SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 22, 2007

CELANESE CORPORATION

(Exact Name of Registrant as specified in its charter)
         
DELAWARE   001-32410   98-0420726
 
 
(State or other jurisdiction
of incorporation) 		  (Commission File
Number) 		  (IRS Employer
Identification No.)

1601 West LBJ Freeway, Dallas, Texas 75234-6034

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (972) 443-4000

Not Applicable

(Former name or former address, if changed since last report):

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Item  2.02 Results of Operations and Financial Condition

          On October 22, 2007, Celanese Corporation (the “Company”) issued a press release reporting the financial results for its third quarter 2007. A copy of the press release is attached to this Current Report on Form 8-K (“ Current Report ”) as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 2.02 disclosure.

Item  7.01 Regulation FD Disclosure

          On October 23, 2007, David N. Weidman, President and Chief Executive Officer of the Company, and Steven M. Sterin, Senior Vice President and Chief Financial Officer of the Company, will make a presentation to investors and analysts via a webcast hosted by the Company at 9:00 a.m. CT. The webcast and slide presentation may be accessed on our website at www.celanese.com under Investor/Presentations & Webcasts. A copy of the slide presentation posted during the webcast is attached to this Current Report as Exhibit 99.2 and is incorporated herein solely for purposes of this Item 7.01 disclosure.

Item  9.01 Financial Statements and Exhibits.

     
(d) Exhibits    
     
Exhibit Number   Description
 
     
99.1   Press Release dated October 22, 2007*
     
99.2   Slide Presentation dated October 23, 2007*

*   In connection with the disclosure set forth in Item 2.02 and Item 7.01, the information in this Current Report, including the exhibits attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information in this Current Report, including the exhibits, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act, regardless of any incorporation by reference language in any such filing. This Current Report will not be deemed an admission as to the materiality of any information in this Current Report that is required to be disclosed solely by Regulation FD.

 

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

     
    CELANESE CORPORATION
 
  By   /s/ Miguel A. Desdin     
Name: Miguel A. Desdin
Title: Vice President and Controller

Date: October 23, 2007

 

Exhibit Index

     
Exhibit Number   Description
 
99.1   Press Release dated October 22, 2007*
     
99.2   Slide Presentation dated October 23, 2007*
 
*   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.
 

Exhibit 99.1
(CELANESE LOGO)
     
Corporate News Release
  Celanese Corporation
Investor Relations
1601 West LBJ Freeway
Dallas, Texas 75234- 6034
 
   
 
  Mark Oberle
Phone: +1 972 443 4464
Celanese Corporation Reports Strong Third Quarter Results; Raises Outlook for Full Year 2007
      Third quarter highlights:
  §   Net sales increased 7% to $1,573 million from prior year
 
  §   Operating profit decreased 15% to $147 million
 
  §   Net earnings increased 17% to $128 million
 
  §   Operating EBITDA increased to $302 million from $296 million in prior year
 
  §   Diluted EPS increased 19% to $0.76
 
  §   Adjusted EPS increased to $0.73 from $0.71 in prior year
 
  §   2007 adjusted earnings per share outlook raised to between $3.10 and $3.20 from previous guidance of between $2.85 and $3.00
                                         
    Three Months Ended   Nine Months Ended        
    September 30,   September 30,        
(in $ millions, except per share data)   2007   2006   2007   2006        
 
Net sales
    1,573       1,471       4,684       4,348          
Operating profit
    147       172       424       480          
Net earnings
    128       109       212       329          
Operating EBITDA 1
    302       296       976       875          
Diluted EPS — continuing operations
  $ 0.77     $ 0.52     $ 0.74     $ 1.58          
Diluted EPS — Total
  $ 0.76     $ 0.64     $ 1.23     $ 1.92          
Adjusted EPS 1
  $ 0.73     $ 0.71     $ 2.49     $ 2.02          
 
1   Non-U.S. GAAP measures. See reconciliation in tables 1 and 6.
Dallas, October 22, 2007: Celanese Corporation (NYSE: CE) today reported strong overall performance with net sales of $1,573 million for the quarter, a 7 percent increase from the prior year. Higher pricing on continued robust global demand for Acetyl Intermediates products and sales from the recently acquired Acetate Products Limited (APL) business drove the increased revenue. Additionally, net sales benefited from increased volume in Advanced Engineered Materials, the successful startup of the company’s acetic acid unit in Nanjing, China and the favorable effect of foreign currency exchange across all businesses. Volumes in Acetyl Intermediates and Industrial Specialties were lower due to the unplanned outage of the acetic acid unit at the company’s Clear Lake, Texas facility which restarted in early August. Operating profit decreased to $147 million from $172 million in the prior year period, primarily due to increased other charges and a loss on sale related to the AT Plastics Films business. Net earnings were $128 million compared with $109 million a year ago, primarily due to U.S. GAAP treatment of taxes in the quarter.

