop new products and applications. Although it is our policy and intention not to infringe valid patents of which we are aware, we cannot provide assurances that our processes and products and other activities do not and will not infringe issued patents (whether present or future) or other intellectual property rights belonging to others. There nonetheless could be third-party patents that cover our products, processes or technologies, and it is possible that we could be liable for infringement of such patents and could be required to take remedial or curative actions to continue our manufacturing and sales activities with respect to one or more products that are found to be infringing. We may also be subject to indemnity claims by our business partners arising out of claims of their alleged infringement of the patents, trademarks and other intellectual property rights of third parties in connection with their use of our products. Intellectual property litigation often is expensive and time-consuming, regardless of the merits of any claim, and our involvement in such litigation could divert our management’s attention from operating our business. If we were to discover that any of our processes, technologies or products infringe on the valid intellectual property rights of others, we may not be able to obtain the necessary licenses on acceptable terms, or at all, or be able to modify our processes or technologies or re-engineer our products in a manner that is successful in avoiding infringement. Moreover, if we are sued for infringement and lose, we could be required to pay substantial damages and/or be enjoined from using or selling the infringing products or technology. Any of the foregoing could cause us to incur significant costs and prevent us from selling our products and could have an adverse effect on our financial condition and results of operations.
Risks Related to Data Security
Cybersecurity incidents including data breaches could compromise confidential information related to our business or the private information of our employees, vendors, and customers, or could negatively impact our operations, which could adversely affect our business and our reputation.
Cybersecurity incidents including data breaches could compromise our confidential information, personal identifiable information (“PII”) of our employees, vendors, or customers, or cause a failure of our computer systems. A cyber security incident or data breach could result in the loss of confidential information or PII, and could negatively impact business operations and pose a negative impact on our operations, reputation or financial results. Such incidents may result from external threats including cyber-attacks by criminal groups, state-sponsored actors or social-activist (hacktivist) organizations or internal threats including malicious employees, mishandled information or inappropriate access. Cybersecurity threats are constantly evolving, becoming more sophisticated and being made by groups and individuals with a wide range of expertise and motives, increasing the difficulty of detecting and successfully defending against them. Furthermore, in addition to using our computer systems, we rely on computer systems operated by third-party service providers. If our third-party service providers experience a cybersecurity incident, it could compromise our confidential information or cause a disruption in our operations. A cybersecurity incident or breach of our systems, or that of a third-party service provider, could lead to ransom, shutdown or destruction of our critical manufacturing systems, manufacturing downtimes or operational disruptions, and other significant costs, which could adversely affect
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our reputation, financial condition and results of operations. In addition, the loss or disclosure of PII of our employees, vendors, or customers as a result of a data breach may result in violations of various data privacy regulations and expose us to litigation, fines and other penalties. Therefore, any such cybersecurity incident, disruptions to our operations or violations of data privacy laws could negatively impact our business, reputation and results of operations.
Risks Related to our Information Systems
The suspension of a new enterprise resource planning (“ERP”) system implementation could cause disruption to our operations.
We began a multi-year transition to a new ERP system intended to replace most of our core financial systems, but the project was paused in 2023 as a cost-control measure and has not restarted. At this time, we do not expect the project to resume in the foreseeable future. The continued suspension of the ERP implementation, or any future restart that does not proceed as planned or fails to operate as intended, could negatively affect the effectiveness of our internal control over financial reporting. These types of disruptions could adversely impact our business, operating results, and financial condition. Additionally, if the ERP project is eventually reinitiated, significant resources and further refinement may be required to achieve the anticipated benefits.
Risks Related to Our Ordinary Shares
Irish law differs from the laws in effect in the U.S. and may afford less protection to holders of our securities than companies formed in the U.S.
It may not be possible to enforce court judgments obtained in the U.S. against us in Ireland based on the civil liability provisions of the U.S. federal or state securities laws. In addition, there is some uncertainty as to whether the courts of Ireland would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers based on the civil liabilities provisions of the U.S. federal or state securities laws or hear actions against us or those persons based on those laws. There is no treaty between Ireland and the U.S. providing for the reciprocal enforcement of foreign judgments. Therefore, a final judgment for the payment of money rendered by any U.S. federal or state court based on civil liability, whether or not based solely on U.S. federal or state securities laws, would not automatically be enforceable in Ireland.
As an Irish company, Trinseo is governed by the Irish Companies Acts, which differ in some material respects from laws generally applicable to U.S. corporations and shareholders, including, among others, differences relating to interested director and officer transactions and shareholder lawsuits. Likewise, the duties of directors and officers of an Irish company generally are owed to the company only. Shareholders of Irish companies generally do not have a personal right of action against directors or officers of the company and may exercise such rights of action on behalf of the company only in limited circumstances. Accordingly, holders of our shares may have more difficulty protecting their interests than would holders of securities of a corporation incorporated in a jurisdiction of the U.S.
Provisions of our articles of association and Irish law could delay or prevent a takeover of us by a third party.
Our articles of association could delay, defer or prevent a third-party from acquiring us, despite the possible benefit to our shareholders. For example, our articles of association impose advance notice requirements for shareholder proposals and nominations of directors to be considered at shareholder meetings, and our articles also require supermajority approval from shareholders to amend or repeal our articles of association.
In addition, several mandatory provisions of Irish law could prevent or delay an acquisition of Trinseo. For example, Irish law does not permit shareholders of an Irish public limited company to take action by written consent with less than unanimous consent. We are also subject to provisions of Irish law relating to mandatory bids, voluntary bids, requirements to make a cash offer and minimum price requirements, as well as rules requiring the disclosure of interests in our ordinary shares in certain circumstances.
These provisions may discourage potential takeover attempts, discourage bids for our ordinary shares at a premium over the market price, and may negatively impact the voting and other rights of our shareholders. These provisions could also discourage proxy contests and make it more difficult for our shareholders to elect directors other than those nominated by our board of directors.
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Any attempts to take us over will be subject to Irish Takeover Rules and subject to review by the Irish Takeover Panel.
We are subject to the Irish Takeover Rules, under which our board of directors will not be permitted to take any action which might frustrate an offer for our ordinary shares once it has received an approach which may lead to an offer or has reason to believe an offer is imminent.
As an Irish public limited company, certain capital structure decisions regarding the Company will require the approval of shareholders, which may limit the Company’s flexibility to manage its capital structure.
Irish law provides that a board of directors may allot shares (or rights to subscribe for or convertible into shares) only with the prior authorization of shareholders, for a maximum period of five years, as specified in the articles of association or relevant shareholder resolution. At our most recent annual general meeting, shareholders authorized the allotment of up to 20% of the nominal value of the Company’s issued ordinary share capital for a period of 18 months. Approval from the Company’s shareholders, by ordinary resolution, being a resolution passed by a simple majority of votes cast, on or prior to expiration, will be required to renew this authorization. Our ability to issue equity without this authorization could be limited which could adversely affect our securities holders.
Irish law also generally provides shareholders with preemptive rights when new shares are issued for cash; however, it is possible for the Company’s articles of association, or shareholders in general meeting, to exclude preemptive rights. At our most recent annual general meeting, shareholders authorized the exclusion of preemptive rights for a period of 18 months for (i) the issuance of shares for cash in connection with any rights issue; and (ii) the issuance of shares for cash not to exceed 5% of our issued ordinary share capital (with an additional 5% provided the company uses it for an acquisition or specified capital investment). Renewal of this exclusion requires approval by Company’s shareholders, by special resolution, being a resolution passed by not less than 75% of votes cast, on or prior to expiration. Should this exclusion not be approved, our ability to issue equity could be limited which could adversely affect our securities holders.
General Risks
Conditions in the global economy and capital markets may adversely affect our results of operations, financial condition and cash flows.
