Celanese Corporation Reports Full Year 2018 and Fourth Quarter Earnings; Reaffirms Long-term Growth Outlook

Mon, January 28 2019

DALLAS--(BUSINESS WIRE)-- Celanese Corporation (NYSE: CE), a global specialty materials company, today reported record GAAP diluted earnings per share of $8.95 and adjusted earnings per share of $11.00 for 2018. The Company also reported fourth quarter GAAP diluted earnings per share of $0.73 and adjusted earnings per share of $2.38. The difference between GAAP and adjusted earnings per share for the quarter and year was due to Certain Items, primarily a pension mark to market adjustment as well as expenses related to M&A and restructuring activities. Net sales for the year grew 17 percent over 2017 to $7.2 billion on price and volume expansion. Robust contributions from both Engineered Materials and the Acetyl Chain drove financial performance for the year. The Acetyl Chain elevated earnings to new levels by exercising its business model to grow volume and price year over year amid improving industry fundamentals. Engineered Materials grew through expanded project commercializations, contributions from the Nilit and Omni acquisitions, and improved joint venture performance. Celanese generated operating cash flow of $1.6 billion and free cash flow of $1.2 billion, both records, and deployed it to high return investments with the Clear Lake VAM expansion, acquisition of a Linde synthesis gas unit at Clear Lake, and acquisitions of Omni and Next Polymers. During the year, Celanese returned a record $1.1 billion in cash to shareholders through share repurchases and dividends.

Fourth Quarter and Full Year 2018 Highlights:

			Three Months Ended										Year Ended
			December 31,										December 31,
				2018					2017					2018					2017
			(unaudited)
			(In $ millions, except per share data)
Net Sales
Engineered Materials				622					580					2,593					2,213
Acetate Tow				161					157					649					668
Acetyl Chain				936					888					4,042					3,371
Intersegment Eliminations				(30	)				(32	)				(129	)				(112	)
Total				1,689					1,593					7,155					6,140
			Three Months Ended										Year Ended
			December 31,										December 31,
				2018					2017					2018					2017
								(As Adjusted)										(As Adjusted)
			(unaudited)
			(In $ millions, except per share data)
Operating Profit (Loss)
Engineered Materials				95					98					460					412
Acetate Tow				19					41					130					189
Acetyl Chain				211					175					1,024					509
Other Activities				(66	)				(74	)				(280	)				(253	)
Total				259					240					1,334					857
Net earnings (loss)				101					204					1,213					849
Adjusted EBIT(1)(2)
Engineered Materials				150					142					694					599
Acetate Tow				53					68					273					301
Acetyl Chain				215					178					1,022					575
Other Activities				(25	)				(36	)				(137	)				(119	)
Total				393					352					1,852					1,356
Equity Earnings and Dividend Income, Other Income (Expense)
Engineered Materials				49					43					219					171
Acetate Tow				25					26					116					107
Operating EBITDA(1)				471					431					2,168					1,659
Diluted EPS - continuing operations			$	0.73				$	1.50				$	8.95				$	6.19
Diluted EPS - total			$	0.75				$	1.49				$	8.91				$	6.09
Adjusted EPS(1)			$	2.38				$	1.98				$	11.00				$	7.51
Net cash provided by (used in) investing activities				(98	)				(92	)				(507	)				(549	)
Net cash provided by (used in) financing activities				(526	)				145					(1,165	)				(351	)
Net cash provided by (used in) operating activities				363					58					1,558					803
Free cash flow(1)				261					(38	)				1,198					509

_____________________________
(1)		See "Non-US GAAP Financial Measures" below.
(2)		The Company's discussion of adjusted earnings includes use of the term "segment income". This non-GAAP term is defined below and reconciled in our Non-US GAAP Financial Measures and Supplemental Information document below.

Full Year Business Segment Overview

Engineered Materials

Engineered Materials' net sales grew 17 percent over 2017 to $2.6 billion. GAAP operating profit of $460 million and segment income of $694 million were driven by both price and volume expansion over 2017. Project commercializations totaling 3,274 for the year, contributions from the Nilit and Omni acquisitions, and improved affiliate performance delivered the fourth straight year of GAAP operating profit expansion and fifth straight year of segment income expansion for the segment. Engineered Materials delivered GAAP operating profit margin of 17.7 percent and segment income margin of 26.8 percent for the year. Volume growth of 9 percent over 2017 was driven by incremental project commercializations and contributions from acquisitions, and more than offset broad destocking across the value chain at the end of 2018. The segment expanded pricing 6 percent over 2017 levels on improved mix and commercial initiatives throughout the year. Affiliate earnings expanded 27 percent over 2017 to $218 million, primarily due to Celanese's higher economic interest in the Ibn Sina joint venture and higher MTBE pricing.

Acetyl Chain

The Acetyl Chain generated net sales of $4.0 billion in 2018, an increase of 20 percent over the prior year. Pricing expanded 19 percent over 2017 levels as the business flexed its global network amid sustained improvements in industry fundamentals and utilization rates. GAAP operating profit of $1.0 billion and segment income of $1.0 billion, both records, represent another step up in the earnings power of the segment. The Acetyl Chain delivered highest-ever GAAP operating profit margin of 25.3 percent, a 1,020 basis point improvement over 2017, and record segment income margin of 25.3 percent, an 820 basis point expansion over the same period. Since implementing a model to leverage its global network, the business has demonstrated multiple years of continued margin expansion by identifying highest value commercial opportunities while driving productivity. Numerous activations to optimize the broad network delivered margin expansion in 2018 that more than offset increases in raw material, freight, and energy costs.

