DELAWARE | 001-32410 | 98-0420726 | ||
(State or other jurisdiction
of incorporation) |
(Commission File
Number) |
(IRS Employer
Identification No.) |
Exhibit Number | Description | |
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99.1
|
Press Release dated February 6, 2007* | |
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99.2
|
Slide Presentation dated February 6, 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. |
CELANESE CORPORATION
By:
/s/ Steven M. Sterin
Name:
Steven M. Sterin
Title:
Vice President
and Corporate Controller
Table of Contents
Exhibit Number
Description
Press Release dated February 6, 2007*
Slide Presentation dated February 6, 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.
|
Celanese Corporation | |
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Investor Relations | |
Corporate News Release
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1601 West LBJ Freeway | |
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Dallas, Texas 75234-6034 | |
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Mark Oberle | |
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Phone: +1 972 443 4464 |
| Net sales increased 8% to $1,656 million from prior year | ||
| Operating profit increased 11% to $185 million | ||
| Operating EBITDA increased 20% to $308 million | ||
| Adjusted EPS increased 28% to $0.77 from prior year |
| Net sales increased 10% to $6,656 million from prior year | ||
| Operating profit increased 30% to $747 million | ||
| Operating EBITDA increased 18% to $1,244 million | ||
| Adjusted EPS increased 34% to $3.00 from prior year |
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(in $ millions, except per share data) | 2006 | 2005 | 2006 | 2005 | ||||||||||||
Net sales
|
1,656 | 1,540 | 6,656 | 6,033 | ||||||||||||
Operating profit
|
185 | 167 | 747 | 573 | ||||||||||||
Net earnings
|
77 | 175 | 406 | 277 | ||||||||||||
Basic EPS
|
$ | 0.47 | $ | 1.08 | $ | 2.50 | $ | 1.73 | ||||||||
Diluted EPS
|
$ | 0.45 | $ | 1.02 | $ | 2.36 | $ | 1.67 | ||||||||
Adjusted EPS*
|
$ | 0.77 | $ | 0.60 | $ | 3.00 | $ | 2.24 | ||||||||
Operating EBITDA*
|
308 | 256 | 1,244 | 1,058 | ||||||||||||
* | Non-U.S. GAAP measures. See reconciliation in tables 1 and 6. |
§ | Reached a settlement with the Frankfurt, Germany, Airport (Fraport AG) to relocate Ticonas Kelsterbach, Germany, business, resolving several years of legal disputes related to the planned Frankfurt airport expansion. Fraport will pay Ticona a total of 650 million over a five-year period for costs associated with the transition of the business from the current location and the closure of the Kelsterbach plant. The settlement is subject to final agreement and approval at Fraports annual meeting of shareholders in May 2007 and is intended to be cost-neutral and tax-neutral for Celanese. | ||
§ | Announced plans to relocate strategic management of the Acetyls business to Shanghai, China, as early as spring 2007. This |
step will strengthen and grow the companys already strong position in Asia. | |||
§ | Signed agreement to sell its oxo products and derivatives businesses, including European Oxo GmbH, a joint venture between Celanese AG and Degussa AG, to Advent International for the purchase price of 480 million. The pending sale is consistent with Celaneses strategy to optimize its portfolio and divest non-core businesses. | ||
§ | Finalized agreement with the remaining minority shareholders of Celanese AG (CAG), the companys German subsidiary, to acquire their shares for 66.99 per share. The total purchase price for the minority shares, representing approximately 2 percent of the CAG outstanding shares, is approximately 62 million or $80 million at current exchange rates. This transaction is expected to be completed in the first quarter of 2007. | ||
