þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
|
For the quarterly period ended March 31, 2011 | ||
Or | ||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
Delaware
(State or Other Jurisdiction of Incorporation or Organization) |
98-0420726
(I.R.S. Employer Identification No.) |
|
1601 West LBJ Freeway,
Dallas, TX (Address of Principal Executive Offices) |
75234-6034
(Zip Code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
2
Item 1. | Financial Statements |
Three Months Ended
|
||||||||||
March 31, | ||||||||||
2011 | 2010 | |||||||||
As Adjusted
|
||||||||||
(Note 3) | ||||||||||
(In $ millions, except share
|
||||||||||
and per share data) | ||||||||||
Net sales
|
1,589 | 1,388 | ||||||||
Cost of sales
|
(1,238 | ) | (1,170 | ) | ||||||
Gross profit
|
351 | 218 | ||||||||
Selling, general and administrative expenses
|
(128 | ) | (124 | ) | ||||||
Amortization of intangible assets
|
(16 | ) | (15 | ) | ||||||
Research and development expenses
|
(23 | ) | (18 | ) | ||||||
Other (charges) gains, net
|
3 | (77 | ) | |||||||
Foreign exchange gain (loss), net
|
1 | 2 | ||||||||
Operating profit (loss)
|
188 | (14 | ) | |||||||
Equity in net earnings (loss) of affiliates
|
43 | 49 | ||||||||
Interest expense
|
(55 | ) | (49 | ) | ||||||
Interest income
|
1 | 1 | ||||||||
Other income (expense), net
|
3 | 6 | ||||||||
Earnings (loss) from continuing operations before tax
|
180 | (7 | ) | |||||||
Income tax (provision) benefit
|
(42 | ) | 20 | |||||||
Earnings (loss) from continuing operations
|
138 | 13 | ||||||||
Earnings (loss) from operation of discontinued operations
|
6 | - | ||||||||
Gain (loss) on disposition of discontinued operations
|
- | 2 | ||||||||
Income tax (provision) benefit from discontinued operations
|
(2 | ) | (1 | ) | ||||||
Earnings (loss) from discontinued operations
|
4 | 1 | ||||||||
Net earnings (loss)
|
142 | 14 | ||||||||
Net (earnings) loss attributable to noncontrolling interests
|
- | - | ||||||||
Net earnings (loss) attributable to Celanese Corporation
|
142 | 14 | ||||||||
Cumulative preferred stock dividends
|
- | (3 | ) | |||||||
Net earnings (loss) available to common shareholders
|
142 | 11 | ||||||||
Amounts attributable to Celanese Corporation
|
||||||||||
Earnings (loss) from continuing operations
|
138 | 13 | ||||||||
Earnings (loss) from discontinued operations
|
4 | 1 | ||||||||
Net earnings (loss)
|
142 | 14 | ||||||||
Earnings (loss) per common share basic
|
||||||||||
Continuing operations
|
0.88 | 0.06 | ||||||||
Discontinued operations
|
0.03 | 0.01 | ||||||||
Net earnings (loss) basic
|
0.91 | 0.07 | ||||||||
Earnings (loss) per common share diluted
|
||||||||||
Continuing operations
|
0.87 | 0.06 | ||||||||
Discontinued operations
|
0.03 | 0.01 | ||||||||
Net earnings (loss) diluted
|
0.90 | 0.07 | ||||||||
Weighted average shares basic
|
155,966,259 | 150,272,227 | ||||||||
Weighted average shares diluted
|
158,666,687 | 152,642,371 |
3
Three Months Ended
|
||||||||||
March 31, | ||||||||||
2011 | 2010 | |||||||||
As Adjusted
|
||||||||||
(Note 3) | ||||||||||
(In $ millions) | ||||||||||
Net earnings (loss)
|
142 | 14 | ||||||||
Other comprehensive income (loss), net of tax
|
||||||||||
Unrealized gain (loss) on marketable securities
|
- | 3 | ||||||||
Foreign currency translation
|
58 | (31 | ) | |||||||
Unrealized gain (loss) on interest rate swaps
|
9 | (3 | ) | |||||||
Pension and postretirement benefits
|
3 | 4 | ||||||||
Total other comprehensive income (loss), net of tax
|
70 | (27 | ) | |||||||
Total comprehensive income (loss), net of tax
|
212 | (13 | ) | |||||||
Comprehensive (income) loss attributable to noncontrolling
interests
|
- | - | ||||||||
Comprehensive income (loss) attributable to Celanese Corporation
|
212 | (13 | ) | |||||||
4
5
Three Months Ended
|
||||||||||
March 31, 2011 | ||||||||||
Shares | Amount | |||||||||
(In $ millions, except share data) | ||||||||||
Preferred stock
|
||||||||||
Balance as of the beginning of the period
|
- | - | ||||||||
Issuance of preferred stock
|
- | - | ||||||||
Balance as of the end of the period
|
- | - | ||||||||
Series A common stock
|
||||||||||
Balance as of the beginning of the period
|
155,759,293 | - | ||||||||
Stock option exercises
|
229,704 | - | ||||||||
Purchases of treasury stock
|
(69,400 | ) | - | |||||||
Stock awards
|
126,724 | - | ||||||||
Balance as of the end of the period
|
156,046,321 | - | ||||||||
Treasury stock
|
||||||||||
Balance as of the beginning of the period
|
22,269,278 | (829 | ) | |||||||
Purchases of treasury stock, including related fees
|
69,400 | (3 | ) | |||||||
Balance as of the end of the period
|
22,338,678 | (832 | ) | |||||||
Additional paid-in capital
|
||||||||||
Balance as of the beginning of the period
|
574 | |||||||||
Stock-based compensation, net of tax
|
4 | |||||||||
Stock option exercises, net of tax
|
5 | |||||||||
Balance as of the end of the period
|
583 | |||||||||
Retained earnings
|
||||||||||
Balance as of the beginning of the period
|
1,851 | |||||||||
Net earnings (loss) attributable to Celanese Corporation
|
142 | |||||||||
Series A common stock dividends
|
(8 | ) | ||||||||
Balance as of the end of the period
|
1,985 | |||||||||
Accumulated other comprehensive income (loss), net
|
||||||||||
Balance as of the beginning of the period
|
(670 | ) | ||||||||
Other comprehensive income (loss)
|
70 | |||||||||
Balance as of the end of the period
|
(600 | ) | ||||||||
Total Celanese Corporation shareholders equity
|
1,136 | |||||||||
Noncontrolling interests
|
||||||||||
Balance as of the beginning of the period
|
- | |||||||||
Net earnings (loss) attributable to noncontrolling interests
|
- | |||||||||
Balance as of the end of the period
|
- | |||||||||
Total shareholders equity
|
1,136 | |||||||||
6
Three Months Ended
|
||||||||||
March 31, | ||||||||||
2011 | 2010 | |||||||||
As Adjusted
|
||||||||||
(Note 3) | ||||||||||
(In $ millions) | ||||||||||
Operating activities
|
||||||||||
Net earnings (loss)
|
142 | 14 | ||||||||
Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities
|
||||||||||
Other charges (gains), net of amounts used
|
(9 | ) | 48 | |||||||
Depreciation, amortization and accretion
|
75 | 93 | ||||||||
Deferred income taxes, net
|
(2 | ) | (7 | ) | ||||||
Other, net
|
38 | 33 | ||||||||
Operating cash provided by (used in) discontinued operations
|
(2 | ) | (3 | ) | ||||||
Changes in operating assets and liabilities
|
||||||||||
Trade receivables third party and affiliates, net
|
(108 | ) | (82 | ) | ||||||
Inventories
|
(60 | ) | (38 | ) | ||||||
Other assets
|
(18 | ) | 23 | |||||||
Trade payables third party and affiliates
|
75 | 32 | ||||||||
Other liabilities
|
1 | (58 | ) | |||||||
Net cash provided by (used in) operating activities
|
132 | 55 | ||||||||
Investing activities
|
||||||||||
Capital expenditures on property, plant and equipment
|
(77 | ) | (44 | ) | ||||||
Acquisitions, net of cash acquired
|
(8 | ) | - | |||||||
Proceeds from sale of businesses and assets, net
|
4 | 5 | ||||||||
Capital expenditures related to Ticona Kelsterbach plant
relocation
|
(54 | ) | (85 | ) | ||||||
Other, net
|
(16 | ) | (8 | ) | ||||||
Net cash provided by (used in) investing activities
|
(151 | ) | (132 | ) | ||||||
Financing activities
|
||||||||||
Short-term borrowings (repayments), net
|
(5 | ) | 1 | |||||||
Proceeds from long-term debt
|
11 | - | ||||||||
Repayments of long-term debt
|
(9 | ) | (10 | ) | ||||||
Purchases of treasury stock, including related fees
|
(3 | ) | - | |||||||
Stock option exercises
|
5 | 3 | ||||||||
Series A common stock dividends
|
(8 | ) | (6 | ) | ||||||
Preferred stock dividends
|
- | (3 | ) | |||||||
Other, net
|
(2 | ) | - | |||||||
Net cash provided by (used in) financing activities
|
(11 | ) | (15 | ) | ||||||
Exchange rate effects on cash and cash equivalents
|
12 | (23 | ) | |||||||
Net increase (decrease) in cash and cash equivalents
|
(18 | ) | (115 | ) | ||||||
Cash and cash equivalents at beginning of period
|
740 | 1,254 | ||||||||
Cash and cash equivalents at end of period
|
722 | 1,139 | ||||||||
7
1. | Description of the Company and Basis of Presentation |
8
2. | Recent Accounting Pronouncements |
3. | Acquisitions, Dispositions, Ventures and Plant Closures |
Weighted
|
||||||||||
Average Life | ||||||||||
(In years) | (In $ millions) | |||||||||
Cash consideration
|
8 | |||||||||
Intangible assets acquired
|
||||||||||
Developed technology
|
4 | 7 | ||||||||
Goodwill
|
1 | |||||||||
Total
|
8 | |||||||||
9
Total From
|
||||||||||
Three Months Ended
|
Acquisition Through
|
|||||||||
March 31, 2011 | March 31, 2011 | |||||||||
(In $ Millions) | ||||||||||
Inventories purchased
|
9 | 12 |
10
Three Months Ended
|
|||||||||||||||
March 31, 2010 | |||||||||||||||
As
|
As Adjusted for
|
||||||||||||||
Originally
|
Retrospective
|
Effect of
|
|||||||||||||
Reported | Application | Change | |||||||||||||
(In $ millions, except per share data) | |||||||||||||||
Equity in net earnings (loss) of affiliates
|
26 | 49 | 23 | ||||||||||||
Dividend income cost investments
|
27 | - | (27 | ) | |||||||||||
Earnings (loss) from continuing operations before tax
|
(3 | ) | (7 | ) | (4 | ) | |||||||||
Earnings (loss) from continuing operations
|
17 | 13 | (4 | ) | |||||||||||
Net earnings (loss)
|
18 | 14 | (4 | ) | |||||||||||
Net earnings (loss) attributable to Celanese Corporation
|
18 | 14 | (4 | ) | |||||||||||
Net earnings (loss) available to common shareholders
|
15 | 11 | (4 | ) | |||||||||||
Earnings (loss) per common share basic
|
|||||||||||||||
Continuing operations
|
0.09 | 0.06 | (0.03 | ) | |||||||||||
Discontinued operations
|
0.01 | 0.01 | - | ||||||||||||
Net earnings (loss) basic
|
0.10 | 0.07 | (0.03 | ) | |||||||||||
Earnings (loss) per common share diluted
|
|||||||||||||||
Continuing operations
|
0.09 | 0.06 | (0.03 | ) | |||||||||||
Discontinued operations
|
0.01 | 0.01 | - | ||||||||||||
Net earnings (loss) diluted
|
0.10 | 0.07 | (0.03 | ) | |||||||||||
Three Months Ended
|
|||||||||||||||
March 31, 2010 | |||||||||||||||
As
|
As Adjusted for
|
||||||||||||||
Originally
|
Retrospective
|
Effect of
|
|||||||||||||
Reported | Application | Change | |||||||||||||
(In $ millions) | |||||||||||||||
Net earnings (loss)
|
18 | 14 | (4 | ) | |||||||||||
Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities
|
|||||||||||||||
Other, net
|
29 | 33 | 4 | ||||||||||||
11
Three Months Ended
|
|||||||||||||||
March 31, 2010 | |||||||||||||||
As
|
As Adjusted for
|
||||||||||||||
Originally
|
Retrospective
|
Effect of
|
|||||||||||||
Reported | Application | Change | |||||||||||||
(In $ millions) | |||||||||||||||
Advanced Engineered Materials Earnings (loss) from continuing
operations before tax
|
67 | 92 | 25 | ||||||||||||
Acetyl Intermediates Earnings (loss) from continuing operations
before tax
|
30 | 1 | (29 | ) |
12
Three Months Ended
|
||||||||||
March 31, | ||||||||||
2011 | 2010 | |||||||||
(In $ millions) | ||||||||||
Employee termination benefits
|
(1 | ) | (1 | ) | ||||||
Contract termination costs
|
- | (3 | ) | |||||||
Reindustrialization costs
|
- | (3 | ) | |||||||
Total exit costs recorded to Other (charges) gains, net
|
(1 | ) | (7 | ) | ||||||
Inventory write-offs
|
- | (4 | ) | |||||||
Other
|
- | (5 | ) | |||||||
Total plant shutdown costs
|
- | (9 | ) | |||||||
4. | Marketable Securities, at Fair Value |
13
Gross
|
Gross
|
|||||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||||||
Cost | Gain | Loss | Value | |||||||||||||||||
(In $ millions) | ||||||||||||||||||||
US corporate debt securities
|
1 | - | - | 1 | ||||||||||||||||
Mutual funds
|
73 | - | - | 73 | ||||||||||||||||
As of March 31, 2011
|
74 | - | - | 74 | ||||||||||||||||
US corporate debt securities
|
1 | - | - | 1 | ||||||||||||||||
Mutual funds
|
77 | - | - | 77 | ||||||||||||||||
As of December 31, 2010
|
78 | - | - | 78 | ||||||||||||||||
5. | Inventories |
As of
|
As of
|
|||||||||
March 31,
|
December 31,
|
|||||||||
2011 | 2010 | |||||||||
(In $ millions) | ||||||||||
Finished goods
|
502 | 442 | ||||||||
Work-in-process