Our products are sold in markets that are sensitive to changes in general economic conditions, such as sales of automotive and construction products. Downturns in general economic conditions can cause fluctuations in demand for our products, product prices, volumes and margins.
Rising inflation rates, recessions, turbulence in the credit markets, fluctuating commodity prices, volatile exchange rates, social and political instability and other challenges affecting the global economy can affect us and our customers. Instability and uncertainty in financial and commodity markets throughout the world may cause, among other things, severely diminished liquidity and credit availability, rating downgrades of certain investments and declining valuations and pricing volatility of others, volatile energy and raw material costs, geopolitical issues and failure and the potential failure of major financial institutions. Adverse events affecting the health of the economy, including recessionary conditions, inflation, sovereign debt and economic crises, natural disasters, disease epidemics or pandemics, political unrest, terrorism, protectionism, tariffs, refugee crises, and war or the threat of war, could have a negative impact on the health of the global economy. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions or on the stability of global markets. For example, current macroeconomic and political instability caused by inflation, geopolitical tensions or conflicts, such as the Russia-Ukraine war and military conflict in Iran, could continue to adversely impact global markets and our results of operations. A disease outbreak or pandemic, similar to the COVID-19 pandemic, could negatively impact economies in the countries in which we operate and adversely impact our business, liquidity, financial condition and results of operations. During any period of uncertainty or heightened market volatility, consumer confidence may decline which could lead to a decline in demand for our products or a shift to lower-margin products, which could adversely affect sales of our products and profitability, result in impairments of certain of our assets, and could negatively impact our business, liquidity, financial condition and results of operations.
Deterioration in the financial and credit market heightens the risk of customer bankruptcies and delay in payment. We are unable to predict the duration of the current economic conditions or their effects on financial markets, our
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business and results of operations. In addition, we have experienced, and expect to continue to experience, increased capital costs due to increases in global interest rates. If our access to capital were to become significantly constrained, or if costs of capital increased significantly due to increased interest rates, adverse credit ratings, prevailing industry conditions, the volatility of the capital markets or other factors, or if economic conditions were to further deteriorate, then our financial condition, our results of operations, and cash flows could be adversely affected.
As a global business, we are exposed to local business risks in different countries, which could have a material adverse effect on our financial condition or results of operations.
We have significant operations worldwide, including manufacturing facilities, R&D facilities, sales personnel and customer support operations. Our international operations are subject to risks inherent in doing business in foreign countries, including, but not necessarily limited to:
● tariffs, export duties, or import quotas;
● domestic and foreign customs and tariffs or other trade barriers;
● restrictive labor and employment laws;
● potential staffing difficulties and labor disputes;
● managing and obtaining support and distribution for local operations;
● increased costs of transportation or shipping;
● credit risk and financial conditions of local customers and distributors;
● potential difficulties in protecting intellectual property;
● risk of nationalization of private enterprises by foreign governments;
● potential imposition of restrictions on investments;
● foreign currency exchange restrictions and fluctuations; and
We may not be successful in developing and implementing policies and strategies to address the foregoing factors in a timely and effective manner at each location where we do business. Consequently, the occurrence of one or more of the foregoing factors could have a material adverse effect on our international operations or upon our financial condition and results of operations.
Our operations in developing markets could expose us to political, economic and regulatory risks that are greater than those we may face in established markets. For example, we operate in some nations that have experienced significant levels of governmental corruption. Any failure by us to ensure that our employees and agents comply with applicable laws and regulations in foreign jurisdictions could result in substantial civil and criminal penalties or restrictions on our ability to conduct business in certain foreign jurisdictions or reputational damage, and our results of operations and financial condition could be materially and adversely affected.
We face competitive risks related to excess supply capacity.
Our products generally compete based on quality, reliability, customer specification, as well as our customer service and length and depth of our customer relationships. Certain Trinseo products compete primarily on price and therefore may face greater competition where comparable products are readily available. Excess supply capacity in the markets where we operate may create negative pricing pressure on these products. Our competitors in certain markets, primarily in Asia, have added or may add significant production capacity, which additional supply could negatively impact our sales, pricing and margins in those regions where new capacity is added or excess supply is made available. Our inability to compete in these markets could have a material effect on our financial condition and results of operations.
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Fluctuations in currency exchange rates may significantly impact our results of operations and may significantly affect the comparability of our results between financial periods.
Our operations are conducted by subsidiaries in many countries. The results of the operations and the financial position of these subsidiaries are reported in the relevant foreign currencies and then translated into U.S. dollars at the applicable exchange rates for inclusion in our consolidated financial statements. The main currency to which we are exposed is the euro, as approximately 46% of our net sales were generated in Europe in 2025. To a lesser degree, we are also exposed to other currencies, including, among others, the Chinese yuan, South Korean won, Swiss franc, and New Taiwan dollar. The exchange rates between these currencies and the U.S. dollar have fluctuated significantly in recent years and may continue to do so in the future. A depreciation of these currencies against the U.S. dollar, in particular the euro, will decrease the U.S. dollar equivalent of the amounts derived from these operations reported in our consolidated financial statements and an appreciation of these currencies will result in a corresponding increase in such amounts. Because some of our raw material costs are procured in U.S. dollars rather than on these currencies, depreciation of these currencies may have an adverse effect on our profit margins or our reported results of operations. Conversely, to the extent that we are required to pay for goods or services in foreign currencies, the appreciation of such currencies against the U.S. dollar will tend to negatively impact our results of operations. In addition, currency fluctuations may affect the comparability of our results of operations between financial periods.
We incur currency translation risk whenever we enter into either a purchase or sale transaction using a currency other than the local currency of the transacting entity. From time to time, we enter into foreign exchange forward contracts to hedge fluctuations associated with certain monetary assets and liabilities, primarily accounts receivable, accounts payable and certain intercompany obligations. However, attempts to hedge against foreign currency fluctuation risk may not be able to effectively limit our exposure to intermediate or long-term movements in currency exchange rates, which could adversely impact our financial condition or results of operations. Given the volatility of exchange rates, there can be no assurance that we will be able to effectively manage our currency translation risks or that any volatility in currency exchange rates will not have a material adverse effect on our financial condition or results of operations.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Trinseo’s business and production operations rely on secure access, processing, storage, and transmission of company confidential and personal identifiable information within various technology platforms. The Company has processes in place to monitor, identify, assess and respond to material risks from cybersecurity threats. We maintain a cyber risk management program to identify, protect, detect, respond and recover from cyber threats and incidents. Our cybersecurity risk management and internal controls programs are aligned to ISO27001 Standards and the National Institute of Standards and Technology (NIST) framework.
As part of our program management activities, we actively engage internal and prominent external experts, as well as industry participants, as part of our continuing efforts to evaluate and enhance the effectiveness of our cybersecurity policies and procedures. The Company has adopted a cybersecurity incident response plan (the “Incident Response Plan”) which defines our approach for prompt detection, analysis and determination of materiality, prioritization and mitigation of cybersecurity incidents. The Incident Response Plan also includes criteria for escalation to cross-functional committees, including executive management, and notification to our Board, as appropriate. Management also periodically performs tabletop exercises to simulate actual cyber threats to strengthen our policies, standards and related governance processes in response to cyber events. In addition, our internal audit function performs periodic audits or other evaluations to assess our cybersecurity program and compliance with policies and procedures.
Our cybersecurity program is managed by a dedicated Chief Information Security Officer (“CISO”). Our CISO has formal education in information technology and extensive cybersecurity program management experience with over three decades of diverse experience in the chemicals and manufacturing industries and maintains various information security certifications. Our CISO is accountable for the enterprise-wide cybersecurity strategy for both information technology (IT) and operations technology (OT), including significant third-party risks. The cybersecurity team, led by
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our CISO, is responsible for policies, standards, architecture, tools, training and processes to keep Trinseo secure. Our CISO provides regular updates to our Digital Steering or Cybersecurity Steering management committees.