 

 

Page 2 of 16
Adjusted earnings per share for the third quarter were $0.73 compared with $0.71 in the same period last year, driven by continued strong operating performance across the company and increased earnings from affiliates.
The 2006 results included approximately $0.04 of after-tax earnings per share associated with the production of methanol which the company ceased in 2007. The 2007 results for adjusted earnings per share excluded approximately $40 million in costs primarily associated with the company’s debt refinancing initiative and the previously announced revitalization strategy for Industrial Specialties. The tax rate used for adjusted earnings per share was 28 percent and 25 percent for the third quarters of 2007 and 2006, respectively. Operating EBITDA for the quarter was $302 million versus $296 million in the prior year period.
“The global fundamentals of our businesses remain strong and we continue to deliver on our growth commitments,” said David Weidman, chairman and chief executive officer. “Although we encountered volatility in key raw materials and were challenged with the impact of the Clear Lake outage, we demonstrated the resiliency of our integrated hybrid structure. Our global balance and end market diversity continued to provide a platform for sustained earnings growth and cash generation.”
Year to Date 2007
Net sales for the first nine months of 2007 were $4,684 million, an 8 percent increase from last year’s results. Overall higher pricing on continued strong demand for acetyl products, positive currency effects, and additional sales from the APL business contributed to the increase. Operating profit was $424 million compared with $480 million in the prior year period, primarily due to a long-term management compensation program paid upon the exit of the company’s private equity sponsor, and expenses associated with the company’s restructuring and revitalization programs. Operating EBITDA for the first nine months of 2007 was $976 million, up 12 percent from the first nine months of 2006. Adjusted earnings per share were $2.49 versus $2.02 in the same period last year, driven by strong operating performance.

 

 

Page 3 of 16
Recent Highlights
  §   Celebrated milestone events in Asia, marking the company’s historical presence in China and Singapore, as well as its commitment to growth in the region. Events included the 20th anniversary of the company’s acetate joint venture at Nantong Cellulose Fibers Company; the 10th anniversary of acetyl products operations in Singapore; and the inauguration of the integrated chemical complex in Nanjing, China.
 
  §   Sold the Films business of the AT Plastics subsidiary to British Polythene Industries PLC (BPI). The sale was part of Celanese’s ongoing plan to divest non-core businesses.
 
  §   Announced the sale of the Pampa, Texas facility as part of the company’s plan to pursue strategic alternatives for the site. Celanese’s chemical production and other operations will continue at the site until at least early 2009.
 
  §   Selected Frankfurt-Hoechst Industrial Park as the new site for Ticona’s Kelsterbach production operations in Germany.
Third Quarter Segment Overview
In December 2006, the company announced a realignment of its businesses to drive strategic growth and group businesses with similar dynamics and growth opportunities. Beginning with the third quarter 2007, financial results for the business segments reflect this realignment and are reported in the new structure. The comparative segment data, which also reflect the realignment, exclude results from the company’s oxo alcohol business, substantially all of which was divested in the first quarter of 2007. Quarterly earnings for the discontinued Edmonton methanol operations are included in Other Charges and Other Adjustments. For quarterly historical financial information in the new reporting segments for the fiscal years 2005 and 2006 and for the first two fiscal quarters of 2007, please refer to the Investor section of the company’s website, www.celanese.com .
Advanced Engineered Materials
Advanced Engineered Materials experienced continued high volume growth, fueled by strong end market demand and innovative application development. Net sales increased to $258 million from $230 million in the same period last year as volume increases of 11 percent and positive currency impacts of 4 percent more than offset slightly lower average pricing related to product

 

 

Page 4 of 16
and segment mix. Operating profit decreased to $35 million from $37 million in the same period last year as the increased sales were offset by higher energy costs and the impact of product and segment mix. Operating EBITDA, however, increased to $70 million from $67 million in the prior year period, driven by increased earnings from its equity affiliates. Advanced Engineered Materials represents the previously reported Technical Polymers Ticona segment.
Consumer Specialties
Consumer Specialties continued to deliver superior performance and realize the benefits of the revitalization strategy for its Acetate Products business. Net sales increased 32 percent to $282 million compared with the same period last year. The increase was primarily driven by $59 million of additional net sales in the quarter from the acquired APL business. Net sales also benefited from higher pricing on continued strong demand in Acetate Products. Increased volumes for Sunett ® sweetener helped to offset lower acetate flake volumes associated with the company’s strategy to expand its China ventures and close flake production in Edmonton, Canada. Operating profit was $34 million, $1 million lower than the prior year period. The increased sales were offset by higher raw material and energy costs, higher depreciation and amortization, and expenses associated with the continued integration of the recently acquired APL business. Operating EBITDA increased to $53 million compared with $44 million in the same period last year. Consumer Specialties combines the previously reported Acetate Products and Performance Products segments.
Industrial Specialties
Net sales for the integrated, downstream specialty businesses decreased 6 percent to $314 million compared with the prior year period, primarily driven by lower volumes resulting from the unplanned outage of the acetic acid unit at the company’s Clear Lake facility and its subsequent force majeure. Net sales benefited, however, from higher pricing on continued strong demand and favorable currency effects in the period. Operating profit was a loss of $9 million, $26 million lower than the prior year period, on lower volumes and higher raw material costs, primarily VAM. Third quarter 2007 results also included a $7 million loss on sale of the AT Plastics Films business in August 2007. Operating EBITDA was $18 million compared with $36 million in the prior year period. The Industrial Specialties segment combines the emulsions, polyvinyl alcohol (PVOH) and AT Plastics businesses which were previously reported in the Chemical Products and Other segments, respectively.