Acetate Tow

Acetate Tow GAAP operating profit was $130 million and segment income was $273 million for the year. Volume was flat year over year. Pricing in 2018 fell 3 percent off 2017 due to lower industry capacity utilization and was partially offset by mix. Raw material costs increased in 2018 over the prior year, primarily driven by higher acetyls pricing and freight costs. Dividends from affiliates were $116 million, 8 percent higher than last year.

Recent Highlights

• Announced global reconfiguration of the acetic acid production footprint by expanding Clear Lake, Texas acetic acid capacity to approximately 2.0 million tons by late 2021 with limited net change in the Company's total system tonnage via equivalent productivity options in Singapore and Nanjing, China.
• Signed an agreement to acquire India-based Next Polymers Ltd., one of the country's largest domestic engineering thermoplastic (ETP) compounders. Completed on January 2, 2019, the acquisition adds 20 kt of local compounding capacity.
• Announced the signing of an agreement to acquire a 365 kt synthesis gas production unit from Linde, located at the Company's Clear Lake, Texas Acetyl Chain production facility.
• Commercialized 866 Engineered Materials projects in the fourth quarter of 2018. Total new project completions in 2018 were 3,274, a 47 percent increase year over year.
• Selected to join the S&P 500 index effective prior to the open of trading on December 24, 2018.
• Completed a registered offering of €500 million of 2.125% Senior Notes due 2027, using proceeds primarily to refinance an existing term loan maturing in 2021. Also extended maturity of revolving credit facility to 5 years and increased to $1.25 billion. This extends Celanese debt maturities while also reducing interest costs.

Fourth Quarter Business Segment Overview

Engineered Materials

Engineered Materials delivered record fourth quarter net sales of $622 million, 7 percent higher than the same quarter of 2017. The segment delivered fourth quarter GAAP operating profit of $95 million and fourth quarter segment income of $150 million as the business grew pricing and volume over the prior year. In the fourth quarter, a focused effort to extend the opportunity pipeline model grew Engineered Materials volumes over the fourth quarter of 2017, more than offsetting a reset of inventory levels across the industry value chain which began late in the quarter. The opportunity pipeline commercialized 866 projects in the quarter, 48 percent higher than the same quarter of 2017, as the business increasingly met customer innovation needs with customized technology solutions. GAAP operating profit margin was 15.3 percent and segment income margin was 24.1 percent, respectively, down 160 and 40 basis points from last year, driven by new acquisitions contributing to margin dilution and strong growth in Asia. Margins are expected to recover from fourth quarter levels as the segment returns to more normalized regional sales mix and lower raw material costs in the quarter flow through inventory.

Acetyl Chain

The Acetyl Chain's net sales for the quarter were $936 million, 5 percent higher than the fourth quarter of 2017, driven by price increases. GAAP operating profit of $211 million and segment income of $215 million, fourth quarter records, both increased by 21 percent over the same quarter last year. The global supply network and integrated product chain positioned the Acetyl Chain to expand pricing in excess of raw material increases year over year. Volume in the quarter declined 2 percent over the fourth quarter of 2017 as the segment offset most of the impact of an extended VAM turnaround at Clear Lake and customer destocking in the quarter, particularly in Asia. The Acetyl Chain delivered GAAP operating margin of 22.5 percent and segment income margin of 23.0 percent, both fourth quarter records, sustaining margin levels in a quarter with winter seasonality.

Acetate Tow

Acetate Tow recorded fourth quarter GAAP operating profit of $19 million and segment income of $53 million. Income in the quarter declined year over year due primarily to the impact of an inventory build in the fourth quarter of 2017 and higher acetyls raw material costs. Pricing declined 2 percent from the fourth quarter of 2017. Segment performance is expected to rebound sequentially in the first quarter of 2019, more consistent with the third quarter of 2018.

Cash Flow and Tax

Celanese generated operating cash flow of $1.6 billion and free cash flow of $1.2 billion for the year. Capital expenditures for the year was $337 million, approximately $70 million higher than 2017 due to a number of productivity investments and incremental expansion projects across businesses. For the year, $1.1 billion of cash was returned to shareholders, including $817 million in share repurchases and $280 million in cash dividends. The Company completed $567 million in share repurchases in the fourth quarter with $713 million remaining under the current share repurchase authorization as of December 31, 2018. The effective US GAAP tax rate was 19 percent for 2018 compared to 20 percent for 2017. The tax rate for adjusted earnings per share was 14 percent for 2018, 2 percent lower year over year, primarily due to the impact of US tax reform.

Outlook

"Underlying fundamentals and forward looking demand forecasts for our products and solutions-based businesses remain strong. The strength of our business models, additional contribution from organic investment projects underway, and planned acquisition contributions give us confidence in reaffirming our plan to earn $12 per share in 2020. Having said that, we believe the economic weakness surfacing last quarter primarily in Europe and Asia will continue through the first quarter and into the second before global business starts to recover. Assuming this slower start and expecting some fourth quarter 2019 moderation, which we commonly see, we would anticipate 2019 adjusted earnings of approximately $10.50 per share. We will be in a better position to refine this outlook during our first quarter earnings call in April, based on updated views of customer activity and economic trends," said Mark Rohr, chairman and chief executive officer.

Regarding a forward view on a US GAAP basis, 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 fourth quarter and full year results will be posted on its website at investors.celanese.com under News & Events/Presentations after market close on January 28, 2019. 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 businesses use the full breadth of Celanese's global chemistry, technology and commercial expertise to create value for our customers, employees, shareholders 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 7,700 employees worldwide and had 2018 net sales of $7.2 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. There can be no assurance that the company will realize these expectations or that these beliefs will prove correct. There are a number of risks and uncertainties that could cause actual results to differ materially from the results expressed or implied in the forward-looking statements contained in this release. These risks and uncertainties include, among other things: changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate; the length and depth of product and industry business cycles, particularly in the automotive, electrical, 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 three business segments, Engineered Materials, Acetate Tow and Acetyl Chain.

