DELAWARE | 001-32410 | 98-0420726 | ||
(State or other jurisdiction
of incorporation) |
(Commission File
Number) |
(IRS Employer
Identification No.) |
Item 2.02 Results of Operations and Financial Condition | ||||||||
Item 7.01 Regulation FD Disclosure | ||||||||
Item 9.01 Financial Statements and Exhibits. | ||||||||
SIGNATURES | ||||||||
EX-99.1: PRESS RELEASE |
Exhibit Number | Description | |
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99.1
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Press Release dated August 1, 2006 |
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 August 1, 2006
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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 | |
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Fax: +1 972 332 9373 | |
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Mark.Oberle@celanese.com |
| Net sales increase 11% from prior year to $1,674 million | ||
| Operating profit up 7% to $163 million | ||
| Diluted EPS is $0.60, an increase of 54% | ||
| Adjusted EPS is $0.71, up 34% | ||
| Operating EBITDA increases 18% to $308 million |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(in $ millions, except per share data)
|
2006 | 2005 | 2006 | 2005 | ||||||||||||
Net sales
|
1,674 | 1,506 | 3,326 | 2,984 | ||||||||||||
Operating profit
|
163 | 152 | 360 | 308 | ||||||||||||
Net earnings
|
103 | 67 | 220 | 57 | ||||||||||||
Basic EPS
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$ | 0.64 | $ | 0.41 | $ | 1.36 | $ | 0.35 | ||||||||
Diluted EPS
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$ | 0.60 | $ | 0.39 | $ | 1.28 | $ | 0.35 | ||||||||
Adjusted EPS*
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$ | 0.71 | $ | 0.53 | $ | 1.43 | $ | 1.21 | ||||||||
Operating EBITDA*
|
308 | 262 | 612 | 547 | ||||||||||||
* | Non-U.S. GAAP measures. See reconciliation in tables 1 and 6. |
| Announced that the company made a $100 million equivalent voluntary prepayment of its term loan facilities, which will be reflected in third quarter 2006 results. | ||
| Announced the nomination of two independent directors, Martin G. McGuinn and John K. Wulff, to the Celanese board. Upon approval by shareholders, the Celanese board will be comprised of a total of 11 directors, which will include 6 independent directors. |
| 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 special charges and other 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 special charges and other adjustments, and divided by the number of basic common shares, diluted preferred shares, and options valued using the treasury method. 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 | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
(in $ millions, except per share data) | 2006 | 2005 | 2006 | 2005 | |||||||||||||
Net sales
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1,674 | 1,506 | 3,326 | 2,984 | |||||||||||||
Cost of sales
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(1,326 | ) | (1,165 | ) | (2,611 | ) | (2,271 | ) | |||||||||
Gross profit
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348 | 341 | 715 | 713 | |||||||||||||
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Selling, general and administrative expenses
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(153 | ) | (135 | ) | (305 | ) | (294 | ) | |||||||||
Research and development expenses
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(18 | ) | (23 | ) | (36 | ) | (46 | ) | |||||||||
Special charges
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(12 | ) | (27 | ) | (12 | ) | (65 | ) | |||||||||
Foreign exchange gain (loss), net
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(1 | ) | (1 | ) | (1 | ) | 2 | ||||||||||
Loss on disposition of assets, net
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(1 | ) | (3 | ) | (1 | ) | (2 | ) | |||||||||
Operating profit
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163 | 152 | 360 | 308 | |||||||||||||
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|||||||||||||||||
Equity in net earnings of affiliates
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18 | 12 | 39 | 27 | |||||||||||||
Interest expense
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(73 | ) | (68 | ) | (144 | ) | (244 | ) | |||||||||
Interest income
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9 | 9 | 17 | 24 | |||||||||||||
Other income, net
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29 | 18 | 35 | 21 | |||||||||||||
Earnings from continuing operations
before tax and minority interests
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146 | 123 | 307 | 136 | |||||||||||||
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Income tax provision
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(42 | ) | (43 | ) | (87 | ) | (51 | ) | |||||||||
Earnings from continuing operations
before minority interests
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104 | 80 | 220 | 85 | |||||||||||||
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Minority interests
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(1 | ) | (13 | ) | (1 | ) | (38 | ) | |||||||||
Earnings from continuing operations
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103 | 67 | 219 | 47 | |||||||||||||
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Earnings from operation of discontinued operations
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| | 1 | 10 | |||||||||||||
Net earnings
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103 | 67 | 220 | 57 | |||||||||||||
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|||||||||||||||||
Cumulative preferred stock
dividend declared
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(2 | ) | (2 | ) | (5 | ) | (4 | ) | |||||||||
Net earnings available to common
