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8-K - FORM 8-K - Celanese Corp | d70963e8vk.htm |
EX-99.2 - EX-99.2 - Celanese Corp | d70963exv99w2.htm |
Exhibit
99.1
Celanese Corporation | ||
Investor Relations | ||
Corporate News Release
|
1601 West LBJ Freeway | |
Dallas, Texas 75234 |
Celanese Corporation Reports Fourth Quarter and Full Year Results
Fourth quarter highlights:
| Net sales were $1,388 million, up 8% from prior year period | ||
| Operating profit was $109 million versus ($152) million in prior year period | ||
| Net earnings were $5 million versus ($155) million in prior year period | ||
| Operating EBITDA was $227 million versus $63 million in prior year period | ||
| Diluted EPS from continuing operations was ($0.01) versus ($0.99) in prior year period | ||
| Adjusted EPS was $0.50 versus ($0.40) in prior year period |
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(in $ millions, except per share data) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Net sales
|
1,388 | 1,286 | 5,082 | 6,823 | ||||||||||||
Operating profit (loss)
|
109 | (152 | ) | 290 | 440 | |||||||||||
Net earnings (loss) attributable to Celanese Corporation
|
5 | (155 | ) | 488 | 282 | |||||||||||
Operating EBITDA 1
|
227 | 63 | 847 | 1,164 | ||||||||||||
Diluted EPS continuing operations
|
($0.01 | ) | ($0.99 | ) | $ | 3.08 | $ | 2.28 | ||||||||
Diluted EPS total
|
$ | 0.02 | ($1.09 | ) | $ | 3.11 | $ | 1.73 | ||||||||
Adjusted EPS 2
|
$ | 0.50 | ($0.40 | ) | $ | 1.71 | $ | 2.75 | ||||||||
1 | Non-U.S. GAAP measure. See reconciliation in Table 1. | |
2 | Non-U.S. GAAP measure. See reconciliation in Table 6. |
Dallas, February 9, 2010: Celanese Corporation (NYSE: CE), a leading, global chemical
company, today reported fourth quarter 2009 net sales of $1,388 million, up 8 percent from the same
period last year. The increase in net sales was primarily driven by higher volumes resulting from
improved global demand for Acetyl Intermediates and Advanced Engineered Materials products. The
higher volumes were offset by lower pricing, primarily in Acetyl Intermediates and Industrial
Specialties, driven by continued low industry utilization and lower raw material input costs. The
fourth quarter 2008 results included $54 million of net sales associated with
the polyvinyl alcohol (PVOH) business, which the company divested in July 2009. Operating profit
was $109 million compared with a loss of $152 million in the prior year period. Last years
results included $94 million of fixed asset impairment charges, primarily related to the closure of
the companys acetic acid and vinyl acetate monomer (VAM) production facility in Pardies, France,
and its VAM production unit in Cangrejera, Mexico. Excluding these impairment charges, the
increase in operating profit was attributed to higher volumes and the positive impact of the
companys fixed spending reduction efforts. Net earnings were $5 million compared with a loss of
$155 million in the prior year period. The fourth quarter 2008 results included $101 million of
non-cash inventory accounting impact.
Page 2 of 13
Adjusted earnings per share for the fourth quarter of 2009 were $0.50 compared with a loss of $0.40
in the same period last year. The 2009 results exclude $17 million of other net charges and
adjustments, primarily related to the companys manufacturing and administrative restructuring
efforts. Adjusted earnings per share reflect an effective tax rate of 23 percent and a diluted
share count of 158.4 million. Operating EBITDA in the period was $227 million compared with $63
million in the prior year period.
Our businesses performed well during the quarter, reflecting the strength of our leading global
positions and our commitment to operational excellence and value creation, said David Weidman,
chairman and chief executive officer. Overall industrial and consumer demand was maintained from
the third quarter and improved significantly from the fourth quarter of 2008. Although 2009 was a
challenging year for the global economies, Celanese made significant progress in executing its
growth strategy and is well positioned to benefit as the economy recovers.
Recent Highlights
| Launched new, innovative polyacetal (POM) technology that is expected to create significant additional growth opportunities for its Advanced Engineered Materials business. | ||
| Signed memorandum of understanding with its acetate joint venture partner, the China National Tobacco Corporation, to expand flake and tow capacities at its joint venture facility in Nantong, China. | ||
| Ceased production of acetic acid and vinyl acetate monomer at its facility in Pardies, France. | ||
| Reached a long-term agreement to supply vinyl acetate monomer to Jiangxi Jiangwei High-Tech Stock Co., Ltd. Jiangwei will cease production of its calcium carbide-based alternative for economic and environmental reasons and source Celaneses vinyl acetate monomer. | ||
| Acquired the long-fiber reinforced thermoplastics (LFT) business of FACT GmbH (Future Advanced Composites Technology) of Germany, supporting the companys Advanced Engineered Materials growth strategy. | ||
| Announced redemption of its Convertible Perpetual Preferred Stock for its Series A Common Stock, to be completed February 22, 2010. |
Fourth Quarter Segment Overview
Advanced Engineered Materials
Advanced Engineered Materials experienced volume recovery and margin expansion as it demonstrated
the significant operating leverage in its specialty engineered polymers business model. Net sales
for the fourth quarter were $239 million compared with $195 million in the fourth quarter of 2008.
