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8-K - FORM 8-K - Celanese Corp | d74826e8vk.htm |
EX-99.2 - EX-99.2 - Celanese Corp | d74826exv99w2.htm |
Exhibit 99.1
Corporate News Release
|
Celanese Corporation Investor Relations 1601 West LBJ Freeway Dallas, Texas 75234 |
Celanese Corporation Reports Strong Second Quarter Results;
Raises Full Year Outlook
Raises Full Year Outlook
Second quarter highlights:
| Net sales were $1,517 million, up 22% from prior year period | ||
| Operating profit was $156 million versus $89 million in prior year period | ||
| Net earnings were $160 million versus $109 million in prior year period | ||
| Operating EBITDA was $332 million versus $248 million in prior year period | ||
| Diluted EPS from continuing operations was $1.03 versus $0.70 in prior year period | ||
| Adjusted EPS was $1.12 versus $0.56 in prior year period |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(in $ millions, except per share data) Unaudited | 2010 | 2009 | 2010 | 2009 | ||||||||||||
As adjusted | As adjusted | |||||||||||||||
Net sales |
1,517 | 1,244 | 2,905 | 2,390 | ||||||||||||
Operating profit (loss) |
156 | 89 | 142 | 116 | ||||||||||||
Net earnings (loss) attributable to Celanese Corporation |
160 | 109 | 174 | 94 | ||||||||||||
Operating EBITDA 1 |
332 | 248 | 574 | 389 | ||||||||||||
Diluted EPS continuing operations |
$ | 1.03 | $ | 0.70 | $ | 1.11 | $ | 0.60 | ||||||||
Diluted EPS total |
$ | 1.01 | $ | 0.69 | $ | 1.10 | $ | 0.60 | ||||||||
Adjusted EPS 2 |
$ | 1.12 | $ | 0.56 | $ | 1.76 | $ | 0.67 | ||||||||
1 | Non-U.S. GAAP measure. See reconciliation in Table 1. | |
2 | Non-U.S. GAAP measure. See reconciliation in Table 6. |
Dallas, July 29, 2010: Celanese Corporation (NYSE: CE), a leading global technology and
specialty materials company, today reported second quarter 2010 net sales of $1,517 million, a 22
percent increase from the same period last year. The increase was primarily driven by
significantly higher volumes across its business lines as the global economic recovery continued in
the period. Net sales in the quarter also benefited from higher pricing in the companys Acetyl
Intermediates and Industrial Specialties businesses. Operating profit was $156 million compared
with $89 million in the prior year period as operating margins expanded versus the prior year. Net
earnings were $160 million compared with $109 million in the same period last year. Equity in net
earnings and dividend income from the companys strategic affiliates were $117 million, a $29
million increase versus the prior year period.
Adjusted earnings per share in the second quarter of 2010 were $1.12 compared with $0.56 in the
same period last year. Adjusted earnings per share in the period are based on an effective tax
rate of 20 percent and a diluted share count of 158.4 million. Operating EBITDA in the second
quarter of 2010 was $332 million compared with $248 million in the prior year period. Adjusted
earnings per share and operating EBITDA excluded a $3 million net benefit of other charges and
other adjustments.
Page 2 of 15
Celaneses strong performance in the quarter further demonstrated the earnings power of our
technology and specialty materials businesses, said David Weidman, chairman and chief executive
officer. Product demand across all regions and industries remained strong and reflected an
ongoing, modest global economic recovery. The significant benefits of our fixed spending reduction
efforts are clearly evident in the sustainable improvements in our operating performance.
Recent Highlights
| Concluded the formal consultation process with employees and their representatives and is continuing to consider a plan to close its acetate flake and tow manufacturing operations in Spondon, Derby, United Kingdom in the latter part of 2011. | ||
| Acquired two product lines, Zenite® liquid crystal polymer (LCP) and Thermx® polycyclohexylene-dimethylene terephthalate (PCT), from DuPont Performance Polymers. | ||
| Announced five-year Environmental Health and Safety sustainability goals for occupational safety performance, energy intensity, greenhouse gases and waste management for the year 2015. | ||
| Received American Chemistry Councils (ACC) 2010 Responsible Care Initiative of the Year Award. This award recognizes companies that demonstrate leadership in the areas of employee health and safety, security or environmental protection in the chemical industry. |
Second Quarter Segment Overview
Presentation of Ibn Sina Results
In April 2010, the company significantly expanded its existing relationship with its Ibn Sina
affiliate in Saudi Arabia, including plans to construct a 50,000 ton polyacetal (POM) production
facility in the Middle East and an increased indirect economic interest in the venture. Beginning
in the second quarter of 2010, results from the companys Ibn Sina investment are reported in the
Advanced Engineered Materials segment using the equity method of accounting. These results were
previously reported in the Acetyl Intermediates segment using the cost method of accounting. All
financial results presented reflect this adjustment.
Advanced Engineered Materials
Advanced Engineered Materials delivered strong financial performance as it continued to demonstrate
the significant operating leverage of its specialty engineered polymers business model. Net sales
for the second quarter of 2010 were $282 million compared with $184 million in the prior year
period. The increase was driven by significantly higher volumes as demand across its end-use
industries continued to improve with the global economic recovery, and continued success in the
innovation and commercialization of new products and applications. Second quarter 2010 net sales
also benefited from sales related to the Future Advanced Composites Technology (FACT) long-fiber
reinforced thermoplastics (LFT) business acquired in December
2009. Operating profit increased to $40 million compared with $1 million in the same period last
year, driven by the higher volumes and increased value-in-use pricing for its high performance
polymers. Operating EBITDA was $98 million in the second quarter of 2010 compared with $36 million
in the prior year period.