|
33 | 31 | ||||||||
Raw materials and supplies
|
153 | 137 | ||||||||
Total
|
688 | 610 | ||||||||
6. | Goodwill and Intangible Assets, Net |
Advanced
|
|||||||||||||||||||||||||
Engineered
|
Consumer
|
Industrial
|
Acetyl
|
||||||||||||||||||||||
Materials | Specialties | Specialties | Intermediates | Total | |||||||||||||||||||||
(In $ Millions) | |||||||||||||||||||||||||
As of December 31, 2010
|
|||||||||||||||||||||||||
Goodwill
|
299 | 249 | 35 | 191 | 774 | ||||||||||||||||||||
Accumulated impairment losses
|
- | - | - | - | - | ||||||||||||||||||||
Total
|
299 | 249 | 35 | 191 | 774 | ||||||||||||||||||||
Acquisitions (Note 3)
|
- | - | 1 | - | 1 | ||||||||||||||||||||
Exchange rate changes
|
8 | 7 | 1 | 13 | 29 | ||||||||||||||||||||
As of March 31, 2011
|
|||||||||||||||||||||||||
Goodwill
|
307 | 256 | 37 | 204 | 804 | ||||||||||||||||||||
Accumulated impairment losses
|
- | - | - | - | - | ||||||||||||||||||||
Total
|
307 | 256 | 37 | 204 | 804 | ||||||||||||||||||||
14
Customer-
|
Covenants
|
|||||||||||||||||||||||||||||
Trademarks
|
Related
|
Not to
|
||||||||||||||||||||||||||||
and Trade
|
Intangible
|
Developed
|
Compete
|
|||||||||||||||||||||||||||
Names | Licenses | Assets | Technology | and Other | Total | |||||||||||||||||||||||||
(In $ Millions) | ||||||||||||||||||||||||||||||
Gross Asset Value
|
||||||||||||||||||||||||||||||
As of December 31, 2010
|
88 | 30 | 526 | 20 | 23 | 687 | ||||||||||||||||||||||||
Acquisitions (Note 3)
|
- | - | - | 7 | - | 7 | ||||||||||||||||||||||||
Exchange rate changes
|
3 | - | 26 | - | - | 29 | ||||||||||||||||||||||||
As of March 31, 2011
|
91 | 30 | 552 | 27 | 23 | 723 | ||||||||||||||||||||||||
Accumulated Amortization
|
||||||||||||||||||||||||||||||
As of December 31, 2010
|
(5 | ) | (10 | ) | (395 | ) | (11 | ) | (14 | ) | (435 | ) | ||||||||||||||||||
Amortization
|
- | - | (14 | ) | (1 | ) | (1 | ) | (16 | ) | ||||||||||||||||||||
Exchange rate changes
|
- | - | (19 | ) | - | (1 | ) | (20 | ) | |||||||||||||||||||||
As of March 31, 2011
|
(5 | ) | (10 | ) | (428 | ) | (12 | ) | (16 | ) | (471 | ) | ||||||||||||||||||
Net book value
|
86 | 20 | 124 | 15 | 7 | 252 | ||||||||||||||||||||||||
Three Months Ended
|
||||||||||
March 31, | ||||||||||
2011 | 2010 | |||||||||
(In $ millions) | ||||||||||
Amortization of intangible assets
|
16 | 15 |
(In $ millions) | |||||
2012
|
49 | ||||
2013
|
31 | ||||
2014
|
19 | ||||
2015
|
8 | ||||
2016
|
5 |
15
7. | Current Other Liabilities |
As of
|
As of
|
|||||||||
March 31,
|
December 31,
|
|||||||||
2011 | 2010 | |||||||||
(In $ Millions) | ||||||||||
Salaries and benefits
|
87 | 111 | ||||||||
Environmental (Note 11)
|
20 | 16 | ||||||||
Restructuring (Note 13)
|
49 | 57 | ||||||||
Insurance
|
22 | 27 | ||||||||
Asset retirement obligations
|
31 | 31 | ||||||||
Derivatives (Note 15)
|
71 | 69 | ||||||||
Current portion of benefit obligations
|
49 | 49 | ||||||||
Interest
|
41 | 29 | ||||||||
Sales and use tax/foreign withholding tax payable
|
9 | 15 | ||||||||
Uncertain tax positions (Note 14)
|
12 | 15 | ||||||||
Other
|
163 | 177 | ||||||||
Total
|
554 | 596 | ||||||||
8. | Noncurrent Other Liabilities |
As of
|
As of
|
|||||||||
March 31,
|
December 31,
|
|||||||||
2011 | 2010 | |||||||||
(In $ Millions) | ||||||||||
Environmental (Note 11)
|
84 | 85 | ||||||||
Insurance
|
72 | 69 | ||||||||
Deferred revenue
|
40 | 41 | ||||||||
Deferred
proceeds
(1)
|
835 | 786 | ||||||||
Asset retirement obligations
|
46 | 46 | ||||||||
Derivatives (Note 15)
|
- | 14 | ||||||||
Income taxes payable
|
4 | 4 | ||||||||
Other
|
33 | 30 | ||||||||
Total
|
1,114 | 1,075 | ||||||||
(1) | Primarily relates to proceeds received from the Frankfurt, Germany Airport as part of a settlement for the Company to relocate its Kelsterbach, Germany Ticona operations to a new site (Note 20). Such proceeds will be deferred until the transfer of title to the Frankfurt, Germany Airport. |
16
As of
|
As of
|
|||||||||
March 31,
|
December 31,
|
|||||||||
2011 | 2010 | |||||||||
(In $ millions) | ||||||||||
Short-term borrowings and current installments of long-term
debt third party and affiliates
|
||||||||||
Current installments of long-term debt
|
78 | 74 | ||||||||
Short-term borrowings, including amounts due to affiliates,
weighted average interest rate of 3.6%
|
141 | 154 | ||||||||
Total
|
219 | 228 | ||||||||
Long-term debt
|
||||||||||
Senior credit facilities
|
||||||||||
Term B loan facility due 2014
|
513 | 508 | ||||||||
Term C loan facility due 2016
|
1,422 | 1,409 | ||||||||
Senior unsecured notes due 2018, interest rate of 6.6%
|
600 | 600 | ||||||||
Pollution control and industrial revenue bonds, interest rates
ranging from 5.7% to 6.7%, due at various dates through 2030
|
181 | 181 | ||||||||
Obligations under capital leases and other secured and unsecured
borrowings due at various dates through 2054
|
233 | 245 | ||||||||
Other bank obligations, interest rates ranging from 1.6% to
6.3%, due at various dates through 2017
|
132 | 121 | ||||||||
Subtotal
|
3,081 | 3,064 | ||||||||
Current installments of long-term debt
|
(78 | ) | (74 | ) | ||||||
Total
|
3,003 | 2,990 | ||||||||
17
Estimated Margin |
Estimated Total
|
||||||||||||||||||
Estimated
|
Decreases
|
Increases
|
Net Leverage
|
||||||||||||||||
Margin as of
|
0.25% if
|
0.25% if
|
Ratio as of
|
||||||||||||||||
March 31, 2011 | Estimated Total | Net Leverage | March 31, 2011 | ||||||||||||||||
Term B and credit-linked revolving facility
|
1.50% | not applicable | > 2.25:1.00 | 2.00 | |||||||||||||||
Term C
|
3.00% | < = 1.75:1.00 | > 2.25:1.00 | 2.00 |
First Lien Senior Secured Leverage Ratios | ||||||||||||||||||||
Estimate, if Fully
|
Borrowing
|
|||||||||||||||||||
Maximum | Estimate | Drawn | Capacity | |||||||||||||||||
(In $ millions) | ||||||||||||||||||||
March 31, 2011 and thereafter
|
3.90 to 1.00 | 1.71 to 1.00 | 2.23 to 1.00 | 600 |
18
Postretirement
|
||||||||||||||||||||
Pension Benefits | Benefits | |||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||