Our Board of Directors has ultimate oversight of cybersecurity risk and our CISO provides periodic reports and updates concerning our cybersecurity program to the Board, as well as our Chief Executive Officer and other members of our senior management, as appropriate. Cybersecurity reports to the Board generally occur at least annually, with updates as deemed necessary by our CISO or senior management. These reports include updates on the Company’s cyber risks and threats, the status of projects to strengthen our information network and data security, assessments of the information security program, and the emerging threat landscape.
The Audit Committee is responsible for oversight of the Company’s Incident Response Plan, including evaluation of material incidents, response and other related actions, and SEC reporting obligations, which is reviewed at least annually, or as circumstances warrant.
Trinseo faces risks from cybersecurity threats that could have a material adverse effect on our business strategy, results of operations, financial condition, cash flows or reputation. Trinseo has experienced, and will continue to experience, cyber incidents in the normal course of our business. Trinseo has not experienced any material cybersecurity incidents or incurred material expenses related to cybersecurity incidents. As of the date of this report, we are not aware of any material risks from cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, financial condition or reputation. See Item 1A Risk Factors for a discussion of cybersecurity risks.
Item 2. Properties
We own and operate production units at 20 manufacturing sites and one recycling facility around the world. In addition, we source products from 7 sites owned by our joint venture. We also own or lease other properties, including office buildings, warehouses, research and development facilities, testing facilities and sales offices.
The following table sets forth a list of our principal offices, production sites and other facilities as of December 31, 2025:
Corporate Offices
Dublin Ireland Leased Corporate office Not applicable
Paris France Leased Corporate office Not applicable
Wayne USA (PA) Leased Global operating center Not applicable
Hong Kong Hong Kong Leased Regional operating center Not applicable
Pfäffikon Switzerland Leased Regional operating center Not applicable
Midland USA (MI) Leased Regional operating center Not applicable
Production Sites
Bristol USA (PA) Leased PMMA Resins Engineered Materials
Dalton USA (GA) Owned Latex Latex Binders
Florence USA (KY) Owned PMMA Sheets Engineered Materials
Hamina Finland Owned Latex Latex Binders
Hoek The Netherlands Owned Compounds and blends Engineered Materials
Hsinchu Taiwan Owned TPEs, Compounds and blends Engineered Materials
Mussolente Italy Owned TPEs Engineered Materials
Norrkoping Sweden Owned Latex Latex Binders
Rheinmünster* Germany Owned Latex Latex Binders
Rho Italy Owned PMMA Resins, MMA Engineered Materials
Saint Avold France Owned PMMA Sheets Engineered Materials
Schkopau* Germany Leased Polystyrene Polymer Solutions
Tessenderlo* Belgium Leased Polystyrene Polymer Solutions
Tsing Yi+ Hong Kong Leased Polystyrene Polymer Solutions
Ulsan Korea Owned Latex Latex Binders
Utrecht ** The Netherlands Leased Recycling facility Polymer Solutions
Zhangjiagang* China Leased Latex, ABS Latex Binders, Polymer Solutions
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R&D Facilities
Dalton USA (GA) Owned Latex Latex Binders
Florence USA (KY) Leased PMMA Sheets Engineered Materials
Hsinchu Taiwan Owned Compounds and blends, TPEs Engineered Materials
Midland 1300 USA (MI) Leased Latex Latex Binders
Mussolente Italy Owned TPEs Engineered Materials
Rheinmünster Germany Owned Latex Latex Binders
Rho Italy Owned PMMA Resins Engineered Materials
+ Facility located on property owned by the applicable government.
++ Facility located on property under certification with right to build.
The following table sets forth a list of principal offices, production sites and other facilities used by our 50%-owned joint venture, Americas Styrenics, as of December 31, 2025:
Site Name Location Leased/owned Products/Functions Business Segments
Americas Styrenics
Allyn’s Point USA (CT) Leased Polystyrene Americas Styrenics
Cartegena Colombia Owned Polystyrene Americas Styrenics
Hanging Rock USA (OH) Leased Polystyrene Americas Styrenics
Joliet USA (IL) Owned Polystyrene Americas Styrenics
Marietta USA (OH) Owned Polystyrene Americas Styrenics
St. James USA (LA) Owned Styrene monomer Americas Styrenics
Torrance USA (CA) Leased Polystyrene Americas Styrenics
We believe that our properties and equipment are generally in good operating condition and are adequate for our present needs. Production capacity at our sites can vary depending upon product mix and operating conditions.
A majority of our global production facilities are certified to ISO 9001 standards. Our manufacturing facilities have established reliability and maintenance programs and leverage production between sites to maximize efficiency.
Our plants often have similar layouts, technology and manufacturing processes, depending upon the product being manufactured. We believe this global uniformity creates a key competitive advantage for us and helps lower overall operating costs.
Item 3. Legal Proceedings
From time to time, we may be subject to various legal claims and proceedings incidental to the normal conduct of business, relating to such matters as product liability, antitrust, competition, waste disposal practices, release of chemicals into the environment, current and former employees, and other matters that may arise in the ordinary course of our business. Regardless of the outcome, legal proceedings can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. For information regarding new matters and material developments in legal proceedings during the year ended December 31, 2025, see “Litigation Matters” in Note 19 to our consolidated financial statements.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities
The principal market on which our ordinary shares is traded is the New York Stock Exchange (“NYSE”), under the ticker symbol “TSE.” On March 2, 2026, we received written notice (the “Notice”) from the NYSE that they determined to commence proceedings to delist the Company’s ordinary shares and will file a Form 25 with the SEC to delist the Company’s ordinary shares from the NYSE upon completion of applicable procedures. The delisting will be effective 10 days after the filing of the Form 25. As stated in the Notice, the NYSE reached its decision to delist the Company’s securities pursuant to Section 802.01B of the NYSE Listed Company Manual because the Company had fallen below the NYSE continued listing standard requiring listed companies to maintain an average market capitalization over a 30-trading day period of at least $15.0 million. None of the Notice, suspension of trading or delisting from the NYSE is expected to affect the Company’s business operations, its relationships with partners or employees or its current SEC reporting obligations.
As of March 5, 2026, there were two record holders of our ordinary shares, 40,708,436 ordinary shares issued, and 36,559,868 ordinary shares outstanding. We have approximately 10,645 beneficial holders who hold shares through brokerage accounts under street names.
Stock Performance Graph
The following performance graph reflects the comparative changes in the value from December 31, 2020 through December 31, 2025, assuming an initial investment of $100 and the reinvestment of dividends or other cash distributions, if any, in (1) our ordinary shares, (2) the S&P 500 Chemicals Industry GICS Level 3 Index, and (3) the S&P SmallCap 600 Index. The share price performance shown in the graph is not necessarily indicative of future price performance.
Ireland Tax Considerations
The following is a summary discussion of the material Irish tax considerations of the acquisition, ownership and disposition of your ordinary shares that may be applicable to you. It is not intended to be, nor should it be construed to be, legal or tax advice. This discussion is based on Irish laws and regulations as they stand on the date of this report and
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is subject to any change in law or regulations or changes in interpretation or application thereof (and which may possibly have a retroactive effect). Investors should therefore consult their own professional advisers as to the effects of state, local or foreign laws and regulations, including Irish tax law and regulations, to which they may be subject.
There are currently no governmental laws, decrees or regulations in Ireland that restrict the remittance of dividends or other payments to non-resident holders of the Company’s shares.
