0000950123-07-010381 8-K 24 20070727 2.02 7.01 9.01 20070727 20070727 Celanese CORP 0001306830 2820 980420726 DE 1231 8-K 34 001-32410 071004826 1601 W. LBJ FREEWAY DALLAS TX 75234 972-443-4000 1601 W. LBJ FREEWAY DALLAS TX 75234 Blackstone Crystal Holdings Capital Partners (Cayman) IV Ltd. 20041022 8-K 1 y37624e8vk.htm FORM 8-K Table of Contents 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): July 27, 2007 CELANESE CORPORATION (Exact Name of Registrant as specified in its charter) DELAWARE 001-32410 98-0420726 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) 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): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) -------------------------------------------------------------------------------- TABLE OF CONTENTS Item 2.02 Results of Operations and Financial Condition Item 7.01 Regulation FD Disclosure Item 9.01 Financial Statements and Exhibits SIGNATURES Exhibit Index EX-99.1: PRESS RELEASE EX-99.2: SLIDE PRESENTATION -------------------------------------------------------------------------------- Table of Contents Item 2.02 Results of Operations and Financial Condition On July 27, 2007, Celanese Corporation (the “Company”) issued a press release reporting the financial results for its second 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 July 27, 2007, David N. Weidman, President and Chief Executive Officer of the Company, and John J. Gallagher III, Executive Vice President (and former Chief Financial Officer) of the Company and President, Acetyls and Celanese Asia, 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 July 27, 2007* 99.2 Slide Presentation date July 27, 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. -------------------------------------------------------------------------------- Table of Contents 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/ Kevin J. Rogan Name: Kevin J. Rogan Title: Assistant Secretary Date: July 27, 2007 -------------------------------------------------------------------------------- Table of Contents Exhibit Index Exhibit Number Description 99.1 Press Release dated July 27, 2007* 99.2 Slide Presentation date July 27, 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. EX-99.1 2 y37624exv99w1.htm EX-99.1: PRESS RELEASE [[Image Removed: (CELANESE LOGO)]] Corporate News Release Celanese Corporation Investor Relations 1601 West LBJ Freeway Dallas, Texas 75234-6034 Mark Oberle Phone: +1 972 443 4464 Fax: +1 972 332 9373 Mark.Oberle@celanese.com Celanese Corporation Reports Second Quarter Results; Adjusted Earnings Per Share Increases 18% to $0.84 Second quarter highlights: • Net sales increased 7% to $1,556 million from prior year • Operating profit decreased 53% to $71 million on other expenses primarily related to restructuring activities and long-term compensation • Net earnings decreased to a loss of $117 million on expenses related to debt refinancing • Operating EBITDA increased 5% to $326 million • Diluted EPS decreased to a loss of $0.76 • Adjusted EPS increased 18% to $0.84 from prior year Three Months Ended Six Months Ended June 30, June 30, (in $ milli ons, exc ept per share data) 2007 2006 2007 2006 Net sales 1,556 1,457 3,111 2,877 Operating profit 71 152 277 308 Net earnings (loss) (117 ) 103 84 220 Operating EBITDA 1 326 310 674 579 Diluted EPS — continuing operations ($0.81 ) $ 0.55 ($0.04 ) $ 1.06 Diluted EPS — Total ($0.76 ) $ 0.60 $ 0.50 $ 1.28 Adjusted EPS 1 $ 0.84 $ 0.71 $ 1.75 $ 1.30 1 Non-U.S. GAAP measures. See reco nciliatio n in tables 1 and 6. Dallas, July 26, 2007: Celanese Corporation (NYSE: CE) today reported net sales of $1,556 million, a 7 percent increase from the prior year, including sales from the acquisition of the acetate flake, tow and film business of Acetate Products Limited (APL). Increased pricing in acetyls on continued strong global demand, the successful startup of the company’s acetic acid unit in Nanjing, China, ongoing growth in Ticona’s advanced engineered materials business, and positive currency effects helped to offset the impact related to an unplanned acetic acid production outage at the company’s Clear Lake, Texas facility that occurred in May 2007. Operating profit decreased to $71 million from $152 million in the same period last year. This year’s results included $105 million of other expenses primarily related to a long-term management compensation program payable upon the exit of the company’s private equity