Celanese Corporation Reports Second Quarter 2012 Results

Sequential Operating EBITDA Growth in All Businesses; Second Highest Quarterly Adjusted EPS in Company History

DALLAS--()--Celanese Corporation (NYSE: CE), a global technology and specialty materials company, today reported second quarter 2012 net sales of $1,675 million, a 4 percent decrease from the same period last year. The company delivered higher overall volumes, but results were impacted by lower pricing, primarily in its Acetyl Intermediates business, and unfavorable currency impacts. Operating profit was $164 million compared with $209 million in the prior year period. Margins expanded in the company's Industrial Specialties and Consumer Specialties businesses but did not completely offset lower margins in its Acetyl Intermediates business due to temporarily elevated industry margins in the prior year, as well as the current weakened economic environment in Europe and slower growth in Asia.

      Three Months Ended   Six Months Ended
June 30, June 30,
(in $ millions, except per share data) - Unaudited   2012   2011 2012   2011
Net sales 1,675 1,753 3,308 3,342
Operating profit (loss) 164 209 262 397
Net earnings (loss) attributable to Celanese Corporation 210 203 393 345
Operating EBITDA 1 402 441 657 745
Diluted EPS - continuing operations $ 1.31 $ 1.29 $ 2.47 $ 2.16
Diluted EPS - total $ 1.31 $ 1.28 $ 2.47 $ 2.17
Adjusted EPS 2   $ 1.47   $ 1.66 $ 2.20 $ 2.62

1 Non-U.S. GAAP measure. See reconciliation in Table 1A.

2 Non-U.S. GAAP measure. See reconciliation in Table 6.

"Celanese delivered the second highest quarterly earnings in company history despite a more challenging global economic environment. Sequentially, each of our businesses delivered improved operating results while remaining focused on providing value-added solutions for our customers. Additionally, with the exception of Acetyl Intermediates, our portfolio of businesses expanded margins year-over-year," said Mark Rohr, chairman and chief executive officer. "Celanese's operating cash flow in the quarter resulted in the second lowest net debt level since the company's IPO in 2005 and enabled us to continue to pursue our balanced capital deployment strategy."

Net earnings were $210 million in the second quarter of 2012 compared with the prior year's results of $203 million. Diluted earnings per share from continuing operations was $1.31 compared with $1.29 last year.

Adjusted earnings per share in the second quarter of 2012, which excluded other charges and other adjustments, was $1.47 compared with $1.66 in the prior year period. The tax rate and diluted share count for adjusted earnings per share in the second quarter were 17 percent and 159.7 million, respectively.

Recent Highlights

  • Announced plans to construct and operate a methanol production facility at its Clear Lake, Texas acetyl complex which is expected to start up after July 1, 2015. As one of the world's largest producers of acetyl products, the company plans to utilize its existing infrastructure to capture the opportunities created by abundant and affordable U.S. natural gas supplies.
  • Launched the new SunsationSM platform to help food and beverage manufacturers develop low- and no-calorie products that are better tasting and simplify the formulation process to bring products to market faster.
  • Entered into an agreement to advance the development of fuel ethanol projects with Pertamina, the state-owned energy company of Indonesia. In line with its long-term strategy to develop new and renewable energy capabilities, Pertamina will collaborate exclusively with Celanese to jointly develop synthetic fuel ethanol projects in the Republic of Indonesia utilizing Celanese's proprietary TCX® ethanol process technology.
  • In the process of starting up its technology development unit for ethanol production at its facility in Clear Lake, Texas. The unit will support the company's continuing development of TCX® ethanol process technology for customers in both industrial-grade and fuel ethanol.

Second Quarter Business Segment Overview

Advanced Engineered Materials

Advanced Engineered Materials' operating EBITDA results improved year-over-year, despite weaker global economic conditions. Net sales decreased to $323 million in the second quarter of 2012 from $346 million in the prior year period. Pricing was up modestly by 2 percent; however, net sales were negatively impacted by lower volumes due to softer demand from industrial goods and electronics as well as currency. Operating EBITDA improved to $114 million from $107 million in the prior year period, as higher pricing and increased equity earnings offset the lower volumes and currency impacts. Equity earnings from the company's affiliates were $55 million compared with $39 million in the prior year period, driven by higher methanol and methyl tertiary-butyl ether (MTBE) pricing in the company's Ibn Sina affiliate. Operating profit in the second quarter of 2012 was $21 million compared with $27 million in the same period last year, primarily due to higher depreciation and amortization in the period mainly related to the company's startup and expansion of its polyacetal (POM) facility in Frankfurt Hoechst Industrial Park.

