Celanese Corporation Reports Third Quarter 2019 Earnings

Mon, October 21 2019

DALLAS--(BUSINESS WIRE)-- Celanese Corporation (NYSE: CE), a global chemical and specialty materials company, reported third quarter GAAP diluted earnings per share of $2.17 and adjusted earnings per share of $2.53, both sequential improvements over the prior quarter. The Company delivered net sales of $1.6 billion as 2 percent sequential volume growth offset the impact of a 1 percent decline in both pricing and foreign exchange. Despite no meaningful improvement in market demand over the second quarter, the Company recorded sequential growth in both Engineered Materials and the Acetyl Chain via their differentiated business models while again displaying a stable earnings profile in Acetate Tow. The Company generated operating cash flow of $397 million and free cash flow of $315 million. Celanese returned $352 million of cash to shareholders in the quarter via $275 million in share repurchases and $77 million in dividends, bringing the total year-to-date cash returned to $1.0 billion. Based on an expectation that market conditions are unlikely to improve in 2019, and including the impacts of the previously announced unplanned Clear Lake outage, the Company expects to deliver 2019 adjusted earnings between $9.60 and $9.80 per share.

Third Quarter 2019 Financial Highlights:
	Three Months Ended
	September 30, 2019			June 30, 2019			September 30, 2018
	(unaudited)
	(In $ millions)
Operating Profit (Loss)
Engineered Materials	111			103			124
Acetate Tow	34			(44	)		26
Acetyl Chain	180			188			287
Other Activities	(65	)		(61	)		(63	)
Total	260			186			374

	Three Months Ended
	September 30, 2019				June 30, 2019				September 30, 2018
	(unaudited)
	(In $ millions, except per share data)
Net Earnings (Loss)	265				210				402
Adjusted EBIT(1)
Engineered Materials	154				148				187
Acetate Tow	71				71				65
Acetyl Chain	191				189				277
Other Activities	(40		)		(32		)		(35		)
Total	376				376				494
Equity Earnings and Dividend Income, Other Income (Expense)
Engineered Materials	41				36				62
Acetate Tow	27				29				26
Operating EBITDA(1)	458				458				571
Diluted EPS - continuing operations	$	2.17			$	1.67			$	3.00
Diluted EPS - total	$	2.13			$	1.66			$	2.96
Adjusted EPS(1)	$	2.53			$	2.38			$	2.96
Net cash provided by (used in) investing activities	(82		)		(66		)		(78		)
Net cash provided by (used in) financing activities	(299		)		(307		)		(383		)
Net cash provided by (used in) operating activities	397				424				467
Free cash flow(1)	315				356				382

______________________________

(1)

See "Non-US GAAP Financial Measures" below.

Third Quarter 2019 Highlights:

• Finalized permitting for the expansion of Clear Lake acetic acid to 2.0 million tons per year and Fairway methanol to 1.7 million tons per year, as part of the global acid reconfiguration. Engineering work progresses on both projects.
• Completed the addition of new compounding lines in both Nanjing and Suzhou, China to meet growing demand from Engineered Materials' customers in Asia.
• Named ICIS Company of the Year for 2018 based on analysis of 2018 financial metrics, robust profitability in the Acetyl Chain, and accelerated project commercialization in Engineered Materials.
• Commercialized 1,315 Engineered Materials project wins in the third quarter of 2019 and on track to deliver more than 4,000 projects for the year.
• Repurchased 2 percent of outstanding shares in the third quarter and 10 percent of outstanding shares over the last twelve months.

Third Quarter 2019 Business Segment Overview

Engineered Materials (EM)

Engineered Materials reported net sales of $591 million in the third quarter. Volume expanded 2 percent over the prior quarter as the business delivered 1,315 project wins in the third quarter, offsetting the continuation of depressed demand globally and some residual destocking, particularly in Europe. GAAP operating profit of $111 million and adjusted EBIT of $154 million both expanded sequentially as the business offset continued demand softness, a $6 million impact from turnarounds, and lower than expected affiliate contributions. Despite competitive dynamics similar to the previous quarter, Engineered Materials was able to sequentially expand GAAP operating profit and adjusted EBIT margins by 140 and 110 basis points, respectively, by preserving the pricing spreads over raw materials. Engineered Materials has increasingly collaborated with customers via its project model to sustain the earnings power of the base business under current market conditions. Year-to-date 2019 operating profit, which excludes affiliates, is within 2 percent of the same period in 2018, when market economics and demand levels were far more favorable.

