DELAWARE | 001-32410 | 98-0420726 | ||
(State or other jurisdiction | (Commission File | (IRS Employer | ||
of incorporation) | Number) | Identification No.) |
Exhibit Number
Description
Press Release dated July 29, 2010*
Slide Show Presentation dated July 29, 2010*
*
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.
CELANESE CORPORATION
By
/s/ James R. Peacock III
Name:
James R. Peacock III
Title:
Vice President, Deputy General Counsel and
Assistant Corporate Secretary
Exhibit Number
Description
Press Release dated July 29, 2010*
Slide Show Presentation dated July 29, 2010*
*
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.
Corporate News Release
|
Celanese Corporation
Investor Relations 1601 West LBJ Freeway Dallas, Texas 75234 |
| Net sales were $1,517 million, up 22% from prior year period | ||
| Operating profit was $156 million versus $89 million in prior year period | ||
| Net earnings were $160 million versus $109 million in prior year period | ||
| Operating EBITDA was $332 million versus $248 million in prior year period | ||
| Diluted EPS from continuing operations was $1.03 versus $0.70 in prior year period | ||
| Adjusted EPS was $1.12 versus $0.56 in prior year period |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(in $ millions, except per share data) Unaudited | 2010 | 2009 | 2010 | 2009 | ||||||||||||
As adjusted | As adjusted | |||||||||||||||
Net sales
|
1,517 | 1,244 | 2,905 | 2,390 | ||||||||||||
Operating profit (loss)
|
156 | 89 | 142 | 116 | ||||||||||||
Net earnings (loss) attributable to Celanese Corporation
|
160 | 109 | 174 | 94 | ||||||||||||
Operating EBITDA
1
|
332 | 248 | 574 | 389 | ||||||||||||
Diluted EPS continuing operations
|
$ | 1.03 | $ | 0.70 | $ | 1.11 | $ | 0.60 | ||||||||
Diluted EPS total
|
$ | 1.01 | $ | 0.69 | $ | 1.10 | $ | 0.60 | ||||||||
Adjusted EPS
2
|
$ | 1.12 | $ | 0.56 | $ | 1.76 | $ | 0.67 | ||||||||
1 | Non-U.S. GAAP measure. See reconciliation in Table 1. | |
2 | Non-U.S. GAAP measure. See reconciliation in Table 6. |
Page 2 of 15
| Concluded the formal consultation process with employees and their representatives and is continuing to consider a plan to close its acetate flake and tow manufacturing operations in Spondon, Derby, United Kingdom in the latter part of 2011. | ||
| Acquired two product lines, Zenite® liquid crystal polymer (LCP) and Thermx® polycyclohexylene-dimethylene terephthalate (PCT), from DuPont Performance Polymers. | ||
| Announced five-year Environmental Health and Safety sustainability goals for occupational safety performance, energy intensity, greenhouse gases and waste management for the year 2015. | ||
| Received American Chemistry Councils (ACC) 2010 Responsible Care Initiative of the Year Award. This award recognizes companies that demonstrate leadership in the areas of employee health and safety, security or environmental protection in the chemical industry. |
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Media U.S.
Media Europe
Jacqueline Terry
Jens Kurth
Phone: +1 972 443 4417
Phone: +49 (0)6107 772 1574
Telefax: +1 972 443 8519
Telefax: +49 (0)6107 772 7231
Jacqueline.Terry@celanese.com
J.Kurth@celanese.com
Page 7 of 15
| Operating EBITDA, a measure used by management to measure performance, is defined by the company as operating profit from continuing operations, plus equity in net earnings from affiliates, cost dividend income, other income and depreciation and amortization, and further adjusted for other charges and adjustments. We may provide guidance on operating EBITDA and are unable to reconcile forecasted operating EBITDA to a U.S. GAAP financial measure because a forecast of Other Charges and Adjustments is not practical. Our management believes operating EBITDA is useful to investors because it is one of the primary measures our management uses for its planning and budgeting processes and to monitor and evaluate financial and operating results. | ||
| Business operating EBITDA, a measure used by management to measure performance of its internal operations, is defined by the company as operating profit from continuing operations, plus depreciation and amortization, and further adjusted for other charges and adjustments. This reflects the operating results of the companys operations without regard to its equity and cost investments. The company believes that investors should consider business operating EBITDA when evaluating the companys internal operations. | ||
| Proportional affiliate EBITDA, a measure used by management to measure performance of its equity investments, is defined by the company as the proportional operating profit plus the proportional depreciation and amortization of its equity investments. The company has determined that it does not have sufficient ownership for operating control of these investments to consider their results on a consolidated basis. The company believes that investors should consider proportional affiliate EBITDA as an additional measure of operating results. | ||