Higher volumes across all end-markets and geographies, as well as positive currency impacts, offset
lower pricing due to product mix. Operating profit increased to $33 million compared with a loss
of $48 million in the prior year period, driven by the increased net sales, lower raw material and
energy costs, as well as the companys fixed spending reduction efforts. Fourth quarter 2008
results included $16 million associated with fixed asset impairments. Operating EBITDA was $50
million in the fourth quarter of 2009 compared with a loss of $3 million in the same period last
Page 3 of 13
year. Results for the prior year period included $23 million of impact related to inventory
accounting. Equity
earnings from affiliates were $4 million lower than last years results and included the impact of
a planned turnaround at one of the affiliates during the quarter.
Consumer Specialties
Consumer Specialties continued to deliver strong performance with sustained margins. Net sales for
the fourth quarter were $267 million compared with $286 million in the same period last year.
Higher pricing in Acetate Products and positive currency impacts partially offset lower volumes
primarily related to softer consumer demand and continued customer inventory destocking in these
late-cycle businesses. Operating profit was $47 million, $5 million lower than the prior year
period, as the strong pricing and the companys fixed spending reduction efforts could not offset
the lower volumes, primarily in the Nutrinova business. Operating EBITDA was $65 million,
unchanged from the same period last year.
Industrial Specialties
Industrial Specialties also experienced volume recovery in its emulsions and EVA performance
polymers businesses. Net sales for the fourth quarter were $229 million compared with $277 million
in the prior year period, which included $54 million of sales associated with the companys PVOH
business that was divested in July 2009. Higher volumes in the current period offset reduced
average pricing related to lower raw material costs, particularly for VAM and ethylene. Operating
profit was $16 million compared with a loss of $8 million in the same period last year. The fourth
quarter 2009 results included a $10 million captive insurance recovery related to the force majeure
event at the companys performance polymers facility in Edmonton, Canada and also benefited from
the companys fixed spending reduction efforts. Fourth quarter 2008 results included $15 million
of inventory accounting impacts. Operating EBITDA for the quarter was $19 million compared with $8
million in the prior year period.
Acetyl Intermediates
Acetyl Intermediates experienced significant volume recovery and margin expansion as global demand
for acetyl products increased in the seasonally strong fourth quarter. Net sales were $743 million
compared with $656 million in the same period last year as higher volumes and positive currency
impacts more than offset lower average pricing for acetic acid and downstream derivatives. The
higher volumes were primarily driven by stronger year-over-year global demand and were supported by
incremental capacity from the companys expanded acetic acid facility in Nanjing, China, prior to
the closure of the facility in Pardies, France in December 2009. Operating profit was $73 million
compared with a loss of $116 million in the same period last year, driven by the higher volumes,
lower raw material costs, and the companys fixed spending reduction efforts. Fourth quarter 2008
results included an asset impairment of $76 million, primarily related to the closure of the
companys operations in Pardies, France. Last years results also included an impact of inventory
accounting totaling approximately $63 million. Operating EBITDA was $128 million compared with
$21 million in the same period last year. Dividends from the companys cost affiliates were $12
million lower than the prior year period, primarily due to lower profits at Ibn Sina, its methanol
and methyl tertiary-butyl ether (MTBE) affiliate in Saudi Arabia.
Page 4 of 13
Taxes
The tax rate for adjusted earnings per share was 29 percent in the first six months of 2009 and 23
percent for the third and fourth quarters of 2009, compared with 26 percent in 2008. The U.S. GAAP
effective tax rate for continuing operations in 2009 was negative 101 percent compared to 15
percent in 2008. The decrease in the effective tax rate is primarily due to a deferred tax benefit
of $492 million for the release of certain valuation allowances against U.S. net deferred tax
assets, partially offset by lower earnings in jurisdictions participating in tax holidays,
increases in valuation allowances on certain foreign net deferred tax assets and the effect of new
tax legislation in Mexico.
Cash taxes for 2009 were $17 million compared to $98 million in 2008. The decrease in cash taxes
paid is primarily the result of German and Canadian tax refunds, lower earnings and the timing of
cash taxes in certain jurisdictions.
Equity and Cost Investments
Earnings from equity investments and dividends from cost investments, which are reflected in the
companys adjusted earnings and operating EBITDA, were $21 million compared with $37 million in the
same period last year. The decrease was primarily driven by lower dividends from the companys Ibn
Sina cost affiliate. Equity and cost investment dividends, which are included in cash flows, were
$23 million compared with $31 million in the same period last year, also attributed to the lower
dividends from the Ibn Sina cost affiliate.