Consumer Specialties

Consumer Specialties delivered improved year-over-year performance with net sales of $327 million compared with $291 million in the same period last year, mainly driven by higher pricing and volumes. Pricing increased by 7 percent over the prior year period while volumes increased by 6 percent as a production interruption in the company's Acetate Products business during the first quarter of 2012 shifted additional volume into the current period. Operating EBITDA was $168 million compared with $147 million in the same period last year on improved volumes and expanded margins. This quarter's results also included increased dividends from the company's acetate China ventures which totaled $83 million compared with $78 million in the same period last year. Operating profit increased to $75 million from $48 million last year.

Industrial Specialties

Industrial Specialties' net sales in the second quarter of 2012 were $327 million compared with $329 million in the prior year period. Volumes increased by 5 percent year-over-year, primarily in North America and Asia, driven by recent strategic actions. However, results were negatively impacted by currency translation, primarily the Euro. Operating EBITDA increased to $47 million from $40 million in the prior year period, as expanded margins benefited from the increased volumes and lower raw material costs. Operating profit in the second quarter of 2012 was $34 million compared with $28 million in the prior year period.

Acetyl Intermediates

Acetyl Intermediates' net sales in the second quarter of 2012 were $821 million compared with $914 million in the same period last year, primarily due to lower acetyl pricing. The lower pricing year-over-year was the result of temporarily elevated utilization in the second quarter of 2011 due to planned and unplanned outages of acetyl producers as well as softer global demand in the current period driven by weaker economic conditions in Europe and Asia. Operating EBITDA in the second quarter of 2012 was $99 million compared with $177 million in the same period last year, primarily due to the lower pricing. Sequentially, operating EBITDA improved from $83 million, driven by expanded margins on higher pricing. Operating profit in the current period was $77 million compared with $152 million in the same period last year and $60 million in the first quarter of 2012.

Taxes

The tax rate for adjusted earnings per share was 17 percent in the second quarter of 2012 and the second quarter of 2011. The effective tax rate for continuing operations for the second quarter of 2012 was 20 percent compared with 27 percent in the second quarter of 2011. The lower effective tax rate in the second quarter of 2012 was primarily due to tax impacts related to joint venture earnings partially offset by increases in certain jurisdictions' losses providing no income tax benefit. Net cash taxes paid were $23 million in the first six months of 2012 compared with $30 million in the first six months of 2011. The decrease in net cash taxes paid is primarily due to timing of tax refunds received in certain jurisdictions.

Equity and Cost Investments

Earnings from equity investments and dividends from cost investments, which are reflected in the company's earnings and operating EBITDA, were $146 million in the second quarter of 2012, a $21 million increase from the prior year period's results. The cash flow impact of equity and cost investment dividends was $158 million, a $34 million increase from the prior year period. During the second quarter of 2012, the company received $83 million in dividends from its acetate China ventures, a $5 million increase from last year's results. This quarter's results also reflected the increased earnings from the Ibn Sina strategic affiliate.

Cash Flow

During the first six months of 2012, the company generated $402 million in cash from operating activities, an $86 million increase from the same period last year, primarily driven by lower trade working capital usage versus the prior year period. Cash used in investing activities during the first six months of 2012 was $283 million compared with $133 million in the same period last year. The 2012 results included capital expenditures related to the company's acquisition of two product lines from Ashland Inc. and other strategic actions. The 2011 results included $114 million of capital expenditures and $158 million of cash received from Fraport, both related to the relocation of the company's operations in Kelsterbach, Germany. Net cash from financing activities during the first six months of 2012 was a cash inflow of $4 million compared with a cash outflow of $198 million in the prior year period. During the second quarter of 2011, the company used a net of $116 million to prepay one of its term loan facilities. Net debt at the end of the second quarter of 2012 was $2,176 million, the second lowest net debt level since the company's IPO and a $159 million decrease from the end of 2011.

Outlook

"We anticipate the ongoing challenging economic environment in Europe and the current growth rates in Asia will continue through the remainder of 2012," said Rohr. "As a result, we expect second half adjusted earnings per share will reflect typical seasonal trends and be slightly below the first half of 2012, excluding the dividend from the company's acetate China ventures."

The company's earnings presentation and prepared remarks related to the second quarter results will be posted on its website at www.celanese.com in the investor section after market close on July 23.