| Adjusted earnings per share is a measure used by management to measure performance. It is defined by the company as net earnings (loss) available to common shareholders plus preferred dividends, adjusted for other charges and adjustments, and divided by the number of basic common shares, diluted preferred shares, and options valued using the treasury method. We may provide guidance on an adjusted earnings per share basis and are unable to reconcile forecasted adjusted earnings per share to a U.S. GAAP financial measure without unreasonable effort because a forecast of Other Items is not practical. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations, and that when U.S. GAAP information is viewed in conjunction with non-U.S. GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. Note: The tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year, excluding changes in uncertain tax positions, discrete items and other material items adjusted out of our U.S. GAAP earnings for adjusted earnings per share purposes, and changes in managements assessments regarding the ability to realize deferred tax assets. We analyze this rate quarterly and adjust if there is a material change in the range of forecasted tax rates; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate is an estimate and may differ significantly from the tax rate used for U.S. GAAP reporting in any given reporting period. It is not practical to reconcile our prospective adjusted tax rate to the actual U.S. GAAP tax rate in any future period. | ||
| Net debt is defined by the company as total debt less cash and cash equivalents. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the companys capital structure. Our management and credit analysts use net debt to evaluate the companys capital structure and assess credit quality. Proportional net debt is defined as our proportionate share of our affiliates net debt. | ||
| Adjusted free cash flow is defined by the company as cash flow from operations less capital expenditures, other productive asset purchases, operating cash from discontinued operations and certain other charges and adjustments. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the companys cash flow. Our management and credit analysts use adjusted free cash flow to evaluate the companys liquidity and assess credit quality. |
Page 8 of 15
Three Months Ended
Six Months Ended
June 30,
June 30,
(in $ millions, except per share data)
2010
2009
2010
2009
As adjusted
As adjusted
1,517
1,244
2,905
2,390
(1,214
)
(996
)
(2,384
)
(1,942
)
303
248
521
448
(123
)
(114
)
(246
)
(228
)
(15
)
(21
)
(30
)
(38
)
(18
)
(18
)
(37
)
(38
)
(6
)
(6
)
(83
)
(27
)
1
2
3
15
(1
)
15
(4
)
156
89
142
116
45
35
94
41
(49
)
(54
)
(98
)
(105
)
1
2
2
5
72
53
72
56
(1
)
2
5
3
224
127
217
116
(61
)
(17
)
(41
)
(22
)
163
110
176
94
(5
)
(1
)
(5
)
2
2
1
(3
)
(1
)
(2
)
160
109
174
94
160
109
174
94
(2
)
(3
)
(5
)
160
107
171
89
$
1.04
$
0.75
$
1.13
$
0.62
(0.02
)
(0.01
)
(0.01
)
$
1.02
$
0.74
$
1.12
$
0.62
$
1.03
$
0.70
$
1.11
$
0.60
(0.02
)
(0.01
)
(0.01
)
$
1.01
$
0.69
$
1.10
$
0.60
156.3
143.5
153.3
143.5
158.4
157.1
158.7
156.4
Page 9 of 15
Page 10 of 15
Three Months Ended
Six Months Ended
June 30,
June 30,
(in $ millions)
2010
2009
2010
2009
As adjusted
As adjusted
282
184
564
349
291
280
529
546
269
267
511
509
782
622
1,506
1,194
1
1
1
1
(108
)
(110
)
(206
)
(209
)
1,517
1,244
2,905
2,390
40
1
88
(17
)
64
66
34
132
16
19
28
29
68
39
68
50
(32
)
(36
)
(76
)
(78
)
156
89
142
116
2
(14
)
(4
)
3
3
83
3
5
8
2
4
54
9
(10
)
(1
)
(5
)
14
(3
)
(3
)
132
30
17
19
34
36
9
12
20
24
10
11
20
24
24
28
49
55
3
2
6
4
63
72
129
143
59
6
122
15
76
81
137
159
26
35
48
61
94
71
171
114
(39
)
(35
)
(75
)
(60
)
216
158
403
289
39
30
83
30
73
53
73
56
2
2
3
3
2
5
12
11
116
90
171
100
98
36
205
45
149
134
210
215
26
35
48
61
96
73
174
117
(37
)
(30
)
(63
)
(49
)
332
248
574
389
1 | Other Activities primarily includes corporate selling, general and administrative expenses and the results from captive insurance companies. | |
2 | See Table 7 for details. |
Page 11 of 15
Volume
Price
Currency
Other
1
Total
52
%
2
%
-5
%
4
%2
53
%
6
%
-1
%
-1
%
0
%
4
%
13
%
9
%
-3
%
-18
%3
1
%
14
%
15
%
-3
%
0
%
26
%
19
%
9
%
-3
%
-3
%
22
%
Volume | Price | Currency | Other 1 | Total | ||||||||||||||||
Advanced Engineered Materials
|
61 | % | -4 | % | 0 | % | 5 | %2 | 62 | % | ||||||||||
Consumer Specialties
|
-3 | % | 0 | % | 0 | % | 0 | % | -3 | % | ||||||||||
Industrial Specialties
|
14 | % | 3 | % | 0 | % | -17 | %3 | 0 | % | ||||||||||
Acetyl Intermediates
|
14 | % | 12 | % | 0 | % | 0 | % | 26 | % | ||||||||||
Total Company
|
19 | % | 6 | % | 0 | % | -3 | % | 22 | % | ||||||||||
1 | Includes the effects of the captive insurance companies and the impact of fluctuations in intersegment eliminations. | |
2 | 2010 includes the effects of the FACT GmbH (Future Advanced Composites Technology) acquisition. | |
3 | 2010 does not include the effects of the PVOH business, which was sold on July 1, 2009. |
Six Months Ended | ||||||||
June 30, | ||||||||
(in $ millions) | 2010 | 2009 | ||||||
Net cash provided by operating activities
|
219 | 299 | ||||||
Net cash provided by (used in) investing activities
1
|
(275 | ) | 183 | |||||
Net cash used in financing activities
|
(78 | ) | (59 | ) | ||||
Exchange rate effects on cash
|
(39 | ) | 46 | |||||
Cash and cash equivalents at beginning of period
|
1,254 | 676 | ||||||
Cash and cash equivalents at end of period
|
1,081 | 1,145 | ||||||
1 | 2010 includes $0 million of cash received and $151 million of capital expenditures related to the Ticona Kelsterbach plant relocation. 2009 includes $412 million of cash received and $147 million of capital expenditures related to the Ticona Kelsterbach plant relocation. |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(in $ millions) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
