Note 2. Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (GAAP).  The notes that follow are an integral part of the consolidated financial statements.

Chemours did not operate as a separate, stand-alone entity for all periods included within these consolidated financial statements.  Prior to the separation on July 1, 2015, Chemours operations were included in DuPont’s financial results in different legal forms, including but not limited to wholly-owned subsidiaries for which Chemours was the sole business, components of legal entities in which Chemours operated in conjunction with other DuPont businesses and a majority owned joint venture.  For periods prior to July 1, 2015, the accompanying consolidated financial statements have been prepared from DuPont’s historical accounting records and are presented on a stand-alone basis as if the business operations had been conducted independently from DuPont.  Prior to January 1, 2015, aside from a Japanese entity that is a dual-resident for U.S. federal income tax purposes, there was no direct ownership relationship among all the other various legal entities comprising Chemours.  Prior to July 1, 2015, DuPont and its subsidiaries’ net investments in these operations is shown in lieu of Stockholders’ Equity in the consolidated financial statements.  The consolidated financial statements include the historical operations, assets and liabilities of the legal entities that are considered to comprise the Chemours business, including certain environmental remediation and litigation obligations of DuPont and its subsidiaries that Chemours may be required to indemnify pursuant to the separation-related agreements executed prior to the spin-off.

All of the allocations and estimates in the consolidated financial statements prior to July 1, 2015 are based on assumptions that management believes are reasonable.  Therefore, the results of operations and cash flows prior to July 1, 2015 included herein may not be indicative of the financial position, results of operations and cash flows of Chemours in the future or if Chemours had been a separate, stand-alone entity during the periods presented.

The net transfers from DuPont on the Consolidated Statements of Stockholders’ Equity include a non-cash contribution from DuPont of $109 for the year ended December 31, 2015.  This non-cash contribution occurred during physical separation activities at shared production facilities in the U.S. prior to the separation and certain assets identified at separation.  It was determined that assets previously managed by other DuPont businesses would be transferred to and managed by Chemours.

Comprehensive income as of December 31, 2016 includes an out of period adjustment of $31 million relating to 2015 cumulative translation adjustments with corresponding adjustment to other current assets.  This adjustment is not material to the Company’s consolidated financial statements taken as a whole.