Page 3 of 15
Equity earnings from the Ibn Sina affiliate, which are now included in the segments operating
EBITDA, were $24 million in the second quarter of 2010 compared with $8 million in the prior year
period. Ibn Sinas improved performance was attributed to increased pricing for methanol and
methyl tertiary-butyl ether (MTBE), as global demand significantly increased from the same period
last year. Total equity earnings from the companys Asian affiliates were $15 million, an increase
of $11 million versus last year, reflecting increased global demand for the specialty engineered
polymers. Overall earnings contributions from equity affiliates for the segment totaled $39
million in the current period compared with $12 million in the prior year period.
Consumer Specialties
Consumer Specialties continued to deliver stable earnings performance and realize the value of its
strategic ventures in China. Net sales for the second quarter were $291 million compared with $280
million in the same period last year. The increase was driven by higher volumes, primarily
associated with volume recovery from the electrical disruption and subsequent production outage at
the companys acetate manufacturing facility in Narrows, Virginia that occurred during the first
quarter of 2010. Operating profit was $64 million compared with $66 million in the prior year
period, as the higher volumes were unable to completely offset increased raw material and energy
prices. Operating EBITDA was $149 million compared with $134 million in the same period last year,
as dividends from the companys acetate China ventures increased to $71 million, $18 million higher
than the prior year period, reflecting improved performance in the region.
Industrial Specialties
Industrial Specialties delivered sustained results as its businesses continued to experience
improved global demand. Net sales for the second quarter were $269 million compared with $267
million in the prior year period. The second quarter 2009 results included $48 million of sales
associated with the polyvinyl alcohol (PVOH) business that the company divested in July 2009.
Volumes improved across all of its businesses in North America and Europe as demand recovered.
Vinyl acetate/ethylene emulsion production volumes at its Nanjing, China facility remained at full
utilization on strong demand in the Asia Pacific region. As previously announced, the company
plans to expand its production capacity in 2011 to support its continued success in new product
development and application innovation. Operating profit was $16 million compared with $19 million
in the same period last year, or compared with $6 million when excluding the second quarter 2009
results of the divested PVOH business, as the improved volume and pricing more than offset raw
material price increases. Operating EBITDA in the second quarter of 2010 was $26 million compared
with $35 million in the prior year period. The second quarter 2009 results included $14 million of
operating EBITDA related to the divested PVOH business.
Page 4 of 15
Acetyl Intermediates
Acetyl Intermediates delivered improved results, reflecting its leading acetyl technology position.
Net sales were $782 million compared with $622 million in the same period last year, as improved
global demand drove increased volumes and sustained operating margins throughout the acetyl chain.
Pricing improved across all major acetyl derivative products on stronger global demand and higher
raw material costs compared with the prior year. Industry utilization rates for acetic acid
remained in the 80 percent range, while the company continued to operate its units at significantly
higher rates. Operating profit improved to $68 million from $39 million in the same period last
year, reflecting improved margins as well as lower manufacturing costs resulting from the closure
of the companys less advantaged acetic acid and vinyl acetate monomer (VAM) production operations
in Pardies, France. Operating EBITDA was $96 million compared with $73 million in the prior year
period.
Taxes
The tax rate for adjusted earnings per share was 20 percent in the first six months of 2010
compared with 29 percent in the first six months of 2009. The effective tax rate for continuing
operations for the second quarter of 2010 was 27 percent versus 13 percent in the second quarter of
2009. The increase in the effective rate is primarily due to foreign losses not resulting in tax
benefits in the current period. Cash taxes paid were $65 million in the first six months of 2010
compared with a net cash tax refund of less than $1 million in the first six months of 2009. The
increase in cash taxes paid is primarily the result of a German tax refund in 2009 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 $117 million compared with $88 million in
the same period last year. Equity and cost investment dividends, which are included in cash flows,
were $107 million compared with $67 million in the same period last year. Dividends from the
companys acetate China ventures were $71 million in the second quarter of 2010, an $18 million
increase from the prior years results.
The Ticona strategic affiliates in Asia reported earnings in equity investments of $15 million in
the second quarter of 2010 compared with $4 million in the prior year period. Proportional
affiliate EBITDA for the Asian affiliates was $38 million in the same period, a $25 million
increase from second quarter 2009 results, as volumes increased significantly with improved global
demand across the affiliates end-use applications.
Equity in net earnings for Ticonas Middle Eastern affiliates, which includes the companys Ibn
Sina affiliate, were $24 million in the second quarter of 2010 compared with $8 million in the
prior year period. Proportional affiliate EBITDA for the Middle Eastern affiliates was $32 million
compared with $11 million in the prior year, due to increased profitability of its methanol and
MTBE products associated with higher pricing on stronger global demand.
Page 5 of 15
The companys total proportional affiliate EBITDA was $86 million in the second quarter of 2010,
$41 million more than reported in the companys operating EBITDA. The companys total proportional
net debt of affiliates was approximately $87 million as of June 30, 2010.
