0001306830-08-000018 8-K 25 20080721 2.02 7.01 9.01 20080722 20080722 Celanese CORP 0001306830 2820 980420726 DE 1231 8-K 34 001-32410 08962602 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 form8k.htm FORM 8K form8k.htm -------------------------------------------------------------------------------- UNITED STATES 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 21, 2008 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)) -------------------------------------------------------------------------------- Item 2.02 Results of Operations and Financial Condition On July 21, 2008, Celanese Corporation (the “Company”) issued a press release reporting the financial results for its second quarter 2008. 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 22, 2008, David N. Weidman, Chairman 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 July 21, 2008* 99.2 Slide Presentation dated July 22, 2008* * 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: July 22, 2008 -------------------------------------------------------------------------------- Exhibit Index Exhibit Number Description 99.1 Press Release dated July 21, 2008* 99.2 Slide Presentation dated July 22, 2008* * 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 ex99_1.htm PRESS RELEASE DATED JULY 21, 2008 ex99_1.htm EXHIBIT 99.1 [[Image Removed]] Celanese Corporation Investor Relations 1601 West LBJ Freeway Dallas, Texas 75234-6034 Corporate News Release Celanese Corporation Reports Record Second Quarter Results; Reaffirms 2008 Outlook Second quarter highlights: ††† Net sales increased 20% to $1,868 million from prior year ††† Operating profit increased to $207 million from $71 million in prior year ††† Net earnings increased to $134 million from a loss of $117 million in prior year ††† Operating EBITDA increased 24% to $406 million ††† Diluted EPS from continuing operations increased to $1.21 from a loss of $0.81 in prior year ††† Adjusted EPS increased to $1.20 from $0.85 in prior year ††† Reaffirms 2008 outlook for adjusted earnings per share of between $3.60 and $3.85 and operating EBITDA of between $1,355 million and $1,415 million Three Months Ended Six Months Ended June 30, June 30, (in $ millions, except per share data) 2008 2007 2008 2007 Net sales 1,868 1,556 3,714 3,111 Operating profit 207 71 441 277 Net earnings 134 (117 ) 279 84 Operating EBITDA 1 406 328 787 643 Diluted EPS - continuing operations $ 1.21 ($ 0.81 ) $ 2.08 ($ 0.04 ) Diluted EPS - Total $ 0.80 ($ 0.76 ) $ 1.67 $ 0.50 Adjusted EPS 1 $ 1.20 $ 0.85 $ 2.26 $ 1.62 1 Non-U.S. GAAP measures. See reconciliation in tables 1 and 6. Dallas, July 21, 2008: Celanese Corporation (NYSE: CE) today reported record net sales of $1,868 million, a 20 percent increase from the prior year’s results, as higher pricing on continued strong demand, positive currency impacts, and higher volumes associated with the company’s growth strategy in Asia, all contributed to strong top-line growth. Operating profit more than doubled to $207 million from $71 million in the prior year period. The company’s growth in Asia and certain advantaged raw material positions helped to mitigate the impact of significantly higher overall raw material and energy costs. Last year’s results included $105 million of other expenses primarily related to a long-term management compensation program and also included the impact of the unplanned outage at the company’s Clear Lake, Texas, facility. Net earnings were $134 million compared with a loss of $117 million in the same period last year. The second quarter 2008 results included approximately $69 million in net losses from discontinued operations, principally related to a previously announced litigation settlement. The 2007 results included the impact of the company’s debt refinancing transaction, which was completed in April 2007. Adjusted earnings per share for the second quarter were $1.20, a 41 percent increase over the prior year period, reflecting strong volume and pricing on continued strong demand, as well as increased dividends from the company’s strategic affiliates. This quarter’s results excluded approximately $24 million of certain other adjustments, primarily related to the company’s revitalization activities. Operating EBITDA increased to a record $406 million, up 24 percent from last year. -------------------------------------------------------------------------------- Page 2 of 12 “We delivered record second quarter earnings despite challenging global economic conditions and significant inflation in raw material and energy pricing,” said David Weidman, chairman and chief executive officer. “Once again, our results demonstrate the strength and earnings power of Celanese’s attractive portfolio of businesses.” Recent Highlights ††† Successfully started up its newly constructed 