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): April 16, 2018
CELANESE CORPORATION
(Exact name of registrant as specified in its charter)
 
 
 
 
 
Delaware
 
001-32410
 
98-0420726
 
 
 
 
 
(State or other jurisdiction
of incorporation)
 
(Commission File
Number)
 
(IRS Employer
Identification No.)
222 West Las Colinas Blvd. Suite 900N, Irving, TX 75039
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (972) 443-4000

 
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company   o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   o


1



Item 2.02 Results of Operations and Financial Condition
On April 16, 2018 , Celanese Corporation (the " Company ") issued a press release reporting the financial results for its first quarter 2018 . 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. Each non-US GAAP financial measure appearing in the press release is accompanied by the most directly comparable US GAAP financial measure and is reconciled to the most comparable US GAAP financial measure in Exhibit 99.2, which includes other supplemental information of interest to investors, analysts and other parties, including the reasons why management believes such Non-US GAAP financial measures provide useful information to investors, and which is incorporated herein solely for purposes of this Item 2.02 disclosure.
Item 9.01 Financial Statements and Exhibits
(d) The following exhibits are being filed herewith:
*In connection with the disclosure set forth in Item 2.02, 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.


2



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/ JAMES R. PEACOCK III 
 
Name:  
James R. Peacock III 
 
Title:  
Vice President, Deputy General Counsel and Corporate Secretary 
 
 
 
 
 
Date:
April 16, 2018
 


3


Exhibit 99.1
CELOGOA02A01A10A01A02A01A28.JPG
 
Celanese Corporation
 
222 West Las Colinas Blvd.
 
Suite 900N
 
Irving, Texas 75039
Celanese Corporation Reports First Quarter 2018 Earnings; Increases 2018 Outlook

Dallas, April 16, 2018 : Celanese Corporation (NYSE: CE), a global technology and specialty materials company, today reported first quarter 2018 GAAP diluted earnings per share of $2.68 , its second highest ever, and record adjusted earnings per share of $2.79 . Net sales in the quarter expanded 26 percent year over year to $1.9 billion . Growth in both Engineered Materials and the Acetyl Chain contributed to a robust quarter. Engineered Materials expanded earnings through pipeline commercialization and successful integration of recent acquisitions. The Acetyl Chain's expansive network and ability to respond quickly to improved industry utilization rates enabled it to leverage regional momentum to grow earnings meaningfully.
First Quarter 2018 Financial Highlights:
 
Three Months Ended
March 31,
 
2018
 
2017
 
 
 
(As Adjusted)
 
(unaudited)
 
(In $ millions)
Operating Profit (Loss)
 
 
 
Engineered Materials
127

 
104

Acetate Tow
46

 
62

Acetyl Chain
 
 
 
Industrial Specialties
23

 
25

Acetyl Intermediates
231

 
27

Eliminations
(1
)
 

Subtotal
253

 
52

Other Activities
(83
)
 
(48
)
Total
343

 
170



1



 
Three Months Ended
March 31,
 
2018
 
2017
 
(unaudited)
 
(In $ millions, except per share data)
Net Earnings (Loss)
365

 
184

 
 
 
 
Adjusted EBIT (1)(2)
 
 
 
Engineered Materials
182

 
150

Acetate Tow
78

 
93

Acetyl Chain
 
 
 
Industrial Specialties
23

 
25

Acetyl Intermediates
231

 
83

Eliminations
(1
)
 

Subtotal
253

 
108

Other Activities
(39
)
 
(18
)
Total
474

 
333

 
 
 
 
Equity Earnings, Cost-Dividend Income, Other Income (Expense)
 
 
 
Engineered Materials
54

 
43

Acetate Tow
32

 
29

 
 
 
 
Operating EBITDA (1)
553

 
404

Diluted EPS - continuing operations
$
2.68

 
$
1.30

Diluted EPS - total
$
2.66

 
$
1.30

Adjusted EPS (1)
$
2.79

 
$
1.81

 
 
 
 
Net cash provided by (used in) investing activities
(235
)
 
(64
)
Net cash provided by (used in) financing activities
(2
)
 
(270
)
Net cash provided by (used in) operating activities
143

 
192

Free cash flow (1)
55

 
126

______________________________
(1)  
See "Non-US GAAP Financial Measures" below.
(2)  
The Company's discussion of adjusted earnings includes use of terms such as "segment income" and "core income". Those non-GAAP terms are defined below and reconciled in our Non-US GAAP Financial Measures and Supplemental Information document referenced below.

2



First Quarter 2018 Highlights:
Completed the acquisition of Omni Plastics and its subsidiaries. Omni specializes in custom compounding of various engineered thermoplastic materials with a compounding facility and headquarters in Evansville, Indiana.
Commercialized a record 742 projects in Engineered Materials in the first quarter of 2018 , a 45 percent increase over the first quarter of last year. On-track to deliver approximately 3,000 project wins in 2018.
Began the final, large scale installation of critical processing equipment associated with the 150 kt expansion of the Clear Lake, Texas VAM unit.
Abandoned the joint venture agreement with Blackstone’s Rhodia Acetow business as parties were unable to reach an agreement with the European Commission on acceptable conditions.
Received the 2018 ENERGY STAR® Partner of the Year Sustained Excellence Award for continued leadership and superior contributions to ENERGY STAR.

First Quarter 2018 Business Segment Overview
Engineered Materials (EM)
Engineered Materials delivered record net sales of $665 million in the first quarter, 29 percent higher than the prior year. Both GAAP operating profit of $127 million and segment income of $182 million were all-time highs. Growth in adjusted earnings resulted from the success of the opportunity pipeline, growth in Asia, and recent acquisitions. A record 742 projects were commercialized in the quarter, 45 percent higher than the first quarter of 2017. Customers continue to value the project-based approach in EM that constantly matches Celanese's broad solution set and customer-specific needs to uncover opportunities for partnership. Volume in the first quarter of 2018 increased over last year primarily from the Nilit and Omni acquisitions. Operating profit and segment income margins were slightly lower than the same quarter last year, primarily due to acquisitions, while improving sequentially from the fourth quarter of 2017, and in-line with expectations for 2018. Affiliate earnings in Engineered Materials increased year over year to $54 million driven by Ibn Sina.
Acetate Tow
Acetate tow volume and price in the first quarter were lower than the same quarter last year due to unique positive carryovers from 2016 into the first quarter of 2017 as customers transitioned to new contracts that did not repeat in 2018. Affiliate earnings of $32 million were higher mainly due to favorable currency.


3




Acetyl Chain
The Acetyl Chain recorded its highest ever net sales of over $1 billion , a 32 percent increase year over year. GAAP operating profit and core income of $253 million each, were both records. Operating profit expanded $201 million compared to the first quarter in 2017, while core income was $145 million higher. The business leveraged progressively improving industry fundamentals in the quarter to deliver a step-change in earnings growth. More opportunities were pursued to activate the expansive network and drive growth than any other previous quarter. Price and Volume increased year-over-year as a result of the improved industry utilization rates regionally and globally. Record margins of 24.1 percent were driven by higher acetic acid and derivative prices globally, led by China.
Cash Flow
Operating cash flow in the first quarter was $143 million . Free cash flow was $55 million driven by timing of sales and collections, on-track for more than $900 million for 2018. Capital expenditures were $86 million in the quarter. Cash of $63 million was returned to shareholders in the quarter in the form of dividends.
Outlook
"The first quarter of 2018 represents a combination of stronger industry fundamentals and the strength of our commercial models. In Engineered Materials, there is a continued need for customized solutions to reduce complexity for customers. The breadth of polymers and customer enabling competencies have made the business an important partner for our customers. In the Acetyl Chain, improving global supply and demand dynamics in the industry led by China, have raised base profitability levels. A very responsive commercial structure coupled with a global manufacturing footprint will continue to enable the Acetyl Chain in translating this momentum into earnings growth around the world. We believe that the improvement in the acetyls industry will be sustained in the longer term but expect some moderation in instantaneous utilization rates as we go through the year. The on-going success in our businesses gives us confidence that we can grow adjusted earnings per share by 20-25 percent in 2018," said Mark Rohr, chairman and chief executive officer.