Cash Flow
The company continued to generate positive cash flow, reflecting its specialty materials business
model and sustained improvements in its cost structure. During the first six months of 2010, the
company generated $219 million in cash from operating activities compared with $299 million in the
prior year period. The increased earnings were offset by higher trade working capital and higher
cash taxes, as well as cash outflows to fund previously announced and implemented productivity
projects.
During the first six months of 2010, net cash used in investing activities was $275 million,
compared with a cash inflow of $183 million in the same period last year. The 2010 results include
$151 million of capital expenditures related to the relocation of Ticonas business in Kelsterbach,
Germany, and a cash outflow of $46 million related to the companys acquisition of the Zenite® LCP
and Thermx® PCT product lines from DuPont Performance Polymers. The 2009 results include $412
million of cash received and $147 million of capital expenditures related to the Ticona Kelsterbach
plant relocation.
Net cash used in financing activities was $78 million compared with $59 million in the prior year.
Second quarter 2010 results include a cash outflow of $20 million associated with the companys
share repurchase program.
Net debt at the end of the second quarter of 2010 was $2,346 million, a $6 million decrease from
the end of the first quarter of 2010.
Outlook
Based on its strong performance during the first half of 2010 and expectations for a continued,
modest economic recovery, the company raised its outlook for the full year. It now expects full
year 2010 adjusted earnings per share to be at least $1.40 higher than its full year 2009
performance and its 2010 operating EBITDA to be at least $260 million higher than the previous
year. The company had previously expected 2010 adjusted earnings per share and operating EBITDA to
be at least $1.25 and $250 million higher than 2009, respectively.
Based on our current customer order activity, we now expect 2010 results to be better than our
previous outlook, said Weidman. While we remain cautious for the remainder of the year, based
more on macroeconomic indicators than company-specific trends, the strength of our current business
environment is expected to mitigate much of the seasonality we typically experience in the second
half of the year.
Page 6 of 15
Contacts: |
||||
Investor Relations
|
Media U.S. | Media Europe | ||
Mark Oberle
|
Jacqueline Terry | Jens Kurth | ||
Phone: +1 972 443 4464
|
Phone: +1 972 443 4417 | 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
|
Jacqueline.Terry@celanese.com | J.Kurth@celanese.com |
Celanese Corporation is a global technology leader in the production of specialty materials and
chemical products which are used in most major industries and consumer applications. Our products,
essential to everyday living, are manufactured in North America, Europe and Asia. Known for
operational excellence, sustainability and premier safety performance, Celanese delivers value to
customers around the globe with best-in-class technologies. Based in Dallas, Texas, the company
employs approximately 7,400 employees worldwide and had 2009 net sales of $5.1 billion, with
approximately 73% generated outside of North America. For more information about Celanese
Corporation and its global product offerings, visit 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 results expressed or implied in the forward-looking statements contained in this release.
These risks and uncertainties include, among other things: changes in general economic, business,
political and regulatory conditions in the countries or regions in which we operate; the length and
depth of business cycles, particularly in the automotive, electrical, electronics and construction
industries; changes in the price and availability of raw materials; the ability to pass increases
in raw material prices on to customers or otherwise improve margins through price increases; the
ability to maintain plant utilization rates and to implement planned capacity additions and
expansions; the ability to improve productivity by implementing technological improvements to
existing plants; increased price competition and the introduction of competing products by other
companies; changes in the degree of intellectual property and other legal protection afforded to
our products; compliance costs and potential disruption of production due to accidents or other
unforeseen events or delays in construction of facilities; potential liability for remedial actions
and increased costs under existing or future environmental regulations, including those relates 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; and various other
factors discussed from time to time 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.
Reconciliation of Non-U.S. GAAP Measures to U.S. GAAP
This release reflects the following performance measures: operating EBITDA, business operating
EBITDA, proportional 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 and business operating EBITDA is operating profit; for
proportional 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.