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 do not provide reconciliations for adjusted EBIT on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information. 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 margin by business segment may also be referred to by management as segment 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 do not provide reconciliations for adjusted earnings per share on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.
  
  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 January 28, 2019 and also available on our website at investors.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
			December 31,
			2018				2017
							(As Adjusted)
			(In $ millions, except share and per share data)
Net sales			1,689				1,593
Cost of sales			(1,269	)			(1,180	)
Gross profit			420				413
Selling, general and administrative expenses			(134	)			(143	)
Amortization of intangible assets			(6	)			(6	)
Research and development expenses			(18	)			(20	)
Other (charges) gains, net			—				(2	)
Foreign exchange gain (loss), net			(2	)			(1	)
Gain (loss) on disposition of businesses and assets, net			(1	)			(1	)
Operating profit (loss)			259				240
Equity in net earnings (loss) of affiliates			53				48
Non-operating pension and other postretirement employee benefit (expense)			(139	)			(23	)
Interest expense			(30	)			(31	)
Refinancing expense			(1	)			—
Interest income			2				—
Dividend income - equity investments			25				26
Other income (expense), net			5				5
Earnings (loss) from continuing operations before tax			174				265
Income tax (provision) benefit			(76	)			(60	)
Earnings (loss) from continuing operations			98				205
Earnings (loss) from operation of discontinued operations			4				(2	)
Gain (loss) on disposition of discontinued operations			—				—
Income tax (provision) benefit from discontinued operations			(1	)			1
Earnings (loss) from discontinued operations			3				(1	)
Net earnings (loss)			101				204
Net (earnings) loss attributable to noncontrolling interests			(2	)			(1	)
Net earnings (loss) attributable to Celanese Corporation			99				203
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations			96				204
Earnings (loss) from discontinued operations			3				(1	)
Net earnings (loss)			99				203
Earnings (loss) per common share - basic
Continuing operations			0.73				1.50
Discontinued operations			0.02				(0.01	)
Net earnings (loss) - basic			0.75				1.49
Earnings (loss) per common share - diluted
Continuing operations			0.73				1.50
Discontinued operations			0.02				(0.01	)
Net earnings (loss) - diluted			0.75				1.49
Weighted average shares (in millions)
Basic			131.2				135.8
Diluted			132.1				136.3

Consolidated Statements of Operations - Unaudited
			Year Ended December 31,
			2018				2017
							(As Adjusted)
			(In $ millions, except share and per share data)
Net sales			7,155				6,140
Cost of sales			(5,183	)			(4,629	)
Gross profit			1,972				1,511
Selling, general and administrative expenses			(546	)			(496	)
Amortization of intangible assets			(24	)			(20	)
Research and development expenses			(72	)			(73	)
Other (charges) gains, net			9				(59	)
Foreign exchange gain (loss), net			—				(1	)
Gain (loss) on disposition of businesses and assets, net			(5	)			(5	)
Operating profit (loss)			1,334				857
Equity in net earnings (loss) of affiliates			233				183
Non-operating pension and other postretirement employee benefit (expense)			(62	)			44
Interest expense			(125	)			(122	)
Refinancing expense			(1	)			—
Interest income			6				2
Dividend income - equity investments			117				108
Other income (expense), net			8				3
Earnings (loss) from continuing operations before tax			1,510				1,075
Income tax (provision) benefit			(292	)			(213	)
Earnings (loss) from continuing operations			1,218				862
Earnings (loss) from operation of discontinued operations			(5	)			(16	)
Gain (loss) on disposition of discontinued operations			—				—
Income tax (provision) benefit from discontinued operations			—				3
Earnings (loss) from discontinued operations			(5	)			(13	)
Net earnings (loss)			1,213				849
Net (earnings) loss attributable to noncontrolling interests			(6	)			(6	)
Net earnings (loss) attributable to Celanese Corporation			1,207				843
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations			1,212				856
Earnings (loss) from discontinued operations			(5	)			(13	)
Net earnings (loss)			1,207				843
Earnings (loss) per common share - basic
Continuing operations			9.03				6.21
Discontinued operations			(0.04	)			(0.10	)
Net earnings (loss) - basic			8.99				6.11
Earnings (loss) per common share - diluted
Continuing operations			8.95				6.19
Discontinued operations			(0.04	)			(0.10	)
Net earnings (loss) - diluted			8.91				6.09
Weighted average shares (in millions)
Basic			134.3				137.9
Diluted			135.4				138.3

Consolidated Balance Sheets - Unaudited
			As of December 31,
			2018				2017
			(In $ millions)
ASSETS
Current Assets
Cash and cash equivalents			439				576
Trade receivables - third party and affiliates, net			1,017				986
Non-trade receivables, net			301				244
Inventories			1,046				900
Marketable securities, at fair value			31				32
Other assets			40				54
Total current assets			2,874				2,792
Investments in affiliates			979				976
Property, plant and equipment, net			3,719				3,762
Deferred income taxes			84				366
Other assets			290				338
Goodwill			1,057				1,003
Intangible assets, net			310				301
Total assets			9,313				9,538
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates			561				326
Trade payables - third party and affiliates			819				807
Other liabilities			343				354
Income taxes payable			56				72
Total current liabilities			1,779				1,559
Long-term debt			2,970				3,315
Deferred income taxes			255				211
Uncertain tax positions			158				156
Benefit obligations			564				585
Other liabilities			208				413
Commitments and Contingencies
Stockholders' Equity
Preferred stock			—				—
Common stock			—				—
Treasury stock, at cost			(2,849	)			(2,031	)
Additional paid-in capital			233				175
Retained earnings			5,847				4,920
Accumulated other comprehensive income (loss), net			(247	)			(177	)
Total Celanese Corporation stockholders' equity			2,984				2,887
Noncontrolling interests			395				412
Total equity			3,379				3,299
Total liabilities and equity			9,313				9,538

Non-US GAAP Financial Measures and Supplemental Information

January 28, 2019

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 three business segments, Engineered Materials, Acetate Tow and Acetyl Chain.