Acetyl Chain

The Acetyl Chain recorded third quarter net sales of $867 million, as sequential volume growth of 1 percent offset the impact of foreign currency headwinds. GAAP operating profit was $180 million and adjusted EBIT was $191 million, as the business continued to focus downstream on VAM and emulsions, placing sequentially higher volume where incremental value could be captured. Additionally, the business strategically redirected higher volumes of acetic acid to China where industry pricing moderately expanded over the prior quarter, offsetting sequentially lower pricing of acetic acid in the Western Hemisphere. The Acetyl Chain effectively offset China acid pricing that remains low by historical standards, major turnarounds at Frankfurt VAM and Singapore acetic acid, and production limitations related to the incident at Clear Lake to deliver quarterly GAAP operating and adjusted EBIT margins over 20 percent, sustaining the enhanced profitability levels of the last two years. Since the Clear Lake incident, the business has executed a myriad of activations, including industry sourcing and shipping significant volumes across its global network, to expand third quarter volume sequentially and year over year and to continue meeting customer needs into the fourth quarter. Productivity-based investments are progressing at Clear Lake, which will enhance the operating flexibility of the global network and further lift foundational earnings levels.

Acetate Tow

Acetate Tow reported GAAP operating profit of $34 million and adjusted EBIT of $71 million in the third quarter, further demonstrating the continued stability of its earnings profile. Volume and price declined minimally on a sequential basis and were stable year over year, as secular demand and industry dynamics continue to stabilize. Dividends from affiliates were $27 million in the third quarter, down slightly from the prior quarter due to the impact of timing and currency. In the fourth quarter, Acetate Tow is expected to experience typical seasonality in its earnings, consistent with past years.

Cash Flow and Tax

The Company delivered operating cash flow of $397 million and free cash flow of $315 million in the quarter, driven by continued strength of earnings to cash conversion. In the third quarter, capital expenditures were $82 million, and the Company expects capital expenditures for 2019 to total nearly $400 million, inclusive of costs to repair the Clear Lake CO unit. During the third quarter, a total of $352 million in cash was returned to shareholders via $77 million in dividends and $275 million in share repurchases. The U.S. GAAP effective tax rate was 16 percent in the third quarter compared to 12 percent in the same quarter of last year, primarily due to the impact of functional currency differences in certain jurisdictions partially offset by the release of valuation allowance on tax credit carryforwards. During the third quarter, the 2019 tax rate for adjusted earnings per share was revised down to 13 percent, based on a change in sourcing of U.S. earnings between domestic and foreign sources and the associated impact to foreign tax credit utilization for the year.

Outlook

"Our businesses and teams have displayed remarkable resilience in the third quarter to deliver sequential growth despite tremendous challenges including a weak market demand backdrop as well as the incident at Clear Lake in the final weeks of the quarter," said Lori Ryerkerk, chief executive officer. "With few indications of sustained improvement up to this point, we now expect that low demand levels are likely to persist through the remainder of the year. Incorporating the financial impact of the Clear Lake incident to the fourth quarter, we expect 2019 adjusted earnings of $9.60 to $9.80 per share. Our final performance within the range will depend on the evolution of demand conditions and timing of the restart of the Clear Lake CO unit. Looking forward to 2020, we remain focused on controllable factors including productivity initiatives, business model enhancements, and high-return capital deployment that will deliver double-digit adjusted earnings per share growth next year, whether or not current demand conditions improve. At this stage, given an uncertain demand outlook, we expect 2020 adjusted earnings of $11 to $12 per share, with the higher end of the range achievable if we see improvement in demand conditions next year. We are still working a number of controllable actions and will have more visibility to further clarify the outlook as we get into next year and can assess early business conditions across the globe."

The Company is 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 prepared remarks related to the third quarter results will be posted on its website at investors.celanese.com under Financial Information/Financial Document Library after market close on October 21, 2019. Information about Non-US GAAP measures is included in a Non-US GAAP Financial Measures and Supplemental Information document posted on our website. See "Non-GAAP Financial Measures" below.

Celanese Corporation is a global chemical 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.
• 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 October 21, 2019 and also available on our website at investors.celanese.com under Financial Information/Non-GAAP Financial Measures.