§ | Completed the acquisition of the cellulose acetate flake, tow and film business of Acetate Products Limited(APL), a subsidiary of Corsadi B.V., for approximately $110 million. |
§ | 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 managements 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. | ||
§ | Adjusted earnings per share is a measure used by management to measure performance. It is defined as net earnings (loss) available to common shareholders plus preferred dividends, adjusted for other charges and adjustments, and divided by the number of basic common shares, diluted preferred shares, and options valued using the treasury method. We provide guidance on an adjusted earnings per share basis and are unable to reconcile forecasted adjusted earnings per share to a GAAP financial measure because a forecast of Other Items is not practical. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations, and that when U.S. GAAP information is viewed in conjunction with non-U.S. GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. This non-U.S. GAAP information is not intended to be considered in isolation or as a substitute for U.S. GAAP financial information. | ||
§ | Net debt is defined as total debt less cash and cash equivalents. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the companys capital structure. Our management and credit analysts use net debt to evaluate the companys 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. |
Three Months Ended | Twelve Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
(in $ millions, except per share data) | 2006 | 2005 | 2006 | 2005 | |||||||||||||
Net sales
|
1,656 | 1,540 | 6,656 | 6,033 | |||||||||||||
Cost of sales
|
(1,298 | ) | (1,240 | ) | (5,214 | ) | (4,731 | ) | |||||||||
Gross profit
|
358 | 300 | 1,442 | 1,302 | |||||||||||||
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|||||||||||||||||
Selling, general and administrative expenses
|
(135 | ) | (108 | ) | (538 | ) | (511 | ) | |||||||||
Amortization of Intangibles *
|
(17 | ) | (16 | ) | (66 | ) | (51 | ) | |||||||||
Research and development expenses
|
(18 | ) | (23 | ) | (70 | ) | (91 | ) | |||||||||
Other charges
|
2 | 23 | (10 | ) | (66 | ) | |||||||||||
Foreign exchange (loss), net
|
1 | 0 | (2 | ) | | ||||||||||||
Gain (loss) on disposition of assets, net
|
(6 | ) | (9 | ) | (9 | ) | (10 | ) | |||||||||
Operating profit
|
185 | 167 | 747 | 573 | |||||||||||||
|
|||||||||||||||||
Equity in net earnings of affiliates
|
27 | 13 | 86 | 61 | |||||||||||||
Interest expense
|
(76 | ) | (71 | ) | (294 | ) | (387 | ) | |||||||||
Interest income
|
11 | 7 | 37 | 38 | |||||||||||||
Other income, net
|
27 | 42 | 88 | 89 | |||||||||||||
Earnings from continuing operations
before tax and minority interests
|
174 | 158 | 664 | 374 | |||||||||||||
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|||||||||||||||||
Income tax provision
|
(94 | ) | 18 | (253 | ) | (61 | ) | ||||||||||
Earnings from continuing operations
before minority interests
|
80 | 176 | 411 | 313 | |||||||||||||
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Minority interests
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(1 | ) | 4 | (4 | ) | (37 | ) | ||||||||||
Earnings from continuing operations
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79 | 180 | 407 | 276 | |||||||||||||
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Earnings (loss) from operation of discontinued operations
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(2 | ) | (5 | ) | (1 | ) | 1 | ||||||||||