 

 

Page 5 of 16
Acetyl Intermediates
Acetyl Intermediates demonstrated the strength of its global presence and executed on its growth objectives in Asia. Net sales were $859 million compared with $872 million in the prior year period as higher pricing on continued strong global demand and positive currency effects helped to offset overall lower volumes resulting from the company’s unplanned outage at the Clear Lake facility. Additional industry production outages also contributed to the favorable supply/demand balances and higher pricing. Production from the company’s new acetic acid unit in Nanjing, China positively impacted results. Operating profit was $117 million, a 7 percent decrease from the same period last year, driven by lower volumes, higher raw material costs, and higher depreciation and amortization expense associated with the Nanjing, China unit. Operating EBITDA, however, increased modestly to $178 million from $177 million in the same period last year as the company’s Ibn Sina cost affiliate contributed higher dividends in the quarter. Acetyl Intermediates includes acetic acid, VAM, acetic anhydride and other acetyl derivatives previously reported in the Chemical Products segment.
Taxes
The tax rate for adjusted earnings per share was 28 percent in the third quarter of 2007 compared with 25 percent for the third quarter of 2006. The third quarter U.S. GAAP effective rate was significantly lower primarily as a result of revaluing deferred taxes to reflect the recent German tax rate reduction. This rate reduction was accounted for as a discrete transaction in the third quarter. The adjusted tax rate of 28 percent is based on our previous guidance which did not anticipate this rate reduction.
Equity and Cost Investments
Earnings from equity investments and dividends from cost investments, which are reflected in the company’s adjusted earnings and operating EBITDA, totaled $53 million in the third quarter compared with $33 million in the third quarter of 2006. The increase is attributed to higher dividends received from its Ibn Sina cost affiliate, primarily driven by strong methanol and MTBE performance, as well as improved earnings performance in the Advanced Engineered Materials equity affiliates. Equity and cost investment dividends, which are included in operating cash flow, increased to $43 million from $33 million last year.

 

Page 6 of 16

Cash Flow
During the first nine months of 2007, the company generated approximately $279 million in cash flow from operations compared with $444 million in the same period last year. Excluding operating cash used in discontinued operations in both periods, cash flow from operations was $371 million and $437 million for 2007 and 2006, respectively. Through the end of the third quarter 2007, the company has paid $109 million in additional cash taxes compared with the same period last year.
“Our cash generation remains strong,” said Steven Sterin, senior vice president and chief financial officer. “We continue on track to deliver between $400 million and $500 million in free cash flow during 2007.”
Cash and cash equivalents at the end of the period were $531 million, a decrease of $260 million from the end of 2006 and an increase of $61 million from the end of the second quarter of 2007. During the first nine months of 2007, the company executed a comprehensive recapitalization strategy which included a debt refinancing and repurchase of its Series A common stock. The company completed purchasing shares under this plan during July 2007, using $145 million in cash in the third quarter. Net debt at the end of the third quarter was $2,964 million, an increase of $257 million from the end of 2006, primarily driven by the company’s debt refinancing and the acquisition of the APL business.
Outlook
The company raised its full year 2007 outlook for adjusted earnings per share to between $3.10 and $3.20 from its previous guidance range of between $2.85 and $3.00. The company’s guidance is based on a tax rate of 28 percent and a year-end weighted average of 171 million diluted shares outstanding. The company also raised its guidance range for operating EBITDA to between $1,240 million and $1,270 million from its previous guidance range of between $1,180 million and $1,220 million.
“With continued strong business performance and higher pricing across the acetyls industry related to significant production outages, our financial outlook for the remainder of the year has improved. Our Industrial Specialties businesses, however, will be challenged with higher raw material costs consistent with the integrated nature of their earnings profile,” said Weidman. “Overall, the performance of our global portfolio continues to deliver growth and improved earnings.”

 

Page 7 of 16

     
Contacts:    
Investor Relations   Media
Mark Oberle
  Jeremy Neuhart
Phone: +1 972 443 4464
  Phone: +1 972 443 3750
Telefax: +1 972 332 9373
  Telefax: +1 972 443 8519
Email: Mark.Oberle@celanese.com
  Jeremy.Neuhart@celanese.com
As a global leader in the chemicals industry, Celanese Corporation makes products essential to everyday living. Our products, found in consumer and industrial applications, are manufactured in North America, Europe and Asia.  Net sales totaled $6.7 billion in 2006, with over 60% generated outside of North America.  Known for operational excellence and execution of its business strategies, Celanese delivers value to customers around the globe with innovations and best-in-class technologies.  Based in Dallas, Texas, the company employs approximately 8,900 employees worldwide. For more information on Celanese Corporation, please visit the company’s website at www.celanese.com .
Forward-Looking Statements
This release may contain “forward-looking statements,” which include information concerning the company’s plans, objectives, goals, strategies, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. When used in this release, the words “outlook,” “forecast,” “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon current expectations and beliefs and various assumptions. There can be no assurance that the company will realize these expectations or that these beliefs will prove correct. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained in this release. Numerous factors, many of which are beyond the company’s control, could cause actual results to differ materially from those expressed as forward-looking statements. Certain of these risk factors are discussed in the company’s filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made, and the company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.

