0000950136-06-001093 8-K 20 20060216 2.02 7.01 9.01 20060216 20060216 Celanese CORP 0001306830 2820 980420726 DE 1231 8-K 34 001-32410 06624113 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 file001.htm FORM 8-K 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): February 16, 2006 CELANESE CORPORATION (Exact Name of Registrant as specified in its charter) [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] DELAWARE [[Image Removed]] 001-32410 [[Image Removed]] 98-0420726 (State or other jurisdiction of [[Image Removed]] (Commission File [[Image Removed]] (IRS Employer incorporation) Number) Identification No.) [[Image Removed]] 1601 West LBJ Freeway, Dallas, Texas 75234-6034 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (972) 901-4500 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 2.02Results of Operations and Financial Condition On February 16, 2006, Celanese Corporation (the Company) issued a press release reporting the financial results for its fourth quarter and full year 2005, and reaffirming guidance for 2006. A copy of the press release is attached to this Current Report on Form 8-K (Current Report) as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 2.02 disclosure. Item 7.01Regulation FD Disclosure On February 16, 2006, David N. Weidman, President and Chief Executive Officer of the Company, and John J. Gallagher III, Executive Vice President and Chief Financial Officer of the Company, made a presentation to investors and analysts via webcast and teleconference hosted by the Company. A copy of the slide presentation posted during the webcast and teleconference is attached to this Current Report as Exhibit 99.2 and is incorporated herein solely for purposes of this Item 7.01 disclosure. Additionally, the Company has posted the slide presentation on its website at www.celanese.com under the Investor/Investor Webcast section. Item 9.01Financial Statements and Exhibits. (c) Exhibits [[Image Removed]] [[Image Removed]] Exhibit Number Description [[Image Removed]] [[Image Removed]] 99.1 Press Release dated February 16, 2006* [[Image Removed]] [[Image Removed]] 99.2 Slide Presentation dated February 16, 2006* * In connection with the disclosure set forth in Item 2.02 and 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 filing. 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. -------------------------------------------------------------------------------- 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. [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] CELANESE CORPORATION [[Image Removed]] By: [[Image Removed]] /s/ Steven M. Sterin [[Image Removed]] [[Image Removed]] Name:Steven M. Sterin Title: Vice President & Controller [[Image Removed]] Date: February 16, 2006 -------------------------------------------------------------------------------- Exhibit Index [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Exhibit Number [[Image Removed]] Description 99.1 [[Image Removed]] Press Release dated February 16, 2006* 99.2 [[Image Removed]] Slide Presentation dated February 16, 2006* [[Image Removed]] *Exhibit shall be deemed furnished to, but not filed with, the SEC in connection with the disclosure set forth in Item 2.02 and Item 7.01. -------------------------------------------------------------------------------- EX-99.1 3 file002.htm PRESS RELEASE Exhibit 99.1 [[Image Removed]] [[Image Removed]] Celanese Corporation Reports Strong Fourth Quarter and Full Year Results; Company Reaffirms 2006 Adjusted EPS Guidance of Between $2.50 and $2.90 Fourth quarter highlights: [[Image Removed]] [[Image Removed]] [[Image Removed]] Net sales increase 19% to $1,551 million from prior year on higher pricing and net sales from the Acetex and Vinamul acquisitions [[Image Removed]] [[Image Removed]] [[Image Removed]] Basic EPS of $1.08; Adjusted EPS of $0.60 with productivity, pricing and dividends from cost investments more than offsetting higher raw material and energy costs [[Image Removed]] [[Image Removed]] [[Image Removed]] Adjusted EBITDA increases 40% from prior year to $255 million Full year highlights: [[Image Removed]] [[Image Removed]] [[Image Removed]] Net sales increase 22% to $6,070 million from 2004 on higher pricing and net sales from the Acetex and Vinamul acquisitions [[Image Removed]] [[Image Removed]] [[Image Removed]] Basic EPS of $1.73; Adjusted EPS of $2.24 [[Image Removed]] [[Image Removed]] [[Image Removed]] Adjusted EBITDA increases 44% from prior year to $1,116 million [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Q4 2005 [[Image Removed]] Q4 2004 [[Image Removed]] FY 2005 [[Image Removed]] FY 2004 in $ millions, except per share data [[Image Removed]] Successor [[Image Removed]] Successor [[Image Removed]] Successor [[Image Removed]] Combined Net sales [[Image Removed]] 1,551 [[Image Removed]] 1,303 [[Image Removed]] 6,070 [[Image Removed]] 4,962 Operating profit [[Image Removed]] 160 [[Image Removed]] 23 [[Image Removed]] 561 [[Image Removed]] 119 Net earnings (loss) [[Image Removed]] 175 [[Image Removed]] (57 ) [[Image Removed]] 277 [[Image Removed]] (175 ) Basic EPS [[Image Removed]] 1.08 [[Image Removed]] n.m. [[Image Removed]] 1.73 [[Image Removed]] n.m. Diluted EPS [[Image Removed]] 1.02 [[Image Removed]] n.m. [[Image Removed]] 1.67 [[Image Removed]] n.m. Diluted Adjusted EPS [[Image Removed]] 0.60 [[Image Removed]] n.m. [[Image Removed]] 2.24 [[Image Removed]] n.m. Adjusted EBITDA [[Image Removed]] 255 [[Image Removed]] 182 [[Image Removed]] 1,116 [[Image Removed]] 776 [[Image Removed]] [[Image Removed]] [[Image Removed]] n.m. = not meaningful Dallas, February 16, 2006: Celanese Corporation (NYSE: CE) today reported net sales rose 19% to $1,551 million in the fourth quarter compared to $1,303 million in the same period last year primarily due to higher pricing and the inclusion of net sales from Acetex and Vinamul. Net earnings were $175 million with productivity, pricing and dividends from cost investments more than offsetting higher raw material and energy costs. The results included a net benefit of $44 million in special charges/gains and other adjustments, as well as a tax benefit from the reversal of valuation allowances. Special charges/gains of $16 million included insurance recoveries of approximately $30 million related to plumbing litigation matters partially offset by costs associated with the companys cost reduction initiatives. Other adjustments for the quarter primarily included a loss of approximately $35 million related to the disposition of the cyclo-olefin copolymer (COC) business, a gain on disposition of two -------------------------------------------------------------------------------- Acetate properties of $23 million, as well as a gain of approximately $36 million from the settlement of transportation-related antitrust matters. Adjusted earnings per share of $0.60, which includes approximately $25 million of higher than forecasted depreciation and amortization, exceeded the companys previous guidance range of $0.46 and $0.56. The $0.60 per share excludes the net benefit of special charges and other adjustments of $44 million. The tax rate for the fourth quarter reflects the cumulative change in the estimated effective annual tax rate to 21% from 24% as announced in December. Adjusted EBITDA