As adjusted | As adjusted | |||||||||||||||
Dividends from equity investments
|
35 | 14 | 92 | 35 | ||||||||||||
Dividends from cost investments
|
72 | 53 | 72 | 56 | ||||||||||||
Total
|
107 | 67 | 164 | 91 | ||||||||||||
Page 12 of 15
June 30, | December 31, | |||||||
(in $ millions) | 2010 | 2009 | ||||||
Short-term borrowings and current
installments of long-term debt third party and affiliates
|
265 | 242 | ||||||
Long-term debt
|
3,162 | 3,259 | ||||||
Total debt
|
3,427 | 3,501 | ||||||
Less: Cash and cash equivalents
|
1,081 | 1,254 | ||||||
Net Debt
|
2,346 | 2,247 | ||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||||||||
(in $ millions, except per share data) | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||||||
As adjusted | As adjusted | |||||||||||||||||||||||||||||||
per | per | per | per | |||||||||||||||||||||||||||||
share | share | share | share | |||||||||||||||||||||||||||||
Earnings (loss) from continuing operations
|
163 | 1.03 | 110 | 0.70 | 176 | 1.11 | 94 | 0.60 | ||||||||||||||||||||||||
Deduct Income tax (provision) benefit
|
(61 | ) | (17 | ) | (41 | ) | (22 | ) | ||||||||||||||||||||||||
Earnings (loss) from continuing operations
before tax
|
224 | 127 | 217 | 116 | ||||||||||||||||||||||||||||
Other charges and other adjustments
1
|
(3 | ) | (3 | ) | 132 | 30 | ||||||||||||||||||||||||||
Adjusted earnings (loss) from continuing
operations before tax
|
221 | 124 | 349 | 146 | ||||||||||||||||||||||||||||
Income tax (provision) benefit on adjusted earnings
2
|
(44 | ) | (36 | ) | (70 | ) | (42 | ) | ||||||||||||||||||||||||
Less: Noncontrolling interests
|
| | | | ||||||||||||||||||||||||||||
Adjusted earnings (loss) from continuing
operations
|
177 | 1.12 | 88 | 0.56 | 279 | 1.76 | 104 | 0.67 | ||||||||||||||||||||||||
Diluted shares (in millions) 3 | ||||||||||||||||||||||||||||||||
Weighted average shares outstanding
|
156.3 | 143.5 | 153.3 | 143.5 | ||||||||||||||||||||||||||||
Assumed conversion of preferred stock
|
| 12.1 | 3.1 | 12.1 | ||||||||||||||||||||||||||||
Dilutive restricted stock units
|
0.3 | 0.5 | 0.4 | 0.3 | ||||||||||||||||||||||||||||
Dilutive stock options
|
1.8 | 1.0 | 1.9 | 0.5 | ||||||||||||||||||||||||||||
Total diluted shares
|
158.4 | 157.1 | 158.7 | 156.4 | ||||||||||||||||||||||||||||
1 | See Table 7 for details. | |
2 | The adjusted effective tax rate is 20% and 29% for the three and six months ended June 30, 2010 and 2009, respectively. | |
3 | Potentially dilutive shares are included in the adjusted earnings per share calculation when adjusted earnings are positive. |
Page 13 of 15
Three Months Ended
Six Months Ended
June 30,
June 30,
(in $ millions)
2010
2009
2010
2009
4
5
9
29
6
4
3
10
6
(6
)
(2
)
(2
)
(14
)
(3
)
72
1
6
6
83
27
Three Months Ended
Six Months Ended
Income
June 30,
June 30,
Statement
(in $ millions)
2010
2009
2010
2009
Classification
3
1
7
3
SG&A
(2
)
1
(2
)
2
Cost of sales
4
9
8
Cost of sales / SG&A
22
Cost of sales
(14
)
(14
)
(Gain) loss on disposition
17
Cost of sales
4
(15
)
10
(10
)
Various
(9
)
(9
)
49
3
(3
)
(3
)
132
30
1 | These items are included in net earnings but not included in other charges. | |
2 | The three and six months ended June 30, 2009 includes a one-time adjustment to Equity in net earnings (loss) of affiliates of $19 million. |
Page 14 of 15
Three Months Ended
Six Months Ended
(in $ millions)
June 30,
June 30,
2010
2009
2010
2009
As adjusted
As adjusted
379
267
750
439
245
110
502
245
488
487
1,018
997
1,112
864
2,270
1,681
63
9
128
(10
)
118
35
232
77
27
26
47
51
208
70
407
118
20
19
41
46
10
8
16
12
24
24
50
47
54
51
107
105
83
28
169
36
128
43
248
89
51
50
97
98
262
121
514
223
31
7
75
(9
)
104
31
208
68
20
16
35
35
155
54
318
94
94
245
94
245
(89
)
(50
)
(89
)
(50
)
200
482
200
482
205
677
205
677
1 | Ticona Affiliates Asia accounted for using the equity method includes Polyplastics (45%), Korean Engineering Plastics (50%), Fortron Industries (50%), Una SA (50%). | |
2 | Ticona Affiliates Middle East accounted for using the equity method includes National Methanol Company (IBN Sina) (25%). | |
3 | Infraserv Affiliates accounted for using the equity method includes Infraserv Hoechst (32%), Infraserv Gendorf (39%) and Infraserv Knapsack (27%). | |
4 | Affiliate EBITDA, a non-U.S. GAAP measure, is the sum of Operating Profit and Depreciation and Amortization. |
Page 15 of 15
Three Months Ended
Six Months Ended
(in $ millions)
June 30,
June 30,
2010
2009
2010
2009
As adjusted
As adjusted
176
123
347
203
61
28
126
61
160
155
334
318
397
306
807
582
29
4
59
(4
)
30
9
58
19
8
8
15
16
67
21
132
31
9
9
19
21
2
2
4
3
8
8
16
15
19
19
39
39
38
13
78
17
32
11
62
22
16
16
31
31
86
40
171
70
15
4
36
(4
)
24
8
47
16
6
4
11
10
45
16
94
22
23
9
42
21
8
3
15
6
10
12
20
21
41
24
77
48
43
111
43
111
(22
)
(13
)
(22
)
(13
)
66
152
66
152
87
250
87
250
1 | Ticona Affiliates Asia accounted for using the equity method includes Polyplastics (45%), Korean Engineering Plastics (50%), Fortron Industries (50%), Una SA (50%). | |
2 | Ticona Affiliates Middle East accounted for using the equity method includes National Methanol Company (IBN Sina) (25%). | |
3 | Infraserv Affiliates accounted for using the equity method includes Infraserv Hoechst (32%), Infraserv Gendorf (39%) and Infraserv Knapsack (27%). | |