sponsor, and previously announced revitalization plans for the -------------------------------------------------------------------------------- Page 2 of 16 company’s emulsions and polyvinyl alcohol businesses. Net earnings were a loss of $117 million and included approximately $265 million in pre-tax expenses primarily related to the company’s debt refinancing transaction completed in the second quarter. All U.S. GAAP operating results for both periods shown exclude discontinued operations of the company’s methanol production unit that was shut down during the first quarter, and results from the divested oxo alcohol business. Adjusted earnings per share for the quarter were $0.84 compared with $0.71 in the same period last year, driven by lower selling, general and administrative expense; lower ongoing interest expense; and continued strong performance, including increased dividends from the company’s cost investments. The 2007 results for adjusted earnings per share excluded pre-tax expenses of $265 million primarily related to the company’s debt refinancing, $74 million associated with the long-term management compensation program, and approximately $32 million of certain other adjustments, including business optimization and restructuring expense. Adjusted earnings per share included earnings from its discontinued methanol production which was included in the company’s 2007 guidance. The company estimates that the Clear Lake outage had a total net earnings impact of between $0.05 and $0.10 per share in the second quarter. The tax rate used for adjusted earnings per share was 28 percent for the second quarters of 2007 and 2006, respectively. Operating EBITDA for the quarter was $326 million, a 5 percent increase from the prior year period. “The loss of acetic acid production at our Clear Lake facility regrettably affected our customers and had an impact on our earnings,” said David Weidman, chairman and chief executive officer. “However, the solid performance of our specialty businesses in the quarter demonstrates the underlying strength of these global franchises and the successful startup of our Nanjing, China facility positions the company well for future growth.” First Half 2007 Net sales for the first six months of 2007 were $3,111 million, an 8 percent increase from the same period last year, due to the inclusion of sales from the APL acquisition, higher volumes in Ticona, favorable currency impacts, and higher pricing in acetyls on continued strong global demand. Operating profit was $277 million, a decrease of 10 percent from the prior year, driven by other expenses in the second quarter of 2007. Operating EBITDA for the -------------------------------------------------------------------------------- Page 3 of 16 first half of 2007 increased to $674 million from $579 million in the first half of last year. Improved results were primarily driven by expanded operating margins, increased affiliate income, and strong first quarter 2007 operating results. Adjusted earnings per share for the first half of the year were $1.75 compared with $1.30 in the prior year period, driven by lower net interest expense related to the company’s debt refinancing in the second quarter of 2007. Recent Highlights • Began commercial production at its 600,000 metric ton acetic acid facility in Nanjing, China. • Closed debt refinancing transaction, which will increase the company’s operational and financial flexibility and lower interest expense by $10 million to $15 million per quarter versus 2006. • Announced revitalization plans for its Emulsions & PVOH (polyvinyl alcohol) businesses, including global manufacturing restructuring and an R&D and technology realignment. • Announced restructuring plans for the U.K. operations of its recently acquired APL business to capture synergies related to its integration with the Acetate Products business. • Completed the $330 million stock repurchase program authorized by its board of directors in June 2007. Under the program, purchased a total of approximately 8.5 million of its Series A common shares at an average price of $38.88 per share. When combined with its previous share repurchase initiative, this completes a total of $400 million, or approximately 11 million common shares, executed as of July 23, 2007. Through June 30, 2007, the company had repurchased approximately $258 million, or 7.3 million shares. • Named Sandra Beach Lin executive vice president of Celanese