for the fourth quarter rose to $255 million from $182 million in the same period of 2004 on strong operating results, including cost and productivity improvements, and higher dividends from cost investments. These results also exceeded the companys previous guidance range of between $200 million and $230 million. Operating profit increased to $160 million in the fourth quarter from $23 million in the same period last year as higher raw material, energy, and depreciation costs were more than offset by higher pricing, other one-time gains and reduced selling, general and administrative expenses. Fourth quarter 2005 results included a net benefit of $16 million in special charges/gains while fourth quarter 2004 results included a net expense of $33 million. Selling, general and administrative expense declined by $95 million for the period, mainly due to cost savings initiatives, reduced personnel costs and the absence of one-time expenses totaling $61 million of special management compensation and IPO-related fees, included in the prior year, partially offset by the inclusion of selling, general and administrative expenses from the 2005 acquisitions. A strong fourth quarter marked the end of a tremendous year as we executed our plans to position Celanese for greater growth and profitability, said David Weidman, president and chief executive officer. We continued to focus our portfolio, expanded our global reach and improved our industry leadership position. We have identified a clear path to build on this success in 2006. Recent Business Highlights [[Image Removed]] [[Image Removed]] [[Image Removed]] Sold the omega-3 DHA and COC businesses as well as our common shares in the PEMEAS GmbH fuel cell venture, consistent with our strategy to divest non-core businesses. [[Image Removed]] [[Image Removed]] [[Image Removed]] Announced expansion plans for our Nanjing, China site to include a 300,000 metric ton, world-scale vinyl acetate monomer plant and a vinyl acetate ethylene unit in addition to the 600,000 metric ton acetic acid plant scheduled for commercial sales the first quarter of 2007. [[Image Removed]] [[Image Removed]] [[Image Removed]] Announced plans to implement our next generation of VAM technology, known as VAntage Plus, to further improve production efficiency and lower operating costs across our global manufacturing platform. [[Image Removed]] [[Image Removed]] [[Image Removed]] Temporarily suspended discussions with Tasnee Petrochemicals regarding the Saudi Arabian acetyls venture project due to the current high demand on contractors and vendors which have affected project costs. [[Image Removed]] [[Image Removed]] [[Image Removed]] Lowered our borrowing costs on our senior credit facility by reducing the margin over LIBOR from 2.25% to 2.00% on approximately $1.4 billion of the U.S. dollar denominated portion of the Term Loans. [[Image Removed]] [[Image Removed]] [[Image Removed]] Received a ratings upgrade from Standard & Poors on the long-term corporate credit rating for debt holding entities from B+ to BB and placed on positive outlook by Moodys Investor Services. Full Year 2005 Results Adjusted earnings per share, based on an effective 21% tax rate, were $2.24 for the year and included $0.05 per share for discontinued operations associated with the companys exit from the Acetate Products filament business. Earnings from discontinued operations were $9 million for the full year 2005 compared to $33 million in 2004. 2 -------------------------------------------------------------------------------- Net sales increased 22% to $6,070 million based on increased pricing, particularly in the Chemical Products segment, and the additional sales from the Acetex and Vinamul businesses. Operating profit reached $561 million in 2005 versus $119 million in 2004. In 2005, adjusted EBITDA was $1,116 million, an increase of 44% from the prior year. The company expanded its operating margin as price and volume increases and results from productivity and cost reduction initiatives more than offset increased raw material and energy costs. Fourth Quarter Segment Overview Chemical Products Chemical Products had another strong quarter due to robust demand and high industry utilization. Net sales increased 20% to $1,107 million, primarily due to the inclusion of the Acetex and Vinamul acquisitions during 2005, as well as higher pricing for most Chemical products. Volume was lower in acetyl derivative products as the company focused on expanding margins. Overall higher product pricing plus increased dividends from the Ibn Sina cost investment more than offset higher raw materials costs, particularly for natural gas and ethylene. The segment also benefited from the full quarter impact of its Southern Chemical methanol supply contract. Basic products, such as acetic acid and vinyl acetate, had greater success in raising prices while downstream products continued to experience margin compression. Earnings from continuing operations before tax and minority interests increased to $179 million from $131 million in the fourth quarter of 2004. The results included the favorable effect on cost of sales of approximately $36 million from the settlement of transportation-related antitrust matters offset by an additional $37 million, when compared to 2004, in depreciation and amortization related to purchase accounting adjustments in both years. Technical Polymers Ticona Ticona performed well with increased penetration of key markets and the introduction of new applications. Net sales increased 5% to $213 million compared to the same period last year with increases in volumes and pricing partially offset by unfavorable currency impacts. Ticona expanded its operating margins as the increased sales and reduced spending more than offset increases in raw material and energy costs. Earnings from continuing operations before tax and minority interests improved to $9 million compared to a loss of $29 million in the prior year primarily due to higher operating profit. 2005 results included a positive impact of approximately $30 million of plumbing insurance recoveries, while both years included expenses associated with the exit of the COC business. By exiting the COC business, Ticona made significant progress in realigning its portfolio. A loss on disposal of approximately $35 million was recorded in the fourth quarter of 2005. Comparative results for the prior period reflected a non-cash impairment charge for the COC business of $32 million. Adjusting for the offsetting impacts of the COC sale and the settlement of insurance claims in 2005, and considering the non-cash charge for COC in 2004, Ticonas operating performance improved in 2005 versus 2004 on increased volume and expanded margins. Acetate Products Acetate Products significant restructuring efforts and China venture expansions remain on track. Net sales increased 10% to $160 million from the same period last year due to increased pricing and volumes. As part of the restructuring plan, higher flake volumes from increased sales to the companys recently expanded China tow ventures were partially offset by lower tow volumes due to the shutdown of the Canadian tow plant. Earnings from continuing operations before tax and minority interests increased to $44 million from $13 million