4 | Affiliate EBITDA, a non-U.S. GAAP measure, is the sum of Operating Profit and Depreciation and Amortization. | |
5 | Calculated by multiplying each affiliates total share amount by Celaneses respective ownership percentage, netted by reporting category. | |
6 | Calculated as Affiliate EBITDA less Equity in net earnings of affiliates; not included in Celanese operating EBITDA. | |
7 | The three and six months ended June 30, 2009 excludes a one-time tax adjustment to Equity in net earnings of affiliates of $19 million. |
Dave Weidman, Chairman and CEO Steven Sterin, Senior Vice President and CFO Celanese 2Q 2010 Earnings Conference Call / Webcast Thursday, July 29, 2010 10:00 a.m. ET |
Forward Looking Statements Reconciliation and Use of Non-GAAP Measures to U.S. GAAP 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 results expressed or implied in the forward-looking statements contained in this release. These risks and uncertainties include, among other things: changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate; the length and depth of business cycles, particularly in the automotive, electrical, electronics and construction industries; changes in the price and availability of raw materials; the ability to pass increases in raw material prices on to customers or otherwise improve margins through price increases; the ability to maintain plant utilization rates and to implement planned capacity additions and expansions; the ability to improve productivity by implementing technological improvements to existing plants; increased price competition and the introduction of competing products by other companies; changes in the degree of intellectual property and other legal protection afforded to our products; compliance costs and potential disruption of production due to accidents or other unforeseen events or delays in construction of facilities; potential liability for remedial actions and increased costs under existing or future environmental regulations, including those relates to climate change; potential liability resulting from pending or future litigation, or from changes in the laws, regulations or policies of governments or other governmental activities in the countries in which we operate; changes in currency exchange rates and interest rates; and various other factors discussed from time to time in the 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 the following performance measures: operating EBITDA, business operating EBITDA, proportional affiliate EBITDA, adjusted earnings per share, net debt and adjusted free cash flow, as non-U.S. GAAP measures. These measurements are not recognized in accordance with U.S. GAAP and should not be viewed as an alternative to U.S. GAAP measures of performance. The most directly comparable financial measure presented in accordance with U.S. GAAP in our consolidated financial statements for operating EBITDA and business EBITDA is operating profit; for proportional affiliate EBITDA is equity in net earnings of affiliates; for adjusted earnings per share is earnings per common share-diluted; for net debt is total debt; and for adjusted free cash flow is cash flow from operations. Use of Non-U.S. GAAP Financial Information Operating EBITDA, a measure used by management to measure performance, is defined by the company as operating profit from continuing operations, plus equity in net earnings from affiliates, cost dividend income, other income and depreciation and amortization, and further adjusted for other charges and adjustments. We may provide guidance on operating EBITDA and are unable to reconcile forecasted operating EBITDA to a U.S. GAAP financial measure because a forecast of Other Charges and Adjustments is not practical. Our management believes operating EBITDA is useful to investors because it is one of the primary measures our management uses for its planning and budgeting processes and to monitor and evaluate financial and operating results. Business operating EBITDA, a measure used by management to measure performance of its internal operations, is defined by the company as operating profit from continuing operations, plus depreciation and amortization, and further adjusted for other charges and adjustments. This reflects the operating results of the company's operations without regard to its equity and cost investments. The company believes that investors should consider business operating EBITDA when evaluating the company's internal operations. Proportional affiliate EBITDA, a measure used by management to measure performance of its equity investments, is defined by the company as the proportional operating profit plus the proportional depreciation and amortization of its equity investments. The company has determined that it does not have sufficient ownership for operating control of these investments to consider their results on a consolidated basis. The company believes that investors should consider proportional affiliate EBITDA as an additional measure of operating results. Adjusted earnings per share is a measure used by management to measure performance. It is defined by the company as net earnings (loss) available to common shareholders plus preferred dividends, adjusted for other charges and adjustments, and divided by the number of basic common shares, diluted preferred shares, and options valued using the treasury method. We may provide guidance on an adjusted earnings per share basis and are unable to reconcile forecasted adjusted earnings per share to a U.S. GAAP financial measure without unreasonable effort because a forecast of Other Items is not practical. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations, and that when U.S. GAAP information is viewed in conjunction with non-U.S. GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. Note: The tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year, excluding changes in uncertain tax positions, discrete items and other material items adjusted out of our U.S. GAAP earnings for adjusted earnings per share purposes, and changes in 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 by the company as total debt less cash and cash equivalents. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the company's capital structure. Our management and credit analysts use net debt to evaluate the company's capital structure and assess credit quality. Proportional net debt is defined as our proportionate share of our affiliates' net debt. Adjusted free cash flow is defined by the company as cash flow from operations less capital expenditures, other productive asset purchases, operating cash from discontinued operations and certain other charges and adjustments. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the company's cash flow. Our management and credit analysts use adjusted free cash flow to evaluate the company's liquidity and assess credit quality. 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. |
Dave Weidman Chairman and Chief Executive Officer |
Celanese Corporation 2Q 2010 highlights in millions (except EPS) 2nd Qtr 2010 2nd Qtr 2009 Net Sales $1,517 $1,244 Proportional Net Sales from Affiliates $397 $306 Total: $1,914 $1,550 Operating Profit/(Loss) $156 $89 Adjusted EPS $1.12 $0.56 Operating EBITDA $332 $248 Affiliate EBITDA in excess of Equity in net earnings of affiliates* $41 $24 Total: $373 $272 Second Quarter 2010: Strong results driven by technology and specialty materials businesses Global demand significantly higher than prior year and continued to improve modestly from first quarter 2010 * See slide 23 for equity affiliate preliminary results and Celanese proportional share |
Steven Sterin Senior Vice President and CFO |
Ibn Sina venture provides strategic value to Advanced Engineered Materials Venture extended until 2032 provides ongoing earnings POM manufacturing utilizes advantaged raw materials to support growing customer demand Increased economic participation yields higher earnings beyond 2013 Provides structural & strategic hedge for methanol and energy costs Builds on 30-year relationship to bring increasing value in the future Provides additional low cost manufacturing capacity to support fast/growing product demand Accounting shift from cost method to equity method beginning 2Q 2010 Moves from Acetyl Intermediates to Advanced Engineered Materials for segment reporting Value in Ibn Sina Venture |
AEM Business EBITDA Margin* Value of Ibn Sina Affiliate The proposed POM facility leverages economically advantaged raw materials Ibn Sina is a structural hedge against raw material volatility AEM margins including benefit of Ibn Sina * See Slide 24 for reconciliation of Non-U.S. GAAP Measure. AEM Business EBITDA margin with Ibn Sina AEM Business EBITDA margin without Ibn Sina |
Second Quarter 2010: Strong volume and earnings performance as demand increased across all end-use segments - led by automotive and electronics Specialty polymers business model results in high rate of conversion of revenue to earnings Robust innovation pipeline drives growth in new products and applications Advanced Engineered Materials Outlook: Continued strength in earnings and margins in Q3 with only modest earnings seasonality Continued year-over-year growth in equity affiliate earnings in millions 2nd Qtr 2010 2nd Qtr 2009 Net Sales $282 $184 Operating EBITDA $98 $36 Ibn Sina Equity Earnings $24 $8 |
Second Quarter 2010: Increased volumes from recovery of lost production related to outage in 1Q 2010 Strong performance with earnings growth in strategic China ventures Consumer Specialties Outlook: Stable earnings and margins throughout second half of 2010 Demand levels expected to be sustained in millions 2nd Qtr 2010 2nd Qtr 2009 Net Sales $291 $280 Operating EBITDA $149 $134 |
Second Quarter 2010: Increased volumes from improved global demand and pricing partially offset by significantly higher raw material costs Emulsions business in Asia at full utilization ahead of capacity expansion in mid-2011 Innovation helps drive volume and earnings growth in EVA and Emulsions Industrial Specialties Outlook: Sequential margin improvement expected with pricing actions and sustained demand Innovation pipeline continues to drive revenue growth in millions 2nd Qtr 2010 2nd Qtr 2009 Net Sales* $269 $219 Operating EBITDA* $26 $21 * 2Q 2009 financials excludes PVOH business, which was divested in July 2009. 2Q 2009 PVOH sales were $48 million and Operating EBITDA was $14 million |