Celanese Corporation is a global technology leader in the production of specialty materials and chemical products that are used in most major industries and consumer applications. Our products, essential to everyday living, are manufactured in North America, Europe and Asia. Known for operational excellence, sustainability and premier safety performance, Celanese delivers value to customers around the globe with best-in-class technologies. Based in Dallas, Texas, the company employs approximately 7,600 employees worldwide and had 2011 net sales of $6.8 billion, with approximately 73% generated outside of North America. For more information about Celanese Corporation and its global product offerings, visit www.celanese.com or the company's blog at www.celaneseblog.com.

Forward-Looking Statements

This release may contain “forward-looking statements,” which include information concerning the company's plans, objectives, goals, strategies, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. When used in this release, the words “outlook,” “forecast,” “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “may,” “can,” “could,” “might,” “will” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon current expectations and beliefs and various assumptions. There can be no assurance that the company will realize these expectations or that these beliefs will prove correct.

There are a number of risks and uncertainties that could cause actual results to differ materially from the results expressed or implied in the forward-looking statements contained in this release. These risks and uncertainties include, among other things: changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate; the length and depth of product and industry business cycles, particularly in the automotive, electrical, electronics and construction industries; changes in the price and availability of raw materials, particularly changes in the demand for, supply of, and market prices of ethylene, methanol, natural gas, wood pulp and fuel oil and the prices for electricity and other energy sources; the ability to pass increases in raw material prices on to customers or otherwise improve margins through price increases; the ability to maintain plant utilization rates and to implement planned capacity additions and expansions; the ability to improve productivity by implementing technological improvements to existing plants; increased price competition and the introduction of competing products by other companies; market acceptance of our technology; the ability to obtain governmental approvals and to construct facilities on terms and schedules acceptable to the company; changes in the degree of intellectual property and other legal protection afforded to our products or technology, or the theft of such intellectual property; compliance and other costs and potential disruption or interruption of production or operations due to accidents, cyber security incidents, terrorism or political unrest or other unforeseen events or delays in construction or operation of facilities, including as a result of geopolitical conditions, including the occurrence of acts of war or terrorist incidents or as a result of weather or natural disasters; potential liability for remedial actions and increased costs under existing or future environmental regulations, including those relating to climate change; potential liability resulting from pending or future litigation, or from changes in the laws, regulations or policies of governments or other governmental activities in the countries in which we operate; changes in currency exchange rates and interest rates; our level of indebtedness, which could diminish our ability to raise additional capital to fund operations or limit our ability to react to changes in the economy or the chemicals industry; and various other factors discussed from time to time in the company's filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made, and the company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.

Reconciliation of Non-U.S. GAAP Measures to U.S. GAAP

This release reflects the following performance measures: operating EBITDA, business operating EBITDA, affiliate EBITDA and proportional affiliate EBITDA, adjusted earnings per share and net debt as non-U.S. GAAP measures. These measurements are not recognized in accordance with U.S. GAAP and should not be viewed as an alternative to U.S. GAAP measures of performance. The most directly comparable financial measure presented in accordance with U.S. GAAP in our consolidated financial statements for operating EBITDA and business operating EBITDA is net income; for proportional affiliate EBITDA is equity in net earnings of affiliates; for affiliate EBITDA is operating profit; for adjusted earnings per share is earnings per common share-diluted; and for net debt is total debt.