Dividends paid by Trinseo will generally be subject to Irish dividend withholding tax (currently at a rate of 25%). U.S. resident shareholders may claim an exemption from the dividend withholding tax by holding their shares in an account through the Depository Trust Company and having on file with their broker or qualifying agent a valid U.S. address on the record date of the dividend, or by completing certain Irish dividend withholding tax exemption forms or filing a certification of U.S. residency (Form 6166).
Trinseo shareholders who receive their dividends subject to Irish dividend withholding tax will generally have no further liability for Irish income tax, provided a statement is presented to the Irish authorities of the dividend withholding tax imposed.
While there are provisions in the U.S.-Ireland Double Tax Treaty regarding withholding, it would generally be unnecessary for U.S. resident shareholders to rely on the treaty provisions due to the broad scope of withholding tax exemptions available under Irish domestic law.
Item 6.Reserved
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion summarizes the significant factors affecting the operating results, financial condition, liquidity and cash flows of our Company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the audited consolidated financial statements and the accompanying notes thereto, included elsewhere within this Annual Report. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and all other non-historical statements in this discussion are forward-looking statements and are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management and are made as of the date of this Annual Report. See “Cautionary Note Regarding Forward-Looking Statements.” Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere within this Annual Report, particularly in Item 1A—“Risk Factors.” Definitions of capitalized terms not defined herein appear in the notes to our consolidated financial statements.
2025 Highlights and Recent Developments
For the year ended December 31, 2025, we had net loss of $545.6 million, including $140.3 million of restructuring and other charges, and Adjusted EBITDA of $162.5 million. Adjusted EBITDA decreased compared to 2024 primarily due to lower volumes across all business segments and margin compression in Polymer Solutions and Latex Binders as a result of competitive price pressure particularly in Europe and Asia.
The Company continues to critically review its liquidity and anticipated capital requirements, including for service of the Company's debt. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As of December 31, 2025, the Company had liquidity of $334.2 million and an accumulated deficit of $1,339.3 million and used cash in operations of $102.4 million during the year ended December 31, 2025. The Company expects continued operating losses and significant cash outflows from operating activities in the near term. Current macroeconomic and geopolitical conditions, including inflation, conflicts (such as the Russia-Ukraine war and military conflict in Iran), have created, and continue to create, significant uncertainty in operations, and weaker demand in many of our end markets, which have had, and are expected to continue to have, a material adverse effect on the Company's financial performance and liquidity forecasts.
The Company’s debt agreements include financial covenants, including a minimum liquidity requirement of $100.0 million under the 2028 Refinance Credit Agreement and additional liquidity‐related covenants under the OpCo
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Super‐Priority Revolver. Although the Company was in compliance with these covenants as of December 31, 2025, based on current forecasts, available borrowing capacity, and expected operating conditions, the Company believes it is unlikely to remain in compliance with these covenants for at least the twelve months following issuance of these financial statements. Failure to meet these covenant requirements in the future would cause the Company to be in default and could cause the maturity of the related debt to be accelerated and become immediately payable absent obtaining waivers from its lenders or negotiating amendments to avoid acceleration of its indebtedness. There can be no assurance that any such waivers or amendments would be available on acceptable terms or at all.
In February 2026 we entered into an amendment to the credit agreement governing our 2028 Term Loan B (the “Senior Credit Facility”), which extended the grace period for payment of interest due before March 1, 2026 until March 19, 2026, and elected to utilize the contractually-available grace periods for payment of interest on both the 2028 Term Loan B and our 2029 Refinance Senior Notes. These grace periods will both expire on March 19, 2026. A failure to make interest payments owed under the Senior Credit Facility or the 2029 Refinance Senior Notes indenture (the “2L Note Indenture”) at the end of the contractually-available grace periods would result in an event of default under these facilities, and also result in a cross-default under our 2028 Refinance Credit Facility, our Opco Super-Priority Revolver, and our accounts receivable securitization facility.
We expect to seek amendments to our Senior Credit Facility, our 2028 Refinance Credit Facility, our OpCo Super-Priority Revolver and our accounts receivable securitization facility to waive certain acceleration and collateral enforcement rights under such facilities following certain events of default or cross-defaults and to remove certain covenants and other provisions, prior to the end of the contractually-available grace periods. There can be no assurance that any such additional waivers or amendments would be available on acceptable terms or at all.
As a result of these factors, the Company has concluded that substantial doubt exists about its ability to continue as a going concern within one year after the date of issuance of these consolidated financial statements.
Financing and Liquidity Actions
In early 2025, we completed a series of refinancing transactions pursuant to a Transaction Support Agreement executed with key creditor groups. These actions extended our nearest debt maturity to 2028, improved operating liquidity, and reduced outstanding principal through an exchange of our 2029 senior notes. We issued approximately $380.0 million of new second-lien notes in exchange for substantially all of the existing 2029 notes, added a $115.0 million tranche under our 2028 term loan facility to retire the existing notes, and established a new $300.0 million super-priority revolving credit facility that replaced our prior revolver.
Polycarbonate Technology License Transaction
During 2025, we completed the delivery of a polycarbonate technology license and related production equipment under agreements valued at approximately $52.5 million. As a result, we recognized $27.4 million of income in the Polymer Solutions segment upon satisfying our performance obligations in 2025.
Strategic Operational Initiatives
In the fourth quarter of 2025, the Company, upon authorization from the Board of Directors, approved two restructuring plans to streamline our manufacturing footprint and exit underperforming assets. These actions include the planned closure of our MMA and ACH production sites in Italy and the closure of our polystyrene facility in Schkopau, Germany, with consolidation of remaining PS production in Belgium. Once fully implemented, these initiatives are expected to deliver roughly $30.0 million of annualized profitability improvements beginning in 2026.
Dividend Suspension
On October 3, 2025, the Company’s Board of Directors indefinitely suspended the quarterly dividend of $0.01 per share which is expected to save approximately $1.5 million annually.
New York Stock Exchange Delisting Notification
On March 2, 2026, we received written notice (the “Notice”) from the New York Stock Exchange (the “NYSE”) that the NYSE had determined to commence proceedings to delist the Company’s ordinary shares. Trading in our
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ordinary shares was suspended on February 27, 2026. As stated in the Notice, the NYSE reached its decision to delist the Company’s securities pursuant to Section 802.01B of the NYSE Listed Company Manual because the Company had fallen below the NYSE continued listing standard requiring listed companies to maintain an average market capitalization over a 30-trading day period of at least $15 million. The Company had previously received written notice from the NYSE on December 12, 2025 that it was no longer in compliance with Section 802.01B of the NYSE Listed Company Manual due to the fact that the Company’s average total market capitalization over a consecutive 30 trading-day period was less than $50 million and, at the same time, its stockholders’ equity was less than $50 million, and that it was also not in compliance with Section 802.01C of the NYSE Listed Company Manual because its average closing share price had fallen below $1.00 per share for 30 consecutive trading days. As stated in the Notice, the NYSE will file a Form 25 with the SEC to delist the Company’s ordinary shares from the NYSE. The delisting will be effective 10 days after the filing of the Form 25.
Exploration for Divestiture of Americas Styrenics
In March 2024, the Company announced it commenced a sale process for the Company’s interest in Americas Styrenics, via the initiation of an ownership exit provision in the joint venture agreement. Trinseo and Chevron Phillips Chemical Company LP, co-owners of Americas Styrenics, have decided to pursue a joint sale process. We, along with our partner, remain committed to sell Americas Styrenics, with our focus being to maximize value, given recent volatility in equity and debt markets, a signing may not occur until there are improvements in those underlying markets.
