Celanese Corporation Reports Third Quarter Earnings; Maintains 2016 Outlook

DALLAS--()--Celanese Corporation (NYSE: CE), a global technology and specialty materials company, today reported third quarter 2016 GAAP diluted earnings per share of $1.83 and adjusted earnings per share of $1.67, both third quarter records. These impressive results were driven by the strength of our operating models in both Materials Solutions and the Acetyl Chain as well as our consistent focus on productivity. In Advanced Engineered Materials, we drove strong year over year growth by continuing the momentum of our engineered materials opportunity pipeline, where we engage closely with our customers and meet their most pressing needs by combining the broadest materials portfolio with our market knowledge and application expertise. Earlier today, we announced an agreement to acquire Italy based SO.F.TER. Group, which would broaden our portfolio capabilities even further in engineered materials and extend our industry leadership position. In the Acetyl Chain, we were able to drive a differentiated result and maintain profitability in the quarter, leaning on our global footprint and integrated network to manage an environment of low raw material pricing and tepid market demand.

Third Quarter 2016 Financial Highlights:

    Three Months Ended
September 30,
2016
    June 30,
2016
    September 30,
2015
(unaudited)
(In $ millions)
Operating Profit (Loss)
Advanced Engineered Materials 93 82 58
Consumer Specialties 68   80   77  
Total Materials Solutions 161   162   135  
Industrial Specialties 25 29 19
Acetyl Intermediates 83 77 54
Eliminations   1    
Total Acetyl Chain 108   107   73  
Other Activities (23 ) (26 ) (22 )
Total 246   243   186  
   
Three Months Ended
September 30,
2016
    June 30,
2016
    September 30,
2015
(unaudited)
(In $ millions, except per share data)
Net Earnings (Loss) 263 223 151
 
Adjusted EBIT(1)(2)
Advanced Engineered Materials 127 111 106
Consumer Specialties   98     108     105  
Total Materials Solutions   225     219     211  
Industrial Specialties 25 30 28
Acetyl Intermediates 84 80 84
Eliminations       1      
Total Acetyl Chain   109     111     112  
Other Activities   (15 )   (18 )   (18 )
Total   319     312     305  
 
Equity Earnings, Cost-Dividend Income, Other Income (Expense)
Advanced Engineered Materials 33 27 44
Consumer Specialties   27     28     26  
Total Materials Solutions   60     55     70  
 
Operating EBITDA(1) 390 385 375
Diluted EPS - continuing operations $ 1.83 $ 1.50 $ 1.07
Diluted EPS - total $ 1.81 $ 1.50 $ 1.07
Adjusted EPS(1) $ 1.67 $ 1.59 $ 1.50
 
Net cash provided by (used in) investing activities (54 ) (63 ) (107 )
Net cash provided by (used in) financing activities 265 (259 ) (99 )
Net cash provided by (used in) operating activities 304 349 173
Free cash flow(1) 237 285 101
______________________________

(1)

  See "Non-US GAAP Financial Measures" below.

(2)

The company's discussion of adjusted earnings includes use of terms such as "segment income" and "core income." Those non-GAAP terms are defined below and reconciled in our Non-US GAAP Financial Measures and Supplemental Information document below.

 

Third Quarter 2016 Highlights:

  • Signed a definitive agreement to acquire 100% of the stock of Forli, Italy based SO.F.TER. Group, one of the world's largest independent thermoplastics compounders. The acquisition will nearly double the number of Celanese global engineered materials platforms.
  • Issued €750 million of 1.125% Senior Notes due 2023 and used €367 million of the proceeds to repay short term revolver borrowings.
  • Began production at the new vinyl acetate ethylene (VAE) production unit located at its manufacturing facility on Jurong Island, Singapore. The unit will support the growing demand in the Southeast Asia region, including Australia, India and New Zealand.
  • Showcasing the Art of Material Selection at K 2016 in October in Düsseldorf, Germany, the premier global trade fair for the plastics industry. Celanese will highlight polymers supporting a variety of customers, including:
    • Consumer goods and electronics manufacturers as they design and produce effective, functional and attractive products
    • Manufacturers of medical devices, from surgical tools to orthopedic implants, helping them to improve product design, safety and effectiveness
    • Original equipment manufacturers (OEMs) as they secure a competitive edge with more attractive, lightweight, better-designed vehicles

"I am pleased to report the highest third quarter earnings per share performance in our history. Our results demonstrate the leadership positions that we have established in both of our cores and our ability to drive results irrespective of prevailing market conditions. In Materials Solutions, we have had tremendous success leveraging our industry leading portfolio of polymers to meet our customers' most challenging demands and staying ahead of developing market trends. Building on this success, we are excited to announce the acquisition of SO.F.TER. Group, one of the world's largest independent compounders. This acquisition is a natural step in the evolution of engineered materials as it further increases our available polymers, our compounding capabilities and our customer reach. In the Acetyl Chain, we leveraged our integrated production network and global presence during the quarter, managing through a period of stubbornly low capacity utilization to deliver strong performance. Our business results and productivity actions drove another quarter of impressive cash generation, returning $152 million to our shareholders through $100 million of share repurchases and $52 million in dividends. During the quarter, we opportunistically refinanced our short term revolver borrowings with longer term European debt at a very favorable rate, and our balance sheet stands in an optimal position to execute our M&A and capital deployment strategies," said Mark Rohr, chairman and chief executive officer.

Third Quarter 2016 Business Segment Overview

Materials Solutions

Materials Solutions core grew profitability over the prior year, as strong volume growth more than offset the impact of lower affiliate earnings and tow pricing. Advanced Engineered Materials generated a third quarter record operating profit and delivered the highest quarterly adjusted EBIT in its history. We generated strong volume growth year over year across a variety of product lines, driven by customer intimacy and the strength of our opportunity pipeline, which more than offset lower pricing in the quarter. We successfully launched a record 351 new projects, and have launched 996 new projects year-to-date, as we continued to extend our reach with a focus on high-value applications.

Affiliate results in the quarter were impacted mainly by a decline of $13 million in Ibn Sina equity earnings caused primarily by lower prices for MTBE.

Tow pricing was lower than the prior year due to lower industry capacity utilization rates. Volumes declined primarily due to unusual buying patterns in Europe earlier in 2016, which shifted second half volumes into the first half of the year.

Acetyl Chain

In the Acetyl Chain, we leveraged our integrated production network and global presence to preserve margins in the continuing low pricing environment. Pricing for acetic acid and derivatives was lower versus the prior year, principally driven by China and lower methanol prices, which more than offset the benefits of productivity initiatives.

Cash Flow

The company recorded operating cash flow of $304 million, and we generated free cash flow of $237 million. These results were driven by growth in the Materials Solutions core and disciplined working capital management. Capital expenditures in the quarter were $58 million. During the quarter, we returned $152 million to our shareholders, including $100 million to repurchase 1.5 million shares and $52 million of dividends.