Net earnings
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77 | 175 | 406 | 277 | |||||||||||||
|
|||||||||||||||||
Cumulative preferred stock dividend declared
|
(2 | ) | (3 | ) | (10 | ) | (10 | ) | |||||||||
Net earnings available to common
shareholders
|
75 | 172 | 396 | 267 | |||||||||||||
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Earnings (loss) per common share basic:
|
|||||||||||||||||
Continuing operations
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$ | 0.48 | $ | 1.11 | $ | 2.51 | $ | 1.72 | |||||||||
Discontinued operations
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(0.01 | ) | (0.03 | ) | (0.01 | ) | 0.01 | ||||||||||
Net earnings available to common shareholders
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$ | 0.47 | $ | 1.08 | $ | 2.50 | $ | 1.73 | |||||||||
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Earnings (loss) per common share diluted:
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|||||||||||||||||
Continuing operations
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$ | 0.46 | $ | 1.05 | $ | 2.37 | $ | 1.66 | |||||||||
Discontinued operations
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(0.01 | ) | (0.03 | ) | (0.01 | ) | 0.01 | ||||||||||
Net earnings available to common shareholders
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$ | 0.45 | $ | 1.02 | $ | 2.36 | $ | 1.67 | |||||||||
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|||||||||||||||||
Weighted average shares basic
|
158.7 | 158.6 | 158.6 | 154.4 | |||||||||||||
Weighted average shares diluted
|
172.5 | 171.5 | 171.8 | 166.2 | |||||||||||||
* | Customer related intangibles |
Three Months Ended | Twelve Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
(in $ millions) | 2006 | 2005 | 2006 | 2005 | |||||||||||||
Net Sales
|
|||||||||||||||||
Chemical Products
|
1,184 | 1,096 | 4,742 | 4,299 | |||||||||||||
Technical Polymers Ticona
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224 | 213 | 915 | 887 | |||||||||||||
Acetate Products
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186 | 160 | 700 | 659 | |||||||||||||
Performance Products
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38 | 40 | 176 | 180 | |||||||||||||
Other Activities *
|
59 | 69 | 257 | 144 | |||||||||||||
Intersegment eliminations
|
(35 | ) | (38 | ) | (134 | ) | (136 | ) | |||||||||
Total
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1,656 | 1,540 | 6,656 | 6,033 | |||||||||||||
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Operating Profit (Loss)
|
|||||||||||||||||
Chemical Products
|
162 | 149 | 637 | 585 | |||||||||||||
Technical Polymers Ticona
|
29 | (2 | ) | 145 | 60 | ||||||||||||
Acetate Products
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31 | 43 | 106 | 67 | |||||||||||||
Performance Products
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7 | 10 | 50 | 51 | |||||||||||||
Other Activities *
|
(44 | ) | (33 | ) | (191 | ) | (190 | ) | |||||||||
Total
|
185 | 167 | 747 | 573 | |||||||||||||
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Equity Earnings and
Other Income/(Expense) **
|
|||||||||||||||||
Chemical Products
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25 | 36 | 72 | 80 | |||||||||||||
Technical Polymers Ticona
|
13 | 11 | 55 | 54 | |||||||||||||
Acetate Products
|
| 2 | 21 | 4 | |||||||||||||
Performance Products
|
2 | 1 | 3 | (1 | ) | ||||||||||||
Other Activities *
|
14 | 5 | 23 | 13 | |||||||||||||
Total
|
54 | 55 | 174 | 150 | |||||||||||||
|
|||||||||||||||||
Other Charges and
Other Adjustments ***
|
|||||||||||||||||
Chemical Products
|
2 | (38 | ) | 12 | (15 | ) | |||||||||||