and president of Ticona, the company’s advanced engineered materials business. She replaces Lyndon Cole, who has announced his retirement. • Named John J. Gallagher III executive vice president and president, Acetyls and Celanese Asia. • Named Steven M. Sterin senior vice president and chief financial officer. • Completed ownership transition with the final sale of shares from funds affiliated with The Blackstone Group L.P. • Transitioned to a fully independent board of directors with the election of Farah M. Walters; also announced the resignations of Anjan -------------------------------------------------------------------------------- Page 4 of 16 Mukherjee and James A. Quella, both with The Blackstone Group L.P. Second Quarter Segment Overview Chemical Products The successful startup of the Chemical Products’ acetic acid unit in Nanjing helped mitigate the impact of the unplanned acetic acid outage at the company’s Clear Lake facility. Net sales rose 3 percent to $1,002 million compared with the same period last year. The increase in sales was driven by higher pricing on continued strong global demand and favorable currency effects, which more than offset lower volumes. Operating profit, however, decreased to $91 million from $130 million in the same period last year, as the lower volumes, higher raw material costs and $30 million of other charges related to long-term compensation and restructuring expense more than offset the higher pricing. Operating EBITDA decreased to $176 million from $207 million in the prior year period. Methanol production contributed $12 million of operating EBITDA in the second quarter of 2006. The company ceased production of its methanol unit in the first quarter of 2007. Ticona Technical Polymers Growth and innovation drove Ticona’s strong performance in the second quarter. Net sales increased 12 percent to $257 million versus the prior year period on higher volume of 8 percent, driven by strength in Europe, and favorable currency impact of 4 percent. All major product lines experienced volume growth in the period. Operating profit decreased slightly to $32 million from $38 million in the same period last year. Volume increases did not offset higher energy costs in Europe, costs associated with inventory changes and other charges related to long-term compensation in the period. Operating EBITDA increased to $70 million from $66 million primarily driven by improved operating performance. Acetate Products Acetate Products delivered improved results as it continued to demonstrate the success of its revitalization initiatives. Net sales increased to $235 million from $176 million in the same period last year, driven primarily by the inclusion of sales from the acquisition of APL’s acetate flake, tow and film business. Higher pricing helped to partially offset lower flake volume associated with the company’s strategy to expand its China ventures and close flake production in Edmonton, Canada. Operating profit was $29 million, unchanged from the prior year period, as relatively lower margins in the recently acquired APL business and higher restructuring and long-term compensation charges of approximately $8 million offset the increased sales. -------------------------------------------------------------------------------- Page 5 of 16 Operating EBITDA, however, increased to $80 million from $55 million driven by results from the revitalization activities and a $13 million increase in dividends from the company’s strategic cost investments in China. Performance Products Net sales for Performance Products decreased slightly to $47 million for the quarter compared with $48 million in the prior year period. Positive currency impacts did not fully offset lower volumes and slightly lower pricing. The lower volumes were primarily related to the company’s exit of its non-core lower margin trade business during the fourth quarter of 2006. Volumes for Sunett™ sweetener increased, reflecting continued growth in global low calorie beverage and confectionary demand. Operating profit and operating EBITDA were both unchanged from the prior year period and were $16 million and $21 million, respectively. Taxes The tax rate for adjusted earnings per share was 28 percent in the second quarters of 2007 and 2006, respectively. As of June 30, 2007, the U.S. GAAP estimated annualized tax rate was 26 percent. The U.S. GAAP effective tax rate in 2007 will fluctuate from quarter to quarter, for example, given the U.S. GAAP treatment of the recapitalization transaction which was accounted for as a discrete transaction in the second quarter. The adjusted tax rate is based on our previous guidance which did not include this transaction. 