Use of Non-U.S. GAAP Financial Information

  • Operating EBITDA is defined by the company as net earnings less interest income plus loss (earnings) from discontinued operations, interest expense, taxes, and depreciation and amortization, and further adjusted for Other Charges and Adjustments as described in Table 7. We present operating EBITDA because we consider it an important supplemental measure of our operations and financial performance. We believe that operating EBITDA is more reflective of our operations as it provides transparency to investors and enhances period-to-period comparability of our operations and financial performance. Operating EBITDA is one of the measures management uses for its planning and budgeting process to monitor and evaluate financial and operating results and for the company's incentive compensation plan. Operating EBITDA should not be considered as an alternative to net income determined in accordance with U.S. GAAP. We may provide guidance on operating EBITDA and are unable to reconcile forecasted operating EBITDA to a U.S. GAAP financial measure because a forecast of Other Charges and Adjustments is not practical.
  • Business operating EBITDA is defined by the company as net earnings less interest income plus loss (earnings) from discontinued operations, interest expense, taxes and depreciation and amortization, and further adjusted for Other Charges and Adjustments as described in Table 7, less equity in net earnings of affiliates, dividend income from cost investments and other (income) expense. This supplemental performance measure reflects the operating results of the company's operations without regard to the financial impact of its equity and cost investments.
  • Affiliate EBITDA is defined by the company as operating profit plus the depreciation and amortization of its equity affiliates. Proportional affiliate EBITDA, a measure used by management to measure performance of its equity investments, is defined by the company as the proportional operating profit plus the proportional depreciation and amortization of its equity investments. The company has determined that it does not have sufficient ownership for operating control of these investments to consider their results on a consolidated basis. The company believes that investors should consider proportional affiliate EBITDA as an additional measure of operating results.
  • Adjusted earnings per share is a measure used by management to measure performance. It is defined by the company as net earnings (loss) available to common shareholders plus preferred dividends, adjusted for other charges and adjustments, and divided by the number of basic common shares, diluted preferred shares, and options valued using the treasury method. We may provide guidance on an adjusted earnings per share basis and are unable to reconcile forecasted adjusted earnings per share to a U.S. GAAP financial measure without unreasonable effort because a forecast of Other Items is not practical. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations, and that when U.S. GAAP information is viewed in conjunction with non-U.S. GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. Note: The income tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year. This range may include certain partial or full-year forecasted tax opportunities, where applicable, and specifically excludes changes in uncertain tax positions, discrete items and other material items adjusted out of our U.S. GAAP earnings for adjusted earnings per share purposes, and changes in management's assessments regarding the ability to realize deferred tax assets. We analyze this rate quarterly and adjust if there is a material change in the range of forecasted tax rates; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate is an estimate and may differ from the tax rate used for U.S. GAAP reporting in any given reporting period. It is not practical to reconcile our prospective adjusted tax rate to the actual U.S. GAAP tax rate in any given future period.
  • Net debt is defined by the company as total debt less cash and cash equivalents. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the company's capital structure. Our management and credit analysts use net debt to evaluate the company's capital structure and assess credit quality. Proportional net debt is defined as our proportionate share of our affiliates' net debt.

Results Unaudited

The results presented in this release, together with the adjustments made to present the results on a comparable basis, have not been audited and are based on internal financial data furnished to management. Quarterly results should not be taken as an indication of the results of operations to be reported for any subsequent period or for the full fiscal year.

 

Consolidated Statements of Operations - Unaudited

   
Three Months Ended Six Months Ended
June 30, June 30,
(in $ millions, except share and per share data)   2012   2011 2012   2011
Net sales 1,675 1,753 3,308 3,342
Cost of sales   (1,344 ) (1,343 ) (2,707 ) (2,581 )
Gross profit 331 410 601 761
Selling, general and administrative expenses (124 ) (140 ) (258 ) (268 )
Amortization of intangible assets (13 ) (17 ) (26 ) (33 )
Research and development expenses (26 ) (25 ) (52 ) (48 )
Other (charges) gains, net (3 ) (18 ) (3 ) (15 )
Foreign exchange gain (loss), net (1 ) (1 )
Gain (loss) on disposition of businesses and asset, net          
Operating profit (loss) 164 209 262 397
Equity in net earnings (loss) of affiliates 62 46 113 89
Interest expense (45 ) (57 ) (90 ) (112 )
Refinancing expense (3 ) (3 )
Interest income 1 1
Dividend income - cost investments 84 79 84 79
Other income (expense), net   (1 ) 6   1   9  
Earnings (loss) from continuing operations before tax 264 280 371 460
Income tax (provision) benefit   (54 ) (75 ) 22   (117 )
Earnings (loss) from continuing operations   210   205   393   343  
Earnings (loss) from operation of discontinued operations (3 ) 3
Gain (loss) on disposition of discontinued operations
Income tax (provision) benefit, discontinued operations     1     (1 )
Earnings (loss) from discontinued operations     (2 )   2  
Net earnings (loss) 210 203 393 345
Net earnings (loss) attributable to noncontrolling interests          
Net earnings (loss) attributable to Celanese Corporation 210 203 393 345
Cumulative preferred stock dividends          
Net earnings (loss) available to common shareholders   210   203   393   345  
Amounts attributable to Celanese Corporation
Earnings (loss) per common share - basic
Continuing operations 1.33 1.31 2.50 2.20
Discontinued operations     (0.01 )   0.01  
Net earnings (loss) - basic   1.33   1.30   2.50   2.21  
Earnings (loss) per common share - diluted
Continuing operations 1.31 1.29 2.47 2.16
Discontinued operations     (0.01 )   0.01  
Net earnings (loss) - diluted   1.31   1.28   2.47   2.17  
Weighted average shares (in millions)
Basic 158.1 156.3 157.3 156.1
Diluted   159.7   159.2   159.4   158.9  
 