We are unable to reconcile forecasted adjusted earnings per share growth to US GAAP diluted earnings per share without unreasonable efforts because a forecast of Certain Items, such as mark-to-market pension gains/losses, is not practical.

4



The Company's earnings presentation and prepared remarks related to the first quarter results will be posted on its website at www.celanese.com under Investor Relations/Events and Presentations after market close on April 16, 2018 . Information about Non-US GAAP measures is included in a Non-US GAAP Financial Measures and Supplemental Information document posted on the website and available at the link below. See "Non-GAAP Financial Measures" below.
Contacts:
 
 
 
 
Investor Relations
 
Media - U.S.
 
Media - Europe
Surabhi Varshney
 
Travis Jacobsen
 
Jens Kurth
Phone: +1 972 443 3078
 
Phone: +1 972 443 3750
 
Phone: +49(0)69 45009 1574
Surabhi.Varshney@celanese.com
 
William.Jacobsen@celanese.com
 
Jens.Kurth@celanese.com
Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Our businesses use the full breadth of Celanese's global chemistry, technology and commercial expertise to create value for our customers, employees, shareholders and the corporation. As we partner with our customers to solve their most critical business needs, we strive to make a positive impact on our communities and the world through The Celanese Foundation. Based in Dallas, Celanese employs approximately 7,700  employees worldwide and had 2017 net sales of $6.1 billion. For more information about Celanese Corporation and its product offerings, visit  www.celanese.com  or our blog at  www.celaneseblog.com.

Forward-Looking Statements
This release may contain "forward-looking statements," which include information concerning the Company's plans, objectives, goals, strategies, future revenues, synergies, performance, capital expenditures, financing needs and other information that is not historical information. 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 results expressed or implied in the forward-looking statements contained in this release. These risks and uncertainties include, among other things: changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate; the length and depth of product and industry business cycles, particularly in the automotive, electrical, textiles, electronics and construction industries; changes in the price and availability of raw materials, particularly changes in the demand for, supply of, and market prices of ethylene, methanol, natural gas, wood pulp and fuel oil and the prices for electricity and other energy sources; the ability to pass increases in raw material prices on to customers or otherwise improve margins through price increases; the ability to maintain plant utilization rates and to implement planned capacity additions and expansions; the ability to reduce or maintain current levels of production costs and to improve productivity by implementing technological improvements to existing plants; the ability to identify desirable potential acquisition targets and to consummate acquisition or investment transactions consistent with the Company's strategy; increased price competition and the introduction of competing products by other companies; market acceptance of our technology; the ability to obtain governmental approvals and to construct facilities on terms and schedules acceptable to the Company; changes in tariffs, tax rates or legislation; changes in the degree of intellectual property and other legal protection afforded to our products or technologies, or the theft of such intellectual property; compliance and other costs and potential disruption or interruption of production or operations due to accidents, interruptions in sources of raw materials, cyber security incidents, terrorism or political unrest or other unforeseen events or delays in construction or operation of facilities, including as a result of geopolitical conditions, the occurrence of acts of war or terrorist incidents or as a result of weather or natural disasters; potential liability for remedial actions and increased costs under existing or future environmental regulations, including those relating to climate change; potential liability resulting from pending or future litigation, or from changes in the laws, regulations or policies of governments or other governmental activities in the countries in which we operate; changes in currency exchange rates and interest rates; our level of indebtedness, which could diminish our ability to raise additional capital to fund operations or limit our ability to react to changes in the economy or the chemicals industry; and various other factors discussed from time to time 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.
Non-GAAP Financial Measures
Presentation
This document presents the Company's four business segments, Engineered Materials, Acetate Tow, Industrial Specialties and Acetyl Intermediates, with one subtotal reflecting our core, the Acetyl Chain, which is based on similarities among customers, business models and technical processes. The Acetyl Chain includes the Company's Acetyl Intermediates segment and the Industrial Specialties segment. 
Use of Non-US GAAP Financial Information
This release uses the following Non-US GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, adjusted earnings per share and free cash flow. These measures are not recognized in accordance with US GAAP and should not be viewed as an alternative to US GAAP measures of performance or liquidity. The most directly comparable financial measure presented in accordance with US GAAP in our consolidated financial statements for adjusted EBIT and operating EBITDA is net earnings (loss) attributable to Celanese Corporation; for adjusted EBIT margin is operating margin; for adjusted earnings per share is earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted; and for free cash flow is net cash provided by (used in) operations.
Definitions of Non-US GAAP Financial Measures

5



Adjusted EBIT is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense and taxes, and further adjusted for Certain Items (refer to Table 8 of our Non-US GAAP Financial Measures and Supplemental Information document). We do not provide reconciliations for adjusted EBIT on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information. Adjusted EBIT margin is defined by the Company as adjusted EBIT divided by net sales.
Adjusted EBIT by core (i.e., the Acetyl Chain) may also be referred to by management as core income. Adjusted EBIT margin by core may also be referred to by management as core income margin. Adjusted EBIT by business segment may also be referred to by management as segment income. Adjusted EBIT margin by business segment may also be referred to by management as segment income margin.
Operating EBITDA is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense, taxes and depreciation and amortization, and further adjusted for Certain Items, which Certain Items include accelerated depreciation and amortization expense. Operating EBITDA is equal to adjusted EBIT plus depreciation and amortization.
Adjusted earnings per share is a performance measure used by the Company and is defined by the Company as earnings (loss) from continuing operations attributable to Celanese Corporation, adjusted for income tax (provision) benefit, Certain Items, and refinancing and related expenses, divided by the number of basic common shares and dilutive restricted stock units and stock options calculated using the treasury method. We do not provide reconciliations for adjusted earnings per share on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.
Note: The income tax expense (benefit) on Certain Items ("Non-GAAP adjustments") is determined using the applicable rates in the taxing jurisdictions in which the Non-GAAP adjustments occurred and includes both current and deferred income tax expense (benefit). The income tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year. This range may include certain partial or full-year forecasted tax opportunities and related costs, where applicable, and specifically excludes changes in uncertain tax positions, discrete recognition of GAAP items on a quarterly basis, other pre-tax items adjusted out of our GAAP earnings for adjusted earnings per share purposes and changes in management's assessments regarding the ability to realize deferred tax assets for GAAP. In determining the adjusted earnings per share tax rate, we reflect the impact of foreign tax credits when utilized, or expected to be utilized, absent discrete events impacting the timing of foreign tax credit utilization. We analyze this rate quarterly and adjust it if there is a material change in the range of forecasted tax rates; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate is an estimate and may differ from the actual tax rate used for GAAP reporting in any given reporting period. Table 3a of our Non-US GAAP Financial Measures and Supplemental Information document summarizes the reconciliation of our estimated GAAP effective tax rate to the adjusted tax rate. The estimated GAAP rate excludes discrete recognition of GAAP items due to our inability to forecast such items. As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate to the adjusted tax rate for actual results.
Free cash flow is a liquidity measure used by the Company and is defined by the Company as cash flow from operations, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our methanol joint venture, Fairway Methanol LLC ("Fairway").
Reconciliation of Non-US GAAP Financial Measures
Reconciliations of the Non-US GAAP financial measures used in this press release to the comparable US GAAP financial measure, together with information about the purposes and uses of Non-US GAAP financial measures, are included in our Non-US GAAP Financial Measures and Supplemental Information document filed as an exhibit to our Current Report on Form 8-K filed with the SEC on or about April 16, 2018 and also available on our website at www.celanese.com under Financial Information, Non-GAAP Financial Measures, or at this link: http://investors.celanese.com/interactive/lookandfeel/4103411/Non-GAAP.PDF .
Results Unaudited
The results in this document, 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.
Supplemental Information
Additional information about our prior period performance is included in our Quarterly Reports on Form 10-Q and in our Non-US GAAP Financial Measures and Supplemental Information document.