Acetyl Intermediates Second Quarter 2010: Improved global demand and advantaged acetyl technology drive solid results Demand and raw material driven pricing offset higher raw material and energy costs Sustainable productivity improvements positively impact margins Outlook: Continued modest global economic growth and benefits from Nanjing expansion result in year-over-year volume gain Advantaged technology drives stable acetic acid margins in millions 2nd Qtr 2010 2nd Qtr 2009 Net Sales $782 $622 Operating EBITDA $96 $73 |
Second Quarter 2010: Earnings and dividend impact Higher equity earnings driven by improved global demand for specialty engineered polymers, methanol and MTBE Higher dividends from China acetate ventures reflect continued growth and improved financial performance in emerging regions Income Statement Affiliate Performance Cash Flows 0 50 100 150 2Q 2010 2Q 2009 $ millions Earnings - Equity Investments Dividends - Cost Investments 0 50 100 150 2Q 2010 2Q 2009 $ millions Dividends - Equity Investments Dividends - Cost Investments |
2010E Cash Flow Expectation off EBITDA Base 2010E Cash Flow Expectation off EBITDA Base Cash Taxes $100 - $120 Capital Expenditures $240 - $260 Reserve/Other $120 - $150 Net Interest $180 - $190 Pension $30 - $40 Working Capital $80 - $100 Adjusted Free Cash Outflows* $750 - $860 Dividends/Debt Service $75 - $100 Repurchased $20 million of common shares during 2Q 2010 $46 million cash used for strategic acquisition in 2Q 2010 Modest cash outflow for working capital consistent with increased sales Expect to continue to generate positive free cash flow Ticona Kelsterbach relocation: Approximately $160 million expected outflow for the remainder of 2010 Approximately $315 million expected outflow for full year 2010; $150 million is pre-funded by Fraport and reflected in cash balance at 12/31/09 Strong cash generation continues throughout economic cycle Available Cash Available Cash Cash (as of 6/30/2010) $1,081 Operating Cash ~($100 - $200) Cash Available for Strategic Purposes ~$900 $ in millions $ in millions * Excludes Kelsterbach relocation cash flows |
Appendix Notes: 1. References on the following slides to tables correspond to the tables included with Celanese press release dated July 29, 2010. 2. Table 7 references to slide 20 |
Free Cash Flow 2Q 2010 Adjusted Free Cash Flow Adjusted Free Cash Flow Adjusted Free Cash Flow $ in millions 2Q 2010 2Q 2009 Net cash provided by operating activities $164 $99 Adjustments to operating cash for discontinued operations ($3) - Net cash provided by operating activities from continuing operations $161 $99 Less: Capital expenditures ($34) ($40) Add: Other charges and adjustments1 ($4) $74 Adjusted Free Cash Flow $122 $133 1Amounts primarily associated with certain other charges and adjustments and the cash outflows for purchases of other productive assets that are classified as 'investing activities' for U.S. GAAP purposes. 2Q 2009 free cash flow included $75 million VAT related to Fraport relocation project. Factors contributing to cash generation during 2010: Strong cash generation reflecting technology and specialty material businesses Sustained improvements in fixed cost structure |
Ibn Sina Accounting Change 2006 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 YTD 2008 IBN Sina cost dividends as reported (53) (78) (27) (29) (34) (29) (119) IBN Sina equity earnings as adjusted 76 68 30 28 32 28 118 Income Statement Impact 23 (10) 3 (1) (2) (1) (1) Segment Reporting Changes AEM Operating EBITDA (as reported) 260 252 60 68 45 (3) 170 SGA and Non Op adjustment 2 3 1 1 1 - 3 IBN Sina equity earnings as adjusted 76 68 30 28 32 28 118 AEM Operating EBITDA (as adjusted) 338 323 91 96 78 26 291 AI Operating EBITDA (as reported) 672 731 246 227 182 21 676 SGA and Non Op adjustment (2) (3) (1) (1) (1) - (3) IBN Sina cost dividends as reported (53) (78) (27) (29) (34) (29) (119) AI Operating EBITDA (as adjusted) 617 650 218 198 147 (9) 554 Q1 2009 Q2 2009 Q3 2009 Q4 2009 YTD 2009 Q1 2010 Q2 2010 YTD 2010 IBN Sina cost dividends as reported (3) (3) (18) (17) (41) (27) (24) (51) IBN Sina equity earnings as adjusted 8 8 17 18 51 23 24 47 Income Statement Impact 5 5 (1) 1 10 (4) - (4) Segment Reporting Changes AEM Operating EBITDA (as reported) SGA and Non Op adjustment - 28 56 50 134 82 82 IBN Sina equity earnings as adjusted 1 - 1- 2- 2 AEM Operating EBITDA (as adjusted) 8 8 17 18 51 23 24 47 9 36 73 68 186 107 24 131 AI Operating EBITDA (as reported) SGA and Non Op adjustment 48 76 105 128 357 107 107 -IBN Sina cost dividends as reported (1) - (1) - (2)- (2) AI Operating EBITDA (as adjusted) (3) (3) (18) (17) (41) (27) (24) (51) 16 44 73 87 111 315 78 (24) 54 Ibn Sina Accounting Change |
2Q 2010 Other Charges and Other Adjustments by Segment - Unaudited in millions AEM CS IS AI Other Total Employee termination benefits 1 1 - 1 1 4 Plant/office closures - - - - - -Ticona Kelsterbach plant relocation 4 - - - - 4 Plumbing actions (2) - - - - (2) Asset impairments - - - - - -Other - - - - - -Total other charges 3 1 - 1 1 6 Business optimization - - - - 3 3 Ticona Kelsterbach plant relocation (2) - - - - (2) Plant closures - - - - - -Contract termination - - - - - -Gain on sale of building - - - - (14) (14) Write-off of other productive assets - - - - - -Other 1 2 - 1 - 4 Total other adjustments (1) 2 - 1 (11) (9) Total other charges and other adjustments 2 3 - 2 (10) (3) 17 2Q 2010 Other Charges and Other Adjustments by Segment - Unaudited |