Outlook

"In the third quarter, we once again demonstrated the effectiveness of our business models and our ability to create value for our customers and shareholders. As we approach the end of the year, we see no material changes in the operating environment, which is still impacted by sluggish economic growth. Utilization rates in the Acetyl Chain remain historically low, particularly in China, and growth in Europe and North America has been modest. We will continue to focus on commercial discipline and productivity actions to drive value despite a lackluster macro environment, and we expect to deliver growth in adjusted earnings per share of 8-10 percent for full year 2016," said Rohr.

We are unable to reconcile forecasted adjusted earnings per share growth to US GAAP diluted earnings per share without unreasonable efforts because a forecast of Certain Items, such as mark-to-market pension gains/losses, is not practical. The company's earnings presentation and prepared remarks related to the third quarter results will be posted on its website at www.celanese.com under Investor Relations/Events and Presentations after market close on October 17, 2016. Information about Non-US GAAP measures is included in a Non-US GAAP Financial Measures and Supplemental Information document posted on our website and available at the link below. See "Non-GAAP Financial Measures" below.

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Our two complementary business cores, Acetyl Chain and Materials Solutions, use the full breadth of Celanese’s global chemistry, technology and business expertise to create value for our customers and the corporation. As we partner with our customers to solve their most critical business needs, we strive to make a positive impact on our communities and the world through The Celanese Foundation. Based in Dallas, Celanese employs approximately 7,000 employees worldwide and had 2015 net sales of $5.7 billion. For more information about Celanese Corporation and its product offerings, visit www.celanese.com or our 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. All forward-looking statements are based upon current expectations and beliefs and various assumptions, including the announced stock purchase transaction. 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, including with respect to the acquisition. 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, textiles, 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 reduce or maintain their current levels of production costs and 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 technologies, or the theft of such intellectual property; compliance and other costs and potential disruption or interruption of production or operations due to accidents, interruptions in sources of raw materials, 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, 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.

Non-GAAP Financial Measures

Presentation

This document presents the Company's business segments in two subtotals, reflecting our two cores, the Acetyl Chain and Materials Solutions, based on similarities among customers, business models and technical processes. As described in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q, the Acetyl Chain includes the Company's Acetyl Intermediates segment and the Industrial Specialties segment. Materials Solutions includes the Company's Advanced Engineered Materials segment and the Consumer Specialties segment. For comparative purposes, the historical financial information included herein has been presented to reflect the Acetyl Chain and Materials Solutions subtotals. There has been no change to the composition of the Company's business segments.

Use of Non-US GAAP Financial Information

This release uses the following non-US GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, adjusted earnings per share and free cash flow. These measures are not recognized in accordance with US GAAP and should not be viewed as an alternative to US GAAP measures of performance or liquidity. The most directly comparable financial measure presented in accordance with US GAAP in our consolidated financial statements for adjusted EBIT and operating EBITDA is net earnings (loss) attributable to Celanese Corporation; for adjusted EBIT margin is operating margin; for adjusted earnings per share is earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted; and for free cash flow is net cash provided by (used in) operations.

Definitions of Non-US GAAP Financial Measures

  • Adjusted EBIT is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense and taxes, and further adjusted for Certain Items (refer to Table 8 of our Non-US GAAP Financial Measures and Supplemental Information document). We may provide guidance on adjusted EBIT but are unable to reconcile forecasted adjusted EBIT to a US GAAP financial measure without unreasonable efforts because a forecast of Certain Items, such as mark-to-market pension gains and losses, which may be significant, is not practical. Adjusted EBIT margin is defined by the Company as adjusted EBIT divided by net sales.
  • Adjusted EBIT by business segment may also be referred to by management as segment income. Adjusted EBIT by core (i.e. Acetyl Chain and/or Materials Solutions) may also be referred to by management as core income. Adjusted EBIT margin by business segment may also be referred to by management as segment income margin. Adjusted EBIT margin by core may also be referred to by management as core income margin.
  • Operating EBITDA is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense, taxes and depreciation and amortization, and further adjusted for Certain Items, which Certain Items include accelerated depreciation and amortization expense. Operating EBITDA is equal to adjusted EBIT plus depreciation and amortization.
  • Adjusted earnings per share is a performance measure used by the Company and is defined by the Company as earnings (loss) from continuing operations attributable to Celanese Corporation, adjusted for income tax (provision) benefit, Certain Items, and refinancing and related expenses, divided by the number of basic common shares and dilutive restricted stock units and stock options calculated using the treasury method. We may provide guidance on adjusted earnings per share but are unable to reconcile forecasted adjusted earnings per share to a US GAAP financial measure without unreasonable efforts because a forecast of Certain Items, such as mark-to-market pension gains and losses, which may be significant, is not practical.

    Note: The income tax expense (benefit) on Certain Items ("Non-GAAP adjustments") is determined using the applicable rates in the taxing jurisdictions in which the Non-GAAP adjustments occurred and includes both current and deferred income tax expense (benefit). 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 and related costs, where applicable, and specifically excludes changes in uncertain tax positions, discrete recognition of GAAP items on a quarterly basis, other pre-tax items adjusted out of our GAAP earnings for adjusted earnings per share purposes and changes in management's assessments regarding the ability to realize deferred tax assets for GAAP. In determining the adjusted earnings per share tax rate, we reflect the impact of foreign tax credits when utilized, or expected to be utilized, absent discrete events impacting the timing of foreign tax credit utilization. We analyze this rate quarterly and adjust it 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 actual tax rate used for GAAP reporting in any given reporting period. Table 3a of our Non-US GAAP Financial Measures and Supplemental Information document summarizes the reconciliation of our estimated GAAP effective tax rate to the adjusted tax rate. The estimated GAAP rate excludes discrete recognition of GAAP items due to our inability to forecast such items. As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate to the adjusted tax rate for actual results.
  • Free cash flow is a liquidity measure used by the Company and is defined by the Company as cash flow from operations, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our methanol joint venture, Fairway Methanol LLC ("Fairway").

Reconciliation of Non-US GAAP Financial Measures

Reconciliations of the non-US GAAP financial measures used in this press release to the comparable US GAAP financial measure, together with information about the purposes and uses of non-US GAAP financial measures, are included in our Non-US GAAP Financial Measures and Supplemental Information document filed as an exhibit to our Current Report on Form 8-K filed with the SEC on or about October 17, 2016 and also available on our website at www.celanese.com under Financial Information, Non-GAAP Financial Measures, or at this link: http://investors.celanese.com/interactive/lookandfeel/4103411/Non-GAAP.PDF.

Results Unaudited

The results in this document, 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.

Supplemental Information

Additional information about our prior period performance is included in our Quarterly Reports on Form 10-Q and in our Non-US GAAP Financial Measures and Supplemental Information document.

