Request for Remediation Funding Source ("RFS")

[Table of Contents](#i6603aeb911854ef785a9b575909b38eb_7)NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)During the three and nine months ended September 30, 2022, the company recorded charges of $5 million and $32 million, respectively, and during the three and nine months ended September 30, 2021, the company recorded charges of $8 million and $45 million, respectively, to (loss) income from discontinued operations after income taxes in the interim Consolidated Statement of Operations, related to the MOU. The charges during the three and nine months ended September 30, 2022 and 2021, primarily related to an increase in the environmental remediation accrual for Chemours’ Fayetteville Works facility for estimated costs for off-site water systems and on-site surface water and groundwater remediation to address and abate PFAS discharges arising out of pre-July 1, 2015 conduct. The increase is the result of changes in Chemours’ environmental remediation activities at the site under the Consent Order between Chemours and the NC DEQ.  
The accrued environmental obligations and indemnification assets include the following:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | As of September 30, 2022 |
| (In millions) | Indemnification Asset | Accrual balance3 | Potential exposure above amount accrued3 |
| Environmental Remediation Stray Liabilities |  |  |  |
| Chemours related obligations - subject to indemnity1,2 | $ | 155  |  | $ | 155  |  | $ | 266  |  |
| Other discontinued or divested businesses obligations1 | 24  |  | 77  |  | 185  |  |
|  |  |  |  |
| Environmental remediation liabilities primarily related to DuPont - subject to indemnity from DuPont2 | 45  |  | 46  |  | 62  |  |
|  |  |  |  |
| Environmental remediation liabilities not subject to indemnity | —  |  | 80  |  | 54  |  |
|  |  |  |  |
| Indemnification liabilities related to the MOU4 | 21  |  | 125  |  | 29  |  |
| Total | $ | 245  |  | $ | 483  |  | $ | 596  |  |

1.Represents liabilities that are subject to the $200 million threshold and sharing arrangements as discussed on page 24, under the header "Corteva Separation Agreement."2.The company has recorded an indemnification asset related to these accruals, including $36 million related to the Superfund sites.3.Accrual balance represents management’s best estimate of the costs of remediation and restoration, although it is reasonably possible that the potential exposure, as indicated, could range above the amounts accrued, as there are inherent uncertainties in these estimates. Accrual balances includes $67 million for remediation of Superfund sites. Amounts do not include possible impacts from the remediation elements of the EPA's October 2021 PFAS Strategic Roadmap (as applicable), except as disclosed on page 28 relating to Chemours' remediation activities at the Fayetteville Works Facility pursuant to the Consent Order with the NC DEQ.4.Represents liabilities that are subject to the $150 million threshold and sharing agreements as discussed on page 23, under the header "Chemours / Performance Chemicals."  
Chambers Works, New JerseyOn January 28, 2022, the State of New Jersey filed a request for a preliminary injunction against EID and Chemours seeking the establishment of a Remediation Funding Source ("RFS") in an amount exceeding $900 million for environmental remediation at EID's former Chambers Works facility in New Jersey. The RFS primarily relates to non-PFAS remediation, which is not subject to the MOU. Chemours has accepted indemnity and defense for these matters, while reserving rights and declining demand relating to the ISRA and fraudulent transfer matters as alleged under the existing New Jersey natural resource lawsuits discussed on page 26.  
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