shareholders
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101 | 65 | 215 | 53 | |||||||||||||
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Earnings per common share basic:
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Continuing operations
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$ | 0.64 | $ | 0.41 | $ | 1.35 | $ | 0.28 | |||||||||
Discontinued operations
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| | 0.01 | 0.07 | |||||||||||||
Net earnings available to common shareholders
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$ | 0.64 | $ | 0.41 | $ | 1.36 | $ | 0.35 | |||||||||
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Earnings per common share diluted:
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Continuing operations
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$ | 0.60 | $ | 0.39 | $ | 1.28 | $ | 0.28 | |||||||||
Discontinued operations
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| | | 0.07 | |||||||||||||
Net earnings available to common shareholders
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$ | 0.60 | $ | 0.39 | $ | 1.28 | $ | 0.35 | |||||||||
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Weighted average shares basic
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158.6 | 158.5 | 158.6 | 150.2 | |||||||||||||
Weighted average shares diluted
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172.1 | 170.5 | 172.0 | 162.3 | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
(in $ millions) | 2006 | 2005 | 2006 | 2005 | |||||||||||||
Net Sales
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|||||||||||||||||
Chemical Products
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1,194 | 1,085 | 2,363 | 2,129 | |||||||||||||
Technical Polymers Ticona
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230 | 223 | 461 | 462 | |||||||||||||
Acetate Products
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176 | 172 | 343 | 337 | |||||||||||||
Performance Products
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48 | 47 | 97 | 94 | |||||||||||||
Other Activities
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68 | 8 | 129 | 20 | |||||||||||||
Intersegment eliminations
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(42 | ) | (29 | ) | (67 | ) | (58 | ) | |||||||||
Total
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1,674 | 1,506 | 3,326 | 2,984 | |||||||||||||
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Operating Profit (Loss)
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|||||||||||||||||
Chemical Products
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141 | 155 | 303 | 332 | |||||||||||||
Technical Polymers Ticona
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38 | 5 | 79 | 44 | |||||||||||||
Acetate Products
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29 | 10 | 52 | 20 | |||||||||||||
Performance Products
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16 | 15 | 33 | 28 | |||||||||||||
Other Activities
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(61 | ) | (33 | ) | (107 | ) | (116 | ) | |||||||||
Total
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163 | 152 | 360 | 308 | |||||||||||||
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Equity Earnings and Other Income/(Expense) **
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Chemical Products
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16 | (6 | ) | 25 | 8 | ||||||||||||
Technical Polymers Ticona
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15 | 16 | 29 | 28 | |||||||||||||
Acetate Products
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21 | 2 | 21 | 2 | |||||||||||||
Performance Products
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1 | | 1 | | |||||||||||||
Other Activities
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(6 | ) | 18 | (2 | ) | 10 | |||||||||||
Total
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47 | 30 | 74 | 48 | |||||||||||||
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Special Charges and Other Adjustments ***
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Chemical Products
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8 | 3 | 7 | 4 | |||||||||||||
Technical Polymers Ticona
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(2 | ) | 20 | (4 | ) | 21 | |||||||||||
Acetate Products
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| | | 1 | |||||||||||||
Performance Products
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| | | | |||||||||||||
Other Activities
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19 | (10 | ) | 32 | 35 | ||||||||||||
Total
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25 | 13 | 35 | 61 | |||||||||||||
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Depreciation and Amortization Expense
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|||||||||||||||||
Chemical Products
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41 | 39 | 79 | 73 | |||||||||||||
Technical Polymers Ticona
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16 | 14 | 32 | 29 | |||||||||||||
Acetate Products
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5 | 9 | 12 | 18 | |||||||||||||
Performance Products
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4 | 3 | 8 | 6 | |||||||||||||
Other Activities
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7 | 2 | 12 | 4 | |||||||||||||
Total
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73 | 67 | 143 | 130 | |||||||||||||
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Operating EBITDA
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|||||||||||||||||
Chemical Products
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206 | 191 | 414 | 417 | |||||||||||||