6



Consolidated Statements of Operations - Unaudited
 
Three Months Ended
March 31,
 
2018
 
2017
 
 
 
(As Adjusted)
 
(In $ millions, except share and per share data)
Net sales
1,851

 
1,471

Cost of sales
(1,336
)
 
(1,121
)
Gross profit
515

 
350

Selling, general and administrative expenses
(147
)
 
(103
)
Amortization of intangible assets
(6
)
 
(4
)
Research and development expenses
(18
)
 
(17
)
Other (charges) gains, net

 
(55
)
Foreign exchange gain (loss), net
(1
)
 

Gain (loss) on disposition of businesses and assets, net

 
(1
)
Operating profit (loss)
343

 
170

Equity in net earnings (loss) of affiliates
58

 
47

Non-operating pension and other postretirement employee benefit (expense) income
26

 
22

Interest expense
(33
)
 
(29
)
Interest income
2

 

Dividend income - cost investments
32

 
29

Other income (expense), net
4

 
1

Earnings (loss) from continuing operations before tax
432

 
240

Income tax (provision) benefit
(65
)
 
(56
)
Earnings (loss) from continuing operations
367

 
184

Earnings (loss) from operation of discontinued operations
(2
)
 

Income tax (provision) benefit from discontinued operations

 

Earnings (loss) from discontinued operations
(2
)
 

Net earnings (loss)
365

 
184

Net (earnings) loss attributable to noncontrolling interests
(2
)
 
(1
)
Net earnings (loss) attributable to Celanese Corporation
363

 
183

Amounts attributable to Celanese Corporation
 
 
 
Earnings (loss) from continuing operations
365

 
183

Earnings (loss) from discontinued operations
(2
)
 

Net earnings (loss)
363

 
183

Earnings (loss) per common share - basic
 
 
 
Continuing operations
2.69

 
1.30

Discontinued operations
(0.02
)
 

Net earnings (loss) - basic
2.67

 
1.30

Earnings (loss) per common share - diluted
 
 
 
Continuing operations
2.68

 
1.30

Discontinued operations
(0.02
)
 

Net earnings (loss) - diluted
2.66

 
1.30

Weighted average shares (in millions)
 
 
 
Basic
135.9

 
140.6

Diluted
136.4

 
141.0


7



Consolidated Balance Sheets - Unaudited
 
As of
March 31,
2018
 
As of
December 31,
2017
 
(In $ millions)
ASSETS
 
 
 
Current Assets
 
 
 
Cash and cash equivalents
490

 
576

Trade receivables - third party and affiliates, net
1,205

 
986

Non-trade receivables, net
271

 
244

Inventories
955

 
900

Marketable securities, at fair value
32

 
32

Other assets
53

 
54

Total current assets
3,006

 
2,792

Investments in affiliates
979

 
976

Property, plant and equipment, net
3,801

 
3,762

Deferred income taxes
182

 
366

Other assets
369

 
338

Goodwill
1,107

 
1,003

Intangible assets, net
336

 
301

Total assets
9,780

 
9,538

LIABILITIES AND EQUITY
 
 
 
Current Liabilities
 
 
 
Short-term borrowings and current installments of long-term debt - third party and affiliates
425

 
326

Trade payables - third party and affiliates
797

 
807

Other liabilities
266

 
354

Income taxes payable
114

 
72

Total current liabilities
1,602

 
1,559

Long-term debt, net of unamortized deferred financing costs
3,343

 
3,315

Deferred income taxes
219

 
211

Uncertain tax positions
152

 
156

Benefit obligations
582

 
585

Other liabilities
217

 
413

Commitments and Contingencies
 
 
 
Stockholders' Equity
 
 
 
Preferred stock

 

Common stock

 

Treasury stock, at cost
(2,031
)
 
(2,031
)
Additional paid-in capital
192

 
175

Retained earnings
5,220

 
4,920

Accumulated other comprehensive income (loss), net
(128
)
 
(177
)
Total Celanese Corporation stockholders' equity
3,253

 
2,887

Noncontrolling interests
412

 
412

Total equity
3,665

 
3,299

Total liabilities and equity
9,780

 
9,538


8
CELANESEIMAGEA01.JPG
Exhibit 99.2

Non-US GAAP Financial Measures and Supplemental Information
April 16, 2018
In this document, the terms the "Company," "we" and "our" refer to Celanese Corporation and its subsidiaries on a consolidated basis.
Purpose
The purpose of this document is to provide information of interest to investors, analysts and other parties including supplemental financial information and reconciliations and other information concerning our use of non-US GAAP financial measures. This document is updated quarterly.
Presentation
This document presents the Company's four business segments, Engineered Materials, Acetate Tow, Industrial Specialties and Acetyl Intermediates, with one subtotal reflecting our core, the Acetyl Chain, which is based on similarities among customers, business models and technical processes. The Acetyl Chain includes the Company's Industrial Specialties segment and Acetyl Intermediates segment.
Use of Non-US GAAP Financial Measures
From time to time, management may publicly disclose certain numerical "non-GAAP financial measures" in the course of our earnings releases, financial presentations, earnings conference calls, investor and analyst meetings and otherwise. For these purposes, the Securities and Exchange Commission ("SEC") defines a "non-GAAP financial measure" as a numerical measure of historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that effectively exclude amounts, included in the most directly comparable measure calculated and presented in accordance with US GAAP, and vice versa for measures that include amounts, or are subject to adjustments that effectively include amounts, that are excluded from the most directly comparable US GAAP measure so calculated and presented. For these purposes, "GAAP" refers to generally accepted accounting principles in the United States.
Non-GAAP financial measures disclosed by management are provided as additional information to investors, analysts and other parties because the Company believes them to be important supplemental measures for assessing our financial and operating results and as a means to evaluate our financial condition and period-to-period comparisons. These non-GAAP financial measures should be viewed as supplemental to, and should not be considered in isolation or as alternatives to, net earnings (loss), operating profit (loss), operating margin, cash flow from operating activities (together with cash flow from investing and financing activities), earnings per share or any other US GAAP financial measure. These non-GAAP financial measures should be considered within the context of our complete audited and unaudited financial results for the given period, which are available on the Investor Relations/Financial Information/SEC Filings page of our website, www.celanese.com. The definition and method of calculation of the non-GAAP financial measures used herein may be different from other companies' methods for calculating measures with the same or similar titles. Investors, analysts and other parties should understand how another company calculates such non-GAAP financial measures before comparing the other company's non-GAAP financial measures to any of our own. These non-GAAP financial measures may not be indicative of the historical operating results of the Company nor are they intended to be predictive or projections of future results.
Pursuant to the requirements of SEC Regulation G, whenever we refer to a non-GAAP financial measure, we will also present in this document, in the presentation itself or on a Form 8-K in connection with the presentation on the Investor Relations/Financial Information/Non-GAAP Financial Measures page of our website, www.celanese.com, to the extent practicable, the most directly comparable financial measure calculated and presented in accordance with GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable GAAP financial measure.
This document includes definitions and reconciliations of non-GAAP financial measures used from time to time by the Company.
Specific Measures Used
This document provides information about the following non-GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, operating EBITDA margin, operating profit (loss) attributable to Celanese Corporation, adjusted earnings per share, net debt, free cash flow and return on invested capital (adjusted). The most directly comparable financial measure presented in accordance with US GAAP in our consolidated financial statements for adjusted EBIT and operating EBITDA is net earnings (loss) attributable to Celanese Corporation; for adjusted EBIT margin and operating EBITDA margin is operating margin; for operating profit (loss) attributable to Celanese Corporation is operating profit (loss); for adjusted earnings per share is earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted; for net debt is total debt; for free