Results Unaudited

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

Supplemental Information

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

Consolidated Statements of Operations - Unaudited
	Three Months Ended
	September 30, 2019			June 30, 2019			September 30, 2018
	(In $ millions, except share and per share data)
Net sales	1,586			1,592			1,771
Cost of sales	(1,172	)		(1,169	)		(1,255	)
Gross profit	414			423			516
Selling, general and administrative expenses	(120	)		(118	)		(129	)
Amortization of intangible assets	(6	)		(6	)		(5	)
Research and development expenses	(17	)		(17	)		(18	)
Other (charges) gains, net	(7	)		(98	)		12
Foreign exchange gain (loss), net	(1	)		1			—
Gain (loss) on disposition of businesses and assets, net	(3	)		1			(2	)
Operating profit (loss)	260			186			374
Equity in net earnings (loss) of affiliates	45			39			66
Non-operating pension and other postretirement employee benefit (expense) income	17			17			25
Interest expense	(27	)		(29	)		(30	)
Refinancing expense	—			(4	)		—
Interest income	1			2			2
Dividend income - equity investments	27			30			26
Other income (expense), net	—			(2	)		(1	)
Earnings (loss) from continuing operations before tax	323			239			462
Income tax (provision) benefit	(53	)		(28	)		(54	)
Earnings (loss) from continuing operations	270			211			408
Earnings (loss) from operation of discontinued operations	(6	)		(2	)		(7	)
Income tax (provision) benefit from discontinued operations	1			1			1
Earnings (loss) from discontinued operations	(5	)		(1	)		(6	)
Net earnings (loss)	265			210			402
Net (earnings) loss attributable to noncontrolling interests	(2	)		(1	)		(1	)
Net earnings (loss) attributable to Celanese Corporation	263			209			401
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations	268			210			407
Earnings (loss) from discontinued operations	(5	)		(1	)		(6	)
Net earnings (loss)	263			209			401
Earnings (loss) per common share - basic
Continuing operations	2.18			1.68			3.02
Discontinued operations	(0.04	)		(0.01	)		(0.04	)
Net earnings (loss) - basic	2.14			1.67			2.98
Earnings (loss) per common share - diluted
Continuing operations	2.17			1.67			3.00
Discontinued operations	(0.04	)		(0.01	)		(0.04	)
Net earnings (loss) - diluted	2.13			1.66			2.96
Weighted average shares (in millions)
Basic	122.7			125.3			134.5
Diluted	123.3			125.8			135.5

Consolidated Balance Sheets - Unaudited
	As of September 30, 2019			As of December 31, 2018
	(In $ millions)
ASSETS
Current Assets
Cash and cash equivalents	497			439
Trade receivables - third party and affiliates, net	947			1,017
Non-trade receivables, net	335			301
Inventories	994			1,046
Marketable securities, at fair value	26			31
Other assets	44			40
Total current assets	2,843			2,874
Investments in affiliates	970			979
Property, plant and equipment, net	3,585			3,719
Operating lease right-of-use assets	206			—
Deferred income taxes	98			84
Other assets	344			290
Goodwill	1,054			1,057
Intangible assets, net	314			310
Total assets	9,414			9,313
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates	368			561
Trade payables - third party and affiliates	764			819
Other liabilities	358			343
Income taxes payable	43			56
Total current liabilities	1,533			1,779
Long-term debt, net of unamortized deferred financing costs	3,359			2,970
Deferred income taxes	269			255
Uncertain tax positions	169			158
Benefit obligations	523			564
Operating lease liabilities	182			—
Other liabilities	240			208
Commitments and Contingencies
Stockholders' Equity
Treasury stock, at cost	(3,622	)		(2,849	)
Additional paid-in capital	244			233
Retained earnings	6,431			5,847
Accumulated other comprehensive income (loss), net	(306	)		(247	)
Total Celanese Corporation stockholders' equity	2,747			2,984
Noncontrolling interests	392			395
Total equity	3,139			3,379
Total liabilities and equity	9,414			9,313

Non-US GAAP Financial Measures and Supplemental Information

October 21, 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/Financial Document Library 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.
• 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.

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.