Page 7 of 15
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, cost dividend income, 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. | ||
| Business operating EBITDA, a measure used by management to measure performance of its internal operations, is defined by the company as operating profit from continuing operations, plus depreciation and amortization, and further adjusted for other charges and adjustments. This reflects the operating results of the companys operations without regard to its equity and cost investments. The company believes that investors should consider business operating EBITDA when evaluating the companys internal operations. | ||
| Proportional affiliate EBITDA, a measure used by management to measure performance of its equity investments, is defined by the company as the proportional operating profit plus the proportional depreciation and amortization of its equity investments. The company has determined that it does not have sufficient ownership for operating control of these investments to consider their results on a consolidated basis. The company believes that investors should consider proportional affiliate EBITDA as an additional measure of operating results. | ||
| Adjusted earnings per share is a measure used by management to measure performance. It is defined by the company as net earnings (loss) available to common shareholders plus preferred dividends, adjusted for other charges and adjustments, and divided by the number of basic common shares, diluted preferred shares, and options valued using the treasury method. We may provide guidance on an adjusted earnings per share basis and are unable to reconcile forecasted adjusted earnings per share to a U.S. GAAP financial measure without unreasonable effort because a forecast of Other Items is not practical. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations, and that when U.S. GAAP information is viewed in conjunction with non-U.S. GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. Note: The 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. Proportional net debt is defined as our proportionate share of our affiliates net debt. | ||
| 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 8 of 15
Preliminary Consolidated Statements of Operations Unaudited
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(in $ millions, except per share data) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
As adjusted | As adjusted | |||||||||||||||
Net sales |
1,517 | 1,244 | 2,905 | 2,390 | ||||||||||||
Cost of sales |
(1,214 | ) | (996 | ) | (2,384 | ) | (1,942 | ) | ||||||||
Gross profit |
303 | 248 | 521 | 448 | ||||||||||||
Selling, general and administrative expenses |
(123 | ) | (114 | ) | (246 | ) | (228 | ) | ||||||||
Amortization of Intangible assets |
(15 | ) | (21 | ) | (30 | ) | (38 | ) | ||||||||
Research and development expenses |
(18 | ) | (18 | ) | (37 | ) | (38 | ) | ||||||||
Other (charges) gains, net |
(6 | ) | (6 | ) | (83 | ) | (27 | ) | ||||||||
Foreign exchange gain (loss), net |
| 1 | 2 | 3 | ||||||||||||
Gain (loss) on disposition of businesses and assets, net |
15 | (1 | ) | 15 | (4 | ) | ||||||||||
Operating profit (loss) |
156 | 89 | 142 | 116 | ||||||||||||
Equity in net earnings (loss) of affiliates |
45 | 35 | 94 | 41 | ||||||||||||
Interest expense |
(49 | ) | (54 | ) | (98 | ) | (105 | ) | ||||||||
Interest income |
1 | 2 | 2 | 5 | ||||||||||||
Dividend income cost investments |
72 | 53 | 72 | 56 | ||||||||||||
Other income (expense), net |
(1 | ) | 2 | 5 | 3 | |||||||||||
Earnings (loss) from continuing operations before tax |
224 | 127 | 217 | 116 | ||||||||||||
Income tax (provision) benefit |
(61 | ) | (17 | ) | (41 | ) | (22 | ) | ||||||||
Earnings (loss) from continuing operations |
163 | 110 | 176 | 94 | ||||||||||||
Earnings (loss) from operation of discontinued operations |
(5 | ) | (1 | ) | (5 | ) | | |||||||||
Gain on disposal of discontinued operations |
| | 2 | | ||||||||||||
Income tax (provision) benefit, discontinued operations |
2 | | 1 | | ||||||||||||
Earnings (loss) from discontinued operations |
(3 | ) | (1 | ) | (2 | ) | | |||||||||
Net earnings (loss) |
160 | 109 | 174 | 94 | ||||||||||||
Less: Net earnings (loss) attributable to noncontrolling interests |
| | | | ||||||||||||
Net earnings (loss) attributable to Celanese Corporation |
160 | 109 | 174 | 94 | ||||||||||||
Cumulative preferred stock dividend |
| (2 | ) | (3 | ) | (5 | ) | |||||||||
Net earnings (loss) available to common shareholders |
160 | 107 | 171 | 89 | ||||||||||||
Amounts attributable to Celanese Corporation |
||||||||||||||||
Earnings (loss) per common share basic |