20,000 ton GUR® ultra-high molecular weight polyethylene (UHMW-PE) facility, 100,000 ton acetic anhydride facility, and 300,000 ton vinyl acetate monomer facility, all located at the company’s integrated chemical complex in Nanjing, China. ††† Signed an agreement to establish a 20,000 square-meter commercial and technology center in Shanghai. Expected to be completed in early 2010, the new center will combine the headquarters for Celanese’s Asia businesses, customer application development and research and development facilities. ††† Celanese’s Nutrinova business and BRAIN AG, a leading European biotech company, identified all-natural compounds for high intensity sweeteners and sweetness enhancers. ††† Introduced EcoVAE™, a new vinyl acetate/ethylene (VAE) emulsion technology specially designed to facilitate the manufacture of high quality, eco-friendly paints for North America. ††† Resolved a legacy litigation matter by entering into a settlement agreement relating to sales by the polyester staple fibers business, which Hoechst AG sold to KoSa, Inc. in 1998. ††† Announced intent to divest ownership interest in legacy Infraserv investments located in Knapsack, Gendorf, and Wiesbaden, Germany, where Celanese no longer has manufacturing operations. Second Quarter Segment Overview Advanced Engineered Materials Advanced Engineered Materials continued to execute its growth strategy, as global expansion offset the impacts of ongoing challenges in the U.S. automotive sector and initial signs of weakness in the European sector. Net sales increased to $300 million from $257 million in the same period last year, primarily on positive currency impacts, as well as higher volumes, particularly in Asia. Operating profit increased to $37 million from $32 million in the prior year period, as increased volumes and lower overall expense more than offset significantly higher raw material and energy costs, including ethylene and other petroleum-based feedstocks. Operating EBITDA, however, was $68 million compared with $70 million in the same period last year, mainly due to lower earnings from equity affiliates. Consumer Specialties Consumer Specialties continued to contribute stable earnings, driven by its expansion in Asia and successful integration of its acquired Acetate Products Limited (APL) business. Net sales increased to $292 million compared with $281 million in the same period last year, driven by higher pricing on continued strong demand and positive currency impacts. Higher acetate tow volumes helped to offset lower acetate flake volumes resulting from the company’s strategic decision to shift flake production to its expanded acetate China ventures, and slightly lower volumes for Sunett®, the company’s high-intensity food sweetener business. Operating profit was $46 million, $2 million lower than last year’s results, as the higher pricing could not fully offset significantly higher raw material and energy costs in the period. Operating EBITDA increased to $107 million from $104 million in the same period last year, however, on higher dividends from the company’s China ventures. -------------------------------------------------------------------------------- Page 3 of 12 Industrial Specialties Continued revitalization of the Industrial Specialties businesses delivered improved results, despite continued softness in certain markets and significantly higher raw material costs. Net sales increased to $386 million from $355 million in the same period last year, primarily driven by higher pricing related to increased raw material costs, as well as favorable currency impacts. Increased volumes related to the company’s strategic expansion in Asia were offset by volume declines in North American and southern European painting and coating applications. Operating profit increased to $20 million, compared with a loss of $1 million in the prior year period, as higher pricing more than offset higher raw material costs and the lower volumes. The 2007 results included approximately $19 million of expense related to the company’s revitalization activities. Operating EBITDA was $37 million compared with $34 million in the second quarter of 2007. Acetyl Intermediates Strategic expansions in Asia, attractive industry fundamentals, and advantaged raw material positions drove significant sales and earnings growth in Acetyl Intermediates. Net sales were $1,067 million compared with $829 million in the same period last year, driven by higher pricing on continued strong demand, increased volumes from its Nanjing acetic acid unit, and positive currency impacts. Operating profit increased to $148 million from $91 million and operating EBITDA increased to $227 million from $148 million in the same period last year, as the volume and pricing more than offset higher raw material