Cash Flow
The company continued to generate strong cash flow in 2009 with cash and cash equivalents totaling
$1,254 million at the end of the fourth quarter of 2009 compared with $676 million in the prior
year. Cash flow provided by operating activities was $596 million for the full year 2009 compared
with $586 million in the prior year. Lower cash taxes, lower interest and favorable trade working
capital helped to offset the lower operating performance.
Net cash provided by investing activities for the full year 2009 increased to a cash inflow of $31
million versus a cash outflow of $201 million in 2008. The company received net cash of $168
million from the sale of the PVOH business and an advance payment of $412 million related to the
relocation of Ticonas business in Kelsterbach, Germany in 2009. During 2009, the company spent a
total of $367 million of capital expenditures and other expenses related to the Kelsterbach
relocation.
Net cash used in financing activities for the full year 2009 totaled $112 million compared with
$499 million in 2008. The 2008 results included a cash outflow of $378 million associated with the
companys share repurchase program.
Net debt at the end of the fourth quarter of 2009 was $2,247 million, a $610 million decrease from
the end of the fourth quarter of 2008.
Page 5 of 13
Outlook
The company noted that it remains confident, even absent a significant economic catalyst, in its
ability to increase operating EBITDA in 2010 by approximately $200 million compared with 2009. The
key areas of operating EBITDA growth include:
| increased volumes across all of its businesses totaling approximately $100 million, based on second half 2009 demand levels continuing into 2010 | ||
| additional fixed spending reductions of approximately $100 million, driven by structural streamlining of the companys manufacturing and administrative functions |
Additionally, the company expects an adjusted tax rate in the low 20s percent range. The company
also updated its expectation for depreciation and amortization expense in 2010 to be approximately
$30 million lower than in 2009.
We saw sustained global demand across our major end-markets and geographies throughout the second
half of 2009 and expect this trend to continue in 2010. Even without significant improvement in
the global economies in the short term, we are confident that the execution of our strategies will
drive improved earnings in 2010 and throughout an economic recovery, Weidman said.
Contacts: |
||||
Investor Relations
|
Media U.S. | Media Europe | ||
Mark Oberle
|
W. Travis Jacobsen | Jens Kurth | ||
Phone: +1 972 443 4464
|
Phone: +1 972 443 3750 | Phone: +49 (0)6107 772 1574 | ||
Telefax: +1 972 443 8519
|
Telefax: +1 972 443 8519 | Telefax: +49 (0)6107 772 7231 | ||
Mark.Oberle@celanese.com
|
William.Jacobsen@celanese.com | J.Kurth@celanese.com |
As a global leader in the chemicals industry, Celanese Corporation makes products essential to
everyday living. Our products, found in consumer and industrial applications, are manufactured in
North America, Europe and
Asia. Net sales totaled $5.1 billion in 2009, with approximately 73% generated outside of North
America. Known for operational excellence and execution of its business strategies, Celanese
delivers value to customers around the globe with innovations and best-in-class technologies.
Based in Dallas, Texas, the company employs approximately 7,400 employees worldwide. For more
information on Celanese Corporation, please visit the companys website at
www.celanese.com.
Forward-Looking Statements
This release may contain forward-looking statements, which include information concerning the
companys 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, 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
forward-looking statements contained in this release. Numerous factors, many of which are beyond
the companys control, could cause actual results to differ materially from those expressed as
forward-looking statements. Certain of these risk factors are discussed in the companys 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.
Page 6 of 13
Reconciliation of Non-U.S. GAAP Measures to U.S. GAAP
This release reflects five performance measures, operating EBITDA, affiliate EBITDA, adjusted
earnings per share, net debt and adjusted free cash flow, 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 is operating profit; for affiliate EBITDA is equity in net earnings of affiliates; for
adjusted earnings per share is earnings per common share-diluted; for net debt is total debt; and
for adjusted free cash flow is cash flow from operations.
Use of Non-U.S. GAAP Financial Information
| Operating EBITDA, a measure used by management to measure performance, is defined by the company as operating profit from continuing operations, plus equity in net earnings from affiliates, other income and depreciation and amortization, and further adjusted for other charges and adjustments. 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. Our management believes operating EBITDA is useful to investors because it is one of the primary measures our management uses for its planning and budgeting processes and to monitor and evaluate financial and operating results. | ||
| 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 affiliate EBITDA when determining the equity investments overall value in the company. | ||
| 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 tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year, excluding 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 managements 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 significantly 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 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 companys capital structure. Our management and credit analysts use net debt to evaluate the companys capital structure and assess credit quality. | ||
| Adjusted free cash flow is defined by the company as cash flow from operations less capital expenditures, other productive asset purchases, operating cash from discontinued operations and certain other charges and adjustments. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the companys cash flow. Our management and credit analysts use adjusted free cash flow to evaluate the companys liquidity and assess credit quality. |
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.