 

Consolidated Balance Sheets - Unaudited

   
(in $ millions)

As of

As of
 

June 30,
2012

December 31,
2011

ASSETS
Current assets
Cash & cash equivalents 800 682
Trade receivables - third party and affiliates, net 957 871
Non-trade receivables, net 177 235
Inventories 726 712
Deferred income taxes 106 104
Marketable securities, at fair value 60 64
Other assets   40   35  
Total current assets   2,866   2,703  
Investments in affiliates 756 824
Property, plant and equipment, net 3,265 3,269
Deferred income taxes 562 421
Other assets 390 344
Goodwill 756 760
Intangible assets, net   184   197  
Total assets   8,779   8,518  
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates 131 144
Trade payables - third party and affiliates 688 673
Other liabilities 466 539
Deferred income taxes 18 17
Income taxes payable   37   12  
Total current liabilities   1,340   1,385  
Long-term debt 2,845 2,873
Deferred income taxes 130 92
Uncertain tax positions 172 182
Benefit obligations 1,392 1,492
Other liabilities 1,123 1,153
Commitments and contingencies
Stockholders' equity
Preferred stock
Common stock
Treasury stock, at cost (888 ) (860 )
Additional paid-in capital 725 627
Retained earnings 2,798 2,424
Accumulated other comprehensive income (loss), net   (858 ) (850 )
Total Celanese Corporation stockholders' equity 1,777 1,341
Noncontrolling interests      
Total equity   1,777   1,341  
Total liabilities and equity   8,779   8,518  
 
 
Table 1

Business Segment Data and Reconciliation of Operating Profit (Loss) to Operating EBITDA -

a Non-U.S. GAAP Measure - Unaudited
   
Three Months Ended Six Months Ended
June 30, June 30,
(in $ millions)   2012   2011 2012   2011
Net Sales
Advanced Engineered Materials 323 346 640 674
Consumer Specialties 327 291 591 557
Industrial Specialties 327 329 636 619
Acetyl Intermediates 821 914 1,673 1,727
Other Activities 1 1
Intersegment eliminations   (123 ) (127 ) (232 ) (236 )
Total   1,675   1,753   3,308   3,342  
Operating Profit (Loss)
Advanced Engineered Materials 21 27 42 65
Consumer Specialties 75 48 114 102
Industrial Specialties 34 28 53 53
Acetyl Intermediates 77 152 137 264
Other Activities 1   (43 ) (46 ) (84 ) (87 )
Total   164   209   262   397  
Other Charges and Other Adjustments 2
Advanced Engineered Materials 10 22 13 34
Consumer Specialties (1 ) 10 16 15
Industrial Specialties 2
Acetyl Intermediates 1 (2 ) 3 (19 )
Other Activities 1   9   3   17   7  
Total   19   33   51   37  
Depreciation and Amortization Expense 3
Advanced Engineered Materials 28 19 55 38
Consumer Specialties 10 10 19 18
Industrial Specialties 13 12 26 22
Acetyl Intermediates 19 25 39 50
Other Activities 1   4   2   7   6  
Total   74   68   146   134  
Business Operating EBITDA
Advanced Engineered Materials 59 68 110 137
Consumer Specialties 84 68 149 135
Industrial Specialties 47 40 81 75
Acetyl Intermediates 97 175 179 295
Other Activities 1   (30 ) (41 ) (60 ) (74 )
Total   257   310   459   568  
Equity Earnings, Cost - Dividend Income and Other Income (Expense)
Advanced Engineered Materials 55 39 98 74
Consumer Specialties 84 79 85 80
Industrial Specialties
Acetyl Intermediates 2 2 3 4
Other Activities 1   4   11   12   19  
Total   145   131   198   177  
Operating EBITDA
Advanced Engineered Materials 114 107 208 211
Consumer Specialties 168 147 234 215
Industrial Specialties 47 40 81 75
Acetyl Intermediates 99 177 182 299
Other Activities 1   (26 ) (30 ) (48 ) (55 )
Total   402   441   657   745  

1 Other Activities includes corporate selling, general and administrative expenses and the results from captive insurance companies.