Results of Operations
Results of Operations for the Years Ended December 31, 2025, 2024, and 2023
Year Ended
December 31,
(in millions) 2025 % 2024 % 2023 %
Impairment and other charges — — % — — % 349.5 10 %
Other expense (income), net (25.2) (1) % 3.9 — % (17.2) — %
Provision for income taxes 42.6 1 % 30.5 1 % 68.4 2 %
2025 vs. 2024
Net Sales
Net sales decreased 15% compared to the prior year, reflecting a 10% reduction in sales volumes across all business segments due to continued weakness in end-market demand and a 6% decrease from lower pricing. These impacts were partially offset by a 1% benefit from favorable foreign currency exchange rates.
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Cost of Sales
Cost of Sales decreased 14% year-over-year primarily due to a 7% reduction from lower sales volumes and a 7% decrease due to lower pricing.
Gross Profit
The $99.7 million, or 38% decrease in gross profit was primarily due to margin compression in Polymer Solutions and Latex Binders from competitive price pressure particularly in Europe and Asia. See the segment discussion below for further information.
Selling, General and Administrative Expenses
SG&A expenses increased $90.0 million, or 28%, compared to the prior year. The increase was driven by $41.5 million of non-cash accelerated amortization of capitalized software assets related to the transition of our current ERP system to a cloud-based platform, $27.1 million of costs associated with the debt refinancing completed in the first quarter, $19.2 million of restructuring-related costs, $7.1 million reflecting prior-year pre-tax gains on asset sales that did not recur, and $4.6 million of higher spending on strategic initiatives. These increases were partially offset by a $9.5 million reduction in employee-related compensation accruals.
Equity in Earnings of Unconsolidated Affiliates
The decrease in equity earnings of $18.5 million was due to lower polystyrene volumes and higher raw material input costs, as well as unplanned outages during 2025.
Impairment and other charges
There were no impairment charges during the years ended December 31, 2025 and 2024. During the year ended December 31, 2023, the Company recorded a non-cash goodwill impairment charge of $349.0 million related to the Engineered Materials reporting unit, as described within Note 14 in the consolidated financial statements. The Company also recorded impairment charges of $0.5 million related to the Boehlen styrene monomer assets during the year ended December 31, 2023, as described within Note 18 in the consolidated financial statements.
Interest Expense, Net
The increase in interest expense, net of $6.3 million, or 2%, was primarily attributable to the increased year-over-year usage of our short-term borrowings under the Accounts Receivable Securitization Facility and the OpCo Super-Priority Revolver as well as the additional interest margin incurred from payment in kind elections (“PIK Interest Election”) during 2025. These increases were partially offset by a decrease in market interest rates on our variable rate debt, specifically the 2028 Term Loan B. Refer to Note 16 in the condensed consolidated financial statements for further information.
Loss on Extinguishment of Long-Term Debt
Loss on extinguishment of long-term debt was $0.2 million for the year ended December 31, 2025, this is comprised entirely of the write-off of unamortized deferred financing costs due to the Company redeeming the 2025 Senior Notes in January 2025, in which the notes were cancelled and the related indenture was satisfied and discharged.
Loss on extinguishment of long-term debt was $0.6 million for the year ended December 31, 2024, this is comprised entirely of the write-off of unamortized deferred financing costs due to the Company terminating the 2010 A/R Facility in July 2024 and paying the outstanding amount in full.
Other Expense (Income), Net
Other income, net for the year ended December 31, 2025 was $25.2 million. Other income, net was primarily comprised of $27.4 million of license income for polycarbonate technology. This was partially offset by $0.3 million of foreign exchange translation gains, which included $27.6 million of foreign exchange transaction gains primarily from
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the remeasurement of our euro denominated payables due to the relative change in rates between the U.S. dollar and the euro during the period, offset by $27.3 million of losses from our foreign exchange forward contracts.
Other expense, net for the year ended December 31, 2024 was $3.9 million. Other expense, net was comprised of foreign exchange transaction losses of $1.7 million, which included $19.5 million of foreign exchange transaction losses primarily from the remeasurement of our euro denominated payables due to the relative changes in rates between the U.S. dollar and the euro during the period, partially offset by $17.8 million of gains from our foreign exchange forward contracts.
Provision for Income Taxes
Provision for income taxes was $42.6 million and $30.5 million for the years ended December 31, 2025 and 2024, respectively, which resulted in an effective tax rate of (8)% and (10)%, respectively. The increase in provision for income taxes in 2025 was primarily driven by the increase in valuation allowance in France, Germany and the Netherlands, as well as the geographical mix of earnings, partially offset by the increase in valuation allowance in China in 2024.
Selected Segment Information
The Company’s reportable segments are as follows: Engineered Materials, Latex Binders, Polymer Solutions, and Americas Styrenics. Refer to Item 1—Business for a description of our segments, including a detailed overview, products and end uses, and competition and customers.
The following sections present net sales, Adjusted EBITDA, and Adjusted EBITDA margin by segment for the years ended December 31, 2025, 2024, and 2023. Inter-segment sales have been eliminated. Refer to Note 23 in the consolidated financial statements for a detailed definition of Adjusted EBITDA and a reconciliation of income from continuing operations before income taxes to segment Adjusted EBITDA.
Engineered Materials Segment
Year Ended
December 31, Percentage Change
Adjusted EBITDA margin 11 % 9 % 4 %
2025 vs. 2024
The 8% decrease in net sales was attributable to an 8% decrease due to lower sales volumes from PMMA Resins, Rigid Compounds, and MMA.
Adjusted EBITDA increased $14.8 million, of which $29.8 million was due to higher margins resulting from mix improvements, $14.0 million was from lower fixed costs, $0.6 million was from favorable currency impacts, and $0.4 million was from favorable foreign exchange rate impacts. These increases were partially offset by a $30.0 million decrease due to the lower sales volumes from PMMA Resins, Rigid Compounds, and MMA.
Latex Binders Segment
Year Ended
December 31, Percentage Change
Adjusted EBITDA margin 9 % 10 % 9 %
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2025 vs. 2024
The 17% decrease in net sales was primarily due to a 11% decrease due to lower sales volumes in paper and board and textile applications in Europe and a 7% decrease from lower price from the pass-through of lower raw material costs. These decreases were partially offset by a 1% increase from favorable foreign exchange rate impacts.
The $28.3 million, or 30%, decrease in Adjusted EBITDA was primarily due to a $28.8 million, or 30%, decrease due to lower sales volumes and a $10.0 million decrease from lower margins. These decreases were partially offset by a $9.3 million increase from lower fixed costs, a $0.8 million increase from favorable foreign exchange rate impacts, and a $0.4 million increase from favorable currency impacts.
Polymer Solutions Segment
Year Ended
December 31, Percentage Change
Adjusted EBITDA margin 6 % 6 % 3 %
2025 vs. 2024
Net sales decreased 20% year-over-year, driven by an 11% decline in sales volumes and a 10% decrease from lower pricing due to unfavorable product mix. These impacts were partially offset by a 1% benefit from favorable foreign currency exchange rates.
The $16.8 million, or 20%, decrease in Adjusted EBITDA was primarily due to a $56.2 million, or 66%, decrease due to lower sales volume and a $39.7 million, or 46%, decrease due to lower margins. These decreases were partially offset by a $50.7 million, or 59%, increase from lower fixed costs from the exit of styrene production, a $27.4 million, or 32% increase from polycarbonate technology licensing income, and a $0.8 million, or 1%, increase from favorable foreign exchange rate impacts.
Americas Styrenics Segment
Year Ended
December 31, Percentage Change
Adjusted EBITDA* $ (3.1) $ 15.4 $ 62.1 (120) % (75) %
*The results of this segment are comprised entirely of earnings from Americas Styrenics, our equity method investment. As such, Adjusted EBITDA related to this segment is included within “Equity in earnings of unconsolidated affiliates” in the consolidated statements of operations.