   
 

Consolidated Statements of Operations - Unaudited

 
Three Months Ended
September 30,
2016
    June 30,
2016
    September 30,
2015
(In $ millions, except share and per share data)
Net sales 1,323 1,351 1,413
Cost of sales (968 ) (1,013 ) (1,110 )
Gross profit 355 338 303
Selling, general and administrative expenses (81 ) (71 ) (93 )
Amortization of intangible assets (3 ) (2 ) (3 )
Research and development expenses (20 ) (19 ) (19 )
Other (charges) gains, net (3 ) (4 ) (4 )
Foreign exchange gain (loss), net (1 ) (1 ) 3
Gain (loss) on disposition of businesses and asset, net (1 ) 2   (1 )
Operating profit (loss) 246 243 186
Equity in net earnings (loss) of affiliates 41 35 50
Interest expense (28 ) (30 ) (29 )
Refinancing expense (4 )
Interest income
Dividend income - cost investments 26 29 26
Other income (expense), net   (2 ) (8 )
Earnings (loss) from continuing operations before tax 281 275 225
Income tax (provision) benefit (15 ) (52 ) (74 )
Earnings (loss) from continuing operations 266   223   151  
Earnings (loss) from operation of discontinued operations (4 )
Income tax (provision) benefit from discontinued operations 1      
Earnings (loss) from discontinued operations (3 )    
Net earnings (loss) 263 223 151
Net (earnings) loss attributable to noncontrolling interests (1 ) (2 ) 10  
Net earnings (loss) attributable to Celanese Corporation 262   221   161  
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations 265 221 161
Earnings (loss) from discontinued operations (3 )    
Net earnings (loss) 262   221   161  
Earnings (loss) per common share - basic
Continuing operations 1.84 1.51 1.07
Discontinued operations (0.02 )    
Net earnings (loss) - basic 1.82   1.51   1.07  
Earnings (loss) per common share - diluted
Continuing operations 1.83 1.50 1.07
Discontinued operations (0.02 )    
Net earnings (loss) - diluted 1.81   1.50   1.07  
Weighted average shares (in millions)
Basic 144.0 146.5 149.8
Diluted 144.6 147.1 151.0
       
 

Consolidated Balance Sheets - Unaudited

 

As of
September 30,
2016

As of
December 31,
2015

(In $ millions)
ASSETS
Current Assets
Cash and cash equivalents 1,252 967
Trade receivables - third party and affiliates, net 791 706
Non-trade receivables, net 214 285
Inventories 652 682
Deferred income taxes 68
Marketable securities, at fair value 34 30
Other assets 35   49  
Total current assets 2,978   2,787  
Investments in affiliates 864 838
Property, plant and equipment, net 3,578 3,609
Deferred income taxes 216 222
Other assets 290 300
Goodwill 712 705
Intangible assets, net 119   125  
Total assets 8,757   8,586  
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates 92 513
Trade payables - third party and affiliates 591 587
Other liabilities 299 330
Deferred income taxes 30
Income taxes payable 116   90  
Total current liabilities 1,098   1,550  
Long-term debt, net of unamortized deferred financing costs 2,923 2,468
Deferred income taxes 139 136
Uncertain tax positions 101 167
Benefit obligations 1,124 1,189
Other liabilities 221 247
Commitments and Contingencies
Stockholders' Equity
Preferred stock
Common stock
Treasury stock, at cost (1,331 ) (1,031 )
Additional paid-in capital 140 136
Retained earnings 4,211 3,621
Accumulated other comprehensive income (loss), net (310 ) (348 )
Total Celanese Corporation stockholders' equity 2,710 2,378
Noncontrolling interests 441   451  
Total equity 3,151   2,829  
Total liabilities and equity 8,757   8,586  
 
 

Non-US GAAP Financial Measures and Supplemental Information

October 17, 2016

In this document, the terms the "Company," "we" and "our" refer to Celanese Corporation and its subsidiaries on a consolidated basis.

Purpose

The purpose of this document is to provide information of interest to investors, analysts and other parties including supplemental financial information and reconciliations and other information concerning our use of non-US GAAP financial measures. This document is updated quarterly.

Presentation

This document presents the Company's business segments in two subtotals, reflecting our two cores, the Acetyl Chain and Materials Solutions, based on similarities among customers, business models and technical processes. As described in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q, the Acetyl Chain includes the Company's Acetyl Intermediates segment and the Industrial Specialties segment. Materials Solutions includes the Company's Advanced Engineered Materials segment and the Consumer Specialties segment. For comparative purposes, the historical financial information included herein has been presented to reflect the Acetyl Chain and Materials Solutions subtotals. There has been no change to the composition of the Company's business segments.

Use of Non-US GAAP Financial Measures

From time to time, management may publicly disclose certain numerical "non-GAAP financial measures" in the course of our earnings releases, financial presentations, earnings conference calls, investor and analyst meetings and otherwise. For these purposes, the Securities and Exchange Commission ("SEC") defines a "non-GAAP financial measure" as a numerical measure of historical or future financial performance, financial position, or cash flows that excludes amounts, or is subject to adjustments that effectively exclude amounts, included in the most directly comparable measure calculated and presented in accordance with US GAAP, and vice versa for measures that include amounts, or are subject to adjustments that effectively include amounts, that are excluded from the most directly comparable US GAAP measure so calculated and presented. For these purposes, "GAAP" refers to generally accepted accounting principles in the United States.

Non-GAAP financial measures disclosed by management are provided as additional information to investors, analysts and other parties because the Company believes them to be important supplemental measures for assessing our financial and operating results and as a means to evaluate our financial condition and period-to-period comparisons. These non-GAAP financial measures should be viewed as supplemental to, and should not be considered in isolation or as alternatives to, net earnings (loss), operating profit (loss), operating margin, cash flow from operating activities (together with cash flow from investing and financing activities), earnings per share or any other US GAAP financial measure. These non-GAAP financial measures should be considered within the context of our complete audited and unaudited financial results for the given period, which are available on the Investor Relations/Financial Information/SEC Filings page of our website, www.celanese.com. The definition and method of calculation of the non-GAAP financial measures used herein may be different from other companies' methods for calculating measures with the same or similar titles. Investors, analysts and other parties should understand how another company calculates such non-GAAP financial measures before comparing the other company's non-GAAP financial measures to any of our own. These non-GAAP financial measures may not be indicative of the historical operating results of the Company nor are they intended to be predictive or projections of future results.

Pursuant to the requirements of SEC Regulation G, whenever we refer to a non-GAAP financial measure, we will also present in this document, in the presentation itself or on a Form 8-K in connection with the presentation on the Investor Relations/Financial Information/Non-GAAP Financial Measures page of our website, www.celanese.com, to the extent practicable, the most directly comparable financial measure calculated and presented in accordance with GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable GAAP financial measure.

This document includes definitions and reconciliations of non-GAAP financial measures used from time to time by the Company.