Technical Polymers Ticona
|
(1 | ) | 6 | (5 | ) | 31 | |||||||||||
Acetate Products
|
| (24 | ) | | (14 | ) | |||||||||||
Performance Products
|
| | | 1 | |||||||||||||
Other Activities *
|
(2 | ) | 5 | 33 | 47 | ||||||||||||
Total
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(1 | ) | (51 | ) | 40 | 50 | |||||||||||
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Depreciation and
Amortization Expense
|
|||||||||||||||||
Chemical Products
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37 | 48 | 155 | 166 | |||||||||||||
Technical Polymers Ticona
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17 | 18 | 65 | 60 | |||||||||||||
Acetate Products
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6 | 8 | 24 | 29 | |||||||||||||
Performance Products
|
4 | 3 | 15 | 13 | |||||||||||||
Other Activities *
|
6 | 8 | 24 | 17 | |||||||||||||
Total
|
70 | 85 | 283 | 285 | |||||||||||||
|
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Operating EBITDA
|
|||||||||||||||||
Chemical Products
|
226 | 195 | 876 | 816 | |||||||||||||
Technical Polymers Ticona
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58 | 33 | 260 | 205 | |||||||||||||
Acetate Products
|
37 | 29 | 151 | 86 | |||||||||||||
Performance Products
|
13 | 14 | 68 | 64 | |||||||||||||
Other Activities *
|
(26 | ) | (15 | ) | (111 | ) | (113 | ) | |||||||||
Total
|
308 | 256 | 1,244 | 1,058 | |||||||||||||
* | Other Activities primarily includes corporate selling, general and administrative expenses and the results from AT Plastics and captive insurance companies. | |
** | Includes equity earnings from affiliates and other income/(expense), which is primarily dividends from cost investments. | |
*** | Excludes adjustments to minority interest, net interest, taxes, depreciation, amortization and discontinued operations |
(in percent) | Volume | Price | Currency | Other* | Total | |||||||||||||||
Chemical Products
|
-1 | % | 6 | % | 3 | % | 0 | % | 8 | % | ||||||||||
Technical Polymers Ticona
|
4 | % | 0 | % | 4 | % | -3 | % | 5 | % | ||||||||||
Acetate Products
|
8 | % | 8 | % | 0 | % | 0 | % | 16 | % | ||||||||||
Performance Products
|
-5 | % | -5 | % | 5 | % | 0 | % | -5 | % | ||||||||||
Total Company
|
1 | % | 4 | % | 3 | % | 0 | % | 8 | % | ||||||||||
(in percent) | Volume | Price | Currency | Other* | Total | |||||||||||||||
Chemical Products
|
1 | % | 5 | % | 1 | % | 3 | % | 10 | % | ||||||||||
Technical Polymers Ticona
|
6 | % | 0 | % | -1 | % | -2 | % | 3 | % | ||||||||||
Acetate Products
|
-1 | % | 7 | % | 0 | % | 0 | % | 6 | % | ||||||||||
Performance Products
|
7 | % | -9 | % | 0 | % | 0 | % | -2 | % | ||||||||||
Total Company
|
1 | % | 4 | % | 1 | % | 4 | % | 10 | % | ||||||||||
* | Primarily represents net sales from the Acetex business (Chemical Products), the absence of sales related to the COC divestiture (Ticona), and AT Plastics and captive insurance companies (Total Company). |
Twelve Months Ended | ||||||||
December 31, | ||||||||
(in $ millions) | 2006 | 2005 | ||||||
Net cash provided by operating activities
|
751 | 701 | ||||||
Net cash (used in) investing activities
|
(268 | ) | (907 | ) | ||||
Net cash (used in) financing activities
|
(108 | ) | (144 | ) | ||||
Exchange rate effects on cash
|
26 | (98 | ) | |||||
Cash and cash equivalents at beginning of period
|
390 | 838 | ||||||
Cash and cash equivalents at end of period
|
791 | 390 | ||||||
Three Months Ended
Twelve Months Ended
December 31,
December 31,
(in $ millions)
2006
2005
2006
2005
56
5
109
65
17
35
79
89
73
40
188
154
December 31,
December 31,
(in $ millions)
2006
2005
309
155
3,189
3,282
3,498
3,437
791
390
2,707
3,047
Three Months Ended | Twelve Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
