DELAWARE | 001-32410 | 98-0420726 | ||
(State or other jurisdiction
of incorporation) |
(Commission File
Number) |
(IRS Employer
Identification No.) |
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)) |
Exhibit Number | Description | |
|
||
99.1
|
Press Release dated July 27, 2007* | |
|
||
99.2
|
Slide Presentation date July 27, 2007* |
* | In connection with the disclosure set forth in Item 2.02 and Item 7.01, the information in this Current Report, including the exhibits attached hereto, is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act ), or otherwise subject to the liabilities of such section. The information in this Current Report, including the exhibits, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act, regardless of any incorporation by reference language in any such filing. This Current Report will not be deemed an admission as to the materiality of any information in this Current Report that is required to be disclosed solely by Regulation FD. |
CELANESE CORPORATION
By
/s/ Kevin J. Rogan
Name: Kevin J. Rogan
Title: Assistant Secretary
Table of Contents
Exhibit Number
Description
Press Release dated July 27, 2007*
Slide Presentation date July 27, 2007*
*
In connection with the disclosure set forth in Item 2.02 and Item 7.01, the information in
this Current Report, including the exhibits attached hereto, is being furnished and shall not
be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the
Exchange Act
), or otherwise subject to the liabilities of such section.
The information in this Current Report, including the exhibits, shall not be incorporated by
reference into any filing under the Securities Act of 1933, as amended or the Exchange Act,
regardless of any incorporation by reference language in any such filing. This Current Report
will not be deemed an admission as to the materiality of any information in this Current
Report that is required to be disclosed solely by Regulation FD.
Corporate News Release |
Celanese Corporation
Investor Relations 1601 West LBJ Freeway Dallas, Texas 75234-6034 Mark Oberle Phone: +1 972 443 4464 Fax: +1 972 332 9373 Mark.Oberle@celanese.com |
| Net sales increased 7% to $1,556 million from prior year | ||
| Operating profit decreased 53% to $71 million on other expenses primarily related to restructuring activities and long-term compensation | ||
| Net earnings decreased to a loss of $117 million on expenses related to debt refinancing | ||
| Operating EBITDA increased 5% to $326 million | ||
| Diluted EPS decreased to a loss of $0.76 | ||
| Adjusted EPS increased 18% to $0.84 from prior year |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(in $ milli ons, exc ept per share data) | 2007 | 2006 | 2007 | 2006 | ||||||||||||
Net sales
|
1,556 | 1,457 | 3,111 | 2,877 | ||||||||||||
Operating profit
|
71 | 152 | 277 | 308 | ||||||||||||
Net earnings (loss)
|
(117 | ) | 103 | 84 | 220 | |||||||||||
Operating EBITDA
1
|
326 | 310 | 674 | 579 | ||||||||||||
Diluted EPS continuing operations
|
($0.81 | ) | $ | 0.55 | ($0.04 | ) | $ | 1.06 | ||||||||
Diluted EPS Total
|
($0.76 | ) | $ | 0.60 | $ | 0.50 | $ | 1.28 | ||||||||
Adjusted EPS
1
|
$ | 0.84 | $ | 0.71 | $ | 1.75 | $ | 1.30 | ||||||||
1 | Non-U.S. GAAP measures. See reco nciliatio n in tables 1 and 6. |
Page 2 of 16
Page 3 of 16
| Began commercial production at its 600,000 metric ton acetic acid facility in Nanjing, China. | ||
| Closed debt refinancing transaction, which will increase the companys operational and financial flexibility and lower interest expense by $10 million to $15 million per quarter versus 2006. | ||
| Announced revitalization plans for its Emulsions & PVOH (polyvinyl alcohol) businesses, including global manufacturing restructuring and an R&D and technology realignment. | ||