 

Page 8 of 16

Reconciliation of Non-U.S. GAAP Measures to U.S. GAAP
This release reflects four performance measures, operating EBITDA, affiliate EBITDA, adjusted earnings per share, and net debt as non-U.S. GAAP measures. The most directly comparable financial measure presented in accordance with U.S. GAAP in our consolidated financial statements for operating EBITDA is operating profit; for adjusted earnings per share is earnings per common share-diluted; and for net debt is total debt.
Use of Non-U.S. GAAP Financial Information
  •   Operating EBITDA, a measure used by management to measure performance, is defined as operating profit from continuing operations, plus equity in net earnings from affiliates, other income and depreciation and amortization, and further adjusted for other charges and adjustments. We provide guidance on operating EBITDA and are unable to reconcile forecasted operating EBITDA to a GAAP financial measure because a forecast of Other Charges and Adjustments is not practical. Our management believes operating EBITDA is useful to investors because it is one of the primary measures our management uses for its planning and budgeting processes and to monitor and evaluate financial and operating results. Operating EBITDA is not a recognized term under U.S. GAAP and does not purport to be an alternative to operating profit as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Because not all companies use identical calculations, this presentation of operating EBITDA may not be comparable to other similarly titled measures of other companies. Additionally, operating EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements nor does it represent the amount used in our debt covenants.
 
  •   Affiliate EBITDA, a measure used by management to measure performance of its equity investments, is defined as the proportional operating profit plus the proportional depreciation and amortization of its equity investments. Affiliate EBITDA, including Celanese Proportional Share of affiliate information on Table 8, is not a recognized term under U.S. GAAP and is not meant to be an alternative to operating cash flow of the equity investments. The company has determined that it does not have sufficient ownership for operating control of these investments to consider their results on a consolidated basis. The company believes that investors should consider affiliate EBITDA when determining the equity investments’ overall value in the company.
 
  •   Adjusted earnings per share is a measure used by management to measure performance. It is defined as net earnings (loss) available to common shareholders plus preferred dividends, adjusted for other charges and adjustments, and divided by the number of basic common shares, diluted preferred shares, and options valued using the treasury method. We provide guidance on an adjusted earnings per share basis and are unable to reconcile forecasted adjusted earnings per share to a GAAP financial measure because a forecast of Other Items is not practical. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations, and that when U.S. GAAP information is viewed in conjunction with non-U.S. GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. This non-U.S. GAAP information is not intended to be considered in isolation or as a substitute for U.S. GAAP financial information.
 
  •   Net debt is defined as total debt less cash and cash equivalents. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the company’s capital structure. Our management and credit analysts use net debt to evaluate the company’s capital structure and assess credit quality. This non-U.S. GAAP information is not intended to be considered in isolation or as a substitute for U.S. GAAP financial information.
Results Unaudited
The results presented in this release, together with the adjustments made to present the results on a comparable basis, have not been audited and are based on internal financial data furnished to management. Quarterly results should not be taken as an indication of the results of operations to be reported for any subsequent period or for the full fiscal year.

 

Page 9 of 16
Preliminary Consolidated Statements of Operations — Unaudited
                                   
    Three Months Ended     Nine Months Ended
    September 30,     September 30,
(in $ millions, except per share data)   2007   2006     2007   2006
       
Net sales
    1,573       1,471         4,684       4,348  
Cost of sales
    (1,236 )     (1,133 )       (3,651 )     (3,350 )
       
Gross profit
    337       338         1,033       998  
 
                                 
Selling, general and administrative expenses
    (133 )     (129 )       (371 )     (402 )
Amortization of Intangibles 1
    (18 )     (17 )       (53 )     (49 )
Research and development expenses
    (18 )     (15 )       (54 )     (48 )
Other (charges) gains, net
    (12 )     —         (118 )     (12 )
Foreign exchange loss, net
    —       (2 )       —       (3 )
Loss on disposition of assets, net
    (9 )     (3 )       (13 )     (4 )
       
Operating profit
    147       172         424       480  
 
                                 
Equity in net earnings of affiliates
    24       17         65       53  
Interest expense
    (63 )     (73 )       (196 )     (217 )
Refinancing expenses
    —       (1 )       (256 )     (1 )
Interest income
    9       10         34       26  
Dividend income — cost investments
    29       16         93       62  
Other income (expense), net
    (15 )     9         (30 )     (2 )
       
Earnings from continuing operations before tax and minority interests
    131       150         134       401  
 
                                 
Income tax provision
    (1 )     (60 )       (6 )     (128 )
       
Earnings from continuing operations before minority interests
    130       90         128       273  
 
                                 
Minority interests
    —       (2 )       —       (3 )
       
Earnings from continuing operations
    130       88         128       270  
 
                                 
Earnings (loss) from discontinued operations:
                                 
Earnings from operation of discontinued operations
    —       29         38       85  
Gain on disposal of discontinued operations
    —       3         47       4  
Income tax provision
    (2 )     (11 )       (1 )     (30 )
       
Earnings (loss) from discontinued operations
    (2 )     21         84       59  
 
                                 
Net earnings
    128       109         212       329  
       
Cumulative preferred stock dividend
    (2 )     (3 )       (7 )     (8 )
       
Net earnings available to common shareholders
    126       106         205       321  
       
 
                                 
Earnings (loss) per common share — basic:
                                 
Continuing operations
  $ 0.85     $ 0.54       $ 0.78     $ 1.65  
Discontinued operations
    (0.01 )     0.13         0.54       0.37  
       