(In $ millions) | ||||||||||||||||||||
Service cost
|
7 | 8 | - | - | ||||||||||||||||
Interest cost
|
46 | 48 | 4 | 4 | ||||||||||||||||
Expected return on plan assets
|
(50 | ) | (50 | ) | - | - | ||||||||||||||
Recognized actuarial (gain) loss
|
7 | 2 | (1 | ) | (1 | ) | ||||||||||||||
Curtailment (gain) loss
|
(1 | ) | (2 | ) | - | - | ||||||||||||||
Total
|
9 | 6 | 3 | 3 | ||||||||||||||||
As of
|
||||||||||
March 31, 2011 | Expected for 2011 | |||||||||
(In $ millions) | ||||||||||
Cash contributions to defined benefit pension plans
|
13 | 164 | ||||||||
Benefit payments from nonqualified trusts related to
nonqualified pension plans
|
4 | 15 | ||||||||
Benefit payments to other postretirement benefit plans
|
7 | 27 | ||||||||
19
As of
|
As of
|
|||||||
March 31,
|
December 31,
|
|||||||
2011 | 2010 | |||||||
(In $ millions) | ||||||||
Current Other liabilities
|
20 | 16 | ||||||
Noncurrent Other liabilities
|
84 | 85 | ||||||
Total
|
104 | 101 | ||||||
As of
|
As of
|
|||||||||
March 31,
|
December 31,
|
|||||||||
2011 | 2010 | |||||||||
(In $ millions) | ||||||||||
Demerger obligations (Note 17)
|
37 | 36 | ||||||||
Divestiture obligations (Note 17)
|
26 | 26 | ||||||||
US Superfund sites
|
14 | 13 | ||||||||
Other environmental remediation reserves
|
27 | 26 | ||||||||
Total
|
104 | 101 | ||||||||
20
21
Three Months Ended
|
Total From
|
|||||||||||
March 31, |
Inception Through
|
|||||||||||
2011 | 2010 | March 31, 2011 | ||||||||||
Shares repurchased
|
69,400 | - | 11,500,192 | |||||||||
Average purchase price per share
|
$ | 43.42 | $ | - | $ | 37.28 | ||||||
Amount spent on repurchased shares (in millions)
|
$ | 3 | $ | - | $ | 429 |
Three Months Ended March 31, | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Income
|
Income
|
|||||||||||||||||||||||
Tax
|
Tax
|
|||||||||||||||||||||||
Gross
|
(Provision)
|
Net
|
Gross
|
(Provision)
|
Net
|
|||||||||||||||||||
Amount | Benefit | Amount | Amount | Benefit | Amount | |||||||||||||||||||
(In $ millions) | ||||||||||||||||||||||||
Unrealized gain (loss) on marketable securities
|
- | - | - | 3 | - | 3 | ||||||||||||||||||
Foreign currency translation
|
58 | - | 58 | (31 | ) | - | (31 | ) | ||||||||||||||||
Unrealized gain (loss) on interest rate swaps
|
14 | (5 | ) | 9 | (2 | ) | (1 | ) | (3 | ) | ||||||||||||||
Pension and postretirement benefits
|
6 | (3 | ) | 3 | 5 | (1 | ) | 4 | ||||||||||||||||
Total
|
78 | (8 | ) | 70 | (25 | ) | (2 | ) | (27 | ) | ||||||||||||||
Accumulated
|
|||||||||||||||||||||||||
Unrealized
|
Unrealized
|
Pension and
|
Other
|
||||||||||||||||||||||
Gain (Loss) on
|
Foreign
|
Gain (Loss)
|
Postretire-
|
Comprehensive
|
|||||||||||||||||||||
Marketable
|
Currency
|
on Interest
|
ment
|
Income
|
|||||||||||||||||||||
Securities | Translation | Rate Swaps | Benefits | (Loss), Net | |||||||||||||||||||||
(In $ millions) | |||||||||||||||||||||||||
Balance as of December 31, 2010
|
(1 | ) | (1 | ) | (84 | ) | (584 | ) | (670 | ) | |||||||||||||||
Current period change
|
- | 58 | 14 | 6 | 78 | ||||||||||||||||||||
Income tax (provision) benefit
|
- | - | (5 | ) | (3 | ) | (8 | ) | |||||||||||||||||
Balance as of March 31, 2011
|
(1 | ) | 57 | (75 | ) | (581 | ) | (600 | ) | ||||||||||||||||
22
13. | Other (Charges) Gains, Net |
Three Months Ended
|
||||||||||
March 31, | ||||||||||
2011 | 2010 | |||||||||
(In $ millions) | ||||||||||
Employee termination benefits
|
(4 | ) | (5 | ) | ||||||
Ticona Kelsterbach plant relocation (Note 20)
|
(13 | ) | (6 | ) | ||||||
Plumbing actions (Note 17)
|
- | 12 | ||||||||
Asset impairments
|
- | (72 | ) | |||||||
Plant/office closures
|
- | (6 | ) | |||||||
Resolution of commercial disputes
|
20 | - | ||||||||
Total
|
3 | (77 | ) | |||||||
23
Advanced
|
||||||||||||||||||||||||||||||
Engineered
|
Consumer
|
Industrial
|
Acetyl
|
|||||||||||||||||||||||||||
Materials | Specialties | Specialties | Intermediates | Other | Total | |||||||||||||||||||||||||
(In $ millions) | ||||||||||||||||||||||||||||||
Employee Termination Benefits
|
||||||||||||||||||||||||||||||
Reserve as of December 31, 2010
|
3 | 16 | - | 24 | 10 | 53 | ||||||||||||||||||||||||
Additions
|
- | 2 | - | - | 1 | 3 | ||||||||||||||||||||||||
Cash payments
|
- | - | - | (9 | ) | (1 | ) | (10 | ) | |||||||||||||||||||||
Other changes
|
- | - | - | - | (1 | ) | (1 | ) | ||||||||||||||||||||||
Exchange rate changes
|
- | - | - | 1 | 1 | 2 | ||||||||||||||||||||||||
Reserve as of March 31, 2011
|
3 | 18 | - | 16 | 10 | 47 | ||||||||||||||||||||||||
Plant/Office Closures
|
||||||||||||||||||||||||||||||
Reserve as of December 31, 2010
|
- | - | - | 3 | 1 | 4 | ||||||||||||||||||||||||
Additions
|
- | - | - | - | - | - | ||||||||||||||||||||||||
Cash payments
|
- | - | - | (2 | ) | - | (2 | ) | ||||||||||||||||||||||
Exchange rate changes
|
- | - | - | - | - | - | ||||||||||||||||||||||||
Reserve as of March 31, 2011
|
- | - | - | 1 | 1 | 2 | ||||||||||||||||||||||||
Total
|
3 | 18 | - | 17 | 11 | 49 | ||||||||||||||||||||||||
24
15. | Derivative Financial Instruments |
(1) | Fixes the LIBOR portion of the Companys US-dollar denominated variable rate borrowings (Note 9). |
25
(1) | Fixes the LIBOR portion of the Companys US-dollar denominated variable rate borrowings (Note 9). |
As of March 31, 2011 and December 31, 2010 | ||||||||||
Notional Value | Effective Date | Expiration Date | Fixed Rate (1) | |||||||
(In millions) | ||||||||||
150 | April 2, 2007 | April 2, 2011 | 4.04 | % | ||||||
(1) | Fixes the EURIBOR portion of the Companys Euro denominated variable rate borrowings (Note 9). |
As of
|
As of
|
|||||||
March 31,
|
December 31,
|
|||||||
2011 | 2010 | |||||||
(In $ millions) | ||||||||
Total
|
885 | 751 |
Three Months Ended
|
Three Months Ended
|
|||||||||||||||||||||||
March 31, 2011 | March 31, 2010 | |||||||||||||||||||||||
Gain (Loss)
|
Gain (Loss)
|
|||||||||||||||||||||||
Recognized in
|
Recognized in
|
|||||||||||||||||||||||
Other
|
Gain (Loss)
|
Other
|
Gain (Loss)
|
|||||||||||||||||||||
Comprehensive
|
Recognized in
|
Comprehensive
|
Recognized in