Page 7 of 13
Preliminary Consolidated Statements of Operations Unaudited
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(in $ millions, except per share data) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Net sales |
1,388 | 1,286 | 5,082 | 6,823 | ||||||||||||
Cost of sales |
(1,099 | ) | (1,177 | ) | (4,079 | ) | (5,567 | ) | ||||||||
Gross profit |
289 | 109 | 1,003 | 1,256 | ||||||||||||
Selling, general and administrative expenses |
(131 | ) | (124 | ) | (469 | ) | (540 | ) | ||||||||
Amortization of Intangible assets 1 |
(19 | ) | (18 | ) | (77 | ) | (76 | ) | ||||||||
Research and development expenses |
(19 | ) | (21 | ) | (75 | ) | (80 | ) | ||||||||
Other (charges) gains, net |
(13 | ) | (84 | ) | (136 | ) | (108 | ) | ||||||||
Foreign exchange gain (loss), net |
1 | (7 | ) | 2 | (4 | ) | ||||||||||
Gain (loss) on disposition of businesses and assets, net |
1 | (7 | ) | 42 | (8 | ) | ||||||||||
Operating profit |
109 | (152 | ) | 290 | 440 | |||||||||||
Equity in net earnings (loss) of affiliates |
4 | 8 | 48 | 54 | ||||||||||||
Interest expense |
(51 | ) | (66 | ) | (207 | ) | (261 | ) | ||||||||
Interest income |
1 | 4 | 8 | 31 | ||||||||||||
Dividend income cost investments |
17 | 29 | 98 | 167 | ||||||||||||
Other income (expense), net |
6 | (6 | ) | 4 | 3 | |||||||||||
Earnings (loss) from continuing operations before tax |
86 | (183 | ) | 241 | 434 | |||||||||||
Income tax (provision) benefit |
(85 | ) | 43 | 243 | (63 | ) | ||||||||||
Earnings (loss) from continuing operations |
1 | (140 | ) | 484 | 371 | |||||||||||
Earnings (loss) from operation of discontinued operations |
6 | | 6 | (120 | ) | |||||||||||
Gain on disposal of discontinued operations |
| 6 | | 6 | ||||||||||||
Income tax (provision) benefit, discontinued operations |
(2 | ) | (21 | ) | (2 | ) | 24 | |||||||||
Earnings (loss) from discontinued operations |
4 | (15 | ) | 4 | (90 | ) | ||||||||||
Net earnings (loss) |
5 | (155 | ) | 488 | 281 | |||||||||||
Less: Net earnings (loss) attributable to noncontrolling interests |
| | | (1 | ) | |||||||||||
Net earnings (loss) attributable to Celanese Corporation |
5 | (155 | ) | 488 | 282 | |||||||||||
Cumulative preferred stock dividend |
(2 | ) | (2 | ) | (10 | ) | (10 | ) | ||||||||
Net earnings (loss) available to common shareholders |
3 | (157 | ) | 478 | 272 | |||||||||||
Amounts attributable to Celanese Corporation |
||||||||||||||||
Earnings (loss) per common share basic |
||||||||||||||||
Continuing operations |
($0.01 | ) | ($0.99 | ) | $ | 3.30 | $ | 2.44 | ||||||||
Discontinued operations |
0.03 | (0.10 | ) | 0.03 | (0.61 | ) | ||||||||||
Net earnings (loss) basic |
$ | 0.02 | ($1.09 | ) | $ | 3.33 | $ | 1.83 | ||||||||
Earnings (loss) per common share diluted |
||||||||||||||||
Continuing operations |
($0.01 | ) | ($0.99 | ) | $ | 3.08 | $ | 2.28 | ||||||||
Discontinued operations |
0.03 | (0.10 | ) | 0.03 | (0.55 | ) | ||||||||||
Net earnings (loss) diluted |
$ | 0.02 | ($1.09 | ) | $ | 3.11 | $ | 1.73 | ||||||||
Weighted average shares (millions) |
||||||||||||||||
Basic |
144.1 | 143.5 | 143.7 | 148.4 | ||||||||||||
Diluted |
144.1 | 143.5 | 157.1 | 163.5 | ||||||||||||
1 | Customer related intangibles |
Page 8 of 13
Preliminary Consolidated Balance Sheets Unaudited
December 31, | December 31, | |||||||
(in $ millions) | 2009 | 2008 | ||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash & cash equivalents |
1,254 | 676 | ||||||
Trade receivables third party and affiliates, net |
721 | 631 | ||||||
Non-trade receivables |
255 | 274 | ||||||
Inventories |
522 | 577 | ||||||
Deferred income taxes |
42 | 24 | ||||||
Marketable securities, at fair value |
3 | 6 | ||||||
Assets held for sale |
2 | 2 | ||||||
Other assets |
57 | 96 | ||||||
Total current assets |