Technical Polymers Ticona
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67 | 55 | 136 | 122 | |||||||||||||
Acetate Products
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55 | 21 | 85 | 41 | |||||||||||||
Performance Products
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21 | 18 | 42 | 34 | |||||||||||||
Other Activities
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(41 | ) | (23 | ) | (65 | ) | (67 | ) | |||||||||
Total
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308 | 262 | 612 | 547 | |||||||||||||
* | 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 and amortization. |
(in percent) | Volume | Price | Currency | Other* | Total | |||||||||||||||
Chemical Products
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1 | % | 1 | % | 1 | % | 7 | % | 10 | % | ||||||||||
Technical Polymers Ticona
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7 | % | -2 | % | 0 | % | -2 | % | 3 | % | ||||||||||
Acetate Products
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-5 | % | 7 | % | 0 | % | 0 | % | 2 | % | ||||||||||
Performance Products
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13 | % | -11 | % | 0 | % | 0 | % | 2 | % | ||||||||||
Total Company
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2 | % | 0 | % | 0 | % | 9 | % | 11 | % | ||||||||||
(in percent) | Volume | Price | Currency | Other* | Total | |||||||||||||||
Chemical Products
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0 | % | 4 | % | -1 | % | 8 | % | 11 | % | ||||||||||
Technical Polymers Ticona
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4 | % | 0 | % | -2 | % | -2 | % | 0 | % | ||||||||||
Acetate Products
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-5 | % | 7 | % | 0 | % | 0 | % | 2 | % | ||||||||||
Performance Products
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18 | % | -11 | % | -4 | % | 0 | % | 3 | % | ||||||||||
Total Company
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0 | % | 3 | % | -1 | % | 9 | % | 11 | % | ||||||||||
* | 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). |
Six Months Ended | ||||||||
June 30, | ||||||||
(in $ millions) | 2006 | 2005 | ||||||
Net cash provided by operating activities
|
144 | 190 | ||||||
Net cash (used in) investing activities
|
(141 | ) | (138 | ) | ||||
Net cash (used in) provided by financing activities
|
(51 | ) | 168 | |||||
Exchange rate effects on cash
|
12 | (99 | ) | |||||
Cash and cash equivalents at beginning of period
|
390 | 838 | ||||||
Cash and cash equivalents at end of period
|
354 | 959 | ||||||
Three Months Ended
Six Months Ended
June 30,
June 30,
(in $ millions)
2006
2005
2006
2005
19
10
36
46
39
7
46
21
58
17
82
67
June 30,
December 31,
(in $ millions)
2006
2005
174
155
3,320
3,282
3,494
3,437
354
390
3,140
3,047
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
(in $ millions, except per share data) | 2006 | 2005 | 2006 | 2005 | |||||||||||||
Earnings from continuing operations
before tax and minority interests
|
146 | 123 | 307 | 136 | |||||||||||||
Non-GAAP Adjustments:
|
|||||||||||||||||
Special charges and other adjustments *
|
25 | 13 | 35 | 61 | |||||||||||||
Refinancing costs
|
| | | 102 | |||||||||||||
Adjusted earnings from continuing operations
before tax and minority interests
|
171 | 136 | 342 | 299 | |||||||||||||
Income tax provision on adjusted earnings **
|
(48 | ) | (33 | ) | (96 | ) | (74 | ) | |||||||||
Minority interests
|
(1 | ) | (13 | ) | (1 | ) | (38 | ) | |||||||||
Earnings from discontinued operations, net of tax
|
| | 1 | 10 | |||||||||||||
Preferred dividends
|
(2 | ) | (2 | ) | (5 | ) | (4 | ) | |||||||||
Adjusted net earnings available to common shareholders
|
120 | 88 | 241 | 193 | |||||||||||||
Add back: Preferred dividends
|
2 | 2 | 5 | 4 | |||||||||||||
Adjusted net earnings for diluted adjusted EPS
|
122 | 90 | 246 | 197 | |||||||||||||
|
|||||||||||||||||
Diluted shares (millions)
|
|||||||||||||||||
Weighted average shares outstanding
|
158.6 | 158.5 | 158.6 | 150.2 | |||||||||||||
Assumed conversion of Preferred Shares
|
12.0 | 12.0 | 12.0 | 12.0 | |||||||||||||
Assumed conversion of stock options
|
1.5 | | 1.4 | 0.1 | |||||||||||||
Total diluted shares
|
172.1 | 170.5 | 172.0 | 162.3 | |||||||||||||
Adjusted EPS from continuing operations
|
0.71 | 0.53 | 1.42 | 1.15 | |||||||||||||
|
|||||||||||||||||
Earnings per common share from discontinued operations
|
| | 0.01 | 0.06 | |||||||||||||
Adjusted EPS
|
0.71 | 0.53 | 1.43 | 1.21 | |||||||||||||
* | See Table 7 for details | |
** | The U.S. GAAP tax rate for the three and six months ended June 30, 2006 is 29%. The company is using the 28% rate reflective of the original guidance in Q1 2006. |
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
(in $ millions) | 2006 | 2005 | 2006 | 2005 | |||||||||||||
Employee termination benefits
|
9 | 6 | 11 | 8 | |||||||||||||
Plant/office closures
|
2 | 1 | | 2 | |||||||||||||
Total restructuring
|
11 | 7 | 11 | 10 | |||||||||||||
Asset impairments
|
| 24 | | 24 | |||||||||||||
Insurance recoveries associated with plumbing cases
|
(2 | ) | (4 | ) | (3 | ) | (4 | ) | |||||||||
Other
|
3 | | 4 | 35 | * | ||||||||||||
Total
|
12 | 27 | 12 | 65 | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
(in $ millions) | 2006 | 2005 | 2006 | 2005 | |||||||||||||
Executive severance & legal costs related
to Squeeze-Out
|
13 | | 23 | | |||||||||||||
Favorable impact on non-operating foreign
exchange position
|
| (14 | ) | | (14 | ) | |||||||||||
Advisor monitoring fee
|
| | | 10 | |||||||||||||
Total
|
13 | (14 | ) | 23 | (4 | ) | |||||||||||
|
|||||||||||||||||
Total special charges and other adjustments
|
25 | 13 | 35 | 61 | |||||||||||||
* | Termination of advisor monitoring fee | |
** | These items are included in net earnings (loss) but not included in special charges. |