Reg G: Reconciliation of Adjusted EPS -Unaudited Adjusted Earnings (Loss) Per Share - Reconciliation of a Non-U.S. GAAP Measure Three Months Ended Six Months Ended June 30, June 30, (in $ millions, except per share data) 2010 2009 2010 2009 As adjusted As adjusted per per per per share share share share Earnings (loss) from continuing operations 163 1.03 110 0.70 176 1.11 94 0.60 Deduct Income tax (provision) benefit (61) (17) (41) (22) Earnings (loss) from continuing operations before tax 224 127 217 116 Other charges and other adjustments 1 (3) (3) 132 30 Adjusted earnings (loss) from continuing operations before tax 221 124 349 146 Income tax (provision) benefit on adjusted earnings 2 (44) (36) (70) (42) Less: Noncontrolling interests - - - - Adjusted earnings (loss) from continuing operations 177 1.12 88 0.56 279 1.76 104 0.67 Diluted shares (in millions) 3 Weighted average shares outstanding 156.3 143.5 153.3 143.5 Assumed conversion of preferred stock - 12.1 3.1 12.1 Dilutive restricted stock units 0.3 0.5 0.4 0.3 Dilutive stock options 1.8 1.0 1.9 0.5 Total diluted shares 158.4 157.1 158.7 156.4 1 See Table 7 for details. 2 The adjusted effective tax rate is 20% and 29% for the three and six months ended June 30, 2010 and 2009, respectively. 3 Potentially dilutive shares are included in the adjusted earnings per share calculation when adjusted earnings are positive. 18 Reg G: Reconciliation of Adjusted EPS - Unaudited |
Reg G: Reconciliation of Net Debt - Unaudited Net Debt - Reconciliation of a Non-U.S. GAAP Measure June 30, December 31, (in $ millions) 2010 2009 Short-term borrowings and current installments of long-term debt - third party and affiliates 265 242 Long-term debt 3,162 3,259 Total debt 3,427 3,501 Less: Cash and cash equivalents 1,081 1,254 Net Debt 2,346 2,247 Reg G: Reconciliation of Net Debt - Unaudited |
Reg G: Other Charges and Other Adjustments -Unaudited Reconciliation of Other Charges and Other Adjustments Other Charges: Three Months Ended Six Months Ended June 30, June 30, (in $ millions) 2010 2009 2010 2009 Employee termination benefits 4 5 9 29 Plant/office closures - - 6 -Ticona Kelsterbach plant relocation 4 3 10 6 Clear Lake insurance recoveries - - - (6) Plumbing actions (2) (2) (14) (3) Asset impairments - - 72 1 Total 6 6 83 27 Other Adjustments: 1 Three Months Ended Six Months Ended Income June 30, June 30, Statement (in $ millions) 2010 2009 2010 2009 Classification Business optimization 3 1 7 3 SGA Ticona Kelsterbach plant relocation (2) 1 (2) 2 Cost of sales Plant closures - 4 9 8 Cost of sales / SGA Contract termination - - 22 - Cost of sales Gain on sale of building (14) - (14) - (Gain) loss on disposition Write-off of other productive assets - - 17 - Cost of sales Other2 4 (15) 10 (10) Various Total (9) (9) 49 3 Total other charges and other adjustments (3) (3) 132 30 1 These items are included in net earnings but not included in other charges. 2 The three and six months ended June 30, 2009 includes a one-time adjustment to Equity in net earnings (loss) of affiliates of $19 million. 20 Reg G: Other Charges and Other Adjustments - Unaudited Other Charges: |
21 Segment Data and Reconciliation of Operating Profit (Loss) to Operating EBITDA - a Non-U.S. GA AAP Measure - Unaudited Three Months Ended Six Months Ended June 30, June 3 30, (in $ millions) 2010 2009 2010 2009 Reg As adjusted As adjusted Net Sales Advanced Engineered Materials 282 184 564 349 Consumer Specialties 291 280 529 546 G: Industrial Specialties 269 267 511 509 EBITDA Acetyl Intermediates 782 622 1,506 1,194 Other Activities 1 1 1 1 1 Intersegment eliminations (108) (110) (206) (209) Total 1,517 1,244 2,905 2,390 Operating Profit (Loss) Advanced Engineered Materials 40 1 88 (17) Consumer Specialties 64 66 34 132 Industrial Specialties 16 19 28 29 Acetyl Intermediates 68 39 68 50 Other Activities 1 (32) (36) (76) (78) Total 156 89 142 116 Other Charges and Other Adjustments 2 (Unaudited) Advanced Engineered Materials 2 (14) - (4) Consumer Specialties 3 3 83 3 Industrial Specialties - 5 - 8 Reconciliation Acetyl Intermediates 2 4 54 9 Other Activities 1 (10) (1) (5) 14 Total (3) (3) 132 30 of Depreciation and Amortization Expense Advanced Engineered Materials 17 19 34 36 Consumer Specialties 9 12 20 24 Industrial Specialties 10 11 20 24 Acetyl Intermediates 24 28 49 55 Other Activities 1 3 2 6 4 Total 63 72 129 143 Business Operating EBITDA Advanced Engineered Materials 59 6 122 15 Consumer Specialties 76 81 137 159 Operating Industrial Specialties 26 35 48 61 Acetyl Intermediates 94 71 171 114 Other Activities 1 (39) (35) (75) (60) Total 216 158 403 289 Equity Earnings, Cost - Dividend Income and Other Income (Expense) Advanced Engineered Materials 39 30 83 30 Consumer Specialties 73 53 73 56 Industrial Specialties - - - - Acetyl Intermediates 2 2 3 3 Other Activities 1 2 5 12 11 Total 116 90 171 100 Operating EBITDA Advanced Engineered Materials 98 36 205 45 Consumer Specialties 149 134 210 215 Industrial Specialties 26 35 48 61 Acetyl Intermediates 96 73 174 117 Other Activities 1 (37) (30) (63) (49) Total 332 248 574 389 1 Other Activities primarily includes corporate selling, general and administrative expenses and the results from captive insurance companies. 2 See Table 7 for details. Reg G: Reconciliation of Operating EBITDA (Unaudited) |