2025 vs. 2024
The decrease in Adjusted EBITDA was mainly due to a costs associated with unplanned outages in the second and third quarter at its styrene production facility, lower polystyrene volumes, as well as lower margins from higher raw material input costs.
Outlook
The Company is expecting a delay in demand recovery and lower cumulative growth than previously expected. Geopolitical events continue to disproportionally impact European chemical producers and the Chinese chemical industry continues to benefit from low-cost Russian crude, which enables lower downstream pricing. Because of these market factors, including the delay in demand recovery, 2026 demand will likely be similar to 2025. However, the proactive management actions taken to exit underperforming assets in 2025 are expected to result in improved operational results for the Company.
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The Company continues to execute on cash management and strategic operational plans to manage liquidity and debt covenant compliance, including evaluating contractual obligations and productivity initiatives to manage operating expenses. Additionally, as previously disclosed, the Company is engaged in ongoing discussions with its financial stakeholders regarding its capital structure to evaluate and execute potential strategic alternatives to our existing capital structure including modification of the terms of our outstanding indebtedness. The Company is unable to predict, with certainty, the impact that the current macroeconomic conditions will have on its ability to consummate these potential transactions or maintain compliance with the financial covenants contained in the Company's debt agreements.
Non-GAAP Performance Measures
We present Adjusted EBITDA as a non-GAAP financial performance measure, which we define as income from continuing operations before interest expense, net; provision for income taxes; depreciation and amortization expense; loss on extinguishment of long-term debt; asset impairment charges; gains or losses on the dispositions of businesses and assets; restructuring charges; acquisition related costs and other items. In doing so, we are providing management, investors, and credit rating agencies with an indicator of our ongoing performance and business trends, removing the impact of transactions and events that we would not consider a part of our core operations.
There are limitations to using financial performance measures such as Adjusted EBITDA. This performance measure is not intended to represent net income or other measures of financial performance. As such, it should not be used as an alternative to net income as an indicator of operating performance. Other companies in our industry may define Adjusted EBITDA differently than we do. As a result, it may be difficult to use this or similarly-named financial measures that other companies may use to compare the performance of those companies to our performance. We compensate for these limitations by providing a reconciliation of this performance measure to our net income, which is determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Adjusted EBITDA is calculated as follows for the years ended December 31, 2025, 2024, and 2023. For discussion related to 2023 activity, refer to the Company’s Form 10-K filed on February 27, 2025.
Year Ended
December 31,
Provision for income taxes 42.6 30.5 68.4
Loss on financing transactions(c) 26.5 — —
Net gain on disposition of businesses and assets(d) — (7.1) (25.6)
Restructuring and other charges(e) 63.9 44.7 31.4
Acquisition transaction and integration net costs(f) — — (1.4)
Asset impairment charges or write-offs(g) — — 2.7
Goodwill impairment charges(h) — — 349.0
Other items(i) 9.7 6.4 21.5
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Note that the accelerated depreciation charges incurred as part of both the Company’s asset restructuring plan and corporate restructuring program are included within the “Depreciation and amortization” caption above and therefore are not included as a separate adjustment within this caption.
Other items for the years ended December 31, 2024 and 2023 primarily relate to third party fees incurred in conjunction with certain of the Company’s strategic initiatives, including the ERP upgrade project.
Liquidity and Capital Resources
Capital Resources, Indebtedness and Liquidity
We require cash primarily to fund day-to-day operations, capital investments and other strategic initiatives, purchase raw materials, and service our outstanding debt obligations. Our liquidity is generated from cash on hand, cash flows from continuing operations, and borrowing availability under the OpCo Super-Priority Revolver and the Accounts Receivable Securitization Facility.
The 2028 Refinance Credit Agreement includes customary affirmative, negative, and financial covenants, with events of default that include (i) a change of control, (ii) failure to maintain at least $100.0 million of Liquidity at each month-end, and (iii) a cross-default to the Credit Agreement. If a default occurs, the Term Lenders may accelerate amounts due under the 2028 Refinance Term Loans. Liquidity, as defined consistently under both the OpCo Super-Priority Revolver and the 2028 Refinance Credit Agreement, includes cash and cash equivalents held by certain restricted subsidiaries and available borrowing capacity under both facilities, subject to terms in the 2028 Refinance Credit Agreement.
The OpCo Super-Priority Revolver also includes an anti-cash hoarding provision requiring repayment of borrowings to the extent cash and cash equivalents on the 15th of each month exceed $100.0 million at loan parties or $50.0 million at nonloan parties. The OpCo Super-Priority Revolver also features a springing covenant which applies when 30% or more of the OpCo Super-Priority Revolver’s capacity is drawn which then requires the Company to meet a superpriority lien net leverage ratio (as defined in the secured credit agreement) not to exceed 1.50:1.00 at the end of each financial quarter. As of December 31, 2025, the outstanding borrowings, inclusive of certain letters of credit, did
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exceed the 30% threshold, however the superpriority lien net leverage ratio was below the 1.50x threshold, (0.38):1.00. As of December 31, 2025, the Company was in compliance with all covenants in its debt agreements.
As of December 31, 2025, we had total Liquidity of $334.2 million, consisting of $139.4 million of cash and cash equivalents and $194.8 million of borrowing availability under the 2026 Revolving Facility and the Accounts Receivable Securitization Facility ($191.6 million and $3.2 million, respectively). We had $2,591.4 million of outstanding indebtedness as of December 31, 2025, compared to $2,448.4 million at December 31, 2024, and working capital of $150.0 million and $267.3 million at those respective dates. Of our cash, $89.6 million and $107.7 million, respectively, was held outside Ireland (our country of domicile), all of which is readily convertible into other currencies including U.S. dollars. Because we do not intend to indefinitely reinvest foreign cash, we record deferred tax liabilities on unremitted earnings. Additional information about our debt, rates, and maturities is provided in Note 16 to the consolidated financial statements.
Potential Restructuring of Our Indebtedness
We have been reviewing a number of potential alternatives regarding our outstanding indebtedness. These alternatives include refinancings, exchange offers, consent solicitations, the issuance of new indebtedness, amendments to the terms of our existing indebtedness and/or other transactions. We are currently in active discussions with holders of our indebtedness and have engaged outside advisors with respect to these alternatives. Additionally, the Company has appointed two new board members with significant experience in debt restructuring and strategic transactions.
Among these alternatives is a restructuring that would, on a consensual basis, seek to modify the terms of substantially all of our outstanding indebtedness, potentially through an in-court or out-of-court process. We may offer to exchange the indebtedness under our 2028 Refinance Term Loans, 2028 Term Loan B, or 2029 Refinance Senior Notes for new debt and/or equity securities of our parent and/or subsidiary companies. In conjunction with any such transactions, we may seek consents to amend the documents governing our indebtedness to amend or eliminate certain covenants or collateral provisions. Because the terms of any such transactions will be subject to negotiations with the holders of our indebtedness, they may differ materially from those described above and are, to a large extent, outside of our control. There can be no assurance that we will be able to complete any such transactions, and, as no decision with respect to the terms of any such transactions has been made, we may decide not to pursue any such transactions. If we are unable or elect not to complete any such transactions, or if the Company is unable to obtain necessary waivers or amendments and its debt is accelerated, there can be no assurance that the Company would be able to obtain replacement financing or to satisfy its obligations, in which case the Company may pursue a process to restructure its indebtedness, through an in-court or out-of-court process. We continue to focus on our initiatives to drive operational performance, maintain safe manufacturing processes, retain talent in our organization and continue our objective to become a specialties materials provider.
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates realization of assets and satisfaction of liabilities in the ordinary course of business. As such, they do not include any adjustments to the recoverability and reclassification of recorded amounts that might be necessary should the Company be unable to continue as a going concern. Refer to Note 16 and Item 1A— Risk Factors, for additional information.