||||||||||||||||
Continuing operations |
$ | 1.04 | $ | 0.75 | $ | 1.13 | $ | 0.62 | ||||||||
Discontinued operations |
(0.02 | ) | (0.01 | ) | (0.01 | ) | | |||||||||
Net earnings (loss) basic |
$ | 1.02 | $ | 0.74 | $ | 1.12 | $ | 0.62 | ||||||||
Earnings (loss) per common share diluted |
||||||||||||||||
Continuing operations |
$ | 1.03 | $ | 0.70 | $ | 1.11 | $ | 0.60 | ||||||||
Discontinued operations |
(0.02 | ) | (0.01 | ) | (0.01 | ) | | |||||||||
Net earnings (loss) diluted |
$ | 1.01 | $ | 0.69 | $ | 1.10 | $ | 0.60 | ||||||||
Weighted average shares (millions) |
||||||||||||||||
Basic |
156.3 | 143.5 | 153.3 | 143.5 | ||||||||||||
Diluted |
158.4 | 157.1 | 158.7 | 156.4 | ||||||||||||
Page 9 of 15
Preliminary Consolidated Balance Sheets Unaudited
June 30, | December 31, | |||||||
(in $ millions) | 2010 | 2009 | ||||||
As adjusted | ||||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash & cash equivalents |
1,081 | 1,254 | ||||||
Trade receivables third party and affiliates, net |
862 | 721 | ||||||
Non-trade receivables |
244 | 262 | ||||||
Inventories |
522 | 522 | ||||||
Deferred income taxes |
41 | 42 | ||||||
Marketable securities, at fair value |
2 | 3 | ||||||
Assets held for sale |
| 2 | ||||||
Other assets |
70 | 50 | ||||||
Total current assets |
2,822 | 2,856 | ||||||
Investments in affiliates |
769 | 792 | ||||||
Property, plant and equipment, net |
2,676 | 2,797 | ||||||
Deferred income taxes |
485 | 484 | ||||||
Marketable securities, at fair value |
75 | 80 | ||||||
Other assets |
273 | 311 | ||||||
Goodwill |
736 | 798 | ||||||
Intangible assets, net |
269 | 294 | ||||||
Total assets |
8,105 | 8,412 | ||||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
Current liabilities |
||||||||
Short-term borrowings and current
installments of long-term debt third party and affiliates |
265 | 242 | ||||||
Trade payables third party and affiliates |
607 | 649 | ||||||
Other liabilities |
532 | 611 | ||||||
Deferred income taxes |
30 | 33 | ||||||
Income taxes payable |
76 | 72 | ||||||
Total current liabilities |
1,510 | 1,607 | ||||||
Long-term debt |
3,162 | 3,259 | ||||||
Deferred income taxes |
121 | 137 | ||||||
Uncertain tax positions |
224 | 229 | ||||||
Benefit obligations |
1,260 | 1,288 | ||||||
Other liabilities |
1,139 | 1,306 | ||||||
Commitments and contingencies |
||||||||
Shareholders equity |
||||||||
Preferred stock |
| | ||||||
Common stock |
| | ||||||
Treasury stock, at cost |
(801 | ) | (781 | ) | ||||
Additional paid-in capital |
535 | 522 | ||||||
Retained earnings |
1,664 | 1,505 | ||||||
Accumulated other comprehensive income (loss), net |
(709 | ) | (660 | ) | ||||
Total Celanese Corporation shareholders equity |
689 | 586 | ||||||
Noncontrolling interests |
| | ||||||
Total shareholders equity |
689 | 586 | ||||||
Total liabilities and shareholders equity |
8,105 | 8,412 | ||||||
Page 10 of 15
Table 1
Segment Data and Reconciliation of Operating Profit (Loss) to Operating EBITDA
a Non-U.S. GAAP Measure Unaudited
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(in $ millions) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
As adjusted | As adjusted | |||||||||||||||
Net Sales |
||||||||||||||||
Advanced Engineered Materials |
282 | 184 | 564 | 349 | ||||||||||||
Consumer Specialties |
291 | 280 | 529 | 546 | ||||||||||||
Industrial Specialties |
269 | 267 | 511 | 509 | ||||||||||||
Acetyl Intermediates |
782 | 622 | 1,506 | 1,194 | ||||||||||||
Other Activities 1 |
1 | 1 | 1 | 1 | ||||||||||||
Intersegment eliminations |
(108 | ) | (110 | ) | (206 | ) | (209 | ) | ||||||||
Total |
1,517 | 1,244 | 2,905 | 2,390 | ||||||||||||
Operating Profit (Loss) |
||||||||||||||||
Advanced Engineered Materials |
40 | 1 | 88 | (17 | ) | |||||||||||
Consumer Specialties |
64 | 66 | 34 | 132 | ||||||||||||
Industrial Specialties |
16 | 19 | 28 | 29 | ||||||||||||
Acetyl Intermediates |
68 | 39 | 68 | 50 | ||||||||||||
Other Activities 1 |
(32 | ) | (36 | ) | (76 | ) | (78 | ) | ||||||||
Total |
156 | 89 | 142 | 116 | ||||||||||||
Other Charges and Other Adjustments 2 |
||||||||||||||||
Advanced Engineered Materials |
2 | (14 | ) | | (4 | ) | ||||||||||
Consumer Specialties |
3 | 3 | 83 | 3 | ||||||||||||
Industrial Specialties |
| 5 | | 8 | ||||||||||||
Acetyl Intermediates |
2 | 4 | 54 | 9 | ||||||||||||
Other Activities 1 |
(10 | ) | (1 | ) | (5 | ) | 14 | |||||||||
Total |
(3 | ) | (3 | ) | 132 | 30 | ||||||||||
Depreciation and Amortization Expense |
||||||||||||||||
Advanced Engineered Materials |
17 | 19 | 34 | 36 | ||||||||||||
Consumer Specialties |
9 | 12 | 20 | 24 | ||||||||||||
Industrial Specialties |
10 | 11 | 20 | 24 | ||||||||||||