Reg G: Equity Affiliate Preliminary Results and Celanese Proportional Share -- Unaudited Equity Affiliate Preliminary Results - Total - Unaudited Three Months Ended Six Months Ended (in $ millions) June 30, June 30, 2010 2009 2010 2009 As adjusted As adjusted Net Sales Ticona Affiliates - Asia1 379 267 750 439 Ticona Affiliates - Middle East2 245 110 502 245 Infraserv Affiliates3 488 487 1,018 997 Total 1,112 864 2,270 1,681 Operating Profit Ticona Affiliates - Asia1 63 9 128 (10) Ticona Affiliates - Middle East2 118 35 232 77 Infraserv Affiliates3 27 26 47 51 Total 208 70 407 118 Depreciation and Amortization Ticona Affiliates - Asia1 20 19 41 46 Ticona Affiliates - Middle East2 10 8 16 12 Infraserv Affiliates3 24 24 50 47 Total 54 51 107 105 Affiliate EBITDA4 Ticona Affiliates - Asia1 83 28 169 36 Ticona Affiliates - Middle East2 128 43 248 89 Infraserv Affiliates3 51 50 97 98 Total 262 121 514 223 Net Income Ticona Affiliates - Asia1 31 7 75 (9) Ticona Affiliates - Middle East2 104 31 208 68 Infraserv Affiliates3 20 16 35 35 Total 155 54 318 94 Net Debt Ticona Affiliates - Asia1 94 245 94 245 Ticona Affiliates - Middle East2 (89) (50) (89) (50) Infraserv Affiliates3 200 482 200 482 Total 205 677 205 677 1 Ticona Affiliates - Asia accounted for using the equity method includes Polyplastics (45%), Korean Engineering Plastics (50%), Fortron Industries (50%), Una SA (50%). 2 Ticona Affiliates - Middle East accounted for using the equity method includes National Methanol Company (IBN Sina) (25%). 3 Infraserv Affiliates accounted for using the equity method includes Infraserv Hoechst (32%), Infraserv Gendorf (39%) and Infraserv Knapsack (27%). 22 4 Affiliate EBITDA, a non-U.S. GAAP measure, is the sum of Operating Profit and Depreciation and Amortization. Reg G: Equity Affiliate Preliminary Results and Celanese Proportional Share - Unaudited |
Reg G: Equity Affiliate Preliminary Results and Celanese Proportional Share - Unaudited Equity Affiliate Preliminary Results - Celanese Proportional Share - Unaudited5 Three Months Ended Six Months Ended (in $ millions) June 30, June 30, 2010 2009 2010 2009 As adjusted As adjusted Proportional Net Sales Ticona Affiliates - Asia1 176 123 347 203 Ticona Affiliates - Middle East2 61 28 126 61 Infraserv Affiliates3 160 155 334 318 Total 397 306 807 582 Proportional Operating Profit Ticona Affiliates - Asia1 29 4 59 (4) Ticona Affiliates - Middle East2 30 9 58 19 Infraserv Affiliates3 8 8 15 16 Total 67 21 132 31 Proportional Depreciation and Amortization Ticona Affiliates - Asia1 9 9 19 21 Ticona Affiliates - Middle East2 2 2 4 3 Infraserv Affiliates3 8 8 16 15 Total 19 19 39 39 Proportional Affiliate EBITDA4 Ticona Affiliates - Asia1 38 13 78 17 Ticona Affiliates - Middle East2 32 11 62 22 Infraserv Affiliates3 16 16 31 31 Total 86 40 171 70 Equity in net earnings of affiliates (as reported on the Income Statement) Ticona Affiliates - Asia1, 7 15 4 36 (4) Ticona Affiliates - Middle East2 24 8 47 16 Infraserv Affiliates3 6 4 11 10 Total 45 16 94 22 Proportional Affiliate EBITDA in excess of Equity in net earnings of affiliates6 Ticona Affiliates - Asia1 23 9 42 21 Ticona Affiliates - Middle East2 8 3 15 6 Infraserv Affiliates3 10 12 20 21 Total 41 24 77 48 Proportional Net Debt Ticona Affiliates - Asia1 43 111 43 111 Ticona Affiliates - Middle East2 (22) (13) (22) (13) Infraserv Affiliates3 66 152 66 152 Total 87 250 87 250 1 Ticona Affiliates - Asia accounted for using the equity method includes Polyplastics (45%), Korean Engineering Plastics (50%), Fortron Industries (50%), Una SA (50%). 2 Ticona Affiliates - Middle East accounted for using the equity method includes National Methanol Company (IBN Sina) (25%). 3 Infraserv Affiliates accounted for using the equity method includes Infraserv Hoechst (32%), Infraserv Gendorf (39%) and Infraserv Knapsack (27%). 4 Affiliate EBITDA, a non-U.S. GAAP measure, is the sum of Operating Profit and Depreciation and Amortization. 5 Calculated by multiplying each affiliate's total share amount by Celaneses respective ownership percentage, netted by reporting category. 6 Calculated as Affiliate EBITDA less Equity in net earnings of affiliates; not included in Celanese operating EBITDA. 23 7 The three and six months ended June 30, 2009 excludes a one-time tax adjustment to Equity in net earnings of affiliates of $19 million. Reg G: Equity Affiliate Preliminary Results and Celanese Proportional Share - Unaudited |
Business EBITDA - Reconciliation of a Non-U.S. GAAP Measure Reg G: Reconciliation of Business EBITDA 2006 2007 (in $ millions) FY FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Net Sales Advanced Engineered Materials 915 1030 294 300 272 195 1061 165 184 220 239 808 282 282 Operating Profit (Loss) Advanced Engineered Materials 145 133 30 37 13 (48) 32 (19) 0 21 33 35 46 40 Other Charges and Other Adjustments 1 Advanced Engineered Materials (5) (5) 1 1 1 22 25 10 (14) 7 (3) 0 (2) 2 Depreciation and Amortization Expense Advanced Engineered Materials 65 69 20 19 19 18 76 17 19 17 19 72 17 17 Business EBITDA Advanced Engineered Materials 205 197 51 57 33 (8) 133 8 5 45 49 107 61 59 Equity Earnings (as adjusted) Ibn Sina 76 68 30 28 32 28 118 8 8 17 18 51 23 24 Business EBITDA Margin Advanced Engineered Materials 22% 19% 17% 19% 12% (4%) 13% 5% 3% 20% 21% 13% 22% 21% with Ibn Sina adjusted Equity Earnings 31% 26% 28% 28% 24% 10% 24% 10% 7% 28% 28% 20% 30% 29% 1 See Table 7 for details. 2008 2009 2010 |