1

CELANESEIMAGEA02.JPG

cash flow is net cash provided by (used in) operations; and for return on invested capital (adjusted) is net earnings (loss) attributable to Celanese Corporation divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation stockholders' equity.
Definitions
Adjusted EBIT is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense and taxes, and further adjusted for Certain Items (refer to Table 8 ). We believe that adjusted EBIT provides transparent and useful information to management, investors, analysts and other parties in evaluating and assessing our primary operating results from period-to-period after removing the impact of unusual, non-operational or restructuring-related activities that affect comparability. Our management recognizes that adjusted EBIT has inherent limitations because of the excluded items. Adjusted EBIT is one of the measures management uses for planning and budgeting, monitoring and evaluating financial and operating results and as a performance metric in the Company's incentive compensation plan. We do not provide reconciliations for adjusted EBIT on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information. Adjusted EBIT margin is defined by the Company as adjusted EBIT divided by net sales. Adjusted EBIT margin has the same uses and limitations as Adjusted EBIT.
Adjusted EBIT by core (i.e. the Acetyl Chain) may also be referred to by management as core income. Adjusted EBIT margin by core may also be referred to by management as core income margin. Adjusted EBIT by business segment may also be referred to by management as segment income. Adjusted EBIT margin by business segment may also be referred to by management as segment income margin.
Operating EBITDA is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense, taxes and depreciation and amortization, and further adjusted for Certain Items, which Certain Items include accelerated depreciation and amortization expense. Operating EBITDA is equal to adjusted EBIT plus depreciation and amortization. We believe that Operating EBITDA provides transparent and useful information to investors, analysts and other parties in evaluating our operating performance relative to our peer companies. Operating EBITDA margin is defined by the Company as Operating EBITDA divided by net sales. Operating EBITDA margin has the same uses and limitations as Operating EBITDA.
Operating profit (loss) attributable to Celanese Corporation is defined by the Company as operating profit (loss), less earnings (loss) attributable to noncontrolling interests ("NCI"). We believe that operating profit (loss) attributable to Celanese Corporation provides transparent and useful information to management, investors, analysts and other parties in evaluating our core operational performance. Operating margin attributable to Celanese Corporation is defined by the Company as operating profit (loss) attributable to Celanese Corporation divided by net sales. Operating margin attributable to Celanese Corporation has the same uses and limitations as Operating profit (loss) attributable to Celanese Corporation.
Adjusted earnings per share is a performance measure used by the Company and is defined by the Company as earnings (loss) from continuing operations attributable to Celanese Corporation, adjusted for income tax (provision) benefit, Certain Items, and refinancing and related expenses, divided by the number of basic common shares and dilutive restricted stock units and stock options calculated using the treasury method. We believe that adjusted earnings per share provides transparent and useful information to management, investors, analysts and other parties in evaluating and assessing our primary operating results from period-to-period after removing the impact of the above stated items that affect comparability and as a performance metric in the Company's incentive compensation plan. We do not provide reconciliations for adjusted earnings per share on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.
Note: The income tax expense (benefit) on Certain Items ("Non-GAAP adjustments") is determined using the applicable rates in the taxing jurisdictions in which the Non-GAAP adjustments occurred and includes both current and deferred income tax expense (benefit). The income tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year. This range may include certain partial or full-year forecasted tax opportunities and related costs, where applicable, and specifically excludes changes in uncertain tax positions, discrete recognition of GAAP items on a quarterly basis, other pre-tax items adjusted out of our GAAP earnings for adjusted earnings per share purposes and changes in management's assessments regarding the ability to realize deferred tax assets for GAAP. In determining the adjusted earnings per share tax rate, we reflect the impact of foreign tax credits when utilized, or expected to be utilized, absent discrete events impacting the timing of foreign tax credit utilization. We analyze this rate quarterly and adjust it if there is a material change in the range of forecasted tax rates; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate is an estimate and may differ from the actual tax rate used for GAAP reporting in any given reporting period. Table 3a summarizes the reconciliation of our estimated GAAP effective tax rate to the adjusted tax rate. The

2

CELANESEIMAGEA02.JPG

estimated GAAP rate excludes discrete recognition of GAAP items due to our inability to forecast such items. As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate to the adjusted tax rate for actual results.
Free cash flow is a liquidity measure used by the Company and is defined by the Company as net cash provided by (used in) operations, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our methanol joint venture, Fairway Methanol LLC ("Fairway"). We believe that free cash flow provides useful information to management, investors, analysts and other parties in evaluating the Company's liquidity and credit quality assessment because it provides an indication of the long-term cash generating ability of our business. Although we use free cash flow as a measure to assess the liquidity generated by our business, the use of free cash flow has important limitations, including that free cash flow does not reflect the cash requirements necessary to service our indebtedness, lease obligations, unconditional purchase obligations or pension and postretirement funding obligations.
Net debt is defined by the Company as total debt less cash and cash equivalents. We believe that net debt provides useful information to management, investors, analysts and other parties in evaluating changes to the Company's capital structure and credit quality assessment.
Return on invested capital (adjusted) is defined by the Company as adjusted EBIT, tax effected using the adjusted tax rate, divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation stockholders' equity. We believe that return on invested capital (adjusted) provides useful information to management, investors, analysts and other parties in order to assess our income generation from the point of view of our stockholders and creditors who provide us with capital in the form of equity and debt and whether capital invested in the Company yields competitive returns. In addition, achievement of certain predetermined targets relating to return on invested capital (adjusted) is one of the factors we consider in determining the amount of performance-based compensation received by our management.
Supplemental Information
Supplemental Information we believe to be of interest to investors, analysts and other parties includes the following:
Net sales for the Acetyl Chain and each of our business segments and the percentage increase or decrease in net sales attributable to price, volume, currency and other factors for the Acetyl Chain and each of our business segments.
Cash dividends received from our equity and cost investments.
For those consolidated ventures in which the Company owns or is exposed to less than 100% of the economics, the outside stockholders' interests are shown as NCI. Beginning in 2014, this includes Fairway for which the Company's ownership percentage is 50%. Amounts referred to as "attributable to Celanese Corporation" are net of any applicable NCI.
Recent Developments
Effective January 1, 2018, we reorganized our operating and reportable segments to align with recent structural and management reporting changes. The change reflects the movement of our food ingredients business from the Consumer Specialties reportable segment into the Engineered Materials reportable segment. The former Consumer Specialties reportable segment is being renamed the Acetate Tow segment and the former Advanced Engineered Materials reportable segment is being renamed the Engineered Materials segment. This reorganization better reflects how we manage our food ingredients' related products commercially. Engineered Materials and food ingredients are both project-based models which focus on delivering customized solutions and are led by the same senior management team. These changes in operating and reportable segments were applied retrospectively to prior periods through 2014.
Results Unaudited
The results in this document, 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.