Results Unaudited

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

Table 1

Adjusted EBIT and Operating EBITDA - Reconciliation of Non-GAAP Measures - Unaudited

	Q3 '19			Q2 '19			Q1 '19			2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18
	(In $ millions)
Net earnings (loss) attributable to Celanese Corporation	263			209			337			1,207			99			401			344			363
(Earnings) loss from discontinued operations	5			1			1			5			(3	)		6			—			2
Interest income	(1	)		(2	)		(1	)		(6	)		(2	)		(2	)		—			(2	)
Interest expense	27			29			31			125			30			30			32			33
Refinancing expense	—			4			—			1			1			—			—			—
Income tax provision (benefit)	53			28			46			292			76			54			97			65
Certain Items attributable to Celanese Corporation (Table 8)	29			107			7			228			192			5			18			13
Adjusted EBIT	376			376			421			1,852			393			494			491			474
Depreciation and amortization expense(1)	82			82			81			316			78			77			82			79
Operating EBITDA	458			458			502			2,168			471			571			573			553
	Q3 '19			Q2 '19			Q1 '19			2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18
	(In $ millions)
Engineered Materials	1			—			1			1			—			—			1			—
Acetate Tow	5			2			—			19			5			11			3			—
Acetyl Chain	6			—			1			7			5			2			—			—
Other Activities(2)	—			—			—			—			—			—			—			—
Accelerated depreciation and amortization expense	12			2			2			27			10			13			4			—
Depreciation and amortization expense(1)	82			82			81			316			78			77			82			79
Total depreciation and amortization expense	94			84			83			343			88			90			86			79

______________________________
(1)		Excludes accelerated depreciation and amortization expense as detailed in the table above, which amounts are included in Certain Items above.
(2)		Other Activities includes corporate Selling, general and administrative ("SG&A") expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

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

	Q3 '19						Q2 '19						Q1 '19						2018						Q4 '18						Q3 '18						Q2 '18						Q1 '18
	(In $ millions, except percentages)
Operating Profit (Loss) / Operating Margin
Engineered Materials	111			18.8	%		103			17.4	%		144			21.7	%		460			17.7	%		95			15.3	%		124			19.3	%		114			17.2	%		127			19.1	%
Acetate Tow	34			21.5	%		(44	)		(26.8	)%		40			24.1	%		130			20.0	%		19			11.8	%		26			16.5	%		39			24.1	%		46			27.4	%
Acetyl Chain(1)	180			20.8	%		188			21.7	%		202			22.7	%		1,024			25.3	%		211			22.5	%		287			28.5	%		273			26.0	%		253			24.1	%
Other Activities(2)	(65	)					(61	)					(66	)					(280	)					(66	)					(63	)					(68	)					(83	)
Total	260			16.4	%		186			11.7	%		320			19.0	%		1,334			18.6	%		259			15.3	%		374			21.1	%		358			19.4	%		343			18.5	%
Less: Net Earnings (Loss) Attributable to NCI(1)	2						1						1						6						2						1						1						2
Operating Profit (Loss) Attributable to Celanese Corporation	258			16.3	%		185			11.6	%		319			18.9	%		1,328			18.6	%		257			15.2	%		373			21.1	%		357			19.4	%		341			18.4	%
Operating Profit (Loss) / Operating Margin Attributable to Celanese Corporation
Engineered Materials	111			18.8	%		103			17.4	%		144			21.7	%		460			17.7	%		95			15.3	%		124			19.3	%		114			17.2	%		127			19.1	%
Acetate Tow	34			21.5	%		(44	)		(26.8	)%		40			24.1	%		130			20.0	%		19			11.8	%		26			16.5	%		39			24.1	%		46			27.4	%
Acetyl Chain(1)	178			20.5	%		187			21.6	%		201			22.6	%		1,018			25.2	%		209			22.3	%		286			28.4	%		272			25.9	%		251			23.9	%
Other Activities(2)	(65	)					(61	)					(66	)					(280	)					(66	)					(63	)					(68	)					(83	)
Total	258			16.3	%		185			11.6	%		319			18.9	%		1,328			18.6	%		257			15.2	%		373			21.1	%		357			19.4	%		341			18.4	%
Equity Earnings and Dividend Income, Other Income (Expense) Attributable to Celanese Corporation
Engineered Materials	41						36						46						219		(3)				49						62						54						54
Acetate Tow	27						29						32						116						25						26						33						32
Acetyl Chain	2						1						1						8						1						2						3						2
Other Activities(2)	2						1						(1	)					15						8						1						—						6
Total	72						67						78						358						83						91						90						94
Non-Operating Pension and Other Post-Retirement Employee Benefit (Expense) Income Attributable to Celanese Corporation
Engineered Materials	—						—						—						—						—						—						—						—
Acetate Tow	—						—						—						—						—						—						—						—
Acetyl Chain	—						—						—						—						—						—						—						—
Other Activities(2)	17						17						17						(62	)					(139	)					25						26						26
Total	17						17						17						(62	)					(139	)					25						26						26
Certain Items Attributable to Celanese Corporation (Table 8)
Engineered Materials	2						9						(7	)					15						6						1						7						1
Acetate Tow	10						86						—						27						9						13						5						—
Acetyl Chain	11						1						1						(4	)					5						(11	)					2						—
Other Activities(2)	6						11						13						190						172						2						4						12
Total	29						107						7						228						192						5						18						13
Adjusted EBIT / Adjusted EBIT Margin
Engineered Materials	154			26.1	%		148			25.0	%		183			27.6	%		694			26.8	%		150			24.1	%		187			29.1	%		175			26.4	%		182			27.4	%
Acetate Tow	71			44.9	%		71			43.3	%		72			43.4	%		273			42.1	%		53			32.9	%		65			41.1	%		77			47.5	%		78			46.4	%
Acetyl Chain	191			22.0	%		189			21.8	%		203			22.8	%		1,022			25.3	%		215			23.0	%		277			27.5	%		277			26.4	%		253			24.1	%
Other Activities(2)	(40	)					(32	)					(37	)					(137	)					(25	)					(35	)					(38	)					(39	)
Total	376			23.7	%		376			23.6	%		421			25.0	%		1,852			25.9	%		393			23.3	%		494			27.9	%		491			26.6	%		474			25.6	%