|
|||||||||||||||||||||
Income | Income | Income | Income | |||||||||||||||||||||
(In $ millions) | ||||||||||||||||||||||||
Derivatives designated as cash flow
|
||||||||||||||||||||||||
hedging instruments
|
||||||||||||||||||||||||
Interest rate swaps
|
(1 | ) (1 | ) | (16 | ) (3 | ) | (16 | ) (2 | ) | (18 | ) (3 | ) | ||||||||||||
Derivatives not designated as
|
||||||||||||||||||||||||
hedging instruments
|
||||||||||||||||||||||||
Foreign currency forwards and swaps
|
- | (12 | ) | - | 25 | |||||||||||||||||||
Total
|
(1 | ) | (28 | ) | (16 | ) | 7 | |||||||||||||||||
(1) | Amount excludes $1 million of losses associated with the Companys equity method investments derivative activity and $5 million of tax expense recognized in Other comprehensive income (loss). | |
(2) | Amount excludes $4 million of losses associated with the Companys equity method investments derivative activity and $1 million of tax expense recognized in Other comprehensive income (loss). | |
(3) | Amount represents reclassification from Accumulated other comprehensive income (loss), net and is classified as Interest expense in the unaudited interim consolidated statements of operations. |
26
27
Fair Value Measurement Using | |||||||||||||||
Quoted Prices in
|
|||||||||||||||
Active Markets for
|
Significant Other
|
||||||||||||||
Identical Assets
|
Observable Inputs
|
||||||||||||||
(Level 1) | (Level 2) | Total | |||||||||||||
(In $ millions) | |||||||||||||||
Marketable securities, at fair value
|
|||||||||||||||
US corporate debt securities
|
- | 1 | 1 | ||||||||||||
Mutual funds
|
73 | - | 73 | ||||||||||||
Derivatives not designated as hedging instruments
|
|||||||||||||||
Foreign currency forwards and swaps
|
- | 3 | 3 (1 | ) | |||||||||||
Total assets as of March 31, 2011
|
73 | 4 | 77 | ||||||||||||
Derivatives designated as cash flow hedging instruments
|
|||||||||||||||
Interest rate swaps
|
- | (57 | ) | (57 | ) (2 | ) | |||||||||
Derivatives not designated as hedging instruments
|
|||||||||||||||
Foreign currency forwards and swaps
|
- | (14 | ) | (14 | ) (2 | ) | |||||||||
Total liabilities as of March 31, 2011
|
- | (71 | ) | (71 | ) | ||||||||||
Marketable securities, at fair value
|
|||||||||||||||
US corporate debt securities
|
- | 1 | 1 | ||||||||||||
Mutual funds
|
77 | - | 77 | ||||||||||||
Derivatives not designated as hedging instruments
|
|||||||||||||||
Foreign currency forwards and swaps
|
- | 3 | 3 (1 | ) | |||||||||||
Total assets as of December 31, 2010
|
77 | 4 | 81 | ||||||||||||
Derivatives designated as cash flow hedging instruments
|
|||||||||||||||
Interest rate swaps
|
- | (59 | ) | (59 | ) (2 | ) | |||||||||
Interest rate swaps
|
- | (14 | ) | (14 | ) (3 | ) | |||||||||
Derivatives not designated as hedging instruments
|
|||||||||||||||
Foreign currency forwards and swaps
|
- | (10 | ) | (10 | ) (2 | ) | |||||||||
Total liabilities as of December 31, 2010
|
- | (83 | ) | (83 | ) | ||||||||||
(1) | Included in current Other assets in the unaudited consolidated balance sheets. | |
(2) | Included in current Other liabilities in the unaudited consolidated balance sheets. | |
(3) | Included in noncurrent Other liabilities in the unaudited consolidated balance sheets. |
As of
|
As of
|
||||||||||||||||||
March 31,
|
December 31,
|
||||||||||||||||||
2011 | 2010 | ||||||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
||||||||||||||||
Amount | Value | Amount | Value | ||||||||||||||||
(In $ millions) | |||||||||||||||||||
Cost investments
|
140 | - | 139 | - | |||||||||||||||
Insurance contracts in nonqualified pension trusts
|
67 | 67 | 70 | 70 | |||||||||||||||
Long-term debt, including current installments of long-term debt
|
3,081 | 3,104 | 3,064 | 3,087 |
28
29
Three Months Ended
|
||||||||||
March 31, | ||||||||||
2011 | 2010 | |||||||||
(In $ millions) | ||||||||||
Recoveries
|
- | 11 | ||||||||
Legal reserve reductions
|
- | 1 | ||||||||
Total
|
- | 12 | ||||||||
30
31
Asbestos Cases | ||||||
As of December 31, 2010
|
499 | |||||
Case adjustments
|
- | |||||
New cases filed
|
16 | |||||
Resolved cases
|
(7 | ) | ||||
As of March 31, 2011
|
508 | |||||
32
| The Company will indemnify Hoechst, and its legal successors, against those liabilities up to 250 million; |
| Hoechst, and its legal successors, will bear those liabilities exceeding 250 million; provided, however, that the Company will reimburse Hoechst, and its legal successors, for one-third of liabilities exceeding 750 million in the aggregate. |
33
34
(1) | Net sales for Acetyl Intermediates and Consumer Specialties include inter-segment sales of $108 million and $1 million, respectively, for the three months ended March 31, 2011 and $94 million and $4 million, respectively, for the three months ended March 31, 2010. | |
(2) | Excludes expenditures related to the relocation of the Companys Ticona plant in Kelsterbach (Note 20) and includes a decrease in accrued capital expenditures of $18 million and $21 million for the three months ended March 31, 2011 and 2010, respectively. | |
(3) | Includes $2 million for Advanced Engineered Materials and $20 million for Acetyl Intermediates for the accelerated amortization of the unamortized prepayment related to a raw material purchase agreement (Note 17). |
35
Three Months Ended March 31, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
Basic | Diluted | Basic | Diluted | |||||||||||||
As Adjusted
|
||||||||||||||||
(Note 3) | ||||||||||||||||
(In $ millions, except share and per share data) | ||||||||||||||||
Amounts attributable to Celanese Corporation
|
||||||||||||||||
Earnings (loss) from continuing operations
|
138 | 138 | 13 | 13 | ||||||||||||
Earnings (loss) from discontinued operations
|
4 | 4 | 1 | 1 | ||||||||||||
Net earnings (loss)
|
142 | 142 | 14 | 14 | ||||||||||||
Cumulative preferred stock dividends
|
- | - | (3 | ) | (3 | ) | ||||||||||
Net earnings (loss) available to common shareholders
|
142 | 142 | 11 | 11 | ||||||||||||
Weighted-average shares basic
|