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 $72 million in the second quarter, a $15 million increase from last year, on higher dividends from its Acetate China ventures. Equity and cost investment dividends, which are included in operating cash flow, increased to $59 million from $58 million last year. Cash Flow During the first six months of 2007, the company generated approximately $79 million in cash flow from operations compared with $167 million in the prior year period. Excluding cash used in discontinued operations, as well as the payment for the company’s long-term management compensation program, the company generated $253 million in cash flow from operations during the first six months of 2007. Results for the first half of 2007 also include cash tax payments of approximately $141 million, or $109 million higher than the -------------------------------------------------------------------------------- Page 6 of 16 prior year period. During the second quarter, the company used $706 million in cash primarily associated with its comprehensive recapitalization plan which includes debt repayments of $211 million, debt refinancing costs of $240 million and share repurchases of $258 million. Cash and cash equivalents at the end of the period were $470 million, a decrease of $321 million from the end of 2006, and a decrease of $645 million from the end of the first quarter of 2007. Net debt at the end of the second quarter was $2,915 million, an increase of $208 million and $541 million compared to the fourth quarter of 2006 and the first quarter of 2007, respectively. Outlook “The underlying fundamentals of our business are strong. Global demand remains robust and our growth strategies are on track to deliver on our commitments to increase shareholder value,” said Weidman. “Unfortunately, due to uncertainty regarding the timeline of repair and expected restart date of the Clear Lake acetic acid unit, we are unable to provide short-term financial guidance at this time.” The company carries normal and customary insurance coverage for property damage and business interruption subject to a self retention of approximately $50 million. The timing of any potential insurance recoveries, however, may lag the expense associated with repair and lost income by six to eight quarters. Contacts: Investor Relations Media – U.S. Media — Europe Mark Oberle Jeremy Neuhart Jens Kurth Phone: +1 972 443 4464 Phone: +1 972 443 3750 Phone: +49 69 305 7137 Telefax: +1 972 332 9373 Telefax: +1 972 443 8519 Telefax: +49 69 305 36787 Email: Jeremy.Neuhart@celanese.com Email: J.Kurth@celanese.com Mark.Oberle@celanese.com As a global leader in the chemicals industry, Celanese Corporation makes -------------------------------------------------------------------------------- Page 7 of 16 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. 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. 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 -------------------------------------------------------------------------------- Page 8 of 16 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 Six Months Ended June 30, June 30, (in $ millions, except per share data 2007 2006 2007 2006 Net sales 1,556 1,457 3,111 2,877 Cost of sales (1,219 ) (1,121 ) (2,415 ) (2,217 ) Gross profit 337 336 696 660 Selling, general and administrative expenses (122 ) (136 ) (238 ) (273 ) Amortization of Intangibles 1 (17 ) (18 ) (35 ) (32 ) Research and development expenses (19 ) (16 ) (36 ) (33 ) Other charges (105 ) (12 ) (106 ) (12 ) Foreign exchange loss, net — (1 ) — (1 ) Loss on disposition of assets, net (3 ) (1 ) (4 ) (1 ) Operating profit 71 152 277 308 Equity in net earnings of affiliates 23 18 41 36 Interest expense (61 ) (73 ) (133 ) (144 ) Refinancing expenses (256 ) — (256 ) — Interest income 11 8 25 16 Dividend income — cost investments 49 39 64 46 Other income (expense), net (5 ) (10 ) (15 ) (11 ) Earnings (loss) from continuing operations before tax and minority interests (168 ) 134 3 251 Income tax (provision) benefit 44 (38 ) (5 ) (68 ) Earnings (loss) from continuing operations before minority interests (124 ) 96 (2 ) 183 Minority interests — (1 ) — (1 ) Earnings (loss) from