0001306830-09-000020 8-K 29 20091207 7.01 9.01 20091207 20091207 Celanese CORP 0001306830 2820 980420726 DE 1231 8-K 34 001-32410 091226382 1601 W. LBJ FREEWAY DALLAS TX 75234 972-443-4000 1601 W. LBJ FREEWAY DALLAS TX 75234 Blackstone Crystal Holdings Capital Partners (Cayman) IV Ltd. 20041022 8-K 1 form8k_regfdmlpres.htm FORM 8-K REG FD MERRILL LYNCH PRESENTATION form8k_regfdmlpres.htm -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): December 7, 2009 CELANESE CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 001-32410 98-0420726 (State or other (Commission File Number) (IRS jurisdiction of Employer Identification incorporation) No.) 1601 West LBJ Freeway, Dallas, Texas 75234-6034 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (972) 443-4000 Not Applicable (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) -------------------------------------------------------------------------------- Item 7.01 Regulation FD Disclosure. On December 9, 2009, David N. Weidman, chairman and chief executive officer of Celanese Corporation (the "Company"), will address attendees of the Bank of America Merrill Lynch 2009 Global Industries Conference in New York. The slideshow presentation that will accompany the remarks made by Mr. Weidman and other investor relations professionals of the Company, during the conference and at other investor sessions, is being furnished to the Securities and Exchange Commission and is attached hereto as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 7.01 disclosure. A webcast of the presentation and a replay of the webcast will be available on the Company’s website at www.celanese.com under Investor/Presentations & Webcasts. The information set forth in this Item 7.01, as well as statements made by representatives of the Company during the course of the presentation, includes “forward-looking statements”. All statements, other than statements of historical facts, included in this Item 7.01, the attached Exhibit 99.1, or made during the course of the presentation, that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. In connection with the disclosure set forth in this Item 7.01, the information in this Current Report, including the exhibits attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information in this Current Report, including the exhibits, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filings. This Current Report will not be deemed an admission as to the materiality of any information in this Current Report that is required to be disclosed solely by Regulation FD. Item 9.01 Financial Statements and Exhibits. (d) Exhibit(s) Exhibit Number Description 99.1 Slide Presentation related to the presentation to be given by Celanese Corporation at the Bank of America Merrill Lynch 2009 Global Industries Conference on December 9, 2009 in New York -------------------------------------------------------------------------------- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CELANESE CORPORATION Date: December 7, 2009 By: /s/ Robert L. Villaseñor Name : Robert L. Villaseñor Title : Associate General Counsel and Assistant Secretary -------------------------------------------------------------------------------- Exhibit Index Exhibit Description Number 99.1 Slide Presentation related to the presentation to be given by Celanese Corporation at the Bank of America Merrill Lynch 2009 Global Industries Conference on December 9, 2009 in New York -------------------------------------------------------------------------------- EX-99.1 2 ex99_1slide.htm EXHIBIT 99.1 PRESENTATION ex99_1slide.htm [[Image Removed]] Celanese Corporation December 2009 -------------------------------------------------------------------------------- [[Image Removed]] 2 Forward Looking Statements Reconciliation and Use of Non-GAAP Measures to U.S. GAAP Forward-Looking Statements This presentation 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. When used in this release, the words “outlook,” “forecast,” “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon current expectations and beliefs and various assumptions. There can be no assurance that the company will realize these expectations or that these beliefs will prove correct. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained in this release. Numerous factors, many of which are beyond the company’s control, could cause actual results to differ materially from those expressed as forward-looking statements. Certain of these risk factors are discussed 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. Reconciliation of Non-U.S. GAAP Measures to U.S. GAAP This presentation reflects five performance measures, operating EBITDA, affiliate EBITDA, adjusted earnings per share, net debt and adjusted free cash flow, as non-U.S. GAAP measures. The most directly comparable financial measure presented in accordance with U.S. GAAP in our consolidated financial statements for operating EBITDA is operating profit; for affiliate EBITDA is equity in net earnings of affiliates; for adjusted earnings per share is earnings per common share-diluted; for net debt is total debt; and for adjusted free cash flow is cash flow from operations. Use of Non-U.S. GAAP Financial Information ?Operating EBITDA, a measure used by management to measure performance, is defined as operating profit from continuing operations, plus equity in net earnings from affiliates, other income and depreciation and amortization, and further adjusted for other charges and adjustments. We may provide guidance on operating EBITDA and are unable to reconcile forecasted operating EBITDA to a U.S.GAAP financial measure because a forecast of Other Charges and Adjustments is not practical. Our management believes operating EBITDA is useful to investors because it is one of the primary measures our management uses for its planning and budgeting processes and to monitor and evaluate financial and operating results. Operating EBITDA is not a recognized term under U.S. GAAP and does not purport to be an alternative to operating profit as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Because not all companies use identical calculations, this presentation of operating EBITDA may not be comparable to other similarly titled measures of other companies. Additionally, operating EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements nor does it represent the amount used in our debt covenants. ?Affiliate EBITDA, a measure used by management to measure performance of its equity investments, is defined as the proportional operating profit plus the proportional depreciation and amortization of its equity investments. Affiliate EBITDA, including Celanese Proportional Share of affiliate information on Table 8, is not a recognized term under U.S. GAAP and is not meant to be an alternative to operating cash flow of the equity investments. The company has determined that it does not have sufficient ownership for operating control of these investments to consider their results on a consolidated basis. The company believes that investors should consider affiliate EBITDA when determining the equity investments’ overall value in the company. ?Adjusted earnings per share is a measure used by management to measure performance. It is defined as net earnings (loss) available to common shareholders plus preferred dividends, adjusted for other charges and adjustments, and divided by the number of basic common shares, diluted preferred shares, and options valued using the treasury method. We may provide guidance on an adjusted earnings per share basis and are unable to reconcile forecasted adjusted earnings per share to a GAAP financial measure without unreasonable effort because a forecast of Other Items is not practical. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations, and that when U.S. GAAP information is viewed in conjunction with non-U.S. GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. This non-U.S. GAAP information is not intended to be considered in isolation or as a substitute for U.S. GAAP financial information. ?The tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year, excluding changes in uncertain tax positions, discrete items and changes in management’s assessments regarding the ability to realize deferred tax assets. We analyze this rate quarterly and adjust if there is a material change in the range of forecasted tax rates; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate is an estimate and may differ significantly from the tax rate used for U.S. GAAP reporting in any given reporting period. It is not practical to reconcile our prospective adjusted tax rate to the actual U.S. GAAP tax rate in any future period. ?Net debt is defined as total debt less cash and cash equivalents. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the company’s capital structure. Our management and credit analysts use net debt to evaluate the company's capital structure and assess credit quality. This non-U.S. GAAP information is not intended to be considered in isolation or as a substitute for U.S. GAAP financial information. ?Adjusted free cash flow is defined as cash flow from operations less capital expenditures, other productive asset purchases, operating cash from discontinued operations and certain other charges and adjustments. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the company’s cash flow. Our management and credit analysts use adjusted free cash flow to evaluate the company’s liquidity and assess credit quality. This non-U.S. GAAP information is not intended to be considered in isolation or as a substitute for U.S. GAAP financial information. Results Unaudited The results presented in this presentation, 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. -------------------------------------------------------------------------------- [[Image Removed]] 3 Celanese ($ million) 2009 3Q YTD Revenue: $3,694 2009 3Q YTD Op. EBITDA: $620 Consumer Specialties 2009 3Q YTD Revenue: $817 2009 3Q YTD Op. EBITDA: $283 Advanced Engineered Materials 2009 3Q YTD Revenue $569 2009 3Q YTD Op. EBITDA: $84 Industrial Specialties 2009 3Q YTD Revenue: $745 2009 3Q YTD Op. EBITDA: $90 Acetyl Intermediates 2009 3Q YTD Revenue: $1,860 2009 3Q YTD Op. EBITDA: $229 Strong financial performance in a challenging year Celanese diversified portfolio delivers shareholder value through leading franchises -------------------------------------------------------------------------------- [[Image Removed]] 4 Portfolio Characteristics Financial Impact Acetyl Intermediates ? A global leader ? Capital efficient (Acetic Acid, Vinyl Acetate ? Advantaged technology ? More stable EBITDA Monomer, Acetyl Derivatives) ? Superior cost position Advanced Engineered Materials ? Industry-leading technology ? Higher growth (Engineered Thermoplastics and ? Strong product pipeline ? Margin expansion Polymers) Industrial Specialties ? Upstream integration ? Asia growth (Vinyl Emulsions and Polymers) ? Emerging economy opportunities ? Increased demand for low VOC ? Growth through innovation Consumer Specialties ? Stable cash generation ? Cash flow (Acetate Flake and Tow, High ? Industry-leading partnerships in ? Stable Intensity Food Sweetener) Asia Balanced portfolio creates a unique hybrid business model Portfolio well-positioned to deliver and execute -------------------------------------------------------------------------------- [[Image Removed]] 5 Divest non-core assets and revitalize underperforming businesses Aggressively align with our customers and their markets to capture growth Participate in businesses where we have a sustainable competitive advantage Leverage and build on advantaged positions that optimize our portfolio FOCUS GROWTH REDEPLOYMENT INVESTMENT Celanese Strategic Pillars Celanese’s strategic DNA remains consistent -------------------------------------------------------------------------------- [[Image Removed]] 6 ? Balanced footprint in key regions ? Recovering conditions in key end-use industries ? Attractive balance sheet with strong cash generation Geographic Demand Capital Structure ? Sustainable fixed spending reductions ? Efficient and scalable capital ? Global macro trends driving customer growth Operating Innovation Celanese Advantages Celanese Levers of Value Increasing the earnings power of the business through multiple levers Why Celanese? Why Celanese Now? -------------------------------------------------------------------------------- [[Image Removed]] 7 Operating EBITDA ~$1,100 million $1,600-1,800 million Second half 2009 performance provides platform for future growth Increased earnings power drives significant shareholder value -------------------------------------------------------------------------------- [[Image Removed]] 8 Earnings power of portfolio expected to double from today’s level Expanded Earnings Power 2009E to Group Capital Demand Geographic Operating Innovation Recovery Structure Lever Lever Lever Lever Lever EBITDA Growth* Advanced Engineered X X X X $275-325MM Materials Consumer X X $10-60MM Specialties X X X X $275-375MM Industrial X X X X $75-125MM Specialties * “2009 to Recovery EBITDA Growth” based on Nov. 20, 2009 first call consensus EBITDA estimate and management’s previous Recovery range of $1.6 - 1.8 billion. Levers build significant earnings power of the portfolio -------------------------------------------------------------------------------- [[Image Removed]] 9 Recent strategic actions build earnings power of portfolio ? MOU announced for Acetate expansion project with current China partner Consumer Specialties ? 2011+: Increased earnings through JV dividends ? Nanjing VAE / Emulsion capacity expansion Industrial Specialties ? 2011+: Volume expansion supporting growth in China Well defined path forward - delivering today ? Nanjing successfully expanded to 1.2 kt/a acid capacity ? Pardies site closure project on schedule for completion end of 2009 ? Jiangxi Jiangwei VAM sourcing agreement Acetyl Intermediates ? 2010+: $40-50 million operating margin improvement ? Strengthen derivatives position ? Launch of innovative impact modified POM Advanced Engineered Materials ? 