in the same period last year, largely due to a $23 million gain on the sale of the Rock Hill, 3 -------------------------------------------------------------------------------- S.C. plant and Charlotte, N.C. research and development center. Operations were phased out at both sites as part of the restructuring efforts. Increased pricing plus results from restructuring and productivity improvements more than offset increased raw material and other costs. Performance Products Performance Products continued to perform well. Management sharpened its focus on the core sweetener and food protection businesses with the sale of the omega-3 DHA business in December 2005. Net sales increased by $1 million to $40 million compared to the same period last year as higher volumes, primarily for Sunett sweetener and sorbates, were partly offset by lower pricing for the sweetener and unfavorable currency effects. Earnings from continuing operations before tax and minority interests increased by $7 million to $10 million compared to the same period last year, primarily due to ongoing cost saving initiatives and a gain of approximately $3 million from the DHA sale. Equity and Cost Investments Cash dividends from equity and cost investments in the fourth quarter increased to $40 million from $11 million in the same quarter last year, mainly due to higher dividends from the Ibn Sina cost investment in Saudi Arabia. For the full year, dividends increased to $154 million from $77 million in 2004. 2005 was a record year for dividends from our ventures, said John J. Gallagher III, executive vice president and chief financial officer. Our equity and cost investments continue to be a critical component of our overall strategy. Taxes In December, the company changed the tax forecast for its 2005 adjusted EPS guidance to a tax rate of between 19% and 21% versus the previously forecasted tax rate of 24% due to the companys increased earnings in lower tax jurisdictions. The effective rate for 2005 was 21%. The fourth quarter effective rate was lower than the annual rate to reflect the cumulative difference from the original forecast. On a US GAAP basis, the effective tax rate for 2005 was approximately 16% as a tax benefit was recorded in the fourth quarter due to the reversal of a valuation allowance in Germany. This reversal, combined with actual earnings in the various tax jurisdictions, resulted in a decrease in the effective tax rate from the previously estimated 35%. Cash Flow Preliminary net cash provided by operating activities was approximately $200 million in the fourth quarter and $700 million for 2005. This result is primarily attributable to increased operating profit, higher dividends from cost investments, strong working capital performance and lower pension contributions in 2005. Celanese continues to generate strong cash flow from its operations, said Gallagher. We expect these trends to continue in 2006 with strong business performance and dividends from our equity and cost investments. Outlook The company reaffirmed its adjusted EPS guidance for 2006 in the range of $2.50 to $2.90 per share, despite a forecast for increased depreciation and amortization expense. The company now expects depreciation and amortization to be between $300 million and $330 million, $60 to $70 million higher than the companys prior guidance primarily due to purchase accounting. Adjusted EPS guidance is based on 172 million diluted shares and an effective tax rate between 18% and 22%. For 2006, the company expects demand for Chemical Products to remain strong and to absorb the additional capacity that began coming on stream in early 2006. Raw material costs are forecasted to 4 -------------------------------------------------------------------------------- moderate from those of late 2005 throughout the year, but could be volatile and remain high relative to historic levels. Acetate Products and Ticona are expected to show improved results, benefiting from the impacts of restructuring and increased volume and pricing, respectively. The company also expects dividends from Acetate Products China ventures to be paid in the second quarter of 2006. Performance Products earnings are expected to remain essentially flat as volume increases offset lower pricing. Overall, we expect continued performance improvement in 2006 with a first quarter adjusted EPS modestly higher than the first quarter of 2005 results of $0.62, said Weidman. The company is focused on executing our strategies and delivering value for our customers and shareholders during another year of expected strong global demand. Celanese Corporation (NYSE:CE) is an integrated global producer of value-added industrial chemicals based in Dallas, Texas. The Company has four major businesses: Chemicals Products, Technical Polymers Ticona, Acetate Products and Performance Products. Celanese has production plants in 13 countries in North America, Europe and Asia. In 2005, Celanese Corporation had net sales of $6.1 billion. For more information on Celanese Corporation, please visit the company's web site at www.celanese.com. Forward-Looking Statements This release may contain forward-looking statements, which include information concerning the companys plans, objectives, goals, strategies, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. When used in this release, the wordsoutlook,forecast, estimates, expects, anticipates, projects, plans, intends, believes, and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon current expectations and beliefs and various assumptions. There can be no assurance that the company will realize these expectations or that these beliefs will prove correct. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained in this release. Numerous factors, many of which are beyond the companys control, could cause actual results to differ materially from those expressed as forward-looking statements. Certain of these risk factors are discussed in the companys filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made, and the company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. 5 -------------------------------------------------------------------------------- Preliminary Consolidated Statements of Operations Unaudited [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Q4 2005 [[Image Removed]] Q4 2004 [[Image Removed]] FY 2005 [[Image Removed]] FY 2004 in $ millions [[Image Removed]] Successor [[Image Removed]] Successor [[Image Removed]] Successor [[Image Removed]] Combined Net sales [[Image Removed]] 1,551 [[Image Removed]] 1,303 [[Image Removed]] 6,070 [[Image Removed]] 4,962 Cost of sales [[Image Removed]] (1,251 ) [[Image Removed]] (1,006 ) [[Image Removed]] (4,773 ) [[Image Removed]] (4,009 ) Gross profit [[Image Removed]] 300 [[Image Removed]] 297 [[Image Removed]] 1,297 [[Image Removed]] 953 Selling, general and administrative expenses [[Image Removed]] (124 ) [[Image Removed]] (219 ) [[Image Removed]] (562 ) [[Image Removed]] (633 ) Research and development expenses [[Image Removed]] (23 ) [[Image Removed]] (22 ) [[Image Removed]] (91 ) [[Image Removed]] (90 ) Special (charges)/gains: [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Insurance recoveries associated with plumbing cases [[Image Removed]] 30 [[Image Removed]] [[Image