______________________________
(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.)

	Q3 '19						Q2 '19						Q1 '19						2018						Q4 '18						Q3 '18						Q2 '18						Q1 '18
	(In $ millions, except percentages)
Depreciation and Amortization Expense(1)
Engineered Materials	32						31						31						125						30						31						32						32
Acetate Tow	9						9						10						39						9						10						10						10
Acetyl Chain	37						38						37						141						36						34						36						35
Other Activities(2)	4						4						3						11						3						2						4						2
Total	82						82						81						316						78						77						82						79
Operating EBITDA / Operating EBITDA Margin
Engineered Materials	186			31.5	%		179			30.2	%		214			32.3	%		819			31.6	%		180			28.9	%		218			34.0	%		207			31.2	%		214			32.2	%
Acetate Tow	80			50.6	%		80			48.8	%		82			49.4	%		312			48.1	%		62			38.5	%		75			47.5	%		87			53.7	%		88			52.4	%
Acetyl Chain	228			26.3	%		227			26.2	%		240			27.0	%		1,163			28.8	%		251			26.8	%		311			30.9	%		313			29.8	%		288			27.4	%
Other Activities(2)	(36	)					(28	)					(34	)					(126	)					(22	)					(33	)					(34	)					(37	)
Total	458			28.9	%		458			28.8	%		502			29.8	%		2,168			30.3	%		471			27.9	%		571			32.2	%		573			31.1	%		553			29.9	%

___________________________
(1)		Excludes accelerated depreciation and amortization expense, which amounts are included in Certain Items above. See Table 1 for details.
(2)		Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

Table 3

Adjusted Earnings (Loss) per Share - Reconciliation of a Non-GAAP Measure - Unaudited

	Q3 '19						Q2 '19						Q1 '19						2018						Q4 '18						Q3 '18						Q2 '18						Q1 '18
				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	268			2.17			210			1.67			338			2.64			1,212			8.95			96			0.73			407			3.00			344			2.52			365			2.68
Income tax provision (benefit)	53						28						46						292						76						54						97						65
Earnings (loss) from continuing operations before tax	321						238						384						1,504						172						461						441						430
Certain Items attributable to Celanese Corporation (Table 8)	29						107						7						228						192						5						18						13
Refinancing and related expenses	—						4						—						1						1						—						—						—
Adjusted earnings (loss) from continuing operations before tax	350						349						391						1,733						365						466						459						443
Income tax (provision) benefit on adjusted earnings(1)	(38	)					(49	)					(55	)					(243	)					(51	)					(65	)					(64	)					(62	)
Adjusted earnings (loss) from continuing operations(2)	312			2.53			300			2.38			336			2.62			1,490			11.00			314			2.38			401			2.96			395			2.90			381			2.79
	Diluted shares (in millions)(3)
Weighted average shares outstanding	122.7						125.3						127.5						134.3						131.2						134.5						135.6						135.9
Incremental shares attributable to equity awards	0.6						0.5						0.7						1.1						0.9						1.0						0.7						0.5
Total diluted shares	123.3						125.8						128.2						135.4						132.1						135.5						136.3						136.4