2010+: $500 million application opportunity growth -------------------------------------------------------------------------------- [[Image Removed]] 10 Automotive Opportunity ? Current “best-in-class” translation to all models yields translation opportunity ? Westernization of current China production drives China opportunity ? Successful commercialization of application R&D creates pipeline opportunity 3.0 Total AEM Today Total Competitors Today Translation China Pipeline Total Opportunity Significant opportunities exist in ~$3 billion industry space AEM: Application development creates current - and future - opportunities -------------------------------------------------------------------------------- [[Image Removed]] 11 Improvement in POM Technical Performance New Ticona POM Space Existing POM Space Increase weldline strain @ break % Technology enables additional $500 million application space opportunity Automotive Applications ? Chemical resistance ? Superior impact & weldline strength ? Elevated heat deflection temperature Industrial Applications ? Higher stiffness (Modulus) ? Improved slip & wear performance ? Less mold deposit Consumer Applications ? Design freedom ? Superior impact and weldline strength Incremental $500 Million Application Opportunity Ticona: Growing application space through innovation -------------------------------------------------------------------------------- [[Image Removed]] 12 Source: Celanese internal estimates MOU announced for expansion project with current China partner kT China ROW Chinese Imports Chinese Domestic Production Tow Demand Growth Additional Demand Growth $230 million Operating EBITDA 2005 Base Productivity Recovery Growth Operating & Innovation 2006 - 2010 Strategic Objectives >$50 million 2009 to “Recovery” Strategic Objectives $20-30 million $350-400 million CS: Acetate Tow demand in China will drive worldwide growth -------------------------------------------------------------------------------- [[Image Removed]] 13 A Growing Franchise ? Proven execution and leadership capability ? Significant value from downstream derivatives ? Build upon advantages to optimize returns over the long-term ? Long-term growth rates in excess of GDP ? Favorable position on a steep industry cost curve ? Advantaged raw material and conversion position ? Flexible manufacturing and low-cost capacity An Advantaged Business in an Attractive Industry Technology leadership at the heart of Acetyl competitive position AI: A growing franchise in an attractive industry -------------------------------------------------------------------------------- [[Image Removed]] 14 ? Manufacturing realignment and Nanjing expansion further improving cost position ? Reinvestment economics challenged for non-leading technologies 2009/2011E Acetic Acid Cost Curve (kT) By Prod Avg Other Leading Technology Effective Industry Utilization Rates Ethylene Highest Cost China MeOH Ethanol Average Celanese Lower Cost China MeOH Source: Celanese internal estimates Pricing for CE to earn >15% EBITDA AI: New capacity not expected to impact Celanese’s advantaged position on the cost curve -------------------------------------------------------------------------------- [[Image Removed]] 15 IS: Global leader in emulsions systems for environmentally-friendly paints and coatings ? Consumer perception favoring “greener” building products ? Regulation shifting to low-VOC content ? Celanese building off of a European leadership position Global opportunity of $400-500 million - Nanjing expansion announced to meet growing China demand European VAE Growth Celanese EcoVAE® Progress ? 14 new customers utilizing EcoVAE® ? Projects with six major paint producers ? Launching new EcoVAE® products • Low-VOC exterior paint • Acrylic replacement in Non-Flats ? Expanding EcoVAE® products to Asia -------------------------------------------------------------------------------- [[Image Removed]] 16 Productivity Driven Tax Rate Represents approximately $1.00 per share in 2010 earnings improvement 2010 Earnings Improvement ? AEM: Destocking complete ? AI: Technology, 2009 FIFO effect ? IS: Asia growth focus ? CS: Sustain performance ? Pardies & Cangrejera closures ? Other manufacturing realignment ? SG&A realignment ? Sustain lower tax rate ? Benefits of manufacturing and administrative restructuring ? Cash taxes rate expected to be similar Volume Driven $80 - $100 At least $100 Low 20% range vs. 29% $ in millions -------------------------------------------------------------------------------- [[Image Removed]] 17 Strong cash generation continues throughout economic cycle 2010E Cash Generation off EBITDA Base $ in millions 2010E Comments Cash Taxes $140 - $160 Consistent with earnings growth and lower tax rate Capital Expenditures $240 - $260 Continued focus on cost reduction and growth through Nanjing VAE expansion Reserve/Other $110 - $130 Increase primarily related to fixed spending reduction efforts Net Interest $200 - $210 Unchanged from 2009 Pension $40 - $50 No significant increase expected in 2010 Adjusted Free Cash $730 - $810 Outflows Hybrid portfolio well positioned -------------------------------------------------------------------------------- [[Image Removed]] 18 Available Cash Cash (as of 9/30/2009) $1,293 Kelsterbach Spending ~($300) Operating Cash ~($300) Cash Available for ~$700 Strategic Purposes ? Ticona Kelsterbach relocation cash flow neutral through end of 2010 ? Expect to continue to generate positive free cash flow ? Productivity investments expected to be self-funding Significant cash available for strategic purposes after anticipated cash commitments $ million Positive cash generation and portfolio improvements enhance our cash position -------------------------------------------------------------------------------- [[Image Removed]] 19 Term Loan - $2.8 billion Other Debt Obligations - $775 million Cash - $1.3 billion Net Debt - $2.3 billion Revolver - $600 million Cost Stability Flexibility Structure Characteristics Primary Components Solid liquidity position and covenant-lite term loan create advantaged capital structure Credit Linked Facility - $136 million Celanese capital structure -------------------------------------------------------------------------------- [[Image Removed]] 20 Why Celanese? Why Celanese Now? Significant value upside over current share price Geographic Demand Capital Structure Operating Innovation Track record of execution High return opportunities ? $1.6-1.8 billion recovery earnings ? Rapid earnings growth of the current base - $1.00/share growth in 2010 ? Over $2 billion of cash generation through 2014 ? Returns continue to exceed weighted average cost of capital ? More stable earnings profile Levers of Value Shareholder Value -------------------------------------------------------------------------------- [[Image Removed]] Celanese Corporation December 2009 -------------------------------------------------------------------------------- [[Image Removed]] 22 Acetyl Intermediates Industrial Specialties Advanced Engineered Materials Consumer Specialties JVs Dividends PVOH Divesture 3Q 2009 Segment Operating EBITDA Recovery -------------------------------------------------------------------------------- [[Image Removed]] 23 Celanese Global Manufacturing Locations All values shown in kT per year Singapore Acid = 600 VAM = 210 Esters = 130 Frankfurt, Germany VAM = 285 Esters = 40 Tarragona, Spain VAM = 200 Bay City, TX VAM = 300 Clear Lake, TX Acid = 1,200 VAM = 310 Cangrejera, Mexico Anhydride = 90 Esters = 105 VAM = 115 Pardies, France (announced closure) Acid = 440 VAM = 150 Nanjing, China Acid = 1,200 (expansion) VAM = 300 Anhydride = 100 ? Utilization of all global Celanese acetic acid and downstream sites to meet global customer needs ? Ensure all Celanese sites have a leading cost structure ? Strategy to remove high cost facilities Roussillon, France Anhydride = 30 Celanese well-positioned globally to meet changing demand landscape Pampa, TX (site closed) Acid = 290 Anhydride = 145 Esters = 60 Leading global footprint positioned to meet customer demand -------------------------------------------------------------------------------- [[Image Removed]] 24 Company Capacity 2007 2008 2009 2010 2011 BP / Sinopec 550 kt Sipchem 430 kt Sopo (expansion) 600 kt Wujing (expansion) 500 kt Yangkuang Cathay 350 kt Henan Shunda 200 kt HC Tianjin Bohei 200 kt HC Hualu Hensheng 200 kt HC Henan Yima 200 kt Yunan Yunwei 200 kt Kingboard 400 kt A A A A A A A A X X X X X X X X X Company Announced Startup Current Update A CE 2005 Update SU = Actual plant startup X CE 2006 Update HC = Highest Cost X CE 2007 Update X X X X X X X SU X SU Viability of many higher cost projects is in question 1Celanese internal analysis and opinion ? A SU X A A ? Timing in question Timing in question Forecast Capacity Expansions1 Delays in project startups likely to continue -------------------------------------------------------------------------------- [[Image Removed]] 25 Majority of announced capacity additions challenged in today’s pricing environment 1Source: Celanese internal estimates, Tecnon 2008. Based on nameplate capacity Disadvantaged technology Significant differentiation in technology of announced expansions -------------------------------------------------------------------------------- [[Image Removed]] 26 Balance for “high return” productivity and capital efficient growth Note: Not including Kelsterbach plant relocation Maintain Plant Other Growth Nanjing Productivity Capital Spending by Category Efficient use of cash -------------------------------------------------------------------------------- [[Image Removed]] 27 --------------------------------------------------------------------------------