and energy costs in the period. Increased dividends from the company’s Ibn Sina methanol and MTBE cost affiliate also contributed to the improved results. The prior year’s operating results included a partial impact of the unplanned outage at the company’s Clear Lake, Texas, facility. Taxes The tax rate for adjusted earnings per share was 26 percent in the second quarter of 2008 compared with 28 percent in the second quarter of 2007. The U.S. GAAP effective tax rate for continuing operations for the second quarter of 2008 was 18 percent compared with 26 percent in the same period last year. The decrease in the U.S. GAAP effective tax rate for the period ended June 30, 2008 was primarily due to the U.S. income tax effect resulting from the maturity of cross currency swap arrangements in June 2008. The tax rate for adjusted earnings per share is based upon the company’s previous guidance which did not include these items. Cash taxes for the first six months of 2008 were $45 million, $96 million lower than the prior year period. 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 $92 million in the second quarter versus $72 million in the same period last year. Higher dividends from the company’s acetate China ventures and Ibn Sina cost affiliate offset lower earnings from the Advanced Engineered Materials equity affiliates. Equity and cost investment dividends, which are included in cash flows, were $87 million compared with $59 million in the prior year period. -------------------------------------------------------------------------------- Page 4 of 12 Cash Flow The company generated $346 million in cash from operating activities during the first six months of 2008 compared with $79 million generated during the same period last year, driven by strong operating performance and lower cash taxes. The 2008 results included a $107 million payment related to the resolution of a legacy litigation matter and an increased use of cash in trade working capital. The 2007 results included a $74 million cash payment related to a long-term management compensation program. Cash used in investing activities was $33 million at the end of the second quarter and included a $93 million payment to settle a cross currency swap that matured in June 2008. During the first half of 2008, the company repurchased approximately $126 million of its outstanding common shares and has approximately $274 million in authorized purchases remaining. Net debt at the end of the second quarter was $2,640 million, a decrease of $91 million from the fourth quarter of 2007. Cash and cash equivalents at the end of the second quarter were $983 million compared with $825 million at the end of 2007. During the quarter, the company received a scheduled progress payment of $311 million related to the relocation of Ticona’s Kelsterbach production facility, reflected in investing activities; and $59 million in associated value added tax, reflected in operating activities. Outlook The company reaffirmed its full year outlook for adjusted earnings per share to between $3.60 and $3.85 based on the strength of its performance in the first half of 2008 and continued execution of its earnings growth strategy. On a comparable basis, 2007 results were $3.29 per share. The guidance is based on an adjusted tax rate of 26 percent and an estimated year-end weighted average of 166 million diluted shares outstanding. The company also reaffirmed its operating EBITDA guidance range of between $1,355 million and $1,415 million. “The rapid escalation of raw material and energy prices, along with concerns of slowing economic growth in the U.S. and parts of Europe have created challenges in the short-term,” said Weidman. “With our geographic and end market diversity, advantaged feedstock positions, and an integrated business model, we believe that Celanese is well-positioned to mitigate the potential impact of today’s environment.” Contacts: Investor Relations Media – U.S. Media - Europe Jens Kurth Mark Oberle Gretchen Rosswurm Phone: +49 69 305 7137 Phone: +1 972 443 4464 Phone: +1 972 443 4847 Telefax: +49 69 305 36787 Telefax: +1 972 443 8519 Telefax: +1 972 443 8519 J.Kurth@celanese.com Mark.Oberle@celanese.com Gretchen.Rosswurm@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 $6.4 billion in 2007, with approximately 70% 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 8,400 employees worldwide. For more information on Celanese Corporation, please visit the company's website at www.celanese.com. -------------------------------------------------------------------------------- Page 5 of 12 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 five performance measures, operating EBITDA, affiliate EBITDA, adjusted earnings per share, net debt and adjusted free cash flow, 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 affiliate EBITDA is equity in net earnings of affiliates; for adjusted earnings per share is earnings per common share-diluted; for net debt is total debt; and for adjusted free cash flow is cash flow from operations. Use of Non-U.S. GAAP Financial Information ††† Operating EBITDA, a measure used by management to measure performance, is defined 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 without unreasonable effort because a forecast of Other Items is not practical. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations, and that when U.S. GAAP information is viewed in conjunction with non-U.S. GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. This non-U.S. GAAP information is not intended to be considered in isolation or as a substitute for U.S. GAAP financial information. ††† The tax rate used for adjusted earnings per share is the tax rate based on our initial guidance, less changes in uncertain tax positions. We adjust this tax rate during the year only if there is a substantial change in our underlying operations; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate may differ significantly from the tax rate used for U.S. GAAP reporting in any given reporting period. It is not practical to reconcile our prospective adjusted tax rate to the actual U.S. GAAP tax rate in any future period. ††† Net debt is defined 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. ††† Adjusted free cash flow is defined as cash flow from operations less capital expenditures, other productive asset purchases, operating cash from discontinued operations and certain other charges and adjustments. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the company’s cash flow. Our management and credit analysts use adjusted free cash flow to evaluate the company’s liquidity and assess credit quality. 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 6 of 12 Preliminary Consolidated Statements of Operations- Unaudited Three Months Ended Six Months Ended June 30, June 30, (in $ millions, except per share 2008 2007 2008 2007 data) Net sales 1,868 1,556 3,714 3,111 Cost of sales (1,472) (1,219) (2,900) (2,415) Gross profit 396 337 814 696 Selling, general and (138) (122) (274) (238) administrative expenses Amortization of Intangibles 1 (20) (17) (39) (35) Research and development (18) (19) (41) (36) expenses Other (charges) gains, net (7) (105) (23) (106) Foreign exchange gain (loss), (3) - 4 - net Gain (loss) on disposition of (3) (3) - (4) assets, net Operating profit 207 71 441 277 Equity in net earnings of 17 23 27 41 affiliates Interest expense (63) (61) (130) (133) Refinancing expenses - (256) - (256) Interest income 10 11 19 25 Dividend income - cost 75 49 103 64 investments Other income (expense), net 1 (5) 5 (15) Earnings (loss) from continuing operations before tax and minority 247 (168) 465 3 interests Income tax (provision) benefit (45) 44 (118) (5) Earnings (loss) from continuing operations before minority interests 202 (124) 347 (2) Minority interests 1 - 1 - Earnings (loss) from continuing 203 (124) 348 (2) operations Earnings (loss) from discontinued operations: Earnings ( loss) from (112) (5) (112) 38 operation of discontinued operations Gain on disposal of - 16 - 47 discontinued operations Income tax benefit 43 (4) 43 1 Earnings (loss) from (69) 7 (69) 86 discontinued operations Net earnings (loss) 134 (117) 279 84 Cumulative preferred stock (2) (3) (5) (5) dividends Net earnings (loss) available to common shareholders 132 (120) 274 79 Earnings (loss) per common share - basic: Continuing operations $1.33 ($0.81) $2.26 ($0.04) Discontinued operations (0.46) 0.05 (0.45) 0.54 Net earnings (loss) available to $0.87 ($0.76) $1.81 $0.50 common shareholders Earnings (loss) per common share - diluted: Continuing operations $1.21 ($0.81) $2.08 ($0.04) Discontinued operations (0.41) 0.05 (0.41) 0.54 Net earnings (loss) available to $0.80 ($0.76) $1.67 $0.50 common shareholders Weighted average shares - basic 150.9 156.9 151.4 158.1 Weighted average shares - 167.8 156.9 167.6 158.1 diluted 1 Customer related intangibles -------------------------------------------------------------------------------- Page 7 of 12 Preliminary Consolidated Balance Sheets - Unaudited June 30, December 31, (in $ millions) 2008 2007 ASSETS Current assets: Cash and cash equivalents 983 825 Receivables: Trade - third party and affiliates, 1,061 1,009 net Other 381 437 Inventories 754 636 Deferred income taxes 68 70 Marketable securities, at fair value 24 46 Other assets 30 40 Total current assets 3,301 3,063 Investments 803 814 Property, plant and equipment, net 2,542 2,362 Deferred income taxes 50 10 Marketable securities, at fair value 208 209 Other assets 376 309 Goodwill 897 866 Intangible assets, net 437 425 Total assets 