155,966,259 | 155,966,259 | 150,272,227 | 150,272,227 | ||||||||||||
Dilutive stock options
|
1,992,598 | 1,921,121 | ||||||||||||||
Dilutive restricted stock units
|
707,830 | 449,023 | ||||||||||||||
Assumed conversion of preferred stock
|
- | - | ||||||||||||||
Weighted-average shares diluted
|
158,666,687 | 152,642,371 | ||||||||||||||
Per share
|
||||||||||||||||
Earnings (loss) from continuing operations
|
0.88 | 0.87 | 0.06 | 0.06 | ||||||||||||
Earnings (loss) from discontinued operations
|
0.03 | 0.03 | 0.01 | 0.01 | ||||||||||||
Net earnings (loss)
|
0.91 | 0.90 | 0.07 | 0.07 | ||||||||||||
Three Months Ended
|
||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Stock options
|
180,625 | 611,250 | ||||||
Restricted stock units
|
- | - | ||||||
Convertible preferred stock
|
- | 6,302,027 | ||||||
Total
|
180,625 | 6,913,277 | ||||||
36
Three Months Ended
|
Total From
|
|||||||||||
March 31, |
Inception Through
|
|||||||||||
2011 | 2010 | March 31, 2011 | ||||||||||
(In $ millions) | ||||||||||||
Deferred proceeds
|
- | - | 749 | |||||||||
Costs expensed
|
13 | 6 | 72 | |||||||||
Costs capitalized
(1)
|
49 | 68 | 970 | |||||||||
Lease buyout
|
- | - | 22 |
(1) | Includes a decrease in accrued capital expenditures of $5 million and $17 million for the three months ended March 31, 2011 and 2010, respectively. |
37
Three Months Ended March 31, 2011 | ||||||||||||||||||||||||
Parent
|
Subsidiary
|
Non-
|
||||||||||||||||||||||
Guarantor | Issuer | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
(In $ millions) | ||||||||||||||||||||||||
Net sales
|
- | - | 615 | 1,231 | (257 | ) | 1,589 | |||||||||||||||||
Cost of sales
|
(436 | ) | (1,051 | ) | 249 | (1,238 | ) | |||||||||||||||||
Gross profit
|
- | - | 179 | 180 | (8 | ) | 351 | |||||||||||||||||
Selling, general and administrative expenses
|
- | - | (39 | ) | (89 | ) | - | (128 | ) | |||||||||||||||
Amortization of intangible assets
|
- | - | (4 | ) | (12 | ) | - | (16 | ) | |||||||||||||||
Research and development expenses
|
- | - | (13 | ) | (10 | ) | - | (23 | ) | |||||||||||||||
Other (charges) gains, net
|
- | - | 19 | (16 | ) | - | 3 | |||||||||||||||||
Foreign exchange gain (loss), net
|
- | - | - | 1 | - | 1 | ||||||||||||||||||
Operating profit
|
- | - | 142 | 54 | (8 | ) | 188 | |||||||||||||||||
Equity in net earnings (loss) of affiliates
|
142 | 178 | 28 | 36 | (341 | ) | 43 | |||||||||||||||||
Interest expense
|
- | (51 | ) | (12 | ) | (10 | ) | 18 | (55 | ) | ||||||||||||||
Interest income
|
- | 6 | 9 | 4 | (18 | ) | 1 | |||||||||||||||||
Other income (expense), net
|
- | 2 | - | 1 | - | 3 | ||||||||||||||||||
Earnings (loss) from continuing operations before tax
|
142 | 135 | 167 | 85 | (349 | ) | 180 | |||||||||||||||||
Income tax (provision) benefit
|
- | 7 | (44 | ) | (6 | ) | 1 | (42 | ) | |||||||||||||||
Earnings (loss) from continuing operations
|
142 | 142 | 123 | 79 | (348 | ) | 138 | |||||||||||||||||
Earnings (loss) from operation of discontinued operations
|
- | - | 6 | - | - | 6 | ||||||||||||||||||
Income tax (provision) benefit from discontinued operations
|
- | - | (2 | ) | - | - | (2 | ) | ||||||||||||||||
Earnings (loss) from discontinued operations
|
- | - | 4 | - | - | 4 | ||||||||||||||||||
Net earnings (loss)
|
142 | 142 | 127 | 79 | (348 | ) | 142 | |||||||||||||||||
Net (earnings) loss attributable to noncontrolling interests
|
- | - | - | - | - | - | ||||||||||||||||||
Net earnings (loss) attributable to Celanese Corporation
|
142 | 142 | 127 | 79 | (348 | ) | 142 | |||||||||||||||||
38
Three Months Ended March 31, 2010 | ||||||||||||||||||||||||
Parent
|
Subsidiary
|
Non-
|
||||||||||||||||||||||
Guarantor | Issuer | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
(In $ millions) (As Adjusted, Note 3) | ||||||||||||||||||||||||
Net sales
|
- | - | 552 | 1,067 | (231 | ) | 1,388 | |||||||||||||||||
Cost of sales
|
- | - | (430 | ) | (977 | ) | 237 | (1,170 | ) | |||||||||||||||
Gross profit
|
- | - | 122 | 90 | 6 | 218 | ||||||||||||||||||
Selling, general and administrative expenses
|
- | - | (47 | ) | (77 | ) | - | (124 | ) | |||||||||||||||
Amortization of intangible assets
|
- | - | (2 | ) | (13 | ) | - | (15 | ) | |||||||||||||||
Research and development expenses
|
- | - | (10 | ) | (8 | ) | - | (18 | ) | |||||||||||||||
Other (charges) gains, net
|
- | - | 9 | (86 | ) | - | (77 | ) | ||||||||||||||||
Foreign exchange gain (loss), net
|
- | - | - | 2 | - | 2 | ||||||||||||||||||
Operating profit
|
- | - | 72 | (92 | ) | 6 | (14 | ) | ||||||||||||||||
Equity in net earnings (loss) of affiliates
|
14 | 39 | 27 | 33 | (64 | ) | 49 | |||||||||||||||||
Interest expense
|
- | (39 | ) | (9 | ) | (12 | ) | 11 | (49 | ) | ||||||||||||||
Interest income
|
- | 5 | 6 | 1 | (11 | ) | 1 | |||||||||||||||||
Other income (expense), net
|
- | 1 | (1 | ) | 6 | - | 6 | |||||||||||||||||
Earnings (loss) from continuing operations before tax
|
14 | 6 | 95 | (64 | ) | (58 | ) | (7 | ) | |||||||||||||||
Income tax (provision) benefit
|
- | 8 | (12 | ) | 23 | 1 | 20 | |||||||||||||||||
Earnings (loss) from continuing operations
|
14 | 14 | 83 | (41 | ) | (57 | ) | 13 | ||||||||||||||||
Gain (loss) on disposal of discontinued operations
|
- | - | 2 | - | - | 2 | ||||||||||||||||||
Income tax (provision) benefit from discontinued operations
|
- | - | (1 | ) | - | - | (1 | ) | ||||||||||||||||
Earnings (loss) from discontinued operations
|
- | - | 1 | - | - | 1 | ||||||||||||||||||
Net earnings (loss)
|
14 | 14 | 84 | (41 | ) | (57 | ) | 14 | ||||||||||||||||
Net (earnings) loss attributable to noncontrolling interests
|
- | - | - | - | - | - | ||||||||||||||||||
Net earnings (loss) attributable to Celanese Corporation
|
14 | 14 | 84 | (41 | ) | (57 | ) | 14 | ||||||||||||||||
39
40
41
Three Months Ended March 31, 2011 | ||||||||||||||||||||||||
Parent
|
Subsidiary
|
Non-
|
||||||||||||||||||||||
Guarantor | Issuer | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
(In $ millions) | ||||||||||||||||||||||||
Net cash provided by (used in) operating activities
|