continuing operations (124 ) 95 (2 ) 182 Earnings (loss) from discontinued operations: Earnings (loss) from operation of discontinued operations (5 ) 11 38 56 Gain on disposal of discontinued operations 16 1 47 1 Income tax (provision) benefit (4 ) (4 ) 1 (19 ) Earnings from discontinued operations 7 8 86 38 Net earnings (loss) (117 ) 103 84 220 Cumulative preferred stock dividend (3 ) (2 ) (5 ) (5 ) Net earnings (loss) available to common shareholders (120 ) 101 79 215 Earnings (loss) per common share — basic: Continuing operations ($0.81 ) $ 0.59 ($0.04 ) $ 1.12 Discontinued operations 0.05 0.05 0.54 0.24 Net earnings (loss) available to common shareholders ($0.76 ) $ 0.64 $ 0.50 $ 1.36 Earnings (loss) per common share — diluted: Continuing operations ($0.81 ) $ 0.55 ($0.04 ) $ 1.06 Discontinued operations 0.05 0.05 0.54 0.22 Net earnings (loss) available to common shareholders ($0.76 ) $ 0.60 $ 0.50 $ 1.28 Weighted average shares — basic 156.9 158.6 158.1 158.6 Weighted average shares — diluted 156.9 172.1 158.1 172.0 1 Customer related intangibles -------------------------------------------------------------------------------- Page 10 of 16 Preliminary Consolidated Balance Sheets — Unaudited June 30, December 31, (in $ millions) 2007 2006 ASSETS Current assets: Cash and cash equivalents 470 791 Restricted cash — 46 Receivables: Trade receivables — third party and affiliates, net 857 1,001 Other receivables 467 475 Inventories 575 653 Deferred income taxes 76 76 Other assets 51 69 Total current assets 2,496 3,111 Investments 745 763 Property, plant and equipment, net 2,176 2,155 Deferred income taxes 67 22 Other assets 565 506 Goodwill 869 875 Intangible assets , net 437 463 Total assets 7,355 7,895 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term borrowings and current installments of long-term debt — third party and affiliates 187 309 Trade payables — third parties and affiliates 667 823 Other current liabilities 731 787 Deferred income taxes 8 18 Income taxes payable 11 279 Total current liabilities 1,604 2,216 Long-term debt 3,198 3,189 Deferred income taxes 301 297 Benefit obligations 898 889 Other liabilities 693 443 Minority interests 5 74 Shareholders’ equity: Preferred stock — — Common stock — — Treasury stock, at cost (258 ) — Additional paid-in capital 392 362 Retained earnings 474 394 Accumulated other comprehensive income (loss), net 48 31 Total shareholders’ equity 656 787 Total liabilities and shareholders’ equity 7,355 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 Six Months Ended June 30, June 30, (in $ millions) 2007 2006 2007 2006 Net Sales Chemical Products 1,002 977 2,004 1,914 Technical Polymers Ticona 257 230 519 461 Acetate Products 235 176 458 343 Performance Products 47 48 92 97 Other Activities 1 58 68 117 129 Intersegment eliminations (43 ) (42 ) (79 ) (67 ) Total 1,556 1,457 3,111 2,877 Operating Profit (Loss) Chemical Products 91 130 239 251 Technical Polymers Ticona 32 38 68 79 Acetate Products 29 29 58 52 Performance Products 16 16 32 33 Other Activities 1 (97 ) (61 ) (120 ) (107 ) Total 71 152 277 308 Equity Earnings and Other Income/(Expense) 2 Chemical Products 18 15 22 23 Technical Polymers Ticona 16 14 30 29 Acetate Products 34 21 34 21 Performance Products 1 1 1 1 Other Activities 1 (2 ) (4 ) 3 (3 ) Total 67 47 90 71 Other Charges and Other Adjustments 3 Chemical Products 30 20 76 33 Technical Polymers Ticona 5 (2 ) 5 (4 ) Acetate Products 8 — 9 — Performance Products — — — — Other Activities 1 72 19 76 32 Total 115 37 166 61 Depreciation and Amortization Expense Chemical Products 37 42 71 75 Technical Polymers Ticona 17 16 34 32 Acetate Products 9 5 16 12 Performance Products 4 4 8 8 Other Activities 1 6 7 12 12 Total 73 74 141 139 Operating EBITDA Chemical Products 176 207 408 382 Technical Polymers Ticona 70 66 137 136 Acetate Products 80 55 117 85 Performance Products 21 21 41 42 Other Activities 1 (21 ) (39 ) (29 ) (66 ) Total 326 310 674 579 1 Other Activities primarily includes corporate selling, general and administrative expenses and the results from AT Plastics and 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 Second Quarter 2007 Segment Net Sales Compared to Second Quarter 2006 (in percent) Volume Price Currency Other 1 Total Chemical Products -5 % 4 % 4 % 0 % 3 % Technical Polymers Ticona 8 % 0 % 4 % 0 % 12 % Acetate Products -8 % 6 % 0 % 36 % 34 % Performance Products -4 % -2 % 4 % 0 % -2 % Total Company -3 % 3 % 3 % 