Removed]] 34 [[Image Removed]] 1 Restructuring, impairment and other special charges [[Image Removed]] (14 ) [[Image Removed]] (33 ) [[Image Removed]] (107 ) [[Image Removed]] (111 ) Foreign exchange gain (loss), net [[Image Removed]] 0 [[Image Removed]] (1 ) [[Image Removed]] [[Image Removed]] (3 ) Gain (loss) on disposition of assets [[Image Removed]] (9 ) [[Image Removed]] 1 [[Image Removed]] (10 ) [[Image Removed]] 2 Operating profit [[Image Removed]] 160 [[Image Removed]] 23 [[Image Removed]] 561 [[Image Removed]] 119 Equity in net earnings of affiliates [[Image Removed]] 13 [[Image Removed]] 1 [[Image Removed]] 61 [[Image Removed]] 48 Interest expense [[Image Removed]] (71 ) [[Image Removed]] (72 ) [[Image Removed]] (387 ) [[Image Removed]] (306 ) Interest income [[Image Removed]] 7 [[Image Removed]] 9 [[Image Removed]] 38 [[Image Removed]] 29 Other income (expense), net [[Image Removed]] 42 [[Image Removed]] (5 ) [[Image Removed]] 89 [[Image Removed]] (3 ) Earnings (loss) from continuing operations before tax [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] and minority interests 151 (44 ) 362 (113 ) Income tax benefit (provision) [[Image Removed]] 20 [[Image Removed]] (12 ) [[Image Removed]] (57 ) [[Image Removed]] (87 ) Earnings (loss) from continuing operations before [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] minority interests 171 (56 ) 305 (200 ) Minority interests [[Image Removed]] 4 [[Image Removed]] (6 ) [[Image Removed]] (37 ) [[Image Removed]] (8 ) Earnings (loss) from continuing operations [[Image Removed]] 175 [[Image Removed]] (62 ) [[Image Removed]] 268 [[Image Removed]] (208 ) Earnings from operation of discontinued operations (including gain on disposal of discontinued [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] operations) 5 9 15 Related income tax benefit [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] 15 Earnings from discontinued operations [[Image Removed]] [[Image Removed]] 5 [[Image Removed]] 9 [[Image Removed]] 33 Net earnings (loss) [[Image Removed]] 175 [[Image Removed]] (57 ) [[Image Removed]] 277 [[Image Removed]] (175 ) Cumulative declared and undeclared preferred stock [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] dividend (3 ) (10 ) Net earnings (loss) available to common shareholders [[Image Removed]] 172 [[Image Removed]] (57 ) [[Image Removed]] 267 [[Image Removed]] (175 ) [[Image Removed]] 6 -------------------------------------------------------------------------------- Preliminary Consolidated Balance Sheets Unaudited [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Dec 31 [[Image Removed]] Dec 31 in $ millions 2005 2004 ASSETS [[Image Removed]] [[Image Removed]] Current assets: [[Image Removed]] [[Image Removed]] Cash and cash equivalents [[Image Removed]] 390 [[Image Removed]] 838 Receivables, net: [[Image Removed]] [[Image Removed]] Trade receivables, net third party and affiliates [[Image Removed]] 918 [[Image Removed]] 843 Other receivables [[Image Removed]] 481 [[Image Removed]] 670 Inventories [[Image Removed]] 661 [[Image Removed]] 604 Deferred income taxes [[Image Removed]] 83 [[Image Removed]] 71 Other assets [[Image Removed]] 91 [[Image Removed]] 86 Assets of discontinued operations [[Image Removed]] 2 [[Image Removed]] 39 Total current assets [[Image Removed]] 2,626 [[Image Removed]] 3,151 Investments [[Image Removed]] 776 [[Image Removed]] 833 Property, plant and equipment, net [[Image Removed]] 2,040 [[Image Removed]] 1,702 Deferred income taxes [[Image Removed]] 94 [[Image Removed]] 54 Other assets [[Image Removed]] 482 [[Image Removed]] 523 Goodwill [[Image Removed]] 919 [[Image Removed]] 747 Intangible assets, net [[Image Removed]] 481 [[Image Removed]] 400 Total assets [[Image Removed]] 7,418 [[Image Removed]] 7,410 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) [[Image Removed]] [[Image Removed]] Current liabilities: [[Image Removed]] [[Image Removed]] Short-term borrowings and current installments of long-term debt [[Image Removed]] [[Image Removed]] third party and affiliates 155 144 Accounts payable and accrued liabilities: [[Image Removed]] [[Image Removed]] Trade payables third party and affiliates [[Image Removed]] 810 [[Image Removed]] 716 Other current liabilities [[Image Removed]] 798 [[Image Removed]] 888 Deferred income taxes [[Image Removed]] 54 [[Image Removed]] 20 Income taxes payable [[Image Removed]] 204 [[Image Removed]] 214 Liabilities of discontinued operations [[Image Removed]] 2 [[Image Removed]] 13 Total current liabilities [[Image Removed]] 2,023 [[Image Removed]] 1,995 Long-term debt [[Image Removed]] 3,282 [[Image Removed]] 3,243 Deferred income taxes [[Image Removed]] 281 [[Image Removed]] 256 Benefit obligations [[Image Removed]] 1,127 [[Image Removed]] 1,000 Other liabilities [[Image Removed]] 425 [[Image Removed]] 510 Minority interests [[Image Removed]] 61 [[Image Removed]] 518 Shareholders' equity (deficit): [[Image Removed]] [[Image Removed]] Preferred stock [[Image Removed]] [[Image Removed]] Common stock [[Image Removed]] [[Image Removed]] Additional paid-in capital [[Image Removed]] 339 [[Image Removed]] 158 Retained earnings (accumulated deficit) [[Image Removed]] 24 [[Image Removed]] (253 ) Accumulated other comprehensive loss [[Image Removed]] (144 ) [[Image Removed]] (17 ) Total shareholders' equity [[Image Removed]] 219 [[Image Removed]] (112 ) Total liabilities and shareholders' equity (deficit) [[Image Removed]] 7,418 [[Image Removed]] 7,410 [[Image Removed]] 7 -------------------------------------------------------------------------------- Table 1 Segment Data* [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Q4 2005 [[Image Removed]] Q4 2004 [[Image Removed]] FY 2005 [[Image Removed]] FY 2004 in $ millions [[Image Removed]] Successor [[Image Removed]] Successor [[Image Removed]] Successor [[Image Removed]] Combined Net sales [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Chemical Products [[Image Removed]] 1,107 [[Image Removed]] 925 [[Image Removed]] 4,336 [[Image Removed]] 3,391 Technical Polymers Ticona [[Image Removed]] 213 [[Image Removed]] 203 [[Image Removed]] 887 [[Image Removed]] 863 Acetate Products [[Image Removed]] 160 [[Image Removed]] 145 [[Image Removed]] 659 [[Image Removed]] 588 Performance Products [[Image Removed]] 40 [[Image Removed]] 39 [[Image Removed]] 180 [[Image Removed]] 175 Other activities [[Image Removed]] 69 [[Image Removed]] 14 [[Image Removed]] 144 [[Image Removed]] 56 Intersegment eliminations [[Image Removed]] (38 ) [[Image Removed]] (23 ) [[Image Removed]] (136 ) [[Image Removed]] (111 ) Total [[Image Removed]] 1,551 [[Image Removed]] 1,303 [[Image Removed]] 6,070 [[Image Removed]] 4,962 Operating Profit (Loss) [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Chemical Products [[Image Removed]] 143 [[Image Removed]] 129 [[Image Removed]] 573 [[Image Removed]] 313 Technical Polymers Ticona [[Image Removed]] (2 ) [[Image Removed]] (38 ) [[Image Removed]] 60 [[Image Removed]] 19 Acetate Products [[Image Removed]] 42 [[Image Removed]] 13 [[Image Removed]] 67 [[Image Removed]] (13 ) Performance Products [[Image Removed]] 10 [[Image Removed]] 4 [[Image Removed]] 51 [[Image Removed]] 29 Other activities [[Image Removed]] (33 ) [[Image Removed]] (85 ) [[Image Removed]] (190 ) [[Image