2,856 | 2,286 | ||||||
Investments in affiliates |
790 | 789 | ||||||
Property, plant and equipment, net |
2,797 | 2,470 | ||||||
Deferred income taxes |
484 | 27 | ||||||
Marketable securities, at fair value |
80 | 94 | ||||||
Other assets |
311 | 357 | ||||||
Goodwill |
798 | 779 | ||||||
Intangible assets, net |
294 | 364 | ||||||
Total assets |
8,410 | 7,166 | ||||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
Current liabilities |
||||||||
Short-term borrowings and current installments of long-term debt third party and affiliates |
242 | 233 | ||||||
Trade payables third party and affiliates |
649 | 523 | ||||||
Other liabilities |
611 | 574 | ||||||
Deferred income taxes |
33 | 15 | ||||||
Income taxes payable |
72 | 24 | ||||||
Total current liabilities |
1,607 | 1,369 | ||||||
Long-term debt |
3,259 | 3,300 | ||||||
Deferred income taxes |
137 | 122 | ||||||
Uncertain tax positions |
229 | 218 | ||||||
Benefit obligations |
1,288 | 1,167 | ||||||
Other liabilities |
1,306 | 806 | ||||||
Commitments and contingencies |
||||||||
Shareholders equity |
||||||||
Preferred stock |
| | ||||||
Common stock |
| | ||||||
Treasury stock, at cost |
(781 | ) | (781 | ) | ||||
Additional paid-in capital |
522 | 495 | ||||||
Retained earnings |
1,502 | 1,047 | ||||||
Accumulated other comprehensive income (loss), net |
(659 | ) | (579 | ) | ||||
Total Celanese Corporation shareholders equity |
584 | 182 | ||||||
Noncontrolling interests |
| 2 | ||||||
Total shareholders equity |
584 | 184 | ||||||
Total liabilities and shareholders equity |
8,410 | 7,166 | ||||||
Page 9 of 13
Table 1
Segment Data and Reconciliation of Operating Profit (Loss) to Operating EBITDA -
a Non-U.S. GAAP Measure
a Non-U.S. GAAP Measure
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(in $ millions) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Net Sales |
||||||||||||||||
Advanced Engineered Materials |
239 | 195 | 808 | 1,061 | ||||||||||||
Consumer Specialties |
267 | 286 | 1,084 | 1,155 | ||||||||||||
Industrial Specialties |
229 | 277 | 974 | 1,406 | ||||||||||||
Acetyl Intermediates |
743 | 656 | 2,603 | 3,875 | ||||||||||||
Other Activities 1 |
1 | 1 | 2 | 2 | ||||||||||||
Intersegment eliminations |
(91 | ) | (129 | ) | (389 | ) | (676 | ) | ||||||||
Total |
1,388 | 1,286 | 5,082 | 6,823 | ||||||||||||
Operating Profit (Loss) |
||||||||||||||||
Advanced Engineered Materials |
33 | (48 | ) | 35 | 32 | |||||||||||
Consumer Specialties |
47 | 52 | 231 | 190 | ||||||||||||
Industrial Specialties |
16 | (8 | ) | 89 | 47 | |||||||||||
Acetyl Intermediates |
73 | (116 | ) | 95 | 309 | |||||||||||
Other Activities 1 |
(60 | ) | (32 | ) | (160 | ) | (138 | ) | ||||||||
Total |
109 | (152 | ) | 290 | 440 | |||||||||||
Equity Earnings, Cost Dividend Income and Other Income
(Expense) |
||||||||||||||||
Advanced Engineered Materials |
1 | 5 | 27 | 37 | ||||||||||||
Consumer Specialties |
1 | (2 | ) | 57 | 47 | |||||||||||
Industrial Specialties |
| | | | ||||||||||||
Acetyl Intermediates |
19 | 30 | 48 | 125 | ||||||||||||
Other Activities 1 |
6 | (2 | ) | 18 | 15 | |||||||||||
Total |
27 | 31 | 150 | 224 | ||||||||||||
Other Charges and Other Adjustments 2 |
||||||||||||||||
Advanced Engineered Materials |
(3 | ) | 22 | | 25 | |||||||||||
Consumer Specialties |
4 | 2 | 10 | 3 | ||||||||||||
Industrial Specialties |
(8 | ) | 2 | (26 | ) | 13 | ||||||||||
Acetyl Intermediates |
7 | 75 | 103 | 108 | ||||||||||||
Other Activities 1 |
17 | 4 | 30 | 22 | ||||||||||||
Total |
17 | 105 | 117 | 171 | ||||||||||||
Depreciation and Amortization Expense |
||||||||||||||||
Advanced Engineered Materials |
19 | 18 | 72 | 76 | ||||||||||||
Consumer Specialties |
13 | 13 | 50 | 53 | ||||||||||||
Industrial Specialties |
11 | 14 | 46 | 57 | ||||||||||||