3

CELANESEIMAGEA02.JPG

Table 1
Adjusted EBIT and Operating EBITDA - Reconciliation of Non-GAAP Measures - Unaudited
 
Q1 '18
 
2017
 
Q4 '17
 
Q3 '17
 
Q2 '17
 
Q1 '17
 
(In $ millions)
Net earnings (loss) attributable to Celanese Corporation
363

 
843

 
203

 
226

 
231

 
183

(Earnings) loss from discontinued operations
2

 
13

 
1

 
4

 
8

 

Interest income
(2
)
 
(2
)
 

 
(1
)
 
(1
)
 

Interest expense
33

 
122

 
31

 
32

 
30

 
29

Refinancing expense

 

 

 

 

 

Income tax provision (benefit)
65

 
213

 
60

 
57

 
40

 
56

Certain Items attributable to Celanese Corporation ( Table 8 )
13

 
167

 
57

 
27

 
18

 
65

Adjusted EBIT
474

 
1,356

 
352

 
345

 
326

 
333

Depreciation and amortization expense (1)
79

 
303

 
79

 
78

 
75

 
71

Operating EBITDA
553

 
1,659

 
431

 
423

 
401

 
404

            
 
Q1 '18
 
2017
 
Q4 '17
 
Q3 '17
 
Q2 '17
 
Q1 '17
 
(In $ millions)
Engineered Materials

 

 

 

 

 

Acetate Tow

 

 

 

 

 

Industrial Specialties

 
2

 

 
2

 

 

Acetyl Intermediates

 

 

 

 

 

Other Activities (2)

 

 

 

 

 

Accelerated depreciation and amortization expense

 
2

 

 
2

 

 

Depreciation and amortization expense (1)
79

 
303

 
79

 
78

 
75

 
71

Total depreciation and amortization expense
79

 
305

 
79

 
80

 
75

 
71

______________________________
(1)  
Excludes accelerated depreciation and amortization expense as detailed in the table above, which amounts are included in Certain Items above.
(2)  
Other Activities includes corporate Selling, general and administrative ("SG&A") expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

4

Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited
 
CELANESEIMAGEA03.JPG

 
Q1 '18
 
2017
 
Q4 '17
 
Q3 '17
 
Q2 '17
 
Q1 '17
 
(In $ millions, except percentages)
Operating Profit (Loss) / Operating Margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials
127

 
19.1
%
 
412

 
18.6
%
 
98

 
16.9
%
 
105

 
18.3
%
 
105

 
19.2
%
 
104

 
20.2
%
Acetate Tow
46

 
27.4
%
 
189

 
28.3
%
 
41

 
26.1
%
 
45

 
28.7
%
 
41

 
25.2
%
 
62

 
32.5
%
Acetyl Chain (1)
253

 
24.1
%
 
509

 
15.1
%
 
175

 
19.7
%
 
147

 
17.0
%
 
135

 
16.3
%
 
52

 
6.5
%
Other Activities (2)
(83
)
 
 
 
(253
)
 
 
 
(74
)
 
 
 
(68
)
 
 
 
(63
)
 
 
 
(48
)
 
 
Total
343

 
18.5
%

857

 
14.0
%
 
240

 
15.1
%
 
229

 
14.6
%
 
218

 
14.4
%
 
170

 
11.6
%
Less: Net Earnings (Loss) Attributable to NCI (1)
2

 
 
 
6

 
 
 
1

 
 
 
2

 
 
 
2

 
 
 
1

 
 
Operating Profit (Loss) Attributable to Celanese Corporation
341

 
18.4
%
 
851

 
13.9
%
 
239

 
15.0
%
 
227


14.5
%
 
216

 
14.3
%
 
169

 
11.5
%
Operating Profit (Loss) / Operating Margin Attributable to Celanese Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials
127

 
19.1
%
 
412

 
18.6
%
 
98

 
16.9
%
 
105

 
18.3
%
 
105

 
19.2
%
 
104

 
20.2
%
Acetate Tow
46

 
27.4
%
 
189

 
28.3
%
 
41

 
26.1
%
 
45

 
28.7
%
 
41

 
25.2
%
 
62

 
32.5
%
Industrial Specialties
23

 
8.4
%
 
85

 
8.3
%
 
15

 
6.0
%
 
19

 
7.2
%
 
26

 
9.9
%
 
25

 
10.2
%
Acetyl Intermediates (1)
229

 
26.3
%
 
418

 
15.7
%
 
159

 
22.2
%
 
126

 
18.4
%
 
107

 
16.5
%
 
26

 
4.2
%
Eliminations
(1
)
 
 
 

 
 
 

 
 
 

 
 
 

 
 
 

 
 
Acetyl Chain
251

 
23.9
%
 
503

 
14.9
%
 
174

 
19.6
%
 
145

 
16.8
%
 
133

 
16.1
%
 
51

 
6.4
%
Other Activities (2)
(83
)
 
 
 
(253
)
 


 
(74
)
 
 
 
(68
)
 
 
 
(63
)
 
 
 
(48
)
 
 
Total
341

 
18.4
%
 
851

 
13.9
%
 
239

 
15.0
%
 
227

 
14.5
%
 
216

 
14.3
%
 
169

 
11.5
%
Equity Earnings, Cost-Dividend Income, Other Income (Expense) Attributable to Celanese Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials
54

 
 
 
171

 
 
 
43

 
 
 
47

 
 
 
38

 
 
 
43

 
 
Acetate Tow
32

 
 
 
107

 
 
 
26

 
 
 
24

 
 
 
28

 
 
 
29

 
 
Industrial Specialties

 
 
 

 
 
 

 
 
 

 
 
 

 
 
 

 
 
Acetyl Intermediates
2

 
 
 
6

 
 
 
2

 
 
 
1

 
 
 
2

 
 
 
1

 
 
Acetyl Chain
2

 
 
 
6

 
 
 
2

 
 
 
1

 
 
 
2

 
 
 
1

 
 
Other Activities (2)
6

 
 
 
10

 
 
 
8

 
 
 
(4
)
 
 
 
2

 
 
 
4

 
 
Total
94

 
 
 
294

 
 
 
79

 
 
 
68

 
 
 
70

 
 
 
77

 
 
Non-Operating Pension and Other Post-Retirement Employee Benefit (Expense) Income Attributable to Celanese Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials

 
 
 

 
 
 

 
 
 

 
 
 

 
 
 

 
 
Acetate Tow

 
 
 

 
 
 

 
 
 

 
 
 

 
 
 

 
 
Industrial Specialties

 
 
 
2

 
 
 
1

 
 
 
1

 
 
 

 
 
 

 
 
Acetyl Intermediates

 
 
 

 
 
 

 
 
 

 
 
 

 
 
 

 
 
Acetyl Chain

 
 
 
2

 
 
 
1

 
 
 
1

 
 
 

 
 
 

 
 
Other Activities (2)
26

 
 
 
42

 
 
 
(24
)
 
 
 
22

 
 
 
22

 
 
 
22

 
 
Total
26

 
 
 
44

 
 
 
(23
)
 
 
 
23

 
 
 
22

 
 
 
22

 
 
Certain Items Attributable to Celanese Corporation   ( Table 8 )
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials
1

 
 
 
16

 
 
 
1

 
 
 
5

 
 
 
7

 
 
 
3

 
 
Acetate Tow

 
 
 
5

 
 
 
1

 
 
 

 
 
 
2

 
 
 
2

 
 
Industrial Specialties

 
 
 
3

 
 
 

 
 
 
3

 
 
 

 
 
 

 
 
Acetyl Intermediates

 
 
 
61

 
 
 
1

 
 
 
7

 
 
 
(3
)
 
 
 
56

 
 
Acetyl Chain

 
 
 
64

 
 
 
1

 
 
 
10

 
 
 
(3
)
 
 
 
56

 
 
Other Activities (2)
12

 
 
 
82

 
 
 
54

 
 
 
12

 
 
 
12

 
 
 
4

 
 
Total
13

 
 
 
167

 
 
 
57

 
 
 
27

 
 
 
18

 
 
 
65

 
 
___________________________
(1)  
Net earnings (loss) attributable to NCI is included within the Acetyl Intermediates segment.
(2)  
Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

5

Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited (cont.)
 