Net earnings available to common shareholders
  $ 0.84     $ 0.67       $ 1.32     $ 2.02  
       
 
                                 
Earnings (loss) per common share — diluted:
                                 
Continuing operations
  $ 0.77     $ 0.52       $ 0.74     $ 1.58  
Discontinued operations
    (0.01 )     0.12         0.49       0.34  
       
Net earnings available to common shareholders
  $ 0.76     $ 0.64       $ 1.23     $ 1.92  
       
 
                                 
Weighted average shares — basic
    150.2       158.6         155.4       158.6  
Weighted average shares — diluted
    167.4       171.2         172.1       171.6  
       
 
1   Customer related intangibles

 

 

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Preliminary Consolidated Balance Sheets — Unaudited
                 
    September 30,   December 31,
(in $ millions)   2007   2006
 
ASSETS
               
Current assets:
               
Cash and cash equivalents
    531       791  
Restricted cash
    —       46  
Receivables:
               
Trade receivables — third party and affiliates, net
    953       1,001  
Other receivables
    395       475  
Inventories
    575       653  
Deferred income taxes
    75       76  
Other assets
    61       69  
 
Total current assets
    2,590       3,111  
 
               
Investments
    778       763  
Property, plant and equipment, net
    2,270       2,155  
Deferred income taxes
    51       22  
Other assets
    545       506  
Goodwill
    875       875  
Intangible assets, net
    432       463  
 
Total assets
    7,541       7,895  
 
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current liabilities:
               
Short-term borrowings and current installments of long-term debt — third party and affiliates
    243       309  
Trade payables — third parties and affiliates
    675       823  
Other current liabilities
    851       787  
Deferred income taxes
    6       18  
Income taxes payable
    16       279  
 
Total current liabilities
    1,791       2,216  
 
               
Long-term debt
    3,252       3,189  
Deferred income taxes
    247       297  
Benefit obligations
    880       889  
Other liabilities
    692       443  
Minority interests
    5       74  
Shareholders’ equity:
               
Preferred stock
    —       —  
Common stock
    —       —  
Treasury stock, at cost
    (403 )     —  
Additional paid-in capital
    428       362  
Retained earnings
    594       394  
Accumulated other comprehensive income (loss), net
    55       31  
 
Total shareholders’ equity
    674       787  
 
Total liabilities and shareholders’ equity
    7,541       7,895  
 

 

 

Page 11 of 16
Table 1
Segment Data and Reconciliation of Operating Profit (Loss) to Operating EBITDA — a Non-U.S. GAAP Measure.
                                   
    Three Months Ended     Nine Months Ended
    September 30,     September 30,
(in $ millions)   2007   2006     2007   2006
       
Net Sales
                                 
Advanced Engineered Materials
    258       230         777       691  
Consumer Specialties
    282       213         832       652  
Industrial Specialties
    314       335         1,015       972  
Acetyl Intermediates
    859       872         2,532       2,520  
Other Activities 1
    6       5         2       16  
Intersegment eliminations
    (146 )     (184 )       (474 )     (503 )
       
Total
    1,573       1,471         4,684       4,348  
       
 
                                 
Operating Profit (Loss)
                                 
Advanced Engineered Materials
    35       37         103       116  
Consumer Specialties
    34       35         130       124  
Industrial Specialties
    (9 )     17         2       35  
Acetyl Intermediates
    117       126         340       349  
Other Activities 1
    (30 )     (43 )       (151 )     (144 )
       
Total
    147       172         424       480  
       
 
                                 
Equity Earnings and Other Income/(Expense) 2
                                 
Advanced Engineered Materials
    18       14         48       42  
Consumer Specialties
    2       —         37       22  
Industrial Specialties
    —       —         —       (1 )
Acetyl Intermediates
    28       18         51       40  
Other Activities 1
    (10 )     10         (8 )     10  
       
Total
    38       42         128       113  
       
 
                                 
Other Charges and Other Adjustments 3
                                 
Advanced Engineered Materials
    —       —         5       (4 )
Consumer Specialties
    2       —         11       —  
Industrial Specialties
    14       3         33       14  
Acetyl Intermediates
    2       10         59       36  
Other Activities 1
    22       3         98       31  
       
Total
    40       16         206       77  
       
 
                                 
Depreciation and Amortization Expense
                                 
Advanced Engineered Materials
    17       16         51       48  
Consumer Specialties
    15       9         39       29  
Industrial Specialties
    13       16         43       45  
Acetyl Intermediates
    31       23         81       78  
Other Activities 1
    1       2         4       5  
       
Total
    77       66         218       205  
       
 
                                 
Operating EBITDA
                                 
Advanced Engineered Materials
    70       67         207       202  
Consumer Specialties
    53       44         217       175  
Industrial Specialties
    18       36         78       93  
Acetyl Intermediates
    178       177         531       503  
Other Activities 1
    (17 )     (28 )       (57 )     (98 )
       
Total
    302       296         976       875  
       
 
1   Other Activities primarily includes corporate selling, general and administrative expenses and the results from captive insurance companies.
 
2   Includes equity earnings from affiliates, dividends from cost investments and other income/(expense)
 
3   Excludes adjustments to minority interest, net interest, taxes, depreciation, amortization and discontinued operations (See Table 7).