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 Financial Information/Documents page of our website, investors.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 Financial Information/Non-GAAP Financial Measures page of our website, investors.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 do not provide reconciliations for adjusted EBIT on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information. 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 margin by business segment may also be referred to by management as segment 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 and as a performance metric in the Company's incentive compensation plan. We do not provide reconciliations for adjusted earnings per share on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.
  
  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 each of our business segments and the percentage increase or decrease in net sales attributable to price, volume, currency and other factors for each of our business segments.
• Cash dividends received from our equity 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.

Recent Developments

Effective January 1, 2018, we reorganized our operating and reportable segments to align with recent structural and management reporting changes. The changes reflect the movement of our food ingredients business from the Consumer Specialties reportable segment into the Engineered Materials reportable segment. In addition, the former Consumer Specialties reportable segment was renamed the Acetate Tow segment, and the former Advanced Engineered Materials reportable segment was renamed the Engineered Materials segment. This reorganization better reflects how we manage our food ingredients' related products commercially. Engineered Materials and food ingredients are both project-based models that focus on delivering customized solutions and are led by the same senior management team.

Effective December 31, 2018, we further reorganized our operating and reportable segments to align with recent structural and management reporting changes. The change reflects the resegmentation of the former Industrial Specialties and former Acetyl Intermediates operating and reportable segments, to the Acetyl Chain operating and reportable segment. This reorganization reflects the culmination of a shift in operating strategy and organizational hierarchy, with a focus on integration, collaboration and maximization of value creation through our global optionality and integrated chain model of the underlying businesses along the Acetyl Chain segment. These changes in operating and reportable segments were applied retrospectively to prior periods through 2014.

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
		2018			Q4 '18			Q3 '18			Q2 '18		Q1 '18			2017			Q4 '17		Q3 '17			Q2 '17			Q1 '17
		(In $ millions)
Net earnings (loss) attributable to Celanese Corporation		1,207			99			401			344		363			843			203		226			231			183
(Earnings) loss from discontinued operations		5			(3	)		6			—		2			13			1		4			8			—
Interest income		(6	)		(2	)		(2	)		—		(2	)		(2	)		—		(1	)		(1	)		—
Interest expense		125			30			30			32		33			122			31		32			30			29
Refinancing expense		1			1			—			—		—			—			—		—			—			—
Income tax provision (benefit)		292			76			54			97		65			213			60		57			40			56
Certain Items attributable to Celanese Corporation (Table 8)		228			192			5			18		13			167			57		27			18			65
Adjusted EBIT		1,852			393			494			491		474			1,356			352		345			326			333
Depreciation and amortization expense(1)		316			78			77			82		79			303			79		78			75			71
Operating EBITDA		2,168			471			571			573		553			1,659			431		423			401			404

		2018		Q4 '18		Q3 '18		Q2 '18		Q1 '18		2017		Q4 '17		Q3 '17		Q2 '17		Q1 '17
		(In $ millions)
Engineered Materials		1		—		—		1		—		—		—		—		—		—
Acetate Tow		19		5		11		3		—		—		—		—		—		—
Acetyl Chain		7		5		2		—		—		2		—		2		—		—
Other Activities(2)		—		—		—		—		—		—		—		—		—		—
Accelerated depreciation and amortization expense		27		10		13		4		—		2		—		2		—		—
Depreciation and amortization expense(1)		316		78		77		82		79		303		79		78		75		71
Total depreciation and amortization expense		343		88		90		86		79		305		79		80		75		71