Removed]] (229 ) Total [[Image Removed]] 160 [[Image Removed]] 23 [[Image Removed]] 561 [[Image Removed]] 119 Earnings (Loss) from Continuing Operations Before Tax [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] and Minority Interests Chemical Products [[Image Removed]] 179 [[Image Removed]] 131 [[Image Removed]] 655 [[Image Removed]] 329 Technical Polymers Ticona [[Image Removed]] 9 [[Image Removed]] (29 ) [[Image Removed]] 116 [[Image Removed]] 71 Acetate Products [[Image Removed]] 44 [[Image Removed]] 13 [[Image Removed]] 71 [[Image Removed]] (9 ) Performance Products [[Image Removed]] 10 [[Image Removed]] 3 [[Image Removed]] 46 [[Image Removed]] 26 Other activities [[Image Removed]] (91 ) [[Image Removed]] (162 ) [[Image Removed]] (526 ) [[Image Removed]] (530 ) Total [[Image Removed]] 151 [[Image Removed]] (44 ) [[Image Removed]] 362 [[Image Removed]] (113 ) Special (Charges)/Gains in Operating Profit (Loss) [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Chemical Products [[Image Removed]] (9 ) [[Image Removed]] 1 [[Image Removed]] (25 ) [[Image Removed]] (4 ) Technical Polymers Ticona [[Image Removed]] 30 [[Image Removed]] (33 ) [[Image Removed]] 8 [[Image Removed]] (38 ) Acetate Products [[Image Removed]] 1 [[Image Removed]] [[Image Removed]] (9 ) [[Image Removed]] (41 ) Performance Products [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Other activities [[Image Removed]] (6 ) [[Image Removed]] (1 ) [[Image Removed]] (47 ) [[Image Removed]] (27 ) Total [[Image Removed]] 16 [[Image Removed]] (33 ) [[Image Removed]] (73 ) [[Image Removed]] (110 ) Other Adjustments, excluding Special [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] (Charges)/Gains** Chemical Products [[Image Removed]] 40 [[Image Removed]] [[Image Removed]] 32 [[Image Removed]] Technical Polymers Ticona [[Image Removed]] (36 ) [[Image Removed]] [[Image Removed]] (38 ) [[Image Removed]] Acetate Products [[Image Removed]] 23 [[Image Removed]] [[Image Removed]] 23 [[Image Removed]] Performance Products [[Image Removed]] [[Image Removed]] [[Image Removed]] (1 ) [[Image Removed]] Other activities [[Image Removed]] 1 [[Image Removed]] [[Image Removed]] (102 ) [[Image Removed]] Total [[Image Removed]] 28 [[Image Removed]] nm [[Image Removed]] (86 ) [[Image Removed]] nm Depreciation and Amortization Expense [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Chemical Products [[Image Removed]] 49 [[Image Removed]] 12 [[Image Removed]] 167 [[Image Removed]] 128 Technical Polymers Ticona [[Image Removed]] 18 [[Image Removed]] 14 [[Image Removed]] 60 [[Image Removed]] 64 Acetate Products [[Image Removed]] 8 [[Image Removed]] 3 [[Image Removed]] 29 [[Image Removed]] 41 Performance Products [[Image Removed]] 3 [[Image Removed]] 5 [[Image Removed]] 13 [[Image Removed]] 12 Other activities [[Image Removed]] 8 [[Image Removed]] [[Image Removed]] 17 [[Image Removed]] 6 Total [[Image Removed]] 86 [[Image Removed]] 34 [[Image Removed]] 286 [[Image Removed]] 251 [[Image Removed]] [[Image Removed]] [[Image Removed]] * Other Activities primarily includes corporate selling, general and administrative expenses and the results from AT Plastics and captive insurance companies [[Image Removed]] [[Image Removed]] ** Adjustments to calculate adjusted EPS see reconciliation in Table 6 8 -------------------------------------------------------------------------------- Table 2 Factors Affecting Fourth Quarter 2005 Segment Net Sales Compared to Fourth Quarter 2004 [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] in percent [[Image Removed]] Volume [[Image Removed]] Price [[Image Removed]] Currency [[Image Removed]] Other* [[Image Removed]] Total Chemical Products [[Image Removed]] 8 % [[Image Removed]] 12 % [[Image Removed]] 4 % [[Image Removed]] 20 % [[Image Removed]] 20 % Technical Polymers Ticona [[Image Removed]] 6 % [[Image Removed]] 3 % [[Image Removed]] 4 % [[Image Removed]] 0 % [[Image Removed]] 5 % Acetate Products [[Image Removed]] 6 % [[Image Removed]] 4 % [[Image Removed]] 0 % [[Image Removed]] 0 % [[Image Removed]] 10 % Performance Products [[Image Removed]] 16 % [[Image Removed]] 8 % [[Image Removed]] 5 % [[Image Removed]] 0 % [[Image Removed]] 3 % Segment total [[Image Removed]] 4 % [[Image Removed]] 9 % [[Image Removed]] 3 % [[Image Removed]] 14 % [[Image Removed]] 16 % [[Image Removed]] [[Image Removed]] [[Image Removed]] * Primarily represents net sales of the recently acquired Vinamul and Acetex businesses, excluding AT Plastics Table 3 Factors Affecting Full Year 2005 Segment Net Sales Compared to 2004 [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] in percent [[Image Removed]] Volume [[Image Removed]] Price [[Image Removed]] Currency [[Image Removed]] Other* [[Image Removed]] Total Chemical Products [[Image Removed]] 3 % [[Image Removed]] 16 % [[Image Removed]] 1 % [[Image Removed]] 14 % [[Image Removed]] 28 % Technical Polymers Ticona [[Image Removed]] 0 % [[Image Removed]] 3 % [[Image Removed]] 0 % [[Image Removed]] 0 % [[Image Removed]] 3 % Acetate Products [[Image Removed]] 8 % [[Image Removed]] 4 % [[Image Removed]] 0 % [[Image Removed]] 0 % [[Image Removed]] 12 % Performance Products [[Image Removed]] 7 % [[Image Removed]] 4 % [[Image Removed]] 0 % [[Image Removed]] 0 % [[Image Removed]] 3 % Segment total [[Image Removed]] 1 % [[Image Removed]] 12 % [[Image Removed]] 0 % [[Image Removed]] 10 % [[Image Removed]] 21 % [[Image Removed]] [[Image Removed]] [[Image Removed]] * Primarily represents net sales of the recently acquired Vinamul and Acetex businesses, excluding AT Plastics Table 4 Cash Dividends Received [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Q4 2005 [[Image Removed]] Q4 2004 [[Image Removed]] FY 2005 [[Image Removed]] FY 2004 in $ millions [[Image Removed]] Successor [[Image Removed]] Successor [[Image Removed]] Successor [[Image Removed]] Combined Dividends from equity investments [[Image Removed]] 5 [[Image Removed]] 2 [[Image Removed]] 65 [[Image Removed]] 37 Other distributions from equity investments [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] 1 Dividends from cost investments [[Image Removed]] 35 [[Image Removed]] 9 [[Image Removed]] 89 [[Image Removed]] 39 Total [[Image Removed]] 40 [[Image Removed]] 11 [[Image Removed]] 154 [[Image Removed]] 77 [[Image Removed]] Table 5 Net Debt [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Dec 31 [[Image Removed]] Dec 31 in $ millions [[Image Removed]] 2005 [[Image Removed]] 2004 Short-term borrowings and current installments of [[Image Removed]] [[Image Removed]] long-term debt third party and affiliates 155 144 Plus: Long-term debt [[Image Removed]] 3,282 [[Image Removed]] 3,243 Total debt [[Image Removed]] 3,437 [[Image Removed]] 3,387 Less: Cash and cash equivalents [[Image Removed]] 390 [[Image Removed]] 838 Net Debt [[Image Removed]] 3,047 [[Image Removed]] 2,549 [[Image Removed]] 9 -------------------------------------------------------------------------------- Table 6 Earnings Per Share [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] in $ millions, except for share and per share data [[Image Removed]] Q4 2005 [[Image Removed]] FY 2005 Earnings from continuing operations before tax [[Image Removed]] [[Image Removed]] and minority interests 151 362 Income tax benefit (provision) [[Image Removed]] 20 [[Image Removed]] (57 ) Minority interests [[Image Removed]] 4 [[Image Removed]] (37 ) Earnings from discontinued operations [[Image Removed]] [[Image Removed]] 9 Preferred dividends [[Image Removed]] (3 ) [[Image Removed]] (10 ) Net earnings available to common shareholders [[Image Removed]] 172 [[Image Removed]] 267 Basic EPS Calculation: [[Image Removed]] [[Image Removed]] Weighted average shares outstanding (millions) [[Image Removed]] 158.6 [[Image Removed]] 154.4 Earnings per common share from continuing operations [[Image Removed]] 1.08 [[Image Removed]] 1.67 Earnings per common share from discontinued operations [[Image Removed]] [[Image Removed]] 0.06 Earnings per common share basic [[Image Removed]] 1.08 [[Image Removed]] 1.73 Diluted EPS Calculation: [[Image Removed]] [[Image Removed]] Net earnings available to common shareholders [[Image Removed]] 172 [[Image Removed]] 267 Add back: Preferred dividends [[Image Removed]] 3 [[Image Removed]] 10 Net earnings for diluted EPS [[Image Removed]] 175 [[Image Removed]] 277 Diluted shares (millions) [[Image Removed]] [[Image Removed]] Weighted average shares outstanding [[Image Removed]] 158.6 [[Image Removed]] 154.4 Conversion of Preferred Shares [[Image Removed]] 12.0 [[Image Removed]] 11.1 Assumed conversion of stock options [[Image Removed]] 0.9 [[Image Removed]] 0.7 Total diluted shares [[Image Removed]] 171.5 [[Image Removed]] 166.2 Earnings per common share from continuing operations [[Image Removed]] 1.02 [[Image Removed]] 1.61 Earnings per common share from discontinued operations [[Image Removed]] [[Image Removed]] 0.06 Earnings per common share diluted [[Image Removed]] 1.02 [[Image Removed]] 1.67 [[Image Removed]] 10 -------------------------------------------------------------------------------- Table 6 continued Diluted Adjusted Earnings Per ShareReconciliation of Non-US GAAP Items [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Q4 2005 [[Image Removed]] FY 2005 in $ millions, except for share and per share data Adjusted Adjusted Earnings from continuing operations before tax [[Image Removed]] [[Image Removed]] and minority interests 151 362 Non-GAAP Adjustments: [[Image Removed]] [[Image Removed]] Purchase accounting for inventories [[Image Removed]] (4 ) [[Image Removed]] 12 Special (charges)/gains [[Image Removed]] (16 ) [[Image Removed]] 73 Settlement of transportation-related antitrust [[Image Removed]] [[Image Removed]] matters (36 ) (36 ) Gain on disposition of Acetate properties [[Image Removed]] (23 ) [[Image Removed]] (23 ) Loss on disposition of COC business [[Image Removed]] 35 [[Image Removed]] 35 Non-operating foreign exchange gain [[Image Removed]] [[Image Removed]] (14 ) Sponsor monitoring fee [[Image Removed]] [[Image Removed]] 10 Refinancing costs [[Image Removed]] [[Image Removed]] 102 Adjusted earnings from continuing operations before [[Image Removed]] [[Image Removed]] tax and minority interests 107 521 Income tax provision on adjusted net earnings* [[Image Removed]] (8 ) [[Image Removed]] (109 ) Minority interests [[Image Removed]] 4 [[Image Removed]] (37 ) Earnings from discontinued operations [[Image Removed]] [[Image Removed]] 9 Preferred dividends [[Image Removed]] (3 ) [[Image Removed]] (10 ) Adjusted net earnings available to common [[Image Removed]] [[Image Removed]] shareholders 100 374 Add back: Preferred dividends [[Image Removed]] 3 [[Image Removed]] 10 Adjusted net earnings for diluted adjusted EPS [[Image Removed]] 103 [[Image Removed]] 384 Diluted shares (millions) [[Image Removed]] [[Image Removed]] Weighted average shares outstanding [[Image Removed]] 158.6 [[Image Removed]] 158.6 Conversion of Preferred Shares [[Image Removed]] 12.0 [[Image Removed]] 12.0 Assumed conversion of stock options [[Image Removed]] 0.9 [[Image Removed]] 0.9 Total diluted shares [[Image Removed]] 171.5 [[Image Removed]] 171.5 Diluted Adjusted EPS from continuing operations [[Image Removed]] 0.60 [[Image Removed]] 2.19 Earnings per common share from discontinued [[Image Removed]] [[Image Removed]] operations 0.05 Diluted Adjusted EPS [[Image Removed]] 0.60 [[Image Removed]] 2.24 [[Image Removed]] [[Image Removed]] [[Image Removed]] * The effective tax rate applicable to adjusted net earnings available to common shareholders is 21%. 11 -------------------------------------------------------------------------------- Table 7 Adjusted EBITDA [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Q4 2005 [[Image Removed]] Q4 2004 [[Image Removed]] FY 2005 [[Image Removed]] FY 2004 in $ millions [[Image Removed]] Successor [[Image Removed]] Successor [[Image Removed]] Successor [[Image Removed]] Combined Net earnings (loss) [[Image Removed]] 175 [[Image Removed]] (57 ) [[Image Removed]] 277 [[Image Removed]] (175 ) (Earnings) from discontinued operations [[Image Removed]] [[Image Removed]] (5 ) [[Image Removed]] (9 ) [[Image Removed]] (33 ) Interest expense [[Image Removed]] 71 [[Image Removed]] 72 [[Image Removed]] 387 [[Image Removed]] 306 Interest income [[Image Removed]] (7 ) [[Image Removed]] (9 ) [[Image Removed]] (38 ) [[Image Removed]] (29 ) Income tax provision (benefit) [[Image Removed]] (20 ) [[Image Removed]] 12 [[Image Removed]] 57 [[Image Removed]] 87 Depreciation and amortization [[Image Removed]] 86 [[Image Removed]] 34 [[Image Removed]] 286 [[Image Removed]] 251 EBITDA [[Image Removed]] 305 [[Image Removed]] 47 [[Image Removed]] 960 [[Image Removed]] 407 Adjustments: [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Equity in net earnings of affiliates in excess of [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] cash dividends received (8 ) 1 4 (11 ) Special charges/gains [[Image Removed]] (16 ) [[Image Removed]] 33 [[Image Removed]] 73 [[Image Removed]] 110 Other unusual items and adjustments(1) [[Image Removed]] (26 ) [[Image Removed]] 101 [[Image Removed]] 79 [[Image Removed]] 270 Adjusted EBITDA [[Image Removed]] 255 [[Image Removed]] 182 [[Image Removed]] 1,116 [[Image Removed]] 776 [[Image Removed]] [[Image Removed]] [[Image Removed]] (1) Other Unusual Items and Adjustments [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] in $ millions [[Image Removed]] Q4 2005 [[Image Removed]] Q4 2004 [[Image Removed]] FY 2005 [[Image Removed]] FY 2004 Net (gain) loss on disposition of assets: [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Gain on disposition of Acetate properties [[Image Removed]] (23 ) [[Image Removed]] [[Image Removed]] (23 ) [[Image Removed]] Loss on disposition of COC business [[Image Removed]] 35 [[Image Removed]] [[Image Removed]] 35 [[Image Removed]] Other [[Image Removed]] (3 ) [[Image Removed]] (1 ) [[Image Removed]] (2 ) [[Image Removed]] (2 ) Total net (gain) loss on disposition of assets [[Image Removed]] 9 [[Image Removed]] (1 ) [[Image Removed]] 10 [[Image Removed]] (2 ) Excess of minority interest (income) expense over [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] cash dividends paid to minority shareholders (4 ) 6 37 8 Severance and other restructuring charges not [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] included in special charges 2 8 6 31 Cash interest income used by captive insurance [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] subsidiaries to fund operations 2 3 9 10 Franchise taxes [[Image Removed]] 1 [[Image Removed]] 