 

 

Page 12 of 16
Table 2
Factors Affecting Third Quarter 2007 Segment Net Sales Compared to Third Quarter 2006
                                         
(in percent)   Volume   Price   Currency   Other 1   Total
 
Advanced Engineered Materials
    11 %     -3 %     4 %     0 %     12 %
Consumer Specialties
    -1 %     4 %     1 %     28 %     32 %
Industrial Specialties
    -11 %     3 %     4 %     -2 %     -6 %
Acetyl Intermediates
    -15 %     11 %     3 %     0 %     -1 %
Total Company
    -10 %     7 %     4 %     6 %     7 %
 
Factors Affecting Nine Months 2007 Segment Net Sales Compared to Nine Months 2006
                                         
(in percent)   Volume   Price   Currency   Other 1   Total
 
Advanced Engineered Materials
    9 %     -1 %     4 %     0 %     12 %
Consumer Specialties
    -3 %     5 %     1 %     25 %     28 %
Industrial Specialties
    0 %     1 %     4 %     -1 %     4 %
Acetyl Intermediates
    -10 %     7 %     3 %     0 %     0 %
Total Company
    -5 %     5 %     4 %     4 %     8 %
 
 
1   Primarily represents net sales from APL (Acetate), divestiture of AT Plastics Films business and captive insurance companies (Total Company).
Table 3
Cash Flow Information
                 
    Nine Months Ended
    September 30,
(in $ millions)   2007   2006
Net cash provided by operating activities
    279       444  
Net cash provided by (used in) investing activities
    196       (222 )
Net cash used in financing activities
    (760 )     (109 )
Exchange rate effects on cash
    25       10  
Cash and cash equivalents at beginning of period
    791       390  
 
Cash and cash equivalents at end of period
    531       513  
 
Table 4
Cash Dividends Received
                                   
    Three Months Ended     Nine Months Ended
    September 30,     September 30,
(in $ millions)   2007   2006     2007   2006
Dividends from equity investments
    14       17         54       53  
Dividends from cost investments
    29       16         93       62  
       
Total
    43       33         147       115  
       
Table 5
Net Debt — Reconciliation of a Non-U.S. GAAP Measure
                         
    September 30,   December 31,        
(in $ millions)   2007   2006        
 
Short-term borrowings and current installments of long-term debt — third party and affiliates
    243       309          
Long-term debt
    3,252       3,189          
         
Total debt
    3,495       3,498          
         
Less: Cash and cash equivalents
    531       791          
         
Net Debt
    2,964       2,707          
       

 

 

Page 13 of 16
Table 6
Adjusted Earnings Per Share — Reconciliation of a Non-U.S. GAAP Measure
                                   
    Three Months Ended     Nine Months Ended
    September 30,     September 30,
(in $ millions, except per share data)   2007   2006     2007   2006
       
Earnings (loss) from continuing operations before tax and minority interests
    131       150         134       401  
Non-GAAP Adjustments:
                                 
Other charges and other adjustments 1
    40       16         206       77  
Refinancing costs
            —         254       —  
       
Adjusted earnings from continuing operations before tax and minority interests
    171       166         594       478  
Income tax provision on adjusted earnings 2
    (48 )     (42 )       (166 )     (129 )
Minority interests
    —       (2 )       —       (3 )
       
Adjusted earnings from continuing operations
    123       122         428       346  
Preferred dividends
    (2 )     (3 )       (7 )     (8 )
       
Adjusted net earnings available to common shareholders
    121       119         421       338  
Add back: Preferred dividends
    2       3         7       8  
       
Adjusted net earnings for adjusted EPS
    123       122         428       346  
       
 
                                 
Diluted shares (millions)
                                 
       
Weighted average shares outstanding
    150.2       158.6         155.4       158.6  
Assumed conversion of Preferred Shares
    12.0       12.0         12.0       12.0  
Assumed conversion of Restricted Stock
    0.4       —         0.3       —  
Assumed conversion of stock options
    4.8       0.6         4.4       1.0  
       
Total diluted shares
    167.4       171.2         172.1       171.6  
       
Adjusted EPS
    0.73       0.71         2.49       2.02  
       
 
1   See Table 7 for details
 
2   The adjusted tax rate for the three and nine months ended September 30, 2007 is 28% based on the original full year 2007 guidance.

 

 

Page 14 of 16
Table 7
Reconciliation of Other Charges and Other Adjustments
Other Charges:
                                   
    Three Months Ended     Nine Months Ended
    September 30,     September 30,
(in $ millions)   2007   2006     2007   2006
       
Employee termination benefits
    2       —         27       11  
Plant/office closures
    4       —         4       —  
Insurance recoveries associated with plumbing cases
    (2 )     —         (2 )     (3 )
Long-term compensation triggered by Exit Event
    —       —         74       —  
Asset impairments
    6       —         9       —  
Ticona Kelsterbach relocation
    1       —         4       —  
Other
    1       —         2       4  
       
Total
    12       —         118       12  
       
Other Adjustments: 1
                                   
    Three Months Ended     Nine Months Ended
    September 30,     September 30,
(in $ millions)   2007   2006     2007   2006
       
Executive severance & other costs related to Squeeze-Out
    (1 )     5         —       28  
Ethylene Pipeline Exit
    —       —         10          
Business Optimization
    5       4         10       4  
Foreign exchange loss related to refinancing transaction
    13       —         22       —  
AT Plastics films sale
    7       —         7       —  
Discontinued Methanol production 2
    —       10         31       36  
Other
    4       (3 )       8       (3 )
       
Total
    28       16         88       65  
       
 
                                 
Total other charges and other adjustments
    40       16         206       77  
       
 
1   These items are included in net earnings but not included in other charges.
 
2   Adjusted earnings per share included earnings from its discontinued methanol production which was included in the company’s 2007 guidance.