| Announced restructuring plans for the U.K. operations of its recently acquired APL business to capture synergies related to its integration with the Acetate Products business. | ||
| Completed the $330 million stock repurchase program authorized by its board of directors in June 2007. Under the program, purchased a total of approximately 8.5 million of its Series A common shares at an average price of $38.88 per share. When combined with its previous share repurchase initiative, this completes a total of $400 million, or approximately 11 million common shares, executed as of July 23, 2007. Through June 30, 2007, the company had repurchased approximately $258 million, or 7.3 million shares. | ||
| Named Sandra Beach Lin executive vice president of Celanese and president of Ticona, the companys advanced engineered materials business. She replaces Lyndon Cole, who has announced his retirement. | ||
| Named John J. Gallagher III executive vice president and president, Acetyls and Celanese Asia. | ||
| Named Steven M. Sterin senior vice president and chief financial officer. | ||
| Completed ownership transition with the final sale of shares from funds affiliated with The Blackstone Group L.P. | ||
| Transitioned to a fully independent board of directors with the election of Farah M. Walters; also announced the resignations of Anjan |
Page 4 of 16
Mukherjee and James A. Quella, both with The Blackstone Group L.P. |
Page 5 of 16
Page 6 of 16
Contacts:
|
||||
Investor Relations
|
Media U.S. | Media Europe | ||
Mark Oberle
|
Jeremy Neuhart | Jens Kurth | ||
Phone: +1 972 443 4464
|
Phone: +1 972 443 3750 | Phone: +49 69 305 7137 | ||
Telefax: +1 972 332 9373
|
Telefax: +1 972 443 8519 | Telefax: +49 69 305 36787 | ||
Email:
Mark.Oberle@celanese.com
|
Jeremy.Neuhart@celanese.com | Email: J.Kurth@celanese.com |
Page 7 of 16
| 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. | ||
| Affiliate EBITDA, a measure used by management to measure performance of its equity investments, is defined as the proportional operating profit plus the proportional depreciation and amortization of its equity investments. Affiliate EBITDA, including Celanese Proportional Share of affiliate information on Table 8, is not a recognized term under U.S. GAAP and is not meant to be an alternative to operating cash flow of the equity investments. The company has determined that it does not have sufficient ownership for operating control of these investments to consider their results on a consolidated basis. The company believes that investors should consider affiliate EBITDA when determining the equity investments overall value in the company. | ||
| Adjusted earnings per share is a measure used by management to measure performance. It is defined as net earnings (loss) available to common shareholders plus preferred dividends, adjusted for other charges and adjustments, and divided by the number of basic common shares, diluted preferred shares, and options valued using the treasury method. We provide guidance on an adjusted earnings per share basis and are unable to reconcile forecasted adjusted earnings per share to a GAAP financial measure because a forecast of Other Items is not practical. We believe that the presentation of this |
Page 8 of 16
non-U.S. GAAP measure provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations, and that when U.S. GAAP information is viewed in conjunction with non-U.S. GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. This non-U.S. GAAP information is not intended to be considered in isolation or as a substitute for U.S. GAAP financial information. | |||