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DebtOverview
The table below summarizes our outstanding indebtedness as of December 31, 2025 and 2024, including related interest expense and effective interest rates:
As of and for the Year Ended As of and for the Year Ended
Effective Effective
Interest Interest Interest Interest
2029 Refinance Senior Notes $ 441.6 5.0 % $ 20.4 $ — — % $ —
Senior Credit Facility
OpCo Super-Priority Revolver 75.0 6.9 % 5.8 — — % —
2026 Revolving Facility — — % — — — % 2.9
As of December 31, 2025, our Senior Credit Facility—comprising the OpCo Super-Priority Revolver—had a total capacity of $300.0 million, with $191.6 million available after considering $33.4 million in letters of credit. Unused commitments incur a quarterly fee of 0.375% per annum.
The 2028 Term Loan B (original principal $750.0 million, maturing May 2028) requires quarterly amortization of 0.25% of original principal and bears interest at SOFR + 2.50% (0.00% floor). During 2025, we made $7.5 million in net principal payments and have an additional $7.5 million due within one year.
The 2028 Refinance Term Loans bear interest at Term SOFR + 8.50% (3.00% SOFR floor) and were issued with a 3% original issue discount. In 2025, we made $11.3 million in net principal payments, with $11.3 million classified as current. Through September 8, 2025, we were permitted to elect PIK interest, and during 2025 we deferred $39.6 million of interest, resulting in $48.1 million capitalized to principal.
Our second-lien 2029 Refinance Senior Notes include $379.5 million of 7.625% notes maturing May 3, 2029. Interest is payable semi-annually. Under the 2L Note Indenture, we elected PIK interest on 2.50% of interest during 2025, deferring $9.1 million.
We maintain an Accounts Receivable Securitization Facility maturing January 2028 with an optional one-year extension. The facility allows up to $150.0 million of borrowings and carries a minimum interest charge on $75.0 million regardless of actual borrowings. As of December 31, 2025, $118.0 million was outstanding, supported by $121.2 million of eligible receivables, leaving $3.2 million of availability.
During 2025, the remaining 2025 Senior Notes were redeemed, and the 2029 Senior Notes were exchanged or redeemed in conjunction with the issuance of the 2029 Refinance Senior Notes, resulting in the satisfaction and discharge of both related indentures.
Additional Considerations
Our debt costs and access to capital depend on credit ratings and leverage/coverage metrics. We may also opportunistically repurchase or retire debt based on market conditions and liquidity needs. On November 27, 2025, S&P Global Ratings downgraded the Company’s issuer credit rating to ‘CCC’ and, on March 3, 2026, further downgraded the credit rating to ‘SD’. The ratings agency also highlighted the Company’s heightened refinancing risk associated with its 2028 maturities and the potential for further downward rating actions if liquidity deteriorates or if end-market conditions do not materially improve over the next twelve months. Moody’s outlook remained stable, maintaining their Caa2 rating.
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The borrowers and issuers of our debt depend on upstream cash flows from subsidiaries. Although no material restrictions currently exist, jurisdictional regulations may introduce future constraints. The Senior Credit Facility, Refinance Credit Agreement, and 2L Note Indenture restrict dividends to Trinseo PLC. In 2025, we declared dividends of $0.8 million before the Board elected to suspend future dividends.
Macroeconomic conditions—including tariff uncertainty, higher interest rates, and geopolitical factors—have negatively impacted demand, earnings, and liquidity. We have experienced recurring net losses and negative operating cash flows and expect to remain unprofitable in the near term.
We do not have any off-balance-sheet arrangements that are expected to have a material effect on our financial condition or liquidity.
Cash Flows
The table below summarizes our primary sources and uses of cash for the years ended December 31, 2025, 2024, and 2023. We have derived the summarized cash flow information from our audited financial statements. Refer to the Company’s Form 10-K filed on February 27, 2025 for discussion related to 2023.
Year Ended
December 31,
Net cash provided by (used in):
Operating activities $ (102.4) $ (14.2)
Investing activities (41.0) (55.1)
Financing activities 73.5 26.4
Effect of exchange rates on cash 7.0 (6.3)
Net change in cash, cash equivalents, and restricted cash $ (62.9) $ (49.2)
Operating Activities
Net cash used in operating activities during the year ended December 31, 2025 totaled $102.4 million, which included a$97.1 million decrease in working capital and the impact of $26.3 million in expenses related to refinancing that were not eligible for capitalization as deferred financing costs.
Net cash used in operating activities during the year ended December 31, 2024 totaled $14.2 million, which included a $123.7 million decrease in working capital, principally related to continued inventory management actions and cash collections, $45.0 million of dividends received from Americas Styrenics and $33.9 million in deferred interest cash payments via the PIK Interest Election.
Investing Activities
Net cash used in investing activities during the year ended December 31, 2025 totaled $41.0 million, which was primarily attributable to capital expenditures of $51.0 million offset by proceeds from the sale of business and other assets of $10.0 million. During 2025, the Company continued to proactively reduce or defer capital expenditures during the year to preserve liquidity.
Capital expenditures for 2026 are expected to be similar to 2025, approximately $51.0 million, inclusive of spending for both compliance and maintenance costs, and growth initiatives, including material substitution applications as well as products containing recycled or bio-based materials.
Net cash used in investing activities during the year ended December 31, 2024 totaled $55.1 million, which was primarily attributable to capital expenditures of $63.3 million offset by proceeds from the sale of business and other assets of $8.2 million.
Financing Activities
Net cash provided by financing activities during the year ended December 31, 2025 totaled $73.5 million. During the year, the Company drew $265.0 million and $145.0 million in proceeds and repaid $190.0 million and $102.0 million
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from the A/R Facility and OpCo Super-Priority Revolver, respectively, principally related to funding working capital and other requirements. This activity also included the issuance of additional 2028 Refinance Term Loans ($115.0 million of aggregate principal) in exchange for the redemption of the 2025 Senior Notes ($115.0 million reduction in aggregate principal), $19.8 million in debt issuance costs that met the criteria for deferred financing charges, $19.4 million in debt repayments, $1.2 million of dividends paid, and $3.4 million of net repayments of short-term borrowings.
Net cash provided by financing activities during the year ended December 31, 2024 totaled $26.4 million. During the year, the Company drew $513.2 million in proceeds from the A/R Facility, and repaid $438.2 million, principally related to funding working capital and other requirements. This activity was partially offset by $18.3 million in debt repayments, $1.7 million of dividends paid, and $19.3 million of net repayments of short-term borrowings.
Free Cash Flow
We use Free Cash Flow as a non-GAAP measure to evaluate and discuss the Company’s liquidity position and results. Free Cash Flow is defined as cash from operating activities, less capital expenditures. We believe that Free Cash Flow provides an indicator of the Company’s ongoing ability to generate cash through core operations, as it excludes the cash impacts of various financing transactions as well as cash flows from business combinations that are not considered organic in nature. We also believe that Free Cash Flow provides management and investors with useful analytical indicator of our ability to service our indebtedness, pay dividends (when declared), and meet our ongoing cash obligations.
Free Cash Flow is not intended to represent cash flows from operations as defined by GAAP, and therefore, should not be used as an alternative for that measure. Other companies in our industry may define Free Cash Flow differently than we do. As a result, it may be difficult to use this or similarly-named financial measures that other companies may use to compare the liquidity and cash generation of those companies to our own. We compensate for these limitations by providing a reconciliation to cash provided by operating activities, which is determined in accordance with GAAP.