 

 

Page 15 of 16
Table 8
Equity Affiliate Preliminary Results — Total — Unaudited
                                 
    Three Months Ended   Nine Months Ended
    September 30,   September 30,
(in $ millions)   2007   2006   2007   2006
Net Sales
                               
Ticona Affiliates 1
    315       291       934       862  
Infraserv 2
    422       346       1,175       1,010  
 
Total
    737       637       2,109       1,872  
 
Operating Profit
                               
Ticona Affiliates
    55       42       148       130  
Infraserv
    19       16       61       47  
 
Total
    74       58       209       177  
 
Depreciation and Amortization
                               
Ticona Affiliates
    12       13       39       35  
Infraserv
    21       20       61       59  
 
Total
    33       33       100       94  
 
Affiliate EBITDA 3
                               
Ticona Affiliates
    67       55       187       165  
Infraserv
    40       36       122       106  
 
Total
    107       91       309       271  
 
Net Income
                               
Ticona Affiliates
    38       29       98       85  
Infraserv
    19       10       59       38  
 
Total
    57       39       157       123  
 
Net Debt
                               
Ticona Affiliates
    142       (25 )     142       (25 )
Infraserv
    5       35       5       35  
 
Total
    147       10       147       10  
 
Equity Affiliate Preliminary Results — Celanese Proportional Share — Unaudited 4
                                 
    Three Months Ended   Nine Months Ended
    September 30,   September 30,
(in $ millions)   2007   2006   2007   2006
Net Sales
                               
Ticona Affiliates
    145       134       432       399  
Infraserv
    135       78       388       394  
 
Total
    280       212       820       793  
 
Operating Profit
                               
Ticona Affiliates
    25       20       70       62  
Infraserv
    6       5       20       16  
 
Total
    31       25       90       78  
 
Depreciation and Amortization
                               
Ticona Affiliates
    6       6       18       17  
Infraserv
    6       6       20       19  
 
Total
    12       12       38       36  
 
Affiliate EBITDA 3
                               
Ticona Affiliates
    31       26       88       78  
Infraserv
    12       11       39       34  
 
Total
    43       37       127       112  
 
Equity in net earnings of affiliates (as reported on the Income Statement)                
Ticona Affiliates
    18       13       47       39  
Infraserv
    6       4       18       14  
 
Total
    24       17       65       53  
 
Affiliate EBITDA in excess of Equity in net earnings of affiliates 5                
Ticona Affiliates
    13       13       41       39  
Infraserv
    6       7       21       20  
 
Total
    19       20       62       59  
 
Net Debt
                               
Ticona Affiliates
    62       (13 )     62       (13 )
Infraserv
    3       13       3       13  
 
Total
    65       —       65       —  
 
 
1   Ticona Affiliates includes PolyPlastics (45% ownership), Korean Engineering Plastics(50%) and Fortron Industries(50%)
 
2   Infraserv includes Infraserv Entities valued as equity investments (Infraserv Höchst Group — 31% ownership, Infraserv Gendorf — 39% and Infraserv Knapsack 27%)
 
3   Affiliate EBITDA is the sum of Operating Profit and Depreciation and Amortization, a non-U.S. GAAP measures
 
4   Calculated as the product of figures from the above table times Celanese ownership percentage
 
5   Product of Celanese proportion of Affiliate EBITDA less Equity in net earnings of affiliates; not included in Celanese operating EBITDA

 

Exhibit 99.2
Dave Weidman, Chairman and CEO Steven Sterin, Senior Vice President and CFO Celanese 3Q 2007 Earnings Conference Call / Webcast Tuesday, October 23, 2007 10:00 a.m. ET

 

Forward Looking Statements, Reconciliation and Use of Non- GAAP Measures to U.S. GAAP

 

Acetyl Intermediates Formaldehyde VAM Acetic Acid Differentiated Intermediates Specialty Products Building Block Celanese resegmentation: Realigning the businesses to accelerate growth Raw Materials Advanced Engineered Materials (AEM) Industrial Specialties (IS) Anhydride and esters Consumer Specialties (CS) Engineered Plastics Emulsions/PVOH Nutrinova Acetate AT Plastics

 

Dave Weidman Chairman and Chief Executive Officer

 

Celanese Corporation Q3 2007 Highlights in millions (except EPS) 3rd Qtr 2007 3rd Qtr 2006 Net Sales $1,573 $1,471 Operating Profit $147 $172 Adjusted EPS $0.73 $0.71 Operating EBITDA $302 $296 Note: All figures exclude results of the divested Oxo Alcohol business. The results of the discontinued Edmonton Methanol business have only been excluded from Net Sales and Operating Profit.