Acetyl Intermediates |
24 | 28 | 49 | 55 | ||||||||||||
Other Activities 1 |
3 | 2 | 6 | 4 | ||||||||||||
Total |
63 | 72 | 129 | 143 | ||||||||||||
Business Operating EBITDA |
||||||||||||||||
Advanced Engineered Materials |
59 | 6 | 122 | 15 | ||||||||||||
Consumer Specialties |
76 | 81 | 137 | 159 | ||||||||||||
Industrial Specialties |
26 | 35 | 48 | 61 | ||||||||||||
Acetyl Intermediates |
94 | 71 | 171 | 114 | ||||||||||||
Other Activities 1 |
(39 | ) | (35 | ) | (75 | ) | (60 | ) | ||||||||
Total |
216 | 158 | 403 | 289 | ||||||||||||
Equity Earnings, Cost Dividend Income and Other
Income (Expense) |
||||||||||||||||
Advanced Engineered Materials |
39 | 30 | 83 | 30 | ||||||||||||
Consumer Specialties |
73 | 53 | 73 | 56 | ||||||||||||
Industrial Specialties |
| | | | ||||||||||||
Acetyl Intermediates |
2 | 2 | 3 | 3 | ||||||||||||
Other Activities 1 |
2 | 5 | 12 | 11 | ||||||||||||
Total |
116 | 90 | 171 | 100 | ||||||||||||
Operating EBITDA |
||||||||||||||||
Advanced Engineered Materials |
98 | 36 | 205 | 45 | ||||||||||||
Consumer Specialties |
149 | 134 | 210 | 215 | ||||||||||||
Industrial Specialties |
26 | 35 | 48 | 61 | ||||||||||||
Acetyl Intermediates |
96 | 73 | 174 | 117 | ||||||||||||
Other Activities 1 |
(37 | ) | (30 | ) | (63 | ) | (49 | ) | ||||||||
Total |
332 | 248 | 574 | 389 | ||||||||||||
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 11 of 15
Table 2
Factors Affecting Second Quarter 2010 Segment Net Sales Compared to Second Quarter 2009 Unaudited
Volume | Price | Currency | Other1 | Total | ||||||||||||||||
Advanced Engineered Materials |
52 | % | 2 | % | -5 | % | 4 | %2 | 53 | % | ||||||||||
Consumer Specialties |
6 | % | -1 | % | -1 | % | 0 | % | 4 | % | ||||||||||
Industrial Specialties |
13 | % | 9 | % | -3 | % | -18 | %3 | 1 | % | ||||||||||
Acetyl Intermediates |
14 | % | 15 | % | -3 | % | 0 | % | 26 | % | ||||||||||
Total Company |
19 | % | 9 | % | -3 | % | -3 | % | 22 | % | ||||||||||
Factors Affecting Six Months 2010 Segment Net Sales Compared to
Six Months 2009 Unaudited
Volume | Price | Currency | Other1 | Total | ||||||||||||||||
Advanced Engineered Materials |
61 | % | -4 | % | 0 | % | 5 | %2 | 62 | % | ||||||||||
Consumer Specialties |
-3 | % | 0 | % | 0 | % | 0 | % | -3 | % | ||||||||||
Industrial Specialties |
14 | % | 3 | % | 0 | % | -17 | %3 | 0 | % | ||||||||||
Acetyl Intermediates |
14 | % | 12 | % | 0 | % | 0 | % | 26 | % | ||||||||||
Total Company |
19 | % | 6 | % | 0 | % | -3 | % | 22 | % | ||||||||||
1 | Includes the effects of the captive insurance companies and the impact of fluctuations in intersegment eliminations. | |
2 | 2010 includes the effects of the FACT GmbH (Future Advanced Composites Technology) acquisition. | |
3 | 2010 does not include the effects of the PVOH business, which was sold on July 1, 2009. |
Table 3
Cash Flow Information Unaudited
Six Months Ended | ||||||||
June 30, | ||||||||
(in $ millions) | 2010 | 2009 | ||||||
Net cash provided by operating activities |
219 | 299 | ||||||
Net cash provided by (used in) investing activities 1 |
(275 | ) | 183 | |||||
Net cash used in financing activities |
(78 | ) | (59 | ) | ||||
Exchange rate effects on cash |
(39 | ) | 46 | |||||
Cash and cash equivalents at beginning of period |
1,254 | 676 | ||||||
Cash and cash equivalents at end of period |
1,081 | 1,145 | ||||||
1 | 2010 includes $0 million of cash received and $151 million of capital expenditures related to the Ticona Kelsterbach plant relocation. 2009 includes $412 million of cash received and $147 million of capital expenditures related to the Ticona Kelsterbach plant relocation. |
Table 4
Cash Dividends Received Unaudited
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(in $ millions) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
As adjusted | As adjusted | |||||||||||||||
Dividends from equity investments |
35 | 14 | 92 | 35 | ||||||||||||
Dividends from cost investments |
72 | 53 | 72 | 56 | ||||||||||||
Total |
107 | 67 | 164 | 91 | ||||||||||||
Page 12 of 15
Table 5
Net Debt Reconciliation of a Non-U.S. GAAP Measure Unaudited
June 30, | December 31, | |||||||
(in $ millions) | 2010 | 2009 | ||||||
Short-term borrowings and current
installments of long-term debt third party and affiliates |
265 | 242 | ||||||
Long-term debt |
3,162 | 3,259 | ||||||
Total debt |
3,427 | 3,501 | ||||||
Less: Cash and cash equivalents |
1,081 | 1,254 | ||||||
Net Debt |
2,346 | 2,247 | ||||||
Table 6
Adjusted Earnings (Loss) Per Share Reconciliation of a Non-U.S. GAAP Measure Unaudited
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||||||||
(in $ millions, except per share data) | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||||||