CELANESEIMAGEA04.JPG

 
Q1 '18
 
2017
 
Q4 '17
 
Q3 '17
 
Q2 '17
 
Q1 '17
 
(In $ millions, except percentages)
Adjusted EBIT / Adjusted EBIT Margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials
182

 
27.4
%
 
599

 
27.1
%
 
142

 
24.5
%
 
157

 
27.4
%
 
150

 
27.5
%
 
150

 
29.2
%
Acetate Tow
78

 
46.4
%
 
301

 
45.1
%
 
68

 
43.3
%
 
69

 
43.9
%
 
71

 
43.6
%
 
93

 
48.7
%
Industrial Specialties
23

 
8.4
%
 
90

 
8.8
%
 
16

 
6.3
%
 
23

 
8.7
%
 
26

 
9.9
%
 
25

 
10.2
%
Acetyl Intermediates
231

 
26.5
%
 
485

 
18.2
%
 
162

 
22.6
%
 
134

 
19.6
%
 
106

 
16.3
%
 
83

 
13.4
%
Eliminations
(1
)
 
 
 

 
 
 

 
 
 

 
 
 

 
 
 

 
 
Acetyl Chain
253

 
24.1
%
 
575

 
17.1
%
 
178

 
20.0
%
 
157

 
18.2
%
 
132

 
16.0
%
 
108

 
13.6
%
Other Activities (2)
(39
)
 
 
 
(119
)
 
 
 
(36
)
 
 
 
(38
)
 
 
 
(27
)
 
 
 
(18
)
 
 
Total
474

 
25.6
%
 
1,356

 
22.1
%
 
352

 
22.1
%
 
345

 
22.0
%
 
326

 
21.6
%
 
333

 
22.6
%
Depreciation and Amortization Expense (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials
32

 
 
 
111

 
 
 
29

 
 
 
30

 
 
 
27

 
 
 
25

 
 
Acetate Tow
10

 
 
 
41

 
 
 
11

 
 
 
10

 
 
 
10

 
 
 
10

 
 
Industrial Specialties
9

 
 
 
36

 
 
 
10

 
 
 
8

 
 
 
10

 
 
 
8

 
 
Acetyl Intermediates
26

 
 
 
105

 
 
 
27

 
 
 
26

 
 
 
26

 
 
 
26

 
 
Acetyl Chain
35

 
 
 
141

 
 
 
37

 
 
 
34

 
 
 
36

 
 
 
34

 
 
Other Activities (2)  
2

 
 
 
10

 
 
 
2

 
 
 
4

 
 
 
2

 
 
 
2

 
 
Total
79

 
 
 
303

 
 
 
79

 
 
 
78

 
 
 
75

 
 
 
71

 
 
Operating EBITDA / Operating EBITDA Margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials
214

 
32.2
%
 
710

 
32.1
%
 
171

 
29.5
%
 
187

 
32.6
%
 
177

 
32.4
%
 
175

 
34.0
%
Acetate Tow
88

 
52.4
%
 
342

 
51.2
%
 
79

 
50.3
%
 
79

 
50.3
%
 
81

 
49.7
%
 
103

 
53.9
%
Industrial Specialties
32

 
11.7
%
 
126

 
12.3
%
 
26

 
10.3
%
 
31

 
11.7
%
 
36

 
13.7
%
 
33

 
13.5
%
Acetyl Intermediates
257

 
29.5
%
 
590

 
22.1
%
 
189

 
26.4
%
 
160

 
23.4
%
 
132

 
20.3
%
 
109

 
17.6
%
Eliminations
(1
)
 
 
 

 
 
 

 
 
 

 
 
 

 
 
 

 
 
Acetyl Chain
288

 
27.4
%
 
716

 
21.2
%
 
215

 
24.2
%
 
191

 
22.1
%
 
168

 
20.3
%
 
142

 
17.9
%
Other Activities (2)
(37
)
 
 
 
(109
)
 
 
 
(34
)
 
 
 
(34
)
 
 
 
(25
)
 
 
 
(16
)
 
 
Total
553

 
29.9
%
 
1,659

 
27.0
%
 
431

 
27.1
%
 
423

 
27.0
%
 
401

 
26.6
%
 
404

 
27.5
%
___________________________
(1)  
Excludes accelerated depreciation and amortization expense, which amounts are included in Certain Items above. See Table 1 for details.
(2)  
Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

6

CELANESEIMAGEA02.JPG

Table 3
Adjusted Earnings (Loss) per Share - Reconciliation of a Non-GAAP Measure - Unaudited
 
Q1 '18
 
2017
 
Q4 '17
 
Q3 '17
 
Q2 '17
 
Q1 '17
 
 
 
per share
 
 
 
per share
 
 
 
per share
 
 
 
per share
 
 
 
per share
 
 
 
per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations attributable to Celanese Corporation
365

 
2.68

 
856

 
6.19

 
204

 
1.50

 
230

 
1.68

 
239

 
1.72

 
183

 
1.30

Income tax provision (benefit)
65

 
 
 
213

 
 
 
60

 
 
 
57

 
 
 
40

 
 
 
56

 
 
Earnings (loss) from continuing operations before tax
430

 
 
 
1,069

 
 
 
264

 
 
 
287

 
 
 
279

 
 
 
239

 
 
Certain Items attributable to Celanese Corporation   ( Table 8 )
13

 
 
 
167

 
 
 
57

 
 
 
27

 
 
 
18

 
 
 
65

 
 
Adjusted earnings (loss) from continuing operations before tax
443

 
 
 
1,236

 
 
 
321

 
 
 
314

 
 
 
297

 
 
 
304

 
 
Income tax (provision) benefit on adjusted earnings (1)
(62
)
 
 
 
(198
)
 
 
 
(51
)
 
 
 
(50
)
 
 
 
(48
)
 
 
 
(49
)
 
 
Adjusted earnings (loss) from continuing operations (2)
381

 
2.79

 
1,038

 
7.51

 
270

 
1.98

 
264

 
1.93

 
249

 
1.79

 
255

 
1.81

 
Diluted shares (in millions) (3)
Weighted average shares outstanding
135.9

 
 
 
137.9

 
 
 
135.8

 
 
 
136.6

 
 
 
138.6

 
 
 
140.6

 
 
Incremental shares attributable to equity awards
0.5

 
 
 
0.4

 
 
 
0.5

 
 
 
0.4

 
 
 
0.4

 
 
 
0.4

 
 
Total diluted shares
136.4

 
 
 
138.3

 
 
 
136.3

 
 
 
137.0

 
 
 
139.0

 
 
 
141.0

 
 
______________________________
(1)  
Calculated using adjusted effective tax rates ( Table 3a ) as follows:
 
Q1 '18
 
2017
 
Q4 '17
 
Q3 '17
 
Q2 '17
 
Q1 '17
 
(In percentages)
Adjusted effective tax rate
14
 
 
 
16
 
 
 
16
 
 
 
16
 
 
 
16
 
 
 
16
 
 
(2)  
Excludes the immediate recognition of actuarial gains and losses and the impact of actual vs. expected plan asset returns.
 
 
Actual Plan Asset Returns
 
Expected Plan Asset Returns
 
 
(In percentages)
2017
 
10.5

 
7.3

(3)  
Potentially dilutive shares are included in the adjusted earnings per share calculation when adjusted earnings are positive.