- | - | 102 | 30 | - | 132 | ||||||||||||||||||
Investing activities from continuing operations
|
||||||||||||||||||||||||
Capital expenditures on property, plant and equipment
|
- | - | (32 | ) | (45 | ) | - | (77 | ) | |||||||||||||||
Acquisitions, net of cash acquired
|
- | - | (8 | ) | - | - | (8 | ) | ||||||||||||||||
Proceeds from sale of businesses and assets, net
|
- | - | 1 | 3 | - | 4 | ||||||||||||||||||
Capital expenditures related to Ticona Kelsterbach plant
relocation
|
- | - | - | (54 | ) | - | (54 | ) | ||||||||||||||||
Other, net
|
- | - | (2 | ) | (14 | ) | - | (16 | ) | |||||||||||||||
Net cash provided by (used in) investing activities
|
- | - | (41 | ) | (110 | ) | - | (151 | ) | |||||||||||||||
Financing activities from continuing operations
|
||||||||||||||||||||||||
Short-term borrowings (repayments), net
|
- | - | (6 | ) | 1 | - | (5 | ) | ||||||||||||||||
Proceeds from long-term debt
|
- | - | - | 11 | - | 11 | ||||||||||||||||||
Repayments of long-term debt
|
- | (5 | ) | - | (4 | ) | - | (9 | ) | |||||||||||||||
Proceeds and repayments from intercompany financing activities
|
- | 5 | (5 | ) | - | - | - | |||||||||||||||||
Purchases of treasury stock, including related fees
|
(3 | ) | - | - | - | - | (3 | ) | ||||||||||||||||
Dividends from subsidiary
|
9 | 9 | - | - | (18 | ) | - | |||||||||||||||||
Dividends to parent
|
- | (9 | ) | (9 | ) | - | 18 | - | ||||||||||||||||
Stock option exercises
|
5 | - | - | - | - | 5 | ||||||||||||||||||
Series A common stock dividends
|
(8 | ) | - | - | - | - | (8 | ) | ||||||||||||||||
Other, net
|
- | (2 | ) | - | - | (2 | ) | |||||||||||||||||
Net cash provided by (used in) financing activities
|
3 | - | (22 | ) | 8 | - | (11 | ) | ||||||||||||||||
Exchange rate effects on cash and cash equivalents
|
- | - | - | 12 | - | 12 | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents
|
3 | - | 39 | (60 | ) | - | (18 | ) | ||||||||||||||||
Cash and cash equivalents at beginning of period
|
- | - | 128 | 612 | - | 740 | ||||||||||||||||||
Cash and cash equivalents at end of period
|
3 | - | 167 | 552 | - | 722 | ||||||||||||||||||
42
Three Months Ended March 31, 2010 | ||||||||||||||||||||||||
Parent
|
Subsidiary
|
Non-
|
||||||||||||||||||||||
Guarantor | Issuer | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
(In $ millions) (As Adjusted, Note 3) | ||||||||||||||||||||||||
Net cash provided by (used in) operating activities
|
1 | - | (33 | ) | 87 | - | 55 | |||||||||||||||||
Investing activities from continuing operations
|
||||||||||||||||||||||||
Capital expenditures on property, plant and equipment
|
- | - | (18 | ) | (26 | ) | - | (44 | ) | |||||||||||||||
Proceeds from sale of businesses and assets, net
|
- | - | - | 5 | - | 5 | ||||||||||||||||||
Capital expenditures related to Ticona Kelsterbach plant
relocation
|
- | - | - | (85 | ) | - | (85 | ) | ||||||||||||||||
Other, net
|
- | - | (3 | ) | (5 | ) | - | (8 | ) | |||||||||||||||
Net cash provided by (used in) investing activities
|
- | - | (21 | ) | (111 | ) | - | (132 | ) | |||||||||||||||
Financing activities from continuing operations
|
||||||||||||||||||||||||
Short-term borrowings (repayments), net
|
- | - | - | 1 | - | 1 | ||||||||||||||||||
Repayments of long-term debt
|
- | (7 | ) | (1 | ) | (2 | ) | - | (10 | ) | ||||||||||||||
Proceeds and repayments from intercompany financing activities
|
- | 7 | 26 | (33 | ) | - | - | |||||||||||||||||
Dividends from subsidiary
|
2 | 2 | - | - | (4 | ) | - | |||||||||||||||||
Dividends to parent
|
- | (2 | ) | (2 | ) | - | 4 | - | ||||||||||||||||
Stock option exercises
|
3 | - | - | - | - | 3 | ||||||||||||||||||
Series A common stock dividends
|
(6 | ) | - | - | - | - | (6 | ) | ||||||||||||||||
Preferred stock dividends
|
(3 | ) | - | - | - | - | (3 | ) | ||||||||||||||||
Net cash provided by (used in) financing activities
|
(4 | ) | - | 23 | (34 | ) | - | (15 | ) | |||||||||||||||
Exchange rate effects on cash and cash equivalents
|
- | - | - | (23 | ) | - | (23 | ) | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents
|
(3 | ) | - | (31 | ) | (81 | ) | - | (115 | ) | ||||||||||||||
Cash and cash equivalents at beginning of period
|
5 | - | 520 | 729 | - | 1,254 | ||||||||||||||||||
Cash and cash equivalents at end of period
|
2 | - | 489 | 648 | - | 1,139 | ||||||||||||||||||
43
22. | Subsequent Events |
44
Item 2.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
changes in general economic, business, political and regulatory
conditions in the countries or regions in which we operate;
the length and depth of product and industry business cycles
particularly in the automotive, electrical, textiles,
electronics and construction industries;
changes in the price and availability of raw materials,
particularly changes in the demand for, supply of, and market
prices of ethylene, methanol, natural gas, wood pulp and fuel
oil and the prices for electricity and other energy sources;
the ability to pass increases in raw material prices on to
customers or otherwise improve margins through price increases;
45
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the ability to maintain plant utilization rates and to implement
planned capacity additions and expansions;
the ability to reduce or maintain at their current levels
production costs and 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 or technologies;
costs and potential disruption or interruption 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 relating to climate change;
potential liability resulting from pending or future litigation,
or from changes in the laws, regulations or policies of
governments or other governmental activities in the countries in
which we operate;
changes in currency exchange rates and interest rates;
our level of indebtedness, which could diminish our ability to
raise additional capital to fund operations or limit our ability
to react to changes in the economy or the chemicals
industry; and
various other factors, both referenced and not referenced in
this Quarterly Report.