Specific Measures Used

This document provides information about the following non-GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, operating EBITDA margin, operating profit (loss) attributable to Celanese Corporation, adjusted earnings per share, net debt, free cash flow and return on invested capital (adjusted). The most directly comparable financial measure presented in accordance with US GAAP in our consolidated financial statements for adjusted EBIT and operating EBITDA is net earnings (loss) attributable to Celanese Corporation; for adjusted EBIT margin and operating EBITDA margin is operating margin; for operating profit (loss) attributable to Celanese Corporation is operating profit (loss); for adjusted earnings per share is earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted; for net debt is total debt; for free cash flow is net cash provided by (used in) operations; and for return on invested capital (adjusted) is net earnings (loss) attributable to Celanese Corporation divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation stockholders' equity.

Definitions

  • Adjusted EBIT is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense and taxes, and further adjusted for Certain Items (refer to Table 8). We believe that adjusted EBIT provides transparent and useful information to management, investors, analysts and other parties in evaluating and assessing our primary operating results from period-to-period after removing the impact of unusual, non-operational or restructuring-related activities that affect comparability. Our management recognizes that adjusted EBIT has inherent limitations because of the excluded items. Adjusted EBIT is one of the measures management uses for planning and budgeting, monitoring and evaluating financial and operating results and as a performance metric in the Company's incentive compensation plan. We may provide guidance on adjusted EBIT but are unable to reconcile forecasted adjusted EBIT to a US GAAP financial measure without unreasonable efforts because a forecast of Certain Items, such as mark-to-market pension gains and losses, which may be significant, is not practical. Adjusted EBIT margin is defined by the Company as adjusted EBIT divided by net sales. Adjusted EBIT margin has the same uses and limitations as Adjusted EBIT.
  • Adjusted EBIT by business segment may also be referred to by management as segment income. Adjusted EBIT by core (i.e. Acetyl Chain and/or Materials Solutions) may also be referred to by management as core income. Adjusted EBIT margin by business segment may also be referred to by management as segment income margin. Adjusted EBIT margin by core may also be referred to by management as core income margin.
  • Operating EBITDA is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense, taxes and depreciation and amortization, and further adjusted for Certain Items, which Certain Items include accelerated depreciation and amortization expense. Operating EBITDA is equal to adjusted EBIT plus depreciation and amortization. We believe that Operating EBITDA provides transparent and useful information to investors, analysts and other parties in evaluating our operating performance relative to our peer companies. Operating EBITDA margin is defined by the Company as Operating EBITDA divided by net sales. Operating EBITDA margin has the same uses and limitations as Operating EBITDA.
  • Operating profit (loss) attributable to Celanese Corporation is defined by the Company as operating profit (loss), less earnings (loss) attributable to noncontrolling interests ("NCI"). We believe that operating profit (loss) attributable to Celanese Corporation provides transparent and useful information to management, investors, analysts and other parties in evaluating our core operational performance. Operating margin attributable to Celanese Corporation is defined by the Company as operating profit (loss) attributable to Celanese Corporation divided by net sales. Operating margin attributable to Celanese Corporation has the same uses and limitations as Operating profit (loss) attributable to Celanese Corporation.
  • Adjusted earnings per share is a performance measure used by the Company and is defined by the Company as earnings (loss) from continuing operations attributable to Celanese Corporation, adjusted for income tax (provision) benefit, Certain Items, and refinancing and related expenses, divided by the number of basic common shares and dilutive restricted stock units and stock options calculated using the treasury method. We believe that adjusted earnings per share provides transparent and useful information to management, investors, analysts and other parties in evaluating and assessing our primary operating results from period-to-period after removing the impact of the above stated items that affect comparability. We may provide guidance on adjusted earnings per share but are unable to reconcile forecasted adjusted earnings per share to a GAAP financial measure without unreasonable efforts because a forecast of Certain Items, such as mark-to-market pension gains and losses, which may be significant, is not practical.

    Note: The income tax expense (benefit) on Certain Items ("Non-GAAP adjustments") is determined using the applicable rates in the taxing jurisdictions in which the Non-GAAP adjustments occurred and includes both current and deferred income tax expense (benefit). 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 and related costs, where applicable, and specifically excludes changes in uncertain tax positions, discrete recognition of GAAP items on a quarterly basis, other pre-tax items adjusted out of our GAAP earnings for adjusted earnings per share purposes and changes in management's assessments regarding the ability to realize deferred tax assets for GAAP. In determining the adjusted earnings per share tax rate, we reflect the impact of foreign tax credits when utilized, or expected to be utilized, absent discrete events impacting the timing of foreign tax credit utilization. We analyze this rate quarterly and adjust it 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 actual tax rate used for GAAP reporting in any given reporting period. Table 3a summarizes the reconciliation of our estimated GAAP effective tax rate to the adjusted tax rate. The estimated GAAP rate excludes discrete recognition of GAAP items due to our inability to forecast such items. As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate to the adjusted tax rate for actual results.
  • Free cash flow is a liquidity measure used by the Company and is defined by the Company as net cash provided by (used in) operations, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our methanol joint venture, Fairway Methanol LLC ("Fairway"). We believe that free cash flow provides useful information to management, investors, analysts and other parties in evaluating the Company's liquidity and credit quality assessment because it provides an indication of the long-term cash generating ability of our business. Although we use free cash flow as a measure to assess the liquidity generated by our business, the use of free cash flow has important limitations, including that free cash flow does not reflect the cash requirements necessary to service our indebtedness, lease obligations, unconditional purchase obligations or pension and postretirement funding obligations.
  • Net debt is defined by the Company as total debt less cash and cash equivalents. We believe that net debt provides useful information to management, investors, analysts and other parties in evaluating changes to the Company's capital structure and credit quality assessment.
  • Return on invested capital (adjusted) is defined by the Company as adjusted EBIT, tax effected using the adjusted tax rate, divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation stockholders' equity. We believe that return on invested capital (adjusted) provides useful information to management, investors, analysts and other parties in order to assess our income generation from the point of view of our stockholders and creditors who provide us with capital in the form of equity and debt and whether capital invested in the Company yields competitive returns. In addition, achievement of certain predetermined targets relating to return on invested capital (adjusted) is one of the factors we consider in determining the amount of performance-based compensation received by our management.

Supplemental Information

Supplemental Information we believe to be of interest to investors, analysts and other parties includes the following:

  • Net sales for Materials Solutions, the Acetyl Chain and each of our business segments and the percentage increase or decrease in net sales attributable to price, volume, currency and other factors for Materials Solutions, the Acetyl Chain and each of our business segments.
  • Cash dividends received from our equity and cost investments.
  • For those consolidated ventures in which the Company owns or is exposed to less than 100% of the economics, the outside stockholders' interests are shown as NCI. Beginning in 2014, this includes Fairway for which the Company's ownership percentage is 50%. Amounts referred to as "attributable to Celanese Corporation" are net of any applicable NCI.

Results Unaudited

The results in this document, 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.