8,614 8,058 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term borrowings and current installments of long-term debt - 252 272 third party and affiliates Trade payables - third parties and 829 818 affiliates Other liabilities 824 888 Deferred income taxes 30 30 Income taxes payable 38 23 Total current liabilities 1,973 2,031 Long-term debt 3,371 3,284 Deferred income taxes 277 265 Income taxes payable 259 220 Benefit obligations 676 696 Other liabilities 822 495 Minority interests 4 5 Shareholders' equity: Preferred stock - - Common stock - - Treasury stock, at cost (529) (403) Additional paid-in capital 494 469 Retained earnings 1,061 799 Accumulated other comprehensive 206 197 income (loss), net Total shareholders' equity 1,232 1,062 Total liabilities and shareholders' 8,614 8,058 equity -------------------------------------------------------------------------------- Page 8 of 12 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) 2008 2007 2008 2007 Net Sales Advanced Engineered Materials 300 257 594 519 Consumer Specialties 292 281 574 550 Industrial Specialties 386 355 751 701 Acetyl Intermediates 1,067 829 2,163 1,668 Other Activities 1 1 - 1 1 Intersegment eliminations (178) (166) (369) (328) Total 1,868 1,556 3,714 3,111 Operating Profit (Loss) Advanced Engineered Materials 37 32 67 68 Consumer Specialties 46 48 96 96 Industrial Specialties 20 (1) 37 11 Acetyl Intermediates 148 91 325 223 Other Activities 1 (44) (99) (84) (121) Total 207 71 441 277 Equity Earnings, Cost - Dividend Income and Other Income Expense Advanced Engineered Materials 11 16 20 30 Consumer Specialties 48 35 48 35 Industrial Specialties - - - - Acetyl Intermediates 33 18 62 23 Other Activities 1 1 (2) 5 2 Total 93 67 135 90 Other Charges and Other Adjustments 2 Advanced Engineered Materials 1 5 2 5 Consumer Specialties - 8 1 9 Industrial Specialties 3 19 8 19 Acetyl Intermediates 12 13 20 26 Other Activities 1 8 72 15 76 Total 24 117 46 135 Depreciation and Amortization Expense Advanced Engineered Materials 19 17 39 34 Consumer Specialties 13 13 27 24 Industrial Specialties 14 16 28 30 Acetyl Intermediates 34 26 66 50 Other Activities 1 2 1 5 3 Total 82 73 165 141 Operating EBITDA Advanced Engineered Materials 68 70 128 137 Consumer Specialties 107 104 172 164 Industrial Specialties 37 34 73 60 Acetyl Intermediates 227 148 473 322 Other Activities 1 (33) (28) (59) (40) Total 406 328 787 643 1 Other Activities primarily includes corporate selling, general and administrative expenses and the results from captive insurance companies. 2 Excludes adjustments to minority interest, net interest, taxes, depreciation, amortization and discontinued operations (See Table 7). -------------------------------------------------------------------------------- Page 9 of 12 Table 2 Factors Affecting Second Quarter 2008 Segment Net Sales Compared to Second Quarter 2007 (in percent) Volume Price Currency Other 1 Total Advanced 8% 0% 9% 0% 17% Engineered Materials Consumer -4% 5% 3% 0% 4% Specialties Industrial -9% 13% 8% -3% 9% Specialties Acetyl 10% 13% 6% 0% 29% Intermediates Total Company 4% 11% 6% -1% 20% Factors Affecting Six Months 2008 Segment Net Sales Compared to Six Months 2007 (in percent) Volume Price Currency Other 1 Total Advanced 7% -1% 8% 0% 14% Engineered Materials Consumer -7% 4% 3% 4% 4% Specialties Industrial -10% 12% 7% -2% 7% Specialties Acetyl 9% 15% 6% 0% 30% Intermediates Total Company 2% 11% 7% -1% 19% 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 Six Months Ended June 30, (in $ millions) 2008 2007 Net cash provided by operating activities 1 346 79 Net cash provided by (used in) investing (33) 295 activities 2 Net cash used in financing activities (183) (706) Exchange rate effects on cash 28 11 Cash and cash equivalents at beginning of 825 791 period Cash and cash equivalents at end of period 983 470 Cash and cash equivalents at end of period, net 613 470 of Ticona Kelsterbach plant relocation activities 1 2008 includes $59 million of value-added taxes related to Ticona Kelsterbach plant relocation 2 2008 includes $311 million of deferred proceeds related to Ticona Kelsterbach plant relocation Table 4 Cash Dividends Received Three Months Ended Six Months Ended June 30, June 30, (in $ millions) 2008 2007 2008 2007 Dividends from equity investments 12 10 55 40 Dividends from cost investments 75 49 103 64 Total 87 59 158 104 Table 5 Net Debt - Reconciliation of a Non-U.S. GAAP Measure June 30, December 31, (in $ millions) 2008 2007 Short-term borrowings and current installments of long-term debt 252 272 - third party and affiliates Long-term debt 3,371 3,284 Total debt 3,623 3,556 Less: Cash and cash equivalents 983 825 Net Debt 2,640 2,731 -------------------------------------------------------------------------------- Page 10 of 12 Table 6 