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

	Q3 '19					Q2 '19					Q1 '19					2018					Q4 '18					Q3 '18					Q2 '18					Q1 '18
	(In percentages)
Adjusted effective tax rate	11					14					14					14					14					14					14					14

(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)
2018		(3.9	)		6.7

(3)

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

Table 3a

Adjusted Tax Rate - Reconciliation of a Non-GAAP Measure - Unaudited

	Estimated			Actual
	2019			2018
	(In percentages)
US GAAP annual effective tax rate	14			19
Utilization of foreign tax credits	(3	)		—
Changes in valuation allowances, excluding impact of other charges and adjustments(1)	1			(5	)
Other(2)	1			—
Adjusted tax rate	13			14

______________________________
Note: As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate for actual results.
(1)		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.
(2)		Tax impacts related to full-year forecasted tax opportunities and related costs.

Table 4

Net Sales by Segment - Unaudited

	Q3 '19			Q2 '19			Q1 '19			2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18
	(In $ millions)
Engineered Materials	591			593			663			2,593			622			642			664			665
Acetate Tow	158			164			166			649			161			158			162			168
Acetyl Chain	867			865			889			4,042			936			1,006			1,049			1,051
Intersegment eliminations(1)	(30	)		(30	)		(31	)		(129	)		(30	)		(35	)		(31	)		(33	)
Net sales	1,586			1,592			1,687			7,155			1,689			1,771			1,844			1,851

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

Table 4a

Factors Affecting Segment Net Sales Sequentially - Unaudited

Three Months Ended September 30, 2019 Compared to Three Months Ended June 30, 2019

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	2			(2	)		(1	)		—			(1	)
Acetate Tow	(2	)		(1	)		—			—			(3	)
Acetyl Chain	1			—			(1	)		—			—
Total Company	2			(1	)		(1	)		—			—

Three Months Ended June 30, 2019 Compared to Three Months Ended March 31, 2019

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	(7	)		(3	)		(1	)		—			(11	)
Acetate Tow	(1	)		—			—			—			(1	)
Acetyl Chain	2			(4	)		(1	)		—			(3	)
Total Company	(2	)		(3	)		(1	)		—			(6	)

Three Months Ended March 31, 2019 Compared to Three Months Ended December 31, 2018

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	5			2			—			—			7		(1)
Acetate Tow	1			2			—			—			3
Acetyl Chain	5			(10	)		—			—			(5	)
Total Company	5			(5	)		—			—			—

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		(2)
Acetate Tow	8			—			—			—			8
Acetyl Chain	8			9			3			(2	)		18
Total Company	9			6			2			(1	)		16

_________________________
(1)		2019 includes the effect of the acquisition of Next Polymers Ltd.
(2)		2018 includes the effect of the acquisition of Omni Plastics, L.L.C.

Table 4b

Factors Affecting Segment Net Sales Year Over Year - Unaudited

Three Months Ended September 30, 2019 Compared to Three Months Ended September 30, 2018

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	(4	)		(2	)		(2	)		—			(8	)
Acetate Tow	—			—			—			—			—
Acetyl Chain	6			(18	)		(2	)		—			(14	)
Total Company	2			(11	)		(2	)		1			(10	)

Three Months Ended June 30, 2019 Compared to Three Months Ended June 30, 2018

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	(8	)		—			(3	)		—			(11	)
Acetate Tow	1			1			(1	)		—			1
Acetyl Chain	(1	)		(14	)		(3	)		—			(18	)
Total Company	(3	)		(8	)		(3	)		—			(14	)

Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	(3	)		7			(4	)		—			—
Acetate Tow	(1	)		—			—			—			(1	)
Acetyl Chain	(4	)		(8	)		(3	)		—			(15	)
Total Company	(3	)		(2	)		(4	)		—			(9	)