We announced the expansion of our ethylene vinyl acetate
(EVA) capacity at our Edmonton manufacturing
facility due to strong growth in strategic, high-value segments.
Global EVA production increases are fueled by growth in the
photovoltaic cell industry in China, strong demand for EVA in
other parts of Asia, and demand for EVA in innovative
applications like controlled-release excipients and medical
packaging. We expect our
46
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capacity to increase by up to 15 percent for our higher
vinyl acetate content EVA grades in the second half of 2011.
We announced that our Board of Directors approved a 20% increase
in our quarterly Series A common stock cash dividend. The
dividend rate increased from $0.05 to $0.06 per share of
Series A common stock on a quarterly basis and from $0.20
to $0.24 per share on an annual basis. Our Board of Directors
also approved an increase of $129 million to our existing
share repurchase authorization for a total remaining
authorization of $200 million of our Series A common
stock. As of March 31, 2011, we had $71 million
remaining under our previously announced plan that authorized up
to $500 million.
47
Table of Contents
Three Months Ended
March 31,
2011
2010
(As Adjusted)
(unaudited)
(In $ millions)
1,589
1,388
351
218
(128
)
(124
)
3
(77
)
188
(14
)
43
49
(55
)
(49
)
180
(7
)
138
13
4
1
142
14
72
89
As of
As of
March 31,
December 31,
2011
2010
(unaudited)
(In $ millions)
722
740
debt third party and affiliates
219
228
3,003
2,990
3,222
3,218
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Three Months Ended
March 31,
2011
2010
(unaudited)
(In $ millions)
(4
)
(5
)
(13
)
(6
)
-
12
-
(72
)
-
(6
)
20
-
3
(77
)
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Table of Contents
Three Months Ended
March 31,
2011
2010
Change
As Adjusted
(unaudited)
(In $ millions, except percentages)
328
282
46
266
238
28
290
242
48
813
724
89
1
-
1
(109
)
(98
)
(11
)
1,589
1,388
201
(13
)
5
(18
)
(1
)
(73
)
72
-
-
-
18
(7
)
25
(1
)
(2
)
1
3
(77
)
80
38
48
(10
)
54
(30
)
84
25
12
13
112
-
112
(41
)
(44
)
3
188
(14
)
202
73
92
(19
)
55
(30
)
85
25
12
13
114
1
113
(87
)
(82
)
(5
)
180
(7
)
187
21
20
1
12
11
1
10
10
-
25
45
(20
)
4
3
1
72
89
(17
)
11.6
%
17.0
%
(5.4
)
%
20.3
%
(12.6
)
%
32.9
%
8.6
%
5.0
%
3.6
%
13.8
%
-
%
13.8
%
11.8
%
(1.0
)
%
12.8
%
(1)
Defined as operating profit (loss) divided by net sales.
50
Table of Contents
Volume
Price
Currency
Other
Total
(unaudited)
(In percentages)
6
8
(1
)
3
(1)
16
10
4
-
(2
)
(2)
12
8
13
(1
)
-
20
-
12
-
-
12
4
11
(1
)
-
(3)
14
(1)
2011 includes the effects of the two product lines acquired from
DuPont Performance Polymers (acquired May 2010).
(2)
Includes the impact of fluctuations in intersegment sales.
(3)
Includes the effects of the captive insurance companies and the
impact of fluctuations in intersegment eliminations.
Three Months Ended
March 31,
Change
2011
2010
in $
As Adjusted
(unaudited)
(In $ millions, except percentages)
328
282
46
6
%
8
%
(1
)
%
3
%
(13
)
5
(18
)
38
48
(10
)
11.6
%
17.0
%
34
44
(10
)
before tax
73
92
(19
)
21
20
1
51
Table of Contents
Three Months Ended
March 31,
Change
2011
2010
in $
(unaudited)
(In $ millions, except percentages)
266
238
28
10
%
4
%
-
%
(2
)
%
(1
)
(73
)
72
54
(30
)
84
20.3
%
(12.6
)
%
1
-
1
before tax
55
(30
)
85
12
11
1
52
Table of Contents
Three Months Ended
March 31,
Change
2011
2010
in $
(unaudited)
(In $ millions, except percentages)
290
242
48
8
%
13
%
(1
)
%
-
-
-
-
25
12
13
8.6
%
5.0
%
before tax
25
12
13
10
10
-
53
Table of Contents
Three Months Ended
March 31,
Change
2011
2010
in $
(As Adjusted)
(unaudited)
(In $ millions, except percentages)
813
724
89
-
%
12
%
-
%
-
%
18
(7
)
25
112
-
112
13.8
%
-
%
2
1
1
114
1
113
25
45
(20
)
54
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55
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56
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57
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First Lien Senior Secured Leverage Ratios
Estimate, If Fully
Borrowing
Maximum
Estimate
Drawn
Capacity
(unaudited)
(In $ millions)
3.90 to 1.00
1.71 to 1.00
2.23 to 1.00
600
Three Months Ended
Total From
March 31,
Inception Through
2011
2010
March 31, 2011
(unaudited)
69,400
-
11,500,192
$
43.42
-
$
37.28
$
3
-
$
429
58
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59
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60
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Approximate Dollar
Total Number of
Value of Shares
Total Number
Average
Shares Purchased as
Remaining that may be
of Shares
Price Paid
Part of Publicly
Purchased Under
Period
Purchased
per Share
Announced Program
the Program
(unaudited)
57,596
(1)
$
42.34
-
$
74,300,000
69,400
$
43.42
69,400
$
71,300,000
-
$
-
-
$
71,300,000
126,996
$
42.93
69,400
$
71,300,000
(1)
Relate to shares employees have elected to have withheld to
cover their statutory minimum withholding requirements for
personal income taxes related to the vesting of restricted stock
units.
61
Table of Contents
Exhibit
Number
Description
3
.1
Second Amended and Restated Certificate of Incorporation
(Incorporated by reference to Exhibit 3.1 to the Annual
Report on
Form 10-K
filed with the SEC on February 11, 2011).
3
.2
Third Amended and Restated By-laws, effective as of
October 23, 2008 (Incorporated by reference to
Exhibit 3.1 to the Current Report on
Form 8-K
filed with the SEC on October 29, 2008).
31
.1
Certification of Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
31
.2
Certification of Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
32
.1
Certification of Chief Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
32
.2
Certification of Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
101
.INS
XBRL Instance Document
101
.SCH
XBRL Taxonomy Extension Schema Document
101
.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101
.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101
.LAB
XBRL Taxonomy Extension Label Linkbase Document
101
.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
62
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By:
By:
63