Adjusted Earnings (Loss) Per Share - Reconciliation of a Non-U.S. GAAP Measure Three Months Ended Six Months Ended June 30, June 30, (in $ millions, except per share data) 2008 2007 2008 2007 Earnings (loss) from continuing operations before tax and minority interests 247 (168) 465 3 Non-GAAP Adjustments: Other charges and other adjustments 1 24 117 46 135 Refinancing costs - 256 - 254 Adjusted Earnings (loss) from continuing operations before tax and minority interests 271 205 511 392 Income tax (provision) benefit on (70) (57) (133) (110) adjusted earnings 2 Minority interests 1 - 1 0 Adjusted Earnings (loss) from 202 148 379 282 continuing operations Preferred dividends (2) (3) (5) (5) Adjusted net earnings (loss) available 200 145 374 277 to common shareholders Add back: Preferred dividends 2 3 5 5 Adjusted net earnings (loss) for 202 148 379 282 adjusted EPS Diluted shares (millions) Weighted average shares outstanding 150.9 156.9 151.4 158.1 Assumed conversion of Preferred Shares 12.1 12.0 12.1 12.0 Assumed conversion of Restricted Stock 0.8 0.5 0.6 0.2 Assumed conversion of stock options 4.1 5.2 3.4 4.2 Total diluted shares 167.8 174.6 167.6 174.5 Adjusted EPS $ 1.20 $ 0.85 2.26 1.62 1 See Table 7 for details 2 The adjusted tax rate for the three months ended June 30, 2008 is 26% based on the forecasted adjusted tax rate for 2008. -------------------------------------------------------------------------------- Page 11 of 12 Table 7 Reconciliation of Other Charges and Other Adjustments Other Charges: Three Months Ended Six Months Ended June 30, June 30, (in $ 2008 2007 2008 2007 millions) Employee termination benefits 4 25 11 25 Plant/office closures - - 7 - Long-term compensation - 74 - 74 triggered by Exit Event Asset impairments - 3 - 3 Ticona Kelsterbach plant 3 3 5 3 relocation Other - - - 1 Total 7 105 23 106 Other Adjustments: 1 Three Months Ended Six Months Ended Income June 30, June 30, Statement (in $ millions) 2008 2007 2008 2007 Classification Ethylene pipeline exit costs (2 ) - (2 ) 10 Other income/expense, net Business optimization 9 3 18 5 SG&A Foreign exchange loss related - 9 - 9 Other to refinancing transaction income/expense, net Ticona Kelsterbach plant (2 ) - (4 ) - Cost of Sales relocation Plant 7 - 7 - Cost of Sales closures Other 5 - 4 5 Various Total 17 12 23 29 Total other charges and other 24 117 46 135 adjustments 1 These items are included in net earnings but not included in other charges. -------------------------------------------------------------------------------- Page 12 of 12 Table 8 Equity Affiliate Preliminary Results - Total - Unaudited Three Months Ended Six Months Ended (in $ millions) June 30, June 30, 2008 2007 2008 2007 Net Sales Ticona Affiliates1 364 312 719 619 Infraserv2 592 411 1,140 753 Total 956 723 1,859 1,372 Operating Profit Ticona Affiliates 41 49 74 93 Infraserv 29 25 48 42 Total 70 74 122 135 Depreciation and Amortization Ticona Affiliates 16 13 38 27 Infraserv 29 21 56 40 Total 45 34 94 67 Affiliate EBITDA3 Ticona Affiliates 57 62 112 120 Infraserv 58 46 104 82 Total 115 108 216 202 Net Income Ticona Affiliates 22 30 41 60 Infraserv 27 27 65 40 Total 49 57 106 100 Net Debt Ticona Affiliates 179 164 179 164 Infraserv 356 47 356 47 Total 535 211 535 211 Equity Affiliate Preliminary Results - Celanese Proportional Share - Unaudited4 Three Months Ended Six Months Ended (in $ millions) June 30, June 30, 2008 2007 2008 2007 Net Sales Ticona 167 145 330 287 Affiliates Infraserv 158 133 334 253 Total 325 278 664 540 Operating Profit Ticona 19 24 34 45 Affiliates Infraserv 8 9 14 14 Total 27 33 48 59 Depreciation and Amortization Ticona 7 6 17 12 Affiliates Infraserv 8 7 17 14 Total 15 13 34 26 Affiliate EBITDA3 Ticona 26 30 51 57 Affiliates Infraserv 16 16 31 27 Total 42 46 82 84 Equity in net earnings of affiliates (as reported on the Income Statement) Ticona 10 15 19 29 Affiliates Infraserv 7 8 8 12 Total 17 23 27 41 Affiliate EBITDA in excess of Equity in net earnings of affiliates5 Ticona 16 15 32 28 Affiliates Infraserv 9 8 23 15 Total 25 23 55 43 Net Debt Ticona 83 75 83 75 Affiliates Infraserv 87 17 87 17 Total 170 92 170 92 1Ticona Affiliates includes PolyPlastics (45% ownership), Korean Engineering Plastics (50%) and Fortron Industries(50%) 2Infraserv includes Infraserv Entities valued as equity investments (Infraserv Höchst Group - 31% ownership, Infraserv Gendorf - 39% and Infraserv Knapsack 27%) 3Affiliate EBITDA is the sum of Operating Profit and Depreciation and Amortization, a non-U.S. GAAP measure 4Calculated as the product of figures from the above table times Celanese ownership percentage 5Product of Celanese proportion of Affiliate EBITDA less Equity in net earnings of affiliates; not included in Celanese operating EBITDA -------------------------------------------------------------------------------- EX-99.2 