7

CELANESEIMAGEA02.JPG

Table 3a
Adjusted Tax Rate - Reconciliation of a Non-GAAP Measure - Unaudited
 
Estimated
 
Actual
 
2018
 
2017
 
(In percentages)
US GAAP annual effective tax rate
14

 
20

Discrete quarterly recognition of GAAP items (1)

 
(11
)
Tax impact of other charges and adjustments (2)
(2
)
 
1

Utilization of foreign tax credits

 
20

Changes in valuation allowances, excluding impact of other charges and adjustments (3)
1

 
(13
)
Other (4)
1

 
(1
)
Adjusted tax rate
14

 
16

______________________________
Note: As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate for actual results.
(1)  
Such as changes in tax laws (including US tax reform), deferred taxes on outside basis differences, changes in uncertain tax positions and prior year audit adjustments.
(2)  
Reflects the tax impact on pre-tax adjustments presented in Certain Items ( Table 8 ), which are excluded from pre-tax income for adjusted earnings per share purposes.
(3)  
Reflects changes in valuation allowances related to changes in judgment regarding the realizability of deferred tax assets or current year operations, excluding other charges and adjustments.
(4)  
Tax impacts related to full-year forecasted tax opportunities and related costs.

8

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Table 4
Net Sales by Segment - Unaudited
 
Q1 '18
 
2017
 
Q4 '17
 
Q3 '17
 
Q2 '17
 
Q1 '17
 
(In $ millions)
Engineered Materials
665

 
2,213

 
580

 
573

 
546

 
514

Acetate Tow
168

 
668

 
157

 
157

 
163

 
191

Industrial Specialties
274

 
1,023

 
252

 
264

 
262

 
245

Acetyl Intermediates
871

 
2,669

 
717

 
684

 
649

 
619

Eliminations (1)
(94
)
 
(321
)
 
(81
)
 
(85
)
 
(85
)
 
(70
)
Acetyl Chain
1,051

 
3,371

 
888

 
863

 
826

 
794

Other Activities (2)

 

 

 

 

 

Intersegment eliminations (1)
(33
)
 
(112
)
 
(32
)
 
(27
)
 
(25
)
 
(28
)
Net sales
1,851

 
6,140

 
1,593

 
1,566

 
1,510

 
1,471

___________________________
(1)  
Includes intersegment sales as follows:
 
Q1 '18
 
2017
 
Q4 '17
 
Q3 '17
 
Q2 '17
 
Q1 '17
 
(In $ millions)
Acetate Tow

 
(2
)
 
(2
)
 

 

 

Industrial Specialties
(2
)
 
(4
)
 
(1
)
 
(1
)
 
(1
)
 
(1
)
Acetyl Intermediates
(125
)
 
(427
)
 
(110
)
 
(111
)
 
(109
)
 
(97
)
Intersegment eliminations
(127
)
 
(433
)
 
(113
)
 
(112
)
 
(110
)
 
(98
)
(2)  
Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

9

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Table 4a
Factors Affecting Segment Net Sales Sequentially - Unaudited
Three Months Ended March 31, 2018 Compared to Three Months Ended December 31, 2017
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
 
(In percentages)
 
Engineered Materials
10
 
3
 
2
 

 
15
(1)  
Acetate Tow
8
 
 
 

 
8
 
 
 
 
 
 
 
 
 
 
 
 
Industrial Specialties
5
 
1
 
3
 

 
9
 
Acetyl Intermediates
9
 
11
 
2
 

 
22
 
 Acetyl Chain
8
 
9
 
3
 
(2
)
 
18
 
 
 
 
 
 
 
 
 
 
 
 
Total Company
9
 
6
 
2
 
(1
)
 
16
 
Three Months Ended December 31, 2017 Compared to Three Months Ended September 30, 2017
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
 
(In percentages)
 
Engineered Materials
(8
)
 
9

 
 
 
1

 
Acetate Tow
2

 
(2
)
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
Industrial Specialties
(6
)
 
1

 
 
 
(5
)
 
Acetyl Intermediates
(4
)
 
9

 
 
 
5

 
Acetyl Chain
(5
)
 
7

 
 
1
 
3

 
 
 
 
 
 
 
 
 
 
 
 
Total Company
(5
)
 
7

 
 
 
2

 
Three Months Ended September 30, 2017 Compared to Three Months Ended June 30, 2017
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
 
(In percentages)
 
Engineered Materials
1

 
1

 
3
 
 
5

 
Acetate Tow
(5
)
 
1

 
 
 
(4
)
 
 
 
 
 
 
 
 
 
 
 
 
Industrial Specialties
(4
)
 
2

 
3
 
 
1

 
Acetyl Intermediates
3

 
(1
)
 
3
 
 
5

 
Acetyl Chain
1

 

 
3
 
 
4

 
 
 
 
 
 
 
 
 
 
 
 
Total Company

 
1

 
3
 
 
4

 

 


Three Months Ended June 30, 2017 Compared to Three Months Ended March 31, 2017
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
 
(In percentages)
 
Engineered Materials
4

 

 
2
 

 
6

(2)  
Acetate Tow
(12
)
 
(3
)
 
 

 
(15
)
 
 
 
 
 
 
 
 
 
 
 
 
Industrial Specialties
2

 
3

 
2
 

 
7

 
Acetyl Intermediates
(1
)
 
5

 
1
 

 
5

 
Acetyl Chain

 
5

 
1
 
(2
)
 
4

 
 
 
 
 
 
 
 
 
 
 
 
Total Company

 
3

 
1
 
(1
)
 
3

 
Three Months Ended March 31, 2017 Compared to Three Months Ended December 31, 2016
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
 
(In percentages)
 
Engineered Materials
33

 

 
(1
)
 
 
32

(3)  
Acetate Tow
2

 
(6
)
 

 
 
(4
)
 
 
 
 
 
 
 
 
 
 
 
 
Industrial Specialties
11

 
1

 

 
 
12

 
Acetyl Intermediates
(2
)
 
6

 

 
 
4

 
Acetyl Chain
2

 
5

 
(1
)
 
 
6

 
 
 
 
 
 
 
 
 
 
 
 
Total Company
11

 
2

 
(1
)
 
 
12

 
___________________________
(1)  
2018 includes the effect of the acquisition of Omni Plastics, L.L.C.
(2)  
2017 includes the effect of the acquisition of the nylon compounding division of Nilit Group.
(3)  
2017 includes the effect of the SO.F.TER. S.p.A. acquisition.





10

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Table 4b
Factors Affecting Segment Net Sales Year Over Year - Unaudited
Three Months Ended March 31, 2018 Compared to Three Months Ended March 31, 2017
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
(In percentages)
Engineered Materials
19

 
3

 
7
 

 
29

Acetate Tow
(9
)
 
(4
)
 
1
 

 
(12
)
 
 
 
 
 
 
 
 
 
 
Industrial Specialties
(3
)
 
7

 
8
 

 
12

Acetyl Intermediates
5

 
30

 
6
 

 
41

Acetyl Chain
3

 
25

 
7
 
(3
)
 
32

 
 
 
 
 
 
 
 
 
 
Total Company
7

 
14

 
6
 
(1
)
 
26

Three Months Ended December 31, 2017 Compared to Three Months Ended December 31, 2016
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
(In percentages)
Engineered Materials
45

 

 
4
 

 
49

Acetate Tow
(14
)
 
(9
)
 
1
 
1

 
(21
)
 
 
 
 
 
 
 
 
 
 
Industrial Specialties
3

 
7

 
5
 

 
15

Acetyl Intermediates
(4
)
 
21

 
3
 

 
20

Acetyl Chain
(2
)
 
19

 
4
 
(2
)
 
19

 
 
 
 
 
 
 
 
 
 
Total Company
10

 
10

 
3
 
(1
)
 
22

Three Months Ended September 30, 2017 Compared to Three Months Ended September 30, 2016
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
(In percentages)
Engineered Materials
45

 
(2
)
 
2
 

 
45

Acetate Tow
(12
)
 
(8
)
 
1
 

 
(19
)
 
 
 
 
 
 
 
 
 
 
Industrial Specialties
2

 
4

 
2
 

 
8

Acetyl Intermediates
(1
)
 