______________________________

(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
		2018						Q4 '18						Q3 '18						Q2 '18						Q1 '18						2017						Q4 '17						Q3 '17						Q2 '17						Q1 '17
		(In $ millions, except percentages)
Operating Profit (Loss) / Operating Margin
Engineered Materials		460			17.7	%		95			15.3	%		124			19.3	%		114			17.2	%		127			19.1	%		412			18.6	%		98			16.9	%		105			18.3	%		105			19.2	%		104			20.2	%
Acetate Tow		130			20.0	%		19			11.8	%		26			16.5	%		39			24.1	%		46			27.4	%		189			28.3	%		41			26.1	%		45			28.7	%		41			25.2	%		62			32.5	%
Acetyl Chain(1)		1,024			25.3	%		211			22.5	%		287			28.5	%		273			26.0	%		253			24.1	%		509			15.1	%		175			19.7	%		147			17.0	%		135			16.3	%		52			6.5	%
Other Activities(2)		(280	)					(66	)					(63	)					(68	)					(83	)					(253	)					(74	)					(68	)					(63	)					(48	)
Total		1,334			18.6	%		259			15.3	%		374			21.1	%		358			19.4	%		343			18.5	%		857			14.0	%		240			15.1	%		229			14.6	%		218			14.4	%		170			11.6	%
Less: Net Earnings (Loss) Attributable to NCI(1)		6						2						1						1						2						6						1						2						2						1
Operating Profit (Loss) Attributable to Celanese Corporation		1,328			18.6	%		257			15.2	%		373			21.1	%		357			19.4	%		341			18.4	%		851			13.9	%		239			15.0	%		227			14.5	%		216			14.3	%		169			11.5	%
Operating Profit (Loss) / Operating Margin Attributable to Celanese Corporation
Engineered Materials		460			17.7	%		95			15.3	%		124			19.3	%		114			17.2	%		127			19.1	%		412			18.6	%		98			16.9	%		105			18.3	%		105			19.2	%		104			20.2	%
Acetate Tow		130			20.0	%		19			11.8	%		26			16.5	%		39			24.1	%		46			27.4	%		189			28.3	%		41			26.1	%		45			28.7	%		41			25.2	%		62			32.5	%
Acetyl Chain(1)		1,018			25.2	%		209			22.3	%		286			28.4	%		272			25.9	%		251			23.9	%		503			14.9	%		174			19.6	%		145			16.8	%		133			16.1	%		51			6.4	%
Other Activities(2)		(280	)					(66	)					(63	)					(68	)					(83	)					(253	)					(74	)					(68	)					(63	)					(48	)
Total		1,328			18.6	%		257			15.2	%		373			21.1	%		357			19.4	%		341			18.4	%		851			13.9	%		239			15.0	%		227			14.5	%		216			14.3	%		169			11.5	%
Equity Earnings and Dividend Income, Other Income (Expense) Attributable to Celanese Corporation
Engineered Materials		219		(3)				49						62						54						54						171						43						47						38						43
Acetate Tow		116						25						26						33						32						107						26						24						28						29
Acetyl Chain		8						1						2						3						2						6						2						1						2						1
Other Activities(2)		15						8						1						—						6						10						8						(4	)					2						4
Total		358						83						91						90						94						294						79						68						70						77
Non-Operating Pension and Other Post-Retirement Employee Benefit (Expense) Income Attributable to Celanese Corporation
Engineered Materials		—						—						—						—						—						—						—						—						—						—
Acetate Tow		—						—						—						—						—						—						—						—						—						—
Acetyl Chain		—						—						—						—						—						2						1						1						—						—
Other Activities(2)		(62	)					(139	)					25						26						26						42						(24	)					22						22						22
Total		(62	)					(139	)					25						26						26						44						(23	)					23						22						22
Certain Items Attributable to Celanese Corporation (Table 8)
Engineered Materials		15						6						1						7						1						16						1						5						7						3
Acetate Tow		27						9						13						5						—						5						1						—						2						2
Acetyl Chain		(4	)					5						(11	)					2						—						64						1						10						(3	)					56
Other Activities(2)		190						172						2						4						12						82						54						12						12						4
Total		228						192						5						18						13						167						57						27						18						65
Adjusted EBIT / Adjusted EBIT Margin
Engineered Materials		694			26.8	%		150			24.1	%		187			29.1	%		175			26.4	%		182			27.4	%		599			27.1	%		142			24.5	%		157			27.4	%		150			27.5	%		150			29.2	%
Acetate Tow		273			42.1	%		53			32.9	%		65			41.1	%		77			47.5	%		78			46.4	%		301			45.1	%		68			43.3	%		69			43.9	%		71			43.6	%		93			48.7	%
Acetyl Chain		1,022			25.3	%		215			23.0	%		277			27.5	%		277			26.4	%		253			24.1	%		575			17.1	%		178			20.0	%		157			18.2	%		132			16.0	%		108			13.6	%
Other Activities(2)		(137	)					(25	)					(35	)					(38	)					(39	)					(119	)					(36	)					(38	)					(27	)					(18	)
Total		1,852			25.9	%		393			23.3	%		494			27.9	%		491			26.6	%		474			25.6	%		1,356			22.1	%		352			22.1	%		345			22.0	%		326			21.6	%		333			22.6	%

___________________________

(1)		Net earnings (loss) attributable to NCI is included within the Acetyl Chain 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 $218 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.)
		2018						Q4 '18						Q3 '18						Q2 '18						Q1 '18						2017						Q4 '17						Q3 '17						Q2 '17						Q1 '17
		(In $ millions, except percentages)
Depreciation and Amortization Expense(1)
Engineered Materials		125						30						31						32						32						111						29						30						27						25
Acetate Tow		39						9						10						10						10						41						11						10						10						10
Acetyl Chain		141						36						34						36						35						141						37						34						36						34
Other Activities(2)		11						3						2						4						2						10						2						4						2						2
Total		316						78						77						82						79						303						79						78						75						71
Operating EBITDA / Operating EBITDA Margin
Engineered Materials		819			31.6	%		180			28.9	%		218			34.0	%		207			31.2	%		214			32.2	%		710			32.1	%		171			29.5	%		187			32.6	%		177			32.4	%		175			34.0	%
Acetate Tow		312			48.1	%		62			38.5	%		75			47.5	%		87			53.7	%		88			52.4	%		342			51.2	%		79			50.3	%		79			50.3	%		81			49.7	%		103			53.9	%
Acetyl Chain		1,163			28.8	%		251			26.8	%		311			30.9	%		313			29.8	%		288			27.4	%		716			21.2	%		215			24.2	%		191			22.1	%		168			20.3	%		142			17.9	%
Other Activities(2)		(126	)					(22	)					(33	)					(34	)					(37	)					(109	)					(34	)					(34	)					(25	)					(16	)
Total		2,168			30.3	%		471			27.9	%		571			32.2	%		573			31.1	%		553			29.9	%		1,659			27.0	%		431			27.1	%		423			27.0	%		401			26.6	%		404			27.5	%