 
 
Table 1
Adjusted EBIT and Operating EBITDA - Reconciliation of Non-GAAP Measures - Unaudited
 
    Q3 '16     Q2 '16     Q1 '16     2015     Q4 '15     Q3 '15     Q2 '15     Q1 '15
(In $ millions)
Net earnings (loss) attributable to Celanese Corporation 262 221 257 304 (298 ) 161 205 236
(Earnings) loss from discontinued operations 3 (1 ) 2 2
Interest income (1 ) (1 ) (1 )
Interest expense 28 30 33 119 33 29 30 27
Refinancing expense 4 2
Income tax provision (benefit) 15 52 60 201 31 74 24 72

Certain Items attributable to Celanese Corporation (Table 8)

 

7 9 8   611   490   41 65   15
Adjusted EBIT 319 312 358 1,236 256 305 325 350
Depreciation and amortization expense(1) 71 73 73   279   76   70 66   67
Operating EBITDA 390 385 431   1,515   332   375 391   417
 

 

Q3 '16 Q2 '16 Q1 '16 2015 Q4 '15 Q3 '15 Q2 '15 Q1 '15
(In $ millions)
Advanced Engineered Materials
Consumer Specialties 1 10 10
Industrial Specialties 28 18 10
Acetyl Intermediates 40 1 39
Other Activities(2)        
Accelerated depreciation and amortization expense 1 78 29 10 39
Depreciation and amortization expense(1) 71 73 73   279   76   70 66   67
Total depreciation and amortization expense 72 73 73   357   105   80 105   67
______________________________

(1)

 

Excludes accelerated depreciation and amortization expense as detailed in the table above, which amounts are included in Certain Items above.

(2)

Other Activities includes corporate Selling, general and administrative ("SG&A") expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

 
 

Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited

 
    Q3 '16   Q2 '16   Q1 '16   2015   Q4 '15   Q3 '15   Q2 '15   Q1 '15
(In $ millions, except percentages)
Operating Profit (Loss) / Operating Margin                
Materials Solutions 161 27.3 % 162 27.0 % 166 27.9 % 497 21.7 % 97 17.4 % 135 23.6 % 144 24.2 % 121 21.2 %
Acetyl Chain(1) 108 14.2 % 107 13.7 % 145 17.3 % 69 2.0 % (246 ) (30.3 )% 73 8.4 % 82 9.0 % 160 17.6 %
Other Activities(2) (23 ) (26 ) (24 ) (240 ) (156 ) (22 ) (38 ) (24 )
Total 246   18.6 % 243   18.0 % 287   20.4 % 326   5.7 % (305 ) (22.9 )% 186   13.2 % 188   12.7 % 257   17.7 %
Less: Net Earnings (Loss) Attributable to NCI(1) 1   2   2   (19 ) (3 ) (10 ) (4 ) (2 )
Operating Profit (Loss) Attributable to Celanese Corporation 245   18.5 % 241   17.8 % 285   20.3 % 345   6.1 % (302 ) (22.6 )% 196   13.9 % 192   13.0 % 259   17.9 %
Operating Profit (Loss) / Operating Margin Attributable to Celanese Corporation
Advanced Engineered Materials 93 25.5 % 82 22.5 % 88 25.1 % 235 17.7 % 51 16.4 % 58 17.8 % 67 19.4 % 59 17.2 %
Consumer Specialties 68   30.2 % 80   34.0 % 78   32.0 % 262   27.0 % 46   18.7 % 77   31.2 % 77   30.9 % 62   27.3 %
Total Materials Solutions 161   27.3 % 162   27.0 % 166   27.9 % 497   21.7 % 97   17.4 % 135   23.6 % 144   24.2 % 121   21.2 %
Industrial Specialties 25 10.2 % 29 11.1 % 31 12.3 % 72 6.7 % (4 ) (1.7 )% 19 6.9 % 28 9.8 % 29 10.3 %
Acetyl Intermediates(1) 82 13.9 % 75 12.7 % 112 16.9 % 16 0.6 % (239 ) (37.1 )% 64 9.4 % 58 8.2 % 133 18.7 %
Eliminations   1              
Total Acetyl Chain 107   14.0 % 105   13.5 % 143   17.0 % 88   2.5 % (243 ) (29.9 )% 83   9.5 % 86   9.4 % 162   17.8 %
Other Activities(2) (23 ) (26 ) (24 ) (240 ) (156 ) (22 ) (38 ) (24 )
Total 245   18.5 % 241   17.8 % 285   20.3 % 345   6.1 % (302 ) (22.6 )% 196   13.9 % 192   13.0 % 259   17.9 %
Equity Earnings, Cost-Dividend Income, Other Income (Expense) Attributable to Celanese Corporation
Advanced Engineered Materials 33 27 31 151 33 44

(3

)

31 43
Consumer Specialties 27   28   28   108   27   26   27   28  
Total Materials Solutions 60   55   59   259   60   70   58   71  
Industrial Specialties
Acetyl Intermediates 1   2   2   7   3   2   1   1  
Total Acetyl Chain 1   2   2   7   3   2   1   1  
Other Activities(2) 6   5   4   14   5   (4 ) 9   4  
Total 67   62   65   280   68   68   68   76  

Certain Items Attributable to Celanese Corporation (Table 8)

 

Advanced Engineered Materials 1 2 1 11 1 4 4 2
Consumer Specialties 3       41   36   2   1   2  
Total Materials Solutions 4   2   1   52   37   6   5   4  
Industrial Specialties 1 2 38 26 9 2 1
Acetyl Intermediates 1   3   1   365   296   18   48   3  
Total Acetyl Chain 1   4   3   403   322   27   50   4  
Other Activities(2) 2   3   4   156   131   8   10   7  
Total 7   9   8   611   490   41   65   15  
Adjusted EBIT / Adjusted EBIT Margin
Advanced Engineered Materials 127 34.8 % 111 30.4 % 120 34.3 % 397 29.9 % 85 27.3 % 106 32.5 % 102 29.5 % 104 30.3 %
Consumer Specialties 98   43.6 % 108   46.0 % 106   43.4 % 411   42.4 % 109   44.3 % 105   42.5 % 105   42.2 % 92   40.5 %
Total Materials Solutions 225   38.1 % 219   36.5 % 226   38.0 % 808   35.2 % 194   34.8 % 211   36.8 % 207   34.8 % 196   34.4 %
Industrial Specialties 25 10.2 % 30 11.5 % 33 13.0 % 110 10.2 % 22 9.2 % 28 10.2 % 30 10.5 % 30 10.6 %
Acetyl Intermediates 84 14.3 % 80 13.5 % 115 17.3 % 388 14.1 % 60 9.3 % 84 12.4 % 107 15.1 % 137 19.2 %
Eliminations   1              
Total Acetyl Chain 109   14.3 % 111   14.2 % 148   17.6 % 498   14.2 % 82   10.1 % 112   12.8 % 137   15.0 % 167   18.4 %
Other Activities(2) (15 ) (18 ) (16 ) (70 ) (20 ) (18 ) (19 ) (13 )
Total 319   24.1 % 312   23.1 % 358   25.5 % 1,236   21.8 % 256   19.2 % 305   21.6 % 325   22.0 % 350   24.1 %

___________________________

(1)   Net earnings (loss) attributable to NCI is included within the Acetyl Intermediates segment.
(2) Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).
(3) Includes $43 million of Equity in net earnings (loss) of affiliates and $1 million of Other income.
 