 

Advanced Engineered Materials Continue >2x GDP volume growth across transportation and non-transportation end-uses Continuing high raw material costs Consumer Specialties Improved earnings continue from revitalization efforts Integration of APL acquisition Strong underlying business fundamentals Industrial Specialties Continued challenge with high raw material costs Force majeure impact expected to conclude in fourth quarter Acetyl Intermediates Continued strong global demand Favorable pricing continues into Q4 ~($0.07)/share Q4Y/Y headwind associated with Edmonton methanol exit 2007 Business Outlook 2007 Guidance: Adjusted EPS $3.10 to $3.20 Operating EBITDA $1,240 to $1,270 MM Forecasted 2007 tax rate of 28%

 

Celanese continues to execute its growth strategy $300 - $350 million increased EBITDA profile plus EPS potential by 2010 Group Asia Revitalization Innovation Organic Balance Sheet Operational Excellence EBITDA Impact Advanced Engineered Materials X X X X > $100MM Consumer and Industrial Specialties X X X X > $100MM Acetyl Intermediates X X X > $100MM Celanese Corporate X X Incremental EPS Primary Growth Focus Operating EBITDA EPS

 

Steven Sterin Senior Vice President and CFO

 

Celanese Corporation Financial Highlights in millions (except EPS) 3rd Qtr 2007 3rd Qtr 2006 Net Sales $1,573 $1,471 Operating Profit $147 $172 Net Earnings $128 $109 Special Items Other Charges/Adjustments $40 $16 Adjusted EPS $0.73 $0.71 Effective Tax Rate 28% 25% Diluted Share Basis 167.4 171.2 Operating EBITDA $302 $296 Net sales increased 7% from the prior year Continued strong global demand for Acetyl Intermediates Double digit volume growth in Advanced Engineered Materials Higher pricing in Consumer Specialties Operating profit decreased 15% driven primarily by increased other charges and a loss on sale related to the AT Plastics Films business Adjusted EPS up to $0.73/share Operating EBITDA increased to $302

 

in millions 3rd Qtr 2007 3rd Qtr 2006 Net Sales $258 up 12% $230 Operating EBITDA $70 up 4% $67 Advanced Engineered Materials Third Quarter 2007: Net sales increase driven by strong volume growth (11%) and currency effect (4%) offset by pricing declines related to product and application mix Volume growth partially offset by mix effect and higher energy costs Increased earnings from equity affiliates contributed to Operating EBITDA improvement

 

Third Quarter 2007: Increased revenues primarily attributable to $59 million of additional net sales from APL and higher pricing on continued strong global demand for Acetate Products Continued volume growth in Sunett(r) partially offset lower overall pricing for the sweetener Increased volumes, higher overall pricing and realized benefits from the revitalization efforts helped to offset increased raw material and energy costs Consumer Specialties in millions 3rd Qtr 2007 3rd Qtr 2006 Net Sales $282 up 32% $213 Operating EBITDA $53 up 20% $44

 

Third Quarter 2007: Net sales decrease primarily driven by lower volumes resulting from the unplanned outage at the Clear Lake facility and the subsequent force majeure Higher pricing and favorable currency impacts could not offset the significantly lower volumes and higher raw material costs Industrial Specialties in millions 3rd Qtr 2007 3rd Qtr 2006 Net Sales $314 down 6% $335 Operating EBITDA $18 down 50% $36

 

Acetyl Intermediates in millions 3rd Qtr 2007 3rd Qtr 2006 Net Sales $859 down 1% $872 Operating EBITDA $178 up 1% $177 Third Quarter 2007: Higher pricing, favorable currency effects and production from the new Nanjing unit positively impacted results Challenged with reduced volumes resulting from the unplanned outage at the Clear Lake facility Favorable supply/demand balances as a result of unplanned outages at key competitors continued to drive increased pricing in the industry Operating EBITDA includes increased dividends from the Ibn Sina cost affiliate

 

Q3 2006 Q3 2007 YTD 2006 YTD 2007 Q3 2006 Q3 2007 YTD 2006 YTD 2007 Q3 2007: Earnings impact higher than cash flows primarily due to increased earnings in the equity affiliates of Advanced Engineered Materials Updated FY 2007 Income Guidance: Income significantly above 2006 full-year performance of ~$154 million Full-year 2007 Cash Flow guidance: Cash flow approximates income statement impact Income Statement Cash Flow Strong performance continues for Equity and Cost Investments Note: All figures exclude results of the divested Oxo Alcohol business.

 

Continued strong cash generation ($ in millions) YTD 2007 YTD 2006 Net cash provided by operating activities $279 $444 Operating cash used in discontinued operations $92 ($7) Net cash provided by operating activities from continuing operations $371 $437 Less: Capital expenditures $217 $171 Add: Other charges and other adjustments1 $90 ($10) Free Cash Flow - Adjusted $244 $256 Cash Flow from Operations Year over Year Comparison Factors contributing to strong cash generation during 2007: Strong operating performance despite unplanned outage at Clear Lake Facility Continued commitment and increased investment in Asia 2007 YTD cash flows from operations included ~$109 million in additional cash taxes 1 Amounts primarily associated with the long-term management compensation plan payment in 2007 and the cash impacts from the Edmonton methanol production in both 2007 and 2006.

 

Appendix

 

Reg G: Reconciliation of Adjusted EPS

 

Reg G: Reconciliation of Net Debt

 

Reg G: Other Charges and Other Adjustments

 

Reg G: Reconciliation of Operating EBITDA