3 ex99_2.htm SLIDE PRESENTATION DATED JULY 22, 2008 ex99_2.htm [[Image Removed]] 1 Dave Weidman, Chairman and CEO Steven Sterin, Senior Vice President and CFO Celanese 2Q 2008 Earnings Conference Call / Webcast Tuesday, July 22, 2008 10:00 a.m. ET -------------------------------------------------------------------------------- [[Image Removed]] 2 Forward Looking Statements, Reconciliation and Use of Non- GAAP Measures to U.S. GAAP Forward-Looking Statements This presentation may contain “forward-looking statements,” which include information concerning the company’s plans, objectives, goals, strategies, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. When used in this release, the words “outlook,” “forecast,” “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon current expectations and beliefs and various assumptions. There can be no assurance that the company will realize these expectations or that these beliefs will prove correct. There are a number of risks and uncertainties that could cause actual results to differ materially from the 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 presentation reflects five performance measures, operating EBITDA, affiliate EBITDA, adjusted earnings per share, net debt and adjusted free cash flow, 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 affiliate EBITDA is equity in net earnings of affiliates; for adjusted earnings per share is earnings per common share-diluted; for net debt is total debt; and for adjusted free cash flow is cash flow from operations. Use of Non-U.S. GAAP Financial Information ?Operating EBITDA, a measure used by management to measure performance, is defined 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 without unreasonable effort because a forecast of Other Items is not practical. We believe that the presentation of this non- U.S. GAAP measure provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations, and that when U.S. GAAP information is viewed in conjunction with non-U.S. GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. This non-U.S. GAAP information is not intended to be considered in isolation or as a substitute for U.S. GAAP financial information. ?The tax rate used for adjusted earnings per share is the tax rate based on our initial guidance, less changes in uncertain tax positions. We adjust this tax rate during the year only if there is a substantial change in our underlying operations; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate may differ significantly from the tax rate used for U.S. GAAP reporting in any given reporting period. It is not practical to reconcile our prospective adjusted tax rate to the actual U.S. GAAP tax rate in any future period. ?Net debt is defined 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 ?Adjusted free cash flow is defined as cash flow from operations less capital expenditures, other productive asset purchases, operating cash from discontinued operations and certain other charges and adjustments. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the company’s cash flow. Our management and credit analysts use adjusted free cash flow to evaluate the company’s liquidity and assess credit quality. 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 presentation, together with the adjustments made to present the results on a comparable basis, have not been audited and are based on internal financial data furnished to management. Quarterly results should not be taken as an indication of the results of operations to be reported for any subsequent period or for the full fiscal year. -------------------------------------------------------------------------------- [[Image Removed]] 3 Dave Weidman Chairman and Chief Executive Officer -------------------------------------------------------------------------------- [[Image Removed]] ††Higher pricing on continued strong demand, increased volumes driven by Asia expansion and positive currency impacts drove record sales for the quarter ††Advantaged feedstock positions helped to mitigate significantly higher raw material and energy costs Celanese Corporation 2Q 2008 Highlights -------------------------------------------------------------------------------- [[Image Removed]] 5 Operating EBITDA Growth Objectives Clear Path to 2010 Growth Objectives ? AEM: volume growth > 2X GDP through further penetration ? CIS: Acetate continues execution on revitalization strategy; Emulsions/PVOH revitalization commences ? AI: Nanjing acetic acid plant startup leads integrated complex Acetyl Intermediates Consumer and Industrial Specialties Advanced Engineered Materials $350 - $400 million increased EBITDA profile plus EPS potential by 2010 -------------------------------------------------------------------------------- [[Image