As adjusted | As adjusted | |||||||||||||||||||||||||||||||
per | per | per | per | |||||||||||||||||||||||||||||
share | share | share | share | |||||||||||||||||||||||||||||
Earnings (loss) from continuing operations |
163 | 1.03 | 110 | 0.70 | 176 | 1.11 | 94 | 0.60 | ||||||||||||||||||||||||
Deduct Income tax (provision) benefit |
(61 | ) | (17 | ) | (41 | ) | (22 | ) | ||||||||||||||||||||||||
Earnings (loss) from continuing operations
before tax |
224 | 127 | 217 | 116 | ||||||||||||||||||||||||||||
Other charges and other adjustments 1 |
(3 | ) | (3 | ) | 132 | 30 | ||||||||||||||||||||||||||
Adjusted earnings (loss) from continuing
operations before tax |
221 | 124 | 349 | 146 | ||||||||||||||||||||||||||||
Income tax (provision) benefit on adjusted earnings 2 |
(44 | ) | (36 | ) | (70 | ) | (42 | ) | ||||||||||||||||||||||||
Less: Noncontrolling interests |
| | | | ||||||||||||||||||||||||||||
Adjusted earnings (loss) from continuing
operations |
177 | 1.12 | 88 | 0.56 | 279 | 1.76 | 104 | 0.67 | ||||||||||||||||||||||||
Diluted shares (in millions) 3 | ||||||||||||||||||||||||||||||||
Weighted average shares outstanding |
156.3 | 143.5 | 153.3 | 143.5 | ||||||||||||||||||||||||||||
Assumed conversion of preferred stock |
| 12.1 | 3.1 | 12.1 | ||||||||||||||||||||||||||||
Dilutive restricted stock units |
0.3 | 0.5 | 0.4 | 0.3 | ||||||||||||||||||||||||||||
Dilutive stock options |
1.8 | 1.0 | 1.9 | 0.5 | ||||||||||||||||||||||||||||
Total diluted shares |
158.4 | 157.1 | 158.7 | 156.4 | ||||||||||||||||||||||||||||
1 | See Table 7 for details. | |
2 | The adjusted effective tax rate is 20% and 29% for the three and six months ended June 30, 2010 and 2009, respectively. | |
3 | Potentially dilutive shares are included in the adjusted earnings per share calculation when adjusted earnings are positive. |
Page 13 of 15
Table 7
Reconciliation of Other Charges and Other Adjustments Unaudited
Other Charges:
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(in $ millions) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Employee termination benefits |
4 | 5 | 9 | 29 | ||||||||||||
Plant/office closures |
| | 6 | | ||||||||||||
Ticona Kelsterbach plant relocation |
4 | 3 | 10 | 6 | ||||||||||||
Clear Lake insurance recoveries |
| | | (6 | ) | |||||||||||
Plumbing actions |
(2 | ) | (2 | ) | (14 | ) | (3 | ) | ||||||||
Asset impairments |
| | 72 | 1 | ||||||||||||
Total |
6 | 6 | 83 | 27 | ||||||||||||
Other
Adjustments:
1
Three Months Ended | Six Months Ended | Income | ||||||||||||||||
June 30, | June 30, | Statement | ||||||||||||||||
(in $ millions) | 2010 | 2009 | 2010 | 2009 | Classification | |||||||||||||
Business optimization |
3 | 1 | 7 | 3 | SG&A | |||||||||||||
Ticona Kelsterbach plant relocation |
(2 | ) | 1 | (2 | ) | 2 | Cost of sales | |||||||||||
Plant closures |
| 4 | 9 | 8 | Cost of sales / SG&A | |||||||||||||
Contract termination |
| | 22 | | Cost of sales | |||||||||||||
Gain on sale of building |
(14 | ) | | (14 | ) | | (Gain) loss on disposition | |||||||||||
Write-off of other productive assets |
| | 17 | | Cost of sales | |||||||||||||
Other2 |
4 | (15 | ) | 10 | (10 | ) | Various | |||||||||||
Total |
(9 | ) | (9 | ) | 49 | 3 | ||||||||||||
Total other charges and other
adjustments |
(3 | ) | (3 | ) | 132 | 30 | ||||||||||||
1 | These items are included in net earnings but not included in other charges. | |
2 | The three and six months ended June 30, 2009 includes a one-time adjustment to Equity in net earnings (loss) of affiliates of $19 million. |
Page 14 of 15
Table 8
Equity Affiliate Preliminary Results Total Unaudited
Three Months Ended | Six Months Ended | |||||||||||||||
(in $ millions) | June 30, | June 30, | ||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
As adjusted | As adjusted | |||||||||||||||
Net Sales |
||||||||||||||||
Ticona Affiliates Asia1 |
379 | 267 | 750 | 439 | ||||||||||||
Ticona Affiliates Middle East2 |
245 | 110 | 502 | 245 | ||||||||||||
Infraserv Affiliates3 |
488 | 487 | 1,018 | 997 | ||||||||||||
Total |
1,112 | 864 | 2,270 | 1,681 | ||||||||||||
Operating Profit |
||||||||||||||||
Ticona Affiliates Asia1 |
63 | 9 | 128 | (10 | ) | |||||||||||
Ticona Affiliates Middle East2 |
118 | 35 | 232 | 77 | ||||||||||||
Infraserv Affiliates3 |
27 | 26 | 47 | 51 | ||||||||||||
Total |
208 | 70 | 407 | 118 | ||||||||||||
Depreciation and Amortization |
||||||||||||||||
Ticona Affiliates Asia1 |
20 | 19 | 41 | 46 | ||||||||||||
Ticona Affiliates Middle East2 |
10 | 8 | 16 | 12 | ||||||||||||
Infraserv Affiliates3 |
24 | 24 | 50 | 47 | ||||||||||||
Total |
54 | 51 | 107 | 105 | ||||||||||||
Affiliate EBITDA4 |