(in $ millions, except per share data) | 2006 | 2005 | 2006 | 2005 | |||||||||||||
Earnings from continuing operations
before tax and minority interests
|
174 | 158 | 664 | 374 | |||||||||||||
Non-GAAP Adjustments:
|
|||||||||||||||||
Other charges and other adjustments *
|
(1 | ) | (51 | ) | 40 | 50 | |||||||||||
Refinancing costs
|
| | | 102 | |||||||||||||
Adjusted earnings from continuing operations
before tax and minority interests
|
173 | 107 | 704 | 526 | |||||||||||||
Income tax provision on adjusted earnings **
|
(43 | ) | (5 | ) | (186 | ) | (106 | ) | |||||||||
Minority interests
|
(1 | ) | 4 | (4 | ) | (37 | ) | ||||||||||
Earnings from discontinued operations, net of tax and adjustments ***
|
4 | (5 | ) | 1 | 1 | ||||||||||||
Preferred dividends
|
(2 | ) | (3 | ) | (10 | ) | (10 | ) | |||||||||
Adjusted net earnings available to common shareholders
|
131 | 98 | 505 | 374 | |||||||||||||
Add back: Preferred dividends
|
2 | 3 | 10 | 10 | |||||||||||||
Adjusted net earnings for diluted adjusted EPS
|
133 | 101 | 515 | 384 | |||||||||||||
|
|||||||||||||||||
Diluted shares (millions)
|
|||||||||||||||||
Weighted average shares outstanding
|
158.7 | 158.6 | 158.6 | 158.6 | |||||||||||||
Assumed conversion of Preferred Shares
|
12.0 | 12.0 | 12.0 | 12.0 | |||||||||||||
Assumed conversion of stock options
|
1.8 | 0.9 | 1.2 | 0.9 | |||||||||||||
Total diluted shares
|
172.5 | 171.5 | 171.8 | 171.5 | |||||||||||||
Adjusted EPS from continuing operations
|
0.75 | 0.63 | 2.99 | 2.23 | |||||||||||||
|
|||||||||||||||||
Earnings per common share from discontinued operations, net of
adjustments
|
0.02 | (0.03 | ) | 0.01 | 0.01 | ||||||||||||
Adjusted EPS
|
0.77 | 0.60 | 3.00 | 2.24 | |||||||||||||
* | See Table 7 for details | |
** | The U.S. GAAP tax rate for the three months ended December 31, 2006 is 54% and twelve months ended December 31, 2006 is 38%. The companys adjusted tax rate for the three months ended December 31, 2006 is 25% and the resulting full year adjusted tax rate is 26%. The difference between our US GAAP taxes and our adjusted taxes are due to: (i) the favorable impact of purchase accounting on our net operating losses ($59 million); (ii) the elimination of discrete tax items not related to the current period ($6 million) and (iii) the elimination of tax related to a dividend from an equity investment not included in earnings under US GAAP ($17 million). | |
*** | Does not include gain on sale related to discontinued operations. |
Three Months Ended | Twelve Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
(in $ millions, | 2006 | 2005 | 2006 | 2005 | |||||||||||||
Employee
termination
benefits
|
1 | 3 | 12 | 19 | |||||||||||||
Plant/office
closures
|
(1 | ) | 5 | (1 | ) | 20 | |||||||||||
Total
restructuring
|
| 8 | 11 | 39 | |||||||||||||
Asset impairments
|
| | 25 | ||||||||||||||
Insurance
recoveries
associated with
plumbing cases
|
(2 | ) | (30 | ) | (5 | ) | (34 | ) | |||||||||
Other
|
| (1 | ) | 4 | 36 | ** | |||||||||||
Total
|
(2 | ) | (23 | ) | 10 | 66 | |||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(in $ millions) | 2006 | 2005 | 2006 | 2005 | ||||||||||||
Executive severance
& legal costs
related
to Squeeze-Out
|
2 | | 30 | | ||||||||||||
Favorable impact on
non-operating
foreign
exchange position
|
| | | (14 | ) | |||||||||||
Advisor monitoring
fee
|
| | | 10 | ||||||||||||
Purchase accounting
for inventories
|
| (4 | ) | | 12 | |||||||||||
Business
Optimization
|
8 | | 12 | | ||||||||||||
Settlement of
transportation-related antitrust
matters
|
| (36 | ) | | (36 | ) | ||||||||||
Gain on disposition
of Acetate
properties
|
| (23 | ) | | (23 | ) | ||||||||||