Acetyl Intermediates |
29 | 32 | 111 | 134 | ||||||||||||
Other Activities 1 |
2 | 2 | 11 | 9 | ||||||||||||
Total |
74 | 79 | 290 | 329 | ||||||||||||
Operating EBITDA |
||||||||||||||||
Advanced Engineered Materials |
50 | (3 | ) | 134 | 170 | |||||||||||
Consumer Specialties |
65 | 65 | 348 | 293 | ||||||||||||
Industrial Specialties |
19 | 8 | 109 | 117 | ||||||||||||
Acetyl Intermediates |
128 | 21 | 357 | 676 | ||||||||||||
Other Activities 1 |
(35 | ) | (28 | ) | (101 | ) | (92 | ) | ||||||||
Total |
227 | 63 | 847 | 1,164 | ||||||||||||
1 | Other Activities primarily includes corporate selling, general and administrative expenses and the results from captive insurance companies. | |
2 | See Table 7 for details. |
Page 10 of 13
Table 2
Factors Affecting Fourth Quarter 2009 Segment Net Sales Compared to Fourth Quarter 2008
Volume | Price | Currency | Other 1 | Total | ||||||||||||||||
Advanced Engineered Materials |
22 | % | -6 | % | 7 | % | 0 | % | 23 | % | ||||||||||
Consumer Specialties |
-12 | % | 3 | % | 1 | % | 1 | % | -7 | % | ||||||||||
Industrial Specialties |
10 | % | -12 | % | 5 | % | -20 | % | -17 | % | ||||||||||
Acetyl Intermediates |
27 | % | -18 | % | 4 | % | 0 | % | 13 | % | ||||||||||
Total Company |
16 | % | -12 | % | 5 | % | -1 | % | 8 | % |
Factors Affecting 2009 Segment Net Sales Compared to 2008
Volume | Price | Currency | Other 1 | Total | ||||||||||||||||
Advanced Engineered Materials |
-21 | % | -1 | % | -2 | % | 0 | % | -24 | % | ||||||||||
Consumer Specialties |
-12 | % | 7 | % | -1 | % | 0 | % | -6 | % | ||||||||||
Industrial Specialties |
-10 | % | -10 | % | -2 | % | -9 | % | -31 | % | ||||||||||
Acetyl Intermediates |
-6 | % | -26 | % | -1 | % | 0 | % | -33 | % | ||||||||||
Total Company |
-10 | % | -16 | % | -2 | % | 2 | % | -26 | % |
1 | Includes the effects of the captive insurance companies, impact of fluctuations in intersegment eliminations and changes related to the sale of PVOH on July 1, 2009. |
Table 3
Cash Flow Information
Year Ended | ||||||||
December 31, | ||||||||
(in $ millions) | 2009 | 2008 | ||||||
Net cash provided by operating activities |
596 | 586 | ||||||
Net cash provided by (used in) investing activities
1 |
31 | (201 | ) | |||||
Net cash used in financing activities |
(112 | ) | (499 | ) | ||||
Exchange rate effects on cash |
63 | (35 | ) | |||||
Cash and cash equivalents at beginning of period |
676 | 825 | ||||||
Cash and cash equivalents at end of period |
1,254 | 676 | ||||||
1 | 2009 includes $412 million of cash received and $351 million of capital expenditures related to the Ticona Kelsterbach plant relocation. 2008 includes $311 million of cash received and $185 million of capital expenditures related to the Ticona Kelsterbach plant relocation. |
Table 4
Cash Dividends Received
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(in $ millions) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Dividends from equity investments |
6 | 2 | 37 | 64 | ||||||||||||
Dividends from cost investments |
17 | 29 | 98 | 167 | ||||||||||||
Total |
23 | 31 | 135 | 231 | ||||||||||||
Page 11 of 13
Table 5
Net Debt Reconciliation of a Non-U.S. GAAP Measure
December 31, | December 31, | |||||||
(in $ millions) | 2009 | 2008 | ||||||
Short-term borrowings and current
installments of long-term debt third party and affiliates |
242 | 233 | ||||||
Long-term debt |
3,259 | 3,300 | ||||||
Total debt |
3,501 | 3,533 | ||||||
Less: Cash and cash equivalents |
1,254 | 676 | ||||||
Net Debt |
2,247 | 2,857 | ||||||
Table 6
Adjusted Earnings (Loss) Per Share Reconciliation of a Non-U.S. GAAP Measure
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||||
(in $ millions, except per share data) | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||||||