2 See Table 7 for details.

3 Excludes accelerated depreciation and amortization expense included in Other Charges and Other Adjustments above. See Table 1A for details.

 
 
Table 1A

Reconciliation of Consolidated Net Earnings (Loss) to Operating EBITDA -

a Non-U.S. GAAP Measure - Unaudited
         
Three Months Ended Six Months Ended
March 31, June 30, June 30,
(in $ millions)   2012 2012 2011 2012 2011
Net earnings (loss) attributable to Celanese Corporation 183 210 203 393 345
(Earnings) loss from discontinued operations 2 (2 )
Interest income (1 ) (1 ) (1 )
Interest expense 45 45 57 90 112
Refinancing expense 3 3
Income tax provision (benefit) (76 ) 54 75 (22 ) 117
Depreciation and amortization expense 2 72 74 68 146 134
Other charges (gains), net 1 3 18 3 15
Other adjustments 1   32   16   15   48   22  
Operating EBITDA   255   402   441   657   745  
Detail by Business Segment
Advanced Engineered Materials 94 114 107 208 211
Consumer Specialties 66 168 147 234 215
Industrial Specialties 34 47 40 81 75
Acetyl Intermediates 83 99 177 182 299
Other Activities 3   (22 ) (26 ) (30 ) (48 ) (55 )
Operating EBITDA   255   402   441   657   745  

1 See Table 7 for details.

2 Excludes accelerated depreciation and amortization expense as detailed in the table below and included in Other adjustments above.

3 Other Activities includes corporate selling, general and administrative expenses and the results from captive insurance companies.

         
 
Three Months Ended Six Months Ended
March 31, June 30, June 30,
(in $ millions)   2012 2012 2011 2012 2011
Advanced Engineered Materials 1 3
Consumer Specialties 1 3 1 7
Industrial Specialties 2 2
Acetyl Intermediates
Other Activities 3  
Accelerated depreciation and amortization expense 2 1 4 3 10
Depreciation and amortization expense 2   72 74 68 146 134
Total depreciation and amortization expense   74 75 72 149 144
 
 
Table 2
Factors Affecting Business Segment Net Sales - Unaudited
 
Three Months Ended June 30, 2012 Compared to Three Months Ended June 30, 2011
         
    Volume Price Currency Other Total
(In percentages)
Advanced Engineered Materials (4 ) 2 (5 ) (7 )
Consumer Specialties 6 7 (1 ) 12
Industrial Specialties 5 (1 ) (5 ) (1 )
Acetyl Intermediates 4 (10 ) (4 ) (10 )
Total Company   3   (4 ) (3 ) (4 )
 
 

Six Months Ended June 30, 2012 Compared to Six Months Ended June 30, 2011

         
    Volume Price Currency Other Total
(In percentages)
Advanced Engineered Materials (4 ) 2 (3 ) (5 )
Consumer Specialties 7 (1 ) 6
Industrial Specialties 5 1 (3 ) 3
Acetyl Intermediates 6 (7 ) (2 ) (3 )
Total Company   3   (1 ) (3 ) (1 )
 
 
Table 3
Cash Flow Information - Unaudited
   
Six Months Ended
June 30,
(in $ millions)   2012 2011
Net cash provided by operating activities 402 316
Net cash (used in) investing activities 1 (283 ) (133 )
Net cash provided by (used in) financing activities 4 (198 )
Exchange rate effects on cash and cash equivalents (5 ) 16
Cash and cash equivalents at beginning of period   682   740  
Cash and cash equivalents at end of period   800   741  

1 2012 and 2011 include $35 million and $114 million, respectively, of capital expenditures related to the Ticona Kelsterbach plant relocation. 2011 includes $158 million of cash proceeds related to the Ticona Kelsterbach plant relocation.