 

Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited (cont.)

 
    Q3 '16   Q2 '16   Q1 '16   2015   Q4 '15   Q3 '15   Q2 '15   Q1 '15
(In $ millions, except percentages)
Depreciation and Amortization Expense(1)                
Advanced Engineered Materials 22 25 24 99 24 26 24 25
Consumer Specialties 11   11   11   50   12   15   12   11  
Total Materials Solutions 33   36   35   149   36   41   36   36  
Industrial Specialties 9 8 8 36 7 10 9 10
Acetyl Intermediates 27   27   27   83   29   17   18   19  
Total Acetyl Chain 36   35   35   119   36   27   27   29  
Other Activities(2) 2   2   3   11   4   2   3   2  
Total 71   73   73   279   76   70   66   67  
Operating EBITDA / Operating EBITDA Margin
Advanced Engineered Materials 149 40.8 % 136 37.3 % 144 41.1 % 496 37.4 % 109 35.0 % 132 40.5 % 126 36.4 % 129 37.6 %
Consumer Specialties 109   48.4 % 119   50.6 % 117   48.0 % 461   47.6 % 121   49.2 % 120   48.6 % 117   47.0 % 103   45.4 %
Total Materials Solutions 258   43.7 % 255   42.5 % 261   43.9 % 957   41.7 % 230   41.3 % 252   44.0 % 243   40.8 % 232   40.7 %
Industrial Specialties 34 13.9 % 38 14.5 % 41 16.2 % 146 13.5 % 29 12.1 % 38 13.9 % 39 13.6 % 40 14.2 %
Acetyl Intermediates 111 18.8 % 107 18.1 % 142 21.4 % 471 17.2 % 89 13.8 % 101 14.9 % 125 17.7 % 156 21.9 %
Eliminations   1              
Total Acetyl Chain 145   19.0 % 146   18.7 % 183   21.8 % 617   17.6 % 118   14.5 % 139   15.9 % 164   18.0 % 196   21.6 %
Other Activities(2) (13 ) (16 ) (13 ) (59 ) (16 ) (16 ) (16 ) (11 )
Total 390   29.5 % 385   28.5 % 431   30.7 % 1,515   26.7 % 332   24.9 % 375   26.5 % 391   26.5 % 417   28.8 %
___________________________
(1)   Excludes accelerated depreciation and amortization expense, which amounts are included in Certain Items above. See Table 1 for details.
(2) Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).
 
 
Table 3
Adjusted Earnings (Loss) per Share - Reconciliation of a Non-GAAP Measure - Unaudited
 
    Q3 '16   Q2 '16   Q1 '16   2015   Q4 '15   Q3 '15   Q2 '15   Q1 '15
  per share   per share   per share   per share   per share   per share   per share   per share
(In $ millions, except per share data)
Earnings (loss) from continuing operations attributable to Celanese Corporation 265 1.83 221 1.50 256 1.73 306 2.01 (298 ) (2.03 ) 161 1.07 207 1.34 236 1.53
Income tax provision (benefit) 15   52   60   201   31   74   24   72  
Earnings (loss) from continuing operations before tax 280 273 316 507 (267 ) 235 231 308

Certain Items attributable to Celanese Corporation (Table 8)

7 9 8 611 490 41 65 15
Refinancing and related expenses 4     2            
Adjusted earnings (loss) from continuing operations before tax 291 282 326 1,118 223 276 296 323
Income tax (provision) benefit on adjusted earnings(1) (49 ) (48 ) (55 ) (201 ) (40 ) (50 ) (53 ) (58 )
Adjusted earnings (loss) from continuing operations(2) 242   1.67 234   1.59 271   1.83 917   6.02 183   1.25   226   1.50 243   1.58 265   1.72
Diluted shares (in millions)(3)
Weighted average shares outstanding 144.0 146.5 147.4 150.8 146.9 149.8 153.5 153.2
Incremental shares attributable to equity awards 0.6   0.6   0.7   1.5     1.2   0.5   0.7  
Total diluted shares 144.6   147.1   148.1   152.3   146.9   151.0   154.0   153.9  
 
______________________________
(1) Calculated using adjusted effective tax rates (Table 3a) as follows:
Q3 '16 Q2 '16 Q1 '16 2015 Q4 '15 Q3 '15 Q2 '15 Q1 '15
(In percentages)
Adjusted effective tax rate 17 17 17 18 18 18 18 18
 

(2) Excludes the immediate recognition of actuarial gains and losses and the impact of actual vs. expected plan asset returns.

 

Actual Plan
Asset Returns

 

Expected
Plan Asset
Returns

   
Q4 '15 & 2015 (2.5 )% 7.8 %
 

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

 
 
Table 3a
Adjusted Tax Rate - Reconciliation of a Non-GAAP Measure - Unaudited
 
    Estimated   Actual
2016 2015
(In percentages)
US GAAP effective tax rate 16 41
Discrete quarterly recognition of GAAP items(1) 2 2
Tax impact of other charges and adjustments (15 )
Utilization of foreign tax credits (2 )
Changes in valuation allowances, excluding impact of other charges and adjustments (2 ) (5 )
Other(2) 1   (3 )
Adjusted tax rate 17   18  
______________________________

Note: As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate for actual results.

(1)   Such as changes in tax laws, deferred taxes on outside basis differences, changes in uncertain tax positions and prior year audit adjustments.
(2) Tax impacts related to full-year forecasted tax opportunities and related costs.
 
 
Table 4
Net Sales by Segment - Unaudited
 
    Q3 '16   Q2 '16   Q1 '16   2015   Q4 '15   Q3 '15   Q2 '15   Q1 '15
(In $ millions)
Advanced Engineered Materials 365 365 350 1,326 311 326 346 343
Consumer Specialties 225   235   244   969   246   247   249   227  
Total Materials Solutions 590   600   594   2,295   557   573   595   570  
Industrial Specialties 245 262 253 1,082 239 274 287 282
Acetyl Intermediates 589 592 663 2,744 644 680 707 713
Eliminations(1) (71 ) (74 ) (76 ) (323 ) (71 ) (82 ) (83 ) (87 )
Total Acetyl Chain 763   780   840   3,503   812   872   911   908  
Other Activities(2)
Intersegment eliminations(1) (30 ) (29 ) (30 ) (124 ) (35 ) (32 ) (29 ) (28 )
Net sales 1,323   1,351   1,404   5,674   1,334   1,413   1,477   1,450  
___________________________

(1)

 

Includes intersegment sales as follows:

Q3 '16 Q2 '16 Q1 '16 2015 Q4 '15 Q3 '15 Q2 '15 Q1 '15
(In $ millions)
Industrial Specialties (1 ) (1 )
Acetyl Intermediates (100 ) (102 ) (106 ) (447 ) (106 ) (114 ) (112 ) (115 )

Intersegment eliminations

(101 ) (103 ) (106 ) (447 ) (106 ) (114 ) (112 ) (115 )

(2)

Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

 
 
Table 4a
Factors Affecting Segment Net Sales Sequentially - Unaudited
 
Three Months Ended September 30, 2016 Compared to Three Months Ended June 30, 2016
 
  Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials (1 ) 1
Consumer Specialties (4 ) (4 )
Total Materials Solutions (2 ) (2 )
 
Industrial Specialties (6 ) (1 ) (7 )
Acetyl Intermediates
Total Acetyl Chain (2 ) (1 ) 1 (2 )
 
Total Company (2 ) (2 )
 
 

Three Months Ended June 30, 2016 Compared to Three Months Ended March 31, 2016

 
    Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials 6 (2 ) 1 5
Consumer Specialties (3 ) (1 ) (4 )
Total Materials Solutions 2 (2 ) 1 1
 
Industrial Specialties 4 (1 ) 1 4
Acetyl Intermediates (11 ) (11 )
Total Acetyl Chain (7 ) (1 ) 1 (7 )
 
Total Company (4 ) (1 ) 1 (4 )
 
 

Three Months Ended March 31, 2016 Compared to Three Months Ended December 31, 2015

 
    Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials 12 12
Consumer Specialties 6 (7 ) (1 )
Total Materials Solutions 10 (3 ) 7
 
Industrial Specialties 9 (3 ) 6
Acetyl Intermediates 7 (4 ) 3
Total Acetyl Chain 8 (4 ) (1 ) 3
 
Total Company 9 (4 ) 5
 
 

Three Months Ended December 31, 2015 Compared to Three Months Ended September 30, 2015

 
    Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials (3 ) (1 ) (4 )
Consumer Specialties (1 ) 1
Total Materials Solutions (3 ) (3 )
 
Industrial Specialties (7 ) (5 ) (1 ) (13 )
Acetyl Intermediates 1 (7 ) (1 ) 2 (5 )
Total Acetyl Chain (2 ) (7 ) (1 ) 3 (7 )
 
Total Company (1 ) (4 ) (1 ) (6 )
 
 

Three Months Ended September 30, 2015 Compared to Three Months Ended June 30, 2015

 
    Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials (5 ) (1 ) (6 )
Consumer Specialties
Total Materials Solutions (3 ) (1 ) (4 )
 
Industrial Specialties (5 ) 1 (4 )
Acetyl Intermediates (1 ) (3 ) (4 )
Total Acetyl Chain (2 ) (2 ) (4 )
 
Total Company (3 ) (1 ) (4 )
 
 

Three Months Ended June 30, 2015 Compared to Three Months Ended March 31, 2015

 
    Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials 2 (1 ) 1
Consumer Specialties 11 (1 ) 10
Total Materials Solutions 6 (1 ) (1 ) 4
 
Industrial Specialties 6 (4 ) (1 ) 1
Acetyl Intermediates (1 ) 1 (1 ) (1 )
Total Acetyl Chain 2 (1 ) (1 )
 
Total Company 3 (1 ) (1 ) 1 2
 
 

Three Months Ended March 31, 2015 Compared to Three Months Ended December 31, 2014

 
    Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials 6 2 (4 ) 4
Consumer Specialties (16 ) (2 ) (18 )
Total Materials Solutions (4 ) (3 ) (7 )
 
Industrial Specialties 16 (4 ) (5 ) 7
Acetyl Intermediates 1 (11 ) (3 ) (13 )
Total Acetyl Chain 5 (10 ) (4 ) 1 (8 )
 
Total Company 2 (6 ) (4 ) 1 (7 )
 
 
Table 4b
Factors Affecting Segment Net Sales Year Over Year - Unaudited
 
Three Months Ended September 30, 2016 Compared to Three Months Ended September 30, 2015
 
    Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials 16 (4 ) 12
Consumer Specialties (2 ) (7 ) (9 )
Total Materials Solutions 8 (5 ) 3
 
Industrial Specialties (1 ) (9 ) (1 ) (11 )
Acetyl Intermediates (3 ) (11 ) 1 (13 )
Total Acetyl Chain (3 ) (12 ) 2 (13 )
 
Total Company 1 (9 ) 2 (6 )
 
 

Three Months Ended June 30, 2016 Compared to Three Months Ended June 30, 2015

 
    Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials 8 (4 ) 1 5
Consumer Specialties 2 (8 ) (6 )
Total Materials Solutions 5 (5 ) 1 1
 
Industrial Specialties (1 ) (8 ) (9 )
Acetyl Intermediates (5 ) (13 ) 2 (16 )
Total Acetyl Chain (4 ) (12 ) 2 (14 )
 
Total Company (10 ) 1 (9 )
 
 

Three Months Ended March 31, 2016 Compared to Three Months Ended March 31, 2015

 
    Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials 5 (2 ) (1 ) 2
Consumer Specialties 17 (9 ) 8
Total Materials Solutions 9 (5 ) 4
 
Industrial Specialties (9 ) (1 ) (10 )
Acetyl Intermediates 6 (13 ) (2 ) 2 (7 )
Total Acetyl Chain 5 (13 ) (2 ) 1 (9 )
 
Total Company 7 (10 ) (2 ) 1 (4 )
 
 

Three Months Ended December 31, 2015 Compared to Three Months Ended December 31, 2014

 
    Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials (2) 1 (5) (6)
Consumer Specialties (8) (3) (1) (12)
Total Materials Solutions (5) (1) (3) (9)
 
Industrial Specialties 8 (12) (6) (10)
Acetyl Intermediates (17) (5) 1 (21)
Total Acetyl Chain 2 (17) (5) 3 (17)
 
Total Company (1) (11) (5) 2 (15)
 
 

Three Months Ended September 30, 2015 Compared to Three Months Ended September 30, 2014

 
    Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials (3 ) (1 ) (7 ) (11 )
Consumer Specialties (10 ) (4 ) (1 ) (15 )
Total Materials Solutions (7 ) (2 ) (4 ) (13 )
 
Industrial Specialties (5 ) (8 ) (13 )
Acetyl Intermediates (6 ) (15 ) (6 ) (27 )
Total Acetyl Chain (5 ) (14 ) (7 ) 2 (24 )
 
Total Company (5 ) (10 ) (6 ) 1 (20 )
 
 

Three Months Ended June 30, 2015 Compared to Three Months Ended June 30, 2014

 
    Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials (1) (1) (9) (11)
Consumer Specialties (10) (3) (1) (14)
Total Materials Solutions (5) (2) (5) (12)
 
Industrial Specialties (1) (4) (9) (14)
Acetyl Intermediates (4) (10) (8) (22)
Total Acetyl Chain (3) (10) (9) 3 (19)
 