___________________________

(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
		2018					Q4 '18					Q3 '18					Q2 '18					Q1 '18					2017					Q4 '17					Q3 '17					Q2 '17					Q1 '17
					per share					per share					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		1,212			8.95		96			0.73		407			3.00		344			2.52		365			2.68		856			6.19		204			1.50		230			1.68		239			1.72		183			1.30
Income tax provision (benefit)		292					76					54					97					65					213					60					57					40					56
Earnings (loss) from continuing operations before tax		1,504					172					461					441					430					1,069					264					287					279					239
Certain Items attributable to Celanese Corporation (Table 8)		228					192					5					18					13					167					57					27					18					65
Refinancing and related expenses		1					1					—					—					—					—					—					—					—					—
Adjusted earnings (loss) from continuing operations before tax		1,733					365					466					459					443					1,236					321					314					297					304
Income tax (provision) benefit on adjusted earnings(1)		(243	)				(51	)				(65	)				(64	)				(62	)				(198	)				(51	)				(50	)				(48	)				(49	)
Adjusted earnings (loss) from continuing operations(2)		1,490			11.00		314			2.38		401			2.96		395			2.90		381			2.79		1,038			7.51		270			1.98		264			1.93		249			1.79		255			1.81
		Diluted shares (in millions)(3)
Weighted average shares outstanding		134.3					131.2					134.5					135.6					135.9					137.9					135.8					136.6					138.6					140.6
Incremental shares attributable to equity awards		1.1					0.9					1.0					0.7					0.5					0.4					0.5					0.4					0.4					0.4
Total diluted shares		135.4					132.1					135.5					136.3					136.4					138.3					136.3					137.0					139.0					141.0

______________________________

(1)

Calculated using adjusted effective tax rates (Table 3a) as follows:

		2018		Q4 '18		Q3 '18		Q2 '18		Q1 '18		2017		Q4 '17		Q3 '17		Q2 '17		Q1 '17
		(In percentages)
Adjusted effective tax rate		14		14		14		14		14		16		16		16		16		16

(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
		(In percentages)
Q4 '18 & 2018		(3.9	)		6.7
Q4 '17 & 2017		10.5			7.3

(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
		Actual
		2018			2017
		(In percentages)
US GAAP annual effective tax rate		19			20
Discrete quarterly recognition of GAAP items(1)		—			(11	)
Tax impact of other charges and adjustments(2)		—			1
Utilization of foreign tax credits		—			20
Changes in valuation allowances, excluding impact of other charges and adjustments(3)		(5	)		(13	)
Other(4)		—			(1	)
Adjusted tax rate		14			16

______________________________

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

(1)		Such as changes in tax laws (including US tax reform), deferred taxes on outside basis differences, changes in uncertain tax positions and prior year audit adjustments.
(2)		Reflects the tax impact on pre-tax adjustments presented in Certain Items (Table 8), which are excluded from pre-tax income for adjusted earnings per share purposes.
(3)		Reflects changes in valuation allowances related to changes in judgment regarding the realizability of deferred tax assets or current year operations, excluding other charges and adjustments.
(4)		Tax impacts related to full-year forecasted tax opportunities and related costs.

Table 4
Net Sales by Segment - Unaudited
		2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18			2017			Q4 '17			Q3 '17			Q2 '17			Q1 '17
		(In $ millions)
Engineered Materials		2,593			622			642			664			665			2,213			580			573			546			514
Acetate Tow		649			161			158			162			168			668			157			157			163			191
Acetyl Chain		4,042			936			1,006			1,049			1,051			3,371			888			863			826			794
Other Activities(1)		—			—			—			—			—			—			—			—			—			—
Intersegment eliminations(2)		(129	)		(30	)		(35	)		(31	)		(33	)		(112	)		(32	)		(27	)		(25	)		(28	)
Net sales		7,155			1,689			1,771			1,844			1,851			6,140			1,593			1,566			1,510			1,471

___________________________

(1)		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).
(2)		Includes intersegment sales primarily related to the Acetyl Chain.

Table 4a
Factors Affecting Segment Net Sales Sequentially - Unaudited
Three Months Ended December 31, 2018 Compared to Three Months Ended September 30, 2018
		Volume			Price			Currency			Other		Total
		(In percentages)
Engineered Materials		(4	)		2			(1	)		—		(3	)
Acetate Tow		2			(1	)		—			—		1
Acetyl Chain		(3	)		(4	)		(1	)		1		(7	)
Total Company		(3	)		(2	)		(1	)		1		(5	)

Three Months Ended September 30, 2018 Compared to Three Months Ended June 30, 2018
		Volume			Price		Currency			Other		Total
		(In percentages)
Engineered Materials		(2	)		—		(1	)		—		(3	)
Acetate Tow		(2	)		—		—			—		(2	)
Acetyl Chain		(4	)		2		(2	)		—		(4	)
Total Company		(3	)		1		(2	)		—		(4	)

Three Months Ended June 30, 2018 Compared to Three Months Ended March 31, 2018
		Volume			Price		Currency			Other			Total
		(In percentages)
Engineered Materials		(1	)		3		(2	)		—			—
Acetate Tow		(3	)		—		(1	)		—			(4	)
Acetyl Chain		(2	)		4		(1	)		(1	)		—
Total Company		(2	)		3		(1	)		—			—

Three Months Ended March 31, 2018 Compared to Three Months Ended December 31, 2017
		Volume		Price		Currency		Other			Total
		(In percentages)
Engineered Materials		10		3		2		—			15	(1)
Acetate Tow		8		—		—		—			8
Acetyl Chain		8		9		3		(2	)		18
Total Company		9		6		2		(1	)		16