| Net debt is defined as total debt less cash and cash equivalents. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the 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. |
Page 9 of 16
Three Months Ended
Six Months Ended
June 30,
June 30,
(in $ millions, except per share data
2007
2006
2007
2006
1,556
1,457
3,111
2,877
(1,219
)
(1,121
)
(2,415
)
(2,217
)
337
336
696
660
(122
)
(136
)
(238
)
(273
)
(17
)
(18
)
(35
)
(32
)
(19
)
(16
)
(36
)
(33
)
(105
)
(12
)
(106
)
(12
)
(1
)
(1
)
(3
)
(1
)
(4
)
(1
)
71
152
277
308
23
18
41
36
(61
)
(73
)
(133
)
(144
)
(256
)
(256
)
11
8
25
16
49
39
64
46
(5
)
(10
)
(15
)
(11
)
(168
)
134
3
251
44
(38
)
(5
)
(68
)
(124
)
96
(2
)
183
(1
)
(1
)
(124
)
95
(2
)
182
(5
)
11
38
56
16
1
47
1
(4
)
(4
)
1
(19
)
7
8
86
38
(117
)
103
84
220
(3
)
(2
)
(5
)
(5
)
(120
)
101
79
215
($0.81
)
$
0.59
($0.04
)
$
1.12
0.05
0.05
0.54
0.24
($0.76
)
$
0.64
$
0.50
$
1.36
($0.81
)
$
0.55
($0.04
)
$
1.06
0.05
0.05
0.54
0.22
($0.76
)
$
0.60
$
0.50
$
1.28
156.9
158.6
158.1
158.6
156.9
172.1
158.1
172.0
1 | Customer related intangibles |
Page 10 of 16
Page 11 of 16
Three Months Ended
Six Months Ended
June 30,
June 30,
(in $ millions)
2007
2006
2007
2006
1,002
977
2,004
1,914
257
230
519
461
235
176
458
343
47
48
92
97
58
68
117
129
(43
)
(42
)
(79
)
(67
)
1,556
1,457
3,111
2,877
91
130
239
251
32
38
68
79
29
29
58
52
16
16
32
33
(97
)
(61
)
(120
)
(107
)
71
152
277
308
18
15
22
23
16
14
30
29
34
21
34
21
1
1
1
1
(2
)
(4
)
3
(3
)
67
47
90
71
30
20
76
33
5
(2
)
5
(4
)
8
9
72
19
76
32
115
37
166
61
37
42
71
75
17
16
34
32
9
5
16
12
4
4
8
8
6
7
12
12
73
74
141
139
176
207
408
382
70
66
137
136
80
55
117
85
21
21
41
42
(21
)
(39
)
(29
)
(66
)
326
310
674
579
1 | Other Activities primarily includes corporate selling, general and administrative expenses and the results from AT Plastics and captive insurance companies. | |
2 | Includes equity earnings from affiliates, dividends from cost investments and other income/(expense) | |
3 | Excludes adjustments to minority interest, net interest, taxes, depreciation, amortization and discontinued operations (See Table 7). |
Page 12 of 16
(in percent)
Volume
Price
Currency
Other
1
Total
-5
%
4
%
4
%
0
%
3
%
8
%
0
%
4
%
0
%
12
%
-8
%
6
%
0
%
36
%
34
%
-4
%
-2
%
4
%
0
%
-2
%
-3
%
3
%
3
%
4
%
7
%
(in percent)
Volume
Price
Currency
Other
1
Total
-3
%
4
%
4
%
0
%
5
%
9
%
-1
%
5
%
0
%
13
%
-4
%
7
%
0
%
31
%
34
%
-8
%
-2
%
5
%
0
%
-5
%
-1
%
3
%
3
%
3
%
8
%
1 | Primarily represents net sales from APL (Acetate), AT Plastics and captive insurance companies (Total Company). |
Page 13 of 16
Six Months Ended
June 30,
(in $ millions)
2007
2006
79
167
295
(164
)
(706
)
(51
)
11
12
791
390
470
354
Three Months Ended
Six Months Ended
June 30,
June 30,
(in $ millions)
2007
2006
2007
2006
10
19
40
36
49
39
64
46
59
58
104
82
June 30,
December 31,
(in $ millions)
2007
2006
187
309
3,198
3,189
3,385
3,498
470
791
2,915
2,707
Page 14 of 16
Three Months Ended
Six Months Ended
June 30,
June 30,
(in $ millions, except per share data)
2007
2006
2007
2006
(168
)
134
3
251
115
37
166
61
256
254
203
171
423
312
(57
)
(48
)
(118
)
(87
)
(1
)
(1
)
146
122
305
224
(3
)
(2
)
(5
)
(5
)
143
120
300
219
3
2
5
5
146
122
305
224
156.9
158.6
158.1
158.6
12.0
12.0
12.0
12.0
0.5
0.2
5.2
1.5
4.2
1.4
174.6
172.1
174.5
172.0
0.84
0.71
1.75
1.30
1 | See Table 7 for details | |
2 | The adjusted tax rate fo r the three and six months ended June 30, 2007 is 28% based on the original full year 2007 guidance. |
Page 15 of 16
Three Months Ended
Six Months Ended
June 30,
June 30,
(in $ millions)
2007
2006
2007
2006
25
9
25
11
2
25
11
25
11
(2
)
(3
)
74
74
3
3
3
3
3
1
4
105
12
106
12
Three Months Ended
Six Months Ended
June 30,
June 30,
(in $ millions)
2007
2006
2007
2006
13
1
23
10
3
5
9
9
(2
)
12
31
26
4
10
25
60
49
115
37
166
61