per | per | per | per | |||||||||||||||||||||||||||||
share | share | share | share | |||||||||||||||||||||||||||||
Earnings (loss) from continuing operations |
1 | (0.01 | ) | (140 | ) | (0.99 | ) | 484 | 3.08 | 371 | 2.28 | |||||||||||||||||||||
Deduct Income tax (provision) benefit |
(85 | ) | 43 | 243 | (63 | ) | ||||||||||||||||||||||||||
Earnings (loss) from continuing operations
before tax |
86 | (183 | ) | 241 | 434 | |||||||||||||||||||||||||||
Other charges and other adjustments 1 |
17 | 105 | 117 | 171 | ||||||||||||||||||||||||||||
Adjusted earnings (loss) from continuing
operations before tax |
103 | (78 | ) | 358 | 605 | |||||||||||||||||||||||||||
Income tax (provision) benefit on adjusted earnings 2 |
(24 | ) | 20 | (90 | ) | (157 | ) | |||||||||||||||||||||||||
Less: Noncontrolling interests |
| | | (1 | ) | |||||||||||||||||||||||||||
Adjusted earnings (loss) from continuing
operations |
79 | 0.50 | (58 | ) | (0.40 | ) | 268 | 1.71 | 449 | 2.75 | ||||||||||||||||||||||
Diluted shares (in millions) 3 |
||||||||||||||||||||||||||||||||
Weighted average shares outstanding |
144.1 | 143.5 | 143.7 | 148.4 | ||||||||||||||||||||||||||||
Assumed conversion of preferred stock |
12.1 | | 12.1 | 12.0 | ||||||||||||||||||||||||||||
Dilutive restricted stock units |
0.3 | | 0.2 | 0.5 | ||||||||||||||||||||||||||||
Dilutive stock options |
1.9 | | 1.1 | 2.6 | ||||||||||||||||||||||||||||
Total diluted shares |
158.4 | 143.5 | 157.1 | 163.5 | ||||||||||||||||||||||||||||
1 | See Table 7 for details. | |
2 | The adjusted effective tax rate for the six months ended December 31, 2009 is 23%. The adjusted effective tax rate for the six months ended June 30, 2009 is 29%. | |
3 | Potentially dilutive shares are included in the adjusted earnings per share calculation when adjusted earnings are positive. |
Page 12 of 13
Table 7
Reconciliation of Other Charges and Other Adjustments
Other Charges:
Three Months Ended | Year Ended | |||||||||||||||||
December 31, | December 31, | |||||||||||||||||
(in $ millions) | 2009 | 2008 | 2009 | 2008 | ||||||||||||||
Employee termination benefits |
11 | 2 | 105 | 21 | ||||||||||||||
Plant/office closures |
(3 | ) | | 17 | 7 | |||||||||||||
Ticona Kelsterbach plant relocation |
6 | 4 | 16 | 12 | ||||||||||||||
Clear Lake insurance recoveries |
| (15 | ) | (6 | ) | (38 | ) | |||||||||||
Plumbing actions |
(7 | ) | | (10 | ) | | ||||||||||||
Sorbates settlement |
| | | (8 | ) | |||||||||||||
Asset impairments |
6 | 94 | 14 | 115 | ||||||||||||||
Other |
| (1 | ) | | (1 | ) | ||||||||||||
Total |
13 | 84 | 136 | 108 | ||||||||||||||
Other Adjustments: 1
Three Months Ended | Year Ended | Income | ||||||||||||||||
December 31, | December 31, | Statement | ||||||||||||||||
(in $ millions) | 2009 | 2008 | 2009 | 2008 | Classification | |||||||||||||
Ethylene pipeline exit costs |
| | | (2 | ) | Other (income) expense, net | ||||||||||||
Business optimization |
4 | 6 | 7 | 33 | SG&A | |||||||||||||
Ticona Kelsterbach plant relocation |
(3 | ) | 2 | | (4 | ) | Cost of sales | |||||||||||
Plant closures |
9 | 9 | 25 | 23 | Cost of sales | |||||||||||||
Gain on sale of PVOH business |
| | (34 | ) | | (Gain) loss on disposition | ||||||||||||
Other2 |
(6 | ) | 4 | (17 | ) | 13 | Various | |||||||||||
Total |
4 | 21 | (19 | ) | 63 | |||||||||||||
Total other charges and other adjustments |
17 | 105 | 117 | 171 | ||||||||||||||
1 | These items are included in net earnings but not included in other charges. | |
2 | The year ended December 31, 2009 includes a one-time adjustment to Equity in net earnings (loss) of affiliates of $19 million. |
Page 13 of 13
Table 8 Equity Affiliate Data
Equity Affiliate Preliminary Results Total Unaudited
Three Months Ended | Year Ended | |||||||||||||||