       
 
Table 4
Cash Dividends Received - Unaudited
 
Three Months Ended Six Months Ended
June 30, June 30,
(in $ millions)   2012 2011 2012 2011
Dividends from equity investments 74 45 185 118
Dividends from cost investments   84 79 84 79
Total   158 124 269 197
 
 
Table 5    
Net Debt - Reconciliation of a Non-U.S. GAAP Measure - Unaudited
 
As of As of
(in $ millions)  

June 30,
2012

December 31,
2011

Short-term borrowings and current installments of long-term debt - third party and affiliates 131 144
Long-term debt   2,845 2,873
Total debt 2,976 3,017
Less: Cash and cash equivalents   800 682
Net debt   2,176 2,335
 
 
Table 6
Adjusted Earnings (Loss) Per Share - Reconciliation of a Non-U.S. GAAP Measure - Unaudited
               
Three Months Ended Six Months Ended
June 30, June 30,
(in $ millions, except share and per share data)   2012 2011 2012 2011
per

share

per

share

per

share

per

share

Earnings (loss) from continuing operations 210 1.31 205 1.29 393 2.47 343 2.16
Deduct: Income tax (provision) benefit   (54 )     (75 )     22       (117 )    
Earnings (loss) from continuing operations before tax 264 280 371 460
Other charges and other adjustments 1 19 33 51 37
Refinancing - related expenses         6             6      
Adjusted earnings (loss) from continuing operations before tax 283 319 422 503
Income tax (provision) benefit on adjusted earnings 2 (48 ) (54 ) (72 ) (86 )
Less: Noncontrolling interests                          
Adjusted earnings (loss) from continuing operations   235     1.47 265     1.66 350     2.20 417     2.62
Diluted shares (in millions) 3                          
Weighted average shares outstanding 158.1 156.3 157.3 156.1
Dilutive stock options 1.0 2.0 1.4 2.0
Dilutive restricted stock units       0.6     0.9     0.7     0.8
Total diluted shares       159.7     159.2     159.4     158.9

1 See Table 7 for details.

2 The adjusted effective tax rate is 17% and 17% for the three and six months ended June 30, 2012 and 2011, respectively.

3 Potentially dilutive shares are included in the adjusted earnings per share calculation when adjusted earnings are positive.

           
 

Table 7

Other Charges and Other Adjustments - Reconciliation of a Non-U.S. GAAP Measure - Unaudited

 
Other Charges (Gains), net:
Three Months Ended Six Months Ended
March 31, June 30, June 30,
(in $ millions)   2012 2012 2011 2012 2011
Employee termination benefits 1 9 1 13
Ticona Kelsterbach plant relocation 2 16 2 29
Plumbing actions (4 ) (4 )
Commercial disputes (2 ) (22 )
Other   (1 ) (1 )
Total   3 18   3 15  
 
Other Adjustments: 1
Three Months Ended Six Months Ended
March 31, June 30, June 30, Income Statement
(in $ millions)   2012 2012 2011 2012 2011   Classification
Business optimization 5 3 2 8 5 Cost of sales / SG&A
Ticona Kelsterbach plant relocation 3 8 5 11 2 Cost of sales
Plant closures 4 2 7 6 13 Cost of sales / SG&A
(Gain) loss on disposition of assets (1 )
Write-off of other productive assets (1 ) (1 ) Cost of sales
Acetate production interruption costs 10 10 Cost of sales
Other   10 3 3   13 3   Various
Total   32 16 15   48 22  
Total other charges and other adjustments   32 19 33   51 37  

1 These items are included in net earnings but not included in other charges (gains), net.

       
 
Table 8
Equity Affiliate Results and Reconciliation of Operating Profit to Affiliate EBITDA -
a Non-U.S. GAAP Measure - Total - Unaudited
 
Three Months Ended Six Months Ended
June 30, June 30,
(in $ millions)   2012 2011 2012 2011
Net Sales
Ticona Affiliates - Asia 1 441 393 864 804
Ticona Affiliates - Middle East 2 380 252 684 517
Infraserv Affiliates 3   478   550   945   1,057  
Total   1,299   1,195   2,493   2,378  
Operating Profit
Ticona Affiliates - Asia 1 57 52 103 95
Ticona Affiliates - Middle East 2 197 104 336 206
Infraserv Affiliates 3   31   34   60   67  
Total   285   190   499   368  
Depreciation and Amortization
Ticona Affiliates - Asia 1 19 15 38 37
Ticona Affiliates - Middle East 2 9 18 23 30
Infraserv Affiliates 3   26   29   53   55  
Total   54   62   114   122  
Affiliate EBITDA
Ticona Affiliates - Asia 1 76 67 141 132
Ticona Affiliates - Middle East 2 206 122 359 236
Infraserv Affiliates 3   57   63   113   122  
Total   339   252   613   490  
Net Income
Ticona Affiliates - Asia 1 36 37 68 64
Ticona Affiliates - Middle East 2 175 93 300 183
Infraserv Affiliates 3   23   23   48   50  
Total   234   153   416   297  
Net Debt
Ticona Affiliates - Asia 1 273 101 273 101
Ticona Affiliates - Middle East 2 (184 ) (78 ) (184 ) (78 )
Infraserv Affiliates 3   328   308   328   308  
Total   417   331   417   331  

1 Ticona Affiliates - Asia accounted for using the equity method includes Polyplastics (45%), Korean Engineering Plastics (50%), Fortron Industries (50%), Una SA (2012 - 0%, 2011 - 50%). Una SA was divested during the Three Months Ended March 31, 2011.