Year Ended
December 31,
Cash provided by (used in) operating activities $ (102.4) $ (14.2) $ 148.7
Capital expenditures (51.0) (63.3) (69.7)
Refer to the discussion above for significant impacts to cash provided by operating activities for the years ended December 31, 2025 and 2024. Refer to the Company’s Form 10-K filed on February 27, 2025 for discussion related to 2023.
Contractual Obligations and Commercial Commitments
The Company’s primary contractual obligations and commercial commitments consist of the payments for principal and interest on our outstanding long-term debt, raw material purchases, funding requirements under our pension and other postretirement benefits, lease commitments, and obligations under our SAR SSAs.
The Company has both fixed and variable-rate long-term debt arrangements, which have varying principal and interest payment requirements over their contractual terms. Refer to the table and section above as well as to Note 16 in the consolidated financial statements for more information on our debt arrangements. Additionally, refer to Item 7A—Quantitative and Qualitative Disclosures about Market Risk for discussion of our interest rate and foreign currency risks related to our debt and debt-related hedging arrangements.
The Company has certain raw material purchase contracts where we are required to purchase certain minimum volumes at prevailing market prices. As of December 31, 2025, the Company had $694.0 million of raw material purchase obligations, of which $219.7 million is due within the next twelve months. These commitments have remaining terms ranging from one to five years. Refer to Note 19 in the consolidated financial statements for more information on
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raw material purchase commitments. Additionally, refer to Item 1 – Business – Sources and Availability of Raw Materials for further description of the sources of our key raw materials.
The Company has various pension and other postretirement plans. The Company is required to make minimum contributions to certain of our funded pension plans and is also obligated to make benefit payments to employees for the unfunded pension plans and other postretirement plans. As of December 31, 2025, the Company’s estimated future benefit payments through 2035, reflecting expected future service, as appropriate, was $154.1 million, of which $14.4 million is due within the next twelve months. Refer to the section of our Critical Accounting Policies and Estimates entitled “Pension Plans and Postretirement Benefits” for more information on the factors impacting our pension and postretirement costs. Additionally, refer to Note 21 in the consolidated financial statements for more details on these employee benefit plans and the future payments expected to be made for them through 2034.
The Company has operating and finance leases for certain of its plant and warehouse sites, office spaces, rail cars, storage facilities, and equipment. The Company’s leases have remaining terms of one month through eleven years. As of December 31, 2025, the Company’s estimated minimum commitments related to our finance and operating lease obligations was $83.1 million, of which $16.8 million is due within the next twelve months. Refer to Note 20 in the consolidated financial statements for further information on our lease portfolio and future lease obligations.
As described in Item 1— Business— Our Relationship with Dow, the Company is party to SAR SSAs with Dow, which are agreements under which Dow provides certain site services to the Company at Dow-owned locations. Based on our current year known costs and assuming that we continue with the SAR SSAs with similar annualized costs going forward, we estimate our contractual obligations under these agreements to be approximately $17.5 million annually for 2025 through 2029, and a total of $108.5 million thereafter through June 2041. Refer to the aforementioned section of Item 1 for more information regarding these agreements, including details regarding the rights of the Company and Dow to terminate said agreements.
Derivative Instruments
The Company’s ongoing business operations expose it to various risks, including fluctuating foreign exchange rates, interest rate risk, and commodity price risk. To manage this risk, the Company periodically enters into derivative financial instruments, such as foreign exchange forward contracts, interest rate swap agreements, and commodity swap agreements. A summary of these derivative financial instrument programs is described below; however, refer to Note 17 of the consolidated financial statements for further information. The Company does not hold or enter into financial instruments for trading or speculative purposes.
Foreign Exchange Forward Contracts
Certain subsidiaries have assets and liabilities denominated in currencies other than their respective functional currencies, which creates foreign exchange risk. Our principal strategy in managing exposure to changes in foreign currency exchange rates is to naturally hedge the foreign currency-denominated liabilities on our consolidated balance sheets against corresponding assets of the same currency such that any changes in liabilities due to fluctuations in exchange rates are offset by changes in their corresponding foreign currency assets. In order to further reduce our exposure, the Company uses foreign exchange forward contracts to economically hedge the impact of the variability in exchange rates on our assets and liabilities denominated in certain foreign currencies. These derivative contracts are not designated for hedge accounting treatment.
Foreign Exchange Cash Flow Hedges
The Company also enters into forward contracts with the objective of managing the currency risk associated with forecasted U.S. dollar-denominated raw materials purchases by one of our subsidiaries whose functional currency is the euro. By entering into these forward contracts, which are designated as cash flow hedges, the Company buys a designated amount of U.S. dollars and sells euros at the prevailing market rate to mitigate the risk associated with the fluctuations in the euro-to-U.S. dollar foreign currency exchange rate.
Commodity Cash Flow Hedges & Commodity Economic Hedges
The Company purchased certain commodities, primarily natural gas, to operate facilities and generate heat and steam for various manufacturing processes, which are subject to price volatility. In order to manage the risk of price
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fluctuations associated with these commodity purchases, as deemed appropriate, the Company may enter into commodity swaps agreements or option contracts. Under these derivative contracts, the Company is effectively converting a portion of our natural gas costs into a fixed rate obligation to mitigate the risk of price fluctuations associated with the underlying commodity purchases. Certain of these commodity swaps were designated as cash flow hedges (“commodity cash flow hedges”), and the remaining commodity swaps were not designated for hedge accounting treatment (“commodity economic hedges”). The Company does not have any outstanding commodity cash flow or economic agreements as of December 31, 2025.
Critical Accounting Policies and Estimates
Our discussion and analysis of results of operations and financial condition are based upon our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the amounts reported. We base these estimates and judgments on historical experiences and assumptions believed to be reasonable under the circumstances. Actual results could vary from our estimates under different conditions. Our significant accounting policies, which may be affected by our estimates and assumptions, are more fully described in Note 2 in the consolidated financial statements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements. The following critical accounting policies reflect our most significant estimates and assumptions used in the preparation of the consolidated financial statements.
Valuation of Assets and Impairment Considerations
Valuation of Assets
Acquisitions that qualify as a business combination are accounted for using the purchase accounting method. Amounts paid for an acquisition are allocated to the assets acquired and liabilities assumed based on their fair value as of the date of acquisition. Goodwill is recorded as the difference between the fair value of the acquired assets and liabilities assumed (net assets acquired) and the purchase price. Goodwill is not amortized, but is reviewed for impairment annually as of October 1, or when events or changes in the business environment indicate that the carrying value of a reporting unit may exceed its fair value. Refer to the discussion below for further information on asset impairments.
Specifically, the calculation of the fair value of tangible assets, including property, plant and equipment, typically utilize the cost approach, which computes the cost to replace the asset, less accrued depreciation resulting from physical deterioration and functional and external obsolescence. The calculation of the fair value of identified intangible assets is determined using cash flow models following the income and cost approaches (or some combination thereof). Significant inputs include estimated future cash flows, discount rates, royalty rates, growth rates, sales projections, customer retention rates, and terminal values, all of which require significant management judgment. Definite-lived intangible assets, which are primarily comprised of customer relationships, developed technology, tradenames, and software, are amortized over their estimated useful lives using the straight-line method and are assessed for impairment whenever events or changes in circumstances indicate the carrying value of the asset may not be recoverable.
Impairment Considerations
As of December 31, 2025, net property, plant and equipment, net identifiable finite-lived intangible assets, and goodwill totaled $523.6 million, $492.9 million, and $67.7 million, respectively. Management makes estimates and assumptions in preparing the consolidated financial statements for which actual results will emerge over long periods of time. This includes the recoverability of long-lived assets employed in the business. These estimates and assumptions are closely monitored by management and periodically adjusted as circumstances warrant. For instance, expected asset lives may be shortened or impairment may be recorded based on a change in the expected use of the asset or performance of the related asset group.