Three Months Ended December 31, 2017 Compared to Three Months Ended September 30, 2017
		Volume			Price			Currency		Other		Total
		(In percentages)
Engineered Materials		(8	)		9			—		—		1
Acetate Tow		2			(2	)		—		—		—
Acetyl Chain		(5	)		7			—		1		3
Total Company		(5	)		7			—		—		2

Three Months Ended September 30, 2017 Compared to Three Months Ended June 30, 2017
		Volume			Price		Currency		Other		Total
		(In percentages)
Engineered Materials		1			1		3		—		5
Acetate Tow		(5	)		1		—		—		(4	)
Acetyl Chain		1			—		3		—		4
Total Company		—			1		3		—		4

Three Months Ended June 30, 2017 Compared to Three Months Ended March 31, 2017
		Volume			Price			Currency		Other			Total
		(In percentages)
Engineered Materials		4			—			2		—			6		(2)
Acetate Tow		(12	)		(3	)		—		—			(15	)
Acetyl Chain		—			5			1		(2	)		4
Total Company		—			3			1		(1	)		3

Three Months Ended March 31, 2017 Compared to Three Months Ended December 31, 2016
		Volume		Price			Currency			Other		Total
		(In percentages)
Engineered Materials		33		—			(1	)		—		32		(3)
Acetate Tow		2		(6	)		—			—		(4	)
Acetyl Chain		2		5			(1	)		—		6
Total Company		11		2			(1	)		—		12

___________________________

(1)		2018 includes the effect of the acquisition of Omni Plastics, L.L.C.
(2)		2017 includes the effect of the acquisition of the nylon compounding division of Nilit Group.
(3)		2017 includes the effect of the SO.F.TER. S.p.A. acquisition.

Table 4b
Factors Affecting Segment Net Sales Year Over Year - Unaudited
Three Months Ended December 31, 2018 Compared to Three Months Ended December 31, 2017
		Volume			Price			Currency			Other			Total
		(In percentages)
Engineered Materials		2			7			(2	)		—			7
Acetate Tow		5			(2	)		—			—			3
Acetyl Chain		(2	)		10			(2	)		(1	)		5
Total Company		—			8			(2	)		—			6

Three Months Ended September 30, 2018 Compared to Three Months Ended September 30, 2017
		Volume			Price			Currency			Other			Total
		(In percentages)
Engineered Materials		7			6			(1	)		—			12
Acetate Tow		5			(3	)		—			(1	)		1
Acetyl Chain		(3	)		22			—			(2	)		17
Total Company		1			14			(1	)		(1	)		13

Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017
		Volume		Price			Currency		Other			Total
		(In percentages)
Engineered Materials		11		7			4		—			22
Acetate Tow		1		(2	)		—		—			(1	)
Acetyl Chain		6		19			5		(3	)		27
Total Company		7		13			4		(2	)		22

Three Months Ended March 31, 2018 Compared to Three Months Ended March 31, 2017
		Volume			Price			Currency		Other			Total
		(In percentages)
Engineered Materials		19			3			7		—			29
Acetate Tow		(9	)		(4	)		1		—			(12	)
Acetyl Chain		3			25			7		(3	)		32
Total Company		7			14			6		(1	)		26

Three Months Ended December 31, 2017 Compared to Three Months Ended December 31, 2016
		Volume			Price			Currency		Other			Total
		(In percentages)
Engineered Materials		45			—			4		—			49
Acetate Tow		(14	)		(9	)		1		1			(21	)
Acetyl Chain		(2	)		19			4		(2	)		19
Total Company		10			10			3		(1	)		22

Three Months Ended September 30, 2017 Compared to Three Months Ended September 30, 2016
		Volume			Price			Currency		Other			Total
		(In percentages)
Engineered Materials		45			(2	)		2		—			45
Acetate Tow		(12	)		(8	)		1		—			(19	)
Acetyl Chain		—			13			2		(2	)		13
Total Company		11			6			2		(1	)		18

Three Months Ended June 30, 2017 Compared to Three Months Ended June 30, 2016
		Volume			Price			Currency			Other			Total
		(In percentages)
Engineered Materials		42			(2	)		(1	)		—			39
Acetate Tow		(13	)		(9	)		—			—			(22	)
Acetyl Chain		(3	)		12			(2	)		(1	)		6
Total Company		8			5			(1	)		—			12

Three Months Ended March 31, 2017 Compared to Three Months Ended March 31, 2016
		Volume			Price			Currency			Other		Total
		(In percentages)
Engineered Materials		43			(4	)		(2	)		—		37
Acetate Tow		(6	)		(7	)		—			—		(13	)
Acetyl Chain		(9	)		5			(2	)		1		(5	)
Total Company		5			1			(2	)		1		5

Table 4c
Factors Affecting Segment Net Sales Year Over Year - Unaudited
Year Ended December 31, 2018 Compared to Year Ended December 31, 2017
		Volume		Price			Currency		Other			Total
		(In percentages)
Engineered Materials		9		6			2		—			17
Acetate Tow		—		(3	)		—		—			(3	)
Acetyl Chain		1		19			2		(2	)		20
Total Company		4		12			2		(1	)		17

Year Ended December 31, 2017 Compared to Year Ended December 31, 2016
		Volume			Price			Currency		Other		Total
		(In percentages)
Engineered Materials		44			(2	)		1		—		43
Acetate Tow		(11	)		(8	)		—		—		(19	)
Acetyl Chain		(4	)		12			—		—		8
Total Company		9			5			—		—		14