1 [[Image Removed]] 2 [[Image Removed]] 2 Unusual and non-recurring items: [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Settlement of transportation-related antitrust [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] matters (36 ) (36 ) Other* [[Image Removed]] 6 [[Image Removed]] 61 [[Image Removed]] 31 [[Image Removed]] 109 Total Unusual and non-recurring items [[Image Removed]] (30 ) [[Image Removed]] 61 [[Image Removed]] (5 ) [[Image Removed]] 109 Non-cash charges/(gains)** [[Image Removed]] (6 ) [[Image Removed]] 10 [[Image Removed]] 10 [[Image Removed]] 70 Sponsor monitoring fee [[Image Removed]] [[Image Removed]] 5 [[Image Removed]] 10 [[Image Removed]] 10 Pro forma cost savings*** [[Image Removed]] [[Image Removed]] 8 [[Image Removed]] [[Image Removed]] 32 Total Other Unusual Items and Adjustments [[Image Removed]] (26 ) [[Image Removed]] 101 [[Image Removed]] 79 [[Image Removed]] 270 [[Image Removed]] [[Image Removed]] [[Image Removed]] * Primarily includes costs related to the Celanese AG acquisition and related management compensation program (Q4 2004 and FY 2004), Vinamul acquisition (Q4 2005 and FY 2005), productivity enhancement programs (all periods presented), corporate office relocations (all periods presented), and IPO bonus (FY 2005). [[Image Removed]] [[Image Removed]] ** Primarily includes purchase accounting adjustments for inventories and currency translation effects of a net investment hedge (all periods presented). [[Image Removed]] [[Image Removed]] *** Primarily represents adjustments on a proforma basis for certain cost savings that we expected to achieve from additional pension contributions (Q4 2004 and FY 2004). 12 -------------------------------------------------------------------------------- Table 8 Breakout of Special (Charges)/Gains by Type [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] [[Image Removed]] Q4 2005 [[Image Removed]] Q4 2004 [[Image Removed]] FY 2005 [[Image Removed]] FY 2004 in $ millions [[Image Removed]] Successor [[Image Removed]] Successor [[Image Removed]] Successor [[Image Removed]] Combined Employee termination benefits [[Image Removed]] (9 ) [[Image Removed]] (1 ) [[Image Removed]] (27 ) [[Image Removed]] (10 ) Plant/office closures [[Image Removed]] (6 ) [[Image Removed]] (1 ) [[Image Removed]] (8 ) [[Image Removed]] (52 ) Restructuring adjustments [[Image Removed]] [[Image Removed]] 2 [[Image Removed]] [[Image Removed]] 3 Total restructuring [[Image Removed]] (15 ) [[Image Removed]] 0 [[Image Removed]] (35 ) [[Image Removed]] (59 ) Environmental related plant closures [[Image Removed]] [[Image Removed]] [[Image Removed]] (12 ) [[Image Removed]] Plumbing actions [[Image Removed]] 30 [[Image Removed]] [[Image Removed]] 34 [[Image Removed]] 1 Asset impairments [[Image Removed]] [[Image Removed]] (32 ) [[Image Removed]] (25 ) [[Image Removed]] (25 ) Other [[Image Removed]] 1 [[Image Removed]] (1 ) [[Image Removed]] (35 ) [[Image Removed]] (27 ) Total [[Image Removed]] 16 [[Image Removed]] (33 ) [[Image Removed]] (73 ) [[Image Removed]] (110 ) [[Image Removed]] 13 -------------------------------------------------------------------------------- Reconciliation of Non-U.S. GAAP Measures to U.S. GAAP This release reflects three performance measures, adjusted EBITDA, net debt and diluted adjusted earnings per share 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 diluted adjusted earnings per share is diluted earnings (loss) per share; for net debt is total debt; and for adjusted EBITDA is net earnings (loss). Successor Successor represents Celanese Corporation's financial position as of December 31, 2005 and December 31, 2004 and its consolidated results of operations for the three months and twelve months ended December 31, 2005. These consolidated financial statements reflect the application of purchase accounting relating to the acquisition of Celanese AG and Vinamul and preliminary purchase accounting adjustments relating to the acquisition of Acetex. Predecessor Predecessor represents Celanese AG's consolidated results of its operations for the three months ended March 31, 2004. These results relate to a period prior to the acquisition of Celanese AG and present Celanese AG's historical basis of accounting without the application of purchase accounting. The results of the Successor are not comparable to the results of the Predecessor due to the difference in the basis of presentation of purchase accounting as compared to historical cost and different accounting policies. The presentation of combined 2004 consolidated statements of operations of the predecessor and successor results in a non-GAAP measure as the predecessor and successor's consolidated financial statements are based on two different methods of accounting and as the successor's consolidated financial statements include the effects of purchase accounting. Use of Non-U.S. GAAP Financial Information Adjusted EBITDA, a measure used by management to measure performance, is defined as earnings (loss) from continuing operations, plus interest expense net of interest income, income taxes and depreciation and amortization, and further adjusted for certain cash and non-cash charges. Our management believes adjusted 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. Adjusted EBITDA is not a recognized term under U.S. GAAP and does not purport to be an alternative to net earnings 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 adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Additionally, adjusted EBITDA is not intended to be a measure of free cash flow for managements 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. Diluted adjusted net earnings per share is a measure used by management to measure performance. It is defined as income available to common shareholders plus preferred dividends, adjusted for special and one-time expenses and divided by the number of basic common shares, diluted preferred shares, and options valued using the treasury method as of December 31, 2005. 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. Net debt is defined as total debt less cash and cash equivalents. Our management uses net debt to evaluate the Company's capital structure. Results Unaudited The results presented in this release, together with the adjustments made to present the results on a comparable basis, have not been audited and are based on internal financial data furnished to management. Quarterly results should not be taken as an indication of the results of operations to be reported for any subsequent period or for the full fiscal year. 14 -------------------------------------------------------------------------------- EX-99.2 6 file003.htm SLIDE PRESENTATION [[Image Removed]] Exhibit 99.2 Dave Weidman, President and CEO John J. Gallagher III, Executive Vice President and CFO Celanese 4Q 2005 Earnings Conference Call / Webcast Thursday, February 16, 2006 10 a.m. CT 1 [[Image Removed]] This release reflects three performance measures, net debt, adjusted EBITDA, and diluted adjusted earnings per share 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 net debt is total debt; for adjusted EBITDA is net earnings (loss); for diluted adjusted earnings per share is net earnings (loss); and, for adjusted basic earnings per share is income