1 | These items are included in net earnings but not included in other charges. |
2 | Adjusted earnings per share included earnings from its discontinued methanol production which was included in the companys 2007 guidance. |
Page 16 of 16
Three Months Ended
Six Months Ended
(in $ millions)
June 30,
June 30,
2007
2006
2007
2006
312
294
619
571
411
343
753
664
723
637
1,372
1,235
49
44
93
88
25
16
42
31
74
60
135
119
13
10
27
22
21
20
40
39
34
30
67
61
62
54
120
110
46
36
82
70
108
90
202
180
30
26
60
56
27
16
40
28
57
42
100
84
107
(27
)
107
(27
)
47
63
47
63
154
36
154
36
Three Months Ended
Six Months Ended
(in $ millions)
June 30,
June 30,
2007
2006
2007
2006
145
137
287
265
133
205
253
316
278
342
540
581
24
21
45
42
9
7
14
11
33
28
59
53
6
5
12
11
7
6
14
13
13
11
26
24
30
26
57
52
16
13
27
23
46
39
84
75
15
12
29
26
8
6
12
10
23
18
41
36
15
14
28
26
8
7
15
13
23
21
43
39
46
(15
)
46
(15
)
17
21
17
21
63
6
63
6
1 | Ticona Affiliates includes PolyPlastics (45% ownership), Korean Engineering Plastics(50%) and Fortron Industries(50%) | |
2 | Infr aserv includes Infraserv Entities valued as equity investments (Infraserv Höchst Group 31% ownership, Infraserv Gendorf 39% and Infraserv Knapsack 27%) | |
3 | Affiliate EBITDA is the sum of Operating Profit and Depreciation and Amortization, a non-U.S. GAAP measures | |
4 | Calculated as the product of figures from the above table times Celanese ownership percentage | |
5 | Product of Celanese proportion of Affiliate EBITDA less Equity in net earnings of affiliates; not included in Celanese operating EBITDA |
Dave Weidman, Chairman and CEO John J. Gallagher III, Executive Vice President and President Acetyls and Celanese Asia Celanese 2Q 2007 Earnings Conference Call / Webcast Friday, July 27, 2007 10:00 a.m. ET |
Forward Looking Statements, Reconciliation and Use of Non-GAAP Measures to U.S. GAAP |
Dave Weidman Chairman and Chief Executive Officer |
Celanese Corporation Q2 2007 Highlights in millions (except EPS) 2nd Qtr 2007 2nd Qtr 2006 Net Sales $1,556 $1,457 Operating Profit $71 $152 Adjusted EPS $0.84 $0.71 Operating EBITDA $326 $310 Note: All figures exclude results of discontinued operations of Oxo Alcohol business. |
Celanese continues to execute its growth strategy $300 - $350 million increased EBITDA profile plus EPS potential by 2010 Group Asia Revitalization Innovation Organic Balance Sheet Operational Excellence EBITDA Impact Consumer and Industrial Specialties X X X X > $100MM Advanced Engineered Materials X X X X > $100MM Acetyl Intermediates X X X > $100MM Celanese Corporate X X Incremental EPS Primary Growth Focus Operating EBITDA EPS |
John J. Gallagher III Executive Vice President and President Acetyls and Celanese Asia |
Celanese Corporation Financial Highlights in millions (except EPS) 2nd Qtr 2007 2nd Qtr 2006 Net Sales $1,556 $1,457 Operating Profit $71 $152 GAAP Net Earnings (Loss) ($117) $103 Special Items Other Charges/Adjustments Refinancing and Related Costs $106 $265 $37 -- Adjusted EPS $0.84 $0.71 Effective Tax Rate 28% 28% Diluted Share Basis 174.6 172.1 Operating EBITDA $326 $310 Net sales increased 7% from the prior year Improved pricing partially offset reduced volumes in Chemical Products Volume increases in Ticona Inclusion of APL sales in Acetate Products Operating profit decreased 53% due to other expenses related to long- term management compensation and restructuring activities GAAP net earnings decreased to a loss on expenses related to the debt refinancing Adjusted EPS up 18% to $0.84/share Operating EBITDA increased 5% to $326 |