||||||||||||||||
Ticona Affiliates Asia1 |
83 | 28 | 169 | 36 | ||||||||||||
Ticona Affiliates Middle East2 |
128 | 43 | 248 | 89 | ||||||||||||
Infraserv Affiliates3 |
51 | 50 | 97 | 98 | ||||||||||||
Total |
262 | 121 | 514 | 223 | ||||||||||||
Net Income |
||||||||||||||||
Ticona Affiliates Asia1 |
31 | 7 | 75 | (9 | ) | |||||||||||
Ticona Affiliates Middle East2 |
104 | 31 | 208 | 68 | ||||||||||||
Infraserv Affiliates3 |
20 | 16 | 35 | 35 | ||||||||||||
Total |
155 | 54 | 318 | 94 | ||||||||||||
Net Debt |
||||||||||||||||
Ticona Affiliates Asia1 |
94 | 245 | 94 | 245 | ||||||||||||
Ticona Affiliates Middle East2 |
(89 | ) | (50 | ) | (89 | ) | (50 | ) | ||||||||
Infraserv Affiliates3 |
200 | 482 | 200 | 482 | ||||||||||||
Total |
205 | 677 | 205 | 677 | ||||||||||||
1 | Ticona Affiliates Asia accounted for using the equity method includes Polyplastics (45%), Korean Engineering Plastics (50%), Fortron Industries (50%), Una SA (50%). | |
2 | Ticona Affiliates Middle East accounted for using the equity method includes National Methanol Company (IBN Sina) (25%). | |
3 | Infraserv Affiliates accounted for using the equity method includes Infraserv Hoechst (32%), Infraserv Gendorf (39%) and Infraserv Knapsack (27%). | |
4 | Affiliate EBITDA, a non-U.S. GAAP measure, is the sum of Operating Profit and Depreciation and Amortization. |
Page 15 of 15
Table 8 (continued)
Equity
Affiliate Preliminary Results Celanese Proportional Share
Unaudited5
Three Months Ended | Six Months Ended | |||||||||||||||
(in $ millions) | June 30, | June 30, | ||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
As adjusted | As adjusted | |||||||||||||||
Proportional Net Sales |
||||||||||||||||
Ticona Affiliates Asia1 |
176 | 123 | 347 | 203 | ||||||||||||
Ticona Affiliates Middle East2 |
61 | 28 | 126 | 61 | ||||||||||||
Infraserv Affiliates3 |
160 | 155 | 334 | 318 | ||||||||||||
Total |
397 | 306 | 807 | 582 | ||||||||||||
Proportional Operating Profit |
||||||||||||||||
Ticona Affiliates Asia1 |
29 | 4 | 59 | (4 | ) | |||||||||||
Ticona Affiliates Middle East2 |
30 | 9 | 58 | 19 | ||||||||||||
Infraserv Affiliates3 |
8 | 8 | 15 | 16 | ||||||||||||
Total |
67 | 21 | 132 | 31 | ||||||||||||
Proportional Depreciation and Amortization |
||||||||||||||||
Ticona Affiliates Asia1 |
9 | 9 | 19 | 21 | ||||||||||||
Ticona Affiliates Middle East2 |
2 | 2 | 4 | 3 | ||||||||||||
Infraserv Affiliates3 |
8 | 8 | 16 | 15 | ||||||||||||
Total |
19 | 19 | 39 | 39 | ||||||||||||
Proportional Affiliate EBITDA4 |
||||||||||||||||
Ticona Affiliates Asia1 |
38 | 13 | 78 | 17 | ||||||||||||
Ticona Affiliates Middle East2 |
32 | 11 | 62 | 22 | ||||||||||||
Infraserv Affiliates3 |
16 | 16 | 31 | 31 | ||||||||||||
Total |
86 | 40 | 171 | 70 | ||||||||||||
Equity in net earnings of affiliates (as reported
on the Income Statement) |
||||||||||||||||
Ticona
Affiliates
Asia1,
7 |
15 | 4 | 36 | (4 | ) | |||||||||||
Ticona Affiliates Middle East2 |
24 | 8 | 47 | 16 | ||||||||||||
Infraserv Affiliates3 |
6 | 4 | 11 | 10 | ||||||||||||
Total |
45 | 16 | 94 | 22 | ||||||||||||
Proportional Affiliate EBITDA in excess of Equity
in net earnings of affiliates6 |
||||||||||||||||
Ticona Affiliates Asia1 |
23 | 9 | 42 | 21 | ||||||||||||
Ticona Affiliates Middle East2 |
8 | 3 | 15 | 6 | ||||||||||||
Infraserv Affiliates3 |
10 | 12 | 20 | 21 | ||||||||||||
Total |
41 | 24 | 77 | 48 | ||||||||||||
Proportional Net Debt |
||||||||||||||||
Ticona Affiliates Asia1 |
43 | 111 | 43 | 111 | ||||||||||||
Ticona Affiliates Middle East2 |
(22 | ) | (13 | ) | (22 | ) | (13 | ) | ||||||||
Infraserv Affiliates3 |
66 | 152 | 66 | 152 | ||||||||||||
Total |
87 | 250 | 87 | 250 | ||||||||||||
1 | Ticona Affiliates Asia accounted for using the equity method includes Polyplastics (45%), Korean Engineering Plastics (50%), Fortron Industries (50%), Una SA (50%). | |
2 | Ticona Affiliates Middle East accounted for using the equity method includes National Methanol Company (IBN Sina) (25%). | |
3 | Infraserv Affiliates accounted for using the equity method includes Infraserv Hoechst (32%), Infraserv Gendorf (39%) and Infraserv Knapsack (27%). | |
4 | Affiliate EBITDA, a non-U.S. GAAP measure, is the sum of Operating Profit and Depreciation and Amortization. | |
5 | Calculated by multiplying each affiliates total share amount by Celaneses respective ownership percentage, netted by reporting category. | |
6 | Calculated as Affiliate EBITDA less Equity in net earnings of affiliates; not included in Celanese operating EBITDA. | |
7 | The three and six months ended June 30, 2009 excludes a one-time tax adjustment to Equity in net earnings of affiliates of $19 million. |