Total Company (4) (7) (8) 2 (17)
 
 

Three Months Ended March 31, 2015 Compared to Three Months Ended March 31, 2014

 
    Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials (8 ) (8 )
Consumer Specialties (21 ) (3 ) (1 ) (25 )
Total Materials Solutions (9 ) (2 ) (5 ) (16 )
 
Industrial Specialties (4 ) 3 (9 ) (10 )
Acetyl Intermediates (2 ) (7 ) (6 ) (15 )
Total Acetyl Chain (3 ) (5 ) (7 ) 1 (14 )
 
Total Company (6 ) (3 ) (7 ) 1 (15 )
 
 
Table 4c
Factors Affecting Segment Net Sales Year Over Year - Unaudited
 
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
 
    Volume   Price   Currency   Other   Total
(In percentages)
Advanced Engineered Materials (1) (1) (7) (9)
Consumer Specialties (13) (3) (1) (17)
Total Materials Solutions (6) (2) (4) (12)
 
Industrial Specialties (4) (8) (12)
Acetyl Intermediates (3) (13) (6) (22)
Total Acetyl Chain (3) (11) (7) 2 (19)
 
Total Company (4) (8) (6) 1 (17)
 
 
Table 5
Free Cash Flow - Reconciliation of a Non-GAAP Measure - Unaudited
 
    Q3 '16   Q2 '16   Q1 '16   2015   Q4 '15   Q3 '15   Q2 '15   Q1 '15
(In $ millions)
Net cash provided by (used in) investing activities (54 ) (63 ) (75 ) (558 ) (97 ) (107 ) (181 ) (173 )
Net cash provided by (used in) financing activities 265 (259 ) (473 ) (66 ) (2 ) (99 ) 18 17
 
Net cash provided by (used in) operating activities 304 349 287 862 136 173 283 270
Capital expenditures on property, plant and equipment (58 ) (58 ) (70 ) (520 ) (89 ) (104 ) (165 ) (162 )
Capital (distributions to) contributions from NCI (9 ) (6 )   214   27   32   75   80  
Free cash flow(1)(2) 237   285   217   556   74   101   193   188  
______________________________
(1)   Free cash flow is a liquidity measure used by the Company and is defined by the Company as net cash provided by (used in) operating activities, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui) related to our joint venture, Fairway Methanol LLC ("Fairway").
(2) Excludes required debt service and capital lease payments of $56 million and $25 million for the years ending December 31, 2016 and 2015, respectively.
 
 
Table 6
Cash Dividends Received - Unaudited
 
    Q3 '16   Q2 '16   Q1 '16     2015     Q4 '15   Q3 '15   Q2 '15   Q1 '15
(In $ millions)
Dividends from equity method investments 6 73 37   176   54 5 29 88
Dividends from cost method investments 26 29 27   107   27 26 26 28
Total 32 102 64   283   81 31 55 116
 
 
Table 7
Net Debt - Reconciliation of a Non-GAAP Measure - Unaudited
 
    Q3 '16   Q2 '16   Q1 '16   2015   Q4 '15   Q3 '15   Q2 '15   Q1 '15
(In $ millions)
Short-term borrowings and current installments of long-term debt - third party and affiliates 92 119 116 513 513 463 123 128
Long-term debt, net of unamortized deferred financing costs 2,923   2,464   2,487   2,468   2,468   2,522   2,532   2,515  
Total debt 3,015 2,583 2,603 2,981 2,981 2,985 2,655 2,643
Cash and cash equivalents (1,252 ) (735 ) (716 ) (967 ) (967 ) (952 ) (988 ) (851 )
Net debt 1,763   1,848   1,887   2,014   2,014   2,033   1,667   1,792  
 
 

Table 8

Certain Items - Unaudited

 

The following Certain Items attributable to Celanese Corporation are included in Net earnings (loss) and are adjustments to non-GAAP measures:

 
    Q3 '16   Q2 '16   Q1 '16   2015   Q4 '15   Q3 '15   Q2 '15   Q1 '15   Income Statement Classification
(In $ millions)
Employee termination benefits(1) 3 3 5 53 33 6 10 4 Other charges (gains), net
Plant/office closures 2 1 48 31 13 1 3 Other charges (gains), net / Cost of sales / SG&A
Singapore contract termination 174 174 Other charges (gains), net
Business optimization 1 1 2 20 4 6 5 5 Cost of sales / SG&A
Asset impairments 1 126 125 1 Other charges (gains), net
(Gain) loss on disposition of business and assets, net (2 ) 4 (1 ) 5 (Gain) loss on disposition, net
Commercial disputes(2) 6 5 1 Cost of sales / Other charges (gains), net
Write-off of other productive assets 1 2 39 39 Cost of sales / R&D
Employee benefit plan changes 1 4 (1 ) 2 1 2 Cost of sales / SG&A / R&D
Actuarial (gain) loss on pension and postretirement plans 127 126 1 Cost of sales / SG&A / R&D
Start-up costs(3) 1 1 10 (1 ) 8 3 Cost of sales
Mergers and acquisitions 1     SG&A
Certain Items attributable to Celanese Corporation 7   9 8 611 490   41 65 15
______________________________
(1)   Primarily associated with site shutdown costs.
(2) Primarily associated with litigation settlement costs.
(3) Primarily associated with Fairway joint venture operational start-up costs.
 
 
Table 9
Return on Invested Capital (Adjusted) - Presentation of a Non-GAAP Measure - Unaudited
 
        2015

(In $ millions,
except percentages)

Net earnings (loss) attributable to Celanese Corporation 304
 

Adjusted EBIT (Table 1)

1,236
Adjusted effective tax rate (Table 3a) 18 %
Adjusted EBIT tax effected 1,014
 
2015 2014 Average
(In $ millions, except percentages)
Short-term borrowings and current installments of long-term debt - third parties and affiliates 513 137 325
Long-term debt, net of unamortized deferred financing costs 2,468 2,586 2,527
Celanese Corporation stockholders' equity 2,378 2,818 2,598  
Invested capital 5,450  
 
Return on invested capital (adjusted) 18.6 %
 
Net earnings (loss) attributable to Celanese Corporation as a percentage of invested capital 5.6 %

Contacts

Celanese Corporation
Investor Relations
Chuck Kyrish, +1-972-443-4574
Chuck.Kyrish@celanese.com
or
Media - U.S.
Travis Jacobsen, +1-972-443-3750
William.Jacobsen@celanese.com
or
Media - Europe
Jens Kurth, +49(0)69 45009 1574
J.Kurth@celanese.com

Contacts

Celanese Corporation
Investor Relations
Chuck Kyrish, +1-972-443-4574
Chuck.Kyrish@celanese.com
or
Media - U.S.
Travis Jacobsen, +1-972-443-3750
William.Jacobsen@celanese.com
or
Media - Europe
Jens Kurth, +49(0)69 45009 1574
J.Kurth@celanese.com