Table 5
Free Cash Flow - Reconciliation of a Non-GAAP Measure - Unaudited
		2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18			2017			Q4 '17			Q3 '17			Q2 '17			Q1 '17
		(In $ millions)
Net cash provided by (used in) investing activities		(507	)		(98	)		(78	)		(96	)		(235	)		(549	)		(92	)		(68	)		(325	)		(64	)
Net cash provided by (used in) financing activities		(1,165	)		(526	)		(383	)		(254	)		(2	)		(351	)		145			(247	)		21			(270	)
Net cash provided by (used in) operating activities		1,558			363			467			585			143			803			58			255			298			192
Capital expenditures on property, plant and equipment		(337	)		(93	)		(79	)		(79	)		(86	)		(267	)		(87	)		(64	)		(54	)		(62	)
Capital (distributions to) contributions from NCI		(23	)		(9	)		(6	)		(6	)		(2	)		(27	)		(9	)		(10	)		(4	)		(4	)
Free cash flow(1)(2)		1,198			261			382			500			55			509			(38	)		181			240			126
Net sales		7,155			1,689			1,771			1,844			1,851			6,140			1,593			1,566			1,510			1,471
Free cash flow as % of Net sales		16.7	%		15.5	%		21.6	%		27.1	%		3.0	%		8.3	%		(2.4	)%		11.6	%		15.9	%		8.6	%

______________________________

(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 $63 million and $27 million for the years ending December 31, 2018 and 2017, respectively.

Table 6
Cash Dividends Received - Unaudited
		2018		Q4 '18		Q3 '18		Q2 '18		Q1 '18		2017		Q4 '17		Q3 '17		Q2 '17		Q1 '17
		(In $ millions)
Dividends from equity method investments		221		62		44		39		76		131		17		5		59		50
Dividends from equity investments without readily determinable fair values		117		25		26		34		32		108		26		24		29		29
Total		338		87		70		73		108		239		43		29		88		79

Table 7
Net Debt - Reconciliation of a Non-GAAP Measure - Unaudited
		2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18			2017			Q4 '17			Q3 '17			Q2 '17			Q1 '17
		(In $ millions)
Short-term borrowings and current installments of long-term debt - third party and affiliates		561			561			229			366			425			326			326			435			384			107
Long-term debt, net of unamortized deferred financing costs		2,970			2,970			3,196			3,228			3,343			3,315			3,315			2,954			2,931			2,851
Total debt		3,531			3,531			3,425			3,594			3,768			3,641			3,641			3,389			3,315			2,958
Cash and cash equivalents		(439	)		(439	)		(703	)		(708	)		(490	)		(576	)		(576	)		(461	)		(511	)		(501	)
Net debt		3,092			3,092			2,722			2,886			3,278			3,065			3,065			2,928			2,804			2,457

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:
		2018		Q4 '18		Q3 '18		Q2 '18		Q1 '18		2017		Q4 '17		Q3 '17		Q2 '17			Q1 '17			Income Statement Classification
		(In $ millions)
Plant/office closures		19		16		—		3		—		58		2		2		(3	)		57			Cost of sales / SG&A / R&D / Other charges (gains), net
Mergers and acquisitions		33		6		3		11		13		35		9		10		7			9			Cost of sales / SG&A / Other income (expense), net
Impact from natural disasters(1)		—		—		—		—		—		11		—		11		—			—			Cost of sales
InfraServ ownership change		—		—		—		—		—		8		—		—		8			—			Other charges (gains), net / Equity in net earnings (loss) of affiliates
Actuarial (gain) loss on pension and postretirement plans		166		166		—		—		—		46		46		—		—			—			Cost of sales / SG&A / Non-operating pension and other postretirement employee benefit (expense) income
Restructuring		9		4		2		3		—		9		—		4		3			2			Cost of sales / SG&A / Other charges (gains), net / Non-operating pension and other postretirement employee benefit (expense) income
Other		1		—		—		1		—		—		—		—		3			(3	)		(Gain) loss on disposition, net / Equity in net earnings (loss) of affiliates
Certain Items attributable to Celanese Corporation		228		192		5		18		13		167		57		27		18			65

______________________________

(1)

Primarily associated with Hurricane Harvey.

Table 9
Return on Invested Capital (Adjusted) - Presentation of a Non-GAAP Measure - Unaudited
						2018							2017
						(In $ millions, except percentages)							(In $ millions, except percentages)
Net earnings (loss) attributable to Celanese Corporation						1,207							843
Adjusted EBIT (Table 1)						1,852							1,356
Adjusted effective tax rate (Table 3a)						14	%						16	%
Adjusted EBIT tax effected						1,593							1,139
		2018		2017		Average			2017		2016		Average
		(In $ millions, except percentages)
Short-term borrowings and current installments of long-term debt - third parties and affiliates		561		326		444			326		118		222
Long-term debt, net of unamortized deferred financing costs		2,970		3,315		3,143			3,315		2,890		3,103
Celanese Corporation stockholders' equity		2,984		2,887		2,936			2,887		2,588		2,738
Invested capital						6,523							6,063
Return on invested capital (adjusted)						24.4	%						18.8	%
Net earnings (loss) attributable to Celanese Corporation as a percentage of invested capital						18.5	%						13.9	%

View source version on businesswire.com: https://www.businesswire.com/news/home/20190128005734/en/

Investor Relations
Chuck Kyrish
Phone: +1 972 443 4574
Chuck.Kyrish@celanese.com

Media - U.S.
Travis Jacobsen
Phone: +1 972 443 3750
William.Jacobsen@celanese.com

Media - Europe
Jens Kurth
Phone: +49(0)69 45009 1574
J.Kurth@celanese.com

Source: Celanese Corporation