Second Quarter 2007: Reduced volumes due to unplanned outage of Clear Lake acetic acid unit Successful start-up of Nanjing acetic acid unit partially offset volume loss Sales increased due to higher pricing, currency and continued strong demand Pricing strength could not offset margin impact of lower volumes and higher raw material costs in millions 2nd Qtr 2007 2nd Qtr 2006 Net Sales $1,002 up 3% $977 Operating EBITDA $176 down 15% $207 Chemical Products |
Second Quarter 2007: Net sales increase driven by strong volume growth (8%) and currency effect (4%) Strong demand continues for all major products in Europe and Asia Moderate growth in North American automotive and housing applications supported by strong growth in other end markets Volume growth partially offset by higher raw material and energy costs Ticona Technical Polymers in millions 2nd Qtr 2007 2nd Qtr 2006 Net Sales $257 up 12% $230 Operating EBITDA $70 up 6% $66 |
Increased revenues attributable to inclusion of APL acquisition in Q2 Continued operating margin improvement with revitalization program Higher dividends from China ventures contributed to EBITDA improvement Performance Products Continued volume growth in Sunett(tm) and favorable currency impacts did not fully offset decrease in non-core volumes Price reductions in line with company expectations Acetate Products in millions 2nd Qtr 2007 2nd Qtr 2006 Net Sales $235 up 34% $176 Operating EBITDA $80 up 45% $55 in millions 2nd Qtr 2007 2nd Qtr 2006 Net Sales $47 down 2% $48 Operating EBITDA $21 $21 |
Q2 2006 Q2 2007 YTD 2006 YTD 2007 Q2 2006 Q2 2007 YTD 2006 YTD 2007 Q2 2007: Cash flow higher than earnings impact due to increased cash dividend from Acetate China ventures FY 2007 Income Guidance: Income modestly above 2006 full-year performance Full-year 2007 Cash Flow guidance: Cash flow approximates income statement impact Income Statement Cash Flow Strong performance continues for Equity and Cost Investments Note: All figures exclude results of discontinued operations of Oxo Alcohol business |
Affiliates continue to deliver value |
Summary of Cash Flow Changes Debt repayments ($211) Refinancing costs ($240) Share repurchases ($258) Other $3 Cash used in financing activities ($706) Cash Used in Financing Activities ($ in millions) YTD 2007 YTD 2006 Cash from operations $79 $167 Discontinued operations $101 $28 Cash from continuing operations $180 $195 Add back: Long-term mgmt comp $73 Total $253 $195 Cash Flow from Operations Year over Year Comparison |
Chemical Products Clear Lake impact to continue into third quarter Full production rates at Nanjing acetic acid facility Ticona Continue >2x GDP volume growth across transportation and non-transportation end-uses Continuing high raw material costs Acetate Products Improved earnings continue from revitalization efforts Integration of APL acquisition Performance Products Strong business fundamentals continue Continued volume growth in core business 2007 Business Outlook |
Impact from Recent Strategic Initiatives 2006 2006 2006 Q3 Q4 HY06 Adjusted EPS (As Reported) $0.79 $0.77 $1.56 Portfolio Enhancements: Oxo Alcohol Divestiture ($0.08) ($0.13) ($0.21) Edmonton Methanol Shut Down ($0.04) ($0.07) ($0.11) Balance Sheet Improvements: Debt Refinancing $0.04 - $0.06 $0.04 - $0.06 $0.08 - $0.12 Adjusted EPS (Comparable Basis) $0.71 - $0.73 $0.61 - $0.63 $1.32 - $1.36 Divest non-core business lines Closed sale of oxo alcohol business in Q1 2007 Discontinued methanol production unit in Q2 2007 Capital structure opportunities Debt refinancing completed in Q2 2007 (reduced debt by ~$113 MM and lowered interest expense by ~$10-15MM per quarter) Share repurchases (retired 2.4 million shares with Dutch auction and 8.5 million shares with Board authorized plan - impacts not fully realized in EPS for Q2 2007) |
Appendix |
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 |