Loss on disposition
of COC business
|
| 35 | | 35 | ||||||||||||
Gain on disposal of
investment (Pemeas)
|
(11 | ) | | (11 | ) | | ||||||||||
Other
|
2 | | (1 | ) | | |||||||||||
Total
|
1 | (28 | ) | 30 | (16 | ) | ||||||||||
|
||||||||||||||||
Total other charges
and other
adjustments
|
(1 | ) | (51 | ) | 40 | 50 | ||||||||||
* | Previously described as Special Charges | |
** | Termination of advisor monitoring fee | |
*** | These items are included in net earnings but not included in other charges. |
Dave Weidman, President and CEO John J. Gallagher III, Executive Vice President and CFO Celanese 4Q 2006 Earnings Conference Call / Webcast Tuesday, February 6, 2007 10:00 a.m. CT |
Forward Looking Statements, Reconciliation and Use of Non-GAAP Measures to U.S. GAAP |
Dave Weidman President and Chief Executive Officer |
Celanese Corporation Q4 and Full Year 2006 Highlights 2006 Net sales increase 10% from prior year Operating profit up 30% to $747 million Adjusted EPS up 34% to $3.00 Operating EBITDA increases 18% to $1,244 million Strong volume growth in Ticona and Affiliates Improved pricing in Chemical Products Continued revitalization impact for Acetate Products in $ millions (except EPS) 4th Qtr 2006 4th Qtr 2005 FY 2006 FY 2005 Net Sales 1,656 1,540 6,656 6,033 Operating Profit 185 167 747 573 Adjusted EPS $0.77 $0.60 $3.00 $2.24 Operating EBITDA 308 256 1,244 1,058 Free Cash Flow 260 108 497 489 4Q Net sales increase 8% from prior year Operating profit up 11% to $185 million Adjusted EPS up 28% to $0.77 Operating EBITDA increases 20% to $308 million Continued strong demand Increased volumes in Specialty businesses Improved pricing in Chemical Products Positive currency effects Full Year 2006 4Q 2006 |
Celanese 2010 Objective: $300 - $350 million in additional EBITDA growth Asia Revitalization Organic Balance Sheet Innovation Productivity improvements more than offset inflation Nanjing Complex Affiliates Acetate Emulsions Ticona - new products and applications Acetyls - continued greater than market growth in Acetic Acid and VAM Operational Excellence Evaluate capital structure opportunities Business Specific $300-$350 million EBITDA Growth Celanese is well positioned to capture future growth |
John J. Gallagher III Executive Vice President and Chief Financial Officer |
Celanese Corporation Financial Highlights in $ millions (except EPS) 4th Qtr 2006 4th Qtr 2005 FY 2006 FY 2005 Net Sales 1,656 1,540 6,656 6,033 Operating Profit 185 167 747 573 Net Earnings 77 175 406 277 Special Items Other Charges/Adjustments (1) (51) 40 152 Adjusted EPS $0.77 $0.60 $3.00 $2.24 Effective Tax Rate 25% 5% 26% 20% Diluted Share Basis (mm) 172.5 171.5 171.8 166.2 Operating EBITDA 308 256 1,244 1,058 |
Fourth Quarter 2006: Strong earnings driven by continued robust global demand for most of our product lines Industry-wide high utilization rates continue Significant operating profit growth due to improved pricing and easing energy costs offsetting increased raw material costs Lower dividends from Saudi cost investment (IBN Sina) in line with expectations Chemical Products demand remains robust in $ millions 4th Qtr 2006 FY 2006 Net Sales $1,184 up 8% $4,742 up 10% Operating EBITDA $226 up 16% $876 up 7% Chemical Products |
Fourth Quarter 2006: Volume growth driven primarily by strong European demand Continued penetration in key customer segments Operating margins expanded as increased volume and lower natural gas costs more than offset higher methanol costs Strong results from equity affiliates Continued growth through innovation and application development Ticona Technical Polymers in $ millions 4th Qtr 2006 FY 2006 Net Sales $224 up 5% $915 up 3% Operating EBITDA $58 up 76% $260 up 27% |