2 Ticona Affiliates - Middle East accounted for using the equity method includes National Methanol Company (Ibn Sina) (25%).

3 Infraserv Affiliates accounted for using the equity method includes Infraserv Hoechst (32%), Infraserv Gendorf (39%) and Infraserv Knapsack (27%).

Table 8 (continued)

Equity Affiliate Results and Reconciliation of Proportional Operating Profit to Proportional Affiliate EBITDA -
a Non-U.S. GAAP Measure - Celanese Proportional Share - Unaudited

       
Three Months Ended Six Months Ended
June 30, June 30,
(in $ millions)   2012 2011 2012 2011
Proportional Net Sales
Ticona Affiliates - Asia 1 203 182 398 372
Ticona Affiliates - Middle East 2 95 63 171 129
Infraserv Affiliates 3   157   182   310   348  
Total   455   427   879   849  
Proportional Operating Profit
Ticona Affiliates - Asia 1 26 25 48 45
Ticona Affiliates - Middle East 2 49 25 84 51
Infraserv Affiliates 3   10   12   20   22  
Total   85   62   152   118  
Proportional Depreciation and Amortization
Ticona Affiliates - Asia 1 9 7 18 17
Ticona Affiliates - Middle East 2 3 5 6 8
Infraserv Affiliates 3   8   9   17   18  
Total   20   21   41   43  
Proportional Affiliate EBITDA
Ticona Affiliates - Asia 1 35 32 66 62
Ticona Affiliates - Middle East 2 52 30 90 59
Infraserv Affiliates 3   18   21   37   40  
Total   105   83   193   161  
Equity in Net Earnings of Affiliates (as reported in the Consolidated Statement of Operations)
Ticona Affiliates - Asia 1 17 17 32 30
Ticona Affiliates - Middle East 2 38 22 66 43
Infraserv Affiliates 3   7   7   15   16  
Total   62   46   113   89  
Proportional Affiliate EBITDA in Excess of Equity in Net Earnings of Affiliates
Ticona Affiliates - Asia 1 18 15 34 32
Ticona Affiliates - Middle East 2 14 8 24 16
Infraserv Affiliates 3   11   14   22   24  
Total   43   37   80   72  
Proportional Net Debt
Ticona Affiliates - Asia 1 121 45 121 45
Ticona Affiliates - Middle East 2 (46 ) (20 ) (46 ) (20 )
Infraserv Affiliates 3   107   100   107   100  
Total   182   125   182   125  

1 Ticona Affiliates - Asia accounted for using the equity method includes Polyplastics (45%), Korean Engineering Plastics (50%), Fortron Industries (50%), Una SA (2012 - 0%, 2011 - 50%). Una SA was divested during the Three Months Ended March 31, 2011.

2 Ticona Affiliates - Middle East accounted for using the equity method includes National Methanol Company (Ibn Sina) (25%).

3 Infraserv Affiliates accounted for using the equity method includes Infraserv Hoechst (32%), Infraserv Gendorf (39%) and Infraserv Knapsack (27%).

Contacts

Celanese Corporation
Investor Relations
Jon Puckett, +1-972-443-4965
Telefax: +1-972-443-8519
Jon.Puckett@celanese.com
or
Media - U.S.
Linda Beheler, +1-972-443-4924
Telefax: +1-972-443-8519
Linda.Beheler@celanese.com
or
Media - Europe
Jens Kurth, +49(0)69 45009 1574
Telefax: +49(0) 45009 58800
J.Kurth@celanese.com

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Contacts

Celanese Corporation
Investor Relations
Jon Puckett, +1-972-443-4965
Telefax: +1-972-443-8519
Jon.Puckett@celanese.com
or
Media - U.S.
Linda Beheler, +1-972-443-4924
Telefax: +1-972-443-8519
Linda.Beheler@celanese.com
or
Media - Europe
Jens Kurth, +49(0)69 45009 1574
Telefax: +49(0) 45009 58800
J.Kurth@celanese.com