16

 
1
 

 
16

Acetyl Chain

 
13

 
2
 
(2
)
 
13

 
 
 
 
 
 
 
 
 
 
Total Company
11

 
6

 
2
 
(1
)
 
18



 

Three Months Ended June 30, 2017 Compared to Three Months Ended June 30, 2016
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
(In percentages)
Engineered Materials
42

 
(2
)
 
(1
)
 

 
39

Acetate Tow
(13
)
 
(9
)
 

 

 
(22
)
 
 
 
 
 
 
 
 
 
 
Industrial Specialties
(1
)
 
3

 
(2
)
 

 

Acetyl Intermediates
(4
)
 
14

 
(1
)
 
1

 
10

Acetyl Chain
(3
)
 
12

 
(2
)
 
(1
)
 
6

 
 
 
 
 
 
 
 
 
 
Total Company
8

 
5

 
(1
)
 

 
12

Three Months Ended March 31, 2017 Compared to Three Months Ended March 31, 2016
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
(In percentages)
Engineered Materials
43

 
(4
)
 
(2
)
 
 
37

Acetate Tow
(6
)
 
(7
)
 

 
 
(13
)
 
 
 
 
 
 
 
 
 
 
Industrial Specialties
1

 
(2
)
 
(2
)
 
 
(3
)
Acetyl Intermediates
(12
)
 
7

 
(2
)
 
 
(7
)
Acetyl Chain
(9
)
 
5

 
(2
)
 
1
 
(5
)
 
 
 
 
 
 
 
 
 
 
Total Company
5

 
1

 
(2
)
 
1
 
5






11

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Table 4c
Factors Affecting Segment Net Sales Year Over Year - Unaudited
Year Ended December 31, 2017 Compared to Year Ended December 31, 2016
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
(In percentages)
Engineered Materials
44

 
(2
)
 
1
 
 
43

Acetate Tow
(11
)
 
(8
)
 
 
 
(19
)
 
 
 
 
 
 
 
 
 
 
Industrial Specialties
1

 
3

 
 
 
4

Acetyl Intermediates
(5
)
 
14

 
 
 
9

Acetyl Chain
(4
)
 
12

 
 
 
8

 
 
 
 
 
 
 
 
 
 
Total Company
9

 
5

 
 
 
14


12

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Table 5
Free Cash Flow - Reconciliation of a Non-GAAP Measure - Unaudited
 
Q1 '18
 
2017
 
Q4 '17
 
Q3 '17
 
Q2 '17
 
Q1 '17
 
(In $ millions)
Net cash provided by (used in) investing activities
(235
)
 
(549
)
 
(92
)
 
(68
)
 
(325
)
 
(64
)
Net cash provided by (used in) financing activities
(2
)
 
(351
)
 
145

 
(247
)
 
21

 
(270
)
 
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
143

 
803

 
58

 
255

 
298

 
192

Capital expenditures on property, plant and equipment
(86
)
 
(267
)
 
(87
)
 
(64
)
 
(54
)
 
(62
)
Capital (distributions to) contributions from NCI
(2
)
 
(27
)
 
(9
)
 
(10
)
 
(4
)
 
(4
)
Free cash flow (1)(2)
55

 
509

 
(38
)
 
181

 
240

 
126

 
 
 
 
 
 
 
 
 
 
 
 
Net sales
1,851

 
6,140

 
1,593

 
1,566

 
1,510

 
1,471

 
 
 
 
 
 
 
 
 
 
 
 
Free cash flow as % of Net sales
3.0
%
 
8.3
%
 
(2.4
)%
 
11.6
%
 
15.9
%
 
8.6
%
______________________________
(1)  
Free cash flow is a liquidity measure used by the Company and is defined by the Company as net cash provided by (used in) operating activities, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our joint venture, Fairway Methanol LLC ("Fairway").
(2)  
Excludes required debt service and capital lease payments of $63 million and $27 million for the years ending December 31, 2018 and 2017 , respectively.

13

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Table 6
Cash Dividends Received - Unaudited
 
Q1 '18
 
2017
 
Q4 '17
 
Q3 '17
 
Q2 '17
 
Q1 '17
 
(In $ millions)
Dividends from equity method investments
82

 
131

 
17

 
5

 
59

 
50

Dividends from cost method investments
32

 
108

 
26

 
24

 
29

 
29

Total
114

 
239

 
43

 
29

 
88

 
79

Table 7
Net Debt - Reconciliation of a Non-GAAP Measure - Unaudited
 
Q1 '18
 
2017
 
Q4 '17
 
Q3 '17
 
Q2 '17
 
Q1 '17
 
(In $ millions)
Short-term borrowings and current installments of long-term debt - third party and affiliates
425

 
326

 
326

 
435

 
384

 
107

Long-term debt, net of unamortized deferred financing costs
3,343

 
3,315

 
3,315

 
2,954

 
2,931

 
2,851

Total debt
3,768

 
3,641

 
3,641

 
3,389

 
3,315

 
2,958

Cash and cash equivalents
(490
)
 
(576
)
 
(576
)
 
(461
)
 
(511
)
 
(501
)
Net debt
3,278

 
3,065

 
3,065

 
2,928

 
2,804

 
2,457


14

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Table 8
Certain Items - Unaudited
The following Certain Items attributable to Celanese Corporation are included in Net earnings (loss) and are adjustments to non-GAAP measures:
 
Q1 '18
 
2017
 
Q4 '17
 
Q3 '17
 
Q2 '17
 
Q1 '17
 
Income Statement Classification
 
(In $ millions)
 
 
Plant/office closures

 
58

 
2

 
2

 
(3
)
 
57

 
Cost of sales / SG&A / R&D / Other charges (gains), net
Mergers and acquisitions
13

 
35

 
9

 
10

 
7

 
9

 
Cost of sales / SG&A / Other income (expense), net
Impact from natural disasters (1)

 
11

 

 
11

 

 

 
Cost of sales
InfraServ ownership change

 
8

 

 

 
8

 

 
Other charges (gains), net / Equity in net earnings (loss) of affiliates
Actuarial (gain) loss on pension and postretirement plans

 
46

 
46

 

 

 

 
Cost of sales / SG&A / R&D
Restructuring

 
9

 

 
4

 
3

 
2

 
Cost of sales / SG&A / R&D / Other charges (gains), net
Other

 

 

 

 
3

 
(3
)
 
(Gain) loss on disposition, net / Equity in net earnings (loss) of affiliates
Certain Items attributable to Celanese Corporation
13

 
167

 
57

 
27

 
18

 
65

 
 
______________________________
(1)  
Primarily associated with Hurricane Harvey.

15

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Table 9
Return on Invested Capital (Adjusted) - Presentation of a Non-GAAP Measure - Unaudited
 
 
 
 
 
2017
 
 
 
 
 
(In $ millions, except percentages)
Net earnings (loss) attributable to Celanese Corporation
 
 
 
 
843

 
 
 
 
 
 
Adjusted EBIT   ( Table 1 )
 
 
 
 
1,356

Adjusted effective tax rate ( Table 3a )
 
 
 
 
16
%
Adjusted EBIT tax effected
 
 
 
 
1,139

 
 
 
 
 
 
 
2017
 
2016
 
Average
 
(In $ millions, except percentages)
Short-term borrowings and current installments of long-term debt - third parties and affiliates
326

 
118

 
222

Long-term debt, net of unamortized deferred financing costs
3,315

 
2,890

 
3,103

Celanese Corporation stockholders' equity
2,887

 
2,588

 
2,738

Invested capital
 
 
 
 
6,063

 
 
 
 
 
 
Return on invested capital (adjusted)
 
 
 
 
18.8
%
 
 
 
 
 
 
Net earnings (loss) attributable to Celanese Corporation as a percentage of invested capital
 
 
 
 
13.9
%

16