Revitalization continued to deliver improved Operating EBITDA Improved pricing and volume in China Performance Products Continued stable earnings Lower volumes driven by seasonality impacts Price reductions in line with company expectations Attractive, stable cash generating businesses Acetate Products in $ millions 4th Qtr 2006 FY 2006 Net Sales $38 down 5% $176 down 2% Operating EBITDA $13 down 7% $68 up 6% in $ millions 4th Qtr 2006 FY 2006 Net Sales $186 up 16% $700 up 6% Operating EBITDA $37 up 28% $151 up 76% |
Q4 2005 Q4 2006 FY 2005 FY 2006 Q4 2005 Q4 2006 FY 2005 FY 2006 4Q and FY 2006: Cash flow higher than earnings impact due to an increased dividend from PolyPlastics FY 2007 Income Guidance1: Income impact similar to 2006 (~$150MM) FY 2007 Cash Flow Guidance1: Cash flow impact similar to 2006 (~$140MM) excluding the incremental impact of the increased dividend from PolyPlastics Income Statement2 Cash Flow2 1Guidance excludes impact from E-Oxo Equity Investment: 2Includes impact from E-Oxo Equity Investment: ~$3 million 4Q, ~$10MM FY Strong performance continues for Equity and Cost Investments |
Cash Senior Credit Term Loan Senior Credit Revolver Floating Rate Term Loan Total Senior Debt Senior Sub Notes ($) Senior Sub Notes (&128;*) Other Debt Total Cash Pay Debt Discount Notes Series A Discount Notes Series B Total Debt Shareholders' Equity Total Capitalization Net Debt(Total Debt Less Cash) 390 1,708 - - 1,708 800 153 397 3,058 73 306 3,437 235 3,672 3,047 Dec 31, 2005 (in $millions) 791 1,622 - - 1,622 799 171 486 3,078 81 339 3,498 787 4,285 2,707 Dec 31, 2006 2004 2005 2006 Cash Flow from Operations -170 709 719 Net Debt to EBITDA 3.28 2.73 2.17 A Strong Cash Generator Net Debt / EBITDA $ millions Capitalization |
Chemical Products Continued strong global demand Favorable pricing continues into 1Q Nanjing Acetic Acid facility begins commercial production Ticona Increasing penetration in auto despite flat total builds Continued growth in non-transportation applications Acetate Products Improved earnings continue from revitalization efforts Integration of APL acquisition Performance Products Planned price declines continue Continued volume growth Strong underlying business fundamentals 2007 Guidance: Adjusted EPS $2.70 to $3.00 Operating EBITDA $1,155 to $1,225 MM Forecasted 2007 tax rate of 28% 2007 Business Outlook |
Impact from the Oxo Products and Derivatives Divestiture Including Oxo results EPS: $2.90 - $3.20 Operating EBITDA: $1,230 - $1,300MM Excluding Oxo results EPS: $2.70 - $3.00 Operating EBITDA: $1,155 - $1,225MM 2007 Guidance 2006 Results Including Oxo results EPS: $3.00 Operating EBITDA: $1,244MM Excluding Oxo results EPS: $2.70 Operating EBITDA: $1,160MM Assumptions: Divestiture closes in 1Q 2007 Net cash proceeds of $450 - $475MM from the divestiture Cash proceeds used to pay down term loan at LIBOR + 175 bps Estimated Oxo Products and Derivatives earnings in 2007 approximates 2006 full year results Tax rate of 26% for full year 2006; 28% for full year 2007 Reported Pro-Forma Pro-forma Reported $0.10/share reduced interest ($0.30)/share earnings impact ($0.30)/share earnings impact |
Appendix |
Updated 2007 Guidance Adjusted EPS $2.70 to $3.00 Operating EBITDA $1,155 to $1,225 million Capital Expenditure / Depreciation and Amortization Approximately $280 million Net cash interest expense $170-$190 million Estimated Tax Rate for Adjusted EPS of 28% |
Reg G: Reconciliation of Diluted Adjusted EPS |
Reg G: Reconciliation of Net Debt |
Reg G: Reconciliation of Other Charges and Other Adjustments |
Reg G: Reconciliation of Operating EBITDA |