4 % 7 % Factors Affecting Six Months 2007 Segment Net Sales Compared to Six Months 2006 (in percent) Volume Price Currency Other 1 Total Chemical Products -3 % 4 % 4 % 0 % 5 % Technical Polymers Ticona 9 % -1 % 5 % 0 % 13 % Acetate Products -4 % 7 % 0 % 31 % 34 % Performance Products -8 % -2 % 5 % 0 % -5 % Total Company -1 % 3 % 3 % 3 % 8 % 1 Primarily represents net sales from APL (Acetate), AT Plastics and captive insurance companies (Total Company). -------------------------------------------------------------------------------- Page 13 of 16 Table 3 Cash Flow Information Six Months Ended June 30, (in $ millions) 2007 2006 Net cash provided by operating activities 79 167 Net cash provided by (used in) investing activities 295 (164 ) Net cash used in financing activities (706 ) (51 ) Exchange rate effects on cash 11 12 Cash and cash equivalents at beginning of period 791 390 Cash and cash equivalents at end of period 470 354 Table 4 Cash Dividends Received Three Months Ended Six Months Ended June 30, June 30, (in $ millions) 2007 2006 2007 2006 Dividends from equity investments 10 19 40 36 Dividends from cost investments 49 39 64 46 Total 59 58 104 82 Table 5 Net Debt — Reconcilation of a Non-U.S. GAAP Measure June 30, December 31, (in $ millions) 2007 2006 Short-term borrowing s and current installments of long-term debt — third party and affiliates 187 309 Long-term debt 3,198 3,189 Total debt 3,385 3,498 Less: Cash and cash equivalents 470 791 Net Debt 2,915 2,707 -------------------------------------------------------------------------------- Page 14 of 16 Table 6 Adjusted Earnings Per Share — Reconciliation of a Non-U.S. GAAP Measure Three Months Ended Six Months Ended June 30, June 30, (in $ millions, except per share data) 2007 2006 2007 2006 Earnings (loss) from continuing operations before tax and minority interests (168 ) 134 3 251 Non-GAAP Adjustments: Other charges and other adjustments 1 115 37 166 61 Refinancing costs 256 — 254 — Adjusted earnings from continuing operations before tax and minority interests 203 171 423 312 Income tax provision on adjusted earnings 2 (57 ) (48 ) (118 ) (87 ) Minority interests — (1 ) — (1 ) Adjusted earnings from continuing operations 146 122 305 224 Preferred dividends (3 ) (2 ) (5 ) (5 ) Adjusted net earnings available to common shareholders 143 120 300 219 Add back: Preferred dividends 3 2 5 5 Adjusted net earnings for adjusted EPS 146 122 305 224 Diluted shares (millions) Weighted average shares outstanding 156.9 158.6 158.1 158.6 Assumed conversion of Preferred Shares 12.0 12.0 12.0 12.0 Assumed conversion of Restricted Stock 0.5 — 0.2 — Assumed conversion of stock options 5.2 1.5 4.2 1.4 Total diluted shares 174.6 172.1 174.5 172.0 Adjusted EPS 0.84 0.71 1.75 1.30 1 See Table 7 for details 2 The adjusted tax rate fo r the three and six months ended June 30, 2007 is 28% based on the original full year 2007 guidance. -------------------------------------------------------------------------------- Page 15 of 16 Table 7 Reconciliation of Other Charges and Other Adjustments Other Charges: Three Months Ended Six Months Ended June 30, June 30, (in $ millions) 2007 2006 2007 2006 Employee termination benefits 25 9 25 11 Plant/office closures — 2 — — Total restructuring 25 11 25 11 Insurance recoveries associated with plumbing cases — (2 ) — (3 ) Long-term compensation triggered by Exit Event 74 — 74 — Asset impairments 3 — 3 — Ticona Kelsterbach relocation 3 — 3 — Other — 3 1 4 Total 105 12 106 12 Other Adjustments: 1 Three Months Ended Six Months Ended June 30, June 30, (in $ millions) 2007 2006 2007 2006 Executive severance & other costs related to Squeeze-Out — 13 1 23 Ethylene Pipeline Exit — 10 Business Optimi zation 3 — 5 — Foreign exchange loss related to refinancing transaction 9 — 9 — Discontinued Methanol production 2 (2 ) 12 31 26 Other — — 4 — Total 10 25 60 49 Total other charges and other adjustments 115 37 166 61 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 16 of 16 Table 8 Equity Affiliate Preliminary Results — Total — Unaudited Three Months Ended Six Months Ended (in $ millions) June 30, June 30, 2007 2006 2007 2006 Net Sales Ticona Affiliates 1 312 294 619 571 Infraserv 2 411 343 753 664 Total 723 637 1,372 1,235 Operating Profit Ticona Affiliates 49 44 93 88 Infraserv 25 16 42 31 Total 74 60 135 119 Depreciation and Amortization Ticona Affiliates 13 10 27 22 Infraserv 21 20 40 39 Total 34 30 67 61 Affiliate EBITDA 3 Ticona