Removed]] 6 Steven Sterin Senior Vice President and CFO -------------------------------------------------------------------------------- [[Image Removed]] ††Net sales increased 20% from prior year † Higher pricing on strong demand † Growth in Asia † Favorable currency impacts ††Operating profit more than doubled to $207 versus the prior year which included expenses related to a long-term management compensation program and impacts of the Clear Lake outage ††Adjusted EPS up 41% to $1.20/share ††Diluted share basis reflects share repurchase programs †† † 2.9 million shares repurchased for ~$126 million under current authorization ††Operating EBITDA increased 24% to $406 Celanese Corporation Financial Highlights -------------------------------------------------------------------------------- [[Image Removed]] Second Quarter 2008: ? Net sales increase driven by volume growth (8%) and positive currency effects (9%) ? Growth in China and non-automotive applications more than offset impacts of challenging U.S. automotive market ? Higher raw material and energy costs continue to pressure margins ? Operating EBITDA decrease primarily due to lower earnings from equity affiliates Advanced Engineered Materials -------------------------------------------------------------------------------- [[Image Removed]] Second Quarter 2008: ? Net sales increase primarily driven by improved pricing on global demand and favorable currency impacts ? Higher pricing offset by significantly higher raw material and energy costs ? Operating EBITDA improvement driven by higher dividends from expanded China acetate ventures Consumer Specialties -------------------------------------------------------------------------------- [[Image Removed]] Second Quarter 2008: ? Increase in net sales primarily driven by favorable pricing and foreign currency effects ? Volumes pressured by declines in certain North American and European markets ? Operating EBITDA improvement mainly due to higher sales offsetting raw material cost pressures Industrial Specialties -------------------------------------------------------------------------------- [[Image Removed]] Second Quarter 2008: ? Record sales for the quarter attributable to higher pricing on strong global demand, increased volumes from Nanjing and favorable currency impacts ? Volume and pricing strength more than offset high input costs versus the prior year which included impacts from the Clear Lake outage ? Increased dividends from Ibn Sina also contributed to improved Operating EBITDA Acetyl Intermediates -------------------------------------------------------------------------------- [[Image Removed]] ? Total affiliate earnings impact improved 28% to $92 million versus prior year ? Increased dividends from Ibn Sina methanol and MTBE cost affiliate more than offset performance of AEM affiliates currently pressured by high raw material and energy costs ? Cash from affiliates increased with higher dividends from both Ibn Sina and the China ventures Income Statement Cash Flow Affiliates Continue to Deliver Value -------------------------------------------------------------------------------- [[Image Removed]] 1Amounts primarily associated with certain other charges and the cash outflows for purchases of other productive assets that are classified as ‘investing activities’ for U.S. GAAP purposes. Continued Strong Cash Generation -------------------------------------------------------------------------------- [[Image Removed]] 14 Acetyl Intermediates Advanced Engineered Materials Consumer Specialties Industrial Specialties 2008 Guidance: Adjusted EPS $3.60 to $3.85 Operating EBITDA $1,355 to $1,415 million Forecasted 2008 adjusted tax rate of 26% 2008 Business Outlook -------------------------------------------------------------------------------- [[Image Removed]] 15 Appendix -------------------------------------------------------------------------------- [[Image Removed]] 2Q 2008 Other Charges and Other Adjustments by Segment -------------------------------------------------------------------------------- [[Image Removed]] Reg G: Reconciliation of Adjusted EPS -------------------------------------------------------------------------------- [[Image Removed]] Reg G: Reconciliation of Net Debt -------------------------------------------------------------------------------- [[Image Removed]] Reg G: Other Charges and Other Adjustments -------------------------------------------------------------------------------- [[Image Removed]] Reg G: Reconciliation of Operating EBITDA -------------------------------------------------------------------------------- [[Image Removed]] Reg G: Equity Affiliate Preliminary Results and Celanese Proportional Share - Unaudited --------------------------------------------------------------------------------