(in $ millions) | December 31, | December 31, | ||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net Sales |
||||||||||||||||
Ticona Affiliates1 |
344 | 277 | 1,105 | 1,394 | ||||||||||||
Infraserv Affiliates2 |
642 | 537 | 2,186 | 2,243 | ||||||||||||
Total |
986 | 814 | 3,291 | 3,637 | ||||||||||||
Operating Profit |
||||||||||||||||
Ticona Affiliates |
23 | 17 | 58 | 133 | ||||||||||||
Infraserv Affiliates |
16 | 19 | 103 | 98 | ||||||||||||
Total |
39 | 36 | 161 | 231 | ||||||||||||
Depreciation and Amortization |
||||||||||||||||
Ticona Affiliates |
21 | 22 | 87 | 76 | ||||||||||||
Infraserv Affiliates |
28 | 21 | 103 | 106 | ||||||||||||
Total |
49 | 43 | 190 | 182 | ||||||||||||
Affiliate EBITDA3 |
||||||||||||||||
Ticona Affiliates |
44 | 39 | 145 | 209 | ||||||||||||
Infraserv Affiliates |
44 | 40 | 206 | 204 | ||||||||||||
Total |
88 | 79 | 351 | 413 | ||||||||||||
Net Income |
||||||||||||||||
Ticona Affiliates |
| 10 | 15 | 77 | ||||||||||||
Infraserv Affiliates |
11 | 6 | 72 | 55 | ||||||||||||
Total |
11 | 16 | 87 | 132 | ||||||||||||
Net Debt |
||||||||||||||||
Ticona Affiliates |
131 | 216 | 131 | 216 | ||||||||||||
Infraserv Affiliates |
491 | 508 | 491 | 508 | ||||||||||||
Total |
622 | 724 | 622 | 724 | ||||||||||||
Equity Affiliate Preliminary Results Celanese Proportional Share Unaudited4
Three Months Ended | Year Ended | |||||||||||||||
(in $ millions) | December 31, | December 31, | ||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net Sales |
||||||||||||||||
Ticona Affiliates |
159 | 127 | 510 | 642 | ||||||||||||
Infraserv Affiliates |
210 | 173 | 707 | 722 | ||||||||||||
Total |
369 | 300 | 1,217 | 1,364 | ||||||||||||
Operating Profit |
||||||||||||||||
Ticona Affiliates |
11 | 8 | 28 | 61 | ||||||||||||
Infraserv Affiliates |
6 | 9 | 33 | 34 | ||||||||||||
Total |
17 | 17 | 61 | 95 | ||||||||||||
Depreciation and Amortization |
||||||||||||||||
Ticona Affiliates |
10 | 10 | 40 | 35 | ||||||||||||
Infraserv Affiliates |
9 | 6 | 33 | 34 | ||||||||||||
Total |
19 | 16 | 73 | 69 | ||||||||||||
Affiliate EBITDA3 |
||||||||||||||||
Ticona Affiliates |
21 | 18 | 68 | 96 | ||||||||||||
Infraserv Affiliates |
15 | 15 | 66 | 68 | ||||||||||||
Total |
36 | 33 | 134 | 164 | ||||||||||||
Equity in net earnings of affiliates (as reported on the Income Statement) |
||||||||||||||||
Ticona Affiliates5 |
| 4 | 7 | 35 | ||||||||||||
Infraserv Affiliates |
4 | 4 | 22 | 19 | ||||||||||||
Total |
4 | 8 | 29 | 54 | ||||||||||||
Affiliate EBITDA in excess of Equity in net earnings of affiliates6 |
||||||||||||||||
Ticona Affiliates |
21 | 14 | 61 | 61 | ||||||||||||
Infraserv Affiliates |
11 | 11 | 44 | 49 | ||||||||||||
Total |
32 | 25 | 105 | 110 | ||||||||||||
Net Debt |
||||||||||||||||
Ticona Affiliates |
58 | 98 | 58 | 98 | ||||||||||||
Infraserv Affiliates |
162 | 160 | 162 | 160 | ||||||||||||
Total |
220 | 258 | 220 | 258 | ||||||||||||
1 | Ticona Affiliates accounted for using the equity method include Polyplastics (45% ownership), Korean Engineering Plastics (50%), Fortron Industries (50%) and Una SA (50%). | |
2 | Infraserv Affiliates accounted for using the equity method include Infraserv Hoechst (32% ownership), Infraserv Gendorf (39%) and Infraserv Knapsack (27%). | |
3 | Affiliate EBITDA, a non-U.S. GAAP measure, is the sum of Operating Profit and Depreciation and Amortization. | |
4 | Calculated by multiplying each affiliates total share amount by Celaneses respective ownership percentage, netted by reporting category. | |
5 | The year ended December 31, 2009 excludes a one-time tax adjustment to Equity in net earnings of affiliates of $19 million. | |
6 | Calculated as Celanese proportion of Affiliate EBITDA less Equity in net earnings of affiliates; not included in Celanese operating EBITDA. |