Affiliates 62 54 120 110 Infraserv 46 36 82 70 Total 108 90 202 180 Net Income Ticona Affiliates 30 26 60 56 Infraserv 27 16 40 28 Total 57 42 100 84 Net Debt Ticona Affiliates 107 (27 ) 107 (27 ) Infraserv 47 63 47 63 Total 154 36 154 36 Equity Affiliate Preliminary Results — Celanese Proportional Share — Unaudited 4 Three Months Ended Six Months Ended (in $ millions) June 30, June 30, 2007 2006 2007 2006 Net Sales Ticona Affiliates 145 137 287 265 Infraserv 133 205 253 316 Total 278 342 540 581 Operating Profit Ticona Affiliates 24 21 45 42 Infraserv 9 7 14 11 Total 33 28 59 53 Depreciation and Amortization Ticona Affiliates 6 5 12 11 Infraserv 7 6 14 13 Total 13 11 26 24 Affiliate EBITDA 3 Ticona Affiliates 30 26 57 52 Infraserv 16 13 27 23 Total 46 39 84 75 Equity in net earnings of affiliates (as reported on the Income Statement) Ticona Affiliates 15 12 29 26 Infraserv 8 6 12 10 Total 23 18 41 36 Afilliate EBITDA in excess of Equity in net earnings of affiliates 5 Ticona Affiliates 15 14 28 26 Infraserv 8 7 15 13 Total 23 21 43 39 Net Debt Ticona Affiliates 46 (15 ) 46 (15 ) Infraserv 17 21 17 21 Total 63 6 63 6 1 Ticona Affiliates includes PolyPlastics (45% ownership), Korean Engineering Plastics(50%) and Fortron Industries(50%) 2 Infr aserv 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 EX-99.2 3 y37624exv99w2.htm EX-99.2: SLIDE PRESENTATION [[Image Removed]] Dave Weidman, Chairman and CEO John J. Gallagher III, Executive Vice President and President Acetyls and Celanese Asia Celanese 2Q 2007 Earnings Conference Call / Webcast Friday, July 27, 2007 10:00 a.m. ET -------------------------------------------------------------------------------- [[Image Removed]] Forward Looking Statements, Reconciliation and Use of Non-GAAP Measures to U.S. GAAP -------------------------------------------------------------------------------- [[Image Removed]] Dave Weidman Chairman and Chief Executive Officer -------------------------------------------------------------------------------- [[Image Removed]] Celanese Corporation Q2 2007 Highlights in millions (except EPS) 2nd Qtr 2007 2nd Qtr 2006 Net Sales $1,556 $1,457 Operating Profit $71 $152 Adjusted EPS $0.84 $0.71 Operating EBITDA $326 $310 Note: All figures exclude results of discontinued operations of Oxo Alcohol business. -------------------------------------------------------------------------------- [[Image Removed]] 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 Consumer and Industrial Specialties X X X X > $100MM Advanced Engineered Materials X X X X > $100MM Acetyl Intermediates X X X > $100MM Celanese Corporate X X Incremental EPS Primary Growth Focus Operating EBITDA EPS -------------------------------------------------------------------------------- [[Image Removed]] John J. Gallagher III Executive Vice President and President Acetyls and Celanese Asia -------------------------------------------------------------------------------- [[Image Removed]] Celanese Corporation Financial Highlights in millions (except EPS) 2nd Qtr 2007 2nd Qtr 2006 Net Sales $1,556 $1,457 Operating Profit $71 $152 GAAP Net Earnings (Loss) ($117) $103 Special Items Other Charges/Adjustments Refinancing and Related Costs $106 $265 $37 -- Adjusted EPS $0.84 $0.71 Effective Tax Rate 28% 28% Diluted Share Basis 174.6 172.1 Operating EBITDA $326 $310 Net sales increased 7% from the prior year Improved pricing partially offset reduced volumes in Chemical Products Volume increases in Ticona Inclusion of APL sales in Acetate Products Operating profit decreased 53% due to other expenses related to long- term management compensation and restructuring activities GAAP net earnings decreased to a loss on expenses related to the debt refinancing Adjusted EPS up 18% to $0.84/share Operating EBITDA increased 5% to $326 -------------------------------------------------------------------------------- [[Image Removed]] Second Quarter 2007: Reduced volumes due to unplanned outage of Clear Lake acetic acid unit Successful start-up of Nanjing acetic acid unit partially offset volume loss Sales increased due to higher pricing, currency and continued strong demand Pricing strength could not offset margin impact of lower volumes and higher raw material costs in millions 2nd Qtr 2007 2nd Qtr 2006 Net Sales $1,002 up 3% $977 Operating EBITDA $176 down 15% $207 Chemical Products -------------------------------------------------------------------------------- [[Image Removed]] Second