available to common shareholders. For a reconciliation of these non-U.S. GAAP measures to U.S. GAAP figures, see the accompanying schedules to this release. Forward Looking Statements, Reconciliation and Use of Non-GAAP Measures to U.S. GAAP Adjusted EBITDA, a measure used by management to measure performance, is defined as earnings (loss) from continuing operations, plus interest expense net of interest income, income taxes and depreciation and amortization, and further adjusted for certain cash and non-cash charges. Our management believes adjusted 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. Adjusted EBITDA is not a recognized term under U.S. GAAP and does not purport to be an alternative to net earnings 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 adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Additionally, adjusted 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. Net debt is defined as total debt less cash and cash equivalents. Our management uses net debt to evaluate the Company's capital structure. Diluted adjusted net earnings per share is defined as income available to common shareholders plus preferred dividends, adjusted for special and one-time expenses and divided by the number of basic common shares, diluted preferred shares, and options valued using the treasury method as of December 31, 2005. We believe that the presentation of all of the non-U.S. GAAP information 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. 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 presentation, 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 presentation. 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. For a discussion of some of the factors, we recommend that you review the Company’s Annual Report on Form 10-K at the SEC’s website at www.sec.gov. 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. 2 [[Image Removed]] Dave Weidman President and Chief Executive Officer 3 [[Image Removed]] Expansion of operating profit despite high raw material and energy costs Higher pricing on strong demand and high capacity utilization in Chemical Products Includes $25 - $30 million in depreciation and amortization higher than previous guidance Net Sales Operating Profit Diluted Adjusted EPS – at 21% tax rate Dividends from Equity & Cost Investments Adjusted EBITDA $1,551 up 19% $160 up 596% $0.60 $40 up 264% $255 up 40% 4th Qtr 2005 (in $ millions) Strong Underlying Business Results 4 [[Image Removed]] Recent Business Developments Sold omega-3 DHA and COC businesses as well as our common shares in the PEMEAS GmbH fuel cell venture Announced expansion of Nanjing (China) site to include world-scale VAM and emulsions plants Announced plans to implement next generation VAM technology, VAntage PlusTM Temporarily suspended discussions with Tasnee Petrochemicals regarding the Saudi Arabian acetyls project Lowered borrowing costs on senior credit facility by reducing margin over LIBOR from 2.25% to 2.00% Received ratings upgrade from Standard & Poor’s on our long-term corporate credit rating 5 [[Image Removed]] 2006 Business Outlook Planned margin compression continues Moving toward specialty-chemical performance Performanc e Products Improving earnings with progress on restructuring Resumption of dividends from affiliates On path to targeted profitability levels Acetate Products Increasing penetration in key customer segments Flat global automotive demand Positive impact of COC sale Ticona Favorable industry dynamics Continued strong global demand Chemical Products 2006 Adjusted EPS Guidance $2.50 to $2.90 Includes $60 - $70 million higher D&A 6 [[Image Removed]] John J. Gallagher III Executive Vice President and Chief Financial Officer 7 [[Image Removed]] Financial Highlights in $ millions (except per share data) 4th Qtr 2005 FY 2005 Net Sales 1,551 6,070 SG&A (124) (562) Operating Profit 160 561 Net Earnings (Loss) 175 277 Diluted EPS 1.02 1.67 Special Items Special Charges 16 (73) Other Adjustments 28 (86) Diluted Adjusted EPS* $0.60 2.24** Adjusted EBITDA 255 1,116 * Based on diluted shares of 171.5 million as of Dec. 31, 2005, and a 21% effective tax rate ** Including discontinued operations 8 [[Image Removed]] Chemical Products Fourth Quarter: Earnings increase on continued high capacity utilization Pricing and productivity more than offset higher raw material costs in basic businesses; margin compression in downstream businesses Increased dividends from our Saudi cost investment - IBN Sina Lower volume in acetyl derivative products due to focus on margin optimization Net Sales Segment Earnings(1) $1,107 up 20% $179 up 37% 4th Qtr 2005 (in $ millions) (1) –Earnings (Loss) from continuing operations before tax and minority interests Strong integrated chain of acetyl products $4,336 up 28% $655 up 99% FY 2005 9 [[Image Removed]] Ticona Fourth Quarter: Increased penetration in key customer segments Operating margins expanded on increased sales and reduced spending Sold non-core COC business Net Sales Segment Earnings(1) $213 up 5% $9 up from ($29) (in $ millions) (1) –Earnings (Loss) from continuing operations before tax and minority interests Focus on increased growth through innovation 4th Qtr 2005 $887 up 3% $116 up 62% FY 2005 10 [[Image Removed]] Acetate Filament moved to discontinued operations China venture tow expansion complete, moving forward on flake expansion Dividends from China affiliate expected to resume in 2006 Acetate/Performance Products Net Sales Segment Earnings(1) $160 up 10% $44 up 238% (in $ millions) (1) –Earnings (Loss) from continuing operations before tax and minority interests Performance Products Stable earnings on strong sweetener demand Pricing declines consistent with strategy on sales to large-volume customers Attractive, cash generating businesses Net Sales Segment Earnings(1) $40 up 3% $10 up 233% (in $ millions) 4th Qtr 2005 4th Qtr 2005 $659 up 12% $71 up from ($9) FY 2005 $180 up 3% $46 up 77% FY 2005 11 [[Image Removed]] Equity and Cost Investments Play Key Role in Strategy Significant Contribution from Equity and Cost Investments Income Statement Cash Flow Other Distributions - Equity Investments Dividends - Cost Investments Dividends - Equity Investments 2004 Full year dividends = $77 million 2005 Full year dividends = $154 million 12 [[Image Removed]] Capitalization Cash Senior Credit Term Loan Senior Credit Revolver Floating Rate Term Loan Total Senior Debt Senior Sub Notes ($) Senior Sub Notes (€*) Other Debt Total Cash Pay Debt Discount Notes Series A Discount Notes Series B Total Debt Shareholders' Equity Total Capitalization Net Debt(Total Debt Less Cash) 838 624 - 350 974 1,231 272 383 2,860 103 424 3,387 (112) 3,275 2,549 December 31, 2004 (in $ millions) 390 1,708 - - 1,708 800 153 397 3,058 73 306 3,437 219 3,656 3,047 December 31, 2005 * Translated at 1.1797 - effective date December 31, 2005 13 [[Image Removed]] 2006 Guidance Adjusted EPS: $2.50 to $2.90 Depreciation/Amortization $300 - $330 million Cash Interest Expense $230 - $250 million Effective Tax Rate 18% - 22% Capital Expenditures $200 - $250 million CE Equity 158.5 million shares common stock outstanding 11 million stock option grants 12 million shares convertible preferred Preferred dividends of approx. $10 million on 9.6 million shares outstanding 14