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

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

Table 5

Free Cash Flow - Reconciliation of a Non-GAAP Measure - Unaudited

	Q3 '19			Q2 '19			Q1 '19			2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18
	(In $ millions, except percentages)
Net cash provided by (used in) investing activities	(82	)		(66	)		(177	)		(507	)		(98	)		(78	)		(96	)		(235	)
Net cash provided by (used in) financing activities	(299	)		(307	)		(130	)		(1,165	)		(526	)		(383	)		(254	)		(2	)
Net cash provided by (used in) operating activities	397			424			307			1,558			363			467			585			143
Capital expenditures on property, plant and equipment	(82	)		(65	)		(79	)		(337	)		(93	)		(79	)		(79	)		(86	)
Capital (distributions to) contributions from NCI	—			(3	)		(4	)		(23	)		(9	)		(6	)		(6	)		(2	)
Free cash flow(1)(2)	315			356			224			1,198			261			382			500			55
Net sales	1,586			1,592			1,687			7,155			1,689			1,771			1,844			1,851
Free cash flow as % of Net sales	19.9	%		22.4	%		13.3	%		16.7	%		15.5	%		21.6	%		27.1	%		3.0	%

______________________________
(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 finance lease payments of $24 million and $63 million for the years ending December 31, 2019 and 2018, respectively.

Table 6

Cash Dividends Received - Unaudited

	Q3 '19			Q2 '19			Q1 '19			2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18
	(In $ millions)
Dividends from equity method investments	15			41			70			221			62			44			39			76
Dividends from equity investments without readily determinable fair values	27			30			32			117			25			26			34			32
Total	42			71			102			338			87			70			73			108

Table 7

Net Debt - Reconciliation of a Non-GAAP Measure - Unaudited

	Q3 '19			Q2 '19			Q1 '19			2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18
	(In $ millions)
Short-term borrowings and current installments of long-term debt - third party and affiliates	368			319			743			561			561			229			366			425
Long-term debt, net of unamortized deferred financing costs	3,359			3,444			2,933			2,970			2,970			3,196			3,228			3,343
Total debt	3,727			3,763			3,676			3,531			3,531			3,425			3,594			3,768
Cash and cash equivalents	(497	)		(491	)		(441	)		(439	)		(439	)		(703	)		(708	)		(490	)
Net debt	3,230			3,272			3,235			3,092			3,092			2,722			2,886			3,278

Table 8

Certain Items - Unaudited

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

	Q3 '19			Q2 '19			Q1 '19			2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18			Income Statement Classification
	(In $ millions)
Plant/office closures	9			2			3			19			16			—			3			—			Cost of sales / SG&A / Other charges (gains), net / Gain (loss) on disposition of businesses and assets, net
Asset impairments	9			83			—			—			—			—			—			—			Cost of sales / Other charges (gains), net
Mergers and acquisitions	2			4			3			33			6			3			11			13			Cost of sales / SG&A
Actuarial (gain) loss on pension and postretirement plans	—			—			—			166			166			—			—			—			Cost of sales / SG&A / Non-operating pension and other postretirement employee benefit expense (income)
Restructuring	7			15			(1	)		9			4			2			3			—			SG&A / Other charges (gains), net / Non-operating pension and other postretirement employee benefit expense (income)
Other	2			3			2			1			—			—			1			—			Cost of sales / SG&A / Other charges (gains), net
Certain Items attributable to Celanese Corporation	29			107			7			228			192			5			18			13

Table 9

Return on Invested Capital (Adjusted) - Presentation of a Non-GAAP Measure - Unaudited

							2018
							(In $ millions, except percentages)
Net earnings (loss) attributable to Celanese Corporation							1,207
Adjusted EBIT (Table 1)							1,852
Adjusted effective tax rate (Table 3a)							14	%
Adjusted EBIT tax effected							1,593
	2018			2017			Average
	(In $ millions, except percentages)
Short-term borrowings and current installments of long-term debt - third parties and affiliates	561			326			444
Long-term debt, net of unamortized deferred financing costs	2,970			3,315			3,143
Celanese Corporation stockholders' equity	2,984			2,887			2,936
Invested capital							6,523
Return on invested capital (adjusted)							24.4	%
Net earnings (loss) attributable to Celanese Corporation as a percentage of invested capital							18.5	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20191021005815/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