Quarter 2007: Net sales increase driven by strong volume growth (8%) and currency effect (4%) Strong demand continues for all major products in Europe and Asia Moderate growth in North American automotive and housing applications supported by strong growth in other end markets Volume growth partially offset by higher raw material and energy costs Ticona Technical Polymers in millions 2nd Qtr 2007 2nd Qtr 2006 Net Sales $257 up 12% $230 Operating EBITDA $70 up 6% $66 -------------------------------------------------------------------------------- [[Image Removed]] Increased revenues attributable to inclusion of APL acquisition in Q2 Continued operating margin improvement with revitalization program Higher dividends from China ventures contributed to EBITDA improvement Performance Products Continued volume growth in Sunett(tm) and favorable currency impacts did not fully offset decrease in non-core volumes Price reductions in line with company expectations Acetate Products in millions 2nd Qtr 2007 2nd Qtr 2006 Net Sales $235 up 34% $176 Operating EBITDA $80 up 45% $55 in millions 2nd Qtr 2007 2nd Qtr 2006 Net Sales $47 down 2% $48 Operating EBITDA $21 $21 -------------------------------------------------------------------------------- [[Image Removed]] Q2 2006 Q2 2007 YTD 2006 YTD 2007 Q2 2006 Q2 2007 YTD 2006 YTD 2007 Q2 2007: Cash flow higher than earnings impact due to increased cash dividend from Acetate China ventures FY 2007 Income Guidance: Income modestly above 2006 full-year performance 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 discontinued operations of Oxo Alcohol business -------------------------------------------------------------------------------- [[Image Removed]] Affiliates continue to deliver value -------------------------------------------------------------------------------- [[Image Removed]] Summary of Cash Flow Changes Debt repayments ($211) Refinancing costs ($240) Share repurchases ($258) Other $3 Cash used in financing activities ($706) Cash Used in Financing Activities ($ in millions) YTD 2007 YTD 2006 Cash from operations $79 $167 Discontinued operations $101 $28 Cash from continuing operations $180 $195 Add back: Long-term mgmt comp $73 Total $253 $195 Cash Flow from Operations Year over Year Comparison -------------------------------------------------------------------------------- [[Image Removed]] Chemical Products Clear Lake impact to continue into third quarter Full production rates at Nanjing acetic acid facility Ticona Continue >2x GDP volume growth across transportation and non-transportation end-uses Continuing high raw material costs Acetate Products Improved earnings continue from revitalization efforts Integration of APL acquisition Performance Products Strong business fundamentals continue Continued volume growth in core business 2007 Business Outlook -------------------------------------------------------------------------------- [[Image Removed]] Impact from Recent Strategic Initiatives 2006 2006 2006 Q3 Q4 HY06 Adjusted EPS (As Reported) $0.79 $0.77 $1.56 Portfolio Enhancements: Oxo Alcohol Divestiture ($0.08) ($0.13) ($0.21) Edmonton Methanol Shut Down ($0.04) ($0.07) ($0.11) Balance Sheet Improvements: Debt Refinancing $0.04 - $0.06 $0.04 - $0.06 $0.08 - $0.12 Adjusted EPS (Comparable Basis) $0.71 - $0.73 $0.61 - $0.63 $1.32 - $1.36 Divest non-core business lines Closed sale of oxo alcohol business in Q1 2007 Discontinued methanol production unit in Q2 2007 Capital structure opportunities Debt refinancing completed in Q2 2007 (reduced debt by ~$113 MM and lowered interest expense by ~$10-15MM per quarter) Share repurchases (retired 2.4 million shares with Dutch auction and 8.5 million shares with Board authorized plan - impacts not fully realized in EPS for Q2 2007) -------------------------------------------------------------------------------- [[Image Removed]] Appendix -------------------------------------------------------------------------------- [[Image Removed]] Reg G: Reconciliation of Diluted Adjusted EPS -------------------------------------------------------------------------------- [[Image Removed]] Reg G: Reconciliation of Net Debt -------------------------------------------------------------------------------- [[Image Removed]] Reg G: Reconciliation of Other Charges and Other Adjustments -------------------------------------------